HR INSIGHTS • 6 MIN

A Comprehensive Guide to
HR Best Practices You
Need to Know This Year
[Infographic]
By Darren Perucci•October 12, 2018
Updated February 12, 2020

TABLE OF CONTENTS

1. Introduction to HR Best Practices

2. Recruitment & Selection
3. Training & Development
4. Transparency
5. Employee Benefits
6. Employee Incentives
7. Compensation
8. Compliance Issues
9. Terminations
10. Company Examples

HR best practices have been under close examination for many years and
continue to be a hot debate topic in business circles.

So what is the definition of HR best practices?

It is the idea that there are universal HR principles that provide companies
with optimal business performance, regardless of which organization or
industry they are applied to.

However, we can’t discount the principle of the best fit either. It’s important to
align HR goals with the overall goals of your organization, so that the HR,
business, and strategy departments are all on the same page. When you’re
able to combine these two ideas and achieve best practices and best fit,
you’re practicing what’s called strategic human resource management.

To help HR departments focus their efforts on HR best practices, we’ve

compiled a list of some of the best human resource practices. Try these out in
your own organization and see how they can help you increase engagement,
improve retention, and more.

How Were These Best HR Practices

Gathered?

Some HR strategies have been around a long time and are entrenched in HR
as “best practices” despite little proof that they contribute to company goals or
performance.

We’ve compiled the best HR practices of companies by using the Bersin

study, which analyzed 140 HR best practices to find which ones had the
highest impact opportunities for companies. We’ve also included case studies
and examples of HR best practices from companies that have made the top of
Fortune magazine’s 100 Best Companies to Work For list in 2013-2014 and
Glassdoor’s 2014-2015 winners of the Employees’ Choice Awards.
Download the full 8 HR Best Practices
infographic here.
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The Difference Between HR Practices and
HR Activities 
Before we dive in, it’s important to clarify the distinction between HR practices
and HR activities, since without a clear understanding it is possible to
intermingle the two. Both are needed for an HR department to fully reach its
potential, and for an organization to optimize its human capital investment. 
HR practices involve the strategic operations of HR. They form the foundation
and guidance for managing the company’s employees and should coordinate
with the executive business plan. Some examples of HR practices include:
 Setting the mission and goals of the HR department
 Planning, organizing, and managing the HR department
 Measuring the effects of programs
 Creating programs to improve the quality of the work environment
 Developing talent and future leadership
 Conducting motivational programs
 Working with management for ongoing performance evaluations
 Overseeing employee advancement opportunities
In contrast, HR activities are the daily activities to implement the strategies
determined by HR practices. They allow the mission and the goals of the HR
department to be carried out. HR activities may include: 
 Payroll
 Surveys
 Recruitment and selection
 Training and development
 Compensation and benefits
 Employee and labor relations
 Retention
 Safety and health
 Employee attendance and time off
 Overtime
In the most basic terms, HR practices look at the questions of what an
organization wants to do and why, and HR activities address how. 
HR practices should create a natural progression to HR activities so that the
activities directly correlate with practices. If one or the other is neglected, it
can create a disconnect that will be felt throughout the company. Your
company can function this way, but not at its best.
When HR practices and HR activities are aligned and working hand in hand,
HR departments have the ability to thrive, and your company benefits.
Optimum human resources involves an understanding and integrated
approach to HR practices and HR activities.

Introduction to HR Best Practices

We’ve identified the top HR best practices that can give you the most bang for
your buck. In other words, if you focus on improving these areas, you’ll likely
see the greatest results. These areas include recruitment and selection,
training and development, transparency, employee benefits, employee
incentives, compensation and evaluations, compliance, and terminations.

1. Recruitment and Selection

Companies seeking to hire high-performers are turning to innovative

processes to streamline hiring.

There are many different ways to assess whether someone will be a good fit
for the company, both as a high-performer and as a cultural fit. While not
every innovative hiring process will be right for your team, you can learn from
companies who have paved the way and provided data for the rest of us. Here
are a few strategies to consider.

 Panel-Based Interviews: When it comes to interviewing panels,

Google’s study of its interviewing practices showed both the ideal
number of panelists and ideal number of interviews to be four or fewer.
The study showed that scores from a panel of four interviewers made
the same hiring decision 95 percent of the time as panels made up of
more than four interviewers, and that any interviews beyond four added
 little or no value to the process. In fact, more interviews simply wasted
time and resources and led to disinterest and frustration for both sides.
 Better Advertising for Job Openings: Many organizations are doing a
poor job at advertising their open positions and attracting quality
candidates. If your company wants to attract top talent and find high-
performers, you should not only list what skills you want the employee
to have but also give the job searcher a reason to seek out your
organization over another.
When it comes to posting the perfect job ad, you should include some
information about your organization—what technology you use, what kind of
products you create, your mission and vision, and more. Including this
contextual information (instead of only a grocery list of skills you’re looking for)
can encourage more candidates who believe in your organization’s mission to
apply. The best candidates can always learn additional skills; what you want
are employees who are going to be engaged from day one.


 Internships: If your company intends to hire the majority of your

interns, you should seriously consider paying them. While
structuring your intern program, it’s good to know that 60 percent of
paid interns receive job offers, whereas only 37 percent of unpaid
interns get job offers―only one point better than the 36 percent of
graduates who receive job offers without an internship. If you intend
to move an intern to a full-time position, invest in them early on.
 Video Interviewing: Video interviewing can be a great tool for saving
time and allowing you to get a feel for the enthusiasm and passion an
individual has for your organization before you bring them in for an
interview. It can also help you weed out potential candidates who aren’t
serious about applying because video interviews represent a small
investment on the candidate’s part.
 Be Selective: As an HR department, you want to hire the best people
who will contribute to the value of your company and not detract from it.
Hiring poor performers can really affect your company, whereas hiring
top performers can boost productivity by up to 400 percent, no matter
your industry or job type you are looking to fill. One way to streamline
 your process and be selective is to utilize digital tracking. This allows
you to keep track of recruitment metrics such as which hiring sources
send solid candidates your way, and offer acceptance rates. Knowing
which sources send you solid candidates can help you cut down on
ineffective referral sources, and knowing what your acceptance rate is
can help you fix inefficiencies in your hiring process or inadequacies in
your compensation offers. You can also use other tools like interviews,
personality assessments, or reference checks to further streamline your
process or make it more selective.

2. Training and Development

You’ve taken the time to find employees you want to hire, but your
responsibility to them is only just beginning.

It is an HR best practice to invest in training and development opportunities to

improve your current workforce, focus on skill-specific training, and realize the
value that young workers place on learning. As industries are advancing at an
ever-increasing pace, you can support and encourage your employees to
grow as well, keeping them more engaged in their work and your organization.
 Invest in Training and Development: Some of the best practices for
training employees might involve bringing on interns to reduce training
costs before hiring them full-time. Once you’ve found your ideal
employees, you’ll need to keep them at the top of their field, and as
technology develops at an ever-increasing rate, the importance of
training employees cannot be overlooked. If you want your pros to stay
pros, you need to keep training them.
 Focus on Skill-Specific Training: Another crucial element HR
departments must implement is to focus on skill-specific forms of
training. You might have a great general training program, but if you are
focused on teaching skills that don’t line up with the work requirements
or company objectives, you are wasting time and money.

 Younger Employees Value Learning: HR best practices for training

should also consider the fact that many young employees value
 learning more than their predecessors, and your employee turnover
rate could increase greatly if you don’t offer opportunities for growth
and development.This is actually great news for employers because it
means you have a workforce full of employees who are ready to
increase their skills, advance in their careers, and train for new
positions.

3. Transparency

A crucial HR practice is to always maintain transparency and be open with

employees regarding the success and failures of the business. Organizations
that foster an open environment of feedback and communication make
employees feel trusted, respected, and valued.

In order to be a high-impact HR department, you should:

 Promote Collaboration and Idea Sharing: Focus on creating an

environment that promotes collaboration of ideas and information
sharing. Employees who are informed about business operations are
better able to share their ideas, and think it’s important to be able to
contribute to company decisions that impact their careers.
 Maintain Openness and Transparency: When companies are honest
and open with their employees, it promotes a culture of trust between
both employer and employee.
As an HR department, you should also avoid focusing on efficiency and
cutting costs above all else, as this could actually be less effective in the long
run. Instead, promote practices that create transparent environments and
encourage information sharing.
4. Employee Benefits

There is a myriad of benefits you can offer employees, but which ones provide
the greatest value? The best benefit plans take a strategic approach to
accomplishing company goals and retaining great employees as well as
ensuring your employees understand their benefits.
 Choose Benefits that Show You Value Employees: Learning from
other human resource practices can give you some great insight into
where you can focus the company budget when it comes to employee
benefits. It also helps you understand which benefits may actually help
you retain the best employees. You can choose to provide medical and
 dental coverage, health and fitness centers, subsidized tuition, or any
other benefits that will show you value your employees.
 Use Benefits to Solve Workplace Issues: Google is a great example
of using benefits to solve workplace employment issues. Several years
ago they noticed that the number of women working for the company
was gradually decreasing. Google did some research and found that
the decrease was mostly younger women who left to have children. In
an effort to retain employees and maintain their bottom line, Google
implemented a five-month maternity leave policy with full pay and
benefits. This benefit alone led to a 50 percent increase in their
retention rate of women.
While Google’s approach certainly isn’t feasible for all companies, it is
important to identify where you are losing money and why you might be
struggling with employee retention. If you want to hire and keep the best
talent, you have to treat them like they’re the best talent and show you value
your employees.
Download the full 8 HR Best Practices
infographic here.
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5. Employee Incentives

Incentives have their pros and cons. For incentives to be effective, this HR

best practice must be implemented in the correct manner, or you risk
demotivating your employees instead of motivating them. Here are some HR
best practices for providing effective employee incentives.
 Know what Motivates Employees: Some employers have found it
helpful to motivate employees by using commision or productivity as an
indicator of a raise, and not to limit raises to an annual review or bonus
at the end of the year. Employers who simply raise wages once a year
regardless of performance are not incentivizing employees to do their
best because employees begin to simply expect the raise no matter
what.
 Pay Raises vs. Bonuses: As far as the topic of bonuses goes,
another study by Google found that employees valued a base-pay raise
over a single bonus, because it has long-term effects. So if your
company is weighing the overall benefits of pay raises versus a
handsome bonus, go with the pay raise.
 Be Creative with Incentives: While HR might hear the word
“incentive” and think of monetary rewards, there are other incentives
that keep employees motivated, such as a recognition and rewards
program or the use of social recognition to acknowledge employees for
the work they do.
Providing the right incentives shows employees that you care about them and
the value they add to your company.

6. Compensation

If you want great employees, you need to have great compensation plans in
place. Above-average employees deserve above-average compensation, and
you want to show your employees that you value them and the work they do.

Some HR best practices for compensation include:

 Combining Good Benefits with Compensation: A combination of good

benefits and compensation (also known as a total rewards package)
can help show employees that the company values and appreciates
their contribution as workers and their well-being as people.
 Vary Compensation Options: Upping your compensation offer doesn’t
always mean adding more numbers. You could offer other types of
compensation such as additional vacation days, gift cards, company
discounts, stock options, or profit-sharing.

 Compensation Transparency: A winning compensation strategy

comes down to two elements: transparency and communication.
A study published by PayScale found that most employees don’t
actually know how their pay compares to the rest of the market. Of the
 employees who believed they were being paid below market rate, 77
percent were paid at market rate, while an additional 12 percent were
paid above market rate. Only 11 percent of people who said that they
are underpaid actually were paid less than the median market rate. In
short, if your employees don’t understand your organization’s comp
strategy, and if your leadership never communicates that strategy, then
employees are much more likely to become dissatisfied on that point.
Whatever the compensation strategy of your company, it should be based on
the productivity and contributions of the employees, and the managers in your
organization should be prepared to communicate about it.

7. Compliance Issues
The best way to handle compliance issues is to avoid having them in the first
place. That being said, it can be very difficult to juggle the complexities of
compliance issues with the daily tasks of running other human resources
practices in the workplace. Here are some human resource practices to
prevent compliance issues.
 Utilize HR Software: One great way to avoid compliance errors is
to use HR software to simplify your HR compliance practices. This will
help you find and correct errors quickly and avoid future compliance
issues.
 Designate a Point Person for Your HR Team: One of the best ways
to stay up-to-date with compliance is to designate a point person for
your HR team, who has the responsibility to keep up with new
regulations and changing labor laws. They also have the responsibility
to convey this information to the HR department, which ensures
everyone is on the same page when it comes to legal considerations.
Hiring, employee classification, and wage requirements all require constant
attention to stay in compliance. Utilizing your point person and your HR
software can help you stay one step ahead of any upcoming changes to HR.

8. Terminations

This is probably the toughest place to implement HR best practices because it

will always be difficult for those involved. HR best practices include learning
from employees who are terminating their employment as well as
understanding which topics to be sensitive of for legal reasons. Issues that
may warrant termination should always be addressed before they reach a
boiling point. However, when it does come to terminating an employee, you
shouldn’t wait on the decision.

 Show Empathy, but Not Sympathy: HR professionals Amy

Schrameck and Jeanne Knight recommend informing the employee as
to why they are being let go; showing empathy, but not sympathy for
the employee.
 Stand Your Ground: Stand your ground even if the employee gets
emotional or says they will do better. You should be confident enough
in your decision to not waver in your resolve when terminating an
employee.
 Conduct an Effective Exit Interview: One of the best practices for HR
professionals when going through the termination process (whether
voluntary or involuntary) for an employee is to conduct an effective exit
interview. A good exit interview can help emphasize things the
organization does well and things they could improve upon. Exit
interviews should be conducted face-to-face, if possible; otherwise,
send a survey and try to follow up on the results in person. You don’t
want to make the exit interview feel stiff. Rather, you are trying to gain
real insight into what the company can do to retain people in the future.
As you implement these HR practices, you may discover that employees who
leave soon after being hired did not have a good indication of what the job
entailed when they were hired, and you might consider revamping your hiring
process.

Summary of Best Human Resource

Practices

Using these types of human resource practices in the workplace can increase
employee retention and happiness. This is good news for your company
because engaged employees have been found to be up to 20 percent more
productive than unhappy ones. If your employees are in sales, happiness can
increase their sales by up to 37 percent. Employees feel happy when they
receive necessary training, use their skills and abilities to do their best work,
and feel appreciated and valued. All of these are good indicators that your HR
team is on the right track.

Innovative Companies Leading the Way

If you’re still looking inspiring HR best practices, then turn your attention to
companies that are making headlines for being in the top 100 companies to
work for.

Google

Google is a great example we’ve used in this article because they have tried
many innovative approaches. One thing that has contributed to Google’s
success is providing an environment where employee happiness is a high
priority. They provide amenities like free healthy meals, on-site laundry and
fitness centers, paid parental leave, and on-site childcare.

According to Business Insider, a full “73 percent of Google employees find

their jobs to be meaningful,” and the pay doesn’t hurt either, with an average
salary of $140,000. Even newer employees regularly make around $93,000
per year. Google provides transportation and a flexible work environment,
including telecommuting for work. They also strive to maintain transparency
and encourage employees to set high goals and learn from setbacks.
American Express

This company made Fortune’s 2014 list of the Best Companies to Work For
and it’s easy to see why. Amex offers a flexible work environment with
excellent benefits including paid leadership training, 20 weeks paid parental
leave, on-site fitness centers, and reimbursements up to $35,000 for
surrogacy or adoption expenses.

This positive work environment extends to the management as well, and 92

percent of American Express employees think that their management is
honest and ethical in business.

Conclusion
If your organization is dedicated to HR best practices and tries to follow these
principles, you could see higher employee retention and happier employees
who contribute their best. The HR practices of your company can be the
highlight of your business by implementing flexibility and training within the HR
department. Who knows, you may even end up on Fortune magazine’s 100
Best Companies to Work For in a few years.

https://www.bamboohr.com/blog/guide-hr-best-practices/

Human Resource best practices

The first question is: what are HR best practices?

Best practices are a set of Human Resources Management processes and actions that work
universally. In HRM research, there are two schools of thought on how to manage people.
The first one is best fit, the second is best practices.
 The best fit school states that in order to add value, human resource policies should align
with business strategy. This means that HR should focus on both the needs of the
organization and the ones of its employees.
 The best practice school argues that there is a set of universal HR processes that lead to
superior business performance. According to its proponents, there are certain bundles of HR
activities that support companies in reaching a competitive advantage regardless of the
organizational setting or industry (Redman & Wilkinson, 2009).
We’ll skip the extensive scientific debate on the merits and flaws of each approach. With
these kinds of discussions, the truth often lies somewhere in the middle.

This means that the HR strategy and subsequent HR activities should be aligned with the
organization´s strategy for optimum efficiency (a.k.a. strive for best fit). In literature, this
alignment has also been referred to as strategic Human Resource Management.

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At the same time, there are a large number of best practices that have shown to lead to
superior performance for the organization. If HR executes these practices correctly, they will
add substantial value to the business and its goals (a.k.a. implement best practices).

In this article, we’ll focus on the best practices in Human Resource Management.

Seven HR best practices

The 7 Human Resource best practices presented below have been proposed by Jeffrey
Pfeffer. Pfeffer wrote two books on this topic:

 Competitive Advantage through People (1994), and

 The Human Equation: Building Profits by Putting People First (1998)
In these books, he proposes a set of best practices that can increase a company’s profit. When
these best practices are combined (or bundled), their impact is even more profound.

These best practices are:

1. Providing security to employees

2. Selective hiring: Hiring the right people
3. Self-managed and effective teams
4. Fair and performance-based compensation/li>
5. Training in relevant skills
6. Creating a flat and egalitarian organization
7. Making information easily accessible to those who need it
We’ll go over them one by one.

1. Providing security to employees

The first Human Resource best practice is employment security. Life is unpredictable and
work is a stable factor that is very important to most people. Having an employer who
enables the employee to provide for themselves and their family is, in essence, the number
one reason why people come to work.

There is both a formal contract (labor for money) and an informal contract (you put in some
extra effort, we take good care for you) between the employee and the employer.
Employment security enables employees to go home after work and provide for themselves
and their families. This concept of security is essential and underpins almost everything HR
does.

When this employment security is threatened, for example when there is a restructuring or a
layoff, you see this immediately ripple through the organization.
Employment security also benefits organizations because it helps them retain their people.
When employees are laid off, for example, it’s usually the organization that pays the price.
They are the ones who have invested in the selection, training, and development of these
employees. This is a costly process. If the organization doesn’t work on retaining its people,
they are more likely to leave and work for the competition.

2. Selective hiring: Hiring the right people

The second HR best practice is selective hiring. This enables an organization to bring in
employees who add value.

You can’t just hire anyone; you want people who are fit for the job. Companies do their
utmost best to hire exceptional people because they add the most value to the business.

Research shows that the difference in performance between an average performer and a high
performer can be as high as 400%! This holds true for different industries and job types,
including researchers, entertainers, and athletes.
Bringing in the right people is, therefore, a key to building a competitive advantage.

In today’s digital world, there are a lot of different recruitment tools we can use to make the
right selection. More and more companies vigorously keep track of their recruitment
metrics to see how well they are doing in this regard.
Commonly used selection instruments are structured and unstructured interviews, IQ tests,
personality assessments, work tests, peer assessments, and reference checks. These (pre-
employment) assessments are used to uncover three key candidate characteristics.

1. Ability:
is the person able to do the job? Does the person have the right technical and soft skills? Is
the person smart enough to do the job well?
2. Trainability:
can we train this person to improve his/her skills? Has the person the aptitude to learn and
keep developing?
3. Commitment:
will the person commit to his/her work and to the organization? Will we be able to retain
this person once he/she is up to speed and fully productive?
3. Self-managed and effective teams
We all know that teamwork is crucial in achieving goals. High-performance teams are crucial
for any company when it comes to achieving success.

Teams provide value because they consist of people who are and think differently but are
working towards a common goal. This means that different ideas are generated to help
achieve the goal. These ideas are then processed and combined, resulting in the best ones
being selected.
The best teams are cognitively diverse and psychologically safe. This means that team
members can generate ideas that are different while feeling comfortable bringing these up
and discussing them.
Creating and nurturing high-performance teams is one of HR’s key responsibilities. Belbin’s
Team Role Inventory is a commonly used tool for team creation and cooperation.
Individual personality assessments are also often used as they help to understand how other
team members think and behave. Understanding these processes is one of the main
responsibilities of a manager. This is the reason why a lot of management courses focus on it.

There are different tools that facilitate teamwork. Examples include communication software,
feedback tools, project management tools, and other task and goal setting software. These can
facilitate communication and help teams be more efficient.

Finally, HR needs to encourage different teams to work together in the organization. A team
is usually part of a larger entity, like another team or a department. These larger entities also
need to work together. Facilitating this helps to build an efficient and effective organization.
One of the tools that can be used for this is Organizational Network Analysis.
4. Fair and performance-based compensation
Contingent compensation is the fourth Human Resource best practice. It has everything to do
with compensation and benefits.

First of all, if you hire the right people, you want to compensate them above average. These
are the people that will add the most value to your company so you want to retain them and
pay them fairly. This is an example that shows how different best practices work together to
provide more value than they would alone, in this case, selective hiring, contingent
compensation, and employment security.

Paying people above the norm also has a number of potential disadvantages. For instance, it
discourages bad employees to leave. However, if you’re consistently hiring world-class
performers, an above-average compensation is a must.

This sort of compensation can take the form of financial (base) pay and employee benefits.
Secondly, you want to couple individual rewards with the different types of contributions that
employees make. These are performance-related rewards.

By coupling organizational performance outcomes with individual rewards the individual is

incentivized to maximize this outcome. It also creates a sense of ownership for the employee.

Think of profit sharing, shared ownership, or stock options for instance. These are great ways
to create employee commitment to the company’s long-term vision and retain high potentials.
Compensation is a key element for successful talent management.

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In line with the previous, this type of co-ownership is usually not meant for all
employees. Lepak & Snell (2002) offer a good model to assess how important individual
employees are.

As an organization, you want to specifically retain your “Criticals”. They are people with
unique skills (i.e. hard to replace) who are very valuable to the business. That’s why senior
managers, most of which fit this category, are often offered these benefits.

5. Training in relevant skills

This HR best practice states that companies should invest heavily in training time and budget
for its employees.

After recruiting the best people, you need to ensure that they remain the frontrunners in the
field. This has become even more relevant today as the rate at which technology is
developing is growing exponentially. This is where learning and development come in.

How do we create an organization in which the rate of learning matches the pace of change?
Learning has become a way to stay innovative, grow faster, and sustain a competitive
advantage.

Employers increasingly invest in skills-specific forms of training. According to the

Economist’s Lifelong Learning special report, the number of on-demand courses has grown
exponentially. Thanks to the internet, everyone is connected and can learn anything, anytime,
anywhere.
In addition to formal learning, on-the-job learning also plays an important role. Increased
focus on feedback, coaching, and peer learning plays into this. This is part of the often quoted
70|20|10 rule:
 70% of learning is from challenging assignments
 20% of learning is from developmental relationships
 10% of learning is from formal coursework and training
Learning is also becoming increasingly important for the latest generations, such as the
Millennials and Generation Z. According to Gallup, younger employees rate learning and
personal growth as much more important compared to older generations.
The next generation of workers is actively looking for development opportunities and sees
these as a way to grow in their profession. Not offering these opportunities is related to
higher levels of employee turnover.

Learning is, of course, also important for HR. To stay up to date and learn the skills needed to
do HR in the 21st century, check out our courses at the Academy to Innovate HR!
6. Creating a flat and egalitarian organization
This best practice in HR is rooted in the egalitarian practices of Japanese management.
Although we just saw that some employees are more critical than others for the
organization’s success, this shouldn’t be communicated in such a way. Every employee is a
valuable member of the organization and should be treated as such.

In Japanese organizations, this is expressed with common canteens, company uniforms, and
similar sickness and holiday entitlement. Such an egalitarian culture shows that everyone
deserves equal respect and could help in promoting the sharing of ideas.

7. Making information easily accessible to those

who need it
Information sharing is essential. This is an area where a lot of large companies struggle: How
do you keep track of who knows what, so you know where to go to with your questions?

According to Pfeffer, there are two reasons why information sharing is so important.

Firstly, open communication about strategy, financials, and operations creates a culture in
which people feel they are trusted. It truly involves employees in the business. As an
additional effect, it discourages hear-say and negative informal chatter.

Secondly, if you want your people to share their ideas, they need to have an informed
understanding of what’s going on in the business.

Being informed about the business is also something that employees often mention as
something they find important in attitude surveys, as well as having a chance to contribute to
and influence decisions affecting their working life.

Synergies between HR best

practices: Bundles
When these best practices are combined we call them ‘bundles’. Bundles create synergies.
This is how Human Resource Management can create a competitive advantage for the
organization.

An example. Guaranteeing employment security will only benefit you when you have high
performing employees. Otherwise, what’s the use of retaining them? This means that the
employment security best practice, combined with selective hiring leads to more value than
individual practices.

The same goes for selective hiring, extensive training, and contingent compensation. You
want to select employees with potential for growth, invest in them with learning and
development, and reward them appropriately when they show superior performance.

A third example is the reduction of status differences and information sharing. By

encouraging open communication and sharing relevant information, you create a culture of
improvement in which employees feel free to give suggestions and collaboratively help to
improve the business.
By leveraging these bundles, HR is able to add tremendous value to the business and help the
organization succeed in reaching its goals.

Human Resource Management

best practices: a reality check
According to Kurt Lewin, there’s nothing more practical than a good theory. However, each
theory has its drawbacks. It turns out that some of these best practices contradict each other.

Take employment security. This practice sounds nice in theory but in reality, companies are
increasingly working with flexible contractors. These contractors lack the security that
traditional employees have and provide the company with additional flexibility. According
to Marchington and Grugulis (2000), “the reality is that employment security is only offered
when and for as long as it is convenient to the employer”.
Another example is training. A lot of organizations have implemented the extensive training
principle. However, simply delivering training doesn’t add to the company’s competitive
position. The way formal training is provided in organizations often offers a number of
concerns:

 Formal training programs may be directed to skills that are not in line with the employee’s
work
 Employees are provided access to training simply because of the excess budget instead of
business needs
 There’s often more emphasis on being trained than on the impact of training
In other words, extensive training only adds value as long as it helps individuals and teams
contribute to the strategic goals of the organization. This is in line with the Kirkpatrick-
Philips model, which helps assess training effectiveness. This model helps assess whether a
training had a measurable impact on performance and whether the training investment
provided a positive return on investment (ROI).
A final example is selective hiring. This best practice holds that if a company can consistently
hire top performers, they will outperform their competition. However, it is almost impossible
to consistently hire top performers. The reality is simpler: if you consistently hire better
candidates than your competition, you will create a competitive edge.

Conclusion
This article describes the 7 Human Resource best practices, from hiring and training to
offering job security and the creation of an open culture in which people can share knowledge
and ideas.

When implemented, these best practices form the basis of good Human Resource
Management. However, implementation alone isn’t enough. These best practices also need to
align with what the rest of the business is doing.

Selective hiring is great but what kind of profiles do you hire? This depends on the
characteristics of employees that fit what the organization is looking for. And what
capabilities do you train your employees on? These should also align with the organizational
strategy.

Only if the best practices that we have in HR are aligned with what the organization is
striving for can we create an HR function that adds value and that truly supports the business.

To learn more about doing HR in a better way, check out the Academy to Innovate HR!
Subscribe and stay up-to-date.

https://www.digitalhrtech.com/human-resource-best-practices/

Top 10 HR Best Practices

Here are the Top Ten HR Practices that can help you achieve your
organizational goals every year.

1. Safe, healthy and happy workplace

Creating a safe, healthy and happy workplace ensures that employees feel
at home and stay with the organization for a very long time. Capture their
thoughts through frequent surveys.

2. Open book management style

Sharing information about contracts, sales, new clients, management
objectives, company policies, employee personal data, etc. ensures that
the workforce is as enthusiastic about the business as the management. It
helps in making people interested in your strategic decisions, thus aligning
them to your business objectives. Be as open as you can. Employee self-
service portal, manager on-line etc. are some tools available today to
practice this style.

3. Performance linked bonuses

Awarding bonuses or including a variable component in compensation
can be both an incentive and a disillusionment based on how it is
administered and communicated. Bonuses must be designed in such a
way that employees understand that there is no payout unless the
company hits a certain level of profitability. Additional criteria could be the
team’s success and the individuals performance. It is good for employee
retention also.

4. 360 Degree performance management feedback system

This system, which solicits feedback from seniors (including the boss),
peers, and subordinates, has been increasingly embraced as the best
available method for collecting performance feedback. Every person in
the team is responsible for giving relevant, positive and constructive
feedback.
5. Fair evaluation system
Develop an evaluation system that clearly links individual performance to
corporate business goals and priorities. Each employee should have well-
defined reporting relationships. Self-rating should be a part of the
evaluation process as it empowers employees. Evaluation becomes fairer
if it is based on achievements of the employee, tracked over the year. For
higher objectivity, besides the immediate boss, each employee should be
evaluated by the next higher level (often called a reviewer). Cross-
functional feedback, if obtained by the immediate boss from another
manager (for whom this employee’s work is also important), will add to
the fairness of the system.
6. Knowledge sharing
Adopt a systematic approach to ensure that knowledge management
supports strategy. Store knowledge in databases to provide greater access
to information posted either by the company or the employees on the
knowledge portals of the company. When an employee returns after
attending any competencies or skills development program, sharing
essential knowledge with others could be made mandatory. Innovative
ideas (implemented at the work place) should also be posted on these
knowledge sharing platforms. However, what to store and how to
maintain a knowledge base requires further and detailed plans.

7. Highlight performers
Create profiles of top performers and make these visible though
company intranet, display boards, etc. It will encourage others to put in
their best, thereby creating a competitive environment within the
company.
8. Open house discussions and feedback mechanism
Ideas rule the world. Great organizations recognize, nurture and execute
great ideas. Employees are the biggest source of ideas. The only thing that
can stop great ideas being implemented in your organization is the lack of
an appropriate mechanism to capture ideas. Open house discussions,
employee-management meets, suggestion boxes and tools such as Critical
Incidents Diaries can help identify and develop talent.
9. Rewards
Merely recognizing talent may not work, you need to couple it with public
appreciation. Getting a cash bonus is often less significant than listening
to the thunderous applause by colleagues in a public forum.

10. Delight employees with the unexpected

Last but not least, occasionally, delight your employees with unexpected
things in the form of a reward, a gift or a certificate. Reward not only the
top performers but also a few others who need to be motivated to exhibit
their potential.

Empxtrack is a composite HR solution which helps you implement most

of these best practices by utilizing software tools. We provide you with
relevant performance management system which is synchronized with
your HR processes.
Related Posts
   
Top Ten Bad HR Practices
  
7 Workplace Practices That Ensure Employee Happiness
  
Importance of Workplace communication for a successful HR practice
Cloud HREmployee EngagementHR AnalyticsHR DepartmentHR SoftwarePerformance
FeedbackPerformance ManagementSMART Goals

September 10, 2008 Blog HR on Cloud

in  , 

18 Comments
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https://empxtrack.com/blog/top-10-hr-best-practices/
 7 Human Resource Best Practices
(A mini-guide to HRM)
You are here:

1. Home
2. General HR
3. 7 Human Resource Best Practices…
General HR

Human Resource best practices have been around for decades. They have
served as guidelines for many HR professionals. But what do they entail,
and why are they so important? In this article, we’ll go over the 7 best
practices for HR.
In this article:
1. Human Resource best practices
2. Seven HR Best Practices
2.1 Providing security to employees
2.2 Selective hiring: Hiring the right people
2.3 Self-managed and effective teams
2.4 Fair and performance-based compensation
2.5 Training in relevant skills
2.6 Creating a flat and egalitarian organization
2.7 Making information easily accessible to those who need it
3. Synergies between HR best practices: Bundles
4. Human Resource Management best practices: a reality check
5. Conclusion

Human Resource best practices

The first question is: what are HR best practices?

Best practices are a set of Human Resources Management processes and

actions that work universally. In HRM research, there are two schools of thought
on how to manage people. The first one is best  fit, the second is best practices.
 The best fit school states that in order to add value, human resource policies
should align with business strategy. This means that HR should focus on both
the needs of the organization and the ones of its employees.
 The best practice school argues that there is a set of universal HR processes that
lead to superior business performance. According to its proponents, there are
certain bundles of HR activities that support companies in reaching a
competitive advantage regardless of the organizational setting or industry
(Redman & Wilkinson, 2009).
We’ll skip the extensive scientific debate on the merits and flaws of each
approach. With these kinds of discussions, the truth often lies somewhere in the
middle.

This means that the HR strategy and subsequent HR activities should be aligned

with the organization´s strategy for optimum efficiency (a.k.a. strive for best fit).
In literature, this alignment has also been referred to as strategic Human
Resource Management.

 
7 HR Best Practices
Mini-Guide
A mini-guide to practicing HR including 7 universally applicable best practices.

DOWNLOAD PDF

At the same time, there are a large number of best practices that have shown to
lead to superior performance for the organization. If HR executes these
practices correctly, they will add substantial value to the business and its goals
(a.k.a. implement best practices).

In this article, we’ll focus on the best practices in Human Resource Management.

Seven HR best practices

The 7 Human Resource best practices presented below have been proposed by
Jeffrey Pfeffer. Pfeffer wrote two books on this topic:

 Competitive Advantage through People (1994), and

 The Human Equation: Building Profits by Putting People First (1998)
In these books, he proposes a set of best practices that can increase a
company’s profit. When these best practices are combined (or bundled), their
impact is even more profound.

These best practices are:

1. Providing security to employees

2. Selective hiring: Hiring the right people
3. Self-managed and effective teams
4. Fair and performance-based compensation/li>
5. Training in relevant skills
6. Creating a flat and egalitarian organization
7. Making information easily accessible to those who need it
We’ll go over them one by one.
1. Providing security to employees
The first Human Resource best practice is employment security. Life is
unpredictable and work is a stable factor that is very important to most people.
Having an employer who enables the employee to provide for themselves and
their family is, in essence, the number one reason why people come to work.

There is both a formal contract (labor for money) and an informal contract (you
put in some extra effort, we take good care for you) between the employee and
the employer. Employment security enables employees to go home after work
and provide for themselves and their families. This concept of security is
essential and underpins almost everything HR does.

When this employment security is threatened, for example when there is a

restructuring or a layoff, you see this immediately ripple through the
organization.

Employment security also benefits organizations because it helps them retain

their people. When employees are laid off, for example, it’s usually the
organization that pays the price. They are the ones who have invested in the
selection, training, and development of these employees. This is a costly
process. If the organization doesn’t work on retaining its people, they are more
likely to leave and work for the competition.

2. Selective hiring: Hiring the right people

The second HR best practice is selective hiring. This enables an organization to
bring in employees who add value.

You can’t just hire anyone; you want people who are fit for the job. Companies
do their utmost best to hire exceptional people because they add the most value
to the business.

Research shows that the difference in performance between an average

performer and a high performer can be as high as 400%! This holds true for
different industries and job types, including researchers, entertainers, and
athletes.
Bringing in the right people is, therefore, a key to building a competitive
advantage.
In today’s digital world, there are a lot of different recruitment tools we can use
to make the right selection. More and more companies vigorously keep track of
their recruitment metrics to see how well they are doing in this regard.
Commonly used selection instruments are structured and unstructured
interviews, IQ tests, personality assessments, work tests, peer assessments, and
reference checks. These (pre-employment) assessments are used to uncover
three key candidate characteristics.

1. Ability:
is the person able to do the job? Does the person have the right technical and
soft skills? Is the person smart enough to do the job well?
2. Trainability:
can we train this person to improve his/her skills? Has the person the aptitude to
learn and keep developing?
3. Commitment:
will the person commit to his/her work and to the organization? Will we be able
to retain this person once he/she is up to speed and fully productive?

3. Self-managed and effective teams

We all know that teamwork is crucial in achieving goals. High-performance
teams are crucial for any company when it comes to achieving success.

Teams provide value because they consist of people who are and think
differently but are working towards a common goal. This means that different
ideas are generated to help achieve the goal. These ideas are then processed
and combined, resulting in the best ones being selected.

The best teams are cognitively diverse and psychologically safe. This means that
team members can generate ideas that are different while feeling comfortable
bringing these up and discussing them.
Creating and nurturing high-performance teams is one of HR’s key
responsibilities. Belbin’s Team Role Inventory is a commonly used tool for team
creation and cooperation.
Individual personality assessments are also often used as they help to
understand how other team members think and behave. Understanding these
processes is one of the main responsibilities of a manager. This is the reason
why a lot of management courses focus on it.

There are different tools that facilitate teamwork. Examples include

communication software, feedback tools, project management tools, and other
task and goal setting software. These can facilitate communication and help
teams be more efficient.
Finally, HR needs to encourage different teams to work together in the
organization. A team is usually part of a larger entity, like another team or a
department. These larger entities also need to work together. Facilitating this
helps to build an efficient and effective organization. One of the tools that can
be used for this is Organizational Network Analysis.
4. Fair and performance-based compensation
Contingent compensation is the fourth Human Resource best practice. It has
everything to do with compensation and benefits.

First of all, if you hire the right people, you want to compensate them above
average. These are the people that will add the most value to your company so
you want to retain them and pay them fairly. This is an example that shows how
different best practices work together to provide more value than they would
alone, in this case, selective hiring, contingent compensation, and employment
security.

Paying people above the norm also has a number of potential disadvantages.
For instance, it discourages bad employees to leave. However, if you’re
consistently hiring world-class performers, an above-average compensation is a
must.

This sort of compensation can take the form of financial (base) pay
and employee benefits.
Secondly, you want to couple individual rewards with the different types of
contributions that employees make. These are performance-related rewards.

By coupling organizational performance outcomes with individual rewards the

individual is incentivized to maximize this outcome. It also creates a sense of
ownership for the employee.

Think of profit sharing, shared ownership, or stock options for instance. These
are great ways to create employee commitment to the company’s long-term
vision and retain high potentials. Compensation is a key element for
successful talent management.

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In line with the previous, this type of co-ownership is usually not meant for all
employees. Lepak & Snell (2002) offer a good model to assess how important
individual employees are.

As an organization, you want to specifically retain your “Criticals”. They are

people with unique skills (i.e. hard to replace) who are very valuable to the
business. That’s why senior managers, most of which fit this category, are often
offered these benefits.

5. Training in relevant skills

This HR best practice states that companies should invest heavily in training time
and budget for its employees.

After recruiting the best people, you need to ensure that they remain the
frontrunners in the field. This has become even more relevant today as the rate
at which technology is developing is growing exponentially. This is where
learning and development come in.

How do we create an organization in which the rate of learning matches the

pace of change? Learning has become a way to stay innovative, grow faster, and
sustain a competitive advantage.
Employers increasingly invest in skills-specific forms of training. According to the
Economist’s Lifelong Learning special report, the number of on-demand courses
has grown exponentially. Thanks to the internet, everyone is connected and can
learn anything, anytime, anywhere.
In addition to formal learning, on-the-job learning also plays an important role.
Increased focus on feedback, coaching, and peer learning plays into this. This is
part of the often quoted 70|20|10 rule:
 70% of learning is from challenging assignments
 20% of learning is from developmental relationships
 10% of learning is from formal coursework and training
Learning is also becoming increasingly important for the latest generations, such
as the Millennials and Generation Z. According to Gallup, younger employees
rate learning and personal growth as much more important compared to older
generations.
The next generation of workers is actively looking for development opportunities
and sees these as a way to grow in their profession. Not offering these
opportunities is related to higher levels of employee turnover.

Learning is, of course, also important for HR. To stay up to date and learn the
skills needed to do HR in the 21st century, check out our courses at the Academy
to Innovate HR!
6. Creating a flat and egalitarian organization
This best practice in HR is rooted in the egalitarian practices of Japanese
management. Although we just saw that some employees are more critical than
others for the organization’s success, this shouldn’t be communicated in such a
way. Every employee is a valuable member of the organization and should be
treated as such.

In Japanese organizations, this is expressed with common canteens, company

uniforms, and similar sickness and holiday entitlement. Such an egalitarian
culture shows that everyone deserves equal respect and could help in
promoting the sharing of ideas.

7. Making information easily accessible to

those who need it
Information sharing is essential. This is an area where a lot of large companies
struggle: How do you keep track of who knows what, so you know where to go
to with your questions?
According to Pfeffer, there are two reasons why information sharing is so
important.

Firstly, open communication about strategy, financials, and operations creates a

culture in which people feel they are trusted. It truly involves employees in the
business. As an additional effect, it discourages hear-say and negative informal
chatter.

Secondly, if you want your people to share their ideas, they need to have an
informed understanding of what’s going on in the business.

Being informed about the business is also something that employees often
mention as something they find important in attitude surveys, as well as having
a chance to contribute to and influence decisions affecting their working life.

Synergies between HR best

practices: Bundles
When these best practices are combined we call them ‘bundles’. Bundles create
synergies. This is how Human Resource Management can create a competitive
advantage for the organization.

An example. Guaranteeing employment security will only benefit you when you
have high performing employees. Otherwise, what’s the use of retaining them?
This means that the employment security best practice, combined with selective
hiring leads to more value than individual practices.

The same goes for selective hiring, extensive training, and contingent
compensation. You want to select employees with potential for growth, invest in
them with learning and development, and reward them appropriately when they
show superior performance.

A third example is the reduction of status differences and information sharing.

By encouraging open communication and sharing relevant information, you
create a culture of improvement in which employees feel free to give
suggestions and collaboratively help to improve the business.
By leveraging these bundles, HR is able to add tremendous value to the business
and help the organization succeed in reaching its goals.
Human Resource Management
best practices: a reality check
According to Kurt Lewin, there’s nothing more practical than a good theory.
However, each theory has its drawbacks. It turns out that some of these best
practices contradict each other.

Take employment security. This practice sounds nice in theory but in reality,
companies are increasingly working with flexible contractors. These contractors
lack the security that traditional employees have and provide the company with
additional flexibility. According to Marchington and Grugulis (2000), “the reality is
that employment security is only offered when and for as long as it is convenient
to the employer”.
Another example is training. A lot of organizations have implemented the
extensive training principle. However, simply delivering training doesn’t add to
the company’s competitive position. The way formal training is provided in
organizations often offers a number of concerns:

 Formal training programs may be directed to skills that are not in line with the
employee’s work
 Employees are provided access to training simply because of the excess budget
instead of business needs
 There’s often more emphasis on being trained than on the impact of training
In other words, extensive training only adds value as long as it helps individuals
and teams contribute to the strategic goals of the organization. This is in line
with the Kirkpatrick-Philips model, which helps assess training effectiveness. This
model helps assess whether a training had a measurable impact on
performance and whether the training investment provided a positive return on
investment (ROI).

A final example is selective hiring. This best practice holds that if a company can
consistently hire top performers, they will outperform their competition.
However, it is almost impossible to consistently hire top performers. The reality
is simpler: if you consistently hire better candidates than your competition, you
will create a competitive edge.

Conclusion
This article describes the 7 Human Resource best practices, from hiring and
training to offering job security and the creation of an open culture in which
people can share knowledge and ideas.

When implemented, these best practices form the basis of good Human
Resource Management. However, implementation alone isn’t enough. These
best practices also need to align with what the rest of the business is doing.

Selective hiring is great but what kind of profiles do you hire? This depends on
the characteristics of employees that fit what the organization is looking for. And
what capabilities do you train your employees on? These should also align with
the organizational strategy.

Only if the best practices that we have in HR are aligned with what the
organization is striving for can we create an HR function that adds value and that
truly supports the business.

To learn more about doing HR in a better way, check out the Academy to

Innovate HR!
Subscribe and stay up-to-date.

https://www.digitalhrtech.com/human-resource-best-practices/