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Human resource management is the process of managing workforce in an organization. HRM is responsible for utilization of a firms human resources to achieve organizational objective. This make HRM responsible for hiring the right people with right skills for the job and developing to make them to achieve the corporate Goal or objective. So HRM is very closely aligned to the Organization's Mission and Vision. The word strategy means a plan of action or a long term plan to achieve organization's mission. Strategic human resource management (SHRM) is one of the most important aspects of HRM practices that facilitates implementation of effective HR policies to meet the requirements of employees, while proceeding ahead to accomplish the organizational goals (Mathis and Jackson, 2008).
Armstrong (2006, p.115) defines Strategic HRM is an approach to making decisions on the intentions and plans of the organization in the shape of the policies, programs and practices concerning the employment relationship, resourcing, learning and development, performance management, reward, and employee relations. As a strategy, an organization can use their Human resource competency to gain or keep a competitive edge over their rivals. E.g. Many companies give stock option plans (ESOP) for their employees as part of their HR reward policy. This is again a HR strategy to motivate employees to work towards achieving the corporate objective thereby increasing the company market share value.
The importance of Strategic Human Resource Management in Organization
As mentioned before, strategy is a long term plan of actions to achieve the Corporate Mission and Vision. In this competitive world it is very crucial that corporate vision and mission (corporate strategy) is cascaded down to the functional level. It is important that HRM strategy is in line with the corporate strategy. Strategic Human Resource Management (SHRM) helps the organization to achieve corporate objective by making HR strategies in the form of policies and procedures.
As per (Walton (1999), cited in Armstrong 2006, p.533) "Strategic human resource development involves introducing, eliminating, modifying, directing and guiding processes in such a way that all individuals and teams are equipped with the skills, knowledge and competences they require to undertake current and future tasks required by the organization".
The fundamental aim of strategic HRM is to generate a view in which the critical workforce issues can be addressed. SHRM helps the organization by making strategies which have a long term impact on corporate culture and success of the organization by ensuring that the organization has the right skilled , motivated and committed employees to achieve the competitive edge. So SHRM is an integral part of the business. TESCO's corporate strategy is an international expansion by diversifying. It is important that TESCO's HR strategy to be in line with its corporate strategy to achieve its corporate goal. TESCO believes that employees are the asset of the company and they should be made motivated , trained and developed well to achieve
their corporate strategy. The company allow the employees to grow within the organization by giving them training , empowering and motivating.
In 1997, TESCO set out a strategy to grow the core business and diversify with new products and services in existing and new markets. This strategy enabled them to deliver strong, sustained growth over the past 14 years. The strategy now has seven part as given below.
To grow the UK core
To be an outstanding international retailer in stores and online
To be as stronger in everything as well as we are in food
To grow retail services in all our markets
To put our responsibilities to the communities we serve at the heart of what we do
To be a creator of highly valued brands
To build our team to create more value (TESCO Marketing Strategy 2012, Online)
Business factor corroboration in HR Planning in TESCO
HRM planning is not an easy task as it is influenced by both internal and external factors. The Government law and regulatory is one of the major external factor which affect an organization directly when they make decision on hiring, firing, promotion etc.
As TESCO is expanding rapidly, they need a long term plan to recruit on a regular basis for its Food and Non-food division. To achieve this goal TESCO uses a workforce planning table to meet the growing demand for new staff. Looking at the above requirement, following factors should be considered during the human resource planning.
Since TESCO is expanding internationally it is very important to understand the country's Law and local Talent availability.
Introduction of new technology
In this ever changing technology world demands more efficient human resource planning. This will help the company to oversee the requirement well in advance and take necessary action.
Nature of work
Employees identify roles in which they would like to develop their careers with Tesco. In this way employees get motivated and thus improving their performance and thereby achieving company's business objective.
The company believe that employees are asset of the company, so it is important that they get sufficient opportunity to get trained and grow within the company. TESCO practices "Talent planning' to encourage and motivate people to work their way through and up.
Adhere to Government Regulations
TESCO strictly follows the Government law and regulation when it comes to human resource planning. This means that TESCO determined to give equal opportunities to all, irrespective of race, nationality , religion ,sex, disability, marital status or age. This means the organization do not permit direct or indirect discrimination against any employees on above grounds.
Knowledge workers are the key resources of a company that are trained and developed through formal education and training. Highly motivated and satisfied employees are considered to be the best resources one organization can use to perform the allocated task in an optimal way. (TESCO Employee Development 2012, Online)
Assessing Human Resource Requirement in TESCO
As per TESCO's growth plan, human resource requirement can be assessed in following ways
Projection of manpower requirement
Manpower requirement planning is one of the main task of HR division. They should continuously assess the business requirement and align their plan accordingly. Based on the expansion plan HR team should discuss with each department in the organization to understand the manpower requirement.
Developing Plan to execute projected requirement
In order to execute the manpower requirement a carefully tailored execution plan is required. It is very important manpower requirement period is clearly mentioned in the plan. A plan without target date is useless. The plan also should be reviewed depending on the ever changing manpower requirement.
Human Resource Plan for TESCO
Workforce planning will help companies to have the flexibility to realign the plan according to the demands for staffs time to time and give sufficient time to train existing staff to take new responsibilities and to recruit new staff to fill vacancies. As mentioned before TESCO believe that employees are asset of the company, so it is important that they get sufficient opportunity to get trained and grow within the company to retain them.
TESCO can develop following HR Plan to keep competitive edge with other market players. However HR plan should be reviewed time to time.
Develop a clear and transparent HR policies across the business - Most of the employees are not aware of their right and what they are entitled for.
Develop an employee communication strategy - Proper communication plan is necessary to cascade down management decision/ plan to the lower level so that everyone can work towards achieving a common company goal.
Health and safety awareness program - By providing safe and healthy work environment the company can increase the productivity and efficiency of the employee as a result of reduced sickness or accidents at work place.
Policy against discrimination - Direct discrimination takes place when a person is treated less favorably than others are, or would be, treated in similar circumstances.
Reward Program - To motivate the employee
How SMART is the Plan
Most of the organization reward their employees once they achieve their objective. Objective describe something that has to be accomplished. Many organizations use 'SMART' mnemonic to summarize the criteria.
As per the above HR Plan, each employees tasks/objectives are clearly identified by their job description (i.e. Specific).
By providing safe and healthy work environment employee productivity can be improved thereby , tasks can be completed with quality and time (i.e. Measurable).
Communication is the key to successful completion of any job. Proper communication between Employees and management are very crucial in completing very challenging tasks. By providing proper guidelines and/or assigning a task to a group with proper information, employees can complete the task without any confusion. (i.e. Achievable).
Highly motivated employees can achieve relevant objectives of the organization so that the goal of the individual is aligned to corporate goals (i.e. Relevant)
Healthy , Motivated and focused employees can complete their tasks within an agreed time scale(i.e. Time framed)
TESCO conduct special surveys to analyze the information from a number of sources, e.g. Performance Reviews, to identify corporate and group learning and training needs. Moreover Tesco Managers and team members hold weekly meetings to review the status of KPIs (Key performance indicators) set by the company. The feedback of the meeting is used to analyze the current situation and plan further course of action in terms of employee development and training. This kind of structured and continuous analysis helped TESCO to build a strong foundation on employee satisfaction and its growth (Expansion) plans.
Contribution of SHRM to the achievement of the organization's objectives
The HR function provides guidance and training and will develop and help to introduce and maintain formal processes. As per (Armstrong 2006 ,p.771) HR function can and should play a major part in developing employee relations strategies and policies that aim to:
achieve satisfactory employment relationships, taking particular account of the importance of psychological contracts;
build stable and cooperative relationships with employees which recognize that they are stakeholders in the organization and minimize conflict;
achieve commitment through employee involvement and communications processes;
develop mutuality - a common interest in achieving the organization's goals through the development of organizational cultures based on shared values between management and employees;
clarify industrial relations processes with trade unions and build harmonious relationships with them on a partnership basis.
TESCO provide equal opportunity every employee to learn and grow within the organization. Customers are at the top of TESCO's organization structure. The company believe that right people with right skill at the right place or role is the success of its high customer satisfaction rating. TESCO has six work levels in the organization and each level is clearly described. Every employee falls under one of the six levels. This will help the employees to understand whether they have the right knowledge and skills or resources to carry out their roles.(TESCO skills and behaviors 2012, Online )
The Purpose of SHRM in an Organization
The overall purpose of human resource management is to ensure that the organization is able to achieve success through people. As (Ulrich and Lake (1990), cited in Armstrong 2006, p.8) remark: HRM systems can be the source of organizational capabilities that allow firms to learn and capitalize on new opportunities. People are the organization's key resource and organizations performance largely depends on them. Therefore, effective development and implementation of HR Policies and procedures can make a significant impact on organization's performance. TESCO has clear organizational structure , detailed job descriptions and person specifications. SHRM practices are also important to the improvement of organizational learning. An integrated learning organizational model can be developed by the organizations to stimulate positive development of the employees on the basis of better and faster learning.
TESCO should conduct various health and safety training programs for their employees to make sure that proper safety work environment is created. Moreover HR should take a lead in communicating company events/ happenings and major changes / decision in the organization to its employees. This can be through announcements or news bulletins. HR should play major role in implementing reward program for employees. e.g. Employee of the Month Award etc. Being a multinational company TESCO also focus on cross cultural training needs analysis covering organizational analysis and requirements, assignment analysis of key tasks and individual analysis of skills.HR should play a key role in organizational transition and transformation programs. It can provide help and guidance in analysis and diagnosis, highlighting the people issues that will fundamentally affect the success of the programs. According to Delany (2001) successful organizations keep people issues at the forefront of their thinking and at the core of their decision making and planning. The organizations that get the people things right are the organizations likely to be around in the future (Delany (2001) cited in Mullins 2005,p.748). TESCO takes this challenge seriously and find solutions through continuous training, development programs as part of their HR policy and government recommendations towards a learning society. This made TESCO one of the major player in the world of retail market.
Impact of regulatory requirements on TESCO
The Government law and regulatory is one of the major external factor which affect an organization directly when they make decision on hiring, firing, promotion etc.
TESCO strictly follows the Government law and regulation when it comes to human resource planning. TESCO determined to give equal opportunities to all, irrespective of race, nationality , religion ,sex, disability, marital status or age. Company policies and procedures are fully comply with the regulatory requirements. This means the organization do not permit direct or indirect discrimination against any employees on above grounds. Direct discrimination takes place when a person is treated less favorably than others are, or would be, treated in similar circumstances. Strict implementation of Policies and procedures provide a healthy and positive atmosphere within the organization.
Effectiveness of HRM is monitored in TESCO
The need for effective Employee Communications is no longer restricted to simply informing employees about their benefits. The major TESCO challenge is to ensure that every employees , wherever they work , are aware of the company policies and procedure. A proper communication strategy needs to be developed to inform the employees about the changes in policies and procedures. e.g. A weekly news / update bulletins to be circulated among the employees around the world so that everyone is updated about the company development. Urgent and important announcements or news items will be issued in a Bulletin, as and when the need arises. This could be achieved in the form of a Company's staff intranet portal, notice board or internal Bulletins.
Health and Safety
Health and safety are workplace issues with considerable organizational and legal implications for HR and other managers. Perhaps the most regulated realm of the HRM field is maintenance (or benefits), safety and health, and employee/management relations. Chief among regulations in this arena is the Occupational Safety and Health Act of 1970, which established the Occupational Safety and Health Administration. That act was designed to force employers to provide safe and healthy work environments and to make organizations liable for workers' safety. (Naidoo and Wills (2000), cited in Health and Safety 2012, Online) identify a number of benefits to organizations from the promotion of health in the workplace:
'Hard' benefits - such as improvements in productivity as a result of reduced sickness, absence and staff turnover.
'Soft' benefits - including enhanced corporate image.
HR policies can be expressed as overall statements of the values of the organization. HR policies and procedures should made up to date by paying attention to the change in State laws relating to employees such as discrimination, family leave, payroll administration, health and safety. The policy manual should be equipped in such way that any challenge to the policy on employee related or discrimination issues are taken care consistently and fairly. The company policy should be detailed and updated enough to cater employees day to day issues.
TESCO should implement more comprehensive health and safety policy. e.g. A fully documented health and safety system, constantly updated as legislation changes. This includes, but is not limited to
General Health & Safety policy and procedures
Employee safety handbooks
Safety and training records
Impact of Organizational Structure on HRM
Every organization has its own structure based on the organization objective and strategy. It determines how the roles , power/authority and responsibilities are assigned and controlled. Because of the size and nature of the business, TESCO uses hierarchical organizational structure. Hierarchical structure has many levels and each level is controlled by one person. By implementing hierarchical structure, TESCO managed to monitor the activity at different levels. At every level, there is a manager to discuss with employees at that level and take proper decision/ action before it goes out of control or unnoticed.
This structure will help to review employee performance before it moves to next level. It will enable employees to concentrate on work at their level and discuss issues with their manager at that level. Moreover this will help the employees to work as a team at each level and take decision after discussing with the level manager rather than waiting for higher level approval.( TESCO Organization structure 2012, Online)
Impact of Organization Culture on HRM
Culture is the environment that surrounds you at works all of the time. Organization culture is something that differentiate between organization. Organization culture is made up of company values, beliefs, attitudes and behaviors shared by group of people within the organization. Since organization culture is developed based on company values and belief, it has a positive impact on HRM practice. TESCO's multicultural and diversified work force culture is in line with company strategy. The hiring process is very much influenced by the organizational culture of TESCO as they hire people who have the flexibility to adjust. The low employee turnover rate is proved that TESCO has a very strong organization culture which is accepted by employees. At TESCO, employees support each other by sharing their knowledge, working as a team, enjoying work and, when it's time to celebrate, doing just that. TESCO listens to what employee want and they are treated with respect.( TESCO Organization structure 2012, Online)
The study of HR policies of TESCO exhibit that the organization is giving more priority to employee training and development. At the same time the organization give equal importance to their policies to comply with the local regulatory norms. TESCO provide equal opportunities to all, irrespective of race, nationality , religion ,sex, disability, marital status or age.
The HR division has developed very detailed job description of each position in the organization. This will help the employees to clearly understand their duties and responsibilities thereby execute their task more efficiently. They organized in such a way that each employee can go to their manager in their department/level for any clarification. This will enable them to take quick action on any issue / task rather than waiting for approval from top management thus improving the productivity. TESCO also focuses on employee development and empowerment, incentive compensation and career advancement within the organization. This allow the employees get an opportunity to grow within the organization itself. TESCO's HR division is very proactive and they always try to adopt / implement the best industry practices within the organization. The company believes in customer satisfaction and this can be achieved only when your employees are happy. By keeping this in mind TESCO conduct frequent training program to their employees to cop up with the fast changing technology.
In order to achieve their objectives, TESCO's HR policies introducing a higher level of training to all employees from top to bottom. TESCO recognize teams as their key work units, which are the basic drivers for effective functioning and success. The company understand that a cross cultural diversity has to be adopted within the business operations to manage and lead the people in an organized manner. TESCO is a very successful UK retail organization with presence in 14 other countries across the world. It is the third largest retailer in the world in terms of revenue and second largest in terms by profit. This has been achieved partly by the continuous training and development of the employees. Every company should invest in their employee development to get fruit out of it.