Best fit and best practice perspectives are used in strategic human resource management and applied to the field of the specific policy of reward systems to determine the long-run performance of a corporation. The best fit perspective provides that a corporation's reward system should be linked and aligned to support the organization's strategy to achieve competitive advantage. The best practice, on the other hand, provides that there is a bundle of human resource policies such as employee attitude, high skills level, enhanced quality and efficiency including reward system that enhances motivation and commitment which help the organization's competitive advantage (Armstrong & Taylor, 2014).
These two perspectives aim to achieve high performance in organizations by matching human resources strategy with that of the corporation. The best-fit approach focuses on the close alignment between organizational strategy and other systems because organizational strategies specify the companies' goals, objectives, culture, and performance levels. The best practice acknowledges the importance of business strategy on performance by providing that human resource practices should be complimentary. These two perspectives also acknowledge the need for staff in any organization they have specific strategies on recruitment, selection, hiring, procedures and staffing (Albrecht, Bakker, Gruman, Macey, & Saks, 2015). These two approaches support the fact that human resource plays an important role in organizational strategy and objectives. They provide that external competitive reward packages enhance employees' loyalty and satisfaction. In an attempt to promote the reward system, these two perspectives help in structuring an organization's culture (Albrecht et al., 2015).
These approaches also have differentiating features in that best fit is a contingency plan while best practice is a universal approach. Best fit employs the best decision making in devising the appropriate human resource strategies while best practice documents the benefits of human resource management across all contexts. The best-fit approach comes after organizational strategies while best practice provides a prescriptive set of practices and human resources needed to fulfil the objectives of an organization. These approaches also differ in their mode of payment because best fit regards payment as a motivator claiming that most people will perform better if their efforts are rewarded while best practice regard payment as a factor that prevents dissatisfaction and recognizes employees for their effort (Albrecht et al., 2015).
In conclusion, organizations should adopt an approach that is effective in their own situation in terms of context, objectives and demands of the stakeholders. No single perspective is designed to deliver success in all situations, but organizations should plan a coherent framework that reflects the business strategy that achieves the best competitive advantage.
Albrecht, S. L., Bakker, A. B., Gruman, J. A., Macey, W. H., & Saks, A. M. (2015). Employee engagement, human resource management practices and competitive advantage: An integrated approach.
Journal of Organizational Effectiveness: People and Performance, 2(1), 7-35. Retrieved from: http://dro.deakin.edu.au/eserv/DU:30071114/albrecht-employeeengagement-post-2015.pdf
Armstrong, M., & Taylor, S. (2014). Armstrong's handbook of human resource management practice. Kogan Page Publishers. Retrieved from: http://ebooks.bharathuniv.ac.in/gdlc1/gdlc4/MBA/eBooks/Handbook%20of%20HRM%20Practice.pdf
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