Critically compare and contrast the ‘best fit’, BP and RBV models of HRM strategy – explain how EACH approach is argued to contribute to improve organizational performance.

As the global business environment becomes increasingly competitive, more and more organisations are targeting human resources as a means of strategically gaining competitive advantage. Strategic human resource management (SHRM) is a constantly evolving process which is concerned with providing a strategic framework that supports an organisation’s long term business goals. The logic behind this is that organisations are using new innovative technologies to provide qualitative low- cost solutions, and are trying to manage their human assets more effectively (Wright, …show more content…

There are five sub-models contained within the ‘best fit’ concept, and within that strict definition more often than not, companies will wittingly or unwittingly adopt a number of those models when recruiting staff. They will use a variety of the models in pursuit of economic and socio-political goals in order to address the specific context in which they are operating. While one ‘best fit’ model might be appropriate for a recruitment process during stable market conditions, the same model might be totally inappropriate in a period when market forces and demand for labour have changed dramatically. If a company were to adopt one single model to serve its recruitment needs it might be subject to criticism, since it would be failing to consider the context and nature of the firm (Wilton, 2011). However, it can be useful to use a mix of models in order to meet the different business needs. Delery and Doty (1996) suggest we should accept that there will always be socio-cultural variations in how HRM is organised and we should look to systems of HR practices that have a kind of ‘functional equivalence’. Therefore, failing to adopt a flexible model could provide a rival company with a competitive edge. This would be particularly true for companies that operate in a global economy where societal and cultural influences play a significant role. When determining ‘best fit’ between business and HR strategy and