Impact of Strategic HRM on Firm Performance

The provided content comprises a selection of academic articles and book chapters on human resources management (HRM). The topics covered include the relationship between HRM practices and firm performance, strategic HRM, electronic HRM, knowledge management, innovation, employee commitment, and corporate strategy. The summaries and analyses of various studies and theories provide insights into the effectiveness of different HRM approaches in enhancing organizational outcomes.

Human Resource Management

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Difference between personnel management and HRM........................................................1
1.2 Function of HRM..................................................................................................................2
1.3 Role and responsibility of line manager at Harrods..............................................................3
1.4 Impact of legal and regulatory framework on Harrods HRM...............................................3
TASK 2............................................................................................................................................4
2.1 Reasons for human resource planning in Harrods................................................................4
2.2 Stages of the Human resource planning process...................................................................5
2.3 Recruitment and selection process in Harrods and Tesco.....................................................6
2.4 Effectiveness of recruitment and selection process..............................................................7
TASK 3............................................................................................................................................8
3.1 Link between motivation theory and reward........................................................................8
3.2 Process of job evaluation and other factors determining pay...............................................8
3.3 Effectiveness of reward system in different context.............................................................9
3.4 Methods used by Harrods to monitor the performance of employees................................10
TASK 4..........................................................................................................................................10
4.1 Reasons for the cessation of employees of Harrods............................................................10
4.2 Employment exit procedure of Harrods and Tesco.............................................................11
4.3 Impact of the legal and regulatory framework on employment cessation arrangements....11
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................13

INTRODUCTION
Human resource management is the process which is helpful in increasing the efficiency
of employees. These type of roles are generally played by HR. Main functions played included in
human resource management are providing direction to employees, recruitment, retention, etc. In
addition to this, they also provide training, knowledge, coaching, management and legal advices
(Gong, Chang and Xin, 2009). Present report is based on a case scenario of Harrods which is a
retail firm. Further, it covers the difference between personnel management and human resource
management. Covers the process which is involved in recruiting employees and understanding
the importance reward in motivating and retaining employees.
TASK 1
1.1 Difference between personnel management and HRM
Basis Personnel management Human resource management
Definition This concern with the work force and
their relationship with the entity.
HRM focus on the most effective use
of manpower to achieve the
organisational goals.
Approach It is traditional management for
managing people in the organisation.
It is modern approach which is used
by Harrods to managing people in the
organisation.
Pay In this management system, payment
is done on the basis of job evaluation
(fixed grades)
HRM at Harrods use performance
evaluation payment system.
Treatment of
manpower
PM system using it manpower as
machines or tools and this system
assumes people as input for achieving
desired output.
HRM use its manpower as assets of
the organisation and this system at
Harrods assumes people as an
important resource for achieving
desired output.
Job design In this management system job design
is done on the basis of division of
Under this management system at
Harrods, job design is done on the
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labour. basis of group or team work.
Focus Personnel management focuses on
increased production and satisfaction
of employees.
HRM focuses on effectiveness,
productivity and employee's
participation.
Decision
making
At personnel management speed of
decision making and regulating is
slow.
In HRM at Harrods, decision making
and regulating is fast.
Type of
function
It is a routine function. HRM is a strategic function.
1.2 Function of HRM
It covers all aspect of developing and motivating employees for attain their individual
goal as well as organisational goals as well. Some of Harrods HRM functions are as follows;
1. Recruitment and selection:- Recruitment is an important activity of selection of right
people, at the right place and at the right time (Armstrong and Taylor, 2014). Harrods
recruiting people by seeing their ability of customers handling. This programme help
company to get effective resources for fulfilment of its objective. The organisation
attracts new employee who are suitable at particular work profile. Through selecting right
people at right place, organisation's main aim is to utilize its resource in effective manner.
2. Development:- Harrods supports and promote training and education programs to their
employees. This programme gives employees the skill and knowledge to perform their
task effectively. Company give them support they need on different range of training
programmes. The organization also provide training to its experienced employees whose
job is to be change in the future (Martocchio and Laio, 2009). Through this development
programmes Harrods prepare its employee for performing higher responsibility within the
organisation. This helps employees in maximum individual development.
3. Motivation:- Harrods focus on motivate its employee through making flatter structure and
by giving more responsibility so that employee get opportunity by taking further
responsibility for getting job satisfaction. To encourage its employee Harrods create an
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environment in which employee can make decision on their level. Company encourage
its employee to give feedback on every operation that how Harrods can do better.
1.3 Role and responsibility of line manager at Harrods
The line manager are reporting person of individuals or teams to which they directly
report. Line manager have responsibility of directly managing individuals or teams. Line
manager play a vital role in organisation and have set of responsibilities at such as;
1. People management:- Line manager's responsibility is to managing, providing support
and direction to the employee. Manager's main focus should be on getting the most
efficient output from an employee (Becton and Schraeder, 2009). Line manager at
Harrods are encourage communication and advice to employee through face to face
interactions.
2. Organisation work allocation and rotation:- Line manager at Harrods identify the
employee's strength and accordingly work allocate to them so it helps in getting better
output. At Harrods line managers rotate employees from one task to another, which
involves periodically changing job and work area to develop new skill in different work
area of the company. Cross departmental rotation help employees in personal
development.
3. Checking quality:- Line manager's role at Harrods is to check quality of work, that is it up
to the mark or require some improvement (Snell, Morris and Bohlander, 2015). It is
responsibility of line manager to provide appropriate training and resources to the
employees which necessary require to complete task.
4. Dealing with customers/clients:- Line manager's responsibility is to provide training to its
employees, that how to deal with customers/clients. Harrods give high importance to its
brand value and it reflected in how employees behave with customers so it is essential for
line manager to make aware its employees about how to treat clients.
1.4 Impact of legal and regulatory framework on Harrods HRM
There are various law which must be consider during recruitment process which cover
law related to discrimination and equality of opportunity and some other ethical issues. These
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frameworks can impact on Harrods human resource management in different ways, some of
them are described as under;
1. Equal employment opportunity:- It is an employment practice where employer do not
engage in employment activity which is prohibited by legal authorities. It is illegal for
employers to discriminate any applicant on the basis of age, sex, colour, religion and
nationality (Bae, Rowley and Sohn, 2012). If this type of discrimination happen in
Harrods, it will affect company's brand value in the market.
2. Equal pay:- It concerns with equal payment for equal work at same work place. Under
this law both men and women are entitled to equal pay. All form of payment are covered
under this law including salary, overtime, bonuses, allowances, etc. Harrods follows this
law for better payment structure and to reduce conflict between employees and
employers.
3. Employment relation:- These aspects cover employment agreements, rights of trade
union and workplace training and development. These laws give rights to trade union to
demand their rights from organisation (Guest, 2011). They can demand for increase in
salary and for facility improvements to the employer company.
TASK 2
2.1 Reasons for human resource planning in Harrods
The main aim of human resource planning is to achieve all the goals and objectives of
employees requirements. It is an important process which is helpful in developing business
operations and strategies. There are many reasons for human resource planning. Following are
few of them:
Ensuring availability of human resource: It is helpful in ensuring the availability of employees
in order to have a smooth run of the organization (Love and Singh, 2011). In addition to this,
they also ensure the availability of future requirement for the human resource in terms of kind
and number. In simple words, they make sure that the operations which are held in the
organizations are effectively done by ensuring that the performance of human resource who are
involved in operations.
Choosing effective employees: Skilled and energetic employees are very essential so that firm
can provide better services to its customers. Human resource planning is important for selecting
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the most efficient candidate during the recruitment process. Enthusiastic and hard working
employees will contribute effectively and efficiently in achieving the organizational goals and
objectives.
Improving the efficiency: This planning is helpful in knowing the skills which are required in
each level (Jackson, Schuler and Werner, 2011). By understanding the weaknesses of each
employees, then they are given training so that they could improve and enhance their skills so
that they could work with their full capability.
Effective human resource utilization: Human resource is helpful in measuring the requirements
of the employees and accordingly selecting individuals who would suit best in fulfilling those
organizational requirements (Akhtar, Ding and Ge, 2008). Harrods will get highly benefited in
hiring employees who would help them in attracting more and more customers.
2.2 Stages of the Human resource planning process
Human resource planning is a process through which appropriate individual can be
selected of the right job. There are various stages involved in the human resource planning of
Harrods with the help of which they can achieve better results. Following are the steps involved
in human resource planning process:
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Analysing the organizational objectives: Objectives which has to be achieved should be
determined. It includes all the fields or the departments which are involved like marketing,
operational, financial, production and sales. Firm should prepare the objectives and the goals for
each of the departments.
Inventory of present human resources: All the employees who newly hired of recruited
analysed, according to their capability, potential and performance. This is done in order to fill up
the various job requirement.
Forecasting the demand and supply of human resource: All the employees should be place in
the job requirements in such a way that they fulfil all the requirement. Job given to them should
have a match the individuals job specification (Bondarouk and Ruël, 2009). Hired person should
be capable to perform the vacant job efficiently and this is only possible when the job description
matches the job specification.
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Illustration 1: Human resource
planning process
(Source: Steps in human resource
planning, 2010)

Establishing the manpower gaps: In this the firm should determine the drawback which the
employees have. It is possible that the workers do not understand their roles and responsibilities,
in order to understand the roles and in enhancing their skills employees should be given training.
It will be helpful in improving their performance and in enhancing skills.
Formulating the human resource action plan: This plan is helpful in knowing the surplus or
deficit of the organization. Deficit means the employees are in excess and they have to terminate.
On the other hand, surplus means employees are required more. Accordingly, the firm can plan
that they need to provide training, recruit more employees in case of deficit. Or they should
terminate, adopt schemes like redeployment in case of surplus.
Control, monitoring and feedback: According to the human resource plan the employees are
allocated. Firm should monitor them so that they could analyse them and could know the
efficiency level (Chen and Huang, 2009).
2.3 Recruitment and selection process in Harrods and Tesco
Organizations adopt different types of recruitment methods. The main aim of all the firm
is to get the best employee who could contribute effectively in achieving the organizational goals
and objectives. According to the case give Harrod follows a simple process in recruitment.
According to the process followed by Harrod, candidates can apply directly giving their resume
to the organization or visiting their companies website. Among those applications received, firm
will select the best candidate according to the qualifications. Selected candidate will be called for
personal interview through mail (Foot and Hook, 2008). Then they will be asked to write a
written test which will help the management to get to know the strength and weaknesses of the
candidate. Candidates who pass this test are call the for the personal interview in which the HR
manager will ask question in order to know the capability and skills which the candidate possess.
HR will make sure that the skills which the candidate possess dose suits the vacant job. After the
personal interview of candidates who were selected after the written test, HR will select the best
candidate who possess all the skills and knowledge in order to perform effectively for the vacant
position.
On the other hand, Tesco which is a retail firm headquartered al London. They focus on
hiring employees who would contribute to the growth of the organization. Similarly, like Harrod,
they also select the candidates who applied directly or through using the official Tesco website.
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According to their qualification, candidates will be selected. Selected employees are directly
called for the personal interview (Hendry, 2012). In the personal interview which is taken by HR
will ask questions which would help him know the skill, knowledge and capabilities of the
candidate. After these processes the best candidate is selected who will suit best for the vacant
position.
2.4 Effectiveness of recruitment and selection process
Both the techniques adopted by Tesco and Harrod are effective. Both the technique are
helpful in selecting the best candidate who will suit the vacant position. Magazines, newspapers,
advertisements, etc. are few recruitment methods. With the help of these techniques the firm will
be able to promote their vacant job. Both the firm use mailing as their main source of promoting
job vacancies which is very effective as mostly all individuals regularly check their mail
(Lengnick-Hall and et.al., 2009). One of the main objective of the both the firm is to hire skilful
candidate's who will use their skills and knowledge in order to achieve the organizational goals
and objectives. Through this recruitment and selection process the firms are able to fulfil their
objective. On of the main problem arises when the HR makes mistake in selecting the capable
candidate. This increases the expense of the firm as the selected candidate is not capable them
then in order to provide then training or in selecting a new candidate, the firm will have to spend
more.
TASK 3
3.1 Link between motivation theory and reward
Motivation is process which is helpful in changing the behaviour of the employees in a
positive sense and encourages them to perform more effectively and efficiently, this is possible
when all the needs are requirement of the employees are fulfilled. On the other hand rewards are
provided to the employees so that they get motivated and work beyond their capability are get
rewards (McClean and Collins, 2011). Giving rewards are one of the best for motivating the
employees. There are many motivational theories which are helpful for the firm in motivating the
employee's. Rewards are very helpful in motivating and in encouraging the employees which
boosts them so that they work more effectively. Mostly there are two forms in which the firm
gives rewards the employees, which are: Intrinsic rewards and Extrinsic rewards which are very
helpful in motivating employees.
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Extrinsic rewards: It is related with providing the employees with, bonuses, pay/salary,
promotions, fringe and benefits.
Intrinsic rewards: It is not physical a physical gift. In fact it is related to providing employees
with autonomy, empowerment, recognition, appreciation and getting challenging tasks.
Harrod can modifying their employees performance by providing them with adequate rewarding
system in accordance to their performance of the employees (Purce, 2014). The management
should aim on providing both extrinsic rewards and intrinsic rewards. Both types of rewards
should be given equal importance. With the help of this the firm can see a significant change on
their performance. From this it is clear that employee's motivation has a significant impact on
providing them rewards which is helpful in increasing their efficiency in the work they perform
3.2 Process of job evaluation and other factors determining pay
Job evaluation can be determined as a process which is helpful in analyzing and assessing
job in a systematic way in order to understand the relationship with the organization. Following
are the steps which are involved in job evaluation:
Job analysis: It is helpful in determining the all the required information related with the
various aspects of job (Sharma, 2013). It can be understood with the help of two dimensions
which are as follows:
Job description: In this includes all the detailed information regarding the work conditions,
duties, roles and responsibilities which has to performed by the employees.
Job specification: In this it includes all the skills, knowledge and abilities or qualification which
are required in order to qualify for the given post.
Job rating: In order to know the job description and specification different methods are
available. Methods used in this process are ranking, point rating factor comparison, etc.
Money allocation: This is the process in which the pay status is for each of the job is described.
In other words, it is the arrangement of rewards or compensation for each job in accordance with
its worth or value (Mayhew, 2015).
Job Classification: In this process it categorizes the job according to the pay scale. It is the final
step of job evaluation. For example, jobs which are paid low will be placed al last and highly
paid job will be listed at the top.
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3.3 Effectiveness of reward system in different context
Reward is very helpful in boosting up the moral of workers so that they can perform
beyond their full limits. By providing employees with rewards, the organization can get
numerous benefits through employees as it is very helpful in encouraging and motivating. In
addition to this, firm will be able to achieve their desired objective and goals easily. Following
are few effectiveness which the firm gets with reward system:
Workers retention: Workers who are given frequent rewards by the organization tents to stay
long and contribute effectively in achieving the goals are objectives of the organization.
Rewards boosts up the employees moral and also provide a sense of satisfaction (Susan, 2010).
Conducting programs for reward: Reward program should be conducted so that at that point of
time they work hard in order to perform efficiently.
Reduce expenses: Rewards are helpful in building the up the total budget structure and total
amount can be calculated as the expenditure incurred by the organization. Mostly firm has to pay
highly on the each employees which can be compensated by giving the employees rewards.
Measures performance: Reward are helpful in measuring the performance level. As the
employees are given rewards according to their performance and that particular employee will
get the reward only when he will perform better than the last time, so in this way the
performance level can be measured (Armstrong and Taylor, 2014). The desire of achieving
reward will make him perform more effectively.
3.4 Methods used by Harrods to monitor the performance of employees
There are many ways through which performance of the employees can be monitored.
Following are the ways through which Harrods can measure their employees performance:
Quality of Work: It is one of the important indicator which are helpful in measuring the
performance of the employees. Employees how work complete their task effectively and that
also without any error are employees who work with high quality. This type of employees are
very helpful in contributing to their organization (Martocchio and Laio, 2009).
Personal observation: Managers of the Harrods should observe all the employees and should
note down their strength, weakness and capabilities. It is very helpful in knowing the
improvement level and the areas which they lack. For the areas which the employees lack can be
given training which will help them in enhancing their skills.
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Self-monitoring tool: Managers should guide their employees with the help of different tools
like project plans, activity logs and checklist. This will be helpful in knowing that they are able
to complete task on time or not. This also help them in knowing the exact time which they took
in completing the task and through this they will be able to improve their quality of work by
working hard the next time (Snell, Morris and Bohlander, 2015).
TASK 4
4.1 Reasons for the cessation of employees of Harrods
There are various reasons for cessation of employment at the mentioned workplace and it can
either be from the side of employee or from employer side. These are discussed underneath;
From employee side: When employee is not able to work properly and facing issue in settling at
the workplace then it certainly ends up with leaving of job. Further, low pay and monetary
benefits is another concern that leads to cessation. In addition to it, poor motivation is another
reason in this context that affects the employment (Love and Singh, 2011). Apart from it,
excessive work load and pressure also affects the mental state of employee at Harrods and this
certainly leads to cessation.
From employer side: When performance and efficiency of employee is below standard than
management takes decision to terminate that employees so that cost of the company can be
reduced. Additionally, if employee deals into dual employment then it also results into cessation.
Further, when employee behaviour towards work is not positive then it also leads to cessation.
Beside this, any criminal case against the employee is another valid reasons for cessation. In
addition to it, negative attitude of employees at Harrods also leads to cessation after giving
certain number of warming.
4.2 Employment exit procedure of Harrods and Tesco
Going through the company's procedure employees need to plan their resignations.
Employees of Harrod write directly to the highest authority regarding the resignation. High
authority take immediate actions on the resignation given by the employee. After this step they
calculate the total amount which has to be paid to the employee and which is included in the
salary (Jackson, Schuler and Werner, 2011). The firm also provide them with experience letter. It
states that their particular employee has worked for these many years. In addition to this, when
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ever an employees wants to resign, he/ she need to do it before one month. After one month the
employee's will be given reviling letter. Till one month the employee need to give training to that
employee who will be doing the vacant job.
4.3 Impact of the legal and regulatory framework on employment cessation arrangements
There are many legal and regulatory frameworks related to employees cessation.
According to Employment right Act 1996, employee who wishes to leave the organization
should give the firm resignation at least one month before (Bondarouk and Ruël, 2009). Further,
in case of termination firm can take legal actions against the employee who do not take give the
firm at least one month before he leaves the firm. All the legal and regulatory frameworks highly
affects the employees as well as management team of the organization.
CONCLUSION
With the help of this report, it can be state that HRM is one of the significant part of
management that aids in boosting the performance and productivity of employees. Through this,
employees can be motivated by offering different types of rewards such as monetary and non
monetary rewards. These aids in attaining the business objectives of Harrods in an effectual
manner.
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REFERENCES
Books and Journals
Gong, Y., Law, K.S., Chang, S. and Xin, K.R., 2009. Human resources management and firm
performance: The differential role of managerial affective and continuance commitment.
Journal of Applied Psychology. 94(1). pp.263.
Armstrong, M. and Taylor, S., 2014. Armstrong's handbook of human resource management
practice. Kogan Page Publishers.
Martocchio, J. and Laio, H., 2009. Research in personnel and human resources management.
Emerald Group Publishing.
Becton, J.B. and Schraeder, M., 2009. Strategic Human Resources Management: Are we there
yet?. The Journal for Quality and participation. 31(4). pp.11.
Snell, S., Morris, S. and Bohlander, G., 2015. Managing human resources. Cengage Learning.
Bae, J., Rowley, C. and Sohn, T.W. Eds., 2012. Managing Korean business: Organization,
culture, human resources and change. Routledge.
Guest, D.E., 2011. Human resource management and performance: still searching for some
answers. Human Resource Management Journal. 21(1). pp.3-13.
Love, L.F. and Singh, P., 2011. Workplace branding: Leveraging human resources management
practices for competitive advantage through “Best Employer” surveys. Journal of Business
and Psychology. 26(2). pp.175-181.
Jackson, S., Schuler, R. and Werner, S., 2011. Managing human resources. Cengage Learning.
Akhtar, S., Ding, D. Z. and Ge, G. L., 2008. Strategic HRM practices and their impact on
company performance in Chinese enterprises. Human resource management. 47(1). pp.15-
32.
Bondarouk, T. V. and Ruël, H. M., 2009. Electronic Human Resource Management: challenges
in the digital era. The International Journal of Human Resource Management. 20(3).
pp.505-514.
Chen, C. J. and Huang, J. W., 2009. Strategic human resource practices and innovation
performance—The mediating role of knowledge management capacity. Journal of
Business Research. 62(1). pp.104-114.
Foot, M. and Hook, C., 2008. Introducing human resource management. Pearson Education.
Hendry, C., 2012. Human resource management. Routledge.
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Lengnick-Hall, M. L. and et.al., 2009. Strategic human resource management: The evolution of
the field. Human Resource Management Review. 19(2). pp.64-85.
McClean, E. and Collins, C. J., 2011. High‐commitment HR practices, employee effort, and firm
performance: Investigating the effects of HR practices across employee groups within
professional services firms. Human Resource Management. 50(3). pp.341-363.
Purce, J., 2014. The impact of corporate strategy on human resource management. New
Perspectives on Human Resource Management (Routledge Revivals). p.67.
Sharma, M., 2013. Human Resource Management. Lulu. com.
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Susan. M., 2010. What is human resource management. [Online]. Available through:
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