What is best fit in hrm

1.Compare/contrast the essential differences between the best-fit and best-practices perspectives. How do these perspectives impact an organization’s competitive advantage?

In order for organizations to remain competitive or ahead of the rest of the industry they must stay innovative and acquire the talent that will allow for this. HR is given the task to align talent with the organizations goals using a strategic approach. Organizations use reward systems in order to attract and retain the talent it needs. “This is definitely going to add to the competitive advantage of the organization. The reward system includes, bonuses, additional time off, increased pay and many other innovative practices been practiced by the HR department for the staff members who have excelled in their work falling in their specific domain” (Upadhye, 2016). There are two strategic perspectives used which are “Best Fit” and “Best Practice”.“One model “best fit” argues that HR strategy will be more effective when it is appropriately integrated with its specific organizational and environmental context” (Boxall & Purcell, 2000). This means that the reward system it utilizes is customized to fit the organizations policies and strategies. “Best Practices argues that universalism is best for all organizations regardless of its strategy. “It believes that a bunch of HR practices certainly including the reward system ropes Organizational business strategy. This in turn leads to highly committed and motivated employees leading to enhanced competitive advantage” (Upadhye, 2016). Best Fit supports the view that the employees tend to work with a firm that tends to recognize and reward the performers. If the organization offers incentives and additional perks that its competitors do not along with the basic salary, it will have a better opportunity to attract quality employees. The reward system should be able to differentiate between the good performers and the bad ones. The reward system should be such that it makes an arrangement to encourage the good performers and assist the way out for the poor ones, giving the organization a competitive advantage. (Upadhye, 2016).