HRM – Best Practices and RBV

Table of Content

In order to survive and excel in the competitive business environment, managers have had to come up with strategies that give their organizations an edge. This is where HRM and best practice models come into play.


According to Johnson (2000), the concept of best practice models refers to HR methods and systems that have universal, additive, and positive effects on the performance of an organization. These practices should complement each other and enhance the organization’s overall performance.

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According to Delaney and Huselid (1996), HRM best practices aim to improve employees’ overall performance and subsequently enhance organizational performance. They emphasized that commitment from both employers and employees is crucial in implementing best practices as it leads to improved performance. However, commitment alone is not sufficient in promoting best practices; competence, motivation, and effective job design are also necessary to encourage positive employee behaviors. In essence, best practices are targeted at:

1. The focus is on developing employees to improve organisational performance and create a sustainable competitive advantage.

A. HARVARD MODEL (Beer et al 1984)
Example: Google
According to Armstrong (2003), the framework is established on the understanding that the historical personnel management issues can only be resolved when the general managers adopt a perspective on how they want to engage employees in the enterprise and nurture their development, as well as defining HRM policies and practices that can fulfill these objectives.

To simplify the Harvard Model, it is important to consider multiple stakeholders such as employees, the government, and the community. The model also emphasizes the significant influence that employees have on organizational outcomes. Additionally, HRM Policy Choices play a crucial role in this model, including aspects such as employee influence, human resource flow, and reward systems such as pay systems, awards, and employee of the month.

Designing work and aligning people is the essence of a work system.

4. Attaining the key results in HR affects long-term consequences, such as improved productivity and organizational effectiveness. These outcomes, in turn, influence shareholder interests and situational factors, creating a cycle of impact.

5. The Harvard model emphasizes the importance of recognizing an organization’s human resources as assets rather than costs, as they are the source of competitive advantage.

Encourages employees and gains maximum performance from them. Helps employee to turn their work environment to a better place and minimizes stress. Creates equal chance for opportunity to each individual in the company. Eliminates procrastination and monotony. Increases productivity and creativity by decentralizing company structure. Enables long-term communication and collaboration.


The approach may not be suitable for many organizations due to employees’ resistance to change.

Not all employees are motivated by being given more responsibility.

It requires a high level of understanding and application skills from both the business and its employees.

The approach focuses on employing the right people for the needs of business projects and achievements.

There is no clear definition of the partnership model and its focus on the relationship between the organization and either the individual or the trade union. Nevertheless, there are six important principles to consider:

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Shared commitment for the success of the organization. The interests of the partners may vary. Emphasis on employment security and the quality of working life. Encouragement of openness and willingness to listen and engage in discussions about alternative strategies that add value.

Angelo Pesce, from Pesce and Associates Human Resources Consultants.


Managers (line and supervisors):

• Familiarity with the operation

• Familiarity with their employees

• Power to make decisions


Specialised knowledge and expertise, relationships, and innovative approaches to dealing with people.

• Support the process of change
• Engage in negotiations with both employees and employers
• Foster employee satisfaction

Strengths and weaknesses < br/>


Training of line manager with the help of HR, can help promote motivation and efficiency among employees

Improved decision making with the help of both HR, Unions , Managers and Employee input

Increased satisfaction due to the interactions with the organisation and unions

Organisations can use unions as a means of communicating the needs and wants of both employees and employers


Not all individuals, including line managers, unions, and HR personnel, may be willing to cooperate.

Difficulties in reaching decisions due to conflicting perspectives.

Lack of commitment and alignment among partners can lead to ineffective communication and decision-making.


Example: Steve Jobs

According to Henry (2008), the resource-based view focuses on the internal capabilities of an organization when developing the strategy to gain a sustainable competitive advantage in its markets and industries. These resources, which are the inputs for carrying out the organization’s activities, are developed in order to achieve a competitive advantage. The resource-based view (RBV) of the firm emphasizes its internal resources, strategy, and business performance. The role of human resources in this view is to enhance competitive advantage by developing “human capital”. According to Henry (2008), for an organization’s resources to provide the potential for a sustained competitive advantage, they must have four attributes.

• Valuable resources

• Rare/Unique resources

• Imitability of the resource

• Substitutability

Therefore, focusing on human capital development will enable the company to attain a lasting competitive advantage. This is because:

• Companies with employees who possess high levels of cognitive ability compared to their competitors are both valuable and rare.

• Due to social complexity, casual ambiguity, and path dependency, replication of this resource is difficult or even impossible.

• While it may be substitutable in the short term, it cannot provide sustained competitive advantage. Note: HR is necessary for implementing the RBV of HRM, as human capital is considered an asset rather than an expense.



More efficient means of accomplishing tasks
Greater capacity to respond to external changes and developing strategies to adapt to it
Development of high quality human capital


The RBV does not provide much insight into the evolution and development of resources over time.

It is lacking in detail and can be challenging to comprehend (Priem and Buttler 2001).

Does it encompass all human capital or only senior managers?

1. Johnson, E. (2000). The practice of Human Resource Management in New Zealand: Strategic and Best Practice? Asia Pacific Journal of Human Resources

2. Delaney, J., & Huselid, M. (1996). The impact of human resource management practices on perceptions of organisational performance. Academy of Management Journal

3. A, Henry (2008). Understand Strategic Management . Oxford University Press.

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HRM – Best Practices and RBV. (2017, Jan 24). Retrieved from

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