Human Resource Planning and Development: Tesco
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Introduction of Tesco
Jack Cohen founded Tesco in 1919 when he began to sell surplus groceries from a stall in the east end on London. The Tesco brand first appeared in 1924. Jack Cohen made new label using the first three letters of supplier's name (TES) and the first tow letter of his surname (Co), forming the word TESCO. The first Tesco store was opened in 1992 in Burnt oak, Edgware, Middlesex. Tesco was floated in London stock exchange in 1947 as Tesco Stores (Holding) Limited. The first self service store opened in St. Albans in 1951 and the first supermarket in Maldon in 1956.
Tesco is one of the world's leading international retailers. Nowadays it deals in different sectors like telecom, online services, clothing, insurance, electronics, fuel etc, but the principal activity of the Tesco group is food retailing and it has over 2,500 stores worldwide.
Tesco is public owned company its major shareholders as of 2004 were 
- Barclays Global Investors (3.82%)
- Legal and general (2.79%)
- Schroder investment Mgt Ltd (2.87%)
- State street global Advisors (2.73%)
- Axa Investment Manager (2.63%)
- Threadneedle Investments (2.63%)
- Scottish windows (2.08%)
- M & G Investment Mgt Ltd (1.99%)
- Morley fund Management (1.88%)
- USB Global Asset
It is one of the biggest retailer companies in the world which has 702 stores in UK and employee 240,000 people. It originally caters in food but expanded it scope of services to clothing, finance services, electronic, etc. Company strategy is to focus on long term business. Tesco start self service supermarket in US in 1930s. After 20 years Tesco has become a familiar name not only for groceries but also for fresh food, clothing and hundreds of household goods in 1940s. Tesco has built its 100th superstore by 1985 and in 1987. By 1991 the success of its petrol filling station earned for the company British's biggest independent petrol retailer. It broke new level in food retailer in 1995 the first customer loyalty card, which offer benefit to regular customer and other different kinds of offers was given to customer like Tesco Baby club for new parents.
Tesco acquire the "HIT" chain of hypermarkets in Poland in July 2002. By the end of 2002/2003 Tesco had 45 percent of its space overseas. Tesco has developed various kinds of Tesco stores like Tesco Extra, Metro Tesco, and Tesco Express. The grocery store is also offer club card for the customer from which a significant 80% of the sales are transacted.after certain points Tesco gives voucher to the customer to met with a similar success as over a billion vouchers are already given away. The market share is now 16.2%. Tesco operate 4 store formats in the UK.
Introduction to Human Resource Management
Human resources are the people that work for an organisation, and Human Resource Management is concerned with how these people are managed. However, the term Human Resource Management (HRM) has come to mean more than this because people are different from the other resources that work for an organisation. People have thoughts and feelings, aspirations and needs. The term HRM has thus come to refer to an approach, which takes into account:
- The need of organization
- The need of its people
Different individuals have their own needs and aspirations. HRM therefore involves finding out about the needs and aspirations of individual employees, for example through the appraisal process and then creating the opportunities within the organisation (e.g. through job enlargement) and outside the organisation for employees to improve themselves. HRM therefore relates to every aspect of the way in which the organisation interacts with its people, e.g. by providing training and development opportunities, appraisal to find out about individual needs, training and development needs analysis, etc.
Three key activities of HRM in TESCO
Planning staff levels requires that an assessment of present and future needs of the organization be compared with present resources and future predicted resources. Appropriate steps then be planned to bring demand and supply into balance. Thus the first step is to take a rough sketch of the existing workforce profile (number, skills, ages etc) of existing employees and then audit for 1,3 and 10 years ahead by amendments for normal turnover, planned staff movements, retirements etc in line with the business plan for the corresponding time frames. What future demands will be is only influenced in part by the forecast of the personnel manager, whose main task may well be to scrutinize and modify the crude predictions of other managers. Future staff needs will derive from:
- Sales and production forecasts
- The effects of technological change on task needs
- Variations in the efficiency, productivity, flexibility of labour as a result of training, work study, organizational change, new motivations, etc.
- Changes in employment practice
- Variation which respond to new legislation, eg. Payroll taxes or their abolition, new health and safety requirements
- Changes in government policies.
What should emerge from this blue sky gazing is a thought out and logical staffing demand schedule for varying dates in the future which can then be compared with the crude supply schedules. The comparisons will then indicates what steps must be taken to achieve a balance.
That in turn will involve the further planning of such recruitment, training, retraining and labour reductions or change in workforce utilization as will bring supply and demand into equilibrium, not just as a one off but as a continuing workforce planning exercise the inputs to which will need constant varying to reflect actual as against predicted experience on the supply side and changes in production actually achieved as against forecast on the demand side.
Recruitment and selection:
The overall aim of the recruitment and selection process should be to obtain at minimum cost the number and quality of employees required to satisfy the human resource needs of Tesco. The three stages of recruitment and selections are
- Defining recruitments
- Attracting candidates
- Selecting candidates
The number and categories of people required should be specified in the recruitment programme, which is derived from human resource plan. In addition there will be demands for replacements or for new jobs to be filled, and these demands should be checked to ensure that they are justified. It may be particularly necessary to check on the need for a replacement of the level of type of employee that is specified. These provide the basic information required to draft advertisements, brief agencies or recruitment consultants, and assess candidates. A role profile listing competences skill, educational and experience requirements produces the job criteria against which candidates will be assessed at the interview of by means of psychological tests.
Attracting candidates is primarily a matter of identifying, evaluating and using the most appropriate sources of applicants. However in cases where difficulties in attracting or retaining candidates are being met or anticipated, it may be necessary to carry out a preliminary study of the factors that are likely to attract or repel candidates the strengths and weakness of the organization as an employer.
Advertising is the most obvious method of attracting candidates. Tesco basically advertise its vacancy on its web site. This means looking at the alternative sources mentioned above and confirming preferably on the basis of experience, that they will not do. Consideration should be given as to whether it might be better to use an agency of a selection consultant. When making the choice, refer to the three criteria of cost, speed and the likelihood of providing good candidates. The objectives of an advertisement should be to attract attention, create and maintain interest and stimulate action.
Tesco employees are encouraged to ask themselves strategic questions in order to assess their skills and ability to progress. Employee motivation is important for the organisation. It is one of the basic activities needed for the smooth running of an organization. To retain good staff and to encourage them to give of their best while at work requires attention to the financial and psychological and even physiological rewards offered by the organization as a continuous exercise.
Basic financial rewards and conditions of services are determined externally in many occupations but as much as 50 % of the gross pay of manual workers is often the result of local negotiations and details of conditions of services are often more important than the basics. Hence there is scope for financial and other motivations to be used at local levels. As staff needs vary will vary with productivity of the workforce so good personnel policies are desirable. The latter can depends upon
Other factor but unless the wage packet is accepted as fair and just there will be no motivation.
Following are the motivation techniques
Celebrating annual holidays: the regular celebration of annual events help form the company culture, the environment you provide for people at work. Tesco gives pay holiday for its employee which will motivate its employee. If the workers are involved in creative work by which they share their ideas and culture with each other which helps keep the culture of an organization well. Tesco provides different kinds of bonuses and voucher to its employee which helps to motivate them.
Ranking the workers and giving them the rewards which help employee to spend all their time at work place and company gain good profit from this. Providing benefit, medical treatment and basic requirement facilities to the workers motivate workers to give good output to an organization
Human Resource Management Models of Tesco:
This company 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 commitment. This organisation was chosen, through their introduction of strategies which has led to an increase in business. This has demonstrated they are a first class provider of training to their employments, and has given opportunity to expand into new markets.
The matching Model
The early HRM model developed by Fombrun emphasizes the interrelatedness and the coherence of human resource management activities. The human resource management cycle in their model consist of four constituent components: Selection, appraisal, development and reward these four human resource activities aim to increase organizational performance.
- Performance Management
- Human Resource Development
This model also ignores different stakeholder interests, situational factors and the notion of management's strategies choice. The strength of the model however is that it express the coherence of internal HRM polices and the importance of matching internal HRM policies and practices to the organization's external business strategy. The HRM cycle is also a simple model that serves as a pedagogical framework for explaining the nature and significance of key HR practices and the interactions among the factors making up the complex fields of human resource management. As we progress through the book, we will refer to the HRM cycle to explain the relationship of each individual HRM function to other HRM practices.
The Harvard model of HRM
The analytical framework of the Harvard model offered by Beet consists of six basic components:
Human resource management policy choices
A feedback loop through which the outputs flow directly into the organization and to the stakeholders
The situational factors influence management's choice of HR strategy. This normative model incorporates workforce characteristics, management philosophy, labour market regulations, societal values and patterns of unionization, and suggests a meshing of both product market and socio-cultural . The framework is based on the belief that the problems of historical personnel management can only be solved when general managers develop a viewpoint of how they wish to see employees involved in and developed by the enterprise, and of what HRM policies and practices may achieve those goals. Without either a central philosophy or a strategic vision- which can be provided only by general manager- HRM is likely to remain a set of independent activities, each guided by its own practice tradition. Beer and his colleagues believed that today many pressures are demanding a broader, more comprehensive and more strategic perspective with regard to the organization's human resources. These pressures have created a need for a longer- term perspective in managing people and consideration of people as potential assets rather than merely a variable cost. They were the first to underline the HRM tenet that HRM belongs to line managers. They also state that Human resource management involves all management decisions and action that affect the nature of the relationship between the organization and its employees- its human resources. They suggest two characteristic features one is line managers accept more responsibility for ensuring the alignment of competitive policies that govern how personnel activities are developed and implemented in ways that make them more mutually reinforcing.
Human Resource Planning and Development for Tesco
Every organisation has its own HR planning and development process under consideration. Human resource planning is indeed concerned with broader issues about the employment of people than the traditional qualitative approaches of manpower planning.
Appraisal of HR Planning
Training and Development Programme
Determine Job Requirement
Work Study & Demand forecasting
Inventory of HR skills (Findings Gaps)
Objective of HR Planning
Fig: The Process of Human Resource Planning
Objectives of Manpower Planning:- The persons concerned with manpower planning must be clear about goals of manpower planning because once the wrong forecast of future requirement of human resources are made, it may not be possible to rectify the errors in short-run.
Inventory of Skills: - Assessment of demand for operating personnel presents less problems of uncertainty & current manpower supply can be adjusted accordingly. But for supervisory and managerial levels projection is complex problem because required talents are not available at a short notice. This will also help in drawing recruitment & development plans to meet the needs of certain skills future.
Demand Forecasting: - A proper forecast of manpower required in future say, after one year, two years & so on must be attempted. The factors relevant for manpower forecasting are as follows.
(i) Employment Trends: - Manpower planning committee examine number of employees on pay roll during past 5 year to know trend within each group to determine whether particular group has been stable or unstable.
(ii) Replacement Needs: - if staffs leave the job due to death, retirement, resignation & termination of employees. It may relate to supervisory, skilled, clerical groups and must be anticipated in advance. In this case the HR planner set a develop plan to replace staff.
(iii) Productivity: - Gain in productivity will also influence requirements of manpower. Planning for productivity has several aspects. The first aspect relates to effective utilisation of manpower. The second aspect relates to installation of more productive tools, equipments. The last aspect relates to matching of skills with requirements of jobs.
(v) Absenteeism: - Means a situation when a person fails to come for work when he is scheduled to work. Due to absenteeism work get upset leading to overtime work which in turn leads to increased cost of production. The management should go into cause of absenteeism & attempt to reduce absentism as far as possible.
(vi) Work Study: - Can be used when it is possible to apply work measurement to know how long operations should take & amount of labour required. This is also known as 'workload analysis.'
Job Requirements: - Job assessment is done to find out the requirements of the worker, like if employee needs any help from the managerial side, if they need any type of benefits and support from other. If they need to transfer form one department to another, whether the number of staff is low or high and so on.
Employment Plans: - This phase deals with planning how organisation can obtain required number of right type of personnel as reflected by personnel forecasts.
Training & Development Programme: - Training is essential not only for new employees but also for old employees for improving their performance. Similarly executive development programmes have to be devised for development of managerial personnel. The talent of employees are not fully productive without a systematic programme of training & development.
Appraisal of Manpower Planning: - After training programmes have been implemented, an appraisal must be made of effectiveness of manpower planning. Deficiencies in programs should be pointed out & catalogue of manpower inventory should be updated periodically. Connective actions should also be taken whenever it is necessary to remove deficiencies in manpower planning.
Evaluation of HRM planning and development methods of Tesco
According to the method described is one of the best methods for HR planning and development method. By following the above method an HR department of an organization is good at organizing the manpower. It covers the methods form the beginning of the recruitment process to management level. It first evaluate whether the employee is needed or not then after is set up a plan for the recruitment process and goes on to the recruitment process. After that it analyse whether employee needs any training, transfer, motivation etc. So this method is effective development method.
Tesco measures the abilities of its employees to check it has the correct skills for the future. After reviewing and career discussion if staffs need training then they can apply for training. Tesco mainly focus on three things Customer, working with other and own behaviour. This will help to select the leader. Decision is taken for giving training or promoting the staff according to the performance audit of the employee.
In this step job performance of an employee is evaluated typically by the corresponding manager or supervisor. A performance appraisal is a part of a guiding and managing career development. It is the process of analysing, obtaining and recording information about the relative worth of an employee to the organization. It is also the judgement of an employee's performance in a job based on considerations other then productivity alone.
There is the long process of evaluating the performance of an employee's in Tesco. Managerial team prepare an appraisal sheet where individual employee fills in the form in monthly basis. Which includes the feedback on performance of the employee and then manager analyse the sheet collected from different employee and identify whether training is needed and document the criteria used to allocate organizational reward. It also analyse the personal evaluation and decide whether to improve salary, promotion, disciplinary action, bonus etc. It also provides opportunity for organization to diagnosis and develops in facility provided to the communication facilities between employee and administration. Its main aim is to provide performance through counselling, coaching and development of organization.
Methods of Performance Appraisal:
A common approach to assessing performance is to use a numerical or scalar rating system whereby managers are asked to score an individual against a number of objectives. In some companies, employees receive assessment from their manager, subordinates and customers while also performing a self assessment.
Establishing performance standards: setting up of the stanandards which will be used to as the base to compare the actual performance of the employees. This step requires setting the criteria to judge the peroformance of the employee as succesful or unsuccesful and the degees of theri comtrubution to the organizational goal and objectives. The standards set should be clear, easily understandable and in measurable terms. In case the performance of the employee cannot mesasured, great care should be taken to describe the standards.
- Establishing performance standards
- Communicating standards and expectations
- Measuring the actual performance
- Comparing with standards
- Discussing Results
- Decision making-taking corrective actions
Communicating the standards: Once set, it is the responsibility of the management to communicate the standards to all the employees of the organization. The employees should be informed and the standards should be clearly expained. This will help them to understand their roles and to know what exactly is expected form them. The standards should also be communicated to the appraisers or the evaluators and if required, the standards can also be modified at this stage itself according to the relevant feedback from the employees or the evaluators.
Measuring the aperformance: it is difficult to measur the work done by the employees during the specified period of time. It is a continuous process which involves monitoring the performance throught the year. This stage requires the careful selection of the appropriate techniques of measurement, taking care that personal bias does not affect the outcome of the process and providing assistance rather than interfaceing in an employees work.
Comparing the actula with desired performance: the comparision tells the deviations in the performance of teh employees from the standard set. The result can show the actual performance being more than the desired performance or the actual performance being less than the desired performance depiciting a negative deviation in the organizational perofrmane. It includes recalling, evaluating and analysis of data related to the employees performance.
The result of the appraisal is communicated and discussed with the employees on one to one basis. The focus of this discussion is on communication and listening. The results, the problems and the possible solutions are discussed with tha aim of problem solving and reaching conssensus. The feedback should be given with a positive attitude as this can have an effect on the employees future performance. The pressure of teh metting should be to solve the problem faced and motivate the employees to perform better.
The last step of the process is to take decisions which can be taken either to improve the performance of the employees, takes the required corrctive actions, or the related HR decisions lile rewards, promotions, demotions, transfers etc.
Tesco is a succesful organization in UK. They have incresase market share and retails unit over the last five year. Their model of HR is strong and highly practiced and highly commited. Their main focus on the training issues and also on vital to the success of the organisation, without commitment, it would amount to a wsate of resources. The entire organisation is involven in training and is offered to all levels within the organisation.Give good training and development of its employees is necessary for Tesco to continue its work and sustain in the world as a world leading retailer. It uses same approach with both existing and new employees. This ensure the staff of this comapay have right skills to provide a strong base to support future growth of the business.
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