Importance of HRM Practices in Business

This report highlights the importance of Human Resource Management (HRM) practices in business, focusing on how they contribute to organizational growth and development. Effective HRM is crucial for achieving business goals and objectives, and skilled employees can be hired through external and internal sources. The report also emphasizes the significance of employee relations and how it benefits both employers and personnel. Various HRM practices such as training and development, compensation and benefits, orientation are discussed, along with their impact on business operations.

HUMAN RESOURCE
MANAGMENT

Table of Contents
INTRODUCTION ..........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Various purpose and functions of human resource management......................................1
P2 Strength and weakness of different approaches of recruitment and selection..................2
TASK 2............................................................................................................................................4
P3 Benefits of different HRM Practices ................................................................................4
P4 Effectiveness of different HRM practices in terms of raising organisational productivity
and profit ...............................................................................................................................6
TASK 3............................................................................................................................................7
P5 Significance of employee relation ....................................................................................7
P6 Key elements of employee legislation .............................................................................8
TASK 4............................................................................................................................................9
P7 Application of HRM practices..........................................................................................9
CONCLUSION..............................................................................................................................11
REFERENCES ...............................................................................................................................1

INTRODUCTION
Human resource management deals with managing and controlling manpower of an
organization in a structured and through manner so that they can achieve pre-defined goals and
objectives within stipulated time frame (Armstrong and Taylor., 2014). It involve recruitment &
selection, training and development, compensation and benefit, performance appraisal etc. It also
assist in formulating effective HR policies and strategies related with satisfying diverse needs
and wants of employees. This selected organisation for this report is ALDI which is a leading
discounted supermarket chain located in Essen, Germany. The aim of this report is to determine
various purpose and function of human resource management, strength and weakness of different
approaches of recruitment and selection, benefit of HRM practices, key employment legislation
and lastly effectiveness of different practices of human resource in terms of raising
organizational productivity and profit.
TASK 1
P1 Various purpose and functions of human resource management
The HR department of any organisation is primarily responsible for managing and
controlling labour resources in an optimum manner so that all business activities can be carried
out effectively and efficiently. It mainly covers the field of hiring, retention, payroll setting,
performance management, change management, training and development and taking of exist of
workers from the company to round off activities. Employees are considered as the main asset of
business entity and thus it is primarily important to protect their diverse needs and wants and
promote welfare so as to retain them for longer period of time. As human resource is directly
related with manpower needs, thus the department is mainly responsible for effective designing
and execution of various procedures, policies and program that benefit both company and its
employees at large. ALDI's is currently operating in more than 20 countries which means each
country is having its own distinctive HR department who co-ordinate with each other just to
ensure that each of its outlet get skilled and competent labours and earn higher profits and
revenue (Berman and et. al., 2012). Some of the common purpose of Human resource
Management are listed below:
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 Effective utilisation of resources: One of the primary purpose of HR department is to
allocate and utilize resources in an optimum manner which enable company to fulfil
diverse needs and wants of target customer in an effectual manner (Boella and Goss-
Turner, 2013). ALDI stores gained popularity for its unique store layout which means
they need to ensure that all products must be place properly so that customers can easily
find them.
 Recruitment: The main purpose of every association is to earn maximum profits and
achieve pre-defined business goals in an effective manner. However in order to
accomplish these purposes company needs to employ skilled and competent workforce
who work incredibly hard towards achieving these purposes.
 Employee Relation: Open and healthy working environment encourages strong
relationship exist between manager and their sub-ordinates that makes much easier for
ALDI to attain pre-defined goals within stipulated time frame.
In addition to that, certain functions of HRM also discussed below:
 Training and Development: It has been believed that trained employees yield higher
profitability ratio for the company. Therefore, it is primarily important to provide
adequate training and development to workers that makes them more productive and
efficient and also aid in their personal growth and development as well. ALDI is
conducting training and development session for its employees on frequent basis so as to
make them more competent.
 Orientation: It is quite difficult for an employee to adjust themselves in new
environment. Therefore, every enterprise arrange orientation or induction program for
new candidates so as to make them familiar with the company.
P2 Strength and weakness of different approaches of recruitment and selection
Recruitment refers to the process of attracting ample number of candidate and stimulate
them to apply for job in the respective organisation. Basically, it deals with searching skilled and
talented candidate for a company. On the contrary, Selection deals with choosing most suitable
candidate from the pool of applicants who all have applied for the given job vacancy in the
company (Boselie, 2010). It refers to the procedure of selecting most competent and appropriate
candidate for the company who with their effective skills, knowledge and ability achieve
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organizational goals and objectives in a structured and through manner. Recruitment can be
classified into two categories one is INTERNAL and other is EXTERNAL.
Internal Source of Recruitment: It means when candidate is selected within the company only
such as promotion, transfer etc. Various strength and weakness of Internal source of recruitment
are mentioned below:
Strength:  Develop strong and long lasting relationship with employees
 Reduce loss of work
 Cost of recruitment is economical
 Increase employee morale
Weakness:  Chances of creating conflict among existing workers
 Limit the choices
 Lack of fresh talent
 Promotion generate another vacancy in the company which means
hiring one candidate results in recruiting two employee.
External source of recruitment: This method deals with recruiting suitable candidate from
outside the company such as Walk-Ins, campus placement, employment exchange, advertisement
etc. Following are the strength and weakness of external source of recruitment:
Strength:  Outside people brings more creative ideas
 Main advantage is selecting best candidate from the pool of
applicants.
 Fresh talent have wider chance of experience.
 Environmental adaptability
Weakness:  High cost
 Possibility of selecting wrong candidate
 Consumer extensive time and energy
Since ALDI operates in more than 20 countries, every year they give employment opportunities
to large number of people and thus undertake both internal and external source of recruitment
and selection approaches.
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TASK 2
P3 Benefits of different HRM Practices
Human Resource Management include practices that is mainly related with the welfare of
employees and results in making them more effective and productive (Boxall and Purcell, 2011).
Some of the common HRM practices that ALDI deals in covers recruitment, firing, training and
development, payroll, employee benefits and incentives etc. It is difficult to manage HRM
practices in a systematic manner without effective organizational co-ordination. HRM practices
play key role in improving the knowledge of managers and personnel that help them in attaining
both personal and organisational objectives in an effectual manner. Following are the benefit of
different HRM practices for both employee and employer are listed below:
HRM practices Employees Employer
Learning, development and
training practices
Employees that are newly
recruited can easily improve
their skills and ability which
further aid them in performing
their job in an appropriate
manner. It also enable them to
learn how to deal with
different situation.
In context of employer,
training can assist them in
enhancing their existing talent
or skill which enable them to
contribute more effectively
towards achieving business
objectives and goals. Also it
assist in formulating better
future strategies and policies.
Flexible working environment It is important for ALDI to
provide flexible working hour
to its workers that motivates
them to work incredible hard.
For employees, it lead to
increase the feeling of personal
control over work environment
and schedule, providing
flexibility to employees by
reducing overloading and
In context of employers, it
help in increasing their morale,
reduce absenteeism, decrease
employee turnover rate,
increased the ability to hire
outstanding employees and
build long-lasting relationship
with company and its
followers.
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reduces the chances of traffic.
Payment and Reward System Paying attractive salary to
employees help ALDI in keep
them motivated and retain
them for longer period. It also
help in increasing their overall
personality.
In case of employers, attractive
salary and perks retain
employer usually for longer
period. In addition they start
putting much efforts towards
achieving business goals and
objectives. It also assist in
maintaining healthy work
environment in the workplace
that automatically improves
employees productivity as
well.
Employee performance
management and monitoring
By monitoring the
performance of workers on
constant basis, company can
effectively increase the overall
performance and productivity
of employees. One of the main
objective of this HRM practice
is to strengthen the skills,
knowledge and ability of
newly appoint candidate so
that they can carried out task
in structured and through
manner. Also by monitoring
the performance of workers,
manager can keep an eye on
their overall performance.
With the help of monitoring,
employer can adequately learn
additional things that help
them in becoming extra
ordinary or superior from
other.
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P4 Effectiveness of different HRM practices in terms of raising organisational productivity and
profit
Different practices of HRM proves to be effective in context of raising organizational
performance and productivity. Such practices covers training and development of employees,
appraisal system, health and safety, compensation and benefit, healthy working environment etc.
These practices contributes significantly towards achieving organizational goals and objectives
in an effectual manner (Daley, 2012). Also it help in increasing the morale of employees &
reducing employee turnover rate. As ALDI is a leading retail discounted super market chain that
operates in more than 20 countries which means that large number of workers are working with
ALDI that help them in meeting customer requirement in an effective and efficient manner.
However, for managing and controlling all personnel together, they need to implement various
Human Resource Management practices that motivates them and inspire them to work incredibly
hard towards achieving task within stipulated time frame that has been assigned to them. In
addition to that, it also help in putting positive influence on overall productivity and profit of
respective firm. Implementation of different HRM practices in a proper manner assist firm in
achieving higher profit by following prospective:
Innovative and High Performing worker: Proper execution of HRM practices promotes
innovative environment in the company that help in increasing employee motivation. ALDI is
providing healthy working environment that encourage their workers to carried out their task or
duties in an appropriate manner. Also it help in maximising employee productivity and yield
higher revenue for the firm as well.
Setting effective direction and its execution: The main role of HR Department is to formulate
effective goals, policies, purpose, duties and objectives that mainly provide direction and
guidance to ALDI's employees so that they can perform assign task in structured and through
manner. It is important to put right candidate on right job based on their knowledge and skills.
ALDI is assigning task to employees on the ground of their competency and education so that
they can yield maximum profit and revenue for the company.
Effective reward drive performance: Performance of a worker is directly linked with rewards
and benefits as it possess huge impact on employee overall work performance (Gospel and Sako,
2010). Therefore, it is essential for every company to acknowledge the work done by its
personnel by paying them attractive salary and perks that keep them motivated and long-lasting
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with the company. ALDI is paying attractive pay roll to its employees on the basis of their work
performance which encourage them to work more effectively and efficiently. In addition, it also
aid in improving the overall performance of workers. When company value employee and their
work by providing them extra reward in terms of incentives and bonus makes them feel more
satisfied and dedicated towards the company (Heizer, 2016).
Non-monetary factors: There are various other factors that cannot measured in terms of money
can be termed as non-monetary factors. It normally include sense of recognition, achievement,
learning opportunities, praise,challenge etc. ALDI is providing non-monetary benefits to its
workers that leads to raise their energy, motivation, loyalty and dedication towards work. In
addition to that, effective utilization of such factors aid in generating higher profitability ratio.
Updating skills of workforce: In modern era, strong competition prevails in the market and in
order to deal with market competition, it is essential to create a big pace of change. Simply it
means updating or modifying skills, knowledge and ability of an individual on frequent basis that
makes them highly productive and competitive in comparison with others. The HR Department
of ALDI determine skills needs of employees and provide them training and development
accordingly. Providing training as per employee's skill help in making them more productive and
efficient. As a result, overall profitability and revenue of the company increases tremendously.
TASK 3
P5 Significance of employee relation
Every individual share special bond or relationship with their followers or sub-ordinates.
They viably interact with each other so a decent relationship can be maintained among them. An
interactive working environment helps in expanding inspiration among representatives which
can't be estimated in money related terms (Hoque, 2013). Opinions of employees encourages
supervisor in taking compelling choices. Thus, in ALDI, it is exceptionally fundamental that a
decent relationship is keep kept up amongst administration and representatives. Great
coordination and collaboration among them helps in fulfilment of an organizational objectives in
a successful and effective way. Importance of employee relation is discussed below:
Easy working: If connection amongst administration and employees is great, at that point
working turns out to be simple in an association. It diminish work load on single individual and
guarantees auspicious completion of pre-defined task. In ALDI, managers delegate roles and
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responsibilities on the basis of their skills and knowledge so that, coveted objectives can be
accomplish on time. Great connection between representatives increment their cooperation in
exercises of firm and aides in basic leadership of chiefs.
Reduce conflicts among manpower: Good relations between workers drops down the odds of
emerging clashes. It advances coordination and collaboration among specialists. They believe
each other and work all things considered towards accomplishment of shared objectives. In
ALDI, representatives consider their kindred individuals not as contenders, but rather as partners.
It encourages supervisor in settling on better choices and results in higher profitability.
Employee Loyalty: Interactive and wonderful work surroundings of ALDI encourages in
creating steadfast workforce. They play out their doled out obligations energetically as they feel
spurred as a result of good connection between them. A sound work surroundings contributes a
considerable measure in development and accomplishment of organization. It urge
representatives to put their entire undertaking in accomplishing goals of firm and lead it towards
high benefit and profitability.
Ensure equality by good communication: Managers of each association ought to guarantees
that correspondence must be powerful. It helps in creating equity at working environment as it
guarantees employee that there is no segregation happens inside big business in any point of
view. It increment inspiration level of specialists and advance solid condition at work
environment (Jiang and et. al., 2012). It straightforwardly impact their execution and empower
them to play out their obligations viably. Legitimate correspondence framework helps human
asset administrator of ALDI in taking powerful and right choices on time.
P6 Key elements of employee legislation
There are certain kind of employment protection measures which are being taken for
employment legislation following by every company like ALDI. Certain measures which can put
up the certain kind of limit on hiring and firing of workers. Below described are some of
common factors of employment legislation which ALDI has been following: Equality: This kind of factor can be stated as highly essential factor for every kind of
company who is dealing within marketplace. This has to be made sure that the labour
resources in optimum manner along with cost effective (Marchington and et. al., 2016)
.ALDI has the need of giving out equal kind of opportunities for all the workers without
making any kind of discrimination on certain grounds like gender, race, religion and
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many more. Support is being given out for having healthy kind of relationship among
workers and personnel. Along with this, it is highly essential to pay fair kind of wages
and thus retain them for long tenure. Data Protection: In this act, no confidential data can mainly be shared by employees of
the respective company with nay kind of third person or any kind of party who has no
link with company. If there is any illegal act, then appropriate action will taken. Hence, it
is very necessary for the company like ALDI to be careful and thus use the data in
specific and fairly related with the stated kind of purpose (Mok and et. al., 2013). Health and Safety Measures: As per this kind of legislation, it is highly essential for
every kind of company for protecting the interest of the employees which in turn can give
out various kind of facilities which can give out benefits which gave them in physical and
mentally. Example can be taken up of ALDI company which has mainly shown their
concern for the employees of company regarding the healthy working environment which
mainly includes the cleanliness, washing and drinking facilities, training and
development sessions along with protective equipment etc.
 Wages and Remuneration: According to this act, every organisation has the duty towards
paying equal and fair wages as per the level of performance. There should be rewards
which should be given as per the extra efforts which should be made for attaining aims
and objectives of company effectively.
 Working Condition: It is very essential for a company to conduct positiver and healthy
working environment which in turn can give motivation for giving out high level of
performance and attain objectives in effective manner (Nickson, 2013).
TASK 4
P7 Application of HRM practices
Some of common HRM practices that has been used by ALDI is discussed below:
Job Specification: It is statement usually prepared by concerned department that requires new
candidate. It normally outlines roles and responsibilities related with current job opening,
minimum qualification required, requirement of skills etc. It also describe minimum qualification
require for current opening.
JOB SPECIFICATION
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Organisation name:- ALDI
Job Title:- Assistant finance manager
Qualification:- Preferably MBA OR PGDM specialize in finance
Essential criteria:-
 Complete daily targets within given time period.
 Maintenance of financial data in proper and systematic manner.
 Handle all complex problems and issues in an effectively.
 Deep knowledge and understanding of all accounting policies.
Desirable criteria:-
 Minimum experience of 3 years required.
 Effective intellectual and communication skill.
 Adequate knowledge about current financial situation in the market
Job Description: It is a general document that signifies duties, roles and responsibility of a
person related with specific role or position. It include all essential aspects that needs to be
taken into consideration while recruiting and selecting new candidate.
JOB DESCRIPTION
Organisation Name:- ALDI
Division:- Finance department
Location of job:- London, UK
Summary of Job:
ALDI is looking for skilled and knowledgable person who effectively fulfil all requirement and
roles of Assistant Finance Manager. Candidate must proper understanding and knowledge
about all financial instrument, policies and measurement on basis of which they will carry out
task appropriately. .
Roles and responsibilities
 Compliance of all laws and regulations related with finance.
 Maintaining peace and harmony in work environment.
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 No sharing of financial data with any third party.
CURRICULUM VITAE
Curriculum Vitae
Name:- xxx
Address:- xxx
Contact No:- xxx
Profile Specification:- Require a PGDM or MBA holder specialise in finance stream, having a
minimum experience of at-least 3 years or more. Candidate must be effective communicator
with adequate knowledge of all accounting principles and techniques.
Specialisation:- Must hold degree in finance field
Working experience with reputed finance firm
Educational qualification: -
 Bachelor in Commerce Masters in Business administration specialization in finance sector
Declaration:
I hereby declare that all the above information provided is accurate and best of my knowledge.
Date:
Place:
CONCLUSION
According to the above mentioned report it can be concluded that the growth and
development of any business association depend upon how effectively their employees are
working or contributing towards achieving organisational goals and objectives. Skilled and
talented employee can be hire through both external and internal source of recruitment. In
addition to that, there are different HRM practices such as training and development,
compensation and benefits, orientation that provide benefit to both employee and employer on
vast level. Also it aid in carrying out all business activities and operation in a structured and
through manner. Further it also highlighted importance of employee relation which is very
crucial and beneficial for both employer and personnel.
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REFERENCES
Books and Journals
Armstrong, M. and Taylor, S., 2014. Armstrong's handbook of human resource management
practice. Kogan Page Publishers.
Berman, E. M. and et. al., 2012. Human resource management in public service: Paradoxes,
processes, and problems. Sage.
Boella, M. and Goss-Turner, S., 2013. Human resource management in the hospitality industry:
A guide to best practice. Routledge.
Boselie, P., 2010. Strategic human resource management: A balanced approach. Tata McGraw-
Hill Education.
Boxall, P. and Purcell, J., 2011. Strategy and human resource management. Palgrave Macmillan.
Daley, D. M., 2012. Strategic human resources management. Public Personnel Management.
pp.120-125.
Gospel, H. and Sako, M., 2010. The unbundling of corporate functions: the evolution of shared
services and outsourcing in human resource management. Industrial and Corporate
Change. 19(5). pp.1367-1396.
Heizer, J., 2016. Operations Management, 11/e. Pearson Education India.
Hoque, K., 2013. Human resource management in the hotel industry: Strategy, innovation and
performance. Routledge.
Jiang, K. and et. al., 2012. How does human resource management influence organizational
outcomes? A meta-analytic investigation of mediating mechanisms. Academy of
management Journal. 55(6). pp.1264-1294.
Marchington and et. al., 2016. Human resource management at work. Kogan Page Publishers.
Mok, C., Sparks, B. and Kadampully, J., 2013. Service quality management in hospitality,
tourism, and leisure. Routledge.
Nickson, D., 2013. Human resource management for hospitality, tourism and events. Routledge.
Purce, J., 2014. The impact of corporate strategy on human resource management. New
Perspectives on Human Resource Management (Routledge Revivals). 67.

Sparrow, P., Brewster, C. and Chung, C., 2016. Globalizing human resource management.
Routledge.
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Functions of HRM. 2017. [Online]. Available through: .<https://www.keka.com/5-major-
functions-human-resource-management/>
Role of Managers in Employee Relationship. 2018. [Online]. Available through :
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