Best HR Practices
Best practices are a set of human resources management processes and measures that work universally. In HRMS research there are two schools of thought on how to manage people. The first fits best, the second is best practices.
The best fit school says that human resources policy should be consistent with the business strategy to create added value. This means that the HR department should focus on both the needs of the company and those of the employees.
The best practice school argues that there are a number of universal HR processes that lead to superior business performance. According to its proponents, there are certain bundles of HR activities that help companies achieve a competitive advantage regardless of the organizational environment or industry.
Skip the extensive academic debate on the merits and weaknesses of each approach. In this type of discussion, the truth often lies somewhere in the middle.
This means that HR strategy and subsequent HR activities should be aligned with the company’s strategy for optimal efficiency (best fit). In the literature, this alignment is also referred to as strategic human resource management.
At the same time, there are a large number of best practices that have been proven to lead to the superior performance of the company. If the HR department implements these practices correctly, it will create significant value for the company and its goals (implementing best practices).
Below are seven best HR practices in human resource management;
The first best practice in human resources is job security. Life is unpredictable and work is a stable factor that is very important for most people. Having an employee who enables the employee to provide for himself and his family is essentially the main reason why people come to work.
There is a formal contract (work for money) and an informal contract (you go the extra mile, we take care of you) between the employee and the employer. Job security allows employees to go home after work and support themselves and their families. This concept of security is essential and forms the basis for almost everything HR does.
When this job security is threatened, e.g. by restructuring or layoffs, you can immediately see that the threat is spreading throughout the company.
Job security also benefits companies because it enables them to retain their employees. For example, when employees are made redundant, it is usually the company that pays the price. It is the organization that has invested in the selection, training, and development of these employees. It is an expensive process. If the organization makes no effort to retain its employees, they are more likely to leave and work for the competition.
The second best HR practice is selective recruitment. This allows an organization to hire employees who create added value.
You can’t hire just anyone; you want people who can do the job. Companies do their best to hire exceptional people because they are the ones who create the most value for the company.
Research shows that the difference in performance between an average employee and a high-performing employee can be as much as 400%! This applies to different industries and types of occupations, including researchers, artists and athletes.
Attracting the right people is therefore the key to creating a competitive advantage.
In today’s digital world, there are many recruitment tools available to help us make the right choices. More and more companies are vigorously monitoring their recruitment metrics to see how well they are doing in this regard.
Commonly used screening tools include structured and unstructured interviews, IQ tests, personality assessments, job tests, peer assessments, and reference checks. These (pre-employment) assessments are used to reveal three essential characteristics of candidates.
Is the person capable of performing the task? Does the person have the appropriate professional and social skills? Is the person intelligent enough to do the job well?
Can we train this person to improve his or her skills? Does the person have the ability to learn and develop?
Will the person be committed to the job and to the organization? Will we be able to keep this person current and fully productive?
We all know that teamwork is crucial to achieving goals. Efficient teams are essential for any business to succeed.
Teams bring value because they are made up of people who are different and think differently but work towards a common goal. This means that different ideas are generated that help to achieve the goal. These ideas are then processed and combined to select the best ones.
The best teams are cognitively diverse and psychologically safe. This means that team members can generate different ideas while they feel comfortable addressing and discussing them.
Individual personality assessments are also often used as they help to understand how other team members think and behave. Understanding these processes is one of the main tasks of a manager. Therefore, many management courses focus on this.
There are various tools that facilitate teamwork. For example, there is communication software, feedback tools, project management tools and other software for defining tasks and goals. These can facilitate communication and help teams to be more effective.
Finally, the HR department needs to encourage different teams to work together within the organization. A team is usually part of a larger entity, such as another team or another department. These larger units must also work together. Facilitating this cooperation helps to build an efficient and effective organization. One of the tools that can be used for this purpose is organizational network analysis.
Risk compensation is the fourth-best HR practice. It has everything to do with remuneration and performance.
First of all, if you hire the right people, you want to pay them above average. These are the people who will add the most value to your business, so you want to keep them and pay them fairly. Here’s an example of how different best practices combined offer more value than they would alone, in this case, selective hiring, risk pay, and job security.
Paying people above the norm also has a number of potential drawbacks. For example, it discourages bad employees from leaving. But if you consistently hire world-class people, above-average pay is a must.
This type of remuneration can take the form of a (basic) salary and benefits.
Next, you want to combine individual rewards with different types of employee contributions. These are performance-related rewards.
By combining organizational performance results with individual rewards, the individual is encouraged to maximize these results. It also creates a sense of belonging for the employee.
Think, for example, of profit-sharing, co-ownership or stock options. These are great ways to keep employees committed to the long-term vision of the company and keep high potential employees. Compensation is an essential component of successful talent management.
This HR best practice indicates that companies should invest a lot of time and money in training their employees.
Once you’ve recruited the best people, you need to make sure they stay ahead of the curve in this area. This is especially relevant today as the speed at which technology is developing increases exponentially. That’s where learning and development come in.
How do you create an organization where the rate of learning matches the pace of change? Learning has become a way to stay innovative, grow faster and maintain competitive advantage.
Employers are increasingly investing in competency-based forms of training. According to the Economist’s special report on lifelong learning, the number of on-demand courses has grown exponentially. Thanks to the Internet, everyone is networked and can learn anything, anytime, anywhere.
In addition to formal learning, learning in the workplace also plays an important role. This includes greater attention to feedback, coaching and peer learning. This is part of the often quoted rule 70|20|10 :
70% of learning comes from difficult tasks
20% of learning comes from developmental relationships
10% of learning comes from formal courses and training
The next generation of employees is actively seeking development opportunities and sees them as an opportunity to grow in their profession. The lack of these opportunities is linked to higher employee turnover.
Learning is of course also important for HR. To stay up-to-date and acquire the skills needed for HR in the 21st century, take our courses at the Academy for Innovating HR!
This HR best practice is rooted in the egalitarian practices of Japanese management. Although we have just seen that some employees are more critical to the success of the company than others, this should not be communicated in this way. Every employee is a valuable member of the organization and should be treated as such.
In Japanese organizations, this translates into shared canteens, company uniforms, and similar sick leave and vacation entitlements. Such an egalitarian culture shows that everyone deserves the same respect and could promote the exchange of ideas.
Information sharing is essential. This is an area where many large companies struggle: How do you know who knows what, so you know where to go with your questions?
First, open communication on strategy, finance, and operations creates a culture in which people feel confident. It truly engages employees in the company. In addition, it discourages negative informal conversations and meaningful casual conversations.
Second, if you want your employees to share their ideas, they need to have an informed understanding of what’s going on in the company.
Being informed about the company is also something that employees often mention as something they find important in attitude surveys, as well as having the opportunity to contribute to and influence decisions that affect their work life.
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