Best Fit vs Best Practice

The terms ‘best fit’ and ‘best practice’ are used in strategic human resource management literature. The best fit approach refers to the firm using human resources management (HRM) to their particular strategies and adapting to the firm’s condition and the environment referring to workforce character and business strategy. With the use of the Best Fit Approach the SHRM can become more flexible to the response change of the organizational life cycle: start-up, growth, maturity and renewal/decline.
For example, Met Wholesale had chosen low cost strategy to sustain its position in merchandise industry. Thereby under this approach supportive HR practices like employing part-timers, fresh graduates, and by applying training systems will be applied. The outcome will be that the operation cost will be reduced and they will achieve its goal. On the other hand the Best Practice approach speculate that there is a exact set of HR practices that are applied in almost any organization context which helps in the increase in performance to deliver outcomes which may be valuable for all stakeholders particularly employees.
It is based on the idea that there is a set of best HRM practices and its application will help to superior organization performance. This practice could be source from other competitor’s successful strategy. For example, emphasizing the enhancement of employees’ abilities or knowledge and skills through good recruitment and strong training. Another can be through incentives and a reward system; the firm can place emphasis for motivating desired behaviour.

Also, by better trained and motivated employees they would have more contribution of ideas and participation. What separates the two approaches, is that the Best Fit relates to firms’ competitive strategy where the SHRM will be designed according to the firms condition and the environment, where as for Best Practice, the firm is able to refer other firm’s successful strategy or general best practice model to improve the firm itself.