{"id":33792,"date":"2023-09-15T22:40:06","date_gmt":"2023-09-15T22:40:06","guid":{"rendered":"https:\/\/www.goodacademic.com\/blog\/questions\/critically-evaluate-best-practice-contingency-and-resource-based-approaches-to-the-development-of-people-practices\/"},"modified":"2023-09-15T22:40:06","modified_gmt":"2023-09-15T22:40:06","slug":"critically-evaluate-best-practice-contingency-and-resource-based-approaches-to-the-development-of-people-practices","status":"publish","type":"questions","link":"https:\/\/www.goodacademic.com\/blog\/questions\/critically-evaluate-best-practice-contingency-and-resource-based-approaches-to-the-development-of-people-practices\/","title":{"rendered":"Critically evaluate best practice, contingency and resource-based approaches to the development of people practices."},"content":{"rendered":"

Understand how
\nthe development of people practices improved organisational performance and
\nemployee experience. <\/span><\/b><\/p>\n

 <\/span><\/b><\/p>\n

Question: <\/span><\/b><\/p>\n

Critically
\nevaluate best practice, contingency and resource-based approaches to the
\ndevelopment of people practices. <\/span><\/b><\/p>\n

 <\/span><\/p>\n

Discuss the \u201cresource-based approach \u201cto
\ndeveloping people strategies within organisations, critically evaluating its
\nsustainability\/or not for developing these strategies withing your own
\norganisation, or one that is familiar to you. Fully justify your conclusions.<\/p>\n

Pointers for candidates:<\/p>\n

 <\/p>\n

Draw on the academic literature in
\ndefining the \u2018resource-based approach\u2019. 
\n<\/span>Consider the following key aspects: <\/p>\n

\u2022      <\/span><\/span>Resource
\nidentification. This involves analysing the skills, knowledge, and competencies
\nof employees, as well as the culture and values that drive their behaviour.
\nDoes your organisation have a robust system for identifying and evaluating
\nthese resources, the resource-based approach can be effective in developing
\npeople strategies. A well-established performance management processes and
\ntalent assessment framework that enable one to identify and leverage our key
\nresources effectively. <\/p>\n

\u2022     
\n<\/span><\/span>Resource Development: The resource-based approach
\nemphasises the need for ongoing development and enhancement of resources to
\nmaintain a competitive advantage. This involves providing training and
\ndevelopment opportunities, creating a supportive learning environment, and
\nfostering a culture of continuous improvement. Does your organisation place a
\nstrong emphasis on employee development, provide adequate resources for
\ntraining and upskilling, and encourage a learning mindset? <\/p>\n

\u2022     
\n<\/span><\/span>Resource Alignment: Effective people strategies should
\nalign with the overall organisational strategy and objectives. The
\nresource-based approach emphasises the importance of aligning human resources
\nwith the strategic goals of the organisation. Does your organisation have a
\nclear strategic direction and a well-defined people strategy that aligns with
\nit? <\/p>\n

There are several evidence-based factors
\nthat are linked to the efficacy of RBV. These include: <\/p>\n

\u2022     
\n<\/span><\/span>Unique and Inimitable Resources: When organisations
\nhave specific human resources that are unique and not easily replicated, such
\nas specialised knowledge, rare skills, or strong organisational culture, the
\nRBV can be highly effective. <\/p>\n

\u2022     
\n<\/span><\/span>Resource Heterogeneity: Research has found that
\norganisations with diverse and heterogeneous human resources, representing a
\nwide range of skills, backgrounds, and perspectives, tend to benefit from the
\nRBV. Why might this be? <\/p>\n

\u2022     
\n<\/span><\/span>Resource Complementarity: Studies have shown that when
\nhuman resources are aligned and complemented by other organisational resources,
\nsuch as technology, processes, or supportive structures, the RBV becomes more
\neffective.  <\/span><\/p>\n

\u2022     
\n<\/span><\/span>Dynamic Capabilities: Organisations that invest in
\ncontinuous learning, skill development, and flexibility of their human
\nresources tend to benefit from the RBV, as they can respond effectively to
\nchanging market conditions and gain a competitive edge. <\/p>\n

\u2022     
\n<\/span><\/span>Knowledge-Intensive Industries: Research suggests that
\nthe RBV of human resources is particularly effective in knowledge-intensive
\nindustries, where intellectual capital and expertise are crucial for
\nsuccess.  <\/span><\/p>\n

Given your
\nanalysis of the benefits, the barriers and the organisational enablers of the
\n\u2018resource based approach\u2019, critically evaluate its suitability\/or not for
\ndeveloping these strategies within your own organisation.   <\/span><\/p>\n

 <\/span><\/p>\n

Reading  <\/span>material: <\/span><\/b><\/p>\n

 <\/p>\n

Chapter
\n3 Marchington, Wilkinson, Donnelly and Kynighou (2020) Human Resource
\nManagement at Work <\/b><\/p>\n

 <\/span><\/b><\/p>\n

Farnham, D (2015) Human Resource Management in Context 4th<\/sup>
\nEdn CIPD \u2013 various pages on contingency\/ best fit approach <\/b><\/p>\n

 <\/span><\/p>\n

 <\/span><\/p>\n

https:\/\/strategicmanagementinsight.com\/tools\/resource<\/span><\/a>–<\/span><\/a>based<\/span><\/a>–<\/span><\/a>view\/<\/span><\/a> <\/span><\/a><\/p>\n

 <\/span><\/p>\n

https:\/\/jaybarney.org\/wp<\/span><\/a>–<\/span><\/a>content\/uploads\/2022\/06\/13<\/span><\/a>–<\/span><\/a>The<\/span><\/a>–<\/span><\/a>resource<\/span><\/a>–<\/span><\/a>based<\/span><\/a>–<\/span><\/a>view<\/span><\/a>–<\/span><\/a>of<\/span><\/a>–<\/span><\/a>the<\/span><\/a>–<\/span><\/a>firm<\/span><\/a>–<\/span><\/a>Ten<\/span><\/a><\/a>years<\/span><\/a>–<\/span><\/a>after<\/span><\/a>–<\/span><\/a>1991.pdf<\/span><\/a> <\/span><\/a><\/p>\n

 <\/p>\n

https:\/\/www.mindtools.com\/a1snnzo\/mintzbergs-5-ps-of-strategy<\/a><\/p>\n

 <\/p>\n

https:\/\/www.employment-studies.co.uk\/system\/files\/resources\/files\/517_Strategic-Human-Resource-Management-Back-to-the-future-IES-CIPD-2019.pdf<\/a><\/p>\n

Aligning
\nbehaviour with wider organisational vision, values, strategies and plans; a
\nconcern<\/span><\/u> for business outputs and
\nimpact rather than just following processes; connecting with internal<\/u> and external peers regularly to benchmark, share
\ngood practice and anticipate future trends<\/u> to
\ninform future priorities and practice.<\/u> <\/span><\/p>\n

Moving on to look at other research models, in this
\nAssessment Criteria we are evaluating best practice, contingency and
\nresource-based approaches to the development of people practices. <\/span><\/p>\n

 <\/span><\/span><\/p>\n

Best practice: <\/span><\/p>\n

Before we start to look at \u2018Best Practice\u2019 as one of the
\nmodels discussed in Assessment Criteria 2.3, it is a good time to establish the
\ndifference between \u2018best fit\/good practice\u2019 and \u2018best practice\u2019. \u2018Best
\nPractice\u2019 is the theory that there is a \u2018one size fits all\u2019 approach to HRM
\npractices. As we know all organisations are different and therefore can it
\nreally be possible to have one approach to HRM that every organisation
\nfollows?  <\/span>\u2018Best-Fit\u2019 is the view that it
\nis impossible to have a \u2018one-size all\u2019 approach to HRM because every
\norganisation is influenced by several factors externally, such as its product
\nmarket circumstances, etc.   <\/span><\/span><\/p>\n

 <\/span><\/span><\/p>\n

The best practice list according to Pfeffer (1998) <\/span><\/p>\n

1.               
\n<\/span><\/span><\/span>Employment security <\/span><\/p>\n

2.               
\n<\/span><\/span><\/span>Selective hiring <\/span><\/p>\n

3.               
\n<\/span><\/span><\/span>Self-managed teams <\/span><\/p>\n

4.               
\n<\/span><\/span><\/span>High compensation contingent on performance <\/span><\/p>\n

5.               
\n<\/span><\/span><\/span>Training to provide a skilled and motivated workforce <\/span><\/p>\n

6.               
\n<\/span><\/span><\/span>Reduction of status differentials <\/span><\/p>\n

7.               
\n<\/span><\/span><\/span>Shared information <\/span><\/p>\n

 <\/span><\/span><\/p>\n

Pfeffer,
\n1998, The human equation: building profits by putting people first. Boston:
\nHarvard Business School Press <\/span><\/p>\n

 <\/span><\/span><\/p>\n

Let\u2019s debate these 7 practices below: <\/span><\/p>\n

 <\/span><\/span><\/p>\n

1.               
\n<\/span><\/span><\/span>Employment security \u2013 It is unreasonable to promise
\nemployment security, but it is acceptable to \u2018promise\u2019 to look at alternatives
\nsuch as short time working, reduced hours etc., to preserve employment
\nsecurity. Many factors could impact employment security \u2013 such as in today\u2019s
\nworld of Covid-19 and Lockdowns. This fuels the debate that HRM practices need
\nto be agile and fluid to match the external and internal demands of the
\nbusiness (remember Ulrich\u2019s outside-in model of HRM). <\/span><\/p>\n

2.               
\n<\/span><\/span><\/span>Selective hiring \u2013 of course all organisations want the best
\ntalent but the talent that matches your norms and values is always worth the
\nmost. More sophisticated selection methods can help to ensure behaviours and
\nvalues are those that the organisation desires for its business needs. <\/span><\/p>\n

3.               
\n<\/span><\/span><\/span>Self-managed teams \u2013 autonomy is often seen as a key
\nengagement factor in organisations and Dan Pink (2009) in his best-selling book
\nand workshops around \u2018Drive\u2019 showed research that \u2018autonomy\u2019 is seen as a key
\nmotivator of employees and performance. However, not all roles can be
\nautonomous and not all teams work well if they are self-managed. <\/span><\/p>\n

4.               
\n<\/span><\/span><\/span>Performance related pay (high compensation contingent on
\nperformance). Much research and evidence has shown that if the performance
\nrelated pay is not high enough, or reduced through calibration across teams,
\ndepartments and organisations, the effect is less. However, gainshare, share
\noptions and so forth are shown to be a much more valued compensation for
\nperformance, and particularly where an employee has an opportunity to impact
\nperformance. CEO\u2019s and trading desks, financial services are clear examples of
\nwhere this works but ethical thinking such as executive pay ratios have a
\nbearing here. If you can\u2019t impact performance significantly enough to get high
\ncompensation does this work for you? The answer is probably no. <\/span><\/p>\n

5.               
\n<\/span><\/span><\/span>Training to provide a skilled and motivated workforce. It is
\nfair to say that training improves skill but there is little research to prove
\nthat training makes an employee motivated \u2013 it is having the opportunity to
\npractice and apply such skills and with autonomy that creates the
\nmotivation.  <\/span><\/span><\/p>\n

6.               
\n<\/span><\/span><\/span>Reduction of status differentials \u2013 with the rise of the gig
\neconomy flexible contracts have increased not reduced status differentials, but
\nthey suit the type of work and the worker adequately. <\/span><\/p>\n

7.               
\n<\/span><\/span><\/span>Shared information \u2013 research proves that those
\norganisations that share information, not necessarily through collective
\nbargaining but through ICE reps, employee reps or other forums, encourage a
\nsense of belonging between employees. <\/span><\/p>\n

 <\/span><\/span><\/p>\n

Does Best Practice Work? What is the evidence? <\/span><\/p>\n

 <\/span><\/span><\/p>\n

Ahmad and Schroeder (2003) examined the relationship between
\nHRM practices and operations management across a number of countries and
\nindustries. They found a relationship between Pfeffer\u2019s seven best HRM
\npractices and organisational performance across three industries and four
\ncountries. This study provided empirical validation of an ideal HRM system for
\nmanufacturing plants and provided overall support for Pfeffer\u2019s list.  <\/span><\/span><\/p>\n

 <\/span><\/span><\/p>\n

Another study by Guest (2000) in work commissioned by the
\nCIPD identified 18 key practices associated with high performance or high
\ncommitment HRM, including regular appraisals, multi-skilling, profit-related
\nbonuses, internal communications and single status. So you can see that there
\nis some commonality between Guest\u2019s list and that of Pfeffer. Guest\u2019s research
\ndemonstrated some association between his HRM practice list and the
\nprofitability of the organisation. Ahmad and Schroder (2003) and others seems to
\nevidence that \u2018Best Practice\u2019 does work, but there may be a caveat that it only
\nworks in certain circumstances or for various different employee groups\/skill
\nlevels. <\/span><\/p>\n

 <\/span><\/span><\/p>\n

In conclusion most views consider that a combination of best
\nfit and best practice works. It is good to have some best practice HRM
\npractices but to be fluid and agile in adapting these where necessary to create
\na best fit.  <\/span><\/span><\/p>\n

 <\/span><\/span><\/p>\n

Contingency theory and \u2018best fit\u2019 <\/span><\/p>\n

 <\/span><\/span><\/p>\n

So here we touch back to \u2018best-fit\u2019 as closely aligned with
\nour second theory, \u2018contingency\u2019 theory which says HRM should be based on the
\noutcomes of two factors a) which factors in the organisation are important and
\nb) how they influence HRM.  <\/span>The factors
\nthat most commonly affect organisations are law and regulation; political
\nsystem \u2013 both of which give organisations no choice, or may be a choice, but
\nemployers use these forces to legitimise their choices. Another factor is
\nproduct markets and competitive strategies, which should link HRM with business
\nstrategies etc. Contingency theory is based on (a) being product markets and
\ncompetitive strategies and (b) the way they influence HRM. HRM is often aligned
\nto where the organisation is in its life cycle, using models such as the Boston
\nConsultancy Group (BCG) matrix. Remember Ulrich says HR professionals need to
\nconsider the outside environment and its approach on the inside of the
\norganisation. Contingency theory and best-fit are called \u2018outside\/in\u2019 approaches.
\n<\/span><\/p>\n

 <\/span><\/span><\/p>\n

Resource-Based View (RBV) <\/span><\/p>\n

 <\/span><\/span><\/p>\n

Resource based view, which has been developed further into
\nthe now HR Architecture approach (no single HR style or system but varied
\naccording to the relative contributions of particular segments of the
\nworkforce) advocates for labour segmentation. Labour segmentation is where
\ndifferent segments of the workforce receive different HR practices (and
\nsometimes rewards). RBV focuses on the fit between internal resources and the
\nexternal factors \u2013 the \u2018inside\/out\u2019 approach \u2013 that enable organisations to
\nremain viable and achieve sustained competitive advantage <\/span><\/p>\n

 <\/span><\/span><\/p>\n

To gain a more in-depth view of the relevant theories. <\/span><\/p>\n

 <\/p>\n

Read Armstrong, M and Brown, D,
\n2019.  <\/span>Strategic Human Resource Management:
\nBack to the future? A literature review.<\/span> Report 517 Feb 2019. Institute
\nof Employment Studies. Brighton: IES and London: https:\/\/www.employment-studies.co.uk\/system\/files\/resources\/files\/517_Strategic-Human-Resource-Management-Back-to-the-future-IES-CIPD-2019.pdf<\/a><\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

Understand how the development of people practices improved organisational performance and employee experience.   Question: Critically evaluate best practice, contingency and resource-based approaches to the development of people practices.   Discuss the \u201cresource-based approach \u201cto developing people strategies within organisations, critically evaluating its sustainability\/or not for developing these strategies withing your own organisation, or one […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"closed","template":"","meta":[],"disciplines":[1112],"paper_types":[],"tagged":[],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.goodacademic.com\/blog\/wp-json\/wp\/v2\/questions\/33792"}],"collection":[{"href":"https:\/\/www.goodacademic.com\/blog\/wp-json\/wp\/v2\/questions"}],"about":[{"href":"https:\/\/www.goodacademic.com\/blog\/wp-json\/wp\/v2\/types\/questions"}],"author":[{"embeddable":true,"href":"https:\/\/www.goodacademic.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.goodacademic.com\/blog\/wp-json\/wp\/v2\/comments?post=33792"}],"version-history":[{"count":0,"href":"https:\/\/www.goodacademic.com\/blog\/wp-json\/wp\/v2\/questions\/33792\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.goodacademic.com\/blog\/wp-json\/wp\/v2\/media?parent=33792"}],"wp:term":[{"taxonomy":"disciplines","embeddable":true,"href":"https:\/\/www.goodacademic.com\/blog\/wp-json\/wp\/v2\/disciplines?post=33792"},{"taxonomy":"paper_types","embeddable":true,"href":"https:\/\/www.goodacademic.com\/blog\/wp-json\/wp\/v2\/paper_types?post=33792"},{"taxonomy":"tagged","embeddable":true,"href":"https:\/\/www.goodacademic.com\/blog\/wp-json\/wp\/v2\/tagged?post=33792"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}