Table of Contents
Human resource is one of the most important assets in organization; therefore, proper management is very essential. Moreover, organization effectiveness depends on the quality of the workforce and their effectives. Human resources is a term used to describe the individuals who make up the workforce of an organization. Human resource strategies contribute and influence the kind of organization strategies that are used (Armstrong, 2000, p.52).
When developing human resource strategies, some factors must be considered namely organization's vision, mission, and goals. Moreover, the strategies should be inclusive of all groups of people in the firm. In developing an HR strategy, the company must analyze the characteristics of its industry, determine its competitive advantage, and identify key processes and key people. HR strategies are essential as they benefit the company, and improve employee satisfaction, further their success is derived from the strategies becoming coherent and consistent practices in the organization (Bamberger and Meshoulam, 2000, p.179).
The purpose of strategy is to maintain a position of advantage by capitalizing on the strengths of an organization and minimizing its weaknesses. Some types of strategies are growth, retrenchment, and stability strategies. There is need to develop a more focused and coherent approach to managing people in organizations, since there are rapid changes occurring. In developing these approaches, it will be essential to consider the kind of people in the organization and the programs applicable in developing and retaining the staff.
It has been argued that human resource practices lack coherence and consistency, this paper will analyze why design and implementation of strategic human resource lack coherence and consistency. Primarily it will also focus on how lack of understanding of best fit is causing lack of coherence and consistency.
Definition of terms
Strategy is defined as determination of purpose, goals, and long-term objectives of an organization and approving of an action plan and allocation of resources needed to facilitate achievement of the objectives. Human resource strategies (HRS) of an organization refer to the fundamental approaches toward its employees. Human resource development is a process that consists of series of activities that are directed to design behavioral change. Best fit or Contingency approach deals with the alignment of employment policy and practice with the adopted business strategy requirements (Wilton, 2010, p.64). This helps ensure the success of the business and drives the HR function that is previously synchronized with the business ideals.
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Strategic human resource management can be defined as the link between human resources and strategic goals and objectives in order to improve business performance and develop organizational culture that fosters innovation, flexibility, and competitive advantage. Coherence is a state attained when human resource strategies and practices are aligned in a manner that they support each other and promote their individual effectiveness (Kaarsemaker & Poutsma, p.4). Consistency is attained when the actions of an organization are consistent with the expectations of management, and these in turn are with the market and the context.
Thesis statement: The design and implementation of sets of 'strategic' human resource practices continues to lack coherence and consistency, primarily because the concept of 'fit' is still so little understood.
Concept of 'fit'
Generally, fit reflects the interactive role of HRM practices and their relationship with the organizational strategy. The individual, functional, and organizational level are some factors that determine types of fit. Horizontal fit refers to the congruence among the various HRM practices while vertical fit refers to the alignment of HRM practice with the strategic management process of the firm. When developing organization practices, it is important to understand that there are no universal policies and processes that can produce superior organization performance (Ashton and Sung, 2006).
Moreover, design of appropriate HRM practices has lacked consistency due to the over-emphasis of best practice approach of HRM. Indeed, the model emphasises a 'tight fit' between organisational strategy and HR strategies, it completely ignores the interest of employees, and hence considers HRM as a passive, reactive and implementations function (Marchington, 2000). 'Fit' makes the organisation inflexible, incapable of adapting to required changes and hence 'misfitted' to today's dynamic business environment.
The internal fit has two categories, one focuses on the degree of coherence among HR policies and practices themselves, the other focuses on creating synergies between HR policies and practices themselves and between HR systems and other organizational systems (Martin, n.d, p.7).
Understanding of 'best fit' result to coherence and consistency
The best-fit contingency approach lays emphasis on other external environment and its interaction with an organization. Therefore, the appropriate strategies can be developed depending on individual circumstances of an organization. This is contrary to best practice approach where it is assumed that there exist universal best practices which can be applied to any organization across the board and produce superior organization performance (Mess, 2004, p.1). It is evident that some practices yield good results in one organization but fail in another. These can be attributed to the factors like organization culture, management style, technology, or working practices.
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Therefore, to attain coherence and consistency, the organization has to select most relevant policies that can fit with its organization culture. By use of best practice approach, the organization does not consider the unique factors in their firm hence lead to lack of consistency.
There is need of understanding external fit/ vertical fit; much consideration should be done in order to align human resource policies with competitive advantage (Wilton, 2010, p.64). Subsequently, the understanding of horizontal fit or internal fit ensures that human resource strategies are designed as a coherent set since it is concerned with extent of coherence and consistency of strategies. Besides the understanding of horizontal and vertical fit and their mutual relationship is promoting consistency and allows managers to strive to attain both fits hence coherence and consistency (Schuler & Jackson, P.391).
Moreover, horizontal fit also known as internal fit facilitates the integration of HR policies and the overall organization's goals. Therefore, the lack of understanding of horizontal fit bring rise to lack of consistency during the implementation of the strategies (Armstrong, 2000, p.52). Whenever an organization is designing and planning any strategy it is crucial to understand the appropriate strategy that fit the type of organization at hand.
In order to attain high levels of fit, bundling of both internal fit and external fit is necessary. Organizations that manage to bundle both fits are able to attain coherent and consistent human resource strategies. Further, through the holistic model organizations are able to recognize the role of the workforce and influence the determination of organization strategies (Boon, et al, 2009).
Coherency can only be attained if the organizations take into account its particular organization needs hence develop strategies that fit their structure. Moreover the understanding of bundling the different types of fit promotes coherency (Armstrong, 2000, p.52). Much emphasis should be laid on integration of human resource policies with the organization goals (Wilton, 2010, p.64). In understanding best fit approach, consideration of the stage or development level of an organization can be done, hence the appropriate strategies can be employed.
Understanding of 'best fit' does not necessarily result to coherence and consistency
Conversely, lack of understanding of 'fit', is not the only factor that contribute to lack of consistency and coherence in design and implementation of strategic human resource strategies. The best-fit approach has some limitations and there are other factors that can cause lack of coherence and consistency. Primarily, there are other external forces that promote coherency other than best fit they include quality and competencies (Armstrong, 2000, p.54).
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Moreover, the best-fit approach has a limitation in that it does not give the interconnection relationship between various variables and the impact of changes in one of the variables. The relationship between, human resource strategies, competitive advantage and the environment is crucial in determining effectiveness of strategies. In addition, Bundling is essential if an organization is to obtain coherence in its strategies (Armstrong, 2000, p.52). Bundling is the ability to combine the external fit and internal fit, which leads to high performance and attainment of high levels of fit. The ability of an organization to bundle its policies also influence their coherence and consistency.
Due to the dynamic and constant changes occurring in organizations, the organizations cannot be very flexible to adapt to every change happening. Lack of flexibility to the changes in the environment will eventually lead to lack of coherence (Wilton, 2010, p.67). Moreover, the contingency approach is based on some assumptions that management and workforce have similar goals, best practices to manage workers vary from one organization to another. Therefore, the understandings of best fit will not bring desired results since the assumptions in the approach might cause failure.
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Subsequently the best fit is not easily attainable due to the complexity of organization structures.
The human resource is a fundamental aspect in any organization as they contribute to achievement of competitive advantage, and adding value in an organization (Armstrong, 2000, p.57). When using the best-fit approach the organization is able to evaluate its culture, structure, technology in order to come up with a proper strategy. Consistency and coherency of strategies is paramount for success in any organization. In order to achieve coherence and consistency an organization need to understand best-fit actual design of the HR practice depends to some degree on unique organizational contexts. Nevertheless, the understanding of best fit is not the only factor that can help organizations to achieve coherence and consistency.
The best practice can be used in combination with best fit, initially best practice can be used to identify possible practices, then best fit can refine the selected practices to identify which fits best with the organization structure (Holbeche, 2009, p.144). Coherence can be attained by if strategies can be formulated on the basis of the organization goals and clearly stating the roles of the human work force (Armstrong, 2000, p.52). Best practice also known as benchmarking approach is based on the assumption that there is a set of best HRM practices and that adopting them will inevitably lead to superior organizational performance.