BEST FIT AND HRM

LECTURE 3

LECTURE OUTLINE
DEFINITION OF BEST FIT/CONTINGENCY APPROACHES
DIFFERENT CONTINGENCY APPROACHES TO HRM
LIMITATIONS OF BEST FIT APPROACH
CONCLUSION & DISCUSSION

DEFINITION OF BEST FIT

VARIETY OF HRM POLICIES & PRACTICES ACROSS
ORGANIZATIONAL LEVELS, OCCUPATIONS, FIRMS,
SECTORS/INDUSTRIES AND SOCIETIES.
CONTEXT-SPECIFIC HRM & ADAPTATION TO DIFFERENT
ENVIRONMENTS IS NECESSARY FOR PERFORMANCE AND
SURVIVAL.
THERE IS NO SUCH THING AS AN IDEAL SET OF HR
PRACTICES THAT CAN BE APPLIED ACROSS THE BOARD TO
IMPROVE ORGANIZATIONAL PERFORMANCE

BEST PRACTICE VS. BEST FIT

UNIVERSALISM VS. CONTINGENCY THEORIES

INTERNAL/HORIZONTAL FIT VS.

EXTERNAL/VERTICAL FIT

CONTINGENCY VIEWS OF HRM 1

Business Growth

Informal
HRM

Formal,
systematic
HRM

Initial
StagesHCM,
Later StagesCost Cutting

TIME

Decline

Maturity

Growth

Start-Up

Stages of Development/Organizational Life Cycle Model

HR FunctionDiminished or
Disbanded

CONTINGENCY VIEWS OF HRM - II

STRATEGIC
CONFIGURATIONS & HRM
- DELERY AND DOTY
(1996) BASED ON MILES
AND SNOW (1978)
DEFENDER
PROSPECTOR

COMPETITIVE
ADVANTAGE MODELS SISSON AND STOREY
(2000) BASED ON
PORTER (1980)
COST MINIMISATION
QUALITY ENHANCEMENT
INNOVATION

STRATEGIC CONFIGURATIONS & HRM

Human Resource
Practices

Strategic Configuration
Defenders Internal
Employment System

Prospectors Market
Employment System

Recruitment

Great care over recruitment & selection.

Well-developed internal labour markets

Buying-in of labour to undertake specific

tasks. Tight performance
standards/expectations

Learning & Development

Extensive & long-term focus

Well-defined career ladders

Likely to be extensive
Personal responsibility for learning &
development

Employee Relations

Emphasis on co-operation & involvement.

Voice through grievance procedures &
trade unions

Emphasis on responsibility &

performance.

Reward Management

Clear grading structures and transparent

pay systems.

Pay determined by external market

competition
Bonus & incentive payments

Delery and Doty (1996) from Marchington & Wilkinson (2008)

COMPETITIVE ADVANTAGE MODEL

HR Practices

Cost Reduction

Quality
Enhancement

Innovation

Resourcing &
Recruitment

Ad Hoc methods, use of

agencies &
subcontractors. Tight
performance mgt.

Sophisticated methods
of recruitment &
selection. Induction &
socialization

Focus on core
competencies &
transferrable skills.
Agreed performance
outcomes

Learning &
development

Poor/non-existent
training in specific,
immediate skills

Extensive & long term

focus. Emphasis on
learning & career
development

Provided only if
necessary. Personal
responsibility for
learning

Employee
Relations

Little EI or
communications. Unions
tolerated

Well-developed
systems for employee
voice. Partnership
arrangements

Informal communication
preferred. Professional
associations

Reward
Management

Low pay levels.

No additional
employee benefits

Competitive pay and

benefits package.

Cafeteria reward
system. Share
ownership/profit
sharing

HR Function

Slimmed down, lacking

in influence

Work closely with line

managers. Potentially
large influence

Advice & support for

employees. Potentially
some influence

Sisson & Storey (2000). The Realities of HRM based on Porters

(1980) work

LIMITATIONS OF BEST FIT MODELS

DETERMINISTIC AND TOP-DOWN ASSUMPTIONS
MANAGERS ARE NOT OMNISCIENT AND
OMNIPOTENT
ONLY LINK BETWEEN BUSINESS AND HR
STRATEGIES ESTABLISHED, LINKS WITH
MANUFACTURING, SALES, R&D STRATEGIES ETC.
IGNORED
UNIT OF ANALYSIS IS THE INDIVIDUAL
ORGANIZATION

CONCLUSION & DISCUSSION

BEST PRACTICE
VS.
BEST FIT?