Best Practice

The yield expected from successful human resource management (HRM) or development (HRD) differs greatly depending on where the organisation is based, its’ culture, resources, size and socio-economic climate. Therefore, it is imperative that the development and delivery of improved human capital via HRM is rooted in the needs of the organisation rather than opting for an ‘off the shelf’ closed option such as ‘Best Practise’ or high performance work practices. Theorists have yet to settle on a definitive model for best practise, which itself suggests a certain degree of flexibility is built into the interpretation of what it could be. Here lies the first contradiction to the pro best practise argument as these rigid principals are yet to be defined. Debatably, best practise principals should be enforceable regardless of the organisational context and strategy.

Effective HRM is, undoubtedly, influenced by factors which include culture, global, national and local context, size, wealth, product or service industry. These factors will determine the organisational strategy and influence how HRM is delivered within it. Schuler and Jackson (1987) argued the case for the Competitive Strategy to underpin the delivery of HRM with particular emphasis on cost, quality and innovation leading to firm performance. Theorists such as Storey (1992) and Ulrich et al (2005) endeavour to map how HRM is administered citing the importance of strategically aligned Business Partner’s and Change Makers who can readily covert to changing contexts and employment law. These HR models are contradictory to the best practise concepts of ‘one size fits all’ due to the requirement for in built flexibility and rapid change concepts.

HRM and its’ links to improved performance has, in itself, been difficult to measure. In Britain, Cully et al’s (1998) Workplace Employee Relations Study in 1995 lead the way by surveying a random sample HR professionals in 2100 workplaces. A further 28,000 employees also contributed to the study. The purpose was to identify, define and measure the contribution of HRM in increasing the engagement and motivation of the workforce, assuring optimum contribution and enhancing competence. The outcome was widely hoped to provide empirical evidence and give credence to the previous assumption that HRM contributes positively to the organisational bottom line. The secondary outcome was to provide a blueprint for the most effective practises that lead to monetary results. Unfortunately, the employee and the HR professional surveys were compromised by inconsistency how questions were posed leading to answers that were difficult to analyse, amongst other flaws. The results, though questionable, do indicate a tenuous link between the number of the human resource practices in place and the success of the organisation though it would be ambitious to conclude which of these practices are most successful.

Throughout the 1980’s and 1990’s, a raft of Universalists’ including Huslid, Pfeffer and Veiga championed the argument for gaining competitive advantage and increasing the productivity of any workforce by introducing a set of agreed principals regardless of the organisational context, cost of implementation and bureaucratic aftermath. They argued that either fifteen, twelve or, more commonly, seven human resource principals would cumulatively remedy and enhance the performance of the individual and the organisation. None of these principals were weighted as having more importance than the other and, arguably, the more complimentary processes imposed, the more successful and committed the workforce should become. It could be argued that, depending on the organisational context, the implementer could choose either of the fifteen, twelve or seven bundles of principals to suit their own purpose. Again, contradicting that ‘best’ is best if the choice of three bundles are in existence.

Using the example of ‘Job Security’, which features on Pfeffers’ seven bundle, Japanese car producer and advocate for the use of the best practise model, Toyota champions the principal for stable employment by ensuring that it takes a medium to long term view in its objective to provide continued stability jobs for its workers. This badge of honour was displayed in the 2004 Toyota Corporate Social Responsibility Report. Toyota is a large multinational organisation with an established reputation for providing good quality products by using lean production, highly automated and Tayloristic methods of manufacturing. Its relatively flat structure, efficient processes and seemingly endless resource enables this principal to be trusted by its’ employees and wider public. In 2004 the Japanese economy was emergent, though the automotive industry had began to plateau.

The Toyota employee was and is, in general, semi-skilled and reasonably paid. The idea of ‘a job for life’ is still viable in Japan today. Though this sentiment is commendable, this may not work for all. The same type of statement could not be trusted within many similar automotive companies based in the United Kingdom today. Public redundancies at Jaguar, Ford and Vauxhall and the downturn within the economy over the last seven years has seen ‘job for life’ ideology diluted. Greater emphasis is placed on flexibility, particularly when all companies strive to achieve higher performance with less people capability. This is representative of how principals for the best practise models can work in one context, but fail in another. Incidentally, job security does not feature in Huselids’ (1995) best practise list at all, again highlighting the ambiguity of each principal’s importance in isolation.

Superficially, these are positive principals in their own right that should fit comfortably into any unitary organisation. They demonstrate a commitment and interest from the organisation towards the employee, which will undoubtedly be well received, though pluralists may find the principals inflexible and non specific to the needs of the individual. Pluralists may prefer to move away from the ‘one size fits all’ approach towards principals which are grown from the cultural, political and economic aspects of their communities and diversities. If ‘best’ is best, companies who struggle to implement all of the principals equally would be seen as less likely to produce high performing work practises than their larger or richer multinational peers. In reality, these companies may find it easier to adopt a more configurative perspective enabling greater speed and flexibility to respond to legal, technological or political change. During these turbulent financial times it is maybe this speed and flexibility that assures competitiveness rather than blanket processes or expensive procedures. Jackson and Schuler’s (1995) investigation into HRM included analysis of the flexible workforces and quality improvements and indeed, according to Harrow (2011) during our current global economic situation, performance management practises should to be kept simple and fast. He expands by agreeing that only the ‘…best of the best…’ should be selected and that activities should be given ranking of importance in order to determine quantity of resource given to each.

Huslid (1995) sought to provide empirical evidence in support of the high performance work practices argument when he used advance statistical techniques to analyse 968 US firms to determine the effectiveness of the contribution of HRM. Huslid found that attrition fell by over 7% and that the employees’ sales potential rose by $27,044. What is missing from this organisational study is the economic, global and internal context. There is no evidence that these companies would not have performed as well should a different set of positive principals have been applied and therefore, though HRM contribution is tangible, the success of these companies cannot be definitively linked to best practice principals. Guest (1997) summarised that the Huslids’ study had ‘…concentrated on assessing the link between practices and performance with increasing disregard for the mechanisms linking them’ for example processes and procedures already in place or the quality of the line manager capability.

Dickes’ (2006) case study observes that within Shell Plc after much time and monetary investment in standardising HR systems, some line managers were not sharing knowledge and communication was poor within their hierarchal structure. The study recognised that some employees were resistant to change regardless of which best practise principals were in place. It is implied that, with the same standardised processes within the same company, some areas thrived and some failed. Crucially, the report suggests that ‘what works in one country or region won’t work in another’.

A further theoretic school of thought suggests that a contingency approach to HRM, referred to as ‘best fit’, may address issues that may sit out of the ‘best practises’ reach. Advocates include Waiganjo (2012) p65 who describes the principal as ‘…integrated with specific organisational and environmental context….vertical integration of the business objectives…’. Schuler et al (1987) adds that horizontal alignment to process and procedures also describes best fit. Arguably, the variability of best fit makes it impossible to measure as it flexes accordingly to situation. It is this
flexibility, in opposition to the rigidity of best fit, that assures it’s popularity.

Within THE COMPANY The Company Plc in Harrow best practise policy and procedure exist, though the extent to which is it applied over recent years, particularly prior to the 2010 announcement of pending government spending cuts to the customer Ministry of Defence (MoD), suggest that they are rhetorically rather than realistically administered. Many of the procedures linked to best practice, such as performance related pay, are carried out by the line manager. This can lead occasionally leads to inconsistent deployment of process which, in turn, leads to the deterioration of the employees psychological contact in a highly unionized environment when fairness is tested regularly thus countering the intention of motivating the employee.

Today, rather than focus on the best practice policy and procedure, HRM moves towards a ‘best fit’, evolutionary strategy geared specifically towards demonstrating to the customer and employees a move away from complacency and towards efficient and cost/quality focused production. HRM effort is now placed on growing scare skills in house, identification of scare skills and human capital, transferring of knowledge and ‘right first time’ delivery , linking both vertically and horizontally to the cost and quality enablers on the business strategy. Some of these principals maybe perceived as elements of best fit and resource based view (RBV) theories. The HRM overarching effort is placed on managing change in order to build an environment where business debilitating issues such as excessive, patriarchal hierarchies than impact on communications, trade union strong hold’s and ‘cul-de-sac’ soldering workforce mentality maybe remedied. Best practise methods alone cannot suffice with so many obstacles to navigate.

To theorise, the lack of empirical supporting knowledge coupled with the multiple definitions of what HRM should entail initially make if difficult to support the pro best practise argue though best practise principals should be viewed as positive with an acknowledgement that they would have an agreeable impact on motivation and engagement of employees. The use of these principals in isolation without regard to the culture, context and cost detrimentally narrow the focus inwardly of HRM and so further development and testing is required, with theorist such as Guest (1997) providing insight into what the next study should entail. Some HRM and HRD models, including as TBV or best fit, have built in mechanisms to review the context of the organisation and weight the resulting HR effort accordingly to the findings.

Leave a Comment

Your email address will not be published. Required fields are marked *