Strategic Human Resources Management

This report explores the relationship between business strategy and human resource strategy, theoretical perspectives of SHRM, H.R. practices of performance management and reward, and the impact of employee relations. It focuses on Tesco Plc as a case study to understand the implementation of various H.R. strategies and their impact on employee performance.

Strategic Human
Resources Management

Executive Summary
Strategic human resource management is related to managing the employees within an
organisation in such a manner that innovation can be increased in an organisation which can help
it in achieving a competitive advantage in the market. It is important that human resources are
managed effectively through performance management and reward system strategies so that the
performance of employees can be enhanced. In this report, Tesco Plc, which is a British
multinational retailer, is taken so that the impact of various H.R. strategies in a company can be
understood. Also, the impact of employee relations and the role of various actors in maintaining
effective employee relations are also considered in this report so that employee participation can
be increased thereby improving their performance.

Table of Contents
Executive Summary.........................................................................................................................2
INTRODUCTION...........................................................................................................................4
TASK 1............................................................................................................................................4
Explain the relationship between business strategy and the human resource strategy...........4
Critically evaluate the theoretical basis and models of SHRM..............................................5
Explain, critically analyse and inform strategic perspectives of Best fit/Contingency, Best
Practice/Universalist and Resource-Based View, (R.B.V.)...................................................6
Critically evaluate the specific H.R. practices of Performance Management and Reward....6
Make recommendations to propose how your client could design/re-design a performance
management system................................................................................................................7
Task2................................................................................................................................................7
Nature and theoretical perspectives of employee relations....................................................7
Roles of actors within employment relationship....................................................................9
Analysis of changing nature of employment relations.........................................................10
Recommendations................................................................................................................10
Conclusion.....................................................................................................................................11
References......................................................................................................................................12

INTRODUCTION
Strategic human resource management enables an organisation to establish a better
connection between the human resources of the company and the strategies that have been
formulated by them. This brings flexibility and innovation within the organisation with which the
efforts of the employees are integrated with the overall objectives of the organisation
(Armstrong, 2019). By developing a better understanding of the need of the organisation and that
of the employees' chances of more tremendous success of the organisation is ensured. Also, this
facilitates the H.R. department of the company to utilise the talent within the organisation as per
the opportunity identified by them in the market. In addition to this integration of the H.R.
department with other department is ensured effectively as they focus upon establishing better
connection among strategies of the organisation and the employees as per the capabilities and
competence. In this report, the recommendations and understanding are developed for Tesco that
can enable them in accomplishing their goals and objectives. The information includes various
theories and models of SHRM, H.R. practices for performance management as well as reward
management. Apart from this importance of employee relations is discussed in the report along
with the role of actors for the management of the Employment Relationship.
TASK 1
1.1 Explain the relationship between business strategy and the human resource strategy
On the basis of various studies, it has been identified that for the organisation linking of
the business strategy with the H.R. strategy is essential as this enables them in creating a pool of
talent with which they can quickly grab opportunities prevailing in the business environment.
Tesco, by linking their business strategy with their H.R. practices, can take a competitive
advantage over others. With the help of implementation of the SHRM practices the managers at
Tesco can analyse all the opportunities and threats and can accordingly recruit people so that the
influence of the market situation on the capability and competence of Tesco can effectively be
managed. Also, this ensures that the potential of the company is increased by recruiting and
selecting the right talent with better skillset (Fahim, 2018). Along with this clear vision and
business strategy can be developed among the employees due to which they can perform
consistently towards the accomplishment of the aims and objectives.

The linking of H.R. strategy with the business strategy facilitates the company in
managing the culture of Tesco with clear communication and trust. This will further ensure that
the employees become part of the business strategy due to which they become involved in
various aspects of the business due to which levels of trust and respectability between employees
and the management team increases. It brings a positive impact on the overall performance of the
organisation. The confidence so developed will be based on the abilities of the employees as it
will enable them to understand the vision and goals of Tesco. The interlinking of the strategies
facilitates in retaining the employees for a more extended period of time as their active
participation encourage them to contribute as per the planned procedures. Apart from this, the
success of any strategy is based upon the collaboration of the efforts of the individuals and team
where the leaders of Tesco can combine business strategy and H.R.M. processes (Das and
Kodwani, 2018). This will make their employees share their opinions and perspectives to gain a
competitive advantage as they can provide dynamic solutions and recommendations to meet up
the strategic objectives.
1.1.1 Vertical alignment and Horizontal integration are also the business strategy with
the help of which the organisation such as Tesco can expand their market share. With the help of
horizontal integration, they can acquire the similar company within the same industry at the same
point of the supply chain while the vertical integration is associated with acquiring other
companies that are operating after or before them within the same supply chain. Tesco needs to
have capable employees that can manage the burden of change on the company in such a manner
that they have a better supply chain network. Interlinking of both will make them efficient
enough to accept such changes by the employees as they are made part of such strategy
(Hamadamin and Atan, 2019).
1.2 Theoretical perspectives of Best fit/Contingency, Best Practice/Universalist and
Resource-Based View, (R.B.V.)
Various theories and model of strategic human resource can be taken into consideration by the
H.R. managers of Tesco as this will enable them to understand general principles as well as
accepted beliefs. The theories that can be considered by them include:With the help of this
theory the specific knowledge and experience about the firm can be used by Tesco as well as by
the employees so that they can maintain a better relationship with each other by ensuring joint
investment.

Apart from this Ulrich model can be taken into consideration by the organisation such as Tesco.
With the help of this model the emphasis is on the shared activities on the basis of the aim of the
company which can be a strategic focus, process focussed, people-focussed or day to day
operations focussed (Cunningham, 2016). This competency model further will enable them in
making useful and significant shifts from that of strategic management, to administrative, and
human resources so that they can efficiently take a competitive advantage over others in the
market.
Best fit/Contingency,
The organisation has to emphasis on the strategy that is best fit for them as it is a contingency
approach while the best practice is considered to be a universal approach. Tesco must emphasis
on Best suitable strategy as this claim to be useful for the organisation because in this H.R.
strategy is linked with the environment of the business. It further facilitates to explore the link
between the business strategy of the organisation and their H.R. strategy to ensure the vertical
integration in overall business strategy and policies as well as practices of H.R.M. (Jiang, 2016).
Best way may not be that effective to take competitive advantage as it emphasises upon adopting
any policy that can enable enhanced organisational performance, higher productivity, lower level
of absenteeism and turnover etc.
Best fit depends on the reason that picking the best HR strategies and practices relies upon
coordinating them properly to the association's current circumstance. Unforeseen components
affecting the HR approach may include the type of business technology sought, the size of an
association, the type of innovation, geographic area and labor market, managerial skills and
trends, industry sector and financial position . According to Annette Cox (2007) Blackwell
reports online http://www.blackwellreference.com, "A feasibility approach refers to a strategy
for consistent applied dynamics in compliance with appropriate human resources (HR)
procedures and in citing the It is the "most appropriate" approach rather than the "best" approach.
"Best practice is called a global approach because it records the benefits of HRM in all specific
situations.

Best Practice/Universalist
By the time HR practices and exercises are changed and the work associated with the hip, HR
offices can thrive and your organization benefits. Ideal HR provides a holistic and integrated
approach to HR practice and exercises. There are various ways to assess whether someone will
be a real match for the organization, whether as a progressive employee or as a social worker.
While a number of each creative employment cycle will be perfect for your organization, you
can benefit from the organizations that have prepared and provided information to most of us.
Here are a few systems to consider: panel-based interviews and better job advertising.
Resource-Based View, (R.B.V.).
Further, the shift has been taking place towards the resource-based view in which the focus of
H.R. managers is on capabilities of human resources, and its uniqueness as this only can provide
the competitive advantage to the company. With this, Tesco can build a bundle of competent
human resource which can enhance the overall organisational performance
With the help of this theory the specific knowledge and experience about the firm can be used by
Tesco as well as by the employees so that they can maintain a better relationship with each other
by ensuring joint investment.
VRIO analysis is an excellent scientific method to evaluate the body's resources and therefore the
advantage. VRIO is the abbreviation of the initials of the evaluation criteria: Value, Rarity,
Imitability, Organization.
The VRIO study is a development of the PESTLE study (which studies the climate on a large
scale). VRIO is used to examine the situation within the association (effort) - its assets, their
negative effects and their development potential in the particular sector or for a specific resource.
Such evaluation is used, for example, in the critical management of progress in different areas or
for the dynamics of an external or internal circle and the determination of support (for example
the redistribution of choice).
1.3 Critically evaluate the specific H.R. practices of Performance Management and Reward

TESCO follows various practices to measure and improve the performance of the employees.
Those are-
Frequent performance feedback- TESCO uses this practice to ensure that the employees are
working effectively towards the goals. Regular feedbacks reinforce a positive impact on th
employees to work better towards the goal. But this practice has a negative effect; it will create
pressure to do better, which can sometimes give the wrong outcome (Kundu, Mor and Gahlawat,
2020).
Peer review- TESCO uses this as it allows co-workers to praise other co-workers for their
performance and gives scope for improvement. This can sometimes create a lousy reflection as
there may be the awful review which can affect the work of others.
H.R. practice of rewards-
TESCO follows various practices to manage the performances of the employees by way of better
reward strategies. Those are-
Performance-based pay- TESCO uses this practice to motivate employees to work hard, but
this can have a destructive impact as the employee will only work for reward but not for the
organisation which can create hustle between performance and organisation.
Reward for attaining new skill- TESCO uses this for continuously improving the skills of the
employee, which will help them to contribute more efficiently for goals. Its may have a wrong
impact as the employee will only focus on developing a new skill and not on an organisational
objective.
1.4 Make recommendations to propose how your client could design/re-design
performance management system
To improve the overall performance, the focus of the Tesco must be on the developing a better
performance management system as with the help of this they can ensure better capabilities and
competence of their employees' relations (McClean and Collins, 2019). They can re-design their
performance management system, which can include various stages such as:
 Identification of the goals and objectives of the company
 Planning of the SMART objectives on the basis of which roles can be defined, and
accordingly, actions must be taken
 With the help of regular feedback, tracking must be ensured so that various hurdles can
be managed

 Review all the achievements and discussion of the career goals so that improvement can
be ensured for future
1.5 Reward Systems
Employee rewards are forcing employees who are responsible for single execution, group
execution or general association demonstration. These rewards can come in the form of
commission installments, one-time rewards, salary increases, investment opportunities, and
“loot,” for example, corporate limits, game tickets, and additional downtime.
While a rewards framework can involve money, there are many different types of incentives to
help you build a progressive and rewarding team. Below, we take a look at four regular types of
production award schemes.
Monetary Reward Systems
An annual or semi-annual award is the best known type of financial award structure. These mid-
year and end-of-year incentives are great for reinforcing the fierce rivalry between producers
over execution and efficiency. Examples of financial rewards include cash donations, benefit-
sharing plans, and investment opportunities. In many enterprises, the cash-related incentives are
enough to maximize the effectiveness of your employees. This type of payment structure works
best with producers who are motivated by cold, hard cash.
Non-cash reward systems
A non-financial reward framework could be as basic as a "maximum entertainment" or
"employee of the month" qualification. This type of wage satisfies a manufacturer's intent to be
seen for his efforts. Different types of non-financial compensation to consider are additional
downtime, flexible working hours, physical limits (eg, participation in the exercise center) and
free parking.
Employee Assistance Programs
Production assistance programs aim to help employees achieve a better work-life balance by
supporting the physical and mental well-being of manufacturers. Some representative projects

offer physical boundaries related to wellbeing, for example, wellbeing records. Other production
assistance programs help manufacturers transition to work pressures, family problems and pain.
Employee assistance programs are a great way to help employees do their homework so that they
get the best presentation at work.
Employee Recognition Programs
Research shows that manufacturers who are seen for their overall promise and results will work
harder and have more confidence in the work environment. Employee recognition can be as
crucial as verbal or formal recognition. The type of representative recognition that awards can be
relied upon can be awarded every day, week-to-week, or towards the end of the month. Like
various types of pay schemes, employee recognition benefits both the company and the
manufacturer, making the workplace more profitable and positive.
Task2
2.1 The changing nature of employment relations
The nature of work and employment relations is continuously developing so that efficient
working environment can be provided to employees so that they can use their skills and
capabilities in an efficient manner. It is essential that the employment relations are continuously
changed with respect to each of the actor so that development in the market and evolving
technological changes can be included so that employee relations can be improved. This also
helps in enhancing the competitiveness of the organisation in the industry with a significant
difference in employment relations so that employees can use their skills so that the objectives of
the company can be achieved. In order to strategically manage the human resources of an
organisation, it is vital to include changing environmental factors in a company which can help
in utilising employee skills in an effective manner. With increased globalisation, it is crucial that
equal and diverse workforce is promoted within Tesco so that workers can efficiently coordinate
and meet the changing needs and wants of customers (Akinlade and Shalack, 2016). It is also
essential that the minimum wages of employees are increased so that they can be remunerated
effectively for the work performed by them along with considering the inflation rates. This will

help in improving the performance of worker along with maintaining strong relations with them
within Tesco so that its goals and objectives can be achieved on time.
TESCO works with the approach by stating that their success depends on the people who work
with them and their central value lies in their employees, that is, 'treat people as we like to be
treated'. TESCO has become a leading company because it does not even take care of its
customers but also its employees. There is a various mechanism used by the company to
maintain a healthy relationship between employer and employee, which includes employees
feedback surveys, staff question time sessions, etc. Engaging employees in discussions and
decision-making process motivates the employees and creates an environment where they work
freely for the organisation.
The duty to create a healthy employer-employee relationship lies on both as the employee must
try to adjust and compromise to his best with the employer and employer must involve its
employees in debates and discussions for a more positive response. There is a social and
psychological contract between the employer and employee, which helps in filling the bridge of
communication, thereby giving vital results of an increase in confidence and morale of the
employees. The employee-employer relation can be ensured by employee engagement, employee
satisfaction, employee empowerment, etc. There are many perspectives for building the
employee (Rogers, Jiang, Rogers, and Intindola, 2016). The unitary view provides that
employers and employees work as a team for achieving the objective and have an equal
understanding with a similar intention, whereas in pluralist perspective there are different
sectional groups with other objectives, values and interest. They work independently in their own
terms of leadership and authority. Tesco follows both pluralist and unilateral perspective, which
helps in building strong relations within the organisation and the employees feel safe and valued
in their organisation.
National Minimum Wage Act, 1998 etc. are specific laws which affect the employee relations in
the industry along with governing their performance (Zehir and et al., 2016). These laws need to
be followed in Tesco, which will help in maintaining efficient relations with their employees so
that job satisfaction among employees can be increased. Thus the actors in an industry help in

managing useful connections with their employees who also affect the way in which they will
perform their roles and responsibilities in achieving company goals.
2.3 Roles of actors within the employment relationship
Employment relations are related with relations of employees with three different actors that
work in an industry which include employee unions, management and state which affect the way
in which employees in organisations will do along with the rules which will govern their
relations. All these actors play a different role in maintaining employee relations which also
affect their performance and productivity so that they can use their skills and talents in an
efficient manner in achieving the goals of an organisation (Storey, Ulrich and Wright, 2019).
2.3.1 Employees
The employees are the significant assets of the organisation. They work day and night to achieve
organisational goals and objectives. An employer must ensure a healthy working environment
for its employees so that they can work efficiently for the organisation. A healthy environment
leads to an increase in the productivity level of the employee and also motivates the employees
to perform better (Bailey and et al. 2018). A healthy employer-employee relationship shall lead
to better understanding among them which will contribute to attaining common objectives within
the organisation. An employee-employer relationship has a significant impact on the
organisation, if the connection is good, it will ensure an increase in efficiency of workers, and if
the relationship is low, it will have a negative impact on the performance.
2.3.2 Management
Management of Tesco also plays a vital role in affecting the employee relations in the company
by formulating policies that will be beneficial in enhancing their performance by building an
efficient culture and structure in Tesco. With the help of effective management like performance
appraisals, employee engagement etc. so that better employee relations can be maintained. This
also helps in creating an efficient culture in Tesco so that employees can be encouraged to
improve their performance and use their skills in an effective manner. Management of Tesco
thus plays a crucial role in managing effective relations with the employees along with impacting
their performance which also affects the productivity and efficiency of the company in achieving
its objectives.

2.3.3 The unions
The unions help in managing string relations with employees so that they can be unionised and
the interest of employees can be highlighted in front of the management which can affect the
wages, fringe benefits, total compensation, pay inequality and workplace protections. Within
Tesco, the trade unions help the employees in raising everyday demands which give them voice
and power in the organisation and also help them in resolving issues related to their growth and
development. This help in enhancing job satisfaction among employees so that they can use their
skills in achieving company goals in an efficient manner.
2.3.4 The state
The state also affects the employment relationship in an industry as it is responsible for
formulating various rules and regulations that must be followed by the companies so that the
employees can be regulated under legal pursuit. This helps in protecting the rights of employees
along with preventing them from exploitation which is essential in enhancing their productivity
and performance in organisations. Various legislations like Employment Rights Act, 1996;
2.4 Recommendations on the mechanism of employee participation and employee voice
can help in improving the performance of employees as this will improve employment relations
within Tesco. Through increased involvement of employees in decision making, the employees
can be given a chance to come up with their ideas and views related to a particular decision. This
will improve their confidence level as they will become encouraged through the inclusion of
their thoughts and opinions so that influential work culture can be created for them, thereby
enhancing their performance. Also, this will help in giving voice to employees so that they can
use their skills and talents in an effective manner in achieving company objectives efficiently.
Also, with the help of increased employee engagement the creativity among employees can be
improved, which can also help in boosting innovation in products and services offered by the
company thereby satisfying changing needs and wants of customers.
2.4.1 Employee's participation and involvement
The employee's participation and involvement decrease the chances of conflicts and create an
environment which is worthy of working. Nowadays, to maintain a healthy relationship,

grievance and disciplinary mechanism have been introduced to ensure that dispute is settled at
the same place, and employers can provide the employees that their rights are protected from
exploitation. Regular communication between the employees and employer can bring clarity in
working structure and reduces the chances of conflict of opinion as one can convince the other if
they develop a healthy understanding with each other. So one of the biggest reason for the
success of TESCO is the healthy employer-employee relationship which makes is distinct from
other organisation.
2.4.2 Employee Voice
Employee voice is the way in which individuals present their views to their manager and
influence the issues that affect them at work. It helps to build openness and confidence in seeing
someone among the leaders and their friends who can increase ranking success. For leaders, a
strong voice drives progress, profit, and hierarchy development. For producers, it consistently
leads to higher performance, more impact and better open doors for improvement.
Conclusion
From the above report, it can be said that managing human resources in an organisation in a
strategic manner is essential so that their capabilities can be directed towards achieving company
goals in an efficient way. It is crucial that business strategies are aligned top human resource
strategy, which will help in improving the performance of employees. Performance management
and reward system can be included in the organisation which can enhance the performance of
employees. Various actors also affect employee relations in an organisation which must be
efficiently managed so that employee performance can be improved.

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