HR916 HRM in a Business Context - Assignment 1

Drawing on examples from academic literature, critically assess the claims made for 'best practice', 'best fit' and the 'resource-based view' models of HR

Best Practice

There is an universal set of HRM practices that will result in a performance or efficiency increase in all types and sizes of organisations.


  • Selective recruitment
  • Extensive training
  • Performance related pay (PRP)
  • Teamwork
  • Information sharing and communication
  • Reduction of status differences (eg. avoiding status symbols)
  • Employment security

Although there is a large consensus on the benefits of the best practice model, the specific method and implementation are extensive in variation[1:1][1:2]. Competing lists of 'best practices' have been produced by numerous sources[1:3][1:4]. The specific mechanism of performance increase from the empirical best practices results are also unproven theoretically.

Best Fit

Specific strategies which are best suited to the firm will result in the highest competitive advantage in terms of performance or efficiency.

Resource-Based View

Focus on the value of internal resources instead of the ever-changing environmental context.

Competitive advantage in the resource-based view is measured in four factors

  • Value: the inherent value of people, their skills and social networks with business partners and customers as well as their replacement costs

  • Rarity: value in skills which are in short supply, organisations with a steady stream of niche or high demand skills have a competitive advantage

  • Inimitability: the uniqueness of skills, lack or difficulty for a competitor to produce a cheaper "rip-off" version

  • Substitutability: difficulty in automating, replacing or compensating for labour due to skill level requirement or other factors

  1. US Department of Labor (1993) High Performance Work Practices and Work Performance, US Government Printing Office, Washington, DC ↩︎ ↩︎ ↩︎ ↩︎ ↩︎