International Human Resource Management: A case study of Tesco

This report presents a case study of Tesco to demonstrate the importance of international human resource management in the retail sector. The report concludes with some recommendations for the firm to ensure more development in the HRM segment down the line.

Running Head: International Human Resource Management
International Human Resource Management
A case study of Tesco
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Running Head: International Human Resource Management
Table of Contents
Introduction..........................................................................................................................................2
1.1 Background of the company...................................................................................................3
1.2 Company Objectives (Vision/Mission)...................................................................................3
1.3 Current business performance...............................................................................................4
2. Body of Discussion.........................................................................................................................4
2.1 HR strategies............................................................................................................................4
2.2 Employee development...........................................................................................................6
2.3 Employee relations & grievance handling.............................................................................7
2.4 Training......................................................................................................................................8
3.0 Conclusion.....................................................................................................................................9
3.1 Conclusive Thoughts on Tesco’s Practice............................................................................9
3.2 Critical analysis in comparison to Sainsburys....................................................................10
3.3 Recommendations.................................................................................................................14
References........................................................................................................................................15
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Introduction
Business organizations with their global presence nowadays are increasingly
dependent on effective human resource management. This often serves them as a
strategic approach for overall performance management of business and employees
engaged in the development of the business. Therefore international human
resource management has gained huge importance among corporate for managing
their employees in ensuring that competitive advantage of business is not impossible
to achieve and sustain for a long run in an industry. The retail sector in the UK
entails competition which is the reason human resource management has been a
widely accepted approach for business performance development. In this article, a
case study of Tesco has been discussed.
1.1 Background of the company
Tesco Plc runs its business as Tesco and is based in England, UK. Its headquarters
is in Hertfordshire in England. Tesco is a very prominent name in the field of retail
groceries and other merchandises. The firm now is a third biggest retailer in the
world. This firm is a leader in the retail market in the UK, Ireland as well as Hungary.
Back in 1919, the firm was founded by Jack Cohen. The basic business of Tesco
was grocery and since 1990’s early years the firm focused on the diversification of its
business and products geographically (Al Ariss, Cascio and Paauwe, 2014). Many
new diversified products options like clothing, books, electronics, software, petrol,
toys entered into its retailing options. The company also tried to reposition its brand
name and this was the cause the firm transformed itself from low-cost high volume
retail firm to a business entity that has many appeals to social groups. Products of
the firm are Tesco value products and Tesco finest products. This expanded product
portfolio helped the company to increase the number of shops across the countries
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the businesses are operational in (Armstrong and Taylor, 2014). Tesco is a London
stock exchange listed company and also is a part of the FTSE 100 Index.
1.2 Company Objectives (Vision/Mission)
Tesco looks for making its business better by creating value for its stakeholders. The
final objective of business is to meet with the demands and expectations of
customers before competitors are satisfying them. The mission of the firm is to be
champion for valued customers. The firm always has its effort to make sure that
products are as per the choice of customers and these are delivered to them in the
right way with right quality. The mission statement of the firm is ‘We make what
matters better, together.’ The vision of the firm is to understand customer and fulfill
responsibility towards them as well as a community by being a valued and
responsible business entity.
1.3 Current business performance
Financial performance of the firm based on group functions as per result 2017/18
1H 2017/18
Group sales were £25.2bn.
Revenue was £28.3bn and operating profit was £885m. During the period the profit
was £562m. The company achieved growth in the volume of fresh foods and the
growth is measured by 1.5 percent due to improvements made in the offer of food
items. In central Europe and Asia, the profit margin improved. There was an increase
in stan statutory revenue by 3.7 percent and the volume was £28.3bn. Profit (before
tax) also increased and it was £562m (Bratton and Gold, 2017).
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2. Body of Discussion
2.1 HR strategies
HR strategies embedded in strategic management approach of Tesco has several
performance aspects. These are assurance of better operating environment,
implementation of hiring experts, and development of employee motivation
programmes to make it certain that talented employees are handled better and
underperformers are also entitled to opportunities of performance development.
Tyson (2014), argued that these aspects are comprehensive and at the same time
important for employees but it does not necessarily mean that employees feel
appreciated. Even optimist scholars like Storey (2014), remarked that employees’
satisfaction causes the growth of business but scholar-like. Wilton (2016), argued
that if employees being colleagues within their work setting are trying for
outperforming each other then the purpose of amicable job environment remains
limited. However overall beneficial aspects are the main sides the company is reliant
on and that is to increase the performance of employees and their motivation level.
This is helpful for the firm to gain business growth. Riley (2014), stressed the
importance of the better cooperative environment rather than operating environment
as the latter completely relates to working cooperation and relations among staffs
and management of Tesco. Workplace equality is the pivotal ground based on
which an individual is encouraged by Tesco’s HRM to work at his or her best for
serving the business of the firm. Thereby Tesco management believes in reducing
working intimidation among employees and upliftment of employees’ confidence. But
this needs to be always taken care of by Tesco since employees particularly who
have high needs of performance development must not take a carefree approach
because of working leniency caused by HRM through its strategic approach. High-
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quality recruitment is a central HRM part of the company. In the line with this, the
firm puts stress on recruiting best talents from colleges that are top in imparting
education. This remains important for the company as the new talents are nurtured
by training and put into practical job performance. But this does not always provide
business with better results. Purce (2014), opined that companies’ efficacy level in
talent management is largely proportionate with the degree of focus on searching
and developing new talents from the existing workforce. But the firm has important
ground in this respect since a feature like choice improvement plan is in an offer by
HR strategies. As per this plan Tesco team chooses skills and knowledge that have
to be constantly upgraded for becoming strong performance provider within the
company.
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Fig1. HR strategy model
(Source: www.locusassignments.com)
HR strategy of Tesco is aligned with the overall corporate strategy and the
amalgamated planning gives an idea which circles around business analysis and
performance derivation from employees and overall staff management. This makes
the firm more competent in a competitive industry like the retail sector.
2.2 Employee development
Tesco realizes the importance of employee development for enabling them to excel
in their workplaces. In this search of professional excellence, the firm believes that
performance development and employee development are both related which
undertakes motivation as a useful measure for a firm’s growth achievement. Tesco
always tries to ensure that the development of employees is of great support for
work performance and personal life support in terms of better living standard. In
employee development initiatives Tesco always includes its focus to educate its
employees about their roles and responsibilities and privileges they are entitled to. In
addition to this Tesco also holds knowledge development as a most vital basis for
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achieving growth in the company. According to Kramar (2014), Knowledge
development is the primary source of employee development which is nullified by
Purce (2014), saying that knowledge is an alone element but other is to development
of positive mindset. In connection to this, it can be said that Tesco’s initiative of
employee development includes both knowledge and mind frame development to
have a positive effect in the workplace and in personal and professional lives of
employees.
Resource base view is now conceptualized in many organizations and HRM is
placed as a separate department which powers employee base considering the
perspective that is the basis of competitive advantages (Brewster, Chung and
Sparrow, 2016). In this respect, Tesco Plc is also a follower of this concept which
helps the firm to achieve and maintain a competitive advantage.
All the resources are of VRIO attributes
V valuable
R Rare
I Inimitable
O Organized
The above-mentioned framework is helpful for Tesco to analyze its functional
strength based on resource. As per resource-based strategic approach, Tesco
concentrates on employee development with the support of an investment of
available resources and already achieved a competitive advantage. The
amalgamated competence level is perceived to be of continual competitive
advantage for Tesco in markets.
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2.3 Employee relations & grievance handling
Tesco does consider that grievance among employees and their negative thoughts
can be negated by invoking workplace satisfaction. This is the main basis on which
the employee relations and grievance handling of Tesco get into complete shape.
Tesco practices bottom-up feedback as an approach to building up employee
relations and grievance reduction. Employees are empowered to exchange
feedbacks among them and their higher authority in the entity for the development of
the business. This makes them feel parts of the firm. Tesco also offers flexibility in
works for its employees and they are allowed to work near their houses (Brewster et
al, 2016). Management directly gets to know about their grievances and these are
addressed keeping employees satisfied. Some important functions undertaken by
the firm are employee engagement, pride development among them, the
development of programmes that create fun and business-oriented activities and all
employees are encouraged to feel inclusive. These altogether are helpful for the firm
to handle grievance as this becomes minimum and employees feel better always. In
reference to this discussion, it can be said that Tesco’s policy of grievance handling
is most related to Human relations theory (Chebbi et al, 2015).
Human Relations Theory basics
Employees feel personal and professional satisfaction
They are engaged in organizational work
.
Rights of employees are recognized.
Workplace related satisfaction is assured.
Employees are involved in the regulation of work.
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Adoption of this approach by Tesco is useful for minimizing internal confusions and
tensions by developing satisfaction among employees about their work and
workplaces.
2.4 Training
Tesco has a structured and flexible approach regarding its training and knowledge
development programs. This is based on the needs of employees regarding how
much they require to upgrade their skills and knowledge. On the job and off -job
training curriculums are both preferred by Tesco HRM professionals. During on-job
training programs employees are monitored and in course of the problem, the
solution is delivered by the training team (Dickmann, Brewster and Sparrow, 2016).
Direct feedbacks sharing with employees are also a preferred aspect of this training
programme. Off-the-job training is also conducted by Tesco and this is only for
employees who require to develop specific skill such as communication skill and
team building attitude. Riley (2014), argued that off-the-job training is always costly
in comparison with on-job training but Storey (2014), opined that on-job and off-job
training are beneficial in specific situations. Tesco practices system model as a
training approach.
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Figure 2. System model training
(Source: www.yourarticlelibrary.com)
By following this training model Tesco focuses on each segment of training broken
down into several stages ranging among analysis to the final evaluation of the
training programme.
3.0 Conclusion
3.1 Conclusive Thoughts on Tesco’s Practice
Human resource management has always been a topic of study which helps many
firms to prepare themselves in the line with the corporate requirement. Challenging
environment in a sector like retail causes several challenges like manpower attrition,
cost of additional recruitment of employees, increasing pattern of competitors’
advantageous position in the market. These create many concerns for organizations
like Tesco in the retail sector. They need to embrace a suitable human resource
management approach. This is no matter the volume of competition and challenges
existent in the industry. This report presented herein denotes several aspects of
human resource management. The entire discussion, therefore, has been split into
some parts like strategy included in human resource management, training
curriculum and development of employees along with measures taken by the firm to
achieve certainty that workforce is a competent and competitive advantage is within
the capacity range of the firm. The selection of case study, therefore, is considered
most suitable for making this report a logical outcome depending on knowledge
preparation caused by knowledge presentation requirement. At the end of this
analytical discussion, some recommendations have been presented for the firm to
ensure more development in the HRM segment down the line.
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HRM practices by Tesco is beneficial for its management to cause growth in its retail
business. Tesco has enviable growth right from its day of inception and the firm has
opened up many stores across its home country in the UK along with several Asian
countries (Jackson, Schuler and Jiang, 2014). Human resource management
strategy of the firm is to justify its vision and mission. Tesco has several options to
make its HR strategy better and in search of benefits for employees, the firm holds a
belief in making the working environment better and reduction of conflicts among
employees. This is supported by a cooperative working culture of the firm.
Additionally, the firm also launched choice improvement plan that puts the HR
functions of the firm in the line of skill requirement identification (Morschett,
Schramm-Klein, and Zentes, 2015). The model of strategic HRM of Tesco includes
the gamut of functions like external environment analysis, corporate and business
strategy development and staff management like recruitment and selection,
performance management and so on. Employee development plan of Tesco is
supported by VRIO model since the firm believes to invest its resources for the
development of employees. Therefore the competitive advantage of resources is
embedded in the functional aspects of the firm to increase the more competitive
advantage. Human relations theory has an influence on employee relations and
grievance handling functions of Tesco. According to this theory, the firm tries to
ensure that employees are satisfied with their working environment and alongside
they are engaged in development work of their firm. Training gets arranged by the
firm on-the-job and off the job basis and both are useful for the firm in meeting
specific training needs among employees. Therefore system model training is
perceived as a suitable training framework for the company. In the training
arrangement functions, the firm firstly does analytical work followed by the design
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and development of training programs. The later stage of training is the
implementation of training programs along with an evaluation of training
effectiveness (Nel et al, 2014).
3.2 Critical analysis in comparison to Sainsbury's
Retail industry experiences stiff competition with no dearth of competent firms. Apart
from Tesco, there are several retail organizations which are on the frontline in
measures of reputation and business profits. Sainsbury’s is another name that has
also achieved remarkable success in the industry. The firm also has a
comprehensive set of HR strategies. Comparison between the HRM functions
between Tesco and Sainsbury’s set this analytical report ahead in the logical base.
Therefore case studies of Tesco and Sainsbury’s in this report have made for an
evaluative pattern of analysis of HRM approach adopted by the firms. While quality
in the recruitment process is always an urgent lookout the differences are apparent
in the processes adopted by the two firms. Tesco believes in recruiting talented from
top colleges while Sainsbury's is more inclined to online advertisements for reaching
to prospective employees with required volume of talents. Unlike Tesco, it is believed
by Sainsbury’s to recruit talented people for filling suitable positions for existing and
talented employees worth a promotion. Even job shuffling is not uncommon among
HR strategies of Sainsbury’s.
Tesco’s workplace satisfaction for employees, development of cooperation among
employees are fragmented tactics of wide-ranging motivation process (Paillé et al,
2014). But Sainsbury’s is a bit different as the firm independently looks to ensure
motivation in the first place and the efforts like regulating better compensation
programs for talented performers of the firm is the most vital. It cannot be said that
Sainsbury’s maintains austerity through its HRM strategies branching off into
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employee development, training and employee relations approach. Storey (2014)
argued that recruitment process and training and development are some areas
which cannot be compromised at cost of quality. Sainsbury’s talented workforce is
always ready to perform their jobs set by management. Tesco monitors the
performance of employees through on-job training while Sainsbury’s is more keen to
evaluate employees’ skills through task allocation and face to face discussion. It has
been asserted by Tyson (2014), that discussion among seniors and subordinates if
fails to deliver desirable outcomes then the development of employees and
employee relation become difficult to get into expected shape. But (Reiche et al,
2016) said that when employees lack confidence and sense of attachment the
measure like discussion and feedbacks exchange among top level and juniors staffs
cause employees' empowerment. Tesco’s bottom-up discussion option strengthens
employee’s moral confidence and eagerness to work and this is unlike Sainsbury’s
programs of a personal development plan to strengthen employees’ performance
and loyalty towards the firm. Tesco’s evaluation of jobs of employees is based on
direct monitoring of performance and satisfaction level among them. Sainsbury’s in
contrast to this has job evaluation method on basis of job structure, pay and
allowances for a particular job category followed by analysis of actual performance
achieved from employees (Reiche et al, 2016). There are some similarities and
contrasts in respect of HR strategies adopted by the two firms and these are shown
below in the table:
Comparative HRM strategies
Organisation Similarities Dissimilarities Particular model
followed
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Tesco and
Sainsbury’s
Comprehensive
HR strategies
The instructional
system
development model
is used by
Sainsbury’s in its
training programs.
It relates to the
training
requirement on the
performance of
jobs. Sainsbury’s
uses this as a
means to answer
training problems.
The stages are
analysis, planning,
development,
execution, and
evaluation.
Tesco and
Sainsbury’s
Human relations
theory is followed
by both firms.
Based on specific
purposes including
team development
and business
growth.
Sainsbury’s uses a
career
development model
in its employee
development
programs. The four
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elements in this
find your focus,
brand yourself,
interview and
negotiate, identify
opportunities.
Tesco and
Sainsbury’s
On-the-job training
prevails over off-job
training at Tesco.
Sainsbury’s has
more focus on
flexible training
options
Tesco and
Sainsbury’s
workers’
motivation is
looked after from
the beginning and
is the main concern
for Sainsbury’s.
Tesco keeps
separate attention
on segmented
portions of
workplace aspects.
Tesco and Tesco directly
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Sainsbury's monitors
performance unlike
Sainsbury’s.
Performance
during on-job
training is common
by the firm.
Fig 3. Career development model
(Source: a www. impossible-quiz-answers.com)
3.3 Recommendations
Human resource management is always challenging in the retail sector. Some
recommendations in the field of HRM are given here for further development. As the
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frontline workforce of the company work in retail stores, their feedbacks are
important for the company. Therefore the HR team needs to plan for a regular visit
once or twice a week for making or modifying HR related strategies.HRM department
of Tesco needs to focus on cross-training of employees and this could enable
employees to assume important positions in absence of main employee responsible
for performing a particular task (Schumacher et al, 2016). The practice of diversity
and innovation are great factors which elevate the overall performance of the
workforce. Identification of talented employees for supporting diversity and
innovation in the firm could be a better focus of HRM of Tesco. In this regard, the HR
department of Tesco needs to have efficiency in competency mapping which keeps
them better informed about employee’s performance standards and possibilities.
Tesco’s HRM needs to look at whether the expectations of the firm and employees
match with each other. The productivity of employees is not the direct responsibility
of the HR department but manpower development needs to be on a continuous
basis (Snell, Morris and Bohlander, 2015).
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