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, P. 2008). If competitive advantage is understood as a set of organisational capabilities that would lead to superior performance over competitors, then, HRM strategy is essentially the process of defining and enhancing appropriate systems that maximise people’s added value (Wilton, 2011). The key debate which will be explored is whether there is a best way of achieving strategic HRM. This essay will therefore critically engage in this theoretical debate by comparing and contrasting three SHRM models and explore how each can make a contribution towards improved organisational performance.

Boxall and Purcell (2008) highlight that there is significant debate regarding approaches to strategic HRM when they discuss three theoretical contrasting models, namely ‘‘best fit’’, ‘‘best practice’’ and ‘‘resource based view’’ (RBV). Walton (1985) explains that there are two simple typologies which should be considered when formulating HR strategy. The ‘best fit’ or ‘control based strategy’ is predicated upon close monitoring and management of employee performance and reflects a cost minimisation approach. Conversely, the ‘best practice’ or