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A substantial figure of companies has developed into an necessary part of the phase of global competition, increasing development, improved business paradigms, and corporate reorganization. The continuing transformation from the conventional industrial framework with its hierarchical companies to a worldwide, knowledge-founded financial system and intelligent corporations, altering ideas regarding the social contract involving employers and employees, an progressively more adaptable pool of talent and a body of workforce, necessitates human resource (HR) purposes to realign and relocate itself in the vicinity of these drivers.
Changes in the nature of managerial work over the last years have a reflective and alarming impact on the roles of the HR managers within the new modes of organizational flexibility as well as leveling power of information technology. Generally, the appearance of HRM as a universal remedy for integrating business strategy and people management has exposed personnel practitioners to a fresh set of role challenges and managerial expectations that have stressed out the gaps between the HR language and reality. Further, the attempts to capture the changing environment of the HR personnel roles in reply to major transformations in the office, the associated rise of HRM, and the competitive advantage of the whole organization through its manpower are few aspects that HR functions board upon.
This study intends to assess the scheme of competitive advantage using effective human resource strategies in the organization. Particularly, the discussion will concentrate on HR strategy of Tesco. The relationship of strategic HRM and the attainment of organizational commitment from the workforce as a whole are also included. In this manner, the paper will proved the assumption that competitive advantage is highly dependent to effective HR strategy.
Tesco is one of the leading grocery shops in the UK founded in 1924 by John Edward Cohen in the East End of London. The name ‘Tesco’, was first used on tea, and was derived from the initials of Cohen’s tea supplier, T E Stockwell, combined with the first two letters of Cohen. Tesco Stores Limited was incorporated in 1932. In 1935, Jack Cohen visited the USA and was impressed by the supermarkets’ self-service system which enabled more people to be served faster, with lower labour costs. In 1947, the Tesco branch in St Albans, a small shop by 21st century standards (200 square meters) was the first Tesco to be converted to self service, although it didn’t immediately catch the public’s imagination. In the early 1960’s, Cohen lobbied Parliament to have the Retail Price Maintenance (RPM) act abolished, efforts supported by Edward Heath. The RPM allowed manufacturers and suppliers to set the price of goods thus preventing large retailers, who could buy in bulk and had greater buying power, from benefiting from economies of scale and undercutting the prices of smaller shops. To get ‘around’ this, Tesco offered another incentive to get customers through the doors. These were collected by customers when they spent money in the store, and were then traded for goods in a catalogue with an effective discount.
Forecasting is the major function of the bank’s HR department. The forecasting activities include:
Workforce numbers in enough detail to be useful.
Likely changes to the work of the Bank.
Work force supply – this involves forecasting the variations in the current work force estimated to occur over the following years.
Contact on budgets and financial support.
Competitive Advantage and the Role of HR
Any organization, may it be profit oriented or not-for-profit, the most vital asset is its employees. And for these organizations to maximize their assets, they should manage the employees’ working condition with intelligence and efficiency (1998). They must be allowed to be involved in making work-related decisions to further enhance the organizational structure (1996). Furthermore, the structure of tasks among the employees strengthens the organizational performance ( 1989). It is therefore necessary to understand the employees for the organization to be effective (1983). The development, building, motivation, enhancement and enrichment of the employees of any organization largely depend on the leadership, mandate and vision of the organization (1999).
Traditionally, HRM is the helps the organizations in achieving the goals of the organization by hiring and maintaining efficient employees. According to (2002), the following are some of the responsibilities of HRM:
Train the workforce to maintain competitiveness of the organization.
Develop and communicate industrial policies and procedures in line with legislation.
Involvement in grievance and disciplinary hearings.
Implement termination and hiring procedures.
Assessment and management of organizational climate and employees relations.
Liaison with trade unions.
Implementation of outcomes of collective bargaining and negotiation.
Develop compensation strategies and polices in line with legislation and the organization’s business strategy.
Attach meaningful monetary values to posts in the organization ensuring that the organization’s compensation is in line with market forces.
Develop appropriate compensation systems for the organization.
Manage overall labor costs.
Provide current information regarding employees to be used in the decision-making process and measurement of HRM’s contribution to the organization.
In this case, Tesco has 240,000 employees that contributed to the £33.974 billion GBP in 2005. The apparent effective implementation of HR functions by the HR personnel of Tesco is a basis itself to prove that HR strategy is a tool for competitive advantage. Being governed by CEO , Tesco provided comprehensive execution of the HR function with respect to the employees’ welfare.
Furthermore, leadership is a key issue in the development of groups, organizations and nations ( 2001). The study of leadership plays a crucial role in the behavioral and management sciences. It is generally accepted that good leadership is essential to the functioning of an organization.
Truly, Tesco perfected the idea of effective HR strategy in gaining its competitive edge. HR development or the total improvement of all employees involved within the organization serves as the company’s strength. With this, the organizational performance of Tesco is flourishing and in a positive progression.
Tesco aims to ensure all roles work together to drive its business objectives. It needs to ensure it has the right number of people in the right jobs at the right time. To do this, it has a structured process for recruitment and selection to attract applicants for both managerial and operational roles. Workforce planning is the process of analysing an organisation’s likely future needs for people in terms of numbers, skills and locations. It allows the organisation to plan how those needs can be met through recruitment and training. It is vital for a company like Tesco to plan ahead. Because the company is growing, Tesco needs to recruit on a regular basis for both the food and non-food parts of the business. Positions become available because:
â€¢ jobs are created as the company opens new stores in the UK and expands internationally
â€¢ vacancies arise as employees leave the company – when they retire or resign – or get promotion to other positions within Tesco
â€¢ new types of jobs can be created as the company changes its processes and technology.(thetimes100)
Tesco uses a workforce planning table to establish the likely demand for new staff. This considers both managerial and non-managerial positions. In 2008/09, for example, Tesco calculates that to support its business growth there will be a demand for around 4,000 new managers. This planning process runs each year from the last week in February. There are quarterly reviews in May, August and November, so Tesco can adjust staffing levels and recruit where necessary. This allows Tesco sufficient time and flexibility to meet its demands for staff and allows the company to meet its strategic objectives, for example, to open new stores and maintain customer service standards. Tesco seeks to fill many vacancies from within the company. It recognises the importance of motivating its staff to progress their careers with the company. Tesco practises what it calls ‘talent planning’. 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. An important element in workforce planning is to have clear job descriptions and person specifications. A job description sets out:
â€¢ the title of the job
â€¢ to whom the job holder is responsible
â€¢ for whom the job holder is responsible
â€¢ a simple description of roles and responsibilities.
A person specification sets out the skills, characteristics and attributes that a person needs to do a particular job. Together, job descriptions and person specifications provide the basis for job advertisements. They help job applicants and post-holders to know what is expected of them. As they are sent to anyone applying for jobs, they should:
â€¢ contain enough information to attract suitable people
â€¢ act as a checking device to make sure that applicants with the right skills are chosen for interview
â€¢ set the targets and standards for job performance.
At Tesco these documents are combined:
Job descriptions and person specifications show how a job-holder fits into the Tesco business. They help Tesco to recruit the right people. They also provide a benchmark for each job in terms of responsibilities and skills. These help managers to assess if staff are carrying out jobs to the appropriate standards.
Skills and behaviours
Tesco’s purpose is to serve its customers. Its organisational structure has the customer at the top. Tesco needs people with the right skills at each level of this structure. There are six work levels within the organisation. This gives a clear structure for managing and controlling the organisation. Each level requires particular skills and behaviours.
â€¢ Work level 1 – frontline jobs working directly with customers. Various in-store tasks, such as filling shelves with stock. Requires the ability to work accurately and with enthusiasm and to interact well with others.
â€¢ Work level 2 – leading a team of employees who deal directly with customers. Requires the ability to manage resources, to set targets, to manage and motivate others.
â€¢ Work level 3 – running an operating unit. Requires management skills, including planning, target setting and reporting.
â€¢ Work level 4 – supporting operating units and recommending strategic change. Requires good knowledge of the business, the skills to analyse information and to make decisions, and the ability to lead others.
â€¢ Work level 5 – responsible for the performance of Tesco as a whole. Requires the ability to lead and direct others, and to make major decisions.
â€¢ Work level 6 – creating the purpose, values and goals for Tesco plc. Responsibility for Tesco’s performance. Requires a good overview of retailing, and the ability to build a vision for the future and lead the whole organisation. Tesco has a seven-part framework that describes the key skills and behaviours for each job at every level in the company. This helps employees understand whether they have the right knowledge, skills or resources to carry out their roles.
Attracting and recruiting
Recruitment involves attracting the right standard of applicants to apply for vacancies. Tesco advertises jobs in different ways. The process varies depending on the job available. Tesco first looks at its internal Talent Plan to fill a vacancy. This is a process that lists current employees looking for a move, either at the same level or on promotion. If there are no suitable people in this Talent Plan or developing on the internal management development programme, Options, Tesco advertises the post internally on its intranet for two weeks.. For harder-to-fill or more specialist jobs, such as bakers and pharmacists, Tesco advertises externally:
â€¢ through its website and offline media
â€¢ through television and radio
â€¢ by placing advertisements on Google or in magazines such as The Appointment Journal.
Tesco will seek the most cost-effective way of attracting the right applicants. It is expensive to
advertise on television and radio, and in some magazines, but sometimes this is necessary to ensure the right type of people get to learn about the vacancies. Tesco makes it easy for applicants to find out about available jobs and has a simple application process. By accessing the Tesco website, an applicant can find out about local jobs, management posts and head office positions. The website has an online application form for people to submit directly.
Selection 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. In the first stages of screening, Tesco selectors will look carefully at each applicant’s curriculum vitae (CV). The CV summarises the candidate’s education and job history to date. A well-written and positive CV helps Tesco to assess whether an applicant matches the person specification for the job. The company also provides a ‘job type match’ tool on its careers web page. People interested in working for Tesco can see where they might fit in before applying.
Health and safety issues
Over the last two years, Tesco.com’s online grocery delivery service has not only ramped up safety standards among its drivers but also now grows its own driver trainers to maintain the improvement. Sara Bean reports on the initiatives being taken to reduce accident rates.
According to the road safety forum Roadsafe, almost three times as many employees die or are seriously injured while driving on company business, compared with other work environments. On top of the human cost of driving accidents, HSE research has revealed that for every £1 recovered through insurance, between £8 and £36 may be lost via uninsured costs such as lost time in wages, lost orders, legal fees and other damages.
One employer that has taken the initiative on driver safety is Tesco.com. Over the last two years the retail empire’s online grocery delivery service has not only ramped up safety standards among its drivers but also now grows its own driver trainers to maintain the improvement. Its efforts were recognised during RoSPA’s (the Royal Society for the Prevention of Accidents’) recent set of safety awards when Tesco.com won the fleet safety prize, the MORR Trophy, in recognition of what RoSPA described as its “comprehensive approach to managing occupational road risk”.
But with the service’s growing success, road safety became a concern for its management.
“When dot.com was established, we’d take drivers with just a clean driving licence, as they handle vans under three and-a-half tonnes,” recalls Andy Brown, operations manager at Tesco.com. “But we realised over time that, with rising accident rates and costs, we needed to take some action.”
HR and Organization’s Performance
In the era of globalization ( 2000, 121; 1990; 1990), every organization like Tesco must keep itself along with all the other organizations on being globally competitive. Corporate or organizational competitive advantage does not only depend on the organization’s financial resources but on the human resources too. That is, for the organization to achieve competitive advantage, the people involved in the organization must also be competitive.
The 90’s are proving to be a decade of competition. Organizations are now faced with leaner structures and increased competition which in turn are generating a rapid pace of change in the workplace. The greatest barrier to adapting to continual change lies with the management of people rather than technology. In Tesco, the constant efforts of effective implementation and utilization of the HR strategies make it possible for the company to perform well in the market. The increasing profit yean in and year out is an evidence of the successful HR practice (see Appendix II).
Workforce planning is vital if a business is to meet its future demands for staff. It allows a business time to train existing staff to take on new responsibilities and to recruit new staff to fill vacancies or to meet skill shortages. Tesco is a major international company with many job opportunities, including management, graduate, school leaver and apprentice posts. Tesco needs to have people with the right skills and behaviours to support its growth and development. Tesco has 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. This means it can manage its changing demand for staff.
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