In the last instalment there was some reference to best practice, and some colleagues in the industry traced me on social media to ask for more detail on best practice in people management, so this a follow-on article responding to their questions for the benefit of those who may also be asking themselves but are unable for whatever reason to ask out loud.
What is best practice? Is it a new phenomenon reserved for the blue chip, multi-billion pula corporations? No on both counts.
Human resource best practice is the idea that there are universal HR principles that provide companies with optimal business performance, regardless of which organisation or industry they are applied to.
There are two schools of thought that contribute to this discussion. The first one is best fit, the second is best practices. The best fit school says, to add value, HRM policies should align with business strategy, in other words, HR should focus on balancing the needs of the organisation with those of the staff.
The best practice school says there is a set of universal HR processes that lead to superior business performance, and also talks about “bundles of HR activities” which, if applied together, support high performance cultures. We will explore those bundles next week. This time let us define best practice.
Based on the two schools of thought, HR strategy and subsequent HR activities should be aligned with the organisation’s strategy for optimal efficiency, and with that in mind, there are seven primary areas where HR practices have shown to cultivate performance and add value to the business:
l Providing security to employees
Even in this era of high mobility and general uncertainty in business, employment security is listed as best practice.
People work so that they can provide for themselves and their families, and this concept of security underpins almost everything HR does.
When this employment security is threatened, for example when there is a restructuring or retrenchment, the immediate ripple throughout the whole organisation is unmistakeable, as is the impact on productivity.
l Hiring the right people
The second area of best practice is in recruitment and selection.
It is imperative that the right talent is brought into the organisation, and with increasingly more digitised recruitment and screening platforms, as well as well more scientific and generally more sophisticated selection practices (aka psychometrics and competency based interviews), organisations have the resources to minimise the risk of bringing in the wrong people.
l Team building
The team building that many would be thinking of here is that retreat to an exotic location for some fun and games as colleagues. And that has
l Fair and performance-based compensation
Next we look at remuneration as the fourth area of best practice. The principle is, get talent and reward accordingly. Maybe this is an example of the bundles of activities referred to above, that is, hiring the right people, compensating them appropriately and offering employment security.
l Training in relevant skills
It is best practice to invest in the development of employees. After recruiting the best people, you need to ensure that they remain the frontrunners in the field. This has become even more relevant today looking at the pace of technological change in our workspaces. Learning has become a way to stay relevant, innovative, agile, and competitive.
l Creating a flat and democratic organisation
While we agree that some employees, or rather, some skill sets, are more critical for the success of the organisation, we must understand that every employee is a valuable member of the organisation and should be treated as such. In some companies, this principle is expressed practically with equal access to common canteens, providing all staff with uniforms, giving all staff equal leave and medical aid entitlement.
l Making information easily accessible to those who need it
Information sharing is essential. This is an area where a lot of large companies struggle: How do you keep track of who knows what, so you know where to go to with your questions? The organisation will decide how best to share information about strategy, financials, and operations in a meaningful way that creates a culture in which people feel they are trusted and truly involved in the business. Open communications, or information sharing eliminates the need for corridor talk and hear-say, which some of us will attest to having had to weed out before any real progress was made.
In a nutshell, when we talk about best practice, these are the areas that we are talking to. In the next few weeks we will unpack each area and discuss it at both strategic and operational level, and also highlight how bundles can be constructed and implemented for optimal impact in your HR department.