Fblt050 Human Resource Management : Assessment Answers

Answer:

Introduction:

The paper aims to apply principles of human resource management and its importance in attracting, recruiting and retaining talent. Human resource management plays a very significant role of acquiring, staffing, managing and retaining employees. The study considers Aldi, the German multinational retail chain as the background of study. The paper starts with an overview of Aldi and is then divided into four parts or tasks. The tasks delve into the importance of human resource management in the organization with reference to Aldi. The paper also shows the various types of human resources practices like recruitment and training and their role in ensuring high productivity and profits for Aldi. The paper also has mentions of acts like the Fair Work Act 2009, which govern employment policies of international retail chains like Aldi.

An overview of Aldi:

Aldi is a German brand of supermarket having over ten thousands outlets in more than eighteen countries. It is one of the largest super market chains in the world having strong presence in countries like Australia, Austria, Belgium, the United Kingdom, the United States of America and Switzerland. The multinational chain of supermarket is headquartered in Germany(Aldi.us. 2017).

Product line:

The product line of the supermarket can be divided into food items and non food items. The food items consist of meat, eggs, vegetables, whole food items, desserts and alcoholic products. The non food poroducts consist of household cleaners, laundry, pet care and gardening articles. the supermarket chain also sell skin care products and toiletry products. the supermarket chain sells products at its outlets and also online. The buyers can browse the official website of Aldi to order and purchase products online.

Corporate Social Responsibility:

Aldi views itself as a responsible member of the society and has a very strict corporate social responsibility. The super market chain sources its food items from sustainable suppliers, which confirms to its sustainable codes of supply chain. The supermarket is actively involved in supporting social causes and social development (Lund-Thomsen and Lindgreen 2014).

Task 1:

P1: Purpose and functions of human resource functions:

Human resource functions refer to several functions like recruitment, staffing and training which lead to the acquisition and maintenance of employees in organizations. The human resource departments in the organizations play a significant role by providing them with talented and efficient workforces capable of delivering high level of performances.  The following are the purposes of human resource functions:

i) Recruitment and selection:

Recruitment is the process of capturing, screening and selecting potential and qualified candidates. The aim of this process is to attract ad acquire qualified candidates for the organization and exclude ineligible candidates. The human resource departments before starting the recruitment process first creates a plan to recruit human resources aligned to the business needs of the organizations like Aldi, the multinational chain of grocery stores. This leads to acquisition of appropriate human resources capable of serving the customers in the most professional way and deal with their complaints satisfactorily (Vickers, McDonald and Grimes 2014). Thus it can be analyzed that appropriate recruitment and selection is important in international retail chains like Aldi because it ensures hiring of appropriate work force, which contributes, to the growth of the retail chain in the international market (Vickers, McDonald and Grimes  2014).

i) Orientation:

Orientation is a very important function of human resource management and workforce planning especially in the international chains of super markets like Aldi. The purpose of human resource management in orientation is to educate the newly hired employees on their job responsibilities, job role and their relationship with other position. It is closely related to recruitment because it leads to employees recruited getting familiar with the organisational polices and work culture of the company. The human resource management department informs the employees about the expectations the management has from them and what can they expect from the organisation. This analysis shows that orientation is an important human resources management function because it gives the employees a clear idea of their role in the organisation and encourages them to attain high degree of performances (Barry and Starr 2015).

ii) Maintaining good working relationship:

The human resource management creates a positive and healthy work environment in the organizations which encourages the employees to perform higher. The human resource department plays a very important function by motivating the employees to achieve higher degrees of performances using various financial and no financial methods of motivation. For example, the human resource department at Aldi offers incentives to employees to over-achieve their targets (Glavas and Godwin 2013). These measures encourage employee performances, which in turn goes into enhancing their job satisfaction. Thus, human resource management contributes towards healthy relationship between the employers and employees. This healthy relationship motivates employees to attain high level of performances, which ultimately contributes high organizational performances. Thus it can inferred from the discussion that efficient human resources management contributes high organizational performances(Reader et al. 2017).

P2: Strength and weaknesses of different approaches to recruitment and selection for Aldi:

The different approaches to recruitment and selection lead to acquisition of highly efficient staffs capable of delivering high level of performances. Aldi is a multinational chain of retail chain, which follows different approaches to recruitment and selection. Some of these approaches are internal sourcing, external sourcing, and third party sourcing. The following are the strengths and weaknesses of these approaches in reference to Aldi:

i) Internal sourcing:

The internal sourcing approach to recruitment and selection refers to system of advertisement of vacancies within an organisation. The super market chains like Aldi prefer this method of recruitment and filling up of vacant positions. The following are the advantages of internal recruitment:

Morale:

Recruitment of employees from within the organisation through internal promotion results in placing candidates that are more appropriate in responsible position. The candidates are selected within the organisation so does not require induction. they already aware of the organisational culture and start performing easily. For example, when an existing employee of Aldi is recruited internally, he is already aware of the business environment of the company. He thus starts performing more effectively compared to a new employee. This shows that scope of recruitment to higher post internally also boosts the motivation of the present employees and encourages performing higher to gain the higher positions(Sarker 2017).

Cost effectiveness:

Recruitment of employees from within the organisation is less expensive compared to external or third party recruitment. This method results in recruitment of employees from within the organisation and saves cost of hold recruitment drives. International retail chains like Aldi often recruit employees from within the organisation, which saves their cost of recruiting from outside soures (Alam 2016). Thus, it can be analysed that internal recruitment can be more cost effective and save the cost of Aldi compared to external recruitment.

Internal recruitment has several advantages like cost effectiveness but has several disadvantages as well. The following are the disadvantages of internal recruitment with respect to the German multinational retail chain Aldi:

Revitalisation:

Internal recruitment results in employees to higher positions from within the organisation and does not allow the organisation to recruit from external sources. Aldi is a multinational retail chain whose operation requires innovation to maintain its competitive position in the international market. Employees recruited from external sources like from other organisation come with innovative ideas and techniques of operations. These innovative ideas enrich the knowledge capital of the retail chain. Thus, by recruiting employees internally, the company is devoid of these innovation ideas and techniques it can get from externally recruited employees (Lamba and Choudhary 2013).

Intensify internal conflict:

Recruiting employees from within the organisation can result in internal conflict among the existing employees. The old employees may not accept the authority of the junior employee promoted and who is authorised to direct them. This conflict may lead to politics and unethical practices with the organisations, which jeopardises their productivity. For example, if an executive posted at store is promoted to the position of store supervisor at Aldi, the employees who were his peers in the past but are now compelled to report to him may not cooperate with him. This may give rise to internal conflict among the employees, which would jeopardise the productivity of the store (Barma and Gupta 2015). Thus it can stated that though internal recruitment saves cost, it can lead internal struggle among the employees for power.

i) External sourcing:

External sourcing refers to acquiring employees from outside organisation like job boards and newspapers. The following are the advantages of external sourcing of employees with special reference to Aldi:

Increase in quality of capital:

The external candidates come with fresh knowledge, ideas and capabilities, which in turn contribute, to the growth of knowledge capital of the organisation. For example, new employees join Aldi with their knowledge and talent from other organisations like other international retail chains. Aldi can use their knowledge and skills to gain higher level of expertise. Thus, external sourcing of employees contributes to the knowledge capital of the organisations (Tödtling and Grillitsch 2014).

New Qualified candidates:

New candidates come with their knowledge and qualifications and add to the strength of the operations of their new employers. Thet contribute to the growth of the organisation using their talent and qualification. The multinational shopping malls today require highly qualified and talented staff members who are capable of dealing with customer complaints more efficiently. Newly acquired talented employees are able to meet the customer complaints more efficiently, thus contribute to the standard of customer services offered by Aldi.

The following are disadvantages of external recruitment:

Limited understanding of the company:

The new employees have limited understanding of the operations of Aldi and as a result need time to acclimatise themselves with the company. This lack of awareness about the company influences the productivity particularly if the externally recruited employees holds a decision making position. His lack of understanding of the company impedes his decision-making capabilities, which hampers the productivity of the company (Kang and Kang 2014). This analysis shows that new employees may have new ideas and knowledge, which can help in the operations of the company; they often fail to take appropriate decisions due to their lack of knowledge about the company, its employees and organisational culture.

High cost:

Recruitment of employees from outside sources is very expensive and adds to the cost of the company. For example, in order to acquire employees, Aldi has to give advertisement in newspaper and job portals. Then the human resource department require holding interview of candidates. Thus external recruitment of employees are extremely cost which add to the cost of the company (Beck and Schenker-Wicki 2014).

ii) Third party sourcing:

Third party sourcing refers to the sourcing of employees by companies through consultancies. The following are the advantages of third party sourcing of employees by organisations like Aldi:

Candidate relationships:

The companies are able to obtain employees having required talent and knowledge through recruitment consultancies and do not have to bear the cost of recruiting tem. They are able to acquire talented employees and then place them in various positions according to their eligibility. Thus, in case of third party recruitment the companies do not have to take the trouble of finding out talented employees (Jamil and Neem 2013).

Reduction of cost:

Recruitment using third party sources saves the companies from incurring expenses like advertising the vacancies on newspapers and job portals. This helps them to save the cost of searching for candidates as the job consultancy firms do it. The companies can use this saved capital towards training of the employees hired by third party sources. Thus, it can be analysed that third party recruitment helps the companies reduce their cost of recruitment because it is done by consultancies. The company can use the saved amount to offer training to the newly hired candidates and induce them to its work environment.

The following are the weaknesses of third party recruitment of employees to the recruiting companies:

Lack of control:

The employees recruited by consultancies are usually employed on third party payroll basis on whom the company does not enjoy full control. For example, when Aldi recruits employees under third party payroll, the salary is paid to the off role employees by the consultancies and not by Aldi. Thus there is no employee-employer relationship between the company and its third party employees. This lack of employer-employee relationship gives Aldi limited power to control the performances of these employees. As a result, Aldi is not able to take any step if the third party employees indulge in unethical operations that hamper the operations of Aldi. Thus, it can be inferred that Aldi has limited control over the third party employees and cannot take serious steps even if the employees violates organisational culture (Siew-Chen and Vinayan 2016). This analysis shows that the company has limited control over the outsourced employees compared to its own employees.

Communication issues:

There exists serious communication gap between the third party employees and the company because the former is not recruited directly by the latter. Often the consultancies present inaccurate or false picture about the main company, which the third party employees follow. For example, the third party consultancies may create improper presentation about the organisational culture of Aldi. As a result, the third party employees may not follow the organisational norms of Aldi and hamper its productivity (Wukich and Mergel 2015). The outsourced employees are often not informed about the targets and performance parameters of the principle companies hiring them. They often fail to perform efficiently and impede the overall productivity of the department and the company as a whole. This analysis shows that communication gap between the principle company and the outsourced employees results in underperformance of the latter which impacts the market performance of the former..

Task 2:

P3: Benefits of different HRM practices within Aldi to employer (Aldi) and the employees:

The different HRM practices are recruitment and selection, work like balance, training and development. The following are the advantages of these practices to the employer and employees:

i) Advantages of recruitment and selection to employers:

iii) Advantages of work life balance to employers like Aldi:

iv) Advantages of Work life balance to employees:

v) Advantages of training and development to employers:

1. Training and development helps the employers to improve their performances of their employees, which helps them to boost up productivity. Companies like Alditrain their employees to improve their knowledge and expertise. As a result, such employees are able to deal with customers better and ensure customer satisfaction. Thus training and development helps the employers to ensure customer satisfaction and earn huge revenue (Sung and Choi 2014).
2. Training and development of employees help the employers gain competitive advantage in the market. For example, Aldi trains its employees to deal with customers better and meet their complaints. They are able to satisfy the customers and the customers keep on visiting the store of Aldi. Thus, Aldi gains a loyal base of customers who give them repeated business and revenue generation. This revenue generation and loyal consumer base help Aldi to gain competitive advantage in the market. Thus, it can be analysed and stated that, training and development help business organisations to gain competitive advantage in the market (Tahir et al. 2014).

vi) Advantages of training and development to employees:

1. Training and development help the employees to improve their knowledge and skill. This helps them to deliver high degree of performance. This high degree of performances helps employees to gain rewards and promotions. This brings about career growth and job satisfaction to the employees (Sidani and Al Ariss 2014).
2. Training and development increases the skills and knowledge of the employees. This improvement in skills helps the employees to get better-paid jobs, which earns them high salary. Thus, they are able to gain higher competitive advantage in the labour market and get higher paid jobs.

P4: Effectiveness of HRM practices in raising profit and productivity:

The human resources practices like recruitment and selection, work life balance and training and development are effective in increasing profit and productivity. The following section evaluates how these three HRM practices increase profitability and productivity for international retail chains like Aldi.

i) Recruitment and Selection:

Recruitment and selection help Aldi to acquire highly qualified and talented employees. These employees offer superior services to the customers and provide long-term solution to their problems. This offering of prompt solution creates customer satisfaction, which make customers visit the outlets of Aldi repeatedly. This helps Aldi to gain repeat business and earn high profits on continuous basis. It can also be pointed out that recruitment and selection help Aldi to acquire employees from competitors as well. These employees contribute to the productivity by their innovative ways of operating. Thus, it can be evaluated from the discussion that recruitment and selection help Aldi to achieve high degree of productivity and profits (Garavan et al. 2016).

ii) Work life balance:

Work life balance helps Aldi to boost its productivity and profits. Work life balance ensures that employees can balance both their professional and personal lives. This motivates the employees to perform better which creates job satisfaction for them. The employees to experience job satisfaction are more liable to continue serving Aldi and that enables the departmental heads to allocate its employees into crucial business areas (Gangwisch 2014). This helps the company to achieve business productivity to its long term planning of business strategies. Moreover, work life balance creates job satisfaction among employees, which reduces employee turnover. This once again saves the expenditure of Aldi which, can be channelized towards business development. This long-term strategy formation helps Aldi achieve competitive advantage in the market. This competitive advantage helps Aldi to earn higher revenue. Thus, it can be evaluated from the discussion that work life balance helps Aldi to earn high profits and productivity (Grohmann and Kauffeld 2013).

iii) Training and development:

Training and development help in boosting profits and productivity. Training and development improves the skills and knowledge of the employees. These trained employees of Aldi serve the customers better and enhance customer satisfaction. This results in repeated visits by customers that generate high revenue for the international retail chain. Thus, it can be inferred from the discussion that training and development enhances profits and productivity at Aldi (Sung and Choi 2014).

Task 3:

P5: Importance of employee relationship in respect to influencing HRM decision making:

A healthy employee relationship is important for high organisational productivity and organisational excellence. Healthy relationship between employee and employer helps the latter to form more accurate business strategies (Tahir et al. 2014). The human resource department is as a result able to plan the human resource allocation in advance. This advance planning helps the apex management of Aldi to take advantage of the market opportunities and earn higher profits. This analysis shows that healthy employee relationship helps the human resource manager to allocate in the crucial business areas (Grohmann and Kauffeld 2013). This helps the international retail chains like Aldi take advantage of the market opportunities and earn higher profits.

P6: Key elements of employment legislation and its impact on HRM decision making in Aldi:

The key elements of the employment legislation are the various laws passed by the governments of home country and the host countries which the HRM of Aldi requires to follow while making laws. For example, the National Minimum Wage Act 1998, the United Kingdom mandates employers to pay their employees a minimum wage of 7.50 per hour in GBP(Legislation.gov.uk. 2017). The human resource department of Aldi require incorporating the law in its employment policies and decision-making while operating in Britain. Again, the Fair Work Act 2009 requires the HR of Aldi follow it during operating within Australia. Thus, analysis shows that, employment legislations consist of laws, which the HR of Aldi requires to incorporate while making decisions regarding employing people.

Task 4:

P7: Application of HRM practices:

The following are the applications of HRM in work related context used the business organisations like Aldi:

Hiring and training workforce:

Human resource management plays a crucial role in manpower planning according to the business requirements. The human resource managers create strategies to hire employees according to the requirements of the business organisations. For example, Aldi is an international retail chain, which serves customers of diverse origin. The staffs of Aldi are required to be skilful; in meeting the multiple needs of the customers. The human resource department at Aldi hires skilled employees who are capable of meeting customer requirements (Richards 2017). Moreover, the human resource department trains to employees to meet their requirements of customers better. Thus, human resources practice at Aldi ensures high productivity and profitability for the international retail chain.

Supervises Performance Management System:

The human resource department is responsible for maintain performance management system within the organisation. The human resource department motivates the employees to perform higher. The HR department at Aldi defines the responsibilities of the employees and their required skills. Thus, the employees know their responsibilities and feel motivated to deliver high performance. The human resources department informs the employees about their job targets. It also keeps a watch over their performances along with their respective departmental heads. It rewards the high performing employees with recognitions. It also provides training to weak employees and helps them to improve their performances. This analysis shows that human resource practices by the human resource department at Aldi help in maintaining performance management system. It can also be stated that it is due to this strict performance management system that the employees of Aldi deliver high degree of performances (Shanafelt et al. 2015).

Conclusion:

It can concluded that human resource department a very important role in ensuring high organisational performances. It has to be pointed that HR departments play the significant role of attracting, acquiring and retaining employees. It can be denied that international retail chains like Aldi are dependent on their HR departments for their competitive advantage in the market. The HR departments of organisations play crucial role in profit earning and maintenance of international position.  

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