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Examining the Management of Growth of Human Capital in Tesco

TESCO is one the largest retail house in UK market and is present internationally in many countries. It has a store chain of 2000 retail store across UK. It is also known to be the largest grocery retailer in the world. The employee strength of TESCO is 472,000 employees worldwide. Tesco in UK is based from a small Tesco express store format to Large Tesco superstores. TESCO currently is operating in 14 countries apart from UK like USA, China, Japan, Thailand, Ireland, Turkey, Czech Republic, Hungary, Poland, etc.

The company was founded by Jack Cohen in 1919 and opened its first store in 1929 in Burnt Oak, Edgware, Middlesex. Initially it grew organically and through various acquisitions. Presently there are 4811 Tesco stores worldwide.

The internal expansion for Tesco is a strategy for growth. Tesco believes in carrying workforces which are with good knowledge, skill and job satisfaction for the growth of the company

The present CEO of TESCO group is Mr. Philip Clarke. The turnover of the company for FY 2010 was £ 62.5 billion. In 2009 Tesco contributed 1.92% of pre-tax profits towards charities and local community organizations.

HR POLICIES IN TESCO

The various HR policies in TESCO are as follows:

Service rules

There are set of laid down policies in TESCO for new entry or new hire and the policies that apply to all levels and all the departments. The first is that every employee would retire from the current role and responsibility on attaining the age of superannuation as the government laws. The second policy is that the management holds the rights to terminate an employee from his or her service only in case of abolition of a post or by giving them with a 3 month notice or 3 month salary in advance. Apart from temporary or part time service employee, all others need to be a member of contributing provident fund scheme. They would also be eligible for pension and gratuity by the company.

Promotion policy and rules

Promotion means a movement of an employee from a lower grade post to the next higher grade. There are set rules and policies or rather eligibility criteria for a promotion of an employee. Following are the prescribed eligibility criteria for a promotion:

The first is the eligibility period, which states that any employee eligible for promotion needs to be in the present position for a prescribed time frame. An example for this is that a sales executive to go to next level in TESCO needs to be in the post for 18-24 months. But this is not necessary that any person crossing this tenure would be promoted. This is accompanied with various other eligibility criteria.

The second is the seniority. This means that seniority would be maintained and would follow the discipline until the junior general manager level.

The third is the availability of vacancy. This means that promotions would be looked at subject to availability of vacancy of a post. This would also be a call from the management to fill the vacancy or go without it. Also the HR would maintain the Employee pyramid structure for efficient functioning and not over staffing.

The fourth is the screening test, where the internal promotions would be dependent on the performance of the employee. This would be done on screening whether the candidate is best suit for the post or not. Also the deciding factor would be the skill and knowledge needed for the next post. The eligibility would be whether the candidate has the required skill and knowledge for the next grade. The fifth criteria are the final decision of the promotion committee for the promotion.

Along with the promotion criteria there are other factors which need to be considered like the time for considering the promotion. In TESCO the promotion cycle is one a year. All promotions would happen once a year. The performance year in TESCO is 30September and the promotion names are announced in the first week of January. All the promotions are effective from the 1st January every year.

Wage Structure:

In TESCO there has been a set lower bar for salary amount for each level. In case of promotion, an employee would bare minimum get a hike to the minimum salary bar amount. The bar is not disclosed by the company due to confidentiality. The wage structure is accordance to the experience and post of individuals and as per the HR policy; all employees would get a wage increase once a year in January. The wages increase is decided on the basis of performance of individuals. Also the wage includes provident fund contribution from employer and employee, house rent allowance, gratuity, and expense reimbursements.

Employee Motivation and Welfare Scheme:

The HR policies and rules is the most important factor for any company to be successful. It is the motivational tools of the company. Employees in TESCO are motivated through various reasons and through various tools and techniques. Some motivational factors can drive them for short run which would last not for long but for a limited period and some may drive employees to be motivated for years. Motivation can be defined as “the 'emotional force' used to move people towards an action”. People may drive these motivational factors for themselves for higher performance or on others for getting thing done or gaining higher performance. These motivations can also be self motivational or self driven. There are two factors which drive motivation which is known as internal and external stimulate desire and energy which drives employees in a continuous manner for commitment and interest towards their job and responsibility. Motivation helps employees in TESCO to persistent efforts in achieving the goals and objective of a company. Motivation is an activity for energizing the human behavior for a task and also known to be mother of all actions. It is an action done due to conscious and unconscious factors like:

a) Intensity for desire

b) Rewards offered for a goal and

c) Expectation of an employee or an individual.

Following are some of the motivational tools used by TESCO and the welfare scheme: Bonus, Cash incentives on achievement of target, health insurance for self and dependents, free food in Cafeteria for employees, employee discounts for employee, yearly appraisal and many more. The motivational tools carry both monetary and non monetary factors.

Health & safety rules:

In TESCO, the management personally takes care of the Health and safety policies for employee. Thou it is done with the help of the HR team. Currently TESCO follows the following Health and safety policies and rules. The canteen needs to provide hygienic food to employee and the hygiene of the cafeteria is on high priority. There is a department holding for the health and safety. The second is the drinking water which is made user that it is mineral water or is purified before employee use. There is always a doctor or Nurse in the office premise for the employees. Also the company provides employees with health and medical insurance along with a life insurance policy. There are fire extinguishers places in reachable places for safety.

Training and Development:

Training is an ongoing process in any company which needs to be upgraded from time to time for the improvement of employee’s performance and is also needed in the competitive market. Training directly relates to an individual’s performance and his or her productivity. As per Ashton, D. and Felstead, A. (2001) Training is defined as “a planned process to modify attitude, knowledge or skill behavior through learning experience to achieve effective performance in an activity or range of activities. Its’ purpose, in the work situation, is to develop the abilities of the individual and to satisfy the current and future needs of the organization”. As per Stewart, G. L., & Barrick, M. R. (2004) an employee is one who knows himself better than anyone else, about his skill, knowledge and ability and performance. For a company it is very necessary to identify employee training needs for development. As per Barrick, M. R., Mount, M. K., & Judge, T. A. (2001) training is defined as a combination of many aspects like modifying the attitude of the employees or individuals, enhancing skills of the individuals, developing knowledge and ability of employees.

In TESCO, the training is given a great importance. They have pre defined training and training on demand. Predefined training is those which are schedule as per rules like the induction training and new orientation training for new hires. At regular intervals training is given to keep the employees fresh and updated with product knowledge and information on new products and garments introduced.

Then there is training for the promotions to understand better the next level of responsibility. The training on demand is those trainings which the managers feel should be attended by the employee for his development of skill. This is a ongoing process as well due to the managers in TESCO keeping a close relationship with the employees.

(b) An important factor for work force planning is Job description and job specification. In Tesco both these are combined. The three job levels selected in TESCO are as follows:

- Entry level is front line workers

- Middle level is the floor manager and

- Senior level is the store head or store manager.

JOB DESCRIPTION / JOB SPECIFICATION

ENTRY LEVEL - Front line workers

Title/ Designation of job and location in the concern: the designation would be front line workers and the location will be the store at which the hiring is done for.

The nature of duties and operations to be performed in that job: Front line workers need to work directly with the customers and there task will be the various in store operations like filling in the shelves with the stock.

The nature of authority- responsibility relationships: the front line workers needs to be active and would hold the authority and responsibility to look into the in store activities and their smooth flow of operation.

Necessary qualifications that are required for job: The qualification required would be effective communication and comfortable in the regional language. The task of this level is to very frequently interact with customers both internal and external. So communication is a must.

Relationship of that job with other jobs in a concern: a front line workers needs to be in constant touch with other department for the free flow of information and the free flow of goods in the shelves without delay.

MIDDLE LEVEL - Floor manager

Title/ Designation of job and location in the concern: the designation would be floor manager and the location will be the store at which the hiring is done for.

The nature of duties and operations to be performed in that job: the floor manager would be required to lead a team of sales force in the store for an effective presentation and service to its customers. The team needs to be interacting with customers so his task is critical as he would have to manage the staff, who would be the face of the company.

The nature of authority- responsibility relationships: the responsibility of floor manager would be managed the team and keep them motivated for high performance.

Necessary qualifications that are required for job: the floor manager needs to be a graduate at least and should have the skill to manage teams, and keep the team motivated and set targets.

Relationship of that job with other jobs in a concern: floor manager works as a ladder between his team and the upper manager and HR. he is the one who would provide the upper management with the information of the floor and the team performance.

SENIOR LEVEL – Store Manager

Title/ Designation of job and location in the concern: the designation would be store manager.

The nature of duties and operations to be performed in that job: the prime task of the store manager would be for running the operation unit or in this case the store of TESCO.

The nature of authority- responsibility relationships: the prime responsibility of the store manager would be to keep a trace of the store performance and keep motivating the floor managers with targets and improving the performance of the store with higher sales.

Necessary qualifications that are required for job: should carry management skills and should be good at planning, target setting and reporting.

Relationship of that job with other jobs in a concern: should have a effective leadership quality.

HIRING STRATEGIES ADOPTED

The Hiring Strategies adopted by TESCO for different level are different. The commonly used hiring strategies in Tesco are:

Employee Referrals

Campus Recruitments

Advertisements and

HR Consultants

For the entry and middle level employee the following are the hiring strategies:

Referrals,

Campus Recruitments and

Advertisements

Senior Level hiring in Tesco is mainly through HR consultants. There are very few cases when there is a employee referral done at this level.

STEPS OF SELECTION PROCESS

Following are the steps followed for selection process for entry level and middle level staff in TESCO. The senior level selection it is rounds of interview with management and screening of resumes.

Stage 1: Preliminary Interview

The election process starts with a preliminary interview or can be called as screening. This stage would contain interview about general information about the candidate and short listing according to their resume.

Stage 2: Receiving Applications

Short listing the application for the vacancy received from sources like advertisement and consultants or internal referral.

Stage 3: Screening of Application

Screening the applications of the candidates. This is the same as the stage 1. But here it is just the resume of the applicant. These screening is done by HR for entry level and is done by managers for the middle level employee.

Stage 4: Employment Tests

A candidate needs to go through various tests for getting into the next stage. This is needed in Tesco as the company directly deals with the customers and Hr needs to find the right candidate for the right post. Following will be the test for the entry and middle level employees.

Intelligence Tests

€Aptitude Tests

Proficiency Tests

Interest Tests

Personality Tests

Stage 5: Employment Interview

Employee interview is necessary due to the following reasons.

To find out the suitability of the candidate,

To seek more information about the candidate.

To give candidate accurate picture of a job with details of term & conditions and some idea of organization’s policies.

Stage 6: Checking References

Once the candidate has successfully passed the above stages of selection process a reference check is done by the HR to extract information about the candidate’s ability and personality and about the past performance.

Stage 7: Medical Examination

The next step is get a medical examination done as the employees in Tesco needs to be fit and health and should be presentable. He or she should not carry any kind of health problem. This is a formal step for the entry level staff.

Stage 8: Final selection & Appointment letter

Once all these stages are completed successfully, the candidate is offered with the appointment letter for the selection which he or she needs to sigh and submit back in a month’s time or as specified.

DESIGNING THE COMPENSATION PATTERN: INCENTIVES AND BENEFITS

Entry level - Front line workers: the compensation paid to the front line would be a fixed salary and performance bonus depending on the target achievement. They would be provided with health and life insurance and would be eligible for gratuity and PF.

Middle level - Floor manager: it would be the same for the floor manager. The target bonus would depend on the target achievement of the respective team. The benefits remain the same. The additional benefit would be the company provided Car and some additional benefits of expense reimbursement like telephone, petrol expense.

Senior level - Store manager- the compensation would be based on the grade and the minimum slab for the grade. The bonus would depend on the store performance and would be eligible for a unit performance bonus.

EFFECTIVE TRAINING METHODOLOGIES

Entry level - Front line workers: front line workers would be provided with communication training and product training on regular interval to keep them up to date for avoiding false commitments to the client. Also the communication would keep the managers and HR keeps a track of the employees’ improvement and performance.

Middle level - Floor manager – the floor managers would be given the leadership training and motivational training. They should also be given a induction training about the company various products and should also be given product training on regular interval so that the floor manager can update its team on the job about the new products.

Senior level - Store manager – store managers should be given training on planning and implementation for store management.

SUITABLE PERFORMANCE MANAGEMENT SYSTEM

Entry level - Front line workers: the managers and HR would be the evaluator of performance for the front line workers. It would be based on the performance and feedback from the customers about individuals dealing and sale.

Middle level - Floor manager – HR and the direct manager would be the evaluator. The evaluating criteria would be the upward feedback from the team and the team performance. The feedback from the manager would also be taken as performance criteria.

Senior level - Store manager – the unit performance is the performance base line set for a store manager.

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