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Human Resource Management in Tesco Plc

Topic: A critical Assessment of the Human Resource Management in Tesco Plc

Executive Summary

This report reviews and discusses the Human Resource policies and practices at Tescos. The organisation has introduced a high commitment model which offers training and development to all employees. They have developed their culture through extending their logo every little helps to prove their commitment to employees as well as to customers. This has proved a world class model and very successful for the organisation.

The role of HR within the organisation has increased in importance with focus being laid down on Recrutiment & Selection, Training & Development and Performance appraisal.

This organisation was chosen, through their introduction of strategic HR policies, which has led to an increase in business. This has demonstrated they are a first class provider of training to their employees, and has given scope for the organisation to expand into new markets.

Their slogan every little helps is used to show their commitment to customers, this has been used to reduce prices and to increase the level of customer service. This slogan is now used in their staff training, that any intervention will increase the knowledge of the work force.

Company Profile

Tesco is the biggest private sector employer in the UK. The company has more than 360,000 employees worldwide. In the UK, Tesco stores range from small local Tesco Express sites to large Tesco Extras and superstores. Around 86% of all sales are from the UK.

Tesco also operates in 12 countries outside the UK, including China, Japan and Turkey. The company has recently opened stores in the United States. This international expansion is part of Tesco's strategy to diversify and grow the business.

Tescos' operates in a very competitive market; the consumer has a choice where to shop for their groceries. They have expanded their portfolio to include CD's, DVD's, electrical goods and clothing. Recently they have expanded into the financial services offering customers products from Credit cards to insurance. All their products are available on the internet 24 hours a day.

OBJECTIVE 1

Workforce planning is the process of analyzing an organization's likely future needs for people in terms of numbers, skills and locations. It allows the organization to plan how those needs can be met through recruitment and training. It is vital for a company like Tesco to plan ahead. Because the company is growing, Tesco needs to recruit on a regular basis for both the food and non-food parts of the business.

Positions become available because:

• Jobs are created as the company opens new stores in the UK and expands internationally

•Vacancies arise as employees leave the company - when they retire or resign - or get promotion to other positions within Tesco

• New types of jobs can be created as the company changes its processes and technology.

Tesco uses a workforce planning table to establish the likely demand for new staff. This considers both managerial and non-managerial positions. In 2008/09, for example, Tesco calculates that to support its business growth there will be a demand for around 4,000 new managers.

Tesco needs people across a wide range of both store-based and non-store jobs:

• In stores, it needs checkout staff, stock handlers, supervisors as well as many specialists, such as pharmacists and bakers.

• Its distribution depots require people skilled in stock management and logistics.

• Head office provides the infrastructure to run Tesco efficiently. Roles here include human resources, legal services, property management, marketing, accounting and information technology.

TYPE OF STORE

CUSTOMER BENEFIT

EXPRESS

Convenience And Value. Fresh Local Food

METRO

Convenience In Towns And City

Centres. Lots Of Food Lines.

SUPERSTORE

A Wide Range Of Food Lines, Such as DVDs And Books.

EXTRA

A Wide Range Of Food And Non-Food, Including Seasonal Items Such as Garden Furniture.

Tesco aims to ensure all roles work together to drive its business objectives. It needs to ensure it has the right number of people in the right jobs at the right time. To do this, it has a structured process for recruitment and selection to attract applicants for both managerial and operational roles.

This planning process runs each year from the last week in February. There are quarterly reviews in May, August and November, so Tesco can adjust staffing levels and recruit where necessary. This allows Tesco sufficient time and flexibility to meet its demands for staff and allows the company to meet its strategic objectives, for example, to open new stores and maintain customer service standards.

Tesco seeks to fill many vacancies from within the company. It recognizes the importance of motivating its staff to progress their careers with the company. Tesco practices what it call ‘talent planning'. This encourages people to work their way through and up the organization. Through an annual appraisal scheme, individuals can apply for ‘bigger' jobs. Employees identify roles in which they would like to develop their careers with Tesco. Their manager sets out the technical skills, competencies and behaviors necessary for these roles, what training this will require and how long it will take the person to be ready to do the job. This helps Tesco to achieve its business objectives and employees to achieve their personal and career objectives

An important element in workforce planning is to have clear job descriptions and person specifications. A job description sets out:

• The title of the job

• To whom the job holder is responsible

• For whom the job holder is responsible

• a simple description of roles and responsibilities.

A person specification sets out the skills, characteristics and attributes that a person need to do a particular job.

Together, job descriptions and person specifications provide the basis for job advertisements.

They help job applicants and post-holders to know what is expected of them. As they are sent to anyone applying for jobs, they should:

• contain enough information to attract suitable people

• Act as a checking device to make sure that applicants with the right skills are chosen for interview

• set the targets and standards for job performance.

Job descriptions and person specifications show how a job-holder fits into the Tesco business.

They help Tesco to recruit the right people. They also provide a benchmark for each job in terms of responsibilities and skills. These help managers to assess if staff are carrying out jobs to the appropriate standards.

Skills and behaviours

Tesco's purpose is to serve its customers. Its organisational structure has the customer at the top. Tesco needs people with the right skills at each level of this structure. There are six work levels within the organisation. This gives a clear structure for managing and controlling the organisation. Each level requires particular skills and behaviours.

• Work level 1 - frontline jobs working directly with customers. Various in-store tasks, such as filling shelves with stock. Requires the ability to work accurately and with enthusiasm and to interact well with others.

• Work level 2 - leading a team of employees who deal directly with customers. Requires the ability to manage resources, to set targets, to manage and motivate others.

• Work level 3 - running an operating unit. Requires management skills, including planning, target setting and reporting.

• Work level 4 - supporting operating units and recommending strategic change. Requires good knowledge of the business, the skills to analyse information and to make decisions, and the ability to lead others.

• Work level 5 - responsible for the performance of Tesco as a whole. Requires the ability to lead and direct others, and to make major decisions.

• Work level 6 - creating the purpose, values and goals for Tesco plc. Responsibility for Tesco's performance. Requires a good overview of retailing, and the ability to build a vision for the future and lead the whole organization.

Tesco has a seven-part framework that describes the key skills and behaviours for each job at every level in the company. This helps employees understand whether they have the right knowledge, skills or resources to carry out their roles.

Tesco is a major international company with many job opportunities, including management, graduate, school leaver and apprentice posts. Tesco needs to have people with the right skills and behaviours to support its growth and development. Tesco has clear organizational structures, detailed job descriptions and person specifications. It provides user-friendly ways of applying for jobs and a consistent approach to recruitment and selection. This means it can manage its changing demand for staff.

OBJECTIVE 2

Recruitment & Selection at Tesco

It involves attracting the right standard of applicants to apply for vacancies. Tesco advertises jobs in different ways. The process varies depending on the job available. Tesco first looks at its internal Talent Plan to fill a vacancy. This is a process that lists current employees looking for a move, either at the same level or on promotion. If there are no suitable people in this Talent Plan or developing on the internal management development programme, Options, Tesco advertises the post internally on its intranet for two weeks.

For external recruitment, Tesco advertises vacancies via the Tesco website www.tescocareers.com or through vacancy boards in stores. Applications are made online for managerial positions.

The chosen applicants have an interview followed by attendance at an assessment centre for the final stage of the selection process. People interested in store-based jobs with Tesco can approach stores with their CV or register though Jobcentre Plus. The store prepares a waiting list of people applying in this way and calls them in as jobs become available.

For harder-to-fill or more specialist jobs, such as bakers and pharmacists, Tesco advertises externally:

• Through its website and offline media

• Through television and radio

• By placing advertisements on Google or in magazines such as The Appointment Journal.

Tesco will seek the most cost-effective way of attracting the right applicants. It is expensive to advertise on television and radio, and in some magazines, but sometimes this is necessary to ensure the right type of people get to learn about the vacancies. Tesco makes it easy for applicants to find out about available jobs and has a simple application process. By accessing the Tesco website, an applicant can find out about local jobs, management posts and head office positions. The website has an online application form for people to submit directly.

Selection involves choosing the most suitable people from those that apply for a vacancy, whilst keeping to employment laws and regulations. Screening candidates is a very important part of the selection process. This ensures that those selected for interview have the best fit with the job requirements.

In the first stages of screening, Tesco selectors will look carefully at each applicant's curriculum vitae (CV). The CV summarizes the candidate's education and job history to date. A well-written and positive CV helps Tesco to assess whether an applicant matches the person specification for the job. The company also provides a ‘job type match' tool on its careers web page. People interested in working for Tesco can see where they might fit in before applying.

The process Tesco uses to select external management candidates has several stages.

A candidate who passes screening attends an assessment centre. The assessment centres take place in store and are run by managers. They help to provide consistency in the selection process. Applicants are given various exercises, including team-working activities or problem solving exercises. These involve examples of problems they might have to deal with at work.

Candidates approved by the internal assessment centres then have an interview. Line managers for the job on offer take part in the interview to make sure that the candidate fits the job requirements.

OBJECTIVE 3

Analysis of Training and Development

Reasons for emphasizing the growth and development of personnel include

* Creating a pool of readily available and adequate replacements for personnel who may leave or move up in the organization.

* Enhancing the company's ability to adopt and use advances in technology because of a sufficiently knowledgeable staff.

* Building a more efficient, effective and highly motivated team, which enhances the company's competitive position and improves employee morale.

* Ensuring adequate human resources for expansion into new programs.

The need for training of employees would be clear from the observations made by the different authorities.

1. To Increase Productivity:

Instruction can help employees increase their level of performance on their present assignment. Increased human performance often directly leads to increased operational productivity, & increased company profit.”

2. To Improvement Quality:

Better informed workers are less likely to make operational mistakes. Quality increase may be in relationship to a company product or service, or in reference to the intangible organizational employment atmosphere.

3. To Help A Company Fulfill Its Future Personnel Needs:

organizations that have a good internal educational programme will have to make less drastic manpower changes & adjustments in the event of sudden personnel alterations.

4. To Improve Organizational Climate:

An endless chain of positive reactions results from a well-planned training programme. Production & product quality may improve; financial incentives may then be increased, internal promotions become stressed, less supervisory pressure ensure & base pay rate increases result.

The Benefits Of Employee Training

How Training Benefits The Organization

* Leads to improved profitability &/or more positive attitude towards profit orientation

* Improve the job knowledge & skills at levels of the organization

* Improves the morale of the workforce

* Helps people identify with organizational goals

* Helps create a better corporate image

* Fosters authenticity, openness & trust

BENEFITS TO THE INDIVIDUAL

* Helps the individual in making better decision & effective problem solving.

* Through training & development, motivational variables of recognition, achievement, growth, responsibility & advancement are internalized and operationalised

* Aids in encouraging & achieving self development & self confidence

* Helps a person handle stress, tension, frustration & conflict

Conclusions and Discussions

This section will report on the organisations HR policies, the information is taken from current articles and their web site which is outlined in the appendices.

Analysis of HR Practices At Tescos

This section of the paper will discus Tescos approach to HR and compare this to current thinking.

Recognition of the importance of HR in the UK has increased in recent years; this is a result of competition from overseas economies. In countries for example Japan, Germany and Sweden investment in employee development is higher that the UK. This has led to some organisations reviewing their policies on training introducing continuous investment in their employees (Beardwell, I et al 2004).

There are fundamental differences in the approach to HR. Storey (1987) discussed these as ‘hard' and `soft' versions of HRM The ‘hard' version places little emphasis on workers' concerns and, therefore, within its concept, any judgments of the effectiveness of HRM would be based on business performance criteria only. In contrast, 'soft' HRM, while also having business performance as its primary concern, would be more likely to advocate a parallel concern for workers' outcomes (Storey cited in Guest, D. 1999).

The appearance of knowledge based economies, has deep implications for the factors of growth, the organisation of production and its effect on employment and skill requirements. This may call for new directions in industry related government policies. The prime minister stated that “education is the best economic policy we have. That through the policy of lifelong learning the UK would have the knowledge to compete in the new economy (Tony Blair PM (1998) DTI White Paper). Tesco's have exceeded the government's expectations for learning, having introduced training as a strategic advantage.

Tescos have strategically integrated HR into their overall plans. Managers have been to utilise aspects of HR in their decision making. This has shown high commitment to HR, attempting to gain acceptance from all employees, and offering to all employees basic and extended training (Beardwell I 2004). The big picture of Tesco's strategic direction is discussed with all employees. This helps the individual employee to understand their role and importance within the organisation. Therefore, they place a high value on their human resource.

There has been an increase in training within the organisation; all employees now receive more training than before. This is a result of the HR department taking a strategic role. HR is not an administrative department within Tesco; they are proactive and are on the strategic level of the organisation. This increase in training priority has been supported by a rise in Human Resource Management. This practice emphasises that increased growth can only be maintained in the long run; by equipping the work force with the skills they need to complete their tasks (Mullins, L. 2005).

Strategic HRM has gained both credibility and popularity over the past decade, specifically with respect to its impact on organisational performance (Paauwe, J & Boselie P. 2003). Each employee is considered a part of the overall strategy; therefore they are instructed on the importance of their role. This training is delivered in a way that encompasses all learning skills and allows for cultural difference.

There is an increased need for a higher value to be placed on employees, and therefore get the best performance from the employees. According to Delany (2001) successful organisations keep people issues at the fore front of their thinking and at the core of their decision making and planning. Delany adds organisations that get the people things right are the organisations likely to be around in the future (Delany (2001) cited in Mullins, L. 2005:748). Being the largest Private employer in the UK Tesco takes this responsibility seriously, this is demonstrated through their training and development policy. This has exceeded the government's recommendations for training of the individual and the move towards a learning society.

For HR to succeed it must take on a proactive role within the organisation. Strategic HR creates value by providing opportunities for organic learning, development of intellectual capital and enhances core competencies. This value is crucial to the organisation's future success (Treen, D. 2000). Employers are increasing extorting the best possible performance from employees. Best practice will increase the skills of the current workforce, and with recruiting it will reinforce the culture of a highly skilled work force (Mullins, L. 2005).

Reinforcing learning within in an organisations, requires what Hawkins (1994) called “a change at the heart this change is in the understanding of learning, a shift from viewing learning as being abrupt facts to learning as a more multi-faceted and dynamic process” (Hawkins, P 1994:9). This learning environment with Tescos has been extended to encompass all aspects of the work environment.

The learning process has been challenged to create a culture that allows continual learning throughout the organisation. As knowledge is what matters, organisations and individuals alike must become continuous learners (Hawkins, P 1994). The organisation runs an academy that recognises skills in the individual. The training is identified from core, operational and leadership skills. All employees can access the core skills. These development programmes are tailored to the individual's skill level. The delivery method for the training is varied, allowing for the individuals learning preference.

Tesco's operate within a fiercely competitive sector, using a human resource led business strategy, has help to place them in the number one position. This is only sustainable if the strategy is on going, with competitors actions monitored for any changes (Mullins, L. 2005). To fully exploit the wealth of knowledge contained within an organisation, it must be realised that it is in human resource management that the most significant advances will be made. As a result, the human resource department must be made a central figure in an organisation's strategy to establish a knowledge basis for its operations (Armstrong, M 2005).

The principal function of any organisation is to increase the value of the business and therefore enhance the wealth of its Owner(s). This is obtained by efficient use of the limited resources available to them (T Blackwood, 1995). Garrick (1998) discussed that training inextricably linked to market economics, that “knowledge is prized in so far as it can generate a market advantage(Garrick 1998:5). This leads to the assumption that though training and developing employees, it can give the organisation advantage, increasing profit

HR and training literatures highlights the organisational benefits to be gained from adopting a systematic approach to HRD, therefore the ongoing development of employees' skills underpins the wider business objectives (Keep, E 1989). This systematic approach to training often includes models that identifying needs, planning, delivery and evaluation. Harrison developed an eight stage model to identify monitor and evaluate training. The evaluation stage is possibly the most problematic part of the training process (Reid, M and Barrington, H 1997). The organisation has seen the advantages that training can give, and has fully incorporated this into their business. The process of training is formalised through recognition of the need and continual review.

With less job security, the best reward an organisation can give an employee is transferable skills (Marchington M & Wilkinson, A 1997). With the changing employment market, employees feel less job security and are taking more responsibility for their career paths. The skills they are taught within Tesco's could be transferable; therefore in the long run they could benefit competitors. Although the benefits of training the work force exceed the disadvantages, this employee mobility should not be ignored.

Their every little helps slogan is easily recognised by the customer, but is also built in to the training program. This slogan is part of the ethos and culture that is Tesco. The organisation surveys their employees to gauge motivation and to identify training which employees require. This goes further than just identifying organisational benefits of training. Individuals can plan for the future career. Career development is important to the individual employee (Armstrong, M 2005)

Harrison (2002) noted this as an organised planned effort comprised of structured activities or processes that result in a mutual career-plotting effort between employees and the organisation. This is a central component of the psychological contract that binds the individual to the organisation (Harrison, R 2002). This further complicates the role of the HRD practitioner, balancing organisational needs with the individual's expectations. Some employees will develop their career with one employer, while others require transferable skills. The organisation requires employees with the right skills to ensure and sustain competitive advantage (Armstrong, M 2005)

Bibliography

Books

Human Resource Management: A Contemporary Approach
Written By Beardwell, Ian; Claydon, Tim; Beardwell, Julie
Published By Pearson Education UK in 2007

International Human Resource Management
Written By Edwards, Tony; Rees, Chris
Published By Pearson Education UK in 2006

Human Resource Management
Written By Torrington, Derek; Taylor, Stephen; Hall, Laura
Published By Pearson Education UK in 2008

Armstrong, M (2005) (9th Edition) A Handbook of Human Resource Management Practice Kogan Page, London

Mullins, L (2005) (7th Edition) Management and Organisational Behaviour Prentice Hall, Pearson Education, Edinburgh

Journals

Anonymous (2003) Human resources deliver Tesco's bright Future Human Resource Management International Digest, Bradford: Jul/Aug 2003 Vol.7, Iss. 4

Poulter, S. (2005) 2billion Tesco, Daily Mail. London (UK): Apr 13th 2005

Whitelock, N. (2003)Tesco's new recruits see the big picture

Internet

DTI (1998) Building the Knowledge Driven Economy Green Paper, accessed through www.dti.gov.uk/

www.tesco.com

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