1. BEST PRACTICE MODEL
A critical analysis

2. Group Members
Kehkashan Maryam Saleem
Ibrahim Osama
Ijlal Ovais
Isbah Rafay
Layla Saad Mujeeb
Mahrukh Saad Afridi
Manoj Sarfaraz
Maryam Haqqui Usman

3. Definition of Best Practice
No authoritative definition agreed upon by academics or
practitioners
• Leads to lack of conceptual clarity
Several definitions that have emerged that encompass
many of the underlying factors of HRM best practice:
Johnson (2000) details:
“best practice or high performance work practices are
described as HR methods and systems that have
universal, additive, and positive effects on organizational
performance”

4. Purpose and benefits
• The idea revolves around commitment
•Training
Employer •Personal Development
•Better performance
Employee •Higher Productivity

5. Fifteen best practices
1. Employee job security
• Need for formal practices and procedures for employment
2. Selective hiring
3. Effective use of teams
4. Effective compensation strategies
5. Appropriate performance appraisal
6. Training and development
7. Flatter organizations with an aim to reduce status differences
8. Increased communication

6. Fifteen best practices
9. Grievance procedures
10. Promotional criteria
11. Employee ownership of the organization
• Company stocks as compensation
12. Empowerment of employees
13. Ensuring upward channeling of employee suggestions
14. Job rotation
15. Career progression

7. Performance Monitoring:
Benchmarking
A comparison with selected performance indicators
from different organizations typically in the same
industry, or with comparable organizations that are
considered to be the best in class.
 Red Flags:
• Some organizations benchmark firms only from the
same industry
• Some benchmark only competitors

8.  What if firms in your industry or your competitors are
worse than you?
 So why not benchmarking a company that is well
known for being a good model sometimes referred to
as Best Practices, Exemplary Practices, and Business
Excellence.

9. Advantages
 Calibration
 Enables learning from others’ successes and
mistakes.
 Creation of an environment of active learning
 Tool to motivate people to change
 Helps in setting direction and priorities
 Helps in initiating focused programs that move the
company from its current position

10. Adopting the Benchmarking Process
 Decide the composition of the audit team
 Identify the function’s main customers
 Review the HR function’s mission statement
 Review the function’s role in formulating and implementing the
organization’s strategy
 Review the HR function’s role in developing relevant HR policies and
practices
 Review the delivery of current HR policy and practices
 Make internal comparisons to establish ‘best’ practice
 Review the outcome of analysis
• Performance gaps need to be identified and the policy implications
need to be discussed with the customer.
 Implement the agreed improvements and measure the progress against
pre-set targets

11. High commitment adoption barriers
Contingent on strategy?
Sometimes argued that a high commitment approach is
best suited to specific market positions, namely a high
quality and/or high product variety strategy that benefits
from skilled workers and/or organizational flexibility
However, research in other industries has tended to show
that the benefits of the HCWS are not conditional on
strategy (Pfeffer, 1998)

12. High commitment adoption barriers
Satisficing
• Companies who are successful without implementing high
commitment model are not prepared to invest in a risky
change.
Limited awareness
Managerial Interests
• Too costly personally
• Requires skills that they do not have or are not their forte
• Maybe they just don’t “buy into” the idea of a more
committed culture and less autocratic management style

13. Differences Between the Best
Practice and the Best Fit Models
‘Best fit’ perspective ‘Best Practice’ perspective
 Firm’s reward system should  One bundle of HR policies
be aligned to support the including the reward system
organization's business
strategy  Lead to highly motivated and
committed employees who are
 Results in achievement of key to an organization's
competitive advantage. competitive advantage

14. ‘Best Fit’ and ‘Best Practice’ applied
to reward systems
 Basic argument - Whether the rewards system are linked to the organizational
strategy or not?
 Lawler (1995, p. 14) states that all organizational systems must start with
business strategy because
“…it specifies what the company wants to accomplish, how it wants to
behave, and the kinds of performance and performance levels it must
demonstrate to be effective.”
 Business strategy, driving individual and organizational behaviors, is the
touchstone for the development of the reward strategy.

15. ‘Best Fit’ and ‘Best Practice’ applied
to reward systems
 However, according to Purcell (1999, p. 27),
‘…what is most notable about the best practice model is there is no discussion on
company strategy at all.’
 Super human resources, talent and competencies :
“These superior human resources will, in turn, influence the strategy the
organization adopts and is the source of its competitive advantage.” (Milkovich &
Newman, 2002, p. 30)
 Therefore, for this approach, policy precedes strategy.

16. Criticism
 HRM best practice theory is still a widely debated topic in
academic circles
 Largely due to the varying views as to what actually constitutes
‘best practice’
 Best Practices are really nothing more than disparate groups of
methodologies, processes, rules, concepts, and theories that
have previously garnered success in certain areas
 Business is fluid, dynamic, and ever evolving. This means that
static advice is at best short lived, but most times is simply
incompatible with the very nature of business itself.
 More research coupled with greater support for best practice
theory is required

17. Premise of the Cases
Pfeffer argued that there are seven best practices for
achieving competitive advantage
These practices revolved around putting people first
and included:
Providing employment security, selective
hiring, extensive training, sharing information, self-
managed teams, high pay based on company
performance and the reduction of status differentials

19. Planning
 16 factories targeted
• 8 in Vietnam in November 2008
• 8 in Southern China in March 2009
 Employee satisfaction survey
• Understand the issues facing workers
• Measure mutual trust and respect
 Surveys were brought along to the two-week training
 Each factory developed action plans to address core HRM
areas, including:
• Supervisory skills
• Incentive structures
• Employee turnover
• Employee satisfaction

20. Implementation
 Implementation of specific action plans with six-month
deliverables
 Reduction of the number of workers reporting dissatisfaction
with the behavior and attitude of their direct supervisor from 15
% to 5 %
 Targeted training for supervisors including:
• Management, trust and respect
• Leadership
• Company policies
• Grievance systems
 Increasing the technical skill level among workers on the shop
floor

21. Plans also included:
• Reassessing skill levels
• Sharing information with leadership
• Using findings to increase and improve training
Each step in the process had clear
goals, responsibilities, timelines and methods for tracking
the progress
The real measure of success - HRM training's ability to
drive systemic and lasting improvement in working
conditions

24. Background
Among the 100 “Best Companies to Work For”
Reputation of being one of the most employee-
friendly companies in the world
In 2000, FedEx employee turnover rate was 6%, well
below the industry average of 20%

25. Employee Retention
“In our competitive market place, employee loyalty
tends to be low. If employees don’t like their jobs they
simply walk across the street and find a new one. It’s
important to keep your people happy and to create an
environment where they want to stay.”
-Mc Mahan, HR manager at Fedex

26. History of employee commitment
Since inception in 1971, its management focused on
providing a suitable work environment that encouraged
employees to come up with innovative solutions
During severe financial difficulties during the first couple of
years, the employees were prepared to sell their personal
belongings
They were also prepared to use their own credit cards to
purchase fuel to deliver the packages to the customers
Continued working even when they didn’t receive their
salary on time

27. Best Practices at FedEx
People Service Profit (PSP) philosophy:
• Adopted by the founder of FedEx
• If FedEx took proper care of its employees, they would
provide efficient service to the customers
• This in turn would benefit the company by generating more
profits
Survey-Feedback-Action (SFA) Program:
• Helped management take decisions regarding promotions
• Online survey system in the US in 1992
• Each April, every employee is asked to participate in the
online survey
• Managers hold feedback sessions

28. Best Practices at FedEx
Leadership Evaluation and Awareness Process (LEAP)
• Encourage non-managerial cadre employees to move to
the managerial level within the company
Employee Communication Program
• SFA program
• Guaranteed Fair Treatment Procedure
• Open Door Policy
• Grievance system

29. Best Practices at FedEx
Job Change Applicant Tracking System (JCATS)
• Online computer job posting system that allows hourly
employees to post for any available job
Recognition and Reward Program
• Awards such as the ‘Bravo Zulu’ and the ‘Golden Falcon
Award’

30. Conclusion