Environmental fit analysis

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INTRODUCTION:

Since organizations are recognizing the importance of managing their human resources as effectively as possible as well analyzing the factors that might affect the organization supply and demand levels and its costs many are devoting more time, attention, skill and effort to have a competitive edge. Therefore, for this essay I have choose Tesco's and Waitrose's supermarket to look at their grocery industry PEST and SWOT analysis and how this organizations performs the recruitment and selection of personnel.

Tesco is a leading retailer in the UK and one of the largest food retailers in the world. Also, is one of the biggest private sector employers in the UK. Around 86% of all sales are from the UK. Tesco also, operates in 12 countries outside the UK, including China, Thailand, Poland, South Korea and Japan and Turkey.

On the other hand, Waitrose owned by the John Lewis Partnership, operates 137 stores, mainly in the South-east of the UK and currently employs more than 27.000 staff. Stores are of small to medium size, conveniently located. Waitrose is recognized for its focused differentiation strategy targeting the upmarket with a wide range of quality, fresh and organic products.

This document will discuss some areas regarding human resources department in an organization such as basic concepts, implementation and models of recruitment and selection processes.

RESEARCH AND METHODOLOGY:

In the lack of internal contacts within the organizations chosen, this essay is based on information found via Internet search, books and journals.

MAIN FINDINGS:

PEST Analysis:

A different number of frameworks have been developed to classify the vast number of possible issues that might affect an industry. A PEST analysis is one of the frameworks that categorize environmental influences as political, economic, social and technological forces. For a PEST analysis it is important to identify the factors that might affect a number of variables that are likely to influence the organization supply and demand levels and its costs (Kotter and Schlesinger, 2005). The analysis examines the impact of each of these factors on the business. The results can then be used to take advantage of opportunities and to make contingency plans for threats when preparing business and strategic plans (Lawson, 2006).

Based on the results from of the PEST analysis the market grocery is a good industry to be in as can be seen is positive (+76). See appendix table 1 for the grocery industry PEST analysis.

The result shows that the food and grocery market is typically very robust and recession proof. Food sales are at the core of the supermarkets and spending on food has been growing. Non foods sales account for an increasing share of Supermarkets incomes. For example, most of the UK supermarkets are large and carry a complete line of non food products such as cosmetics, non-prescription drugs, kitchen wares, insurances and petrol stations. From the customer point of view, most of the positive factors have been score based on social and technological issues where environmentally friendly strategies and new technological advances benefices both the customer and for the organizations. For example, take away and convenience intended to save resources such as time and energy or frustration. Most of the supermarkets stores such as Tesco have convenience stores like petrol stations where the consumer can save time as he fill the car with petrol or wash it, the customer can do his shopping. From the point of view of the organizations since supermarkets tries to concentrate on satisfying consumer's needs, they need to have in mind that there are several other factors that could affect them, such as external environments for instance, Legislation. The food and grocery market is subject to many pieces of stringent legislation surrounding food safety and distribution. For example, supermarkets in UK can be affected in several ways because of politician's different law agreements. For example, as it can be seen in media new laws implied that supermarkets have to compare their products with their competitor's products or changes made by the government in income taxes, changes on VAT on goods and changes in tobacco and alcohol laws, all this would have a large positive or negative impacts on supermarkets.

Tesco SWOT analysis:

This international expansion is part of Tesco's strategy to diversify and grow the business.

Tesco has established itself as the largest organization of the industry within the UK; its position is strong and has a stable trend. But, intense competition in both domestic and international markets could adversely affect its profitability. However, despite the onset of the economic downturn Tesco reveals its 2008 financial results of annual pre-tax profits rise by ten per cent over the last year. The retailer recorded profits of £3.13 billion per year as turnover exceeded £1 billion per week over the 12-month period. Overall sales were recorded at £59.4 billion, the highest on record for a retailer in the UK. Tesco chief executive Sir Terry Leahy attributed the firm's success to a commitment to a long-term consistent strategy. For example, the introduction of buy-one-get-one-free-later deals to help shoppers cut down on food waste. Under the offers, consumers will be able to postpone getting their free second promotional product until a later shopping trip. This would avoid perishable items sitting in the fridge or fruit bowl and then being thrown away if they are not eaten on time.

Waitrose SWOT analysis:

Waitrose is well positioned the market and very competitive. A difference from Tesco, Waitrose focuses his strategy targeting the upper market with a wide range of quality and fresh products. Waitrose strengths are for instance, the partnership with John Lewis that provides expertise and already familiar and tested supply links. Also, Waitrose was one of the first retailers to develop Own Brands. Own brand lines carry over 16.000 products including sandwiches and fresh meals. Waitrose is promoted for a fresh and healthy lifestyle leading supermarket chain in food quality and range. As in this day's society place more pressure on environmental issues; equally customers put more emphasis on healthy eating and organic food and most are opposed to GM-food. Therefore, Waitrose fully serves this trend with its fresh, quality foods and their own label. Furthermore, Waitrose is undertaking a range of activities to maintain their green image like for example, Bag for Life, publishes an Environmental Report and Fair-trade Bananas. Also, a wide range of social programmes are sponsored. Waitrose actively promotes its commitment to providing British products and offers products through partnerships with farms and dairies.

Furthermore, mayor threats come from others supermarkets that also positioned their own brand labels targeting the upmarket like for example, Tesco Finest which can offer their products at lower prices. Because consumers will generally buy their groceries at the most convenient place with the lowest price and since the products they buy are identical in every chain they don't mind which shop they buy their goods from. Indeed, Waitrose has a good reputation for stocking quality products but this has led to a perception of being expensive.

An additional threat in that Waitrose has concentrated on the food and drinks market, choosing not to diversify as much as Tesco, this can affect grow and incomes. Consequently, their market share cannot really be improved unless they build more stores and expand to other brands labels.

Recruitment and selection:

A study by Rioux and Bernthal (no dated: 1) based on survey results from 162 members of the DDI HR Benchmark Group quote: 'Better recruitment and selection strategies result in improved organizational outcomes. The more effectively organizations recruit and select candidates, the more likely they are to hire and retain satisfied employees'

Human resource recruitment is the process of identifying and attracting potential candidates from within and outside an organization to begin evaluating them for future employment. The goal of recruitment is to ensure that when a vacancy occurs, the organization has a number of reasonably qualified applicants to choose from (Armstrong, 2006).

The process of staff recruitment and selection is becoming increasingly complex and Human Resource (HR) strategies means that the successful outcome of these processes is vital for job performance. Workforce comprises people who are different and share different attitudes, needs, desires, values and work behaviours (D'Netto and Sohal, 1999).

Once candidates are identified, an organization can begin the selection process. This includes collecting, measuring and evaluating information about the candidate qualifications for a specified position. Organizations use these processes to increase the probability of hiring individuals who possess the accurate skills and abilities to be successful at their jobs in which managers and other can choose from a pool of applicants most likely person or persons to succeed in the job given management goals and legal requirements (Rioux and Bernthal, no dated). Consequently, Effective recruitment is essential to the successful functioning of an organization. Successful recruitment depends on finding people with the necessary skills, expertise and qualifications to deliver organisational objectives and the ability to make a positive contribution to the values and aims of the organization (Canterbury Christ Church University, 2009).

Process:

Recruitment is a big investment and is very important that an organization get the process right, fair and consistent to recruit the right person for the job. Getting that right person takes more than simply checking out the technical details of their application in an interview. Of course they need to have the right skills to do the job,but skills and knowledge alone do not necessarily guarantee a positive contribution to the organisation (Canterbury Christ Church University, 2009). For example, for leadership and management roles, in particular, there is a need to know more about candidate interpersonal skills and behaviours, their values and their ability to cope with a range of different situations (Canterbury Christ Church University, 2009). Putting in place a fair and consistent recruitment process is critical in ensuring to make the right decision. It will also safeguard and enhance the reputation as a fair and effective employer (Canterbury Christ Church University, 2009).

Consequently, recruitment and selection have been always been critical process for organizations (Bratton and Gold, 2007). Attracting and selecting the right employees is a critical strategic human resources management decision in all organizations irrespective of their size, structure or sector (Baker and McKenzie, 2009; Marchington and Wilkinson, 2008). For example, a survey in the UK by the chartered institute of Personnel and Development found that 85 per cent of organizations experience recruitment process difficulties such as, lack of experience and specialist skills being the most frequent factors (Bratton and Gold, 2007). Moreover, other keys of staffing for instance, HR planning, labour, turnover and recruitment are often downplayed because attention is focused on how selection decisions can be improved by using new or sophisticated techniques process (Marchington and Wilkinson, 2008). These techniques to recruitment and selection tend to emphasize the power of employers. Traditional approaches attempt to attract a wide choice of candidates for vacancies before screening of those who do not match the criteria set in job descriptions and personnel specifications (Bratton and Gold, 2007). Figure 1 for example, shows an overall view of the stages of recruitment and selection and the connections of these processes to human resource planning.

Recruitment method in Tesco and Waitrose:

The number and categories of people required should be specified derived from the human resource plan. For both stores HR planning is vital as the stores are growing. Tesco and Waitrose need people across a wide range of both store based and non store jobs:

  • In stores: Checkout staffs, stock handlers, supervisors as well as many specialists, such as pharmacists and bakers.
  • Distribution: skilled people in stock management and logistics.
  • Head office: human resources, legal services, property management, marketing, accounting and information technology.

The superstores need 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 or expands internationally such the case of Tesco. Also, vacancies arise as employees leave the company when they retire or resign, or get promotion to other positions within store. The companies use a workforce planning tables to establish the likely demand for new staff planning. For example, Tesco's process runs each year from the last week in February. There are quarterly reviews in May, August and November.

The superstores seek to fill many vacancies from within the company. They recognise the importance of motivating its staff to progress their careers with the company. Tesco for example, practises a talent planning process. This encourages people to work their way through and up the organisation. 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 behaviours 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.

On the other hand, Waitrose practises 'The Waitrose Graduate Scheme' that offers a range of programmes for well rounded graduates with the potential to become leaders of our unique business.

Advertising:

The two organizations advertise jobs in different ways. The process varies depending on the job available. They first looks at its internal talent plan to fill a vacancy.

For external recruitment, Tesco advertises vacancies via the Tesco website www.tesco-careers.com, Waitrose advertises via www.waitrosejobs.com in partnership with John Lewis. This means that people can increase their chances of recruitment in other kind of jobs such as in clothes, furniture, home-wares, electrical and fashion stores. Also, both of them advertise through vacancy boards in stores. 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 can approach stores with their CV or register though Jobcentre Plus. The stores prepare a waiting list of people applying in this way and call them in as jobs become available.

Selection process:

It 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. Both organizations use a screening selection process where selectors will look carefully at each applicant's CV. A candidate who passes screening process 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.

CONCLUSION:

For both supermarkets growth have been excellent for the business, they have shown an increase in turnover despite the economic downturn. Although, Waitrose has shown steady growth it is important for Waitrose to challenge Tesco either by thinking of international expansion or on price.

On the other hand, the growing importance of environmental issues means that supermarkets will have to provide to consumers better green alternatives and also governed by price. This is a sensitive issue as they will have to balance their public stand on environment without losing consumers due to the increase in prices. Waitrose seems to be very well placed on these issues due to its various and recent green initiatives. This presents an opportunity to Tesco where they can improve and have bigger benefits.

Treats to these organizations can be legislation with stringent laws on food and drinks. Tesco and Waitrose will have to follow more and more packaging and labelling policies to deal with these, which can be an additional financial trouble for the companies.

On the other hand, as organizations respond to economic and technological pressures. Jobs change accordingly. Therefore, planning is vital if a business is to meet its future demands for staff. Tesco and Waitrose have many job opportunities, from management to apprentice posts. Both organizations have clear organisational structures, detailed job descriptions and person specifications. It provides user friendly ways of applying for jobs and a consistent approach to recruitment and selection.

RECOMMENDATIONS:

  • As one of the downsides of supermarket shopping is the queuing system, supermarkets should increase the self checkout machines; this can help solve this problem.
  • Internet shopping seems to be growing. However, Waitrose should take additional advantage of this way of shopping.
  • A lot of emphasis and pressure has been added to big companies in reducing carbon footprint and increasing energy efficiency. Organizations will have to invest more on green issues, especially Tesco, as Waitrose has more ethical issues, like sale of organic food and the ethical treatment of animals.
  • Unlike Tesco's expansion plan, Waitrose is not present in international markets. This can lead to trouble especially if there is some problem within food retailing in the UK. Waitrose should have a source of extra growth. They can see the opportunity of expansion and have international market.
  • Supermarkets need to be able to ensure that the management of human resources contributes to support broad goals and also, building a strong relationship between HR management and employees.

REFERENCES:

  • Andidas.com. (2002). Environmental Fit Analysis. Waitrose.
  • Andidas.com (2003). A Guide for Trainee Graduate Retail Managers and Middle-Level Managers. Waitrose. P 1-30.
  • Armstrong, M. (2003). A handbook of human resource management practice. Ninth edition. London: Kohan Page Limited.
  • Armstrong, M. (2006). A handbook of human resource management practice. Tenth edition. London: Kohan Page Limited. Datamonitor (2006). Tesco SWOT Analysis. P 1-10.
  • Bach, S. (2005). Managing Human Resources: Personnel Management in Transition. Fourth edition. Oxford: Blackwell Publishing.
  • Baker and McKenzie. (2009). Australian Master Human Resources Guide. Seventh edition. Australia: McPherson printing group.
  • Bratton, J and Gold J. (1999). Human Resource Management: Theory and Practice. Second edition. Houndmills: Macmillan Press Ltd.
  • Bratton, J and Gold J. (2007). Human Resource Management: Theory and Practice. Fourth edition. Houndmills: Palgrave Macmillan Press Ltd.
  • Canterbury Christ Church University (2009). Recruitment and selection - overview. [Internet]. Available at: <http://www.canterbury.ac.uk/business-management/CLMD/recruitment-and-selection/Home.aspx>. [Accessed, 24 November 2009].
  • Courtney, R. (2002). Strategic management for voluntary non-profit organizations. London: Routledge.
  • Marchington, M and Wilkinson, A. (2008). Human Resource Management at work: people management and development. Fourth edition. London: Chartered Institution of Personnel and Development.
  • Rioux, S. M and Bernthal, P. (no dated).Recruitment and Selection Practices. Development Dimensions International. P. 1-4.
  • Storey, J. (1992). Developments in the Management of Human Resources. London: Blackwell.

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