New Manager

Are best practices really for the best?

C Mahalingam | Updated on December 24, 2014

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Benchmarking only provides performance cover for HR



For years now, benchmarking has been a craze among HR professionals. Adopting best practices from other firms was regarded a progressive people practice. HR conferences were well attended to listen to best practices from successful companies such as the practice of “bell curve” and “360 degree feedback process.” Organisations that brought in these practices as panacea for their challenges, however, were frustrated with the results. In reality, best practices of a particular company rarely qualify as best practices for others.

The issue with benchmarking best practices is:

They are specific to companies, business models and cultures. To assume that they can be implemented irrespective of context is a misnomer.

Best practices focus on what companies do with their HR systems. What makes them work is difficult to explain as there are cultural nuances to their success.

The focus of best practices is cost and efficiency and rarely value and effectiveness. Benchmarking offers only superficial credibility and to cap it all, it is hardly game-changing.

Therefore, benchmarking of best practices only provides a performance cover for HR professionals. Good professionals don't look for this in any case.

So where do HR professionals turn to for help? There are clear sources of data points to direct them. What business today is demanding is not frou-frou HR practices (practices without a valid base, a term coined by Dave Ulrich), but evidence-based ones. These can be determined with the following approaches:

Understand the value disciplines based on which an organisation competes in the market place. Authors Treacy and Wiersema have suggested product leadership, operational excellence and customer intimacy as three common value disciplines. Organisations select one of the three to build their competitive advantage and the remaining two to ensure competitive parity. For example, Apple, Samsung and IBM focus on product leadership. HR practices, therefore, should support creating the right climate and culture for product innovation.

Employee engagement surveys are common in most companies. They cover many areas, from compensation and communication to competency building. With appropriate analytical tools, HR leaders can establish the engagement drivers that directly impact business drivers such as market presence, sales productivity and customer loyalty. Then, people practices that strengthen the business drivers can be invested in.

The next step would be figuring out the resources and processes required to sustain the strategic success. This will involve identifying the right talent pool that constitutes the resources and impacts the processes. HR programmes to recruit, retain and engage the talent pool will then become a source of business impact. Disneyland, for example, recognised their sweepers as pivotal talent to provide extraordinary moments of delight to the guests for their role as the “go-to people” for information and assistance.

In short, HR credibility has a lot to do with designing and implementing evidence-based practices. Best practices are knowledge, but best fit is what organisations need to invest in. It boils down to recognising the signals from the noise.

The writer is an executive coach and HR Advisor to corporates

Published on December 24, 2014

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