It was contended by Delery and Doty (1996: 802–03) that ‘organizations adopting a particular strategy require HR practices that are different from those required by organizations adopting different strategies’ and that organizations with ‘greater congruence between their HR strategies and their (business) strategies should enjoy superior performance’. They identify three HRM perspectives:
- The universalistic perspective – some HR practices are better than others and all organizations should adopt these best practices.
There is a universal relationship between individual ‘best’ practices and firm performance.
- The contingency perspective – in order to be effective, an organization’s HR policies must be consistent with other aspects of the organization. The primary contingency factor is the organization’s strategy. This can be described as ‘vertical fit’.
- The configurational perspective – Delery and Doty (1996: 804) state that: ‘In order to be effective, an organization must develop an HR system that achieves both horizontal and vertical fit. Horizontal fit refers to the internal consistency of the organization’s HR policies or practices, and vertical fit refers to the congruence of the HR system with other organizational characteristics such as firm strategy. An ideal configuration would be one with the highest degree of horizontal fit.’
An alternative way of presenting these perspectives was suggested by Richardson and Thompson (1999). They proposed adopting the commonly used terms of best practice and best fit approaches for the universalistic and contingency perspectives and ‘bundling’ as the third approach. This followed the classification made by Guest (1997) of fit as an ideal set of practices, fit as contingency and fit as bundles. The best practice, best fit and bundling approaches are discussed below.