Discussion
The ideologies of Best Fit and Best practice in the context of Strategic Human Resource Management have been discussed here indicating the benefits and limitations of these two models. Furthermore this essay also accomplishes a detailed analysis of how these two SHRM practices have impacted the retail business of Coles in Australia.
The perspective of Best Fit claims that the strategies involved in Human Resource management of an organisation becomes more effective when they are closely linked with the business environment. This model tends to explore the inter-link between the strategic management and HRM by assessing the level of vertical integration existing between the business strategies of the company with the HRM policies, standards and practices. On the other hand Best Practice implies that best HR management practices in an organisation would result in prolific development of organisational performance. The change brought about as such, is manifested through improvement in the attitude of the employees towards their work goals, reduction in the rate of absenteeism, reduction in the rate of employee turnover and lastly enhancement of skills s leading to higher productivity with enhanced quality. This is how the Best Practice or the High Commitment Model is of utmost significance and importance to the companies. In the course of analysis of these two important SHRM practices, the ways in which these two HR models have impacted the organisational development of Coles Supermarket of Australia have been highlighted.
Both Best Fit and Best Practice models are inclined to help an organisation to achieve highest impact in their performance. Austin and Stuart (2015), implies that these two models are matching in the sense that they align the HRM strategies with the concerned organisation’s objectives.
The Best Fit SHRM model emphasizes that organisation’s basic strategy is closely aligned to the other systems. In this context, Booth and Carroll (2015), discusses that every organisation should start their business campaigns with a predominant business strategy because a proper business strategy acknowledges what an organisation wishes to accomplish, the kind of behaviour it expect s from its employees in that context as well as the nature of performance the employees of a company should demonstrate in order to meet the goals of the concerned business campaign. In contrast, the theory of Best practice also delineates the importance of a business strategy regarding the accumulative performances of the employees and other stakeholders.
Both the concerned SHRM models are similar in that both of them clearly identifies what is needed of the employee base of a company for achieving the organisational outcomes. Both of the concepts are hypothecated to the common urge that employees are of critical importance for the achievement of the goals of an organisation. This is why, both models in turn puts stress on the staffing as well as hiring needs as well as the procurement procedures of the companies. According to the opinion of Brea?Solís, Casadesus?Masanell & Grifell?Tatjé (2015), the HR processes like recruitment, selection, staffing as well as testing are provided an equal importance. Although, the models do not show unanimity over identification of best practices that complement the aforesaid processes, a general link, as identified by Eccles, Krzus and Ribot (2015), provides that selective hiring, security of employment, extensive and rigorous training, an organisational structure that encourages and engages the employees in the business project of the company and lucrative payment helps to keep any organisation ahead of competition in any industry. In the words of Johansen et al. (2015), another important prospect identified by both models is rewarding the employees for the best implementation of each of the approaches of the organisation.
According to Malik (2018), externally competitive pack ages of employee rewards are very crucial for retaining as well as appraising the qualified employees who undertake major portion of the workload to accomplish the deliverables of the company. This scenario is particularly reflective in the case of the Australian retail industry. The amount of competition among the few major retail brands of Australia like Woolworths, Wesfarmers and Coles and so on is very high. Naturally, the threat of employee turnover is high, since the companies are very proactive to screen the potential and most delivering employees engaged with other firms. Nevertheless, the externally competitive system of employee rewarding in the outlets and inventories help in satisfying the most valuable employees in the company. At the time when the employees compare the rewards that they receive from the company against their services, with that received by other employees in similar positions, they feel that they are in a beneficial position within the industry.
Ramalingam, Laric & Primrose (2014), have however argued that the Best Fit is more of a contingency approach. On the contrary, Best Practice is a universal approach. Best Fit, as an approach, advocates the most impactful Human Resource policies that syncs in properly with the environment of the organisation. According to the definitions of Styles, Schoenberger & Galvez-Martos (2015), the predominant contingent factors that can potentially influence the HR strategy in retail organisations are size of the company, kinds of technologies applied, geographic locations, the labour market in the associated business environment and finally the economic condition of the company. Coles Supermarket have payment discrimination depending on the living cost of the cities. The labour market if not extensive in all parts of Australia. In places like Eastern and South Eastern Australia where the labour market is thin, the Coles Company focuses on employment of casual workers. The consolidated training procedure of the company helps to raise the expertise level of the employees easily. This is how the company becomes successful in opening branches in the remote locations also and gain maximum percentage of the customer base.
In case of the best Fit policy, the organisational strategy comes first which is followed by organisation’s system as well as practices. On the contrary, Tandon et al. (2015), professes that practices comes ahead of strategy, however providing whatever HR needs requirement for the fulfilment of the organisational outcomes. In case if an organisation is following the Best Practice model, the organisation beforehand identifies the best Practices and then measure the performances and rewards the champions. However, this differs from the Best Fit model whereby the HR managers at first identifies the external fit against the Operational/marketing strategy appointed by the company and then aligns with the HR policy and strategy. In case of Coles, the HR management of the company prefer to conduct a highly rigid employment and employee selection structure. The company identifies how the recruitment processes are conducted in t5he other companies and in case of selection of experienced candidates, the employee’s appraisal certificates and key skills are witnessed and tested. Hence, it can be concluded that in the context of the recruitment process, the company prefers to follow the Best Practice model. This provides a subtle implication that when the competitive nature of the market is high and there is high chance of segmentation of the customer market, it is evident that Best Practice model is the mostly effective in comparison to the Best Fit strategy.
Best Fit highly recognizes payment as directly linked to employee motivation. As per, Turner & Clegg (2014), the Expectancy Theory is implemented in this model. This theory endorses the belief that people in sales network tends to maximise their efforts if they believe that their efforts would be paid for. In analogy Urban (2018), have opined that the Best Fit model recognises payment as a more poignant factor to restrict dissatisfaction among the employees along with sending a recognisable message that the work of the employees are valued by the organisation. Employee rewarding is not all professed by the process of Best Practice. According to the views of Watson, Wood & Fernie (2015), exclusive reward system can destruct the interrelationship among the employees that is at the heart of best performance by the retail sales teams and overall organisational commitment. The companies following Best practice, promotes a system of employee rewarding that which do not generally mess with the compressed payment bands, endorses the policy of equal pay for all and allows collective incentives scheme.
Coles have been seen to implement the process of Best Practice generally in regard to payments. They seldom acknowledges the work strength of individual employees with material rewards. On the contrary they offer an equally broad platform for earning performance based incentives to the employees. The managers or the supervisors of the work groups gets accumulative incentive amount based on the performance of the sales team(s) delivering under them. The higher managers gets incentive based on the overall sales performance of the outlet.
According to Boxall & Purcell (2015), there are two major aspects of strategic human resource management including the strategic fit and best fit. The strategic fit refers to the two major dimensions associated with the connection created between the management of human resources and strategies associated with the management of business functions and processes within the organization. The strategic fit is also considered as an effective way of managing coordination between the various human resource management practices along with the improvement of business operations and processes’ efficiency at Coles, Australia (Boxall & Purcell 2015). While the strategic fit enables consideration of contingency approach where the HRM policies are linked with the strategic resources and functions for maintaining a holistic approach, furthermore create a better link between the dependent and independent variables. Considering the various issues and complexities related to the management of human resources and implementation of strategies at Coles, Australia, and the company should make effective strategic choices not only for the purpose of ensuring successful functioning but also for mitigating the contingencies through the adoption of the most suitable practice for managing the human resources properly (Cania 2014).
As stated by Boxall & Purcell (2015), the best fit enables managing the HR activities related to the structure and systems all throughout the various stages of the development life cycle. The best fit has enabled managing the flexible styles of human resource management, furthermore the management of professionalized styles, which has often become of the major causes of increasing the numbers of employees and improving their skills, knowledge and expertise too (Boxall & Macky 2014). Gannon, Roper & Doherty (2015) stated that the best fit approach to strategic HRM has also helped in coping up with the complex issues arising between the coordination and decentralization while managing diversification among the organizations. The most effective best fit model has defined the external fit that can allow the organization to gain competitive advantage and at the same time, the business performance would enhance, thereby resulting in reinforcing the organization’s choice of cost or product differentiation at Coles, cost leadership and prioritizing on creating a competitive edge over its competitors (Gannon, Roper & Doherty 2015). Boxall & Purcell (2015) argued that the best fit model for practice has also aligned the business processes to fit with the previous competitive strategies and for ensuring better flexibility in terms of the level of skills, knowledge and expertise obtained to cope up with the various issues in the future.
Based on the statements provided by Farndale, Brewster & Poutsma (2014), the human resources strategy should create an impact on the competitive goals and objectives as well as ensure that the processes of recruitment and selection are successful along with roper motivation of workers through training and developmental sessions at Coles, Australia (Farndale, Brewster & Poutsma 2014). This has created the ability among the organization to encourage the staffs and thus the best fit has been facilitated with the development of skills and knowledge for creation of new business capabilities along with adjusting with the technological advancements to improve the level of customer services, furthermore create higher level of satisfaction among the customers.
On the other hand, the best fit approach to strategic human resource management, on the other hand, focused on the security regarding employment of individuals, selective hiring or recruitment, self-managed teams and managing compensation of workers based on their performances. According to Alfes et al. (2013), the best practices also include providing necessary training to them for facilitating their skills, knowledge and expertise to create a motivated workforce and form a great culture where people can work in coordination and as an unit at Coles in Australia (Alfes et al. 2013). The best practices to strategic HRM also has included the various ways of sharing and exchange of information, which has also improved the communication process along with the betterment of teamwork and coordination among the workers to achieve the business goals and objectives with much ease and effectiveness. Bal, Kooij & De Jong (2013) stated that the communication process has enabled two way processes, which has made each and every members of the organization informed about the business related aspects along with the updated policies, laws and rules to be followed at Coles to smooth business functioning. The best practice approach focused more on the development of high performance work systems with the various strategic HR practices required to improve the organizational performance largely (Bal, Kooij & De Jong 2013). This also includes the management of internal career ladders along with the arrangement of formal training systems and results oriented appraisal and performance based compensation structures. The security of employment is managed and the consideration of employees’ opinions and ideas have further assisted in the process of decision making and deliver the best for benefiting the organization to the utmost level possible. While these are the basic speculations of the best practice approaches to strategic HRM, the best fit approach focused primarily on the contingency theory to ensure that the HR strategies remain inclined with the circumstances of the company.
According to Therioub & Chatzoglou (2014), the best fit approach has been perceived based on the vertical alignment of the organization operations with the HR related strategies with the consideration of competitive strategies, strategic configuration and lifecycle. The best fit strategies have provided various benefits to the organization by enabling innovation, which has allowed Coles to become a unique producers and even delivering the best quality products and services for customer satisfaction (Theriou & Chatzoglou 2014). The cost leadership strategies were implemented to reduce the cost of operations while the policies and procedures aimed at managing the costs by maintaining a proper budget through without compromising on the production of good quality products and services. The best fit model or approach to HRM also has aligned the human resource strategies with the organizational strategies, which has allowed the organization to implement the right HR strategies at the right circumstance and this has even created a positive impact on both the organizational culture and the business operations and processes. Based on the information provided by Boxall & Purcell (2015), it could be thus demonstrated that the best fit approach has been considered as more effective, because of its efficiency in aligning the HR strategies with the organizational strategies for focusing on both the needs and preferences of the organization and its employees.
Conclusion
In conclusion it can be stated that it is not possible to select any one SHRM policy as ideal over the other. There are variety of perspectives associated with the perception through which the researchers in empirical findings have described the best organisational out comes with alignment to both the models. Nevertheless, when the pressure on the marketing and sales domain of a company is high the Best Practice method generally works in favour of the company. The policies undertaken by HR management of Coles Supermarkets for ensuring business proficiency shows that the process of Best Fit requires extensive market research to undertake and mostly favours a company during the conditions of market entry preferably. At times when the company is operating in a known atmosphere and the rival players are also known to them, then Best Practice seems to work better for organisational success.
Reference List
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