Aldi UK: Strategy and Growth

This assignment requires a comprehensive analysis of Aldi UK's business strategy, focusing on its growth trajectory and key success factors within the competitive UK supermarket landscape. Students are expected to conduct a SWOT analysis, identify internal and external factors influencing Aldi's performance, and discuss the role of human resource management in supporting its strategic objectives. The analysis should consider Aldi's market position, pricing strategies, operational efficiency, and employee satisfaction.

ALDI FROM AN HR PERSPECTIVE
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Table of Contents
Introduction.................................................................................................................................................3
Introduction to Aldi.....................................................................................................................................3
LO1.............................................................................................................................................................4
P1 Explain the purpose and the functions of HRM with respect to workforce planning and resourcing in
Aldi..........................................................................................................................................................4
P2 Explain the strengths and weakness of different approaches to recruitment and selection for Aldi....5
LO 2............................................................................................................................................................6
P3 Explain the benefits of different HRM practices within Aldi for both the employer and employee...6
P4 Evaluate the effectiveness of different HRM practices in terms of raising Aldi’s or the chosen
organisations profit and productivity.......................................................................................................8
P5 Analyse the importance of employee relations in respect to influencing HRM decision making for
Aldi..........................................................................................................................................................8
P6 Identify the key elements of employment legislation and the impact it has upon HRM decision
making for Aldi.......................................................................................................................................9
LO4...........................................................................................................................................................10
P7 Illustrate the application of HRM practices in a work-related context, using specific examples from
Aldi........................................................................................................................................................10
Conclusion.................................................................................................................................................11
References.................................................................................................................................................12
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Introduction
Human capital has been known to be a critical part of any organisation. This is on account of
every changing workplace laws followed by globalisation that has made HRM a crucial part of
any business function. The HR professionals focus on a large number of business processes
starting from resource planning, recruitment, developing people as well as managing change
(Rodionova, 2017). The present study focuses on a case study of Aldi were a new branch is
going to be opened in Wembley central. A new HR manager has been appointed by the company
to manage the staff members. As a new manager, the emphasis is required to be given on
purpose and the functions of HRM followed by the benefits given to employees and employers.
Study will also be done on how different HR practices assist in increasing the profit and
productivity of Aldi. This will be followed by carrying out a discussion on employee legislation
and why is essential to maintain good worker relations by the management within the company.
Introduction to Aldi
Aldi which is a combination of Albrecht and discount is a supermarket chain that originated in
Germany during the year 1913. It was the first retailer to offer self-service and from then on its
operations are spread in around 70 nations (About us, 2017). The retailer is a worldwide name
that operates on the principle of providing low priced products on an everyday basis. It ignores
multi-buy offers like buy one get one free and emphasis is majorly on own-brand products that
led to 90 percent of sales. Aldi made an entry in the UK market during 1990s and the company
now has a presence of more than 500 stores that employs a little above 20000 staff members. The
company tries to keep its operations simple one by focusing on core values being consistency
and responsibility (Aldi supermarket core competencies. 2017). It is because of these ideologies
that the firm is able to provide high quality produces at best possible price. The firm has been
named as the best employer in the area of supermarkets within Britain and was given an award of
Grocer during 2016. The financial base of the firm is also strong one that assist in overall growth
and sales revenue followed by an excellent work culture to the staff members.
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LO1
P1 Explain the purpose and the functions of HRM with respect to workforce planning and
resourcing in Aldi.
HRM is a functional activity within Aldi that provides support to the overall planning and
resourcing needs. The concept is all the more important for the company as it is planning to start
a branch in Wembley central. The concept is likely to play many roles within the organisation so
as to aid in the process of workforce planning and resourcing. First of all it will ensure the
operational efficiency of staff members by allocating the right man power at right place and time
so that the goals and objectives can be attained (Cleveland, Byrne and Cavanagh, 2015).
Secondly it is required to focus on carrying out the accurate forecast of employees that are
needed in the new branch. These can be in form of finance managers, sales executive, branch
head, clerks, operational staff among others. The forecast is however required to be done on the
basis of annual budget as well as short/long term plans that had been set aside for HR.
Thirdly there is a need to focus on recruitment and selection processes that are used by the firm
for the new recruits in Wembley branch. This is a very crucial function as if proper process is not
used then inexperienced candidates may join the firm thereby creating issues for the firm (Lian
and Yen, 2014). In this respect, varied strategies are require to be adhered by the firm as for
example, if there is a need to recruit supervisors then internal recruitment can be utilised while
other staff can be recruited through advertisements mentioned on website, job portals among
others..
Next function of HRM within the Wembley branch of Aldi will be of orientation where the need
will be to formulate proper orientation plans so that the employees get accustomed with the new
workplace. The company can also make the employees get aware about their duties and goals set
by the management (Lavania and Dixit, 2017).
Next is the training function which is all about ensuring that employees are churned in there
overall skill set so as to perform the job in best possible manner. Training needs in this regard
will be different for every employees. For example, an experienced accountant will be trained on
the software used by Aldi while non-experienced one will be first given practical sessions
followed by other things (Margea, Hurbean and Artene, 2014). In this regard, the need is to
recruit a trainer from other branch followed by a supervisor who can take care of the overall
impact of training sessions on the employees.
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P2 Explain the strengths and weakness of different approaches to recruitment and selection for
Aldi.
Recruitment can be defined as the process of searching for candidates for the purpose of
employment and stimulating them to apply for given job position. On the other hand, selection is
all about a series of steps that aids in screening of the candidates so that most suitable person can
be chosen for the vacant post (Ulrich and Dulebohn, 2015). The figure given below outlines the
list of steps for recruitment and selection.
There is a presence of different approaches to recruitment and selection that has been discussed
in below mentioned sections followed by their pros and cons.
 Internal recruitment – This technique will involve for recruiting candidates from other
branches by word of mouth and placing notices on the website. The technique can be best
suitable for recruiting supervisors as the new branch is in need of experienced personnel.
This strategy can help in quick as well as cheap recruitment and also assist in promoting
the employees thereby boosting the morale (Muratbekova-Touron and Galindo, 2018).
But it can result in resentment and conflicts in staff members and no generation of new
ideas from outside.
 External recruitment agencies – Use of agencies for recruiting can aid in providing a
large pool of applicants for the job position but the process is a very long and expensive
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Ste p 1 : Ide nti fi cati on o f va can cy an d E va lu a ti on of N e ed
D e ve lo pin g p ro jec t d e scrip ti o n
Fo rm u la ti ng th e re cruitm e nt pla n
So u rcing of ca n d id a te s
Tra ckin g ap plic an ts fo llo w ed b y re v iw in g an d D e ve lo p S ho rt List
C o ndu c t In terv iew s
O ff er e m p lo y m e n t lett e r

one as the company charges substantial amount (Tripathi and Ghosh, 2017). But as Aldi
has got a strong position in market hence it should not be difficult for the company to
spend some money on recruitment agencies. However, issue may also arise as
recruitment agencies are not aware of the internal work culture of Aldi.
 Online job portals – these can be done on websites like Monster.com, naukri.com;
LinkedIn, Facebook etc. where vacancies can be posted by Aldi. The technique is
advantageous as technological usage makes the process speedy and cost effective. But on
a negative note, it may generate inappropriate applications which are difficult in terms of
scruitinisation (Vaiman and Brewster, 2015). In the same lines, if any kind of technical
difficulty arises in the software then it may damage the overall reputation of the
company.
 Selection techniques
 Interview – Varied types of interview can be taken by company such as telephonic, face
to face, panel, stress among others. It depends on the post for which the selection is to be
made by Aldi. The technique is advantageous as it can be arranged in a short course of
time but requires huge time on the part of interviewer (Cleveland, Byrne and Cavanagh,
2015).
 Psychometric test – this is most suitable technique as there is no involvement of biasness
followed by increased accuracy and appropriateness. On a negative note, it may lead to
wrong interpretation of the results if the interpreter lacks knowledge about the test. It is
thus advised to the new branch at Aldi that the Psychometric test must be used in
combination with other methods so as to deliver good results.
LO 2
P3 Explain the benefits of different HRM practices within Aldi for both the employer and
employee
There is a presence of different kinds of HRM practices within Aldi which provides benefit to
either or both the employee and employer. For example, Hard HRM treats the employees simply
as a resource. This strategy is beneficial for the employer as they have to pay minimum wage
which is enough to retain the staff and there is no need to empower employees in different areas.
However this approach may not be suitable for a long run as employees may not like to be a part
of these firms for a long time (Pitt and Koufopoulos, 2012). Then comes soft HRM where
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employees are treated as an important part of company and a source of competitive advantage.
This benefits the employer as employees remain in the firm for longer time and a good work
atmosphere is also maintained. This increases the overall operational efficiency and also saves
them from the cost of recruitment and training. The strategy benefits employees as they are given
competitive pay structure followed by performance-related rewards (Cleveland, Byrne and
Cavanagh, 2015). They further feel empowered and are ready to take personality for their own
development.
The next HRM practice is of providing flexible working conditions to the employees. The
benefit for employee is in form of being able to fulfil the family and social commitment in best
manner. This is followed by reduction in fuel cost for the employee and avoidance of stress
related to heavy traffic (Zhou and Wang, 2014). There is also a decrease in burnout on account
of work based overload. On the other hand, the benefits to employer are in form of increase in
work productivity due to enhanced employee morale and engagement with the company. There
is also a reduction in overall rate of absenteeism and tardiness which gives a chance to company
to manage the work flow. The employers can further recruit outstanding staff who can work for a
few hours with the company.
Then is the employee rewards in from of commission, wages, salary which boosts up the
morale of employee and make him or her give increased efforts towards the company. Employer
is also benefited as productivity of the company increases on account of positive work culture
(Cleveland, Byrne and Cavanagh, 2015). Hence Aldi must pay good rewards to employees in its
new branch from the start of its operations.
Training and development session are also required to be provided by Aldi for its
employees. These can be in form on hands- on, presentation and team development activities.
The strategy will benefit the employees as there will be a sharpening in their overall skill set
thereby making them give good work performance. Aldi will also benefit by the approach as
there will be an overall growth of company because the employees will generate performance in
a better manner (Parahoo and Mahate, 2016). Overall it can be said that the HRM practices
designed by Aldi are there to support the overall working of the company and also give benefits
to employees.
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P4 Evaluate the effectiveness of different HRM practices in terms of raising Aldi’s or the
chosen organisations profit and productivity
As per the above mentioned HR practices especially the ones related to reward management and
motivational techniques there has been an increase in the overall employee productivity which
has made the company become 5th largest chain in the UK (About us, 2018). Also, the
performance management practices of Aldi have been so strong that the company has a goal to
open up 1000 outlets in the country by the year 2022. The firm has also scaled up its operations
largely in comparison to rivals. This has all been possible because of the hard work put the
employees. The line managers have worked a lot in this regard and increased the overall
belongingness of the staff towards the company by focusing on their health and safety needs. The
firm is also known to pay highest salaries to employees in the retail sector of UK. Also there was
a doubling of revenue of the company in a span of just 3 years. The company further was able to
attract 761000 customers in its UK based stores. The share of Aldi has also increased in the
grocery market which stands out to be 6.2 percent (Butler, 2018). All this has been possible on
account of the HRM strategies undertaken by the firm which is now delivering better results to
the company in all possible domains.
LO3
P5 Analyse the importance of employee relations in respect to influencing HRM decision
making for Aldi.
Employee relations Act is one of the most important legislation in UK that provides a proper
structure to employers and trade union in the area of negotiation and entering into collective
agreements. Presence of good employee relations and adherence with the above act is very
essential for Aldi so as to enhance the overall welfare of staff members. The act includes varied
policies that are required to be adhered by management at Aldi in its new branch (Cleveland,
Byrne and Cavanagh, 2015). For example, the firm has to adhere with the grievance policy by
ensuring that the complaints issue by the employee are handled in best possible manner and
within a stipulated time slot.
If this is not done then the affected employee has a right to bring a claim related to breach of
contract against the company. There is further a need on part of management at Aldi to adhere
with collaborative relationship with the unions. This can be done by focusing on the principles of
continuous support as well as communication so that trust relations are built between two parties.
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It can save the firm as well as union members from unwanted experiences (Spagnoli and
Caetano, 2012). Other than this, ACAS, UK has laid down certain areas where communication id
needed by the management. Aldi is thus required to make the employees get clear about
contractual terms and conditions of employment followed by the overall job performance. Aldi
in this regard must adhere with the process of two way communication.
There are several techniques to terminate employees in UK which include dismissal; resignation
and a settlement agreement. But the need here is to provide an advance and a clear notice to
employees; being aware of wrongful dismissal among others.
P6 Identify the key elements of employment legislation and the impact it has upon HRM
decision making for Aldi.
Employment legislation within UK governs the relation that exists between employee and
employer in terms of what they expect from employees and what is the right of staff at work. It
covers all the matters at work place starting from hiring till the end of employment cessation
whether forced or voluntary (Cleveland, Byrne and Cavanagh, 2015). There is also an existence
of certain acts in this which are as follows;
Aldi is required to adhere with Equality Act 2010 by which it has to protect the employees from
discrimination at work place. There is further a need to protect the employees from unfair
treatment so that a just work environment can be established.
Disability discrimination act 1995 is also required to be adhered by Aldi where Hr team has to
make sure that no discrimination is practiced by the employees on the areas of disability. This
further entails for avoiding the acts related to harassment or bullying that may give mental or
physical torture to the employees.
On the basis of health and safety act, the management at Aldi is required to ensure that the
company takes care about overall health, safety and welfare of employees. There is also a
presence of data protection act on account of which the management should ensure that the
personal data of employees is protected and used only for the purpose for which it is meant for.
This can be done by adhering with data encryption so as to avoid security breaches and
compromise with personal information of employees. The non-adherence with above mentioned
act may lead to imposition of penalties on the company followed by tarnishing the overall
reputation and brand image. It is thus required that the new branch of Aldi at Wembley central
adheres with all the laws related to employment so as to avoid the formulation of any issues. The
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branch manager is further required to be trained so that he can be made aware about the laws
thereby leading to proper handling of team members in the best possible manner.
Due to the presence of data protection act, Aldi is further required to make sure that it uses the
personal data of the employees only with respect to the purpose for which it is meant for. The
company is also required to be transparent with the employees in this regard. The same thing
must also be adhered in the contract signed between employee and management. This can be
done by ensuring that all kinds of details with respect to the use and processing of data is carried
out in a separate consent form which should then be duly signed by the employees (Singh and
et.al., 2017). It can decrease the pressure form the staff members as they are sure about the fact
that a free consent has been given by them. The procedures with respect to data encryption must
also be practiced by the authorities as security breaches can led to legal penalties for the
company. The decision further lies in the hands of HR manager as to how long the data is
required to be stored inside the system before getting permanently deleted.
LO4
P7 Illustrate the application of HRM practices in a work-related context, using specific
examples from Aldi.
There is a set of HRM practices that are used by Aldi which are as follows;
Firstly the company adopts a rigorous as well as comprehensive process for recruitment which is
there to analyse the abilities, skill set and overall attitude of the person towards work. Then is the
selection process which is carried out by taking competency tests for the role followed by taking
interview sessions. In this regard, if recruitment activity is to be done for area manager then
interview session is taken by regional managing director (Quinn and Kristandl, 2014).
Other than this, a huge emphasis is kept by Aldi on the training and development sessions. It has
been known that during the year 2015 the company took around 700 training courses in order to
train around 13000 employees (Cleveland, Byrne and Cavanagh, 2015). These included on the
job training, induction etc in order to develop their overall skill set. There is also a presence of
new performance review system which is done so as to ensure that the staff members get an
overall idea about their working within the firm. The company is also concerned about the health
and safety of its employees (Parahoo and Mahate, 2016). Hence it has started many programs to
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ensure the overall health and safety of employees. These are inclusive of providing Accident
prevention training; ergonomically designed workplaces as well as launching National health
protection initiatives. These are there to increase the overall workplace efficiency of employees
and also their wellbeing. For example, the fast and safe program is there to assess the
unfavourable ergonomic postures followed by provision of training sessions to the employees
(About us, 2018).
Conclusion
A conclusion can be drawn from the above report that in order to ensure towards successful
operations by Aldi in the new branch it is important that there is a presence of proper human
resource management system. This will not only aid in increasing the operational flow but also
help in maintain the brand image just like the other branches. In this regard, the management is
required to take proper steps in the area of recruitment and selection; employee relations etc. the
need is further to adhere with employee legislations so that the company indulges in lawful
practices.
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