A number of approaches are used to explain the management of human resource to achieve the maximum performance within the organization. As per theory, there are three different models of SHRM which include the universalistic approach, the contingency approach and the configurationally approach. Universalistic approach focuses on the alignment of a particular criterion on the improvement of HR practices. For instance, impact of training on organizational performance can be considered as an example which bears a generalist viewpoint. High performance based work systems have modified the universalistic approach and incorporated multiple practices simultaneously.
The contingency approach on the other hand, acknowledges the particular relationship between the practice and outcome in HR. The commonly identified contingencies include the alignment of the business strategies with those of HRM strategies. A few others include the extent of the influence of the business strategy with that of HR practice considering the external macroeconomic, labour and other competitive factors. The characteristics of organization in terms of size, technological innovation, and overall structure also have a direct role to play under such circumstances. The configurationally perspective considers varied models to obtain a synergy between the internal coherent factors and the external influences.
There are two important aspects in order to maintain competitive advantage. One is the best fit model and the other is the best practice model. While the best fit model deals with the alignment of the organisational strategies with the HR strategies, the best practice model revolves around the set of universally practiced rules and regulations which help organisations to gain competitive advantage irrespective of the sector or area they operate. In Allianz, a similar set of best practices are followed, which helps the company in diversification as well as expansion. The best practices rules are applied not only in Hong Kong but also in different Asian countries wherever they operate. This has also helped them to gain competitive advantage in diversification where they function not only in insurance sector, but also in asset management and other general insurance arena.