Human Resource Practices: The Best Practice Approach

The best practice approach contains a group of particular human resource practices that, in theory, are able to be applied to all businesses and will, irrespective of their market or operating procedures will result in a competitive advantage for the firm. Many researchers have devised their own group of practices, such as those from Arthur (1992) and MacDuffie (1995), one of the most popular however, is the one developed by Preffer. Preffer (1994) originally identified sixteen different practices which he then later reduced to seven. These practices consist of employment security, selectivity in recruitment, self-managed teams, incentive pay, extensive training, reduced status differentiations and sharing of organisational performance information (Preffer, 1998). Most of if not all of the groups do however follow a similar trend of focus around three practices.

Miles and Snow (1978) for example were able to identify three forms of strategic behaviour ‘Defenders’ have stable products lines and prioritise internal training that is process orientated and internal pay equity. ‘Prospectors’ have changing product lines and depend on innovation more, because of this they rely on external recruitment, external pay equity and result-orientated compensation. ‘Analysers’ use a mixture of stable and changing product lines and so use both internal and external recruitment, pay equity systems and process-orientated performance appraisal. Schuler and Jackson (1987) and Jackson and Schuler (1995) then developed these approaches and were able to identify the types of role behaviours that were needed for each of the competitive strategies that organisations use. They highlighted the kinds of behaviour needed for innovation, quality enhancement and cost reduction and which types of human resource practices that were needed to achieve these