HR Best Practices VS Best Fit

Most organizations don’t place a high enough focus on human capital management as a component of core
competence. In order for organizations to be successful in any market, they must have a strategic approach in
managing human resources which will lead in creating a workforce that provides a sustainable competitive
advantage.
The relationship between performance and human resources management can be linked into two strategic
approaches which are the “best practice” & “best fit”.
Best practice
The Best-practice model claims that certain bundles of HR activities exist which universally support in
improving Any organizational performance in reaching a competitive advantage regardless of the organizational
setting and irrespective of the location & size.
From my point of view: what works well in one organization will not necessarily work well in another because it
may not fit its strategy, culture, management style, technology or working practices.
Best fit
On the other hand, Best-fit approach is also known as the contingency model and proponents of this approach
assert that there is no universal way of doing things as what might work well in one place may be unsuccessful
in another place.
This vertical integrated approach the proposition that organizations will be more effective if they adopt a policy
of strategic configuration by matching their strategy to one of the ideal practices, where leverage is gained
through the close link of HR policies & practices to the business objectives.

Resource-based view (RBV)

The resource-based view of the firm (RBV) represents a fundamental change in SHRM thinking by focusing on
the internal resources of the organization, rather than external. This approach particularly seeks to build a
‘unique bundles’ of HR practices as a source of sustainable competitive advantage.
In order to have competitive advantage keeping key employees loyal is essential.
For an example, a luxury restaurant management provides a unique platform for employees where they
customize their kitchen based on the Chef’s needs & desire, this strategic HR approach is a core competence that
will make your employees feel like business partners.
Another example of using (RBV) approach in attracting & wining back employees who matters to your business.
A trading firm offers their key employee’s a comprehensive benefits scheme through providing flexible hours
initiatives which allows them to work from home; such HR practices acts as a valuable resource which will
reduce the threats of them leaving you and heading to the competitor.