HRM Practices and Employee Retention

This report examines the role of Human Resource Management (HRM) in employee retention, using Aldi as a case study. It highlights various HRM practices such as analyzing work, HR planning, recruiting, selection, training and development, compensation, performance management, and employee relationship. The report also discusses how these practices contribute to strategic management, compensation, benefits, and safety within an organization.

Human Resource Management

Table of Contents

Illustration Index
Illustration 1: Functions of HRM.....................................................................................................2
Illustration 2: HRM practices...........................................................................................................9

INTRODUCTION
Human resource management refers to systematic planning, organising and directing of
manpower employed in the organisation (Jackson, Schuler and Jiang, 2014). This report will
cover the staff management for the new branch of Aldi which established at Wembley Central,
London. HRM purpose and scope in respect with the organisation will be identified. Approaches
of recruitment and selection with their strength and weakness will be evaluated in the report.
Human resource practices followed in the organisation with their benefits to both employee and
employer will be discussed. The effects of those practices in terms of organisation growth and
productivity will be evaluated. The influence of effective employee relations and their
significance to the organisation in order improve the overall work culture will be explained. The
elements of employee legislation and their impact on HRM decision making will be covered.
The human resource management policies and practices according to the work related context
will be illustrated with examples in the report.
Aldi is the leading brand in global supermarket chain with more than 7000 stores in
approximately 70 countries. The organisation established in Germany and has been working in
UK since 1990. There are over 20000 employees in more than 500 stores in the country.
TASK 1
P1 Functions and Purpose of HRM applicable in workforce planning
Human resource management is an essential part of the Aldi. It deals directly with the
people working in the company. Its aim is to maximise the performance of employee by
motivating them using various practices and policies (Budhwar and Debrah, 2013). The function
of HRM is to provide effective and efficient corporate culture that assist the organisation to gain
competitive advantage and can work in long run. The purpose and functions of HRM are:

 Recruitment and selection- The main aim of the human resource management is to
identify the current manpower and required manpower. Aldi is continuously growing
and it requires more employee to be employed in the organisation. The human resource
management essential purpose is hire employees and placed them according to their
qualifications, skills, talent, knowledge and competencies. Employee relations- In long run of business, relationship between employees and
employers must be effective (Brewster and et.al., 2016). The purpose of human resource
management is to maintain effective employee relation in the organisation which help in
avoiding disputes and conflicts and assist in progress of company. Compensation and Benefits- It includes all the monetary benefits which are provided to
the employees. It is the key function and purpose of human resource management in
order to workforce planning in the organisation. Training and Development- Training of new and existing employees to improve their
skills and development for overall growth is the essential function of human resource
management (Renwick, Redman and Maguire, 2013). Aldi's HRM provides various
methods of training and development to seek out their hidden talents and increase their
performance.
Illustration 1: Functions of HRM
(Source: Rodrigo, 2012)

 Performance Management- The function of HRM is to manage the performance of
employee. It includes systematically supervise, monitor and appraise the performance of
the employee.
M1 Functions of HRM provide talent and skills to fulfil the Aldi objectives
The functions played by human resource management assist in increasing skills and
identify hidden talent of the employee. The function of recruitment and selection analyse the
qualification and skills of that can help in achieving the goals of the organisation (Bolman and
Deal, 2017). Training and development function help in increasing the skills and competencies
of employees and stimulate the hidden talent of the employee to attain business objectives.
Compensation and employee relations administration assists in maintaining positive work
environment of trust and belief. An effective relationship between superior and subordinate help
in evolving the skills and talent of workforce in the organisation. Various incentives and other
benefits provided by Aldi help in increasing motivation and job satisfaction.
P2 Recruitment and selection approaches, advantages and disadvantages
Recruitment and selection is an essential function of human resource management. By
identifying the gap between current and required manpower Aldi, organise recruitment and
selection activity (Soltis and et.al., 2013). The organisation use two approach of recruitment
which are internal and external source. Internal source includes promotion and transfer of
employees. External source of recruitment is done by various methods such as advertisements,
broadcasting, campus placements, etc. Both approaches' comes with some specific strengths and
weaknesses. The strength and weaknesses of internal and external source are described below:
Strength of Internal source of recruitment Cost Effective- It helps in reducing the cost of advertisements, broadcasting, etc. as the
vacant position is filled by the existing employee by transfer or promotion.
 Reduce efforts and cost in training- Internal source of recruitment assists in minimising
the cost of training and orientation as existing employee do not require much training.
Weakness of Internal Source of Recruitment Lack of talent pool- Organisation recruit the existing employee for the vacant position.
This limit the growth of more talent in the company (Cavusgil and et.al., 2014).

 Dissatisfaction among failed applicants- Those employees who are not able to qualify or
get promote feels dissatisfied (Huang and Kim, 2013). It effects their loyalty and
commitment towards the organisation.
Strengths of External source of Recruitment Large number of talent pool- It provides Aldi, more candidates who posses greater skills,
talents and competencies. This can help the organisation to accomplish the goals and
objectives.
 New Blood- External source of recruitment introduces new and fresh blood in the
organisation. They come with full determination and commitment which helps the
company to works progressively towards attainment of growth and development.
Weakness of External source of Recruitment Lower motivation of existing employee- When someone from outside employed in the
higher position in the organisation, it reduces the level of motivation of existing
employees (Locke and Latham, 2013). This results in lack of determination towards work
and can impact on organisational objectives.
 Expensive source of recruitment-External source of recruitment is more costly and
expensive as compared to internal source. The cost includes advertisement, broadcasting,
telecasting, online portals and placements agencies are extravagant. This effects the
financial position of the organisation.
M2 & D1 Critically evaluation of strength and weaknesses of apporaches of recruitment and
selection
Strength and weakness of external source of recruitment and selection in the organisation
Aldi prefers to recruit candidates from external source at various positions in the
organisation. For example for cashiers and floor level worker external source of recruitment is
considered as best approach. There are various merits and strength such as it provides
organisation with enormous talents and competencies which are necessary for achievement of
goals and objectives (Cavusgil and et.al., 2014). It also posses some disadvantages and
weaknesses such as it minimise the motivation of existing employees. It is expensive approach as
it includes various costs to attract the candidates for the organisation.
Strength and weakness of internal source of recruitment and selection in the organisation

The internal source recruiting is preferable for higher, top or middle management level.
For example, For the position of General Manager of Human resource, Aldi prefer to promote
the employee who has more experience of working in the field of human resource in the
organisation (Kavanagh and Johnson, 2017). It has various advantages and strength such is it
help to reduce the cost of recruitment and training as the employee got promoted or transfer
within the organisation. But this approach reduces the amount of talent, skills and competencies
by restricting the entry of outside sources.
TASK 2
P2 Benefits of HRM practices
1. Increase in Motivation- HRM practices lead to increase in motivation and morale of
employees and employers in the organisation (Renwick, Redman and Maguire, 2013).
The practices are implemented for the benefits of workforce employed in the organisation
which eventually lead to rise in level of motivation.
2. Increase in Job Satisfaction- Human resource management upgrades its practices with
needs and desires of employees. This helps in increase in the satisfaction level of and
employees become more loyal and committed towards the organisation.
3. Build Environment trust and support- It is essential for an organisation to have an
environment of trust and cooperation. HRM practices of Aldi assist in building and
structuring the environment of trust and support between employer and employees.
4. Effective Corporate Culture- HRM practices include birthday's and festival celebration,
group discussion, frequent trips and tours assist in developing effective corporate culture
in the organisation (Riley, 2014). Aldi's HR management has ability to made effective
corporate culture in the organisation which is important to both employees and employers
at all level.
P4 HRM practices effectiveness evaluation
HRM of Aldi manages to hire new employee and define employee roles and
responsibility. HRM also help to measure about employee performance. After analyse HR
management provide training and development training to their employee. Training and
development program is helpful to increase profit and productivity in business unit. Company

make various training and development program to motivate employee and increase productivity
of organisation.
 Performance appraisal:- It is an effective measure to evaluate the effectiveness of HRM
practices. Company frequently supervise the performance of their employees. They seek
the progress and improvement in the work of employee (Riley and Hoque, 2013). On the
basis of their performance, company provide incentives and other benefits, which helps in
maximising the motivation of the employees. Eventually it leads to the effectiveness in
productivity and profitability of the organisation.
 Training and development:- Organisation provide various training programs to
increase employees skills and knowledge. Training and development program increase
motivation in employee. These program need some HRM practises and guidance to start
and develop training program. HR management can increase their employee efficiency
and competencies, which help employees to be more productive to organisation.
 Employee information:- HR management should get all the information about employee
on interview time. Employee information is very necessary to organisation. Organisation
makes a report on employee data and use that data on training and development time to
increase their productivity and motivation (Marler and Fisher, 2013). An employee can
get more benefit and more advantage from company but employee have to work hard and
achieve individual and organisational goal in company. These program is essential to the
organisation.
D2 Critically evaluation of HRM practices
Human resource practices and polices are very essential in the organisation. In Aldi
where there are over 20000 employees working in different stores under organisation, the HRM
practices plays a significant role to satisfy and motivates the huge amount of employees
(Cavusgil and et.al., 2014). For example, Aldi' HR management initiated a special scheme in
which some specific reward will be provided to the employee who are always punctual. This is
under rewards and benefits practice followed in the organisation. HR practices and polices
greatly influence the work environment in the organisation. An effective practice will lead to

productivity and profitability whereas defective practices will lead to diminishing and loss of the
organisation.
TASK 3
P5 Importance of Employee relations in decision-making
The term employee relations refers to organisation efforts to manage relationship
between employers and employees. Employee relations activities are those activities that are
conducted by the Human Resource Management of organisation in order to maintain effective
and efficient relationship in the organisation. Such activities includes games and events
conducted periodically, annual programs, events and other programs that involves both
employees and employers. Employee relations activities includes:
 Games and events for employees
 Compensation policies transformations
 Rewards and benefits
 Recognition and status
There are many issues on which an individual cannot make decision alone. In a big
organisation like Aldi an employee relations plays a significant role which enables the company
to become one of the leading supermarket chain in the world (Boella and Goss-Turner, 2013).
Importance of employee relations are given below:
1. Reduce Absenteeism- Aldi allows worker participation in management which allows the
worker or employees representative to participate in the decision-making process. This
creates and effective relationship between employers and employees which eventually
leads to the reduction of severe problem of absenteeism.
2. Improved morale and motivation- The organisation posses a good employee and
employer relationship which helps in reduction of conflicts and disputes (Baum ed.,
2016). This leads to increase the morale and motivation of employees.
3. Sharing of work- Employees get frustrated with the lot of work so HRM should analyse
about the problem of employee and try to solve that program. HR management can share
employee work with another employee. It results in formulation of effective relationship
and also helpful to manage organisation work.

4. Productivity:- An effective relationship between employees and employers lead to
increase in productivity of the organisation.
P6 Key elements of employment legislation that impact decision-making
United Kingdom law for labour has been regulated the relationship between workers,
employers and trade unions (Knowles, Holton and Swanson, 2014). Employees of Aldi are
benefited by various employment rights which are described in various acts. Employment
legislations has direct influence on the HR decision. HRM of the organisation bounds by
legislation of UK labour law. All the acts regarding national minimum wages act 1998, contract
of employment act, employment rights act 1996, time regulation act 1998, etc.
The key elements that governs employment legislation are given below: National Minimum Wage Act 1998- The National Minimum Wage Act 1998 mandates
that each and every employee working in an organisation are entitled for minimum wage
which is proposed by the government of United Kingdom. Contracts of Employment Act 1963- As per this act, employee who have worked for more
than a year in an organisation or qualified the contract period cannot be terminated by the
management of organisation (Bolman and Deal, 2017). The motive of this act is to
provide security to the employees and safeguard their rights. Working Time Regulation Act 1998- This act proposed that organisations requires to work
within the working hours prescribed by the parliament of United Kingdom in this act.
Aldi working hours are on the basis of this act, thus providing benefits to the employees
as they have to work for certain hours.
 Data Protection Act 1998- As per Data protection Act, organisation are required to store
the data and personal information of employees in secured place or database(Soltis and
et.al., 2013). It is very important to safeguard the vital information of employees in a
secured place. It will save the reputation and goodwill of organisation in effective and
efficient ways.
M4 Employee relations and legislation that affects HRM decision-making evaluation
Employee relations and employment legislation are directly proportional to each other.
The more lawful an organisation operates, the healthier relationship can be produce in the
company. Employment legislation includes all the laws and regulations which are predefine in

UK labour laws and employee relations shows the behaviour and attitude of workforce employed
in the organisation (Huang and Kim, 2013). The combination of both affects the decision-making
process in the organisation. Aldi empower workers participation management and other activities
which involves all the employees. It helps in producing an effective relationship between
employer and employee and helps in achievement of organisational goals and objectives.
TASK 4
P7 Application of HRM practices
Human resource practices are essential to an organisation for growth and development. In
order for attraction and retention of employees these practices are plays a significant role. For
example, one of the store of Aldi was facing the problem of employee retention. Workers are not
even working for month. This leads to increase in turnover rates of employees up to 300% a year
(Locke and Latham eds., 2013). To resolve the problem of employee retention, the human
resource management appoint a leader in the store and authorise him to follow those practices
which can lead to employee retention. These applications are employed by the human resource
management of organisation. The practices followed by him are given below:

 Analysing and Designing of work- Identifying the loop wholes and design the correct
structure.
 HR planning- Allocating qualified employee to right kind of job. HR planning employed
by HR department of organisation.
 Recruiting- Searching for candidate who can fulfil the vacant position. It is employed by
human resource executives of organisation.
 Selection- Hiring and placing candidate according to his qualification. It is employed by
the human resource management of Aldi.
 Training and development- Raising his skills and competencies. It is employed by the
training and development officer of organisation.
 Compensation- Providing monetary benefits according to organisation policies. Both HR
department and Finance department are responsible for employing compensation
schemes.
 Performance Management- Supervising, monitoring and appraisal of employee
performance. It is employed by human resource manager of the organisation.
 Employee relationship- Maintain a cordial relationship between managers and workers.
Illustration 2: HRM practices
(Source: Human Resource Management Practices, 2015)

Human resource practices are very important in organisation (Kavanagh and Johnson, 2017).
From strategic-management to company image, application of HRM practices plays a significant
role. Rationale for HRM practices in Aldi are given below:
1. Strategy- HR practices contributes in formulation of strategies from ground level to top
level of management.
2. Compensation- Monetary and non monetary incentives are analysed on the basis of
experience and performance of employee.
3. Benefits- Like fringe benefits, various allowances, leave benefits, etc. are reasons for
effective HR practices.
4. Safety- Work safety is supervised by human resource management of the organisation. It
is very essential function of the management.
CONCLUSION
From the above report, it has been concluded that human resource management plays
very important function in the organisation. In order to operate in new branch, Aldi has to focus
on the human resource of the organisation. In the context of organisation, it has been found the
various purpose and functions of HRM influence the corporate culture and improves the working
environment. The approaches of recruitment and selection with strengths and weakness shows
the effectiveness between them. From the above report, it is also understood that good
relationship between employer and employee can lead to growth and productivity of
organisation. The employment legislation and employee relationship are correlated with each
other. For long run of organisation both are necessary and important. Application of HRM
practices and rationale of those practices is also evaluated.

REFERENCES
Books and Journals