Human Capital Practices: Are Best Practices Good Enough to Win in the Future? It's Doubtful
Organisations implement all kinds of best practices. Have they worked for you? Are they sustainable?
Since the beginning of the industrial revolution, “best practices” in the form of methodologies, frameworks, tools, concepts and theories have been promulgated by management consultants as something akin to finding the holy grail when it comes to solving human capital issues. The mantra is: If “best” practices are already out there, why reinvent the wheel?
As a result, it is comparatively rare to hear about the potential pitfalls or limitations inherent in specific “best” practices being discussed within workplaces. That said, to the credit of the consultants, best practices did advance the human capital field especially in the area of performance management – such as KPIs, MBOs, and the Balanced Scorecard, to name but a few.
But there is a problem with best practices in a rapidly changing business environment. To a large extent, and similar to many management fads, many human capital best practices have neither stood the test of time nor brought the intended (positive) outcomes for organisations. In some of the worst cases, “misuse” or simply “copy-catting” or “plug and play” best practices (without critical examination) have brought about many unfortunate and unintended consequences.
Let’s take the enormously popular 360-degree feedback tool as a case in point where best practice has gone wrong for some organisations.
First, this feedback tool - meant for developmental purposes - has been used instead for performance evaluation. This is certainly a big ‘No.’
Second, though this feedback tool captures both the strengths and weaknesses of an individual as a leader or manager, weaknesses have been largely overplayed for developmental purposes.
Third, the heavy focus on benchmarking one’s rating with global norms has edged out the potential for having more customised and qualitative questions.
Approaches such as these downplay the power of connecting feedback with the needs of the organisation and the individual. Though all these pitfalls can be fixed through education or a certification process, the overarching issue is that best practices need closer scrutiny. A lot closer scrutiny.
In our research synthesis, we identified three major issues that are prevalent with best practices.
First, best practices are often obsessed with bridging perceived human capital gaps. This is not surprising as a yawning gap that has the potential to be filled by a “best” practice is likely to be much valued by the industry.
Second, many best practices are based on the sampling – predominantly - of leaders. Often, leaders who have access to executive programmes, conferences, workshops, and so forth end up becoming part of the sampling pool for management consultants.
Third, there are professional biases in favour of these practices, and as such, they are often chosen by human capital practitioners to safeguard their reputations. Peter Drucker cautioned about this six decades ago when he said managers often search for a “gimmick” to impress their management colleagues. It is still happening today because:
“…over the years, the HR profession has suffered from an inferiority complex. This may arise because the role of HR professionals is ill-defined (they are unsure of where they stand), their status is not fully recognised, or top management and line managers have equivocal views about their value to the organization.”[i]
So, for organisations to win in the future, best practices are simply not good enough.
[i] Armstrong, M., & Taylor, S. (2017). Armstrong's Handbook of Human Resource Management Practice, 14th Edition.