HRM & Organizational Performance Using Best Practice
Best Practice can be defined as a management idea which suggests that there is a technique or a method or a process or an incentive or even a reward that is more effective at giving the particular outcomes than any other method or a process or technique. The idea of best practice is that with the right checking and testing the desired outcome can be found with fewer problems and complications.
Best Practice can also be described as the most efficient and effective way of doing or completing a task which is based on a procedure that has been proven themselves over a giving time period for a number of people. The notion of best practice is not new. As Frederick Taylor(1911) said nearly 100 years ago that “ among the various methods and implements used in each trade there is always one method and one implement which is quicker and better than any of the rest ”.Best Practice is an approach that is based around continuation of learning and improvement, which basically helps in the human resource management and organizational performance. Link Between HRM & Organizational Performance Using Best Practice Organizational Performance still continues to be one of the most crucial processes within human resource management.In a today’s world the organizations are competing to be the best and to become ’employers of choice’ which hope to attract the most talented and the brightest individuals ever, corporations or organizations need system to motivate and encourage their employees to maximize their performance towards achieving the organizational goals.
The organizations that use performance management systems can perform more effectively and efficiently. Organizations which manage the performance (by using the best practice) of their employees effectively are more likely to perform much better than their competitors. Ramsay H. , Scholarios D. , Harley B. , said “ employees and high-performance work systems: testing inside the black box”Some argue that these techniques together have the potential to motivate the individuals within the organization and their work groups to evaluate the effectiveness and the efficiency of all the activities and functions of HRM and also to provide the organization with a strategic advantage in their continuous pursuits of competitive goals and objectives and as well as imperatives.
In recent years there has been an increased interest in the concept of best practice human resource management.This is also referred to as high performance work systems or ‘high commitment’ human resource management(Walton 1985); or even as ‘high-involvement’ HRM ( Wood 1999). The idea is that a number of human resource activities have the potential to improve the organizational performance for all the organizations. A lot of studies have been conducted regarding the connection or the link between the human resource management and organizational performance, but despite the output it is still very difficult to draw a standard conclusion from these studies or findings.
Some components or elements regarding best practice with human resource management and organizational performance would include the following:- • Employment security and internal promotion: Pfeffer(1998) see one of the most important HR activities because companies can not ask their employees to produce ideas or can not ask do to hard work of give loyalty to the organization without giving something in return. But there some limits to the safety provided that how much of it is granted to the employees of the organization.In different studies, employment security is defined in different ways and the methods used for these elements of HR are differentiated from each other depending upon that whether the information regarding them is a policy or a practice. Wood and Albanese(1995) included 3 of these measures they are as follows: 1.
a policy of no compulsory redundancy 2. use of temporary workers 3. an expectation on the part of the top management that the new recruits will stay in the firm.Pfeffer(1998) says that the compulsion of lay-offs and downsizing under goes employment security and then he provides us with these alternatives: 1. reducing wages to reduce labor costs 2. freezing recruitment to stop from over staffing 3.
putting production worker into sales to build up demand • Selective hiring and sophisticated selection: Boxal( 1996) says that recruiting and maintaining outstanding individual is been seen as an effective way to achieve advantage over the competitors.Wood and Albanese(1995) found that there are 2 qualities that mostly are looking for in the recruits. And they are: 1. commitment 2.
trainability The proxies that is used to measure selective hiring are as follows: 1. Delaney and Huselid(1996); the no. of applicants per position 2. Huselid(1995); the proportion administered an employment test prior to hiring 3. Hoque(1999); a sophisticated selection process and realistic job preview.• Extensive training, learning and development: Boxal( 1996); when the new recruits are employed, the management need to ensure that these individuals should stay ahead in their fields not only in terms of professional expertise and the knowledge of the company’s product but also in team working as well as in interpersonal relations.
• Employee involvement and voice: Marchington and Wilkinson(2005); there are many reasons why employee involvement is important: open communication about financial performance it ensures the employees as well as they would be treated in a open and positive manner. 2. for teamwork to be successful employees require info so that they can provide ideas and contribute towards organizations performance and improvement. 3.
due to the participation of the employees it can provide the management some legitimacy for its actions. • Self-managed teams/ Team working • Organizational performance • Reduction of status differentialsThere are a lot of links between human resource management and organizational performance using the best practice; for example: Employees of an organization will more likely welcome involvement and information sharing from the management if they know that their job is secured for the future and if it is status free without include any kind of discrimination against them.Another features of best practice is the presence of reword systems for employees in organization, for example, in employees efforts are rewarded with performance related incentives or share ownership in the organization or company training opportunities is likely to motivate them to work hard to achieve target. Another example that links human resource management and organizational performance by using best practice. If we take up employee motivation which would include the proportion of the workforce with the performance appraisal connected to compensation.
the output for this would be labor turnover, productivity and as well as financial performance.But there are some studies regarding human resource management and organizational performance using Best Practice which have not escaped criticism. Which suggests that the employers or the management of the organization should be cautious when interpreting the results especially when scores are dependent on self reporting of the employees. It is somewhat impossible to differentiate that the best practice human resource management has led to improvement in performance or not.
It is always seen that there are some contradictions between ‘ best-practice’ in one area of the organization and in another is it considered to the ‘worst-practice’. The employees of the organization soon start to see these differences and then they pin point towards the inconsistencies between the organizations policies and the workplace practice. Basically no coherence remains between the HR activities in different parts to the organization.Wood and de Menezes(1998); most studies indicate that there is a lack of consistency, reporting fragmentation, ad-hocism, pragmatism etc. rather than the deployment of consistent, integrated and long term packages of HRM. Lets look at an example: one HR officer recommends to hire a individual of a certain profile in for example in the finance department where as in another department like marketing they lay-off an individual with the similar qualities.
Huselid(1995); drew a conclusion after a survey of 1000 organization in the United States, he divided best practice in to 2 categories 1) employee skills & organizational structures and 2) employee motivation. Conclusion In recent years there has been an increased interest in the concept of best practice human resource management. which is also referred as high performance work systems or ‘high commitment’ human resource management or even as ‘high-involvement’ HRM.The idea is that a number of human resource activities have the potential to improve the organizational performance for all the organizations. There are a lot of links between human resource management and organizational performance using the best practice.
A main point about Best Practice is that practices conducted individually can not be implemented effectively but combining practices into a coherent bundle is what that matters and it is most effective.