Evaluation and Analysis of Tesco Plc - Case Study Example

Evaluation and analysis of Tesco plc: The personnel function – job roles and responsibilities BY YOU YOUR SCHOOL INFO HERE HERE Evaluation and analysis of Tesco plc: The personnel function – job roles and responsibilities 1. Introduction and background of Tesco Tesco plc operates in an oligopolistic market structure, one that is dominated by only a few major competing retailers and a market that is marked by intensive competitive rivalry.1 Currently, Tesco holds approximately 28 percent of total European market share in the grocery retailing industry, outperforming such rivals as ASDA, Morrison’s and Sainsbury, making it the largest European grocer by revenues. Tesco maintains a much diversified product line, including private label brands developed by Tesco research and development teams and traditional grocery products ranging from produce to meat procurement. Diversified product offerings have expanded into home furnishings, clothing, books, financial services, and even petroleum. Tesco’s business objectives, as aligned with the company mission, are to “create value for customers to earn their lifetime loyalty”.2 Therefore, pricing is a significant competitive factor for Tesco as a method of providing this mission-supported value, including the development of very profitable low-priced, private label brands. To create further value aligned with business aims, Tesco provides convenience and innovations in a variety of effective business models, including Tesco.com that provides home service grocery delivery. For non-Internet customers, procurement strategy along the international supply chain is critical to providing value, ensuring that localised consumer needs are represented in all of its operating facilities throughout Europe and Asia. Tesco ensures that the business structure is adaptable for diverse customer needs domestically in the UK and in other nations where consumption needs differ based on social and cultural preferences. The company strongly reinforces value to customers by emphasising its commitments to responsible business behaviour under corporate social responsibility models. Tesco is a foremost business leader in establishing responsible and sustainable business strategies that provide a much better brand reputation for the organisation. Emphasis in corporate social responsibility are reflected on the Tesco Wheel (Appendix A) that illustrates commitment to advancing opportunities for growth and development with internal employees and managers, improving the quality of life of foreign, developing supply chain partners, and passing social value to consumers such as through development of healthy eating campaigns and nutrition training. Human resources is aligned with the conceptions listed on the Tesco Wheel, following the firm’s credo on treating employees with respect, creating interesting jobs for retention purposes, and managers that maintain a coaching and mentoring posture. Tesco’s human resources function involves conducting preliminary evaluations of existing skills and competencies of employees and managers using a nine-point criteria framework for measurement. This is referred to as the Tesco Leadership Framework with nine skills and talents necessary to become Tesco’s “best leaders of the future”.3 Once these determinations have been achieved through the leadership framework, Tesco then develops HR strategies that are aligned with many models of human resource best practice. Tesco utilises shadowing, which is having an existing employee show their peers how to perform a task or job function.4 Other strategies include mentoring, coaching and job rotation to increase skills development and stay true with mission values of providing interesting job opportunities. The human resources function with such a strong emphasis on satisfying and developing employees is supported by a decentralised business structure where decision-making is more appropriately shared among employees at lower levels of authority in the business. The evidence provided regarding the human resources strategies at Tesco are aligned with transformational leadership models, in which communications are open and regular, where vision and mission are constantly role modelled and reiterated to gain commitment, and where employee development becomes a critical imperative for human capital advantages competitively.5 Therefore, it should be recognised that Tesco utilises a soft approach to human resources management in which employee psycho-social and tangible motivational needs are constantly considered by human resources talent experts. The human resources function is extremely critical to sustaining other important business functions, including in-store sales strategies, marketing, customer relationship management, and even research and development. Tesco acknowledges that its market success, competitively, stems from competent employees that have been trained with the knowledge necessary to positively engage consumer target segments. In some markets, customers are collectivist, meaning that they value group membership and tradition. In these markets, whether using expatriate talent or local talent, employees must maintain a strong emphasis on providing respect in service and attempting to build long-term, intimate relationships with consumers to gain their loyalty. Therefore, human resources experts must provide more emphasis on sociological or psychological training associated with consumer markets to build a collectivist team philosophy for direct sales strategies. Without appropriate mentoring or coaching, customer service would suffer in these regions where relationship is a primary selling feature for the Tesco brand. 2. Investigation into the responsibilities of two key Tesco personnel This investigation involves analysis of the marketing executive role at Tesco, specifically the Brand Project Manager, as well as the Head of IT and new technologies. The executive role of brand project manager involves many terms and conditions for gaining employment. The individual must provide evidence of experience in cross-functional relationship development, commercial marketing knowledge, experience in project management, and a verifiable track record of managing and implementing change practices.6 Specific, desirable competencies for this role are aligned with the Leadership Framework, nine-point evaluation process that will exhibit planning skills, tenacity, stakeholder management, and developing others with a human resources focus.7 This is a very high profile, executive position that is critical to maintaining the positive brand reputation that Tesco has built through years of effective competitive rivalry strategies and customised market promotions. This position reports directly to the Deputy General Manager, one level below the company president, thus giving this individual considerable authority in the decentralised business structure. The role of the Head of IT and new technologies is currently held by Nick Lansley who also maintains responsibilities associated with information technology research and development. The terms and conditions of this role include proven experience aligning budget with information systems architecture development, excellent interpersonal skills, project management experience, and the ability to prototype and test software innovations included in the business model.8 This position, as well, reports to the Deputy General Manager, which is an authority level above that of procurement management, human resources management, and accounting management. The function of the Brand Project Manager includes creation of a brand hierarchy for domestic and international brand management and ensuring that global products and services are aligned with this framework. One of the main functions is establishing appropriate metrics, which are measurement and evaluation instruments that measure return on investment and performance of brand-related strategies. This executive role involves establishing interactive forums by which communities of practice are promoted, providing best practice guidance to subordinates.9 Tesco, in this oligopolistic market structure, relies heavily on promotion as a competitive advantage. Tesco can no longer focus on positioning the business associated with product, as in this market competition such as ASDA and Sainsbury can easily replicate product procurement strategies and, therefore, provide similar product offerings. Tesco is successful in using marketing best practice to differentiate the brand Tesco by emphasising beliefs in corporate social responsibility, the team environment related to human capital, and providing value related to pricing and diversification of product offerings to maintain its competitive brand advantages. Therefore, the role of the brand project manager is one with considerable responsibility focused on the dimensions of ethical and cohesive business philosophy found on the Tesco Wheel. There is little incentive for acting independently, rather even managers not directly involved in human resources are being promoted to act as mentors and coaches, whilst also inspiring motivation in team function. The Brand Project Manager is critical to success in this market. “A strong brand image is the only asset a company can develop that cannot be copied”.10 Thus, the role of the brand project manager is to determine what types of promotions should be developed that will be aligned with local or standardised marketing practice depending on the specific objectives attempting to be achieved. For example, in Slovakia, Tesco uses corporate social responsibility as a promotional tool in this developing country and operational managers have developed strategic alliances with many small-scale producers of food products to assist in improving procurement and the environment where these products are grown and produced. The Brand Project Manager will determine an effective advertising strategy to bring more value to Tesco, engage subordinates on the team to work socially with supply partners from different cultures, and then align in-store promotional materials to promote the benefits for consumers of purchasing Slovakian products along a quality positioning model. The Brand Project Manager would determine the life cycle of the project, consider how to improve growth through promotional efforts, with attention paid to the homogenous marketing strategy associated with value and CSR that brings cohesion to the Tesco marketing model. The role of IT executive is also considerably important to Tesco’s success, both competitively and related to profitability. Nick Lansley is currently focused on improving Tesco.com, a major revenue contributor to the business under convenience and value positioning. The primary responsibility in this role is to be a contributor to IT research and development to identify innovation opportunities under the online buying model to improve Tesco’s competitive position on the market. For instance, Lansley recently developed (using team members) a software enhancement that provides consumers with mobile applications for smartphone product ordering at Tesco.com.11 Lifestyle changes and technology advancements in the external environment posed opportunities and threats to the business, therefore Tesco relies on positions such as the IT executive to identify new opportunities to satisfy customers, retain their loyalty, and gain new market attention. The IT Executive role also recently developed an API software system that facilitated more convenient ordering of online products. This API can be linked with smart refrigerators that provide automatic ordering for customers with high resources. It also is an enhancement to the tangible online website that customises offerings and improves checkout time for the virtual shopping cart on Tesco.com.12 This role is strongly inter-dependent on the marketing and branding roles as convenience innovations added to the IT infrastructure are critical to maintaining competitive edge and sustaining the company’s current brand position competitively. As identified by the research on competencies required in these roles, their relative responsibilities in the organisation, and the inter-dependencies on other areas of business such as operations, marketing, and human resources, both roles are critical to the branding function. In the oligopolistic market structure, businesses are largely considerate of competitive rivalry and the buying power of consumers, which involves the switching costs for defection to competing grocery brands.13 3. Analysis of utilisation of human resources functions This section will explore the workforce planning and development practices aligned with human resources best practice at Tesco. As it pertains to development, Tesco considers the partnership between worker and line manager to be critical to identifying needs and creating appropriate development plans. The trainee is responsible for collecting evidence of their accomplishments, either in Tesco or created externally, which are provided to the supervising line manager. The manager then helps to construct a Tesco-supported Personal Development Plan by which future feedback on performance is measured.14 Therefore, it should be recognised that the role of management and associated leaders in the business is focused on coaching and mentoring which are necessary constituent elements to a development program launch. Tesco, in terms of development, has developed a tiered framework of competencies necessary for specific job roles. It consists of a bronze, silver, and gold set of tiers, each referring to the level of expertise required in the job role, its importance with inter-dependent Tesco divisions and systems, and associated authorities or autonomies in each role. Achievement of bronze status is a four week training commitment, whilst silver achievements occur over a 12 week developmental period. Psychological theory teaches that one fundamental motivational factor in the workplace is removal of ambiguity; employees want to know their purpose and feel valued as trusted decision-makers.15 Tesco is superb in aligning human resources with motivational strategies aligned with respected models of psychology that brings more interest and enthusiasm in employees to remain dedicated to development programs. This also has supplementary benefits for the business’ competitive advantages by establishing a sense of belonging with peers and management through routine interactions and engagements during development, a fundamental and universal human need that leads to better self-esteem development.16 It is a humanistic approach to development, aligned closely with transformational leadership, where performance measurement and coaching are much more interpersonal and involve shared evaluations of direction and individual worker performance. Workforce planning is strongly aligned with the flexibility required for local and international consumer segments. Consumers, based on their social or other related consumption preferences, place many demands on Tesco for adaptability and the provision of better service. Therefore, different operating divisions, such as the UK versus China, require unique and customised competencies in order to meet customer needs and stay true to the company mission. The business uses the Leadership Framework as an evaluation tool to determine what skills are required in different regions of operations. Additionally, annual performance reviews (which are more intimate between worker and manager than in other industries/companies) and career discussions provide a new framework by which to plan for future workforce needs.17 Such activities could include exit interviews or one-on-one consultation to gain knowledge of the hindrances a role provides as well as opportunities. This helps human resource managers at Tesco develop an appropriate job description and select the most appropriate recruitment and selection techniques necessary to find the right candidate fit for unique market conditions. 4. Assessment support strengthening for key personnel roles There is no evidence that Tesco uses respected HR evaluation models to enhance building a more effective training and development framework relevant to individual needs. The evidence provided that illustrated a transformational and soft approach to HR showed a strong focus on human development and training. However, the business is not using a framework supported by psychology and sociology that would better motivate workers and build a more cohesive organisational culture. It is recommended that Tesco expand its HR function to include personality testing templates that recognise whether individuals in training are better taught using auditory, visual or kinaesthetic processes (experiential) that would facilitate better learning.18 There are many respected models of evaluation that determine how adult learners are better engaged in content if it is aligned with their preferred learning styles. Tesco could improve employee engagement and long-term comprehension if this was included in the training model. In a job role where there are specific skills necessary to be acquired to achieve a transition from the bronze level to the silver level (where pay is also aggregate to experience), this would ensure that there are no discrepancies associated with learning that could have long-term implications for job role success. HR could also implement a 360 degree feedback system which would give evaluators a much better picture of the actual competencies and failures of individuals to help in developing them more effectively. This system takes feedback from co-workers, team members, and even customers, thereby removing bias from just line management evaluation and also helping to coach more effectively by identifying correlated job role weaknesses.19 Since many job roles are involved with direct engagement with customers, which are a critical method by which Tesco positions itself as a leader in CSR and value creation, this would be a more effective measurement tool to assist in training development. Collaboration is not lacking, based on the evidence, at Tesco as the business has a well-developed and dedicated organisational culture that operates under ethical business philosophy and where internal/external stakeholder relationship development is well-supported by executives. However, when it comes to creating better management relationships between managerial colleagues, the business could adopt a transactional reward system. Under this model, the HR professionals set up rewards that are contingent on meeting certain budget, performance or operational targets.20 This type of reward would motivate the Brand Project Manager and others required to follow a project through an elongated life cycle, motivating performance if certain milestones or objectives are met satisfactorily. This would give more incentive to collaborate, share knowledge, and support other managers that must work in complicated and time-conscious projects where the outcome is recognition and remuneration for their efforts. Appendix A: Tesco Wheel and Organisational Structure of Organisation Read More