Tesco Strategic HRM Analysis

This assignment involves a strategic analysis of Tesco plc, focusing on its human resource management (HRM) practices. Students are required to evaluate Tesco's HR strategies based on the provided texts and online resources, including 'Contemporary Human Resource Management – Text and Cases' by Redman and Wilkinson, 'Managing People in the New Economy' by Thite, and others. The analysis should cover strategic human resource management, business strategy, organizational effectiveness, and performance improvement. Special attention should be paid to Tesco's HR strategies in relation to its competitive environment and the influences on its overall performance.

Human resource management

CONTENTS
INTRODUCTION.......................................................................................................................................1
1. PURPOSE AND SCOPE OF HRM.....................................................................................................1
P1 Purpose and the functions of HRM, applicable to workforce planning and resourcing......................1
P2 Strengths and Weaknesses of TESCO in terms of recruitment and selection.....................................2
2. EFFECTIVENESS OF THE KEY ELEMENTS OF HRM.................................................................3
P3 Benefits of different HRM practices in Tesco for both the company and workers.............................3
1. Guest’s model of HRM.................................................................................................................3
2. The triple-headed approach.........................................................................................................3
3. Flexible working practices...........................................................................................................4
P4 Efficiency of different HRM practices in TESCO in terms of raising revenue and output.................4
3. INTERNAL AND EXTERNAL FACTORS AFFECTING THE DECISION MAKING OF HRM....5
P5 Significance of employee relations in influencing HRM decision making in Tesco...........................5
P6 Key fundamentals of employment legislation and its impact on HRM decision making....................6
P7 Application of HRM practices in TESCO..........................................................................................6
CONCLUSION...........................................................................................................................................7
REFERENCES............................................................................................................................................8
BIBLIOGRAPHY.......................................................................................................................................9

INTRODUCTION
To cater with the growing needs and competitive market, the organizations are keen to
perform tremendously. However, the dreams cannot be achieved without the intervention of
people (Redman and Wilkinson, 2001). Thus, here comes the significance of effective human
resource management. HR practices like managing the performance of the workers, skills of
employees, work requirements which are some or the other way related with the overall goals of
the business always considered as the challenge or the company (Mabey and Salaman, 2000).
Therefore, under the current study we will through some light on how human resource
management system and its practices affect the overall organizational purpose, productivity and
decision-making. The corporation taken under consideration in this project is TESCO. It is
considered as the biggest multi-national food retailers worldwide.
1. PURPOSE AND SCOPE OF HRM
P1 Purpose and the functions of HRM, applicable to workforce planning and resourcing
The main perseverance of human resource department of any organization is maintaining
relation with the employees. The main responsibility of this department is to hire and fire staff as
and when it is necessary or the company (Armstrong, 2006). In addition to this, it is also liable to
offer services to the staff. The primary question rise among the managers of the human resource
department is how to increase the performance of the employees so as to maximize the output.
Thus, we can say that HRM act as a binding force between the employees and the organization.
In many establishments most of the facets such as compensations, policies, the culture within the
company and governance are improved, enforced and retained with this department (Tesco
company profile. 2004). Consequently, human resource development is annex within any
association, whether it is a governmental concern or a private company.
The corporation taken under consideration in this project is TESCO. It is considered as the
biggest multi-national food retailers worldwide. Tesco sells groceries, fresh foods, food products
and general merchandise at suitable locations in almost every part of the world (Koutsochera,
2012). As its operations are reaching the international boundaries, management, planning and
resourcing the workforce plays an integral role. The business has also insinuation of the novel
information technology which has helped the human resource department brought down a
service which has minimum risk accompanied with the cost effective strategies and policies of
human resource management systems. Workforce planning and resourcing in TESCO is very
structured and at the same time is very flexible too. The approaches of training and development
are being familiarized with the individual needs of the employees. The firm is linked with the
VAK (Visual, auditory and kinesthetic) leaning theory in order to implement the auditory
approach for store based jobs. They also try to give shadow of the “Honey and Mumford
learning theory” to their employees through there specialize training and development programs.
The company’s growth is highly linked with the synchronization of the staff and their corporate
objectives.
Talking in regards with the recruitment and selection process of Tesco, it heavily relies on
planning of the workforce for the purpose of facilitating their staffing and selection. TESCO has
very clear job descriptions as well specifications of the person in order to fill up the vacancies
through internal recruitment (Tesco Competitive Analysis 2005, 2011). The performance of the
employees is being managed by similar identical process as in the goal setting theory. The
organization also has many reward objectives which in turn helps them to keep their staff highly
motivated and contented. Some of their reward systems are:
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 A unique approach towards the workers like offering them privilege cards
 Giving them personalized annual report
 Awarding them for their long services
P2 Strengths and Weaknesses of TESCO in terms of recruitment and selection
Tesco is known to be the largest private sector proprietor, which is operating nearly in 13
nations outside the United Kingdom. There is increasing demand in the numbers of both non-
stores as well as store-based (Beardwell, I. and et al., 2004). Furthermore, to meet out the goals
of the organization, the team of the human resource department has to make sure that there is
adequate number of employees in the right department and position and at the right time. They
need good amount of workers both at the managerial and operational level. As Tesco is growing
with a high a pace, here it becomes necessary for them to have planning in regards with the
workforce in terms of skills, numbers and locations.
Internal methods adopted by Tesco
Throwing light towards the internal recruitment and selection process of TESCO, they
make use of different approaches such as retired officials, transfers, promotion, temporary
shifting, contractual employees and many more to fulfill their vacant job positions. For this
purpose, they list down the workers who wish to move or needs to be promoted. If there is no
one in the list than the department advertise internally through intranet.
Strengths Weaknesses
The internal recruitment approaches that
TESCO adopts are very cost effective
As HR department already knows the strengths
and weaknesses of the employees, it will
hinder the company not to have new ideas from
outside
Internal recruitment helps the HR department
to cut the cost of recruiting employees from
outside
Through internal recruitment, there might be
limited number of applicants
Less training, development and orientation
required
Employees who are not promoted will be
demotivated
External methods adopted by Tesco
The company also makes use of external recruitment method for selecting the candidate
for the required job. They advertise their vacancies in number of methods such as media, campus
placement, advertisements, magazine, television and radio. The Suitable candidates are selected
through interview and assessment centers tests as well as by using job description and job
specification.
Strengths Weaknesses
Makes easy for the applicants to get the right
type of job at right time and place
Every time it is not considered as cheap to
advertise in magazines as well as television
Application process is very simple As the company post job vacancies online, the
applicants are not encouraged to apply
Helps in increasing the productivity External recruitment is very expensive and will
increase the cost, as it involves long process
Last but not the least, stronger level of The process of external recruitment of TESCO
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commitment of workers towards the company might not be so effective in order to get the
right personnel
2. EFFECTIVENESS OF THE KEY ELEMENTS OF HRM
P3 Benefits of different HRM practices in Tesco for both the company and workers
The current section generally deals with the general HRM strategy and practices of
TESCO. As the company has presence almost in every part of the world, it becomes imperative
for the managers to formulate the feasible human resource plan for the purpose of managing the
employees (Bennett, 2014). Some of these practices are as follows:
1. Guest’s model of HRM
The HR department of Tesco follows the Guest’s model. As per this mode, the strategy of
the HRM is segregated under five different stages like HRM practices, HR outcomes,
performance, behavioral as well as the financial outcomes (Koutsochera, 2012). Through this
model the employers are getting increased productivity, innovation power and quality and the
desired outcomes. Overall it is helping in eradicating the negativity in the organization.
Figure 1 Guest's model of HR management
2. The triple-headed approach
At present, Tesco’s HR strategy revolves around the communication as well as
consultation, training and development of workers, rewards and benefits allied with the
accomplishment of targets (Rose and Kumar, 2006). Over the years, the triple-headed approach
to human resource management is quite fruitful and has supported the company to retain,
motivate and recruit the best professionals. The company also undertakes its training and
development program quite seriously and also assures the workers ‘an opportunity to get on’.
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Their main motive of developing employees is having a labor force which can help and serve
customers better. If the managers effectively understand the culture, they can work better
(Zellars and Fiorito, 1999). Furthermore, under this head, the personnel are also provided
appropriate training in relations with their job skills.
3. Flexible working practices
In order to have good relation with the workers, TESCO is encouraging its employees to
work near their homes. This practice is being initiated under the “green initiative”, which in turn
rendering the supportive help to the firm in minimizing the fuel costs and traveling time spent
(Boxall and Purcell, 2011). In addition to this the company also provides freedom of transfer to
the workers for retaining the efficient employees. Thus, by adopting these HRM practices,
Tesco is leading towards creating a healthy working environment.
P4 Efficiency of different HRM practices in TESCO in terms of raising revenue and output
In today’s era the need of effective human resource management practices and its
implementation has gained quite importance (Peng, 2009). Human resource practices like
managing the performance of the workers, skills of employees, work requirements which are
some or the other way related with the overall goals of the business always considered as the
challenge or the company (Ferris and et.al, 1998). Thus, Tesco makes sure that every single
worker must have a key role to play in their growth and prosperity. If the roles and responsibility
of employees are clear, they can actually work better. TESCO is the biggest and one of the oldest
companies in the super chain market. The firm has started its operations in 1919 and now it is the
major leaders in the global market. The organization has rolled out many strategies pertaining to
human resource through which they were successful enough in increasing their productivity and
overall organizational profit (Tesco plc, 2018). In the last year, the profit of the company rose
more than 20%. This figure has helped TESCO to set a record of 2 billion and has helped them in
setting a new milestone for UK business. Some of the implementation of the HRM that has
helped in achieving the huge profits is as follows:
 Advanced and high performing workers- The human resource department of the company
follows guest’s model due to which the employees are clearly stated about the HR,
behavioral, performance and financial outcomes of the firm. They clearly know their
target and thus work towards the accomplishment of the following.
 Rewards and recognition- If the workers are appreciated for their work, it tends to create
a positive impact on the overall working patterns (Price, 2007). They feel associated and
in turn give their best potential to achieve the goals of the organization. A sense of
belongingness arise in their intellect and they a connection between them and their
employer.
 Effective level of communication with respect to team and individual goals – It is
undoubtedly considered as the most essential part in each and every level of work (Thite,
2004). Unless and until the individual as well as the group goals of the company are not
clearly stated or communicated, it becomes very difficult for a person to work upon
towards the right direction.
 Maintaining the productivity by updating the employee’s skills- If any company wants to
succeed, it is very significant for them to arrange for the proper training and development
programs time to time (Dessler, 2000). Innovation is the key to succeed in this
competitive environment and for achieving this revolution it is very important for them
update their employees with the latest technology.
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 Non-monetary factors- Not every single employee is motivated only through monetary
factor. There are certain things other than money which boost up the morale and
motivation level of the employees. TESCO has many reward and recognition schemes,
appreciation, discounts to the staffs, holiday homes, allotment of shares, membership etc.
3. INTERNAL AND EXTERNAL FACTORS AFFECTING THE
DECISION MAKING OF HRM
P5 Significance of employee relations in influencing HRM decision making in Tesco
There is a certain kind of relations that each and every employees at the workplace shares
with their fellow members. As humans are not machine which works upon just a start of a
button, there comes the need of talking, discussing the ideas and sharing things with each and
other. Thus, we can say that an individual needs people all around, as it cannot work all alone
(Datta, Guthrie and Wright, 2005). It is quite imperative that people in the organization work
together in order accomplish the desired goal. Apparently, it is significant that workers share
healthy relations among themselves.
Talking in regards with the TESCO, with over a quarter of the grocery store, it is among
the largest multiple supermarkets in the state. The company also has enduring union recognition
agreement with USDAW, the union claims density in stores and the shop workers union amid 60
and 70%. Furthermore, the firm has also signed the partnership agreement with the “union of
shop” as well as distributive and allied workers (USDAW) in the year 1998, however, at present
it is under the process of review and they have just signed a corporation agreement with the
administrative arm for their 600 call centers employees. In the middle of the year 1990, the
company started realizing the benefits of securing the employees commitment by the practice of
communication as well as involvement (Overview of Tesco Deals and Charges, 2016). In this
regards, they have proven an involvement director who makes sure compliance related to legal
developments in the field of employee relation. Moreover, it was also apprehended that the
present union as well as management agreements are not favorable in order to get out the
efficient output from the workers. Because of the changing external environment, especially the
appointment of a labor government dedicated towards a partnership approach, the thinking of
Tesco’s HRM has significantly move forwarded.
Tesco has also decided to revise and review their relationship with the USDAW and
thereby formulating a long term agreement related to partnership (Doorewaard and Benschop,
2003). In the year 1997, the union as well as human resource management of the company
reached agreement on 9 pillars of partnership and is as below:
 Training – Employees of Tesco gets training in relation with the industrial relation,
employment legislation, best practices, culture and value and terms and conditions. In
addition to this they also receive about the personal skills development.
 Representation – All the staff members are given opportunity to put forward their views
in the staff forum (Farquharson and Baum, 2002). They can give their opinions towards
the elected representative. Further, the forum is challenging and it is not confronting.
 Understanding the issues – Encouraging employee is essential to raise the issues and at
the same time understanding the issues, listening and acting when it is appropriate.
 Consultation – Under this head the firm has all its right to take decision about their
business by taking the consent of the union. The union must have say in the
management of impact of change (Grundy and Brown, 2003). There are many areas
under which the employees and HRM jointly undertakes any decision are performance
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of the firm, health and safety, competition, acquisitions, grievances procedures,
discipline and pensions.
 Focused towards business – For better performance of the business, it is very important
to acknowledge the employees about the change. And union of the company is also
positively participating in understanding the management as well as role of change.
 Communication – It is the duty of the HRM to pass on information pertaining to any
developments about the business to its workers.
 Culture and values – Under this it is utmost important to underpin the partnership and
work together in order to meet out the needs of the company’s staff members and
customers (Hall, 2002).
 External influences – For providing the opportunities to the employees, they must
promote USDAW and retailing as a career for people.
 Conscience – The Company, union and individual is required to fulfill its social
responsibility and must ensure that they will live up to their values and culture.
P6 Key fundamentals of employment legislation and its impact on HRM decision making
Like any other organization, Tesco is also significantly maintaining the employment
legislation for existing and new workers that has a significant impact on the choice making of the
human resource management. Some of the elements of employment legislation are:
 Health and safety act 1974 – Under this act, the HRM has organized many medical
sessions for their staff members in order to maintain their occupational health policies
and practices.
 Parental leave 2009 – Further down this contract adoption, paternity and maternity leaves
laws are included. Many benefits are available to the workers as per their eligibility
requirements (Walker, 2001).
 Working time regulation 1998 – All the staff members are required to know about their
timings of work. They must know their daily as well as weekly working hours to carry
put a particular task. Employees can work overtime when the time demands, however
they must be paid compensation for the same. This distribution of time will support the
human resource management to take better decisions (Mabey and Salaman, 2000).
 Performance management program – Many regulations and laws are formulated for the
welfare of the employees. However, it has been observed that the workers are not fully
satisfied with these laws and hence, the productivity is affected. Because of this, the
HRM of the firm has planned to implement the new program known as “Performance
management program”. The new program is based upon the work, role as well as the type
of appraisals of the employees (Joyce and Woods, 1996). In this regards, they have also
implemented 360 degree feedback system for the purpose of acquiring knowledge about
the issues of the workers.
P7 Application of HRM practices in TESCO
The Human resource management practices at Tesco have gained significant credibility
over the past few years (How to Write a Strategic Analysis for Business Organizations, 2018).
Moreover it has gained popularity in regards with the impact it has on the performance of the
organization. Application of HRM practices such as reward system and its effects on TESCO’s
work related context are as follows:
 Recruitment and Selection – The recruitment and selection policy of the company has
divided the workers as per the work place context such as blue collar and white collar
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workers. Those employees who are blue collar are involved into labor jobs and carries
out major tasks from their own hands such as workers, low-level staff in the store etc. On
contrary to this, white collar workers performs their tasks in office setting and are skilled
such as managers, store officials etc. TESCO adopts different process of recruitment for
both these types of employees and same is for the reward system. White collar people
gets reward based on their performance level and blue-collar people gets other benefits.
 Training and Development – Talking in reference with the application of training and
development practice within Tesco, they plan training and development events according
to the needs and requirements of their employees. For this they determine the need first
and then plan accordingly. For the store based training, the company has implemented
VAK i.e. visual, auditory and kinesthetic) auditory learning theory. They have many
specialized training programs to empower the employees with more skills and
competence.
CONCLUSION
After reviewing many facets of the human resource management system and its practices,
it is clear that it plays imperative role in the organizational productivity, fulfillment of the
purpose and decision making (Chhabra, 2001). TESCO’s long term strategy is effectively
focusing on valuing the workers training and is also, integrating the same into the culture of the
company. Further, a competitive edge is also achieved through this approach. Hence, we can say
that the company has been successful in the global market through their interventions and
reviewing of the HRM practices. Although, this cannot be considered as the only factor catering
to their success, certainly it is the combination of TESCO’s management, marketing strategy that
helps the business to lead.
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REFERENCES
Books and Journals
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Zellars, K.L. and Fiorito, J., 1999. Evaluations of organizational effectiveness among HR
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