Best Fit vs Best Practice in HRM

The debate between best fit and best practice is one of the most important in strategic Human Resource Management (HRM). At its core, it asks a simple question: Should organizations tailor HR practices to their specific situation—or should they adopt practices that are widely considered effective regardless of context?

Understanding this tension helps HR professionals design smarter, more strategic interventions—and avoid the trap of blindly copying what worked somewhere else.

What Is Best Practice?

The best practice approach assumes that certain HR policies and practices are universally effective. If an organization implements them, performance will improve—regardless of industry, culture, or structure.

Typical best practices might include:

• Selective hiring
• Extensive training
• Performance-based pay
• Internal promotion
• Employment security

One of the most cited frameworks is Pfeffer’s (1998) “Seven HR Practices for Competitive Advantage,” which argues that these practices can improve productivity and employee commitment across sectors.

However, critics argue that copying practices from these firms often fails to replicate results elsewhere.

What Is Best Fit?

The best fit approach argues the opposite: HR practices must align with the organization’s strategy, structure, culture, and external environment. There is no one-size-fits-all.

This idea is based on contingency theory in management, which holds that organizational effectiveness results from fitting internal processes to external conditions.

Best fit may mean:

• Focusing on cost efficiency in a low-margin retail firm
• Emphasizing innovation in a tech startup
• Reinforcing discipline and hierarchy in a military organization

Strategic Models: Matching HR to Strategy

Several well-known models support the best fit perspective:

• The Michigan Model: HR systems should be designed to support the organization’s business strategy.
• Miles and Snow Typology: Different strategies (defender, prospector, analyzer) require different HR practices.
• Schuler and Jackson’s Strategic Typologies: HR practices should align with competitive strategies like cost leadership or differentiation.

Each model reinforces the idea that context shapes what “good HR” looks like.

When Best Practice Works

There’s still a place for best practice thinking—especially around core human needs and legal compliance. For example:

• Transparent communication improves trust in almost every culture
• Employee recognition boosts motivation across industries
• Anti-discrimination policies are both ethical and legally required

Integrating Both Perspectives

Most modern HR strategies integrate both views. This hybrid approach recognizes:

• Some practices (e.g. fairness, feedback, growth opportunities) are universally valuable
• Others (e.g. autonomy levels, performance metrics) depend heavily on context

Why the Debate Still Matters

In the age of AI-generated policies and LinkedIn HR advice, the temptation to copy-and-paste practices is stronger than ever. But effective HR strategy is always about intentional design.

HR leaders must ask:

• Does this practice support our strategic goals?
• Is it culturally and operationally appropriate?
• Can we implement it well with our current capabilities?

Conclusion

Best fit and best practice are not mutually exclusive—they’re lenses. Great HR professionals use both to evaluate, adapt, and refine their strategies. The key is knowing when to apply which perspective.

Next, let’s go deeper into the Human Capital Theory—and how it reshaped the way organizations view people not just as a cost, but as an investment.