Strategic Human Resource Management - Analysis of HRM Practices

This report compares the HR policies and practices of PureGym and Toyota (GB) and analyses the impact of external forces on the corporations. It also evaluates the method of delivering the HR functions in both companies and examines the challenges faced by the line manager.

0Running head: SHRM
Strategic Human Resource Management

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Table of Contents
Introduction................................................................................................................................2
Analysis of HRM Practices........................................................................................................3
PureGym................................................................................................................................3
Toyota (GB) PLC...................................................................................................................3
Effect of External Forces on Company’s HR Strategies............................................................4
Comparision Between Organisation and Delivery of HR Functions.........................................6
Approach to strategy..............................................................................................................6
High Commitment HRM........................................................................................................6
Best Fit HRM.........................................................................................................................7
HRM Practice.........................................................................................................................7
Ulrich’s Three Legged Model................................................................................................7
Role and Barriers for Line Manager..........................................................................................8
Recommendations......................................................................................................................8
Conclusion................................................................................................................................10
References................................................................................................................................11

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Introduction
Human resource is a core part the organizational body that plays a critical role in its
operations and functionalities. The effectiveness of an HR model has a significant influence
on organisation’s success. Strategic human resource management is defined as the activity of
developing, attracting, retaining and rewarding the employees to benefit both workers and the
corporation. Modern companies adopt various model of HRM to ensure employees work at
highest capacity to fulfill the organisational objectives. This report will compare the HR
policies and practices of ‘PureGym’ and ‘Toyota (GB)’ and analyse the impact of external
forces on the corporations. Further, the report will evaluate the method of delivering the HR
functions in both companies and examine the challenges faced by the line manager.

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Analysis of HRM Practices
PureGym
PureGym limited in a fitness chain situated in the United Kingdom; the company is Britain’s
largest gym chain with more than 450,000 members. The corporation has more than 172
gyms situated throughout the United Kingdom (Morrison, 2017). The key stakeholders of the
firm include employees, customers, shareholders, directors, suppliers, and investors. The
employees of PureGym include trainers, management staff, supervisors, and cleaning staff.
The company has adopted a Soft HRM policy to ensure they provide high-quality services to
its members and achieve organisation objectives. The trainers are highly skilled workers with
knowledge in the fitness field and the management staffs also include skilled employees. The
cleaning staffs are low skilled workers who perform repetitive tasks (PureGym, 2017).
The company hires local people who live near the gym; it allows employees to maintain
effective work-life balance; there are two shifts in the gym and employees for both shifts are
different which equally distributes the workload. In Britain, the national minimum wage for
25 years or above people is £7.50, for 21 to 24 its £7.05, for 18 to 20 its £5.60 and under 18
its £4.05, and the cleaning staffs receive such salary (Gov.UK, 2017). PureGym also ensures
that they comply with various other labour laws regarding health and protection of the
workers. Significant political changes, such as Brexit, affect the company because it creates
barriers for Europe expansion strategy. The climate in Britain also influences the business of
PureGym because, in snow storms or heavy rains, people did not prefer to go to the gym
(Shapland, 2015).
Toyota (GB) PLC
Toyota (GB) PLC is the corporation that focuses on marketing, sales, customer relations and
after sales relations between Lexus and Toyota in the United Kingdom. The company has
more than 400 employees, and its head office is situated in Great Burgh, Surrey (Toyota,
2017). The key stakeholders of the company include customers, employees, management,
government, business partners, shareholders, global society/local communities and business
partners (Toyota, 2017). The company has adopted a Soft HRM policy because it considers
employees as valuable assets that assist in the business growth. The company concentrate on
providing excellent customer service and its HRM policy strive to employ best talents from
the industry.

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The company hires employees for financial, legal, sales and marketing, information system,
social media, press, corporate social responsibility, and business operations. The firm
requires highly skilled employees who are qualified in their given field. The company hires
employees from all over the world to bring diversity and expertise in the corporation; the
corporation complies with various labour or employment laws and implements them into HR
policies (Toyota, 2017). The HRM policy on Toyota (GB) incorporate various policies to
improve employee engagement and provide job satisfaction such as work-life balance,
personal development, career progression and many others. Any significant change or
modification in employment law effect corporation’s operations and HR policies.
Effect of External Forces on Company’s HR Strategies
Threat of New Entrants
The risk of new entrant is low for PureGym because the cost of establishment is considerably
high. New companies have to hire professional trainers and buy expensive equipment which
increases initial investment cost.
Whereas, in case of Toyota (GB), the risk of new entrance is low because the industry has
various barriers including high initial cost investment, access to distribution channels,
requirement of license and others. The requirement of highly qualified and skilled employees
is also high which create barriers for new entrants.
Threat of Substitutes
The risk of substitutes is low for PureGym because there are not much fitness chains in the
UK that provide their services in multiple areas along with highly skilled trainers. New
corporations open its business locally and only attract local customers whereas PureGym is
one of the largest fitness chains in the UK and it provides services in various areas of Britain.
Comparing to Toyota (GB), the risk of substitute is moderate because there are several
substitutes. The cost for switching is low, and in specific areas, people may prefer to use
substitute because they might find it more convenient. Specifically, low and middle-class
people prefer transport which is less costly; therefore, Toyota (GB) released new lower price
vehicles and improved its customer services.
Bargaining Power of Buyers

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Due to high competition, competitive prices and local availability, the bargaining power of
buyers is high for PureGym.
For Toyota (GB), the bargaining power of buyers is high because people have several options
to choose and the switching cost is low. The competitor firms attract buyers by offering
competitive prices and other options to suit specific requirements of the customers.
Bargaining Power of Suppliers
There is a high competition between the suppliers to provide fitness equipment; volume of
the order is critical for the suppliers. Therefore, the bargaining power of suppliers is low for
PureGym.
In case of Toyota (GB), the bargaining power of supplier is low because a high number of
supplier which provide products according to company’s requirements. The decision of
supplier to raise material cost depends upon type of supplier and nature of products; in
Toyota (GB)’s case, the reliance of suppliers in just-in-time supply chain management and
risk of loss of business reduces the bargaining power of suppliers.
Industry Rivalry
In PureGym’s case, the industry rivalry is considerably high because the competition is
proliferating in the fitness industry. The competition of PureGym includes Gym Box,
Xercise4Less, Wiggle, and GFG. People’s perspective is changing, and they are becoming
more health conscious; the UK’s fitness industry has a 14.9 percent penetration rate which
means one in every seven people in the United Kingdom has a gym membership (LeisureDB,
2017).
In comparison to PureGym, Toyota (GB)’s competition is higher due to a large number of
global players. The competitors of Toyota (GB) include General Motors, Ford, Nissan,
Volkswagen, BMW, Audi, Hyundai-Kai, and Honda. All these corporations are highly
aggressive regarding marketing and business, and they focus on technological innovation,
design innovation, passenger safety, fuel efficient, customer support and effective marketing
to attract customers.

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Comparision Between Organisation and Delivery of HR Functions
Approach to strategy
PureGym has adopted classical or rational planning model for delivery of HR functional that
focuses on establishment of a central team that provides necessary HR services and handle
the HR requirement. The firm has a soft HRM approach to strategy that focuses on
employees’ requirements and fulfilling them to maximise its performance (Cave, 2015). The
primary staffs include line managers, senior staff, and employees.
Whereas Toyota (GB) uses an evolutional approach for HR functions, and it has adopted soft
HRM approach. The HR model focuses towards achieving organisational objectives and
incorporates them in HR functions.
High Commitment HRM
The HR model of PureGym includes various principles of High commitment HRM model
which allow them to improve their employee engagement and job satisfaction (Chiang, Han,
and Chuang, 2011). The HC HRM model includes a set of HR practices and policies that
have the potential to contribute towards the performance of the company by reducing
absenteeism, improve quality and customer service, improve employees’ attitude and
behaviour and increase labour turnover. PureGym applies these principles while dealing with
trainers and ground level staff to ensure they fulfill the requirements of gym members and
provide high-quality service. For example, the employees can consult HR managers to select
the most suitable shift for them which allow them to maintain their work-life balance.
Similarly, as PureGym, Toyota (GB) has incorporated the provision of HC HRM into their
HR model; it focuses on employment security and formulating policies as per the government
regulations (Farndale, Hope-Hailey, and Kelliher, 2011). The corporation requires highly
qualified and sophisticated employees, therefore, the hiring process is based on various tests
and examinations. The company provides training to its employees to make them familiar
with organisational objectives and procedures (Kwon, Bae, and Lawler, 2010). The
employee’s involvement program of Toyota (GB) is considered as the primary reason for its
success; the program focuses on career progression, work-life balance and personal
development of the employees.

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Best Fit HRM
The best fit HRM approach focuses on developing HR policies according to business strategy
which includes performance objectives, future practices, and other policies to achieve
corporate goals. The approach is based on internal and external factors, such as customers,
government, competition, and suppliers. This approach supports the overall competitive
strategy and assists in providing a competitive advantage to the company.
PureGym and Toyota (GB) include the principle of bet fit HRM policy in their HR model.
PureGym’s motto focus on providing high-quality services to its member and the HR policies
focuses on hiring qualified trainers to achieve its objective (Beauregard and Henry, 2009).
Whereas, in comparison to PureGym, Toyota (GB) emphasis on high level of customer
support, therefore, its recruitment process includes various personality tests which ensure
candidates have social skills to interact with customers.
HRM Practice
According to Caldwell, Truong, Linh, and Tuan (2010), HR professionals can adopt strategic
HRM model that aligns the company’s value, mission and goal with HR practices and it can
contribute to the success of the corporation. This model assists in the accomplishment of
ethical duties of the firm that improve its market reputation. PureGym’s HR department
functions at the strategic level; it formulates long-term policies to achieve the organisational
objective. The company did not outsource its HR activities.
Operational human resource focuses on HR transactions and day-to-day functionality instead
of long-term goal setting; it involves steps that assist is the achievement of organisational
objectives. Not like PureGym, Toyota (GB) HR department functions at the operational level
to improve employee engagement that assists in fulfillment of employees’ requirements
which improve their productivity. The company did not outsource it HR functions, but they
do promote employees from other countries to UK’s headquarters.
Ulrich’s Three Legged Model
Toyota (GB) has adopted Ulrich’s three-legged model to improve its HR functions. The HR
objectives and goals are directly incorporated into the HR model which ensures their
fulfillment (Sparrow, 2014). The expertise of employees allows Toyota (GB) to improve their
performance and provide high-quality services to its customers. Therefore, the company has
established an employee resource center that record and report the performance of each

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employee which is evaluated by the administration to formulate policies for improving
workers’ productivity. The HR model focuses on hardware, software and support systems
that assist HR professionals in collecting reliable and accurate data. PureGym did not
implement Ulrich’s three-legged model in their HR policies.
Role and Barriers for Line Manager
Role
PureGym’s line manager role is to hire professional fitness trainers that provide high-level
services to employees and maintain a friendly behaviour; the manager’s duty is to provide
appropriate training to the trainers in order to improve their knowledge and teach them proper
handling of fitness equipment.
Similarly, as PureGym, Toyota (GB)’s line manager role is to employ highly professional and
sophisticated employees who are expert in customer service, sale, legal or marketing field.
The manager also monitors their performance and provides them training accordingly to
improve their productivity.
Challenge
 Limited resources make it difficult to attract, assess, hire and train qualified and
talented employees in PureGym
 Toyota (GB)’s line manager has to manage frequent employee turnover and improve
retention
 Reluctant and old-fashioned managers made it difficult to apply modern HR approach
in Toyota (GB)
 Maintaining work overload is difficult in PureGym
 Lack of flexibility in HR structure is disadvantageous for Toyota (GB)
Recommendations
PureGym
 The company should increase their HR budget to ensure that they hire qualified
trainers.
 The HR policies should include provisions regarding cleaning staff.

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Toyota (GB)
 The company should hire young HR executives to promote modern HR approach.
 The HR department should improve flexibility by reducing traditional policies.

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Conclusion
To conclude, strategic human resource management is a critical part of an organisation that
assists in its success. PureGym has established a soft HRM approach to ensure they comply
with necessary labour regulations and to fulfill its employee’s requirements, Toyota (GB) has
adopted a similar approach to improve employee engagement and maintain work-life balance.
PureGym has adopted a classical approach for delivering HR functions through which they
promote employee engagement. Whereas, Toyota (GB) has adopted Ulrich’s three-legged
model which centralised their HR structure to focus on management commitment, support,
and training to create competent employees. Modern corporations focus on strategic HRM
models to effectively perform and deliver HR functions which assist in achieving
organisational objectives.

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References
Beauregard, T.A. and Henry, L.C., 2009. Making the link between work-life balance
practices and organizational performance. Human resource management review, 19(1), pp.9-
22.
Caldwell, C., Truong, D.X., Linh, P.T. and Tuan, A., 2011. Strategic human resource
management as ethical stewardship. Journal of business ethics, 98(1), pp.171-182.
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Telegraph. Available at:
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Chiang, H.H., Han, T.S., and Chuang, J.S., 2011. The relationship between high-commitment
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Manpower, 32(5/6), pp.604-622.
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cent [Accessed on 2/12/2017]

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https://www.puregym.com/about-us/ [Accessed on 2/12/2017]
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