Exploring Leadership Development Practices in SMEs

The provided content includes a range of articles and research papers on various topics related to business, management, and human resources. The articles cover topics such as leadership development practices in small and medium-sized enterprises (SMEs), corporate social responsibility, training programs, recruitment and selection processes, organizational commitment, work-life balance, and employee well-being. Additionally, the content includes information on legislation related to national minimum wage and a case study on evaluation of recruitment and selection process.

Running head: HRM OF ALDI
HRM of Aldi
Name of the Student:
Name of the University:
Author Note:

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Table of Contents
Introduction:....................................................................................................................................4
An overview of Aldi:.......................................................................................................................4
Product line:.................................................................................................................................4
Corporate Social Responsibility:.................................................................................................5
Task 1:.............................................................................................................................................5
P1: Purpose and functions of human resource functions:................................................................5
i) Recruitment and selection:......................................................................................................5
i) Orientation:..............................................................................................................................6
ii) Maintaining good working relationship:.................................................................................6
P2: Strength and weaknesses of different approaches to recruitment and selection for Aldi:........7
i) Internal sourcing:.....................................................................................................................7
Morale:.....................................................................................................................................7
Cost effectiveness:...................................................................................................................8
Revitalisation:..........................................................................................................................8
Intensify internal conflict:........................................................................................................9
i) External sourcing:.................................................................................................................9
Increase in quality of capital:...................................................................................................9
New Qualified candidates:.....................................................................................................10
Limited understanding of the company:................................................................................10

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High cost:...............................................................................................................................10
ii) Third party sourcing:.......................................................................................................11
Candidate relationships:.........................................................................................................11
Reduction of cost:..................................................................................................................11
Lack of control:......................................................................................................................12
Communication issues:..........................................................................................................12
Task 2:...........................................................................................................................................13
P3: Benefits of different HRM practices within Aldi to employer (Aldi) and the employees:.....13
i) Advantages of recruitment and selection to employers:.....................................................13
iii) Advantages of work life balance to employers like Aldi:...............................................14
iv) Advantages of Work life balance to employees:............................................................14
v) Advantages of training and development to employers:.......................................................14
vi) Advantages of training and development to employees:....................................................15
P4: Effectiveness of HRM practices in raising profit and productivity:.......................................15
i) Recruitment and Selection:....................................................................................................16
ii) Work life balance:..................................................................................................................16
iii) Training and development:.................................................................................................17
Task 3:...........................................................................................................................................17
P5: Importance of employee relationship in respect to influencing HRM decision making:........17
P6: Key elements of employment legislation and its impact on HRM decision making in Aldi:. 18

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Task 4:...........................................................................................................................................18
P7: Application of HRM practices:...............................................................................................18
Hiring and training workforce:..................................................................................................18
Supervises Performance Management System:.........................................................................19
Conclusion:....................................................................................................................................19
References:....................................................................................................................................21

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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

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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

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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

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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

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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

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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

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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

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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.

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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

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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:
1. The employers are able to acquire highly talented work force through the process of
recruitment and selection. Recruitment and selection help the employers like Aldi
acquire quality human resources management and train them according to their
organisational culture and business needs(Alnıaçık et al. 2014).
2. The employers like Aldi are able to acquire appropriate human resources who can adapt
to the organisational culture. This allows them to allocate the human resources according
to their long and short-term business needs. This allocation of employees in the various
business areas like marketing strategically help the company gain competitive advantage
in the market. Thus, recruitment and selection help the multinational retail chains
like Aldi gain competitive advantage in the market (Al Ariss, Cascio and Paauwe
2014).
ii) Advantages of recruitment and recruitment to the employees:

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1. Recruitment and selection help the employees to judge whether they are appropriate for a
particular company. This helps them to decide whether they want to continue as
employees of the company (Sidani and Al Ariss 2014). Thus, recruitment helps the
employees decide whether they want to work with an employer which helps them to
decide their career planning more accurately.
iii) Advantages of work life balance to employers like Aldi:
1. Work life balance helps the employers like Aldi retain their employees and reduce
employee turnover. For example, the employees of Aldi experiencing work life balance
are able to balance between their professional and personal lives. As a result, they
experience higher degree of job satisfaction and continue serving Aldi. This as a result
helps Aldi to retain employees and allocate them towards its long-term business goals.
Thus, providing of work life balance to employees help employers to retain their
employees and allocate them towards long-term business goals (Alnıaçık et al 2014).
iv) Advantages of Work life balance to employees:
1. The workers experiencing work life balance experience higher degree of job satisfaction,
which motivate them to attain higher level of performances. These higher levels of
performances help them gain promotions and career growth. Thus, work life balance
helps the employees to attain career growth (Gangwisch 2014).
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 Aldi train their

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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.

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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

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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

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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

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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

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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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