Human Resource Management in Tesco - Case Study Example

Human Resource Management: A Case of Tesco Name Institution Course Date Human Resource Management: A Case of Tesco Introduction Tesco is a British multinational retailer founded in 1919 by Jack Cohen though its first store opened ten years later in 1931 (Tesco 2016). Since then, Tesco has grown to become a global brand currently having presence in more than 12 nations, where it operates over 6,902 stores. Although Tesco’s core area of business is grocery sector, the retailer has diversified its product portfolio and currently provides a wide variety of products and services that include mobile phones and personal finance. Tesco is also among the largest employers in the global retail industry, where it currently has a workforce comprising of more than 476,000 people. Despite the challenges it faces in the retail industry, such as the growing competition and changing consumer needs and preferences, Tesco has maintained good performance having posted net income of £129 million in 2016 (Tesco 2016). This paper analyzes Tesco’s human resource management approaches and its impact on the performance of the retailer. Human Resource Management and Strategic Planning: Optimizing performance Human resource management has been key to Tesco’s good performance and success. As a company that has over 476,000 employees, HR plays an important role in ensuring that the company’s people are properly managed to ensure the achievement of the company objective (Tesco 2016). Tesco’s HRM plays a critical role especially in strategic planning. In order for Tesco to compete effectively in the retail industry, it must have the right skills and talents to drive the company towards the achievement of its strategic objectives (Wilkinson & Johnstone 2016, p. 81). For this reason, HRM play an important role in this regard by ensuring that Tesco has the access to the right talents that it needs to ensure its future success. Through strategic planning of human resources, Tesco has been able to have the right number of employees with the skill sets that the company needs to ensure that there is optimal performance. One area where HRM and strategic planning has been key to Tesco is recruitment. Because Tesco stores handle hundreds of customers on a daily basis, having the right number of employees at any given time is important for Tesco’s performance because of its impact on service delivery and customer satisfaction (Tesco 2016). As such, HRM play a critical role in ensuring that all Tesco stores have the right number of employees to deliver services to customers. Accordingly, this ensures that no shortage of employees is experienced as any vacancy is filled within the shortest time possible. Human Resource Planning  HR planning plays an important role in ensuring that a company achieves its strategic objectives. HRM has particularly become important to businesses in today’s globalized economy. Unlike in the past where firms used to operate in the domestic markets, the 21st century companies operate in a global marketplace (Sims 2007, p. 8). This implies that businesses have to compete not just with the domestic rivals, but also with international firms. The same applies to Tesco that has a global presence operating more than 6,902 stores in more than 12 countries across the globe (Tesco 2016). Because of global operation, the company has to align its HR practices and policies to ensure success in the global economy. At the same time, the demographic composition of the marketplace is changing and this affects HR strategy. In most developed countries, the population is aging very first and this creates talent shortage to firms in the developed nation. For instance, because of the aging UK population, retailers like Tesco have started experiencing the challenge of getting people to work at its stores. Beside, the workplaces are fast-changing as workplaces are increasingly becoming diverse because of globalization witnessed over the past decades. To address the challenges of that come with operating, human resource planning can help Tesco by enabling it acquire the right talents that meets the demand of the global economy (Wilkinson & Johnstone 2016, p. 87). This implies that, through HR planning, Tesco can restructure its business to suit the demands of the global economy. Second, as the demographics of the job market changes, with population ages, HR planning can enable Tesco to change its hiring and recruitment approaches to ensure that it is not negatively affected by the changing demographics (Tesco 2016). For instance, Tesco is one of the retailers that has in recent times began outsourcing and off shoring some of its functions to enable it overcome the challenge of getting the right talents occasioned by the changing demographics. Additionally, HR planning can enable Tesco achieve its objectives through structuring to enable it reflect the diversity. As the business world becomes more diverse, companies like Tesco must also ensure that their workplaces reflect the same diversity. Today, companies like those in the retail industry serve customers from diverse backgrounds and with different needs, some of which are based on distinct cultures (Sims 2007, p. 14). Therefore, for Tesco to achieve its objectives, HR planning can help it build a diverse workforce to enable it respond effectively to the diverse needs of customers. Studies show that Tesco’s HR has recognized that, for it to succeed in the 21st century, it has to respond to the market demands and part of this has been by hiring people from diverse backgrounds to help drive the company to success. The diversity of Tesco’s workforce is reflected by the fact that the company’s staff comprises of people from different backgrounds that include blacks, whites, Asians, male, female, disabled and people who subscribe to different religions (Tesco 2017). Aligning the company’s HR strategy to meet the global workplace trend has been critical in helping Tesco achieve its objectives. Recruitment and Selection Recruitment and selection are some of the most important HR functions. Recruitment and selection are important for any organization as it ensures that a company has the right number of employees with the right talents at the right time and place (Sims 2007, p. 12). Tesco is an example of a retailer that understands that its success begins with recruiting the right candidates for the job. Tesco adopts both internal and external recruitment processes (Tesco Underwriting Ltd, 2017). In this respect, recruitment begins by the company looking at its internal Talent Plan that involves looking at whether there is a qualified person internally to fill a vacancy through its Talent Plan, the company proceeds to advertise the position internally on its intranet for a period of at least two weeks (Tesco, 2008). However, if a position needs to be filled from external sources, Tesco usually places an ad for the position on its websites www.tesco-careers.com and o the company’s boards. Candidates who meet the requirements for the positions advertised are invited for an interview, where the company gets a chance to have a one-on-one interaction with the applicants (Tesco Underwriting Ltd, 2017). From the interview, the candidates move to the selection stage, where the candidates are assessed using a variety of testing methods. Because merely looking at a person’s resume and qualifications does not mean that the candidate has the right competence to execute their tasks, Tesco usually subject the candidates who pass the interviews to psychometric testing. At this stage, the candidates are tested on behavioral and personality characteristics and cognitive abilities to see if they are competent enough for the role (Tesco Underwriting Ltd, 2017). Psychometric testing also gives Tesco a chance to see if the candidate’s behaviors and personality suits the retailer’s culture. This rigorous recruitment and selection process ensures that the best candidate is chosen for the job (Tesco, 2017). To enable recruits acquire the right experience and to familiarize with their tasks and roles, Tesco offer induction to all recruits before they can be left to work independently on their assigned roles. The induction process at Tesco lasts up to three months or even more until that time that the new recruits familiarize with their roles. To enable induction process, Tesco has implemented a number of induction tools to facilitate induction process. Some of the induction training tools used by Tesco include BigPicture Learning, The Hatch, Berks, Heartlands, and Burfield Village (Tesco, 2008). The induction process that new recruits are taken through has ensured that the company builds a workforce with strong caliber and ability to deliver to the objectives and goals of the retailer. Training and Development Training and development is important for business growth and success. Training involves gaining the desired skills and knowledge that enable one to perform a task (Wilson, J. P 2005, p. 5). Tesco understands that to achieve its objectives, it needs to have employees with the right skills and knowledge. Accordingly, Tesco has developed a training and development program whose objective is to ensure that employees become the best they can become in terms of skills, knowledge and competencies (Tesco 2017). The training and development is designed to ensure that the company achieve efficiency with regards to how products and services are delivered to customers by enabling employees have the right skills and competence to do their job. Training also ensures that Tesco’s employees become more productive, and better able to meet both the internal and external needs of customers (Tesco 2008). Additionally, Tesco also provide training and development program as a means of motivating its staff. Having a highly motivated workforce is critical to the success of any organization and this is supported by motivational theories, such as Maslow’s hierarchy of needs theory that recognizes that training and development is one way of motivating employees in the workplace. To realize this, Tesco has initiated a wide range of training and development program that aims to ensure the realization of the retailer’s training objectives. Tesco particular provides both on-the-job and off-the-job training. The on-the-job training includes assigning an employee an experienced colleague in the department to show an inexperienced employee how to do the job. At the same time, the retailer has coaching managers who assist employees work through problems, motivate and inspire the trainees to find solutions (Tesco 2008). Tesco also offer mentoring program for its employees. The company uses both internal mentors and external consultants who are hired to mentor Tesco’s employees. Additionally, Tesco conduct job rotation for its employees as part of development program. As part of developing employees’ skills and knowledge, the retailer operates an assessment center at Hertfordshire. The assessment centers take employees and new hires through a psychometric test, in which every employee, especially the new hires are subjected to an aptitude test that aims to pint employees in the right direction for their tasks (Tesco 2017). The assessment centers have helped Tesco build a strong workforce consisting of employees who not only competent and efficient in their roles but also those who fit the retailer’s culture. Additionally, the assessments are also used to identify the potential of managers in their areas of designated work so that training can be designed where they happen to have shortage in skills and competence. Management of Performance Performance management has become an area of increased interest for businesses. Because businesses have recognized the importance of having highly competent and productive employees, companies are investing in performance management as a strategy for ensuring that they have highly competent and knowledgeable workforce. Performance management is the processes that involve reviewing the performance of an employee to see if they are contributing to the organizational objectives (Caldwell 2002, p. 4). There are a variety of performance management strategies used by companies; key among them are performance appraisal, 360 degrees and management by objective among others (Armstrong & Baron 2005, p. 11). Performance appraisal otherwise called performance review is a common performance management tool used by most companies. Performance reviews are usually conducted to evaluate employee’s performance to see if the employee is performing to standard. This is helpful to companies as it help highlight the training needs of each employee who appears not to meet the expected levels of performance (Armstrong & Baron 2005, p. 17). In this regard, based on the feedback obtained from performance reviews, managers can design appropriate training to enhance the skills and capabilities of an employee. Additionally, performance reviews help firms modify employees’ behaviors towards effective working habits (Caldwell 2002, p. 9). Moreover, performance reviews provide managers with a yardstick for assigning job assignments. Tesco is an example of a retailer that recognizes the importance of improving knowledge, skills and job satisfaction of its staff in its continued growth and success. To achieve this, the retailer evaluates the performance of its staff on a regular basis in order to anticipate possible skill shortage that might affects the performance of its employees and the company as a whole (Purcell, 2003, p. 30). Tesco reviews the performance of its employees annually and this helps the retailer and its staff makes decision as to whether they need to improve their skills, knowledge and resources so as to be able to perform their duties effectively (Purcell, 2003, p. 30). Based on the feedback of these performance reviews, employees are able to apply for training that suits their needs as part of correction action for skill and knowledge shortage. HR Workplace Issue That Has Affected the Tesco's Strategic Goals Tesco has been rocked by many HR issues in the recent past. However, the one that has affected the retailer the most is low levels of employee morale that was triggered by pay dispute. The pay dispute between Tesco and its staff was prompted by the move by Tesco to change the terms of conditions of over 1,000 long-serving employees of the company (Cosgrove 2017). Under the new terms of employment, Tesco offered redundancy terms to its employees a strategic move that did not go well with the affected employees at Longford store. The employees’ dissatisfaction with the changes in terms and conditions of employment prompted the affected employees to issue a strike notice which was intended to compel Tesco not to change the terms (Clarke 2017). To address the problem that had pitted the retailer against its long-serving staff, the company had to suspend the implementation of its plan to change the terms of employment that would have seen its pre-1996 staff move to lower paid contracts. Conclusion Human resource management plays an important role in ensuring the success of an organization. As demonstrated by Tesco, HRM ensures that a company has the adequate number of employees with the right skills and knowledge to help drive a company to success. The report has also demonstrated that HRM are responsible for training and developing the skills of employees. However, to know the skill gap, companies like Tesco conducts performance appraisals on regular basis. Despite good performance that the retailer has posted over the years, it must ensure that it addresses the low employee morale at most of its stores as this affects not just the commitment level of its staff, but also their productivity. To address the low morale problem, Tesco needs to provide its employees with attractive contract terms as well as ensure that employees are competitively remunerated. References Armstrong, M., & Baron, A 2005, Managing performance: Performance management in action. Oxford: CIPD Publishing. Caldwell, C. M 2002, Performance management: EBook edition. New York, NY: AMACOM Div American Mgmt Assn. Clarke, V 2017, Strike at eight Tesco stores set for tomorrow in dispute over pay. 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