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Company has a fundamental philosophy that to satisfy customer, employees must be satisfied at the first place. Someone needs to play as role model to show them how to take care of each other specially their customers. It means company understand job satisfaction of their employees significantly. Company's philosophy has also shown some effect on its Human Resource Management practice. Company spent 18% of its turnover on employee's expenditure. The company has highly selective type of recruitment policy. Instead of advertising jobs outside company motivates their current worker to recommend jobs to their friend and families. Recruitment policy believes to hire only those who are fit for the job. Company also try to engage (recruit) their customers and their 62% of staff is female because Mr. Tindell believes that females are excellent team players. (Case study)
The main focus of Strategic Human Resource Management of the company is to link their employees with organisation itself. The main strategy that is used here it to integrate organisation's main goal and with its worker.
The main aim of this report is to produce a critical analysis of the philosophies, policies and practices that relate to the management of human resources at the Container Company. The main focus is given on how these philosophies, practices and policy support company's objectives and principles.
2.0 Literature on Strategic Human Resource Management:
In 2005 two specialist store of the same industry where Container Store was operating were closing down due to falling sales and heavy loss. But on the other hand Container Store was making profit. The company gives credit to its recruitment and training standard. The company is very confident on its strategic human resource management.
According to Budhwar P and Aryee S, 2007 Strategic Human Resource Management is about methodically connecting employee with the organisation. Especially, it is concerning the incorporation of Human Resource Management strategies into company strategies. The main functional duty of HR strategies is to plans and programmes problems and to solve fundamental strategic issues related to the management of human resources in an organisation. They concentrated on 'alignment' of the firm's HR practices, policies and programmes with corporate and strategic business unit plans'. According to Gear T 2008 strategic human resource management, therefore, connect corporate strategy and human resource management. It focuses on the mixing of human resource with the organisation and its internal and external environment. Armstrong 2005 explained that mixing of Human Resource Management and organisational strategy makes human resource management effective and improve company's performance and remarkably contribute in the ultimate victory of a particular business. Further he added that it can also help company to achieve 'competitive advantage' by producing exclusive Human Resource Management structure which cannot be copied by others companies.
Strategic Human Resource Management and organisational strategy
According to Richards J 2007, a strong organisational strategy is one which is expected to succeed can be understood by people factors. It means it can understand by the philosophy, practice and policy of Human Resource Management. Now a days, organisation of today's generation considered there people as a biggest asset. Richards J 2007 notice that if the company wants to produce value it has to used and deploy the knowledge, skills and abilities to its optimum level. The invisible value of a company that lies inside its employees is acquiring credit by accountants and investors, and now it is normally accepted that this has implications for company's performance in long run.
Hence, it is too easy to say that Strategic Human Resource Management secondary branch of the business strategy. The philosophy, practice and policy of Strategic Human Resource Management could be the different parameters that create relation with overall business strategy. The Strategic Human Resource Management and business strategy must be equally informative. The availability of employee's skills and knowledge will shape up business strategy and the way in which employee are treated, deploy, managed, motivated. Such availability of employee's skills and knowledge and be determine by philosophy and policy of Human Resource Management and the way in which employees are been treated, deploy, managed and motivated can be determined by Human Resource Management practice.
Business strategy then may form each human resource strategies. As a result if the organisational strategy is to provide better customer service then this may be converted into motivation plans, designing effective training and performance improvement plan.
3.0 Critical Analysis of Case Study:
The main organisational strategy that helped Container Store to maintain its profit level even in tough business environment was emphasised on effective customer service. The main goal of the business was to provide better customer service. As mention above in literature that the success of business can be lie in people factors as Container Store gained strong competitive advantage through its training and recruitment and this can be expressed through Human Resource Management philosophy, policy and practice. Now it is important to analyse how this support corporate objectives and founding principles. The main objectives is to gain competitive advantage through strong people training and recruitment with the founding principle of providing excellent customer service, below three main parameters of Human Resource Management are discussed individually how they support this objective and principle .
It is Human Resource Management philosophy to satisfy their own employees at the first place to satisfy their customers. It is clear that Container Store strategy is strongly focused on employee's needs. The reason for given high priority to satisfy their employee's need is to motivate themselves to provide competitive customer service. The Barbara Anderson the director of community services and staff development of the company said that 'if we expect our employees to astonish our customers, we have to first take care of them because they are going to treat customer they way we treat them. Someone needs to be a role model for them to show how to treat each other.' The main advantage Container Store can gain is employee retention. As far as workers love their job they will not try to find another job and will stick to their present job. According to Jason R, 2009 job satisfaction play vital role in employees leaving organisation. He also explains that motivation tool cannot work efficiently until employees are satisfied and he add that if companies only focus on their worker job satisfaction they do not need to even think about their motivation, 'companies can hit two targets with just one stone'. They satisfied their workers which leads their workers to get motivated to satisfy their customers. In this case Container Store has followed and believes same philosophy. The first competitive advantage they have got is employee retention which helps Container Store to reduce their training cost that could incurred every time they recruit new staff. In other words it helped them to reduce their staff turnover ratio and second if employee work for long time that gives him to get strong grip on its job which helps him to tackle difficult issues of job easily and long time period also create strong bonding with organisation where he can better understand and support organisation's main objective and principle.
Policy and Practice:
HR policy and practice plays an important role in Strategic Human Resource Management. Such strong policy and practice made Strategic Human Resource Management effective towards organisational overall strategy. Container Store was spending 18% of its revenue on staff expenditure. The Container Store had highly selective recruitment policy. The main recruitment policy was 'hire for fit'. Container Store was not compromising with it recruitment procedure. Container Store was keeping position vacant for two months until they won't find someone suitable for job. The procedure involve couple of stages starts from telephonic screening, group interview and few more interview that last for about three hours. Container Store also preferred to recruit those referred by their employees. Every employee was motivated to refer job to their friends and family and they can get a sum of $200 as an incentive on every successful referred job. apart from the recruitment procedure, company has 62% of female staff because Container Store believes that female worker proves better as team player than male workers.
The company has extensive training programme. Company has appointed full time sales trainer who is dedicated for only training purpose. Further employees are also offered extra training on their promotion occasion or if they except new responsibility. Such training makes employees more invested and confident to carry out their job effectively. The products at Container Store are not easy to understand and according to Boone people cannot figure out their best selling products and therefore Container Store has this much of training importance. The company's structure is comparatively flat and the reason for such practice is top level management can communicate with employees at lower level. This can help to understand and identified management problems and errors which can be solve quickly. Communication which is one of the organisational needs is taken very seriously in Container Store. As a practice, to maintain effective flow of communication company arrange meeting for their employee every day. Company also use bulletin board, e-mails and faxes to ensure that enough communication can be maintain among its employees. Operation manager believes that effective communication between management and employees creates strong bonding and faith and she add that 'the more people know about organisation the more they will care'. Appreciation is one of the tools of motivation. In simple sense if someone work hard but if it is not appreciated or not rewarded the level of motivation for the next time will drop significantly because same as organisation workers are also working for their own interest. In Container Store Boone appreciate himself if someone has done well job. These appreciations give them a feeling of being respected and also add level in job satisfaction. Such appreciation and rewards are based on performance review. On the basis of review pay can be raise upto 50-75 percent. In store clerk have opportunity to earn more than their manager earns. It means company respect the hard work of any employees and reward him respectively.
The key of Container Store success is strong and competitive customer service. This was gained by effective motivation of employee by satisfying their needs. To satisfy their needs company provided adequate training that makes them more confident about their job. Rewards and pay raise given according to performance review, effective communication was maintain to creates faith and bonding with company. Company also offer reward for job referral and it can motivate them to get best person for the company because company recruit only those who are best fitted for job. It to earn reward current employee recommend those to company who may have potential to clear recruitment procedure which helps company to get best person and this can further help in getting competitive advantage over its competitors. In short motivation and job satisfaction play vital role behind the success of strategy of Human Resource Management which leads business overall strategy to success and to implement such philosophy company can take help of effective training, recruitment, pay raise and communication.