work in the context of the organization. Becker and Gerhart (1996) argue that
the idea of best practice might be more appropriate for identifying the prin-
ciples underlying the choice of practices, as opposed to the practices them-
selves. Perhaps it is best to think of ‘good practice’ rather than ‘best practice’.
THE BEST-FIT APPROACH
The best-fit approach emphasizes that HR strategies should be contingent on
the context, circumstances of the organization and its type. ‘Best fit’ can be
perceived in terms of vertical integration or alignment between the organi-
zation’s business and HR strategies. There is a choice of models, namely life
cycle, competitive strategy, and strategic configuration.
The life cycle model
The life cycle model is based on the theory that the development of a firm
takes place in four stages: start-up, growth, maturity and decline. This is in
line with product life cycle theory.
The basic premise of this model was expressed by Baird and Meshoulam
(1988) as follows: ‘Human resource management’s effectiveness depends on
its fit with the organization’s stage of development. As the organization
grows and develops, human resource management programmes, practices
and procedures must change to meet its needs. Consistent with growth and
development models it can be suggested that human resource management
develops through a series of stages as the organization becomes more
complex.’
As Buller and Napier (1993) explain, in a start-up phase, management of the
HR function may be loose and informal; it may even be performed by the
founder/owner. As the organization experiences high growth in sales,
products and markets, the demand for new employees increases. This demand
is beyond the capacity of the founder and line managers to handle. The organi-
zation typically responds to this pressure by adding more formal structure and
functional specialists, including HR. The role of HR in this high-growth stage is
to attract the right kinds and numbers of people, but it is also the time for inno-
vation and the development of talent management, performance management,
learning and development and reward policies and practices. As the organi-
zation matures, HR may become less innovative and more inclined to consol-
idate and develop existing practices rather than create new ones. In the decline
stage HR may not have the scope to engage so wholeheartedly with the
programmes operating in maturity. HR might well be involved in the difficult
decisions that follow downsizing and being taken over.
42 l The conceptual framework of strategic HRM