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Best practice model
The document discusses best practices in human resource management. It outlines 15 best practices including employee job security, selective hiring, effective compensation strategies, training and development, and employee ownership. It also discusses benchmarking performance against other top organizations and the advantages of benchmarking such as learning from others' successes and mistakes. Overall, the document provides an overview of commonly cited best practices in HRM and how benchmarking can help organizations improve.
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Best practice model
- 1. BEST PRACTICE MODEL A critical analysis
- 2. Group Members Kehkashan Maryam Saleem Ibrahim Osama Ijlal Ovais Isbah Rafay Layla Saad Mujeeb Mahrukh Saad Afridi Manoj Sarfaraz Maryam Haqqui Usman
- 3. Definition of BestPractice No authoritative definition agreed upon by academics or practitioners • Leads to lack of conceptual clarity Several definitions that have emerged that encompass many of the underlying factors of HRM best practice: Johnson (2000) details: “best practice or high performance work practices are described as HR methods and systems that have universal, additive, and positive effects on organizational performance”
- 4. Purpose and benefits •The idea revolves around commitment •Training Employer •Personal Development •Better performance Employee •Higher Productivity
- 5. Fifteen best practices 1. Employee job security • Need for formal practices and procedures for employment 2. Selective hiring 3. Effective use of teams 4. Effective compensation strategies 5. Appropriate performance appraisal 6. Training and development 7. Flatter organizations with an aim to reduce status differences 8. Increased communication
- 6. Fifteen best practices 9.Grievance procedures 10. Promotional criteria 11. Employee ownership of the organization • Company stocks as compensation 12. Empowerment of employees 13. Ensuring upward channeling of employee suggestions 14. Job rotation 15. Career progression
- 7. Performance Monitoring: Benchmarking A comparison with selected performance indicators from different organizations typically in the same industry, or with comparable organizations that are considered to be the best in class. Red Flags: • Some organizations benchmark firms only from the same industry • Some benchmark only competitors
- 8. What iffirms in your industry or your competitors are worse than you? So why not benchmarking a company that is well known for being a good model sometimes referred to as Best Practices, Exemplary Practices, and Business Excellence.
- 9. Advantages Calibration Enableslearning from others’ successes and mistakes. Creation of an environment of active learning Tool to motivate people to change Helps in setting direction and priorities Helps in initiating focused programs that move the company from its current position
- 10. Adopting the BenchmarkingProcess Decide the composition of the audit team Identify the function’s main customers Review the HR function’s mission statement Review the function’s role in formulating and implementing the organization’s strategy Review the HR function’s role in developing relevant HR policies and practices Review the delivery of current HR policy and practices Make internal comparisons to establish ‘best’ practice Review the outcome of analysis • Performance gaps need to be identified and the policy implications need to be discussed with the customer. Implement the agreed improvements and measure the progress against pre-set targets
- 11. High commitment adoptionbarriers Contingent on strategy? Sometimes argued that a high commitment approach is best suited to specific market positions, namely a high quality and/or high product variety strategy that benefits from skilled workers and/or organizational flexibility However, research in other industries has tended to show that the benefits of the HCWS are not conditional on strategy (Pfeffer, 1998)
- 12. High commitment adoptionbarriers Satisficing • Companies who are successful without implementing high commitment model are not prepared to invest in a risky change. Limited awareness Managerial Interests • Too costly personally • Requires skills that they do not have or are not their forte • Maybe they just don’t “buy into” the idea of a more committed culture and less autocratic management style
- 13. Differences Between theBest Practice and the Best Fit Models ‘Best fit’ perspective ‘Best Practice’ perspective Firm’s reward system should One bundle of HR policies be aligned to support the including the reward system organization's business strategy Lead to highly motivated and committed employees who are Results in achievement of key to an organization's competitive advantage. competitive advantage
- 14. ‘Best Fit’ and‘Best Practice’ applied to reward systems Basic argument - Whether the rewards system are linked to the organizational strategy or not? Lawler (1995, p. 14) states that all organizational systems must start with business strategy because “…it specifies what the company wants to accomplish, how it wants to behave, and the kinds of performance and performance levels it must demonstrate to be effective.” Business strategy, driving individual and organizational behaviors, is the touchstone for the development of the reward strategy.
- 15. ‘Best Fit’ and‘Best Practice’ applied to reward systems However, according to Purcell (1999, p. 27), ‘…what is most notable about the best practice model is there is no discussion on company strategy at all.’ Super human resources, talent and competencies : “These superior human resources will, in turn, influence the strategy the organization adopts and is the source of its competitive advantage.” (Milkovich & Newman, 2002, p. 30) Therefore, for this approach, policy precedes strategy.
- 16. Criticism HRM bestpractice theory is still a widely debated topic in academic circles Largely due to the varying views as to what actually constitutes ‘best practice’ Best Practices are really nothing more than disparate groups of methodologies, processes, rules, concepts, and theories that have previously garnered success in certain areas Business is fluid, dynamic, and ever evolving. This means that static advice is at best short lived, but most times is simply incompatible with the very nature of business itself. More research coupled with greater support for best practice theory is required
- 17. Premise of theCases Pfeffer argued that there are seven best practices for achieving competitive advantage These practices revolved around putting people first and included: Providing employment security, selective hiring, extensive training, sharing information, self- managed teams, high pay based on company performance and the reduction of status differentials
- 19. Planning 16 factoriestargeted • 8 in Vietnam in November 2008 • 8 in Southern China in March 2009 Employee satisfaction survey • Understand the issues facing workers • Measure mutual trust and respect Surveys were brought along to the two-week training Each factory developed action plans to address core HRM areas, including: • Supervisory skills • Incentive structures • Employee turnover • Employee satisfaction
- 20. Implementation Implementation ofspecific action plans with six-month deliverables Reduction of the number of workers reporting dissatisfaction with the behavior and attitude of their direct supervisor from 15 % to 5 % Targeted training for supervisors including: • Management, trust and respect • Leadership • Company policies • Grievance systems Increasing the technical skill level among workers on the shop floor
- 21. Plans also included: • Reassessing skill levels • Sharing information with leadership • Using findings to increase and improve training Each step in the process had clear goals, responsibilities, timelines and methods for tracking the progress The real measure of success - HRM training's ability to drive systemic and lasting improvement in working conditions
- 24. Background Among the 100“Best Companies to Work For” Reputation of being one of the most employee- friendly companies in the world In 2000, FedEx employee turnover rate was 6%, well below the industry average of 20%
- 25. Employee Retention “In our competitive market place, employee loyalty tends to be low. If employees don’t like their jobs they simply walk across the street and find a new one. It’s important to keep your people happy and to create an environment where they want to stay.” -Mc Mahan, HR manager at Fedex
- 26. History of employeecommitment Since inception in 1971, its management focused on providing a suitable work environment that encouraged employees to come up with innovative solutions During severe financial difficulties during the first couple of years, the employees were prepared to sell their personal belongings They were also prepared to use their own credit cards to purchase fuel to deliver the packages to the customers Continued working even when they didn’t receive their salary on time
- 27. Best Practices atFedEx People Service Profit (PSP) philosophy: • Adopted by the founder of FedEx • If FedEx took proper care of its employees, they would provide efficient service to the customers • This in turn would benefit the company by generating more profits Survey-Feedback-Action (SFA) Program: • Helped management take decisions regarding promotions • Online survey system in the US in 1992 • Each April, every employee is asked to participate in the online survey • Managers hold feedback sessions
- 28. Best Practices atFedEx Leadership Evaluation and Awareness Process (LEAP) • Encourage non-managerial cadre employees to move to the managerial level within the company Employee Communication Program • SFA program • Guaranteed Fair Treatment Procedure • Open Door Policy • Grievance system
- 29. Best Practices atFedEx Job Change Applicant Tracking System (JCATS) • Online computer job posting system that allows hourly employees to post for any available job Recognition and Reward Program • Awards such as the ‘Bravo Zulu’ and the ‘Golden Falcon Award’
- 30.
Editor's Notes
- #4 This definition relates to the fact that the more best practices that the organization employs, each will add to the previous, thus compounding the resulting performance of the organizationEach of these best practices must complement each other, as if this is not the case the other will ultimately negate any advantage that could possibly result from its inception
- #5 In simple terms, each best practice technique is aimed at developing the employee, increasing their commitment, with the resulting intention to improve the organizational performance, and ultimately create a sustainable competitive advantage.