When it comes to how to improve business performance as a whole, there are a variety of arguments linking HR practices to firm performance in the academia. One of the most remarkable is the notion of ‘best practice’ or ‘high commitment HR practices’ (HPWS). In the best practice thinking, a single set of HR practices can be universally applied into any workplaces and will definitely enhance workplace performance. Literatures have used the term ‘high performance work system’ and ‘high involvement HR practices’ synonymously (Harzing & Pinnington, 2011).
There is no single agreed definition of best practice or these synonymous terms. Essentially, literatures advocating for the best practice have focused on universalism in HRM by identifying best bundles of high commitment HR practices and how these can lead to better performance. The list of HR practices involved in high-commitment paradigm can be summarized as: (1) employment security and internal labour market; (2) selecting hiring and sophisticated selection; (3) extensive training, learning and development; (4) employment involvement and participation, work voice; (5) self-managed terms or team working; (6) high compensation contingent on company performance; (7) performance review, appraisal and advancement criteria; (8) reduction of status differences; (9) work-life balance; (10) grievance system; and others. Universalists argue that all companies will see performance improvements as long as they implement some or all of above practices. More specifically, this bundle of HRM generates expected outcomes through influencing the ability, motivation and opportunity (AMO Theory) of employees (Applebaum, 2000). But on the other hand, universalism in HRM has also attra...
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...organisations’ specific internal and external context. The formulation of HR practices should take account of a wide range of factors. Thirdly, the complexity of implementation of best practices increases the uncertainty of outcomes. Best practice can be highly fragile, considering the notion that the contextual obstacles, the commitment of line managers and the perception and reaction of employees toward HR activities can all limit the effectiveness.
To sum up, although the universal applicability of a single bundle of HRM enjoys some evidence support the linkage between best practices with better establishment-level outcomes in many cases and can provide for basic architecture and sources of HRM, it is still problematic with certain critiques and limitations. A larger range of contextual factors needs to be taken into consideration when enacting HR practices.
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