Semester 2 Report: Aldi's Human Resource Management

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STRATEGIC HUMAN RESOURCE
MANAGEMENT
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Contents
INTRODUCTION...........................................................................................................................................3
HR POLICIES AND PRACTICES IN ALDI..........................................................................................................3
EXTERNAL FORCES AND THE EFFECT OF THESE FORCES ON HR STRATEGIC DECISIONS..............................5
ANALYSIS OF HOW THE HR FUNCTION IS ORGANISED AND HOW HR POLICIES AND PRACTICES ARE
DELIVERED...................................................................................................................................................7
CONCLUSION...............................................................................................................................................9
REFERENCE LIST.........................................................................................................................................10
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INTRODUCTION
Strategic human resource management is the practice of attracting, motivating, encouraging,
rewarding, developing and retaining the employees for the benefit of both individual and
organization. The HR department of the company do not work independently but work with the
interaction of other departments for understanding their needs for attaining the objectives of
the department and organization as a whole (Wright et al., 2018). Emerald Publishing Limited.).
The main purpose of SHRM is to use the talent and opportunity in the HR department for
making another department of the organization effective and stronger.
About ALDI
ALDI is a brand that is owned by two German families owned discount supermarket chains and
its headquarter is located in Germany. The success of the organization derived from the
contribution of the employees from store construction to distribution. Every aspect of the
company is reinvented so that it can maximize the quality of the product and increase the
saving of its customers. The company operates through its more than 1,600 stores in 35 states
and it employs more than 25,000 people.
HR POLICIES AND PRACTICES IN ALDI
High commitment HRM
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High commitment HRM is the set of the practice that is designed to contribute to the ALDI
performance. The main aim of adopting high commitment HRM in the ALDI is to decrease the
labor turnover, labor absenteeism, improve labor behavior in the organization and also to
improve the quality of customer service (Maheshwari and Vohra, 2015). The reason for
adopting this HRM practice in the ALDI is that the employees are the only one who interacts
with the potential customer, a satisfied employee will contribute more to making the customer
satisfied. ALDI extensively invest in providing learning, training, and development to increase
their performance and it also contributes to their career development. Thus, the high
commitment HRM practice helps the organization to increase its productivity and profitability.
Best fit HRM
In this approach, the HR policies are developed according to the business strategy. Here
strategy refers to the future planning of ALDI, policies and plans to achieve company's goals and
objectives as well as performance objectives. The HR policies in ALDI is designed which support
the corporate strategy. The HR manager of the ALDI formulates the HR policies according to
organization culture, operational process and the external factors that affect the business
(Croonen et al., 2016).
Hard or soft HRM
In the ALDI, there are two ways in which the HR manager of ALDI approaches the management
of HR in a business. In the ALDI, the HR manager adopts elements of both approaches for
optimally utilize the HR resources. There are
 Hard HRM
 Soft HRM
Hard HRM means when the organization treats its employees as a machine. It is suitable when
the organization wants to maintain a strong commitment to the company. This is a costly
approach as compared to soft HRM. In the hard HRM, the HR manager of the ALDI analyses the
internal situation of an organization such as what resources are required, how to get them,
what will be the steps to get the resources (Michael, 2017). The HR manager only focuses on
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the objective of the organization and ignores the human resource of the company. There is
minimum communication in the organization and the top management does not believe in
delegation and decentralization.
Soft skills mean that when the organization treats the employees as the most important asset
of the organization. The strategies of the HR focus on betterment and development of the
employees. The ALDI uses the employees as the most important resource and uses them to
gain a competitive advantage over competitors to stay ahead in the competition. In the soft
HRM, ALDI encourages two-way communication and builds a strong relationship with the
employees. The top management of the ALDI believes in the skill and competencies of the
employees and delegates the important task to them (Veloso et al., 2015). The pay structure of
the company is competitive means they get performance related rewards.
EXTERNAL FORCES AND THE EFFECT OF THESE FORCES ON HR
STRATEGIC DECISIONS
There are several external factors that affect the operations of the business to achieve strategic
goals and objectives. These external forces can be competition, political, legal, social, economic
and other factors. Some of these are as follows:
External stakeholders
External factors of the ALDI include customers, government agencies, suppliers and others that
affect the strategic decision of the ALDI. The company has its operations in the society and also
the company is totally dependent on the external factors for its resources, sale of the product,
therefore these external agencies or stakeholders have control over the firm. Therefore the
strategic decision of the company is affected by the activities of external stakeholders (Marler
and Parry, 2016).
Workforce demographics
Due to retirement and the recruitment of the young generation, the company's strategic
decision is affected by the different needs of the people. Even the HR manager has to offer
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different work environment to them because they are not able to survive in the existing
environment of ALDI.
Technological advancement
The HR strategic decision in the ALDI is affected by the introduction of new technology in the
industry. The HR manager has to take the decision regarding the downsizing the existing
employees because most of the work in the ALDI is replaced by the machine and technology.
The job which is done by the 2-4 people now can be done with 1 individual. Hence, the
innovation in the technology brings the attention of the HR manager to revise or update the HR
strategy decision in the ALDI. The company is switching over the usage of technology because
the operations of the company become consistency and there are minimum chances of errors
and it is also a cost-effective method (Noe et al., 2017).
Employment market
An employment market is a place where employer i.e. ALDI gets the employees that match with
their requirement. In the organization, the employer needs all types of employees such as
skilled, unskilled, unionized or non-unionized depends on the nature of work.
High skilled or low skilled
The need of the workforce is changing in retail industry i.e. companies are looking for more
skilled employees rather than unskilled employees reason being the operations of the business
is based on technology and machines. But in the ALDI, the organization is looking for both
skilled and unskilled employees. This is because there are many works in the organization which
the skilled employees cannot do. Unskilled employees do not require training or any skills.
These include sweepers, grocery clerks, general cleaners, etc. The skilled employees in the ALDI
should have proper knowledge of the technology and require proper training (Rosenfeld, 2017).
Unionized or non-unionized
In the unionized workplace, the employee control and negotiate with the employer about the
wage, benefits, security, discipline, promotion, etc. The reason why the employees prefer to the
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unionized workplace is that they get the benefit of wage, security, etc. While on the other hand,
in the non-unionized workplace, the employer has more power to decide the wage, work
schedule, promotion and other aspects of work culture (Gannon et al., 2015).
Effect of these forces of HR strategic decision
These external forces directly affect the HR strategic decision of ALDI. The HR manager must
consider these factors before arriving at the decision. External stakeholders directly affect the
organization culture and also its employees. The government rules and regulation regarding the
employment directly affect HR strategic decision. Technological advancement in the ALDI result
in declining the number of employees in the organization therefore, the manager must plan the
requirement of the workforce in the organization. Employment market and the nature of the
work affect the decision regarding the number and type of employee needed in the
organization (Bratton and Gold, 2017).
ANALYSIS OF HOW THE HR FUNCTION IS ORGANISED AND HOW HR
POLICIES AND PRACTICES ARE DELIVERED
Ulrich’s model
This model is developed mainly to organize the HR function in the ALDI. David Ulrich divides the
HR function into four segments.
1. HR business partner
The HR business partner communicates with internal customers or clients. They are the most
important point of contact for the internal members of the ALDI. Their main role is to give
feedback to the internal customers such as experience and also they share HR goals with the
employees so that it can achieve on time (Andrade and Devlin, 2015).
2. Change agent
It is suitable when. The organization wants to expand, evolve or change its organizational goal
or objective. The change agent communicates the change in the internal environment. The HR
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manager arranges the training and learning program so that employees will change according
to change. Therefore, the change agent contributes to the growth or evolution of the
organization.
3. Administrative expert
In the administrative role, the HR manager is responsible for various tasks. He has to follow all
the laws and regulation developed by the government and other bodies such as occupational
health and safety, trade law, labor law, and all other related laws. Also, he is responsible to
collect all the personal information of employees and also he has to make the list update
(Ranjan et al., 2017).
4. Employee advocate/employee champion
In the ALDI, the HR department is responsible to know the interest and skills of employees and
make sure that they are protected. The role of HR is to make the employees satisfied and also
he is responsible to make this information useful in the growth of the organization. The HR
manager analyzes the employee’s interest and ensures that the manager is fair and equitable to
all employees (McCracken et al., 2017).
The role of line managers in the delivery of HRM
Identification of management goals
The manager plays an important role in identifying the goal of management. Hr manager acts as
a link between the top management and employees. The goal of the organization is developed
by the top management but it is implemented on the employees. Employees are the one who is
directly affected by the management objectives. Therefore, the objective of the management
should be according to skills, competencies, and knowledge of employees (Russell et al., 2018).
Competing priorities
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The HR manager should be able to prioritize different task in the organization. His decision and
strategies help the organization in competing with its competitors. The HRM practices should
be attractive so that talented and competent employees will remain in the organization.
Knowledge and skills
The line manager is responsible for providing the training and development to the employees
to maintain their knowledge and skills updated. The HR manager of ALDI conducts the need
assessment task to analyze the gap between the required skills and existing skills. Also, he is
also responsible to determine the strategic direction for overall workforce development that
should align with the company's goal.
Consistencies in HR policies
HR policies and practices should be consistent over several years. A consistent HR policy
prevents employees from dissatisfaction and is also beneficial for an organization to create an
unhealthy work environment. A frequent change in schedule, benefits, roles, and
responsibilities brings dissatisfaction among employees and can create an unhealthy work
environment (Malik et al., 2017).
CONCLUSION
Therefore it can be concluded that strategic Human resource management is the process of
encouraging, motivating, attracting and rewarding the employees for the benefit of both
employees and employer. The report includes the strategic HR practices of ALDI. It includes the
HR policies and practices adopted by the company to manage its HR resources. The practices
and policies adopted by ALDI are high commitment HRM, best fit HRM and hard and soft skills
of HRM. The report also includes the external forces affect the strategic decision of HRM and its
effect on the strategic decision of the company. Additionally, it also includes the Ulrich model
to determine the HR function in the organization and roles of the line manager in the
organization.
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REFERENCE LIST
 Andrade, C.C. and Devlin, A.S., 2015. Stress reduction in the hospital room: Applying
Ulrich's theory of supportive design. Journal of Environmental Psychology, 41, pp.125-
134.
 Bratton, J. and Gold, J., 2017. Human resource management: theory and practice.
Palgrave.
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the middle? The impact of unit ownership on unit HR performance in franchise
systems. International Entrepreneurship and Management Journal, 12(3), pp.697-711.
 Gannon, J.M., Roper, A. and Doherty, L., 2015. Strategic human resource management:
Insights from the international hotel industry. International Journal of Hospitality
Management, 47, pp.65-75.
 Maheshwari, S. and Vohra, V., 2015. Identifying critical HR practices impacting employee
perception and commitment during organizational change. Journal of Organizational
Change Management, 28(5), pp.872-894.
 Malik, A., Boyle, B. and Mitchell, R., 2017. Contextual ambidexterity and innovation in
healthcare in India: the role of HRM. Personnel Review, 46(7), pp.1358-1380.
 Marler, J.H. and Parry, E., 2016. Human resource management, strategic involvement,
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Management, 27(19), pp.2233-2253.
 McCracken, M., O'Kane, P., Brown, T.C. and McCrory, M., 2017. Human resource
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 Michael, F., 2017. Hard and Soft Human Resource Management Compensation Practices
on Employee Job Satisfaction. ORSEA JOURNAL, 5(1).
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management: Gaining a competitive advantage. New York, NY: McGraw-Hill Education.
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 Ranjan, R.K., Mishra, B.K. and Sinha, R.N., 2017. A MATHEMATICAL MODEL TO STUDY
THE XANES SPECTRA OF K-EDGE OF SULPHUR IN SOME SYSTEMS. International Journal
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 Rosenfeld, S.A., 2017. Competitive manufacturing: New strategies for regional
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High-performance work practice implementation and employee impressions of line
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 Veloso, A., Tzafrir, S. and Enosh, G., 2015. How employees perceive HRM practices:
Differences between public and private organizations. Human resource management
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 Wright, P.M., Nyberg, A.J. and Ployhart, R.E., 2018. A Research Revolution in SHRM: New
Challenges and New Research Directions. In Research in Personnel and Human
Resources Management (pp. 141-161). Emerald Publishing Limited.
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