Best Fit and Best Practice Approaches in Strategic Human Resource Management



Strategic Human Resource Management (SHRM) focuses on aligning HR practices with organisational goals to improve performance and employee engagement. Two important approaches in SHRM are best practice and best fit. These approaches explain how organisations can design HR strategies to improve organisational outcomes.

The best-practices approach suggests that certain HR practices, such as training, employee involvement, teamwork, and performance-based rewards, can improve organisational performance in any organisation (Pfeffer, 1998). Conversely, the Best Fit approach proposes aligning HR practices with the organization's strategy, structure, and external environment (Boxall and Purcell, 2016). This means there is not a single HR strategy suitable for all organisations.

In practice, many organisations use a combination of both approaches. Organisations implement common HR practices, such as training and development systems, performance management systems, and reward systems, because these practices improve employee performance and engagement.

At the same time, organisations adjust HR practices based on their business strategies and environments. For example, HR practices in a manufacturing organisation may focus more on efficiency and cost control, while HR practices in a service organisation may focus more on customer service and employee engagement.

Organisations also adapt their HR practices based on size, industry, and market conditions. This shows that both best practice and best fit approaches are important in managing employees effectively.

Unilever serves as a prime example. The company uses best practices in HRM by implementing global training programs, leadership development, and performance management systems across all its operations. At the same time, Unilever applies the Best Fit approach by adapting HR policies based on local market conditions and cultural differences in each country. This combination helps the company improve global employee engagement and organisational performance.

Both best practice and best fit approaches have advantages and limitations. Best Practice provides a standard set of HR practices that can improve employee engagement and performance. However, it does not consider differences between organisations.

Best Fit is more flexible because it considers organisational strategies and external environments. However, if organisations focus only on best fits, they may ignore important HR practices that are generally effective.

Therefore, organisations should balance both approaches in order to achieve better results.

HR practices should vary across organisations from a practical standpoint. While some HR practices are generally effective, organisations should also consider their specific business needs and environments. A balanced approach helps organisations improve both employee engagement and organisational performance.

In conclusion, best practice and best fit are important approaches in strategic HRM. Organisations that combine both approaches are more likely to achieve greater employee engagement and long-term organisational success.

References

Pfeffer, J. (1998) The Human Equation.
Boxall, P. and Purcell, J. (2016) Strategy and Human Resource Management.
Armstrong, M. (2014): Armstrong’s Handbook of Human Resource Management Practice.
Becker, B. and Huselid, M. (1998) ‘High performance work systems’, Academy of Management Journal.
Delery, J. and Doty, D. (1996) ‘Modes of theorising in SHRM’, Academy of Management Journal.

Comments

  1. G.H.M.Salma20 April 2026 at 02:15

    In my view, the idea of balancing best practice and best fit is the most important takeaway, because no single approach works for every organisation. The Unilever example supports this well. Overall, a practical and relevant discussion.

    ReplyDelete
  2. G.H.M.SARA29 April 2026 at 03:49

    Best practice gives tools, best fit gives context.

    ReplyDelete
  3. yashika madushani 3 May 2026 at 04:11

    The Unilever example adds strong practical relevance by showing how global organisations successfully combine standardised HR practices with local adaptation. This reinforces the idea that effective SHRM is not about choosing one approach over the other, but about achieving the right balance between consistency and contextual responsiveness.

    ReplyDelete

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