Most of the firms achieve their organisational goal through their knowledge based view (KBV) and resource based view (RBV). The KBV and RBV are essential developments in strategic management theory that explores the connections between firm’s efforts at knowledge management and their HR strategies (Haesli and Boxall 2005). KBV and RBV help the organisation for ‘best practicing’. Strategic HRM literature has increasingly been influenced through the resource based view (RBV) of the organisation. Human resource placed greatly emphasized on the knowledge and experience of the management team for the business strategy.
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RBV focus on the ways in which firms might build unique cluster of human and technical resources that make desirable levels of performance (Boxall and Purcell 2003). So, resource based view play an important role for practicing ‘best practices’. BUSINESS STRATEGY AND IMPLECATIONS FOR THE ‘SHR SYSTEM’ (R B V AND K B V): Business strategy plays a vital role for the organisation. According to the Web based strategy definition (2006), Business strategy describes about the actions and the approaches crafted by management to produce winning performance in one specific direction of business.
Moreover, the central business strategy issue for achieving a stronger long-term competitive position in the market places. Pitts and Lei (2006 p. 14) state that ‘business strategy is a plans and actions that firms devise to compete in a given product/market scope or setting; addresses the question “how do we compete within an industry”. Business strategy helps the organisation for surviving the global market place. Human resource management system must be modified to the demands of business strategy.
All of impressive and sometimes dramatic competitive approaches revolve around a few fundamental business strategies appear to be present to a greater extent in every industry Miles and Snow (1984). ‘Business strategy’ and ‘best practice’ are related with each other. If the organisation practices the ‘best practice’ model, the organisation could make a good business strategy also. Because this model discuss about the measurement of the practices, over searching philosophy, enhancing employee abilities, good recruitment system, strong employee training, in which are essential for making business strategy.
According to the Michie and Sheehan (2005), best practice is the universal approach. It emphasis on three main approaches. The approaches are the relation between HR and firm performance, links between ‘business strategy’, HR and use of flexible employment contracts, the moderating effects of strategy on the links between HR policies, practices and performance. A lot of Company focuses on business strategy through the help of best practice model. CULTURE: Organisational culture is another important factor for practicing the best practice.
Organisational culture is the system of shared beliefs and values that develops an organisation. Moreover it guides the members of the organisation for achieving organisational goal (Wood et el. 2004). The quality of the management process and of the firm’s workplace culture is seen as major factor at the organisation. Resources are not valuable in and of themselves, but they help firm that create advantages in particular markets (Porter 1991 cited in Boxall and Purcell 2003). Hughes (2002 p.
221) states that ‘best practices include establish a service – oriented culture, building a strong capital base, motivating employees and providing employees with the opportunity to contribute’. So we can say that best practice is not only helping the strategic HR system of the organisation but also it helps to improve the organisation culture also. ETHICS: Ethics is a moral belief. It is also related with equal opportunity, affirmative action of the organisation, work life balance, participation in company’s decision, right to fair wages, cultural control etc (De Cieri et al. 2005).
Best practice also discuss about the moral belief, fair wages, affirmative action of the organisation. So best practice also help in designing the best ethics of the organisation. HR professionals play an important role for the process of developing, updating, communicating, training about and enforcing ethics program. Three of the roles that HR is expected to play in the HR arena. Roles are determined employees’ trust and loyalty, provide consistent and credible information about the organisation and asses perception about corporate leadership (Anonymous 2005).
Organisational setting discuss about the well organized settings of the organisation. Best practice also helps the organisation for well organized setting of the organisation through the human resources and well controlled HR strategy. Baruch and Yehuda (1998) state that Human Resources managers try for practicing the best practices, though it is tough work for HR manager. A balance is needed when making tactical and strategic choices in human resource management. Best practice highlights possible benefits and the main pitfalls to avoid when applying this approach in ‘organizational settings’.