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Outline briefly what is meant by the Best Practice/High Commitment HRM paradigm, and critically review this as a way of looking at HRM. Provide examples from different practice areas of HRM to support your answer, and indicate clearly the key methodological issues that recent research has addressed.
The notion of 'High Commitment' HRM has been promoted as 'Best practice' by scholars and employers who believe that practices connected with this notion would help to improve an organisation's performance. The terms have been used interchangeably by different scholars who see them as practices that help motivate workers to grow and share their knowledge and skills. However, this area of HRM has been debated in recent years. Arguments have sprung forth as to which HR practice should comprise the high commitment bundle, their combination and synergy, how attractive they are to workers and employers alike and most importantly if the practices are universally applicable.
A prominent set of definitions of best practice is associated with Pfeffer's (1994) sixteen practices. These practices are summarised to include employment security, selective hiring and sophisticated selection, extensive training and development, employee involvement and participation, self managed teams, high compensation contingent on performance, reduction of status differences, performance appraisal and work life balance. The practices are to help create competitive advantage and improve performance of firms. Nonetheless, Boxall and Purcell (2000) maintain that if Best Practice is about creating sustained competitive advantage, only a limited number of firms would be able to attain it while others would be disadvantaged.
It is imperative to note the practices mentioned above cannot thrive in isolation. Rather scholars argue that they should complement one another. The complementary practices are regarded as the HR bundle which when combined helps to promote an Organisation's performance. For example, training is a requirement for self managed teams to function effectively. Also, in most Organisations, compensation is linked to performance. Furthermore, workers might be attracted to working in teams if they are convinced they would be rewarded with incentives and training opportunities and privileges. There is thus the belief that the more practices are adopted, the better for organisations.
Nevertheless, are these HR practices applicable in all organisations? I would neither say yes or no, but the universality of HR practices has been challenged by various national, regional, and local cultures. HRM practices might vary in different countries, sector, by size and ownership and what might work well in one country or sector might not succeed in another.
For instance, organisations adopting the innovation strategy would require very high levels of creativity; cooperative and risk oriented people. As a result the firm's HR practices might stress the need for selecting highly skilled people, use minimal control, allow and even reward failure, and appraise performance for its long run implications. On the other hand, organisations practicing the cost reduction strategy might design jobs that are quite repetitive; training of workers might be less practical; reduction of workers to the minimum to cut costs and lastly only reward high output and expected behaviour (Boxall & Purcell, 2003). This makes it obvious that Best practice fit differently with various organisations.
One important HR practice is employment security which claims that it is unfair to layoff an employee who is skilled, committed and hardworking. According to Pfeffer (1998), rather than lay off employees, companies should aim to reduce working hours to spread the pain of reduced employment cost, reduce wages to minimize labour costs and freeze recruitment to prevent overstaffing. While Pfeffer's argument is acceptable, it is important to note that there are limits to which employment security can actually be guaranteed. For example, an organisation facing collapse might be forced to reduce its work force. This should not be seen as undermining the principle of employment security. Many companies have been forced to make some cuts to their workforce as a result of the economic meltdown. Retailers like Mervyn's and the Circus city stores Inc. closed locations, some filed for bankruptcy, and others shut down completely. Even the large companies like American Express, Yahoo, Google, Motorola and Royal Bank of Scotland (one of the biggest victim of the credit crunch) have had to cut down on their workforce. Conversely, in Nigeria, massive job losses have become a shock therapy as organisations are cutting costs of inputs. In the last two month, over 4000 workers lost their jobs in reputable banks. What does that say of the HR practice of employment security as those who still got jobs cannot boost of it for fear of losing it soon. To me, the whole idea of employment security is now regarded as some form of rewards that employers give those workers who do exceptionally well.
Organisations also need to recruit outstanding and exceptional talents. This is considered critical for a firm and could be done through sophisticated use of techniques such as psychometric tests, structured interviews which are used to assess social, interpersonal and team working skills possessed by applicants. However, the practice of recruiting using sophisticated techniques and so on to get the best candidate doesn't apply everywhere. In some organisations, contacts and influence gets you a job you are not necessarily skilled for. There are many cases where vacancies are filled before they are advertised. Even some organisations in Nigeria hire new employees such as family and friends without really having vacancies and the need for them. It is therefore difficult for an individual with exceptional skills to get a job if he does not have contacts with some people in an organisation. For instance, it is possible to find some mangers with no managerial qualifications taken up jobs in certain organisation based on either referrals or who they know. This undermines the hr practices of recruiting the right people. In a recent CIPD Magazine, there was the case of an HR Manager at NHS, Kerrie Devine who was found guilty for lying about her qualifications and thus sentenced by the Exeter Crown Court. It baffles me because I wonder how she got on the job with three forged qualifications. Then again, it should be noted that the system of referrals and influence doesn't apply to all firms, there are still some organisations that use well designed interviews and aptitude tests and employ people who deserve a position.
Recruiting exceptional talents is not sufficient; these talents have to be given extensive training so as to remain relevant in an organisation. Companies such as the NHS, IBM, BP, and Rolls Royce spend lots of money on leadership programmes because they know the value of Training. Yet, others have come to adopt the practice of training worker as a way of fulfilling all righteousness (others are doing it so we have to do it too). Even when they do, what is the quality and relevance of this training? Do the organisations see them as short or long term goals to help boost performance? It is important to state that even within the organisation, the probability is that some workers would be trained, others might not. Also, in some places where it does apply, very little guidance is offered to employees in their effort to obtain new skills. In recent years, training has been used in organisations as a reward for employees who do not necessarily need them. In most organisations in Nigeria, training is usually tied to performance. A worker who does satisfactorily is rewarded and could be selected for a training programme. Though this is good, in some cases it is offered to those close to management who are sometimes non-performing employees and do not deserve it. Managerial judgement on who should go for training and who should not has become a norm. It appears that training to some organisation is regarded as a cost rather than an investment. Also, in cases of economic meltdown; it's one of the first items to be deleted from an organisation's budget. From my personal experience at work in a bank in Nigeria, I had very little training prior to becoming a customer service officer. Most of the learning and training I got was on the job. I practically had to learn on my own. However some organisations still value training and give enough opportunities to employees to take part in training sessions but they are rather few, an example is the multinational companies in Nigeria. Little wonder people are so keen on working in this MNC's.
Furthermore, Information sharing through open communication on strategy and performance help employees feels that they can be trusted and allows them to contribute ideas. It is considered as very important in some companies who take initiatives such as employee satisfaction survey, monthly management meetings and suggestion schemes. An example is Sainsbury who launched the "Tell Justin Scheme" and organised "The Big Pitch" in 2005 as a way of encouraging colleagues to put forth their ideas to improve the business. The Hr director for Sainsbury, Imelda Walsh agrees that employee engagement should be recognised in organisations in order to improve performance (CIPD November 2009).
While some recent studies agree that this practice is been adopted in some organisations, other studies state otherwise arguing that workers voice is often not recognised and ignored. In my opinion, due to the current recession, employees should always be kept informed. The process of information sharing is perhaps one of the most important HRM roles. At present, job security is been threatened as a result of the financial crisis and workers need to be updated about the status of the business and their fate. When communication channel is left open, it bridges the gap for HRM that would have widened if eventually retrenchment took place.
In addition, advocates of "Best practice" are also convinced that self managed teams would bring about greater ideas, ensure better decision making and provide better and creative solution to problems. This has been identified by different organisations as a foundation for success. However, although working in teams leads to the elimination of supervisors, some workers see the whole idea of teamwork as an "Iron Cage" where been in a team is awful because most of the time one person who probably doesn't have the greatest ideas dominates.
It has also been affirmed that compensation and rewards (bonuses, holidays, etc) help to attract and retain very skilled employees and keep them motivated. Well, in so many developing countries like Nigeria and Mozambique, what is applicable is that compensation and rewards are tied to status and longevity (increases as one progresses in the organisation) rather than on performance. From the journals I read, I gathered that organisations have different composition of reward package and that organisations that employ the reward system of performance related pay are more likely to attract problem solving and entrepreneurial employees than those who only offer basic salary.
Also, in a less progressive work environment very little attention might be paid to the care for workers. Some organisations take on relatively inexpensive programmes so as to ease the weight associated with employment and also show respect for their workforce while some others don't really care about the whole idea of work-life balance as they run inflexible schedules, inconsiderate system and management style. For example, a study of the Royal College of Nursing showed that a large number of nurses who were doing difficult shifts wanted to retire at the age of 50 because they did not have access to shift patterns and could not work part time on the same job level. (Torrington et al, 2005).
Lastly an HR practice not really recognised in all organisations is the reduction of status difference. While some organisations practice it by having common canteens, car park space, other organisations still hold on to the power distance between managers and common workers. In developing countries for instance, power distance is seen as important and should be respected; employees do not see it as a big deal as they perceive it to be a privilege for those who attain a certain level. Where I worked in Nigeria, the Regional Head and the managers had their car park space, they never sat with us to eat and it was not seen as anything extraordinary because it was the belief that they are entitled to it.
Most of the journals reviewed built on existing research on HR practices; data was collected through administered questionnaires, interviews and focus groups from managers and employees of different organisations. These organisations range from the auto industry, service sector, hospitals, and the banking industry. Both qualitative and quantitative methods were used in the analysis. Majority of the studies had different perspectives to the HR practices such as training, performance etc as the research varied from different organisations and sectors and what was appropriate in one organisation was not exactly appropriate in the others. The limitation however is that most of these journals did not compare big companies with the small companies as surveys was taking in mostly large organisations. Also, most of the journals didn't really go into the universality of these HRM practices.
The notion of "Best Practice" as it seems is only more in theory than in practice. Taking an in-depth look at them, one would discover they are only nice words and are hardly ever achieved. What applies in one country, sector or organisation does not necessarily apply in another. Also in case of crisis, organisations might tend to bend the rules in their favour or choose to ignore these practices.