Contents

1.0. Introduction. 3

1.1. Company Profile. 3

1.1. A. Mission Statement 3

2.0 Strategic Human Resource Management 4

2.1. Defining Strategic Human Resource Management 4

2.2. Significance of Human Resource Management in Organizations. 5

2.3. Analysis of the Harvard Framework. 5

3.0. Understanding the Formulation and Execution of Human Resource Strategies. 8

3.1. Analyzing Strategic Management Process. 8

3.2. Analyzing the Roles of Key People. 10

3.3. Development and Implementation. 12

3.3. A. Setting Strategic HR Plan. 12

3.3. B.   Implementing HR Strategies. 12

4.0. HR Strategies to be implemented Within an Organization. 13

5.0. Contemporary Issues Affecting Strategic Human Resource Management 14

6.0. Bibliography. 15

 

1.0. Introduction

Strategic human resource management has been devised in order to assist the organizations to best meet the requirements of their employees at the same time as promoting the overall organizational objectives. Human resource management takes into account any areas of a business that puts an impact upon the employees such as compensation plans, selection and recruitment, termination, training and development, benefits and administration. Human resource management also deals with safety procedure information, work incentives, and providing sick leaves or holidays. Strategic human resource management aims at delivering proactive management of the people. Strategic aspect of human resource management needs thinking in advance and forecasting and developing strategies for an organization to meet the goals and needs of its employees and the whole company respectively in a better way. Strategic human resource management influences the manner activities are conducted in a business setting, and helps to improve everything ranging from recruitment practices and staff training programme to evaluation of discipline and techniques.

1.1. Company Profile

In order to understand the role and significance of human resource management in attaining organizational effectiveness the case of Tesco has been considered. Tesco is one of the dominant food retailer in Britain and the third biggest international grocery chain in the world in terms of revenues (‘Tesco’, 2014). The company has it’s headquarter in Cheshunt, United Kingdom. It was founded in the year 1919 and is operating its business across 12 countries throughout Europe, Asia, and North America. Tesco has implemented effective strategic human resource management into their businesses which entails achieving constant growth and increases its operational scale in the global market.

1.1. A. Mission Statement

The management team of Tesco is devoted towards developing sustainable consumer loyalty. In order to achieve this, the organization’s management makes sure that all the activities of the organization is directed towards satisfying the consumers. This helps the organization to provide value to its consumers by comprehending their needs in a better way. The management of Tesco is highly devoted towards incorporating the idea of innovation and ascertains that it contains an extensive range of human resources and develops a good working environment for their organizational people.

2.0 Strategic Human Resource Management

2.1. Defining Strategic Human Resource Management

Human resource management involves all types of management practices and decisions directly influence the organizational people, or human resource related to the organization (Bratton, 2007).  Human resource management at the strategic level is referred as strategic human resource management. Strategic human resource management signifies concern for the methods by which human resource management can control the effectiveness of an organization. Strategic human resource management can be defined as the actions, approach, and decisions that are essential to the management of all business segments, employees, and is also concerned with the application of strategies focused towards attaining sustainable competitive advantage. All the organizations realize the implication of drawing a link between strategies and human resource practices which results in higher performance and productivity.

 

With respect to management, strategy indicates activities that the senior managers consider for accomplishing goals of the organization.  Strategic management is viewed as an ongoing approach which requires having constant regulation of three key inter-dependant poles which are: the principles of the senior management; the environment; and the available resources.

Within an organization strategic human resource management represents accepting and involving the human resource job as a strategic partner in designing and executing the organization’s strategies through human resource activities like recruitment and selection, training and development and providing rewards to the personnel (Litvinov, 2012).

2.2. Significance of Human Resource Management in Organizations

A well planned human resource management strategy embedded in an organization helps to channel and coordinate the human capital into improved productivity. A strong human resource strategy allows an organization to establish a good relation with its employees and helps it to coexist harmoniously and in a mutually profitable way with its host community.

2.3. Analysis of the Harvard Framework

The Harvard framework was proposed by Beer et al (1984) at Harvard University. The Harvard framework recognizes the presence of several stakeholders in an organization. According to Beer and his team members in today’s age several stress and anxiety are demanding a wider, more strategic and more comprehensive point of view with respect to the organization’s human resources (Mbongaya Ivo, 2006). Such stress and anxieties have developed a requirement for: consideration of people as a critical asset of the company instead of viewing them as simply a variable cost and having a long term perspective in controlling the employees. They emerged as the first one to emphasize the human resource management principle that it fit in to the line managers. Also they stated that, human resource management includes all management related actions and decisions that significantly influences the nature of relation between the human resources and the organization.  According to the Harvard school, the HRM includes two main characteristics elements

      Line managers agree to more responsibilities in order to ensure proper alignment of personal policies and competitive strategies.

      Personnel hold the mission of putting into practice the policies that preside over how personnel actions are formed and put into operation in a manner that make them highly mutually reinforcing.

As per Boxall (1992) the benefits of this framework are the following:

      It includes acknowledgment of a wide range of stakeholder’s interest.

      It takes into account the significance of ‘trade-offs’, both implicitly or explicitly, between the concerns of the management and those of the workers along with among several interest groups.

      It helps to broaden the perspective of human resource management in order to involve ‘employee influence’, the organization of job and the related question of managerial style.

      It recognizes a wide range of relative impact upon the management’s selection of strategy, signifying a meshing of both socio-cultural logic and product market.

      This framework gives emphasis to strategic choice- it is not determined by environmental or situational factors.

The Harvard Framework of HRM

The Harvard framework has put forth substantial amount of impact on the practice and theory of human resource management; specifically it highlights the fact that human resource management is the management’s concern in broad-spectrum rather than a personnel activity in particular.

Here in Harvard Framework, four HR policy areas have been outlined:

      Human resource flow: recruitment and selection, appraisal, promotion, termination etc.

      Employee influence: responsibility, delegated levels of authority, and power.

      Work system: formulation of work and coalition of people.

      Reward system: motivation, compensation system etc.

These above mentioned areas lead to achievement of four C’s which include:

      Congruence

      Commitment

      Cost effectiveness

      Competence

Beer et al postulated that the longer term results which include both costs of human resource policy and benefits require to be analyzed at three levels: organizational, personal, and societal. These in turn need to be evaluated with the help of the four Cs.

3.0. Understanding the Formulation and Execution of Human Resource Strategies

3.1. Analyzing Strategic Management Process

An organization’s long term plan is to make strategies for balancing its internal strengths and weaknesses along with its external opportunities and threats in order to sustain competitive advantage (Golding, 2010). The strategic management process encompasses the method of recognizing and implementing the organization’s mission by matching the organization’s competences with the requirements of its environment. There are seven steps included in the strategic management process:

v  Step One: Defining the existing business situations. This step requires choosing the environment on which it would compete, differentiate from its competitors and sell its products.

v  Step Two: Performing internal and external audit in order to understand the business situations.

Strengths:

      High brand value. Tesco holds a strong brand value in the UK market hence other regions in the world also held belief in Tesco brands firstly.  Implementation of new techniques and quality products helped them in improving their brand value.

      Tesco’s online service is one of its strongest ways in generating revenues.

      High market shares.

Weaknesses:

      Debt reduction and serial acquisitions.

      Sole dependence on UK market is one of the key weaknesses of Tesco.

Opportunities:

      Concentrating on international expansion.

      Focusing more towards non-food retailing.

      Expanding business on skincare products i.e. health and beauty.

Threats:

      Strong competition in the market from key players such as Wal-Mart or Asda etc.

      Expansion of its business in the global market could be highly expensive.

      Price war among the UK retailers.

      Overseas profits might decline.

 

v  Step Three: Formulation of new business vision and mission statements. This should be on the basis of the situation analysis. This step should include development of strategies in order to address the core business activities such as methods to differentiate from key competitors.

v  Step Four: Translation of the organization’s mission into strategic goals. Tesco has employed inclusive business strategies that involves achievement of constant growth and expand the scale of operations in the global market.

v  Step Five: Formulation of strategies in order to attain the strategic goals. Tesco’s management has formulated inclusive human resource strategies. The organization’s entire human resource strategy involves the integration of employee training as a component of the organization’s culture. Tesco’s human resource strategy rotates around challenging regulations which are not within the organization’s human resource policies such as performance management, simplification of work, and ascertaining that the employees possess the required core skills. The human resource training also takes into account the bottom level employees.

v  Step Six: In Tesco strategies are implemented in order to attain vertical and horizontal integration. The following methods are incorporated.

• Resourcing: Tesco has undertaken inclusive recruitment process in order to increase its human resource size.  Both external as well as internal supplies of human resource are taken into account during recruitment for ensuring that the organization turns competitive in terms of human capital. The organization’s internal recruitment aims at ascertaining that the workers are motivated to keep moving forwards in their career. For ensuring effective internal recruitment, the management has designed Talent Plan which lists the organization’s staffs who wish for promotions. Internal recruitment allows Tesco to implement the idea of reward management in its function. The organization’s external sources include offline mediums, posting vacancies on the internet. Inclusive recruitment and selection helps Tesco to offer effective service to their customers and assists in undertaking service and product innovation.
• Human Resource Development: Tesco’s management has incorporated strong employee training programme for their workers. Their training programme has led to good working environment and effective human resource development. The training and development strategies allows in attaining their core business goals.

 

v  Step Seven: Performance evaluation is an important step in the strategic human resource management process. In order to make sure that the workers are productive and satisfied in the organization performance evaluation strategies needs to be built. Tesco has developed an employee relation team who are responsible for formulating policies that ensure effective management of the organization’s employees.  The management rewards their employees on the basis of their performance and value they form towards the company.

3.2. Analyzing the Roles of Key People

Role of Board of directors:

      They are responsible for recruiting, supervising, retaining, evaluating, and compensating the managers, CEO, and the general manager which is very significant for the company.

      They give direction to the company. The board of directors contains the strategic function of formulating the mission, vision, and objectives of the company.

      They are responsible for establishing a policy based governance structure.

Role of Stakeholders:

      Stakeholders are responsible for clearly illustrating the requirement of the project to be undertaken.

      Various key stakeholders such as investors provide financial resources for the successful completion of a project.

      Stakeholders are responsible for establishing training and support facilities for the employees.

Role of Front-Line Management:

      They are liable for dealing with strategic management of operational costs.

      They are responsible for offering technical expertise to their teams.

      They are responsible for assessing work and evaluating quality on a regular basis.

      They deal with analyzing operational performance and allocating tasks.

      They are responsible for dealing with clients and customers.

Role of HR Specialists/Consultants

      They are responsible for administering the organization’s payroll and benefits schemes.

      A recruitment specialist is responsible for attracting new and suitable employees to the organization.

      HR specialists are also responsible for conducting several aspects of organizational training for the new and existing employees.

HR Function:

The six key functions of human resource management are as follows:

      Recruitment: This is an important aspect of human resource management as appropriate and effective recruitment process contributes to the success of an organization. Tesco has incorporated strong recruiting system in order to attain efficient workforce (Agarwala, 2008).

      Safety: safety at workplace is a significant factor. As per the Occupational Safety and health Act 1970, all organizations are obliged to deliver a safe work environment for their staffs. Hence this is a critical job for the human resource department.

      Compensation and Benefits: Compensation and benefits is another significant function dealt by HR specialists. This involves setting compensation plans and assessing competitive pay practice.

      Employee Relations: Effective management of employee relations with the help of measuring employee involvement, employee satisfaction, and resolving the workplace conflict is a vital function of the HR specialists.

      Training and Development: This is another important function of HR department as it helps to identify the gaps in performances and provide sufficient training programme for developing the required skills among employees.

      Compliance: Conformity with the employment and labor laws is also a vital HR function.

3.3. Development and Implementation

3.3. A. Setting Strategic HR Plan

Strategic HR plan is a significant part of strategic HR management. It helps to link HR management directly to the strategic plan of the organization. Setting strategic HR plan enables the organization to make HR management decisions for supporting the future direction of the company. Strategic HR planning is critical with respect to budgetary perspective as it considers the costs of training, recruitment within the company’s operating budget.

3.3. B.   Implementing HR Strategies

HR strategies can be effectively implemented by the following methods:

      Considering organization’s strategic vision: In order to effectively implement the HR strategies it should be well aligned with the company’s strategic vision.  Vision helps to indicate the direction of the organization and the requirement of workforce and resources.

      Considering the demographics: This requires examining the demographics of the workforce in order to identify the gaps between the present skills and the required skills work accordingly to align the organization’s vision with the strategies.

      Knowledge Transfer: This process of transferring knowledge among departments and employees is crucial for ensuring effective incorporation of strategies in order to carry on continuity and put minimum effect upon organizational effectiveness and productivity.

4.0. HR Strategies to be implemented Within an Organization

Essential Human Resource Strategies:

      Transformation of the organizational structure:

The structuring of the HR functions relies on the nature of the organization’s business activities, organization’s complete business strategies, and size of the organization. In case of some organizations the HR department prefers to incorporate centralized structure or in some highly decentralized structure of the HR unit might be very much required. It is important for the management to select the relevant form of organizational structure in implementing successful SHRM that will be helpful in meeting the needs of the business and would help the entire organization in achieving the strategic goals. Also, there exist remarkable dissimilarities between the skills and expertise needed by the HR employees in case of conventional HR practice and Strategic HRM practice. In SHRM, the HR employees require to be skilled in change management entailing team building, strategic planning, and building global perspective. HR departments could be exposed to enormous transformation while supervising the human resources having a strategic view.

      Employee relation strategy:

Performance evaluation is an important step in the strategic human resource management process. In order to make sure that the workers are productive and satisfied in the organization performance evaluation strategies needs to be built. Tesco has developed an employee relation team who are responsible for formulating policies that ensure effective management of the organization’s employees.  The management rewards their employees on the basis of their performance and value they form towards the company

      Improving the administrative efficiency:

The key objective that lies in this strategy is to enhance the HR services and administrative roles along with managing cost-effectiveness within the organization. Various strategies are required to improve the efficiency of the organization:

• Improving the administrative efficiency by focusing on the existing process in order to improve them by identifying any significant gaps.
• The efficiency of the organization can also be made better by the creating centralized HR functions that can be shared across the organization.
• Another strategy includes the HR department to analyze how they can add value to the organization in respect of the customer’s point of view.

      Reward Strategy:

This is a very fundamental and direct strategy in HRM. This strategy is useful in making employees work diligently as this is linked with their salary and their portfolio. Moreover, training and development of individuals can also be considered as reward which in turn helps to increase the organization’s efficiency and productivity.

5.0. Contemporary Issues Affecting Strategic Human Resource Management

      Technological advancement and workplace: The setting of the workplace is rapidly changing due to technology (Iqbal, Tayyab, Farmanullah & Yousaf Khan, 2012). Such technological change brings telecommuting, remote reporting relations and remote-work but also this comes with issues related to motivation and discipline. Such issues affect the productivity of an organization.

      Planning, acquisition and development of human resources: This has come up as a significant issue due to the changing demands within the industries.

      Globalization: This has given rise to many contemporary issues such as conflict among diverse workforce, changing laws and legislations etc.

6.0. Bibliography

Agarwala, T. (2008). Strategic human resource management. Arth Anvesan, 71.

Bratton, J. (2007). Strategic human resource management. Human Resource Management I\Ccinde, Der: John Bratton,-Gold, Jeffrey, London: Palgrave Macmillan, London, 37–71.

Golding, N. (2010). Strategic human resource management. Beardwell, J. And Claydon.

Iqbal, D., Tayyab, F., Farmanullah, S., & Yousaf Khan, N. (2012). CONTEMPORARY ISSUES IN HRM: A REVIEW FROM 2007-2011 IN HRM REVIEW. INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS, 4(3).

Litvinov, A. (2012). Human Resource Management and its alignment to the strategy of a Company. Retrieved 17 July 2014, from http://www.unicorncollege.cz/european-it-center/litvinov-alexander/attachments/Bachelor_Thesis_Litvinov.pdf

Mbongaya Ivo, A. (2006). “Best Perspectives to Human Resource Management”. Retrieved 17 July 2014, from http://www.africancentreforcommunity.com/articles-Dateien/Best%20Perspectives%20to%20human%20resource%20management%20by%20Arrey%20Mbongaya%20Ivo.pdf

Tesco. (2014). Retrieved 17 July 2014, from http://www.tescoplc.com/index.asp?pageid=11