Human resource management is very challenging work for a manager in today’s world as employees have different assumptions, attitude, psychology and ambitions or aims in life. It is concerned with people in management and is refers to policy, procedure, framework, philosophy and practices followed by company to manage people (Mathias & Jackson, 2010). Every company is made of people and so it is important for company to develop their skills, motivate them and ensure high level of commitment from them to achieve organizational objective. Human resource main job is to empower employees in organization which includes training employees for their relevant positions, sharing vision and common goals with employees and sharing profits and benefits between both management and employees.
In today’s world, due to immense competition, there is a lot of competition to get right person on right job and so company has to maintain their human resource well to meet globalization and industrialization challenges in business. Companies’ might have technology and capital to meet market challenges, but it is the human resource that makes these things successful. Organizations that can acquire, motivate and retain outstanding workers will grow and be effective and efficient and vice versa (Noe, Hollenback, Gerhart & Wright, 2009).
In this assignment, author will discuss human resource management in detail in with different aspects like how it is different from personnel management, way organizational purposes are achieved through functions of human resource management, responsibilities of line manager in HRM and ways in which legal and regulatory framework impact HRM. Author will also discuss employee recruitment in detail with in depth information on reasons as to why Hr planning is done in organization, stages of planning HR requirements, comparing recruitment and selection process in two organizations and evaluating the effectiveness of these processes. Author will include detailed information on rewarding employees as a tool to motivate and retain them, comparing them with various motivational theories, assessing their effectiveness and ways to monitor employees. At the end author will provide a conclusion after discussing methods of cessation of employees, reasons for the same and will discuss procedures and legal framework for cessation.
1. PERSONNEL MANAGEMENT AND HUMAN RESOURCE MANAGEMENT
Personnel management and human resource management are interlinked with each other. Personnel management is a traditional approach of managing people in organization which mainly includes functions of labor relations, employee welfare and personnel administration. Whereas human resource is an extended and modernized form in which besides personnel management other functions like their recruitment, growth, motivation and retention are included (Durai, 2010).
1.1 DIFFERENCE BETWEEN PERSONNEL MANAGEMENT AND HRM
The main differences between human resource management and personnel management are discussed below.
- Function – personnel management is a routine function where things are pre decided and work is done on that. Whereas human resource management is a strategic function in which strategies are framed, updated and applied continuously depending on company’s requirement.
- Activities – personnel management include routine activities like maintaining employee welfare, personnel administration and maintaining labor relations. Whereas HRM is concerned with development, motivation and retention of employees.
- People – It is assumed that people are input to achieve required output in personnel management. Whereas in HRM, people are assumed to be a very important and valuable resource by management to achieve required output.
- Job design – Division of labor is the basis on which job design is done in personnel management. Team work is the basis on which job design is done for HRM.
- Employee training and development – Such opportunities are not provided much to employees in personnel management but it is provided more in HRM.
- Decision making – Decision making is done as per rules and regulations of company in personnel management whereas in HRM it is done after considering employee participation, external environment and authority.
- Focus – in personnel management, focus is on employee satisfaction and increased production whereas in HRM, focus is on employee participation, work culture and effectiveness.
- Manager level- personnel management is about only personnel manager whereas HRM is about all top to bottom level of managers.
1.2 HRM FUNCTION OF TESCO
TESCO is a company with high commitment model that offers training and development to employees. Their logo “every little helps” is extended from customers to employees as well, as a commitment to them. TESCO received an award as one of “Britain’s Top employers” for 2013 which itself shows the success of HR. It has a workforce of 530000 people working in 12 markets worldwide. As a seven point successful strategy for growth, TESCO aims to develop leaders and a more diverse talent pool as a part to achieve more growth of firm as one of them. “Building a better TESCO” is plan adopted by company to grow in UK market through series of improvement for customers (TESCO PLC. (2014).
Figure 1: TESCO employee
To achieve these results, TESCO HR has adopted various policies like employee growth through training and development, rewards and recognition and motivation. TESCO HR has developed TESCO academy which provides opportunity to its employees to study further. For employee work life balance, TESCO provides its employees with flexible working hours and discounted gym membership. Rewards are offered in terms of company shares, staff discount, competitive salaries and reduced health care benefits. To retain employees, company has introduced life style break, career break and pension scheme. Lifestyle and carrier break allows an employee to return to work after taking a long leave from 4 weeks to 5 years. Thus employee feels safe and motivated at TESCO which is its unique HR strategy and achievement. Thus TESCO HR is flexible and plan strategies as per the employee satisfaction survey and needs and are successful in retaining & motivating its employees thereby helping achieve organizational goals.
1.3 ROLES & RESPONSIBILITES OF HRM MANAGERS AT TESCO
HR department of TESCO carries varied functions like strategic management, recruitment and selection, retention, training and development and assessment of circumstances which leads to TESCO’s success. HR managers are responsible to carry out functions mentioned above. But this cannot be done alone by HR managers; they have to work with line managers. These line managers are the one who is direct reporting authority for teams and is responsible for those teams to higher level management. At TESCO, line managers are responsible for ensuring staff performance by improving their performance through on the job training, setting realistic and achievable targets and communicating the same along with action plan, deadlines and resources available, reviewing regular progress of employees and providing support and motivating employees to achieve their objectives and goals (CIPD, 2012). At TESCO, besides these goals, concerned line managers are also involved in interviewing candidates after internal assessment is done to see if the candidate fits the job requirements.
Thus, it can be said that line managers are involved in all functions of HRM related to their respective teams and are equally answerable to management for their team performance which keeps them on toe in all process from recruiting its team staff to motivating and assessing their performance.
1.4 TESCO COMPLIANCE WITH LEGAL AND REGULATORY REQUIREMENTS OF HRM
“Code of ethics” is guideline set by TESCO management to abide with ethical conduct for all employees in its organization and to work as per laws, regulations and government rules. In this “code of ethics”, TESCO has mentioned that all business should be carried out only as per laws and regulations of that country. Employees are also not allowed to undertake illegal activity either done for himself or for company. For supporting and making its employees understand legal framework of their country of origin, TESCO has developed a “Legal department” which provides assistance on such matters (TESCO, 2014).
HR policy is regulated by HRM which covers various works like pay, equality, discrimination, contractual terms and condition and employment rights and responsibilities; all as per government regulation. The regulatory frameworks followed by TESCO are
- Legal framework about pay which decides on minimum wage, bonus of workers, maintain regularity in payments and work for damage of employee
- Employment rights and responsibility – This is thoroughly studied by HRM so it can decide on legal issues and laws governing such rights and responsibilities and frame job offer letter accordingly. It includes information on maternity benefits, gratuity pay, state insurance if any and other laws.
- Equality – HRM has to make sure that no gender discrimination is prevailing in company and a equal rights is given to all gender and culture is there.
2. HUMAN RESOURCE PLANNING
2.1 HUMAN RESOURCE PLANNING IN TESCO
As discusses above, human resource planning is inevitable for large organizations to meet its future requirement and strategic goal. Looking at TESCO case study given above, human resource planning requirement is assessed as below:
- Human resource planning gives company detailed information on staff requirement which helps company to move ahead with expansion plans (Reilly, 2003).
- Budget control is done by human resource by negotiating better terms for health insurance and healthcare facilities, offering competitive salary through salary analysis and using sources of recruitment that are less expensive. TESCO prefers internal recruitment as it saves money for company.
- HR planning in TESCO saves time as it uses internal sourcing. Besides, advertisement is given in company websites and in stores which saves time and money both for company.
- TESCO has high retention strategy for its employees where they are allowed flexible leave from 4 weeks to 5 years also referred as carrier break or lifestyle break.
- Staff survey is done under HR planning, so they HR can plan changes required to be done in HRM.
- Flexible working and work related rewards are a part of HR planning. If they are planned effectively they lead to good team with high performance, motivation and retention.
2.2 STAGES FOR HUMAN RESOURCE PLANNING
HR planning process includes five steps given below.
- Business goals review needs to be done in starting. For this HRM will check for any upcoming changes in government regulations that can have effect on its policies. Then HRM reviews company’s priorities, budget and performance indicators.
- The next step involves scanning internal and external factors that may have direct or indirect impact on organizational capacity. External factors include identifying market trends in labor market, present and future economic conditions, legislative changes and technological improvements. Internal factor includes workforce available and their composition in terms of profile and skills, internal policy changes, guideline or organization structure changes and learning and development.
- The third step is Gap Identification done on basis of step 1 and 2 which determines the current and future human resource needs.
- Plan development is done at fourth stage in which determination of major human resource requirements and strategies to fulfill those are done. For this, HR priorities, budget available and communication of HR plan to all stakeholders is done.
- Measuring progress is the fifth stage in which measures are taken to ensure that performance measures are clearly mentioned in Accountability framework and a process is established to conduct regular review and adjustments of changes (Potter, Ulrich & Meifert, 2013).
2.3 RECRUITMENT & SELECTION AT TESCO & ARCADIA
Recruitment and selection is a process of attracting new candidates for the job and choosing the right one. A detailed recruitment and selection policy is available with the HR department of a firm which is to be followed by concerned employees while hiring (Murphy, 2011). A comparison is done on recruitment and selection of TESCO and Arcadia, one of UK’s largest fashion retailers.
- TESCO uses workforce planning table to decide on requirement of employees in future. This is done in every February and reviewed in May, August and December. Arcadia does its planning depending on the number of stores opening and store expansion in a year.
- At TESCO, priority is given to internal staff for filling the vacancies. At Arcadia, it focuses on fresh talent and recruits college pass outs and school leavers for filling its vacancies (Arcadia, 2014).
- Advertisements internally is done through intranet, externally through company website and stores for filling regular positions and in magazines, Google website, television and radios for hard-to-fill vacancies (TESCO, 2014). Arcadia attract fresher and so participates in carrier fairs, uses advertisements, posters and company website to post recruitment advertisements.
- At TESCO, for selection of employees, screening is done to see that applicants meet job requirements. At Arcadia, online applications for Retail management trainee are screened on basis of competencies required.
- The next stage at both TESCO and Arcadia is to invite shortlisted candidates at assessment center. In TESCO, internal assessment of candidates is done by given them various tasks like team work and group performing activity in store itself and then after a final interview job is offered. Group exercise, team activities and structured interview is done to select a suitable candidate at Arcadia. They are offered job after this process.
2.4 EFFECTIVESS OF RECRUITMENT AND SELECTION PROCESS
The effectiveness of recruitment and selection process is not only dependent on the number of applications received and vacancies filled, but is also dependent on factors like cost involved, time taken for such recruitment, performance of new candidate on job, job satisfaction and pay (Becker, Huselid & Beatty, 2009). Evaluation of recruitment and selection process of above discussed two companies is as below.
- TESCO believes in hiring internally first, which saves time and cost both. They do not need to spend money on advertisement. For external recruitment also, they use company website and stores which also saves cost. Arcadia advertises in its own website and participates in events which saves them cost of recruitment.
- Since internal employees are hired, TESCO does not need to train them on company work culture and is already aware of their performance. Arcadia recruits fresh candidates and so risk is involved while selecting them about their performance.
- Training cost is saved at TESCO to great extent but it is very high for Arcadia.
- Pay at TESCO needs to be at par in the industry and TESCO may need to give more to experienced candidate to fill a position. Since Arcadia hire fresher, it may save in terms of salary.
- Selection process is almost same for both except that a candidate has to give interview after passing internal assessment. This is time taking which is not a case at Arcadia where interview is taken along with internal assessment, thereby saving time.
3. MOTIVATION, RETENTION & REWARD
3.1 MOTIVATONAL THEORY & REWARD
Motivation is a main source through which company can keep its employees working enthusiastically. Employees can be motivated through reward systems like increase in pay, appreciation of work, advancement opportunity and sense of enjoyment and fulfillment of life goals. There are various motivational theories like
- Taylor’s motivational theory which is concerned with financial rewards.
- Mayo motivational theory which believes in motivation factors like greater communication, manager involvement and team work besides financial factors.
- Maslow’s theory of motivation which divides human needs into five levels starting from psychological needs, safety needs, social needs, esteem needs and self actualization needs (Petri & Govern, 2012).
All these motivational theories are linked to reward provided by company in one or other way. Taylor’s theory is seen TESCO in form of pay rise and bonus it provides to its employees. Mayo and Maslow’s theory are inclined towards employee satisfaction and includes more than just financial rewards. Reward system at TESCO includes the following:
- Share our success which includes buy as you earn, shares in success and save as you earn schemes.
- Staff loyalty cards that are given to TESCO staff which gives them a 10% discount to buy TESCO products.
- Pension schemes and insurance schemes like car insurance, discounted or free medical assistance and private medical insurance.
- Leisure time under which special offers and discounts are given exclusively to TESCO employees at theme parks, holidays and gym membership (TESCO PLC, 2014).
3.2 EVALAUTION OF PROCESS OF JOB EVALUATION & OTHER FACTORS DETERMINING PAY
The process of determination of relative value and size of jobs in an organization so that a base for deciding on job grade and pay structure, salary and qualification required can be created, is known as job evaluation. Job evaluation is very important as to an organization as it gives a clear picture of various job positions held in company and helps in appropriate staffing. Job evaluation process helps in determination of job hierarchy in organization, which is deciding on the level of hierarchy where a job fits, determining pay scale for a particular hierarchy or job role and finally helps in knowing the employee traits required for particular job (Francis, 2014). Other factors determining pay include size of organization, employee work experience, industry in which company works and its environment, organization profitability and employee performance. These factors determining pay are considered as they directly affect employees’ motivation, retention and organization image in industry (Hastings & Armstrong, 2005).
3.3 ASSESSMENT OF REWARD SYSTEM OF ASDA
ASDA is a supermarket chain in UK with 525 stores and 175000 employees. ASDA refers to its employees as colleagues which are a unique way to keep its employees motivated.
ASDA have been awarded as one of the Top Employers in the UK for 2014 which is given to recognize employers with highest standards of employee engagement, support and respect. ASDA has online system for employees, where they can see benefits they are given by ASDA. To motivate its employees ASDA has a comprehensive reward system in form of both formal and informal awards.
- Support in carrier management of employees through ASDA skills academy.
- An Employee recognition scheme is run by ASDA known as ASDA stars which is given to employees for achieving their targets and customer recognition.
- Colleague of month is awarded “star points’ which are added to “ASDA gift cards” (O'Donovan, 2009).
- Sharing bonus as a reward is unique strategy adopted by company to motivate its employees.
The result of such reward schemes has been exceptional. Around 68856 employees of ASDAS have received such reward while 41828 employees are identified and recognized as “unique” due to exceptional work performance. Recently ASDA gave a bonus up to £320 to 143000 employees and ‘super bonus’ of up to £500 to 14000 employees (Paterson, 2014). These bonus pay and recognition clearly show motivation of employees through reward system.
3.4 MONITORING EMPLOYEE PERFORMANCE AT MCDONALDS UK
Employee performance is measured in a number of ways to ensure that they do their duties well and achieve the targets set for them. At McDonalds, restaurant manager is the one responsible in monitoring employee’s performance. This is done in following ways.
- Individual performance plan (IPP) – managers along with employee decide on IPP for the next year in tune with their aims and this makes workers active about their job.
- Individual development plan focuses on individual task of employees at present and in future position.
- Reviews on business goals are conducted every 6 months in July end by managers on basis of change in organizational priorities.
- Annual measurement is done in which employees give their performance opinion. On that basis and as per observation, managers marks on what and how work is done by employee throughout year.
- GAPbuster is used by McDonalds every month who gives point to restaurants. He is a person experienced in customer experience management. He checks on quality of food, staff friendliness, service accuracy, time and cleanliness.
- Competition on Customer satisfaction opportunity is conducted every month among different teams which helps in monitoring their performance (McDonalds, 2014).
From this it can be seen that McDonalds implements a clear goal on staff time and performance expected from them, conducts a half yearly review to monitor employee performance, use benchmarks for employees and frequent checking on staff on the job.
4. CESSATION OF EMPLOYMENT
4.1 REASONS FOR CESSATION OF EMPLOYMENT
Employee may voluntarily leave an organization or organization may terminate employees depending on situations. The reasons for cessation may include:
- Resignation – Employee may resign from job due to causes like job dissatisfaction, better opportunity in other company, shifting to some other place or some personal reasons.
- Layoffs – It is a process taken by a company when a particular position is not required, when there is lack of work, when company is going through financial crisis and needs to reduce its employee strength (Grace, 2014).
- Mergers – Many changes take place in organizational culture, when a merger or acquisition takes place which ultimately affects employment. Employees terminated under such situation, are offered severance package by employers though they are not bound to do so under such circumstances.
- Poor performance – An employee is terminated due to poor performance when he is not able to meet the set standards for his job continuously after proper training and guidance. Steps taken before termination occurred should be documented by employer in such type of termination.
- For cause – this type of termination occurs when an employee violates company rules and policies or behaves in an in appropriate manner. Employee’s behavior and violation should be documented thoroughly before terminating for cause.
4.2 EMPLOYMENT EXIT PROCEDURES FOR TESCO & ASDA
Both TESCO & ASDA has similar exit procedure once an employee resigns from company as they are very concerned about staff turnover percentages. In retail market, there is constant demand for efficient employees and so it is important for them to know reasons for employee leaving in spite of providing so many facilities.
- Employees resign from company and hand a letter of resignation to concerned managers. They have to serve a notice period depending on their tenure of job and confirmation or probation period. This letter carries last day or work and reason for leaving (TESCO, 2014).
- They follow an exit procedure where they take an exit interview to know reasons for employee leaving the organization. This gives opportunity to company to improve its HR policy and on other hand employee can tell actual reasons for leaving like choosing other company, leaving due to internal grievance or some other reasons like study.
- Both companies prepare a letter of termination and obtain signs from required authority.
- Both TESCO and ASDA make changes in HR policy especially if employee is going to join competitors. In cases where employee is a good performer, both TESCO & ASDA try to retain him.
- Once termination is finalized, on or after last day of work, telephone and IT system access if any is cancelled, department computer passwords and accounts are changed and employee’s banks details are cancelled.
4.3 IMPACT OF LEGAL & REGULATORY FRAMEWORK
Contract of employment is a very important document as it frames rules and regulations and defines terms for employment between employer and employee. In UK, such contracts are derived from
- Common law
- Statue and
- Law of European community.
Various laws offer different coverage to employee depending on tenure of work. An employer cannot terminate an employee without proper reasons and should abide by legal framework. As per common law in UK, contracts employment contracts can be terminated by either of party to such contract however it has given special rights to employee to not get dismissed unfairly. The statue law includes employment rights act 1996, employment act 2002, employment relations act 2004, trade union and labor relations act and transfer and undertaking regulation act 2006 (UK Legislation, 2014).
So it becomes very important for employer to see that they abide to legal and regulatory framework provided by these laws. In case they are found not following these frameworks, they can be charged with heavy financial penalty or may have to stop operations in such country as decided by court of law.
Thus from above discussion it can be concluded that HRM is a very lengthy and detailed process which is bound not only by company policies and regulations , but also by legal framework and regulations of that country. By discussing case study of TESCO and ASDA, it can be understood that employee motivation and reward system is closely linked with each other. It can be said that human resource planning is required for company to achieve its organizational objectives and understand employees better. Recruitment and selection process of company decides its staff’s competency and efficiency which is visible in comparison of TESCO and Arcadia recruitment and selection process. Reward system is very effective in an organization and should be carried out as per needs and after a thorough analysis of company’s capacity.
Monitoring employee performance gives company a chance to see how employees are doing their job, if there is a need to make changes in training for employees or employee itself are not capable to perform job. Regular monitoring ensures company targets are achieved on time and within the resources available. Even cessation of employment is not a simple term and is bided by lots of regulatory framework which company has to abide with. Lots of confusion can be sorted out while preparing letter of employment which covers laws, rules and regulations of company.
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