Question
Should organisations adopt ‘best fit’ or ‘best practice’ approaches in rewards management?
Answer
The debate between “best fit” and “best practice” in rewards management revolves around whether organisations should tailor their reward systems to their specific context (“best fit”) or adopt universally recognised strategies (“best practice”).
Best Practice in Rewards Management:
Best practices in reward management often emphasize standardized approaches that are believed to be effective across various contexts. These include benchmarking, 360-degree feedback, and flexible compensation systems, which aim to enhance motivation and performance by aligning with ethical corporate culture and effective leadership (Chen, 2022).
The concept of best practice is also linked to performance-related pay and corporate social responsibility, suggesting a value judgment with ethical components (Preda, 2022).
In fitness centres, best practices include customer service, loyalty programs, and marketing strategies, which are essential for business sustainability and customer engagement (León-Quismondo, García-Unanue and Burillo, 2020).
Best Fit in Rewards Management:
The best fit approach suggests that reward systems should be tailored to the specific needs and context of the organisation. For instance, SMEs in South Africa strategically select rewards to encourage innovation performance, considering their limited financial resources (Kankisingi and Dhliwayo, 2022).
The effectiveness of reward systems can vary based on organisational size and context, as seen in the influence of algorithmic management on workplace well-being, which varies with organisational size (Kinowska and Sienkiewicz, 2022).
Both best fit and best practice have their merits in rewards management. Best practices provide a standardised approach that can be widely applied, while best fit allows for customisation to meet specific organisational needs. The choice between the two depends on the organisation’s context, goals, and resources. Organisations may benefit from integrating elements of both approaches to optimize their reward management systems.
References
Chen, Y., 2022. What Are the Main Objectives of Reward Management Systems, and How Has Best Practice Influenced the Development of Them?. Studies in Social Science & Humanities. https://doi.org/10.56397/sssh.2022.11.06
Kinowska, H., & Sienkiewicz, L., 2022. Influence of algorithmic management practices on workplace well-being – evidence from European organisations. Inf. Technol. People, 36, pp. 21-42. https://doi.org/10.1108/itp-02-2022-0079
Preda, A., 2022. Kimberly Chong. 2018. Best Practice. Management Consulting and the Ethics of Financialization in China. Durham NC: Duke University Press.. Organisation Studies. https://doi.org/10.1177/01708406221123377
Kankisingi, G., & Dhliwayo, S., 2022. Rewards and Innovation Performance in Manufacturing Small and Medium Enterprises (SMEs). Sustainability. https://doi.org/10.3390/su14031737
León-Quismondo, J., García-Unanue, J., & Burillo, P., 2020. Best Practices for Fitness Centre Business Sustainability: A Qualitative Vision. Sustainability, 12, pp. 5067. https://doi.org/10.3390/su12125067
