Approach to HRM is a viewpoint that argues that the effectiveness of HR practices depend on how suitable they are for the achievement of the overall business strategy (external fit) and how well they integrate with each other ( internal fit). This is a perspective based on contingency theory: in other words, that different circumstances, conditions, and business objectives will require different types of HR policies and practices. Rather than there being one best way, the best fit approach tends to assume there will be one most suitable way of managing HR in line with business strategy. The problem is that there is no real agreement amongst exponents of this viewpoint about which aspects of business strategy should be focused upon when deciding how to configure human resource practices. Critics question whether many firms really have a competitive strategy and how this can be identified, and suggest that it is constantly changing in line with the competitive environment—all of which make it impossible for those devising HR policy to be able to achieve the best fit. [See best practice and resource-based view.]
Subjects: Human Resource Management.