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In human resource management literature two important terms or words are used they are Best fit and Best practice. Best fit and best practice are two views that dominate Human Resource Management. Best fit claims that in order to achieve organisations competitive advantage the firm should find the best or the right way of doing things and should be aligned to support the organisation's business strategy. However best practice claims that in order to achieve organisation's competitive advantage there are number of human resource policies including the reward (incentive) system that lead to highly motivated and committed employees who are in turn responsible in achieving the objective of the organisation..
Both the theories claim that human resource is playing an important role in achieving organisation's competitive advantage and objective. They also believe that reward or incentive practices should be consistent with other human resource practices. In order to attract appropriate employees and retaining employees there is a shared view that externally competitive reward system has an important role to play. Both see rewards and incentives with other human resource practices as way of reinforcing organisational culture and structure.
There are some important differences between best practice and best fit. In general best fit has a contingency approach and best practice has a universal approach. For best fit the human resources required to fulfil the organisation's objective is provided by a prescriptive set of practices, rewards, incentives which precedes strategy but provide the organisation with whatever required to achieve the competitive advantage and objective of the organisation. At a more specific level best fit has the ability to motivate individual behaviours through its reward system. This is supported with expectancy theory which says, a theory of motivation where people will do the expected job assigned to them with quality as performance will lead to valued rewards. Usage of variable incentives which are not consolidated into the basic salary package of the employee promote particular behaviour that are important in achieving organisational objective. Incentives gives that financial flexibility to the organisation and it depends on the overall performance of the organisation.
Jeffrey Pfeffer (professor from Stanford school of business) talks about seven principles of successful organisations. They are,
Recruitment and selection of new personnel
Self managed teams and unanimous decision making as the basic principles of organizational design
Organisational and employee performance based rewards
Extensive training and development
Reducing differentiating the employees based on status and removing barriers including dress, language, working arrangements and salary across all levels.
Sharing financial and personal information throughout the organisation.
However these practices may fit in some organisations and not all. So it is necessary to identify what fits in your organisation and adopt those practices to achieve high performance working. Adopting best practices doesn't give best results as it is the mixture of best practice needed for that particular employer and where it fits in the organisation.
Based on authors like Arthur(1992), Delaney, lewin, ichiniowski(1989) and huselid(1995) and macduffie(1995) HR practices in achieving high performance working . Defining the jobs broadly, ensuring full participation of the employees by involving them in all the activities conducted by the organisation. Sharing the information of the organisation within the employees and letting the employees know that they belong to the organisation truly and completely. Employing highly skilled workers by ensuring that the recruitment and selection process does not leave out any talent and also by keeping the job in mind while recruiting we can ensure right employee is matched to right job. Providing extensive skills training and development of existing employees. High wages and benefits for employees performing beyond expectations. Making employees believe that they belong to the organisation by providing stocks and shares.
By making sure that the dispute between the employee and employer, between two employees are minimised or erased by adopting proper grievance procedures. Assessing the attitude of the employee towards the organisation and the way he/ she looks at his/her job by conducting regular employee attitude assessment so that the organisation can try to change the attitude and make the employee move forward to achieve organisation's objective.
Working in teams so that any small idea can be developed into a significant one. Creating problem solving groups which can handle any type of problem within an organisation and give solutions so that everyone else is concentrating on their work instead wasting time on trying to solve problems within and across organisation. Asking the employees for their suggestions before taking any major decisions which will affect the organisation this will also make the employees feel good and respected.
Using all these practices may result in high performance working but it depends on where they fit in an organisation. as in competing with respect to low cost products or differentiation and labour market for these products. Smaller organisations competing on differentiation adopt different HR policies as compared to large organisations competing on being responsive to market variations. Below mentioned case studies can give vague idea of what it exactly is.
Autoglass is a major vehicle glass repair and replacement company in uk with around 2200 employees. Some of the key ideas or themes in autoglass are they have moved on from traditional satisfaction approach to focussing on employee engagement which has given them momentum to people management and also has shown the organisation how to measure success.
In general the approach of autoglass in High Performance Working and People Management is of 'Engaging our People so they give great service'. The above statement is supported by their adoption of employee engagement approach which was the result of previous staff satisfaction survey and involved the establishment of national employee engagement forum which is the main focal point for communication of views between management and staff in both the directions. This has been accompanied by making sure that the employee engagement survey results are known to the staff so that they can give inputs and take actions to improve the performance of the organisation. Earlier there was a communication gap between the results of the survey and staff and this has been
Leadership approach was adopted to people management where the managers are pushed to work with their team closely by engaging them and this was also implied to top level of the organisation. For instance if a Managing Director or Operations Director visit any of the branches they have a chat with technicians about how things are going and are there any work related problems and also sometimes make coffee for them which makes the employees feel good and gives them that extra confidence.
Another major development on the learning and development front has been the introduction of an accreditation system for the technicians called Automotive Technician Accreditation (ATA) initiated with the Institute of Motor vehicles Industry. This was established to improve the technical knowledge, skills of the existing employees and also to make sure that the work is carried out correctly and safely to meet the customer requirements. Autoglass owns a National Accreditation Centre where their technicians are well trained and assessed against the benchmark set by their best employees. Based on their knowledge, skills and experience technicians are accredited at one of the levels and their PAY is linked to this accredited level. Previously their pay was performance related which caused conflicts between the line managers and staff and other objectives of appraisal process were overshadowed.
The introduction ATA scheme made sure that the technicians performance was updated to make it relevant to the accreditation, and this was the starting point for introduction of performance review system for all the staff. The senior management felt that there was a need for motivated workforce so the HR team started speaking to the staff individually and explaining what their role is and what is expected of them whereas the previous method was more generic. The frequency of performance appraisal was increased from once annually to quarterly by introducing traffic light system for measuring performance and behaviour whereas in the past they were separating appraisals from the pay review. Now all the staff gets flat rate pay increase unless they are extremely high on performance and behaviours. Managers are advised to meet the staff on one to one basis in between the quarterly appraisal and this meeting does not have to be formal but can also be chatting over a cup of coffee or while doing work and this relates back to leadership a belief that managers need to know their staff in order to inspire them.
The benefits of these practices are, the rate of response to the first employee engagement survey is 87% much higher to the previously adopted staff satisfaction survey. Good staff retention including the call centre sector where generally service life is small. Survey conducted by the HR department within the organisation showed that the ATA scheme improved productivity and also helped the HR department to match the branch staffing better to workloads and minimise over and under staffing.
Macphie is a UK based family owned food ingredients manufacturer. The company for over 80 years has been providing premium, innovative food ingredients to bakery, food service and retail markets. Some of the practices which are adopted by the company are truly valuing and caring for employees with strong family values of trust integrity and honesty. Strongly believing in the potential of people and spotting the talent of employees recognising their aptitude levels and moulding or developing them so that they achieve best fit in terms of role. Macphie has now focused from being local to going global.
Macphie High Performance Approach is that it believes in Family Values as they explain by 'Family is the word. We believe everyone employed here is part of the Family'. Basic principles for achieving are Trust, Integrity and Honesty together with security where there is a general awareness that every other avenue would be explored first while there is not a formal no redundancy policy. There is an atmosphere of give and take policy so that the managers can use their powers to allow time off, while there is more tangible support to employees in the form of health assistance scheme and pension scheme with employee trust fund. So the employees are confident if personal issues arise the company would support them.
There is opportunity for personal development where people can grow and take on extra responsibility of the organisation while there are many instances of individuals starting at junior levels and working their way through to highly responsible positions supported by their external qualifications. Communication is a vital aspect for any organisation and here the company tries to be as transparent as possible by ensuring there is two way communications. The company's growth plans and developments are shared twice a year during the staff conferences and maintains totals transparency in profitability and sales. Team briefings, newsletters and consultative forum are all in place for managers to discuss issues and challenges to find best solution for any problem. Everybody within the organisation knows everything about the company. Being family organisation helps, they can see the links between what they do and how successful the company is.
Family feeling and equality is again showed during Christmas where the Macphie family serves Christmas lunch to the staff, then everyone sits together and everyone is same. These small things create a major impact in the long run. Managers are flexible in their work depending upon their teams and how to get the best out of them however they need to be careful about the disciplinary and other key issues like performance management and appraisal.
The benefits of adopting these practices are lowest level of staff turnover in the food industry, survey conducted indicate high levels of pride in both jobs and in the company overall. If your staff is well trained and enjoy the work they are doing they produce quality products and end of the day customers are benefitted through high levels of reliability.
Content and code is IT business solutions based software supplier and a small medium company. They develop information management software for business companies who can use the software to create new products, market, and distribute the products. They wanted to develop a new approach to their already existing High Performance Working practices this was resulted due to certain challenges like having to change functioning of the organisation in terms of processes and procedures in order to maintain success and one more main challenge was that many of staff from telesales team left the organisation because of unstructured management. The organisation was bad at managing people and as a result there were some cultural differences within the organisation and the staff were lacking that enjoyable working atmosphere.
The organisation started engaging the highly valuable workforce by introducing mutual benefits to maximise performance. Staff retention issue was addressed and they started attracting people by introducing bonus schemes. Organisation hired a professional to look into the bonus scheme issues. They started emphasising on team work, lack of hierarchy and building relationships between the employees and with the employees. Setting up of cultural environment through engagement by introducing policies like manager of the month and star of the month for the employees who performed exceptionally well and recognised their efforts. Sharing all the good news about the organisation and giving some kind of reward to employees who were good during that period and motivating them to achieve bigger and better things by introducing something called Fruity Mondays. Providing some kind of games within the office like table football for the staff to relax, flexibility in working and on the health side they provided gym membership, health and dental insurance. They introduced daily stand ups where everyone answers questions like what did I do? What challenges did I face? What will I do tomorrow? The performance management scheme which was introduced to maximise staff retention in sales department was developed with the help of an external consultant and interlinked schemes for fee earnings, sales and support staff. These schemes were designed to make sure that staff can earn extra money and help the organisation in attaining success. Communication gap was avoided as the directors would brief the team frequently and interviews and workshops were conducted to ensure all the employees were involved.
By adopting these practices the organisation was able to retain the employees and there was low dropping rate, excellent working atmosphere was achieved and the employees were enjoying whatever work was given, good financial gain, and eventually client satisfaction.