evaluation of tescos management of human resources



The people or the workforce in an organisation represents the most valuable resource of that organisation. In corporate scenario, the most important department that an organisation has is undoubtedly Human Resource management. Human Resource Management in the organization deals not only with issues relating to people such as training, hiring, performance management, development, health and safety, benefits, motivation, communication, administration, and training but also plays an important role in the maximizing these resources to a more strategic level. In simple terms HRM is all about putting the right people to the right task and vice-versa to achieve maximum output for an organization. HRM provides tools for the accomplishment of these strategies and manage the interaction between processes and systems. Both knowledge and capability to successfully implement change and execute strategies make Human Resource management exceptionally valued. Knowing how to interlink change and strategic requirements of the organization will increase employee satisfaction and resistance to change. In this context the way the organisations approach to the management of human resources can lead to the improvement of the corporate performance both in the short and the long term.


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The link between the organisation's corporate and business strategy and human resources strategy is not something new. Well known 7-S framework of McKinsey's emphasising the need for the alignment of seven organisational variables (super ordinate goals, strategy, structure, systems, staff, skills, and style) for organisational effectiveness is more than twenty years old. During this period the link between the organisational success with the people has only increased as during this period the businesses and organisations have become more and more knowledge driven and people oriented. As a result of this industry experts now agree with concept of "individualised corporation" (Sumantra G. and Christopher B.,1997).

We will discuss and see how Tesco, one of the biggest retailers in UK, have fared in their attempt to align their corporate strategy and human resource strategy. Tesco was founded in 1919 by Jack Cohen. He began by selling groceries from a stall in the east end of London; on his first day he did £4 sales with £1 profit (tescoplc.com[history]). Tesco has come a long way since then and as an organisation has been very successful they are one of the biggest in UK and are vastly expanding abroad in foreign markets. Tesco's profits soared 10.1% in the last year to a record £3.4 billion with one in every three pounds spent in supermarkets and more than one of every eight pounds on the High Street going in its coffers. Tesco is Britain's biggest private employer with 283,000 staff (Tesco facts and figures, guardian April 2009).

Tesco management makes sure that each employee understands his or her role towards the strategic goals of Tesco. They have developed an induction programme keeping in mind diverse cultures and styles towards the job. Every single employee of Tesco has to play an important role towards achievement of core values with the frontline employees playing a major role as they are Tesco's ultimate reflection to the customers.

Tesco's slogan of every little helps indicating how committed they are towards customers this same slogan is now used in their staff development and training indicating that any intervening help from management will raise the work knowledge of its staff. This people centred strategy has helped Tesco to gain an upper hand over its competitors in UK supermarket sector.

Thus Tesco has made its approach towards its employees or we can say human resources core element of its strategy. Tesco has successfully integrated Human Resources into their overall plans. Managers have considered various aspects of HR in their process of 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, 2004). Every employee is made aware of the strategic policies and goals which helps each individual employee in understanding their importance in the organisation. There has been a tremendous increase in training within the organisation which indicates that HR department playing a strategic role. HR is no longer just an administrative department in Tesco but plays a very proactive role on the strategic level. This method signifies that in the long run increased growth can only be sustained by providing the work force with the skills they need to fulfil their tasks (Mullins, L. 2005).

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For corporate strategy and HR strategies to be integrated successfully it is extremely important that the top management and HR department needs to interact closely with each other, which Tesco's has successfully implemented been able to do. Tesco is very successful organisation. They have risen to first place in the UK's supermarket sector. This has been possible through successful integration and alignment between their corporate strategy and human resource strategy.


Mergers and acquisitions are the fastest and easiest way to expand. Creating synergy is difficult and lack of understanding of the various human issues makes it worse. Most of the times the focus during mergers and acquisitions is on other activities instead of on HR issues. This may result in failures. However, all these problems can easily be dealt with if the firms involved, systematically address human resource issues during the process. Tesco has already been very successful with joint ventures, mergers, and acquisitions. Whether it be Tesco personal finance in joint venture with Royal Bank of Scotland in 1997 or in Thailand with Lotus chain of stores, or with Samsung in South Korea however there is always room for improvement especially, if you have vast experience and expertise like Tesco. Various researches have demonstrated that organisations with fully integrated HR practices have happier employees and changeover is trouble-free which is quite obvious in case of Tesco.


An organisation is only as good as its people. Organisations seek competitive edge over their rivals. In customer oriented industries like supermarkets the best tool they have is their workforce. The better the level of service they offer the more loyal the customers which in turn will have a positive effect on the overall running of the business. Tesco is number 1 in the UK market recruiting more than 40,000 individuals from various walks of life. It needs people for both store based and non store based job. Tesco has a structured process for recruitment and selection to attract applicants for all types of roles. Tesco main aim in its recruitment drive is to find right number of people in the right jobs at the right time. Tesco advertises jobs in different ways depending on vacancies. Tesco first relies on its internal talent plan, wherein employees looking for a move either at the same level or promotion are considered. Tesco advertises the post internally on its intranet for two weeks. For external recruitment, Tesco uses its website www.tesco-careers.com as well as vacancy boards in stores. Applications for managerial positions are made online with chosen candidates having interview followed by final stage of the selection process at an assessment centre. Store-based jobs are available through Jobcentre Plus. For more specialised jobs like bakers and pharmacists, Tesco advertises externally ( http://www.thetimes100.co.uk). Tesco always tries to attract right people in most cost-effective method. Tesco also makes it easy for the people to find out jobs available and has a very simple process.


Although no specific figures are available turnover rate in Tesco is below the industry standard of 35%. Tesco prides itself on people loyalty with the company, Sir Terry Leahy himself joined Tesco straight from university in 1979. Classification according to age spectrum indicates that one in five staff are over 50, employs more than 30,000 students and it was one of the first few to start recruitment of disabled people. Tesco offers a wide range of flexible working options, maternity and paternity leave, career breaks, job shares and shift-swaps. It has a company pension, plus a share ownership scheme, which, in March, shared out £220m (Nic Paton, PersonnelToday, 05 july 2005)


Tesco about a decade ago had put themselves in the forefront of training by becoming investors in people. According to Delany (2001) successful organisations keep people issues at the forefront of their thinking and at the core of their decisions 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). Tesco as the largest private employer in the UK has taken this responsibility seriously, which is evident from their policy. Most of which is in-house or in-store by managers. Training programmes are designed and co-ordinated by "Tesco Academy". In store training is split into three categories. Basic being Bronze based on developing basic skills of health and safety and hygiene along with other specific departmental skills. Silver concerning developing product knowledge or various processes, and gold aimed at gaining expertise in a particular field. There's scheme called Options designed to give shop staff the managerial skills and experience. On an average Tesco estimates that its retail staff goes through more than 4.5 million hours of training each year.(Nic Paton, PersonnelToday, 05 july 2005).


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"There is a basic human tendency to make judgements about those one is working with, as well as about oneself"(Dulewicz 1989). Therefore appraisal is both necessary and inevitable. It is very important to have a carefully structured system of appraisal otherwise people will judge the work performance of others in a very informal and arbitrary manner. This in turn will create various ethical, legal problems in the organisation which will have negative effect on the working of entire organisation. It began as a simple procedure for wage justification linked completely to the quantitative output of an individual. This system succeeded in getting results but more often it failed. This was because of the fact that people with nearly same abilities, getting same amount of money had completely different levels of motivation and performance. With time usefulness of performance appraisal as a motivational tool was recognised.

In most of the companies HR department is responsible for designing an appraisal method which will check what the competencies are and whether the employee fits the criteria. Then at regular periods these comparisons are done to check whether various criteria's were met or not. In most organisations, but not all, appraisals are used directly or indirectly to determine rewards i.e. better the performance the more the rewards, pay increases and promotions. The linking of performance appraisal with reward outcomes is a controversial issue. There are some who are doubtful about reliability of the performance appraisal process suggesting that this process is so inherently flawed that it may be impossible to perfect it (Derven,1990). On the other hand, there are many strong advocates who view it as "... the most crucial aspect of organizational life" (Lawrie, 1990). According to them every organisation must have a carefully structured method by which rewards, which are limited resource maybe fairly allocated to those who truly deserve them on merit of their performance. Then there is a group with neutral views who believe that this process has important employee developmental uses but linking it with rewards eliminates them. Research by Bannister and Balkin(1990) notes that employees show much greater acceptability and are more satisfied with appraisal process when it is directly linked to rewards.

Thus we can conclude that Performance appraisal with all its practical flaws is the only tool available to achieve fair and consistent reward outcome. It is the necessary evil we can't do without.