Strategic Human Resource Management: A Case Study of Tesco

This study examines the strategic human resource management (HRM) practices of Tesco, a leading multinational retailer. It analyzes Tesco's HR policies and practices against theoretical concepts such as high commitment HRM, best fit HRM, and hard and soft HRM. The study also explores the impact of external forces, as identified through a PESTLE analysis, on Tesco's HR strategic decisions. Finally, it analyzes how Tesco's HR function is organized and how HR policies and practices are delivered, comparing Tesco's approach to Ulrich's model of HRM.

BUSINESS STRATEGIC HUMAN RESOURCE MANAGEMENT
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Table of Contents
Introduction........................................................................................................................3
Task-1................................................................................................................................4
An analysis of HR policies and practices within the organisation(s) against selected
theoretical concepts, e.g. High commitment HRM (HCHRM), best fit HRM or hard and
soft HRM............................................................................................................................4
Task 2................................................................................................................................8
Analysis of external forces (Pestle Analysis) and its effect on HR stratetegic decisions in
an organisation..................................................................................................................8
Task 3:.............................................................................................................................10
An Analysis of how the HR function is organised and how HR policies and practices are
delivered:.........................................................................................................................10
Conclusion.......................................................................................................................12
Recommendation.............................................................................................................13
Reference List..................................................................................................................14
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Introduction
Business strategic human resource management is the process which focus on achieving the
objectives in terms of hiring and developing resources, improving the quality of work
environment and business performance as well as working in a collaborative manner in an
organisation. It provides a clear structure of an organisation. It also helps to find out the strength,
weakness, threats and opportunities. In addition to it this process helps in taking business
decision and formulating business strategies. The focus is to use various HR techniques for the
benefits of employees and organisation, to understand the competitors. The chosen company for
the following study is Tesco. This study will cover the HR policies and practices of organisation
as a whole and analysis of external forces and hr functions. This will also cover the effect of
Pestle analysis on HR strategic decisions. The study provides the utilities of Ulrich's model
which shows how policies and practices are delivered.
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Task-1
An analysis of HR policies and practices within the organisation(s) against selected
theoretical concepts, e.g. High commitment HRM (HCHRM), best fit HRM or hard and
soft HRM.
A successful policies and practices strategy can identify organisation's need as well as make it
more competitive using various advanced training, development and research program.
According to Ahmad (2015), the different human resource policies adopted by organisations
must be easily understood and followed consistently.
 Regulatory policies:
This policy includes the strict regulations and guidelines for employment, payment to employees
and overtime pay.
 Leaves and absence Policies:
There must be certain policies for granting leaves to employees which include the number of
leaves and their types must be followed.
 Flexible working hour policies
The kind of flexible working hours must be communicated to employees
 Reimbursement Policies
An organisation should create a clear policy when and the employees can get paid back.
Organisation must develop some HR practices to encourage the employees and people
outside the organisation:
 Communicate the interview process and tips.
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 Pre-employment background check
 Must be clear regarding the salary and other compensations.
 Taking real time feedback from current employees.
HR policies and practices against the following theoretical concepts:
High Commitment HRM Hard HRM Soft HRM
This consists of hr practices which
mainly focus on the labour
turnover, reduce in absenteeism,
improving quality of products and
customer services ( Ahmad, 2015).
This focuses on treating
employees as a resources of
business accordingly
business plans are made.
This focuses on treating
employees as part of business
as well as sources of
competitive advantage.
Features:
 Best manpower hiring
 Conducting improved
training and development
programmes.
 Work life balance
 Team management
Features:
 Short-term changes
in employee
numbers
 More recruitment
and retain more
staffs.
 Appraisal systems
focus on making
judgments about
staffs.
Features:
 Long term work force
planning
 Employees are
encouraged and
empowered to do more
work.
 Appraisal systems
focus on finding the
developmental needs
of the employees.
Overall needs of the staffs are
identified through this practice.
Here staffs are motivated to
pay.
Here staffs are motivated to
use more techniques in their
work and to become more
skilled.
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Tesco has introduced high commitment hr policies which offer training and development of to
all categories of employees. As it works in a competitive market so it focuses how their products
will available easily around the global market. Their motto is to increase the quality of client
service as well as customer satisfaction. In order to fulfil this Tesco analyzes the future needs of
people in terms of variety, number and location. And ultimately this can be achieved through
recruitment, training and market research. Tesco has a development program where employees
can select program of their choice.The company has an annual survey program for staffs where
they can give their feedback regarding the work culture of the firm. (Brewster, 2017).
Tesco has a need of high skilled and right employees for right position. So that the entire
process can be easily operatedsmoothly.According to Ahmad (2015), the employees are divided
into 6 levels.
 Work level 6:- To know the goal of Tesco.
 Work level 5:- To achieve the overall performance the Tesco.
 Work level 4:- Managing the work process.
 Work level 3:- To run the operation.
 Work level 2:- To manage the front level employees.
 Work level 1:- Dealing and handling customers.
Advantages of HR practices in Tesco:
 Motivates employees to work in a challenging environment: Its sole purpose is to give
more and better client service, (Brewster, 2017).
 Provides a frame work for decision making: It aims at client satisfaction which has a
impact on success and growth of the organisation.
 Provides an organisational position: Strategic decision helps the organisation to make
position in global market
Disadvantages of HR practices in Tesco:
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 This can be expensive: In Tesco management invests a high cost for the development its
employees.
 Immediate consequences may not be achieved: HR policies are implemented with a hope
of long run benefits. It’s not possible for an organisation to get immediate result.
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Task 2
Analysis of external forces (Pestle Analysis) and its effect on HR stratetegic decisions in an
organisation.
In this present scenario, most of the retails organisations are facing rough challenges to expand
the trade in the selected marketplace and additionally the marketing strategy. Through effective
pestle analysis assessment the company can easily assess the macro environmental factors and
develop their business strategies. According to Zalengera et al., (2014), pestle analysis is a
marketer tools to analyse the external environmental factors that have a major impact on an
organisation. The result of pestle analysis is used to identify threads and weakness. Pestle
includes political, economic, social, technique, environmental and legal factors. There are many
external factors that may affect the strategic planning of an organisation. By understanding these
external forces the organisation can maximize the opportunities and minimize the threads. This
concept explains the fundamental of techniques and explores its strength and weaknesses. Tesco
is a multinational British company, headquarter in UK. It is the third largest company in the
world in terms of profit, and revenue. (Newton,2014)
Political factors: Tesco Company operating more than 12 countries including Asia and Europe.
There are many political factors that may affect the company. These include tax rate, act of
legislation and stability. The government of UK has recently adopted a tax measure that may
affect the company; the government of UK increase the vat rate from 17.5 % to 20 % to
maximize the revenue of the government. However this affects the company’s revenue in
negative way.
Economic factors: Tesco are paying high attention to the economic policy of the country as they
directly affected the company’s revenue policy. The UK government has officially declared
under the recession the government’s reduction in interest rate increase the unemployment rate.
The positive aspect of recession is the customer eats out less and eat more at home that provides
opportunity for the retailers company’s like Tesco.
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Social factor: the social factor around the world is different for different country. As different
people belongs from different background or different nation tend to exhibit different behaviour
and culture, each of these issue should be consider in planning for the betterment of the
company.
Technological factors: According to Vintilă et al., (2017), technology is the major external
environmental variable that influenced the Tesco products. The new technology benefits both the
company and the customer. Technology gives new technique to Tesco to improve their product
quality. The company and the customer both are benefited by the new techniques. Due to this
customer satisfaction rises.
Environmental factor: There has been tremendous pressure on many companies and manager
of UK Company to understand their responsibilities towards the betterment of the society. A new
legislation has been created on fatty foods. These may directly affect the Tesco product range,
that has been adopt to increase the relationship between the suppliers and the customer (Hillson
and Murray-Webster, 2017).
Legal factors: government legislation and policies may directly affect the performance of Tesco.
The present competitors in the market may give the thought price war and requirement for the
different product (Ho, 2014).
While companies go through strategic planning process their aim is to review the components of
PESTEL. A firm’s success depends on these components. In order to expand the trade in the
marketplace, Tesco needs to consider the political scenario, as well as the economical scenario.
Strategic planning helps a company to gain success as well as to expand its business. It enables
the firm to enter into new market and to introduce new product. This strategic planning directly
and indirectly affects the profitability of the firm and to gain a continuous success in a long term
basis. It also helps the firm in achieving a global brand name. The PESTEL analysis emphasizes
on how firms conduct their research and accordingly implement those research ideas for the
needs and demand of the customer.
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Task 3:
An Analysis of how the HR function is organised and how HR policies and practices are
delivered:
Analysis of organisation of HR functions
The role of HR is one of the most important because human resource is pivotal in the
development of any organisation. The HR planning as done is the case of TESCO is primarily
based on the identification of the requirement of workforce, numbers, skills and locations related
to the role. These requirements are mainly met through recruitment and training the
workforce.This is in accordance to the HRBP concept of Ulrich’s model as well, because the role
of finding out the right talent is a very crucial task and the organising of the recruitment process
is crucial. Talent planning is done to fill the vacancies from within the company.
At the later stage, the assessment is done and screened in candidate are then given Team-working
activities. The selected candidates are then called for interview which is conducted by the
respective line managers. At this point it is a challenge for the HR managers and line managers
to scrutinize the candidates effectively and make the best recommendation according to the job
requirement.
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Figure- Ulrich’s Model of HRM
(Source- Becker, 2016)
Ulrich and Brockbank (2016), put forward that the workforce already employed in the company
also needs to be constantly motivated and made aware about the changes in the company policies
and takes the initiative to make them achievable by the employees.
 Continuous feedback from the employees is also pivotal in the healthy running of the
production and productivity of the organisation.
 The changes and the reforms are introduced with ease and this HR change agent acts as
the interface in this process.
Labour laws, employee reforms and the safety rules etc. are taken care by the HR departments
well. In this case, the administration is handled by the experts who are pivotal in identifying
solutions to the issues related to labour laws, and takes the responsibility of trade union
bargaining, dealing with difficult employees (Nadiv et al., 2017). The complete database of the
total workforce is safe with the HR dealing in the administration.
A difference in the HR policies between Ulrich’s model and Tesco can be observed in the way
the safety and healthy concept is implemented. The safety at work and safe working practices are
crucial in any organisation (Parent, 2015).
 Tesco has a dedicated People Safety Department. It has post-graduate safety
professionals who are well-trained in handling in the mishaps if occurring in the
organisation.
 Tesco being the Chartered Members of the Institute of the Institute of Occupational
Safety and Health (IOSH) take the idea of health and safety very seriously.
The Tesco way of advocating employees and employee interests lies majorly in the idea of equal
opportunity to all the caste, race, and religion. As opined by Hussain (2016), the Tesco PLC
board ensures that diligently the employees have a fair chance of moving up in the roles and
responsibilities. The Ulrich’s model is basically focussed on the strategic and operational focus
on people and process.
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Conclusion
The above study on the strategic HRM practices gives very good understanding of the way HR
functions in an organisation. The HR practices are in accordance with the Ulrich’s model in
some cases. The core values in the HR practices of Tesco in the Safety and Recruitment
department is somewhat different in the case of comparative analysis.Extensive training, learning
and development of the workforce as an outcome of effective HR practices.An efficient line
management style and person-job fitment. Also, the various policies related to hard HRM, Soft
HRM and High commitment HRM and the theoretical concepts have been discussed in detail.
Moreover, the political, social, economic factors regarding the policies and decisions of the
HRM also affect the overall growth and sustainability of the organisation as a whole. All these
factors and scenarios in total give the whole picture of the roles and responsibilities of the
Human Resource Management and its efficiency.
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Recommendation
 Recruitment based on the structured line management by involving the contemporary
workforce to recommend the fitment for the job role.
 Referral system can be implemented hand-in-hand with the recruitment process.
 Awareness activities by partnering with safety regulatory bodies to promote safe working
practices.
 Partnering with labour unions and labour law authorities to strategize the common benefit
of the employees.
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Reference List
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Brewster, C., 2017. The integration of human resource management and corporate strategy.
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Hillson, D. and Murray-Webster, R., 2017. Understanding and managing risk attitude.
Routledge.
Ho, J.K.K., 2014. Formulation of a systemic PEST analysis for strategic analysis. European
academic research, 2(5), pp.6478-6492.
Hussain, I., 2016. The HR activities performed by “Grow n Excel” & its significance.
Nadiv, R., Raz, A. and Kuna, S., 2017. What a difference a role makes: Occupational and
organizational characteristics related to the HR strategic role among human resource
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Newton, P., 2014. What is the PESTLE Analysis?.
Parent, D.J., 2015. HR Infrastructure & Safety Performance: Considerations for Small
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Reference list : Zalengera, C., Blanchard, R.E., Eames, P.C., Juma, A.M., Chitawo, M.L. and
Gondwe, K.T., 2014. Overview of the Malawi energy situation and A PESTLE analysis for
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ECONOMIC, SOCIAL, TECHNOLOGY, LEGAL AND ENVIRONMENTAL (PESTLE)
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