Business Issues and the Contexts of Human Resources

This document discusses the various factors that impact HR function and organization businesses. It explores the forces shaping the HR agenda and compares different tools for analyzing the business environment. The document also provides insights into strategic objectives and stakeholder expectations.

Business Issues and
the Contexts of Human
Resources

Table of Contents
INTRODUCTION...........................................................................................................................3
1.1 Different factors that impact HR function and organisation businesses..........................3
2.1 Forces shaping HR agenda...............................................................................................5
2.2 Comparison of different tool for analysis of business environment.................................8
2.3 Key stages in formulation of strategy and its implementation in role of HR.................10
2.4 Examination of HR contribution towards accountability and business ethics...............12
3.1 Evaluation of business performance along with role of HR in business planning and
change management.............................................................................................................13
3.2 Different sources of business and contextual data for planning purposes......................14
CONCLUSION..............................................................................................................................15

INTRODUCTION
Human resource is one of the most important functions of every organisation as it is
concern with managing employees and how are they contributing towards functions assigned to
them in the course of achievement of business objectives. Present report is based on discussion
of various factors that posses a impact on the way organisation's business is operating and its
human resource functioning. Further there is discussion of different forces that are shaping the
human resource agenda and a comparison is made for analysing the external business
environment (DeCenzo, Robbins, and Verhulst, 2016). There are certain key stages that are
related to strategy formulation and its implementation according the role played by human
resource managers. There is discussion of the significant contribution that is made by human
resource department towards accountability and business ethics. There is evaluation of business
performance and the role played by human resource department in planning of business and
changing the Management agenda. Lastly, there is evaluation of different sources and contextual
data used for the purpose of effective planning in organisations. With this information there is
assessment and utilisation of various business sources of data that can be used for planning
purposes by organisation.
1.1 Different factors that impact HR function and organisation businesses
The nature and the scope of human resource Management in all organisations have gone
through a serious type of transformation in pats recent years. Now, the role of human resource
managers in organisations have completely changed because of the way employees are treated as
resource or assets for a organisation (Sparrow, Brewster and Chung, 2016). The employees in a
organisation are now being considered as most important resource for purpose of creation of a
competitive advantage for a organisation.
Back office personnel in organisation have completely developed a strategic bond where now a;l;
functions are considered to b e part of new age HRM.
All the factors that are part of external environment has a complete impact on way
organisations are perceiving their human resource functions. In present scenario this impact can
be understood with help of PESTLE analysis as a macro environmental model:
Political factors:
There are certain political factors that has a impact on way organisation are perceiving
their human resource department performance (Brewster,and Hegewisch, , 201). There are some

political laws like regulations that have been developed with time by government of countries
posses a impact on their functioning. Such as, there has been a laws like Disabilities Act and anti
discrimination Act formed by government in UK. Different human resource functions like hiring
of employees, training, disciplining and compensating activities of this department are affected
by these prevailing laws.
In case of Tesco, a retail brand of UK above mentioned legal laws create a need for organisations
to modify their configurations and all reasonable accommodation policies for employees who
are having any type of disabilities.
Economic:
Economic factors are those that are outside the control of human resource department of
organisation but they are very important as they are related to various economic policies that are
part of countries economic policies. In case of situation of economic boom there is requirement
to form policies of hiring employees as there is necessity to hire more employees & in case of
recession there are situations of lay off that are prevailing in a organisation. So, it can be said
that in case of all retail organisation like Tesco, external environmental conditions decide
whether there will be hiring of employees
Legal:
Legal laws consist of various legislations that are affecting human resource functions of
organisations. Laws like health insurance act, accountability act, disability act. Equality act
create a pressure on human resource department of organisations a need to design their policies
for employees according to adequate consideration given to all these legal laws (Tung, 2016). In
Tesco, these legal laws create a obligation on management and human resource managers to
ensure that they are having all their functions and operations within overall confines of these
legal laws. All HR professionals in this organisation are working towards breast of legislation
and providing training to managers to understand their responsibilities.
Unemployment rate is also a economic factors that has a impact on the market rate for
deciding policies related to salaries and employee compensation. If unemployment rate is very
high then it leads to creation of a situation of paying low wages to employees and on other hand
if there is very low rate of unemployment then it creates a competitive situation for organisation
and they have to offer higher wages to retain employees for a longer duration of time in their
organisation.

Social and cultural environment:
Social & cultural environment consist of external environment in which business are
operating and posses a influence in the management of human resources (Analoui, 2018).
Different factors that are part of social environment are ethics of work, employee motivation and
attitude towards work. Such as in some organisation monetary rewards are highly valued and in
some organisation there is importance given to maintaining of a work life balance. In Tesco,
human resource managers have the responsibility to maintain a work life balance for this they
make sure that they are implementing policies related to offering vacations, leave packages to
their employees so that they are able to maintain their effectiveness towards performing their
roles and responsibilities.
Technological factors:
Development of technology creates challenges and opportunities for human resource
professionals in all organisations. There is requirement of every organisation to implement and
adopt new technology. Such as in Tesco, there has been new technology up gradation in form of
using self checkout systems in their physical stores (Debroux, 2017). This has created a need of
making new hiring because present employees may not posses adequate skills and knowledge
base that is required for purpose of using this updated technological transformation that has taken
place in the organisation. There is a need to develop new recruitment and hiring policies in this
scenario for the purpose of hiring competent individuals.
From the above discussed key factors it can be said that these are some of factors that are
to be given adequate consideration by human resource department of all organisations and also
affect the way these organisation are functioning in long run. Above discussed factors are
external to a organisation and are not in control because they are part of macro environment but
all these posses a impact the way organisations are functioning in long run.
2.1 Forces shaping HR agenda
There are certain forces that are shaping the HR agenda in organisations it consist of
using various human resource models, strategic objectives and stakeholders expectations that
have to be considered in order to understand the overall agenda that has been adopted by
organisations:
The standard Casual Model of HRM:

This is one of the best known models that is used for understanding the HR agenda in
organisation with the help of a casual chain that is starting with business strategy and ends with
the HR process along with this financial performance also has to be given adequate consideration
in this model:
This model clearly indicates that Human resource activities of a organisation are always
aligned with the organisation strategy that helps in enhancing permanence of a business (Shen
and Benson, 2018). HR strategies can be effective only if they are having adequate alignment
with business strategy of there contradictions then it might lead to non achievement of Overall
objectives.
HR practises:
HR practises are following HR strategy like it consist of functions like hiring, training,
compensation policies and appraisal requirements. In organisation like Tesco these HR practises
are helping in generation of certain effective outcomes and these are in form of quality
workforce, high commitment of employees and situations of high employee engagement.
HRM outcomes:
Human resource outcomes are helping in increasing internal performance of a
organisation. It consist of innovation, high production and continuous innovation. These
outcomes are leading towards higher financial performance in organisations and it usually is
Illustration 1: Steps in the casual model of HRM

reflected in form of increased profitability, better margins, high ROI and financial turnover
(Ren, Tang,and Jackson 2018).
There is always presence of interesting relationship between HRM effect that clearly
shows that HR practises can have a direct impact on improved internal performance. For
example in retail organisation like Tesco, there is requirement of effective training that can lead
to positive results in form of higher performance and does not posses a impact on HR outcomes.
This model might also create a situation of reverse causality that is leading towards high
financial performance and there are more investment for better HR outcomes and in term of high
effectiveness in HRM practises like retaining of employees for longer time period and there is
reduction of overall impact on high cost of employee turnover (Voegtlinand Greenwood, 2016).
When there is standardised employee performance then it results into higher chances of
employee engagement.
From the above discussion it can be said that results of model are not always in one
direction. There is a need to understand how Human resource strategy can be formulated in a
organisation and it has a impact on internal process of human resource department and overall
financial outcomes of a organisation.
Strategic objectives:
Strategic human resource management is discussion about the interrelation of human
resources of a organisation with their objectives, strategies and goals (Troth, and Guest, 2020).
The main aim of human resource management is to advance more flexibility, competitive
advantage and innovation in the organisation, second is development of a the overall culture of
organisation and lastly there is a need of improving overall business performance.
In case of Tesco, the strategic goal of this organization is to make efforts towards
improvement of customer loyalty and their core business activities for enhancing shopping
experience of their customers. They have also made a investment of one million pounds towards
achievement of these goals. These strategic objectives are main priority of human resource
department of this organisation and for this they are willing to set up objectives like increasing
programmes of employee engagement and Using executive leadership.
Stakeholder expectations:
There are certain primary stakeholders who are direct beneficiaries like employees who
receive direct compensation because of HR has revise the overall compensation structure of HR

department. There is also direct and indirect benefits that stakeholders are receiving because of
HR projects. Every individual and every business organisation to which a organisation posses a
connection has a impact on HR projects. In Tesco, employees working at various different levels
expect higher compensation, better working conditions to be maintained by human resource
managers. It is the responsibility of Human resource managers to fulfil their duties by trying to
work according to expectations of stakeholders like employees in terms of attainment of higher
satisfaction level from their employees so that they can be retained for a longer duration and
there can be control on overall employee turnover. For customers providing them adequate worth
of the forces that they are paying and government by making sure that organisation is able to
form policies according to regulatory framework and all rules & regulations.
2.2 Comparison of different tool for analysis of business environment
There are many different tools that can be understood for the purpose of analysing the
external business environment. In present scenario, there is discussion of SWOT analysis that is
used for developing a detail view of various internal factors that are impacting the performance
of human resource department of Tesco.
Strength:
 Tesco is having a leading market share as they dominate the market of great Britain by
27 percent share and recently they have become more popular supermarket in Ireland.
The increasing market share of Tesco clearly indicates that there is requirement of
Human resource managers to keep a proper synchronisation between objectives of
strategic human resource department and vision of Tesco so that they are able to
maintain their market share in long run (Amarakoon, , Weerawardena and Verreynne,
2018).
 Tesco has been identified as retail organisation that is offering more that 740 thousand
job opportunities to people across world. This has resulted into increase in
responsibilities of human resource managers of Tesco to plan their hiring and recruitment
functions in such a manner that there can be maximisation of contribution towards hiring
most competent individuals who can make effective contribution towards performing
their assigned job roles.
Weakness:

 Tesco has been facing situations of poor operational performance in some of their
markets in some countries like Japanese markets in year 2012. it forced them to close
stores in Japan after nine years. In these conditions HR department have to make
adequate consideration to make efforts towards maintaining operational performance of
those locations where organisation is facing poor operational performance.
Opportunities:
 Tesco has launched their new Jack stores that are special discount stores and have high
prospects of growth in future. These new launches will require human resource managers
to make new hiring according to requirement of specific positions in these organisation.
The plans to expand in countries like Turkey, south Korea and Indonesia will further
lead to opportunity for HR mangers to use internal or extremal sources according to their
feasibility to fulfil the need of individuals.
Threats: Increase in government regulations like legal and taxation matters, economic up heals,
credit crunches lead to a strong threat in reduction of operational efficiency of a
organisation like Tesco. This creates a situation for HR managers to maintain the
operational efficiency by hiring of new employees with required knowledge and potential
or provide training opportunities to existing staff in order to maintain their level of
performance and enhance it according to specific organisation's requirements.
Comparison between internal and external models for analysing its effectiveness in context of
HR issues and HR functions.
SWOT analysis PESTLE analysis
SWOT analysis is a technique that is used for
the purpose of developing a detailed overview
of various internal factors that can posses a
impact on functioning of a business transition.
In case of HR department It helps in
developing a scenario of strength weakness,
opportunities and threats that are internally
affecting the functioning of a business
organisation.
PESTLE analysis is basically a macro
environment tool that can be used for purpose
of analysing various external factors that are
part of the macro environment of a business
organisation. These factors are not in control of
a organisation but has a huge impact in
different functions of human resource
departments In different categories like
political, social, legal and technological such

activities are affecting the functions of a
organisation.
2.3 Key stages in formulation of strategy and its implementation in role of HR
Strategy formulation is considered to be a very important part of environment scanning
and it helps in analysing, identifying and balancing all the available external opportunities with
the internal strengthen & weakness of a organisation. In present case of Tesco there is a
requirement to develop a new strategy to train existing employees for operating key functions
associated with their new launch of automatic system of making payments. There are certain key
stages that are part of overall strategy formulation and implementation in context of human
resource department of a organisation:
1) Aligning of business and HR requirements:
There is a requirement of human resource department to understand the overall strategies and
goals of a business organisation in a deeper context to develop a particular strategy of human
resource department. Such as in case of Tesco, the overall vision of organisation is to maximise
customers value and earning of loyalty & trust of their customers. So, human resource
department in this scenario has to make efforts to convey this value to their workforce.
2) Development of HR strategy:
After having developed a detailed understand of business objectives and the business model
there is a requirement to identify potential opportunities and threats that are part of external
business environment. In Tesco, there is a need of expert HR thinking and identification of
requisite interventions so that there can be a leverage of organisation performance.
3) Organisation performance:
Organisation performance is a basic process where there is management of subsensible
objectives and goals to manage the performance of overall organisation. It helps in developing a
rationale and link for other human resource activities and generation f opportunity so that it can
have a positive impact on organisation performance. For HR department of Tesco there will be
development of skill set posses by line managers. Along with this there is a need of personal
development process in which individual strength & weakness can be identified.
4) Organisational design and structure:

Organisation design is the structure, size and shape of a organisation that has to be according to
customers expectations. It reflects the overall management process that can be a source of
competitive advantage . In Tesco, the role of human resource department is to ensure that there
are adequate changes made in the present structure of organisation to maximise contribution of
each employee towards achievement of high customer value, for example there is strong focus
need to be done on marketing department officials as they have direct connection & interactions
with prospective customers.
5) Strategic resourcing:
There is a need of achieving clarity through the overall structure of organisation that is very
critical to resource strategies. If Tesco is having adequate transparency then it will help in
defining the level of knowledge and skills required to identify all strategic resource requirements.
6) Organisation development:
Development response will have a aim to enhance business skills and its application towards
increasing effectiveness of a organisation. In Tesco, there is a requirement that at individual
level, there is agreement on all developmental needs and there can be providing of necessary
developmental skills of people according to their requirements. At team level it will reflect
individuals ability to work with others and alignment of team skills and individual's Key stages
in formulation of strategy and its implementation in role of HR skills to achieve overall business
objectives.
7) Organisation culture:
Culture can be described as way functions are performed in a organisation. In Tesco there is a
democratic style of leadership that provide equal opportunities to employees to provide their
views in making various decision that are impacting them. So, there can be a option that can be
provided to decide the way that can be used for purpose of providing training whether it must be
on the hob or off the job depending on majority preferred method. It has to be conveyed to the
top management and according to it further decisions have to be made.
Above mentioned are some of the important steps that have to be considered and
performed by human resource department in organisation like Tesco in order to attain their
specified laid down objectives.

2.4 Examination of HR contribution towards accountability and business ethics
HR department of a organization is always making contribution towards various aspects
of a organisation. In present case there are tow major aspects like business ethics and
accountability are considered for understanding impact of Human resource functions on
organisation.
HR contribution towards accountability:
In organisations that are highly accountable there is prevailing a culture that helps in
prioritizing and help in inspiring accountability. HR professionals help in creation of a place
where employees must be made accountable to each other. Accountability can be defined as
having a highly committed workforce in a organisation and it outflows from a particular culture
that is helping in valuing accountability. HR professional has to be familiar with overall values
of a organisation and according to mission of the organisation. There are certain technique that
are used by the Human resource department in Tesco in order to attain higher accountability in
the organisation. Such as :
 Balancing healthy relations between employees and managers. There are adequate facilities made for providing training to employees and use of various
developmental programs. Effective leadership is also used by directing and instructing employees towards
achievement of organisational goals. They posses a focus in redirecting of HR objectives
from transactional to a strategic goal with a process of forward thinking, creativity and
continuous innovation.
 Performance management: Human resource department in Tesco, ensures that
employees are motivated to enhance their level of performance, for this there is a
requirement of using certain motivational approaches like rewards system, promotions
and incentives.
HR contribution towards Business ethics:
The concept of business ethics is gaining a wide importance with the changing times and
increasing concept of CSR. In case of Tesco there are specific role played by Human recourse
manage in conduct with the organisation:
 Nurturing the ethical structure of organisation

 Recruitment of employees according to ethical conduct of organisation and upholding
overall value & ethical climate.
 There must be proper resolution of ethical conflicts in case they are occurring in the
organisation.
 Dealing with the aftermath of ethical conflicts, for example there is ethical responsibility
to offer employees a comfortable environment to work and providing adequate
consideration to their demands (Armstrong,and Taylor, 2020). But many times there is
requirement of higher pay and it conflicts with the objective of organisation to maximise
their profitability. Hence, in such situations of ethical conflict there is role of human
resource managers to deal with them in a more effective manner and solve the dilemma.
3.1 Evaluation of business performance along with role of HR in business planning and change
management
The performance of any entity can be duly evaluated by making a comparison between
the actual and the desired outcomes. For this purpose, financial indicators can be used and these
are defined as follows:-
Financial analysis:
By making analysis of business target and goals, financial plans must be devised
including funds as well as cost needed by the corporations along with the profits and cash flows.
In this relation, the factors that are required to be taken into consideration for the evaluation of
business performance are current sales, revenues, cash flows, turnovers, etc.
Financial Ratios:
These can be calculated on the basis of financial statements for comparison of business
performance at varied intervals of time. Financial ratios can also be used for the purpose of doing
comparative analysis with other organisations.
Employee Satisfaction:
For the analysis of business performance, it is also significant to take into account the
satisfaction level of employees by considering aspects such as working hours, trainings,
corporate culture, etc.
Role of HR in business planning and change management
The role of HR is briefly discussed as follows:-

Selection & Staffing: After the stipulation of business goals it is important for the
organisation to recruit the required number of employees so that the business activities can be
effectively executed. This will help the entity in moving a step towards the timely
accomplishment of corporate goal and objectives.
Training & Development: Whenever a change is executed within the bounds of Tesco,
the HR department provides training to employees so that they can be well acquainted with the
ways by which they can get accustomed to the new systems or patterns of working (Shen and
Benson, 2016). This will make the employees adept at operating in the new organisational
settings after the change is duly executed.
3.2 Different sources of business and contextual data for planning purposes
The information about a business can be gathered by mainly two types of sources named
internal and external. In this relation, the internal sources tend to comprise of workforce as well
as the shareholders of the company. On the other hand, the external sources include book,
journal, article, magazine, etc. In the present era of digitalisation, internet has solved the
challenge of gathering information. Online media in today's world is regarded to be the quickest
way of procuring information about a corporation such as TESCO. It is a powerful tool,
however, excellent searching skills are required for using this source for the purpose of data
collection.
HR Metrics: These are put to use for the purpose of measuring effectualness of Human
Resource initiatives that constitute labour cost, turnovers, expenditure and trainings. This is
required for depicting the amount incurred by the company in terms of training and development
cost over every individual functioning within the bounds of TESCO. It is considered as the duty
of HR manager to provide the business information to leaders such that important decisions can
be duly undertaken by them in relation to new product launch, marketing initiatives, etc.
(Brewster and Hegewisch, 2017).
HR Trends: Human resource team tries to deal with the circumstances such as work
pressure, challenges of market and economy, stress, etc. (Soltis, Brass and Lepak, 2018). Over
the course of time, evolution of technology has affected almost every domain of the businesses.
Automation has also hit the HR sector.

CONCLUSION
In accordance with the discussion done above, it can be comprehensively said that each
and every organisation tends to encounter some business issues or challenges which need to be
dealt with in an effectual manner. The importance of addressing and resolving these issues in a
timely manner arises because this ensures that the firm holds a significant share in the market
place. Besides this, it has been acknowledged that the Human Resource Management team
pertinent to any organisation holds the responsibility of organizing as well as managing
administrative functioning along with performance. In addition to this, strategic planning should
be executed for formulation of steps that can ensure the achievement of business objectives in
pre defined course of time. HR manager of a company possesses the role of carrying out training
and development sessions for the workforce so that they can be acquainted with important skills
and knowledge along with the latest market trends. It is often seen that the enthusiasm of human
resource team impacts upon the manpower in a positive manner. Along with this, it is determined
that business performance of a corporation can be duly evaluated by way of carrying out SWOT,
financial analysis, customer satisfaction and so on.

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