H&M Executive Report: Evaluating Business Theories, Models & Practices

This executive report evaluates and applies relevant business theories and models within H&M, focusing on enhancing job ability and employee motivation. It examines the company's flat organizational structure and opportunities for employee growth through new challenges and international transfers. The report highlights the application of job design theory, emphasizing core characteristics like skill enhancement, task identity, and autonomy to improve employee motivation and performance. Reward management theories, including reinforcement and expectancy theory, are also discussed, alongside the importance of fair compensation and incentive policies. Furthermore, the report touches upon H&M's corporate governance, sustainability efforts, and employee welfare policies, such as animal welfare and global grievance policies. A SWOT analysis identifies the company's strengths (brand image), weaknesses (fashion targets), opportunities (e-commerce expansion), and threats (economic recession). The report recommends cost-cutting measures through employee incentivization and regular training sessions to address employee grievances, ultimately aiming to improve organizational effectiveness and efficiency. Desklib provides more solved assignments for students.

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Executive Report
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Introduction
Established in the year 1947, Hennes and Mauritz is a Swedish company often
abbreviated as H&M. The retail company offers fashion as well as quality at the best price for
men, women, children and teenagers. In addition to this, the company has its own brand
accessories, footwear and cosmetics (About.hm.com, 2018). The purpose of this report is to
evaluate, select and apply relevant theories as well as models related to the diverse range of
business settings in H&M. It throws light on the increase in job ability of the company, which
will help in maximizing employee motivation. In addition to this, it also highlights the
performance management models, appraisal component and other factors in order to establish
the findings.
Findings
According to the annual report of the company, it can be stated that H&M is a flat
organization. However, the organization is evolving constantly and growing fast. This helps
in providing more and more opportunities to the existing employees. The employees are
mainly motivated by providing with new challenges in different departments, roles or
transferring them to another country. In addition to this, the company can adopt certain
performance management theories as well as models in order to increase their job abilities,
motivation, reward systems and employee retention and health safety legislations
(About.hm.com, 2018).
The company can adopt the job design theory which is the core function of the
human resource management. It is related to specification of the methods, relationship of jobs
and contents for satisfying the organizational as well as technological requirements, personal
and social requirements of the job. The job characteristics model is considered to the most

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influential attempts of designing the jobs along with increased motivational properties. This
model was coined by Hackman and Oldham, who describes the five core dimensions of the
job leading to some critical psychological states. It results into job related outcomes
(Armstrong & Taylor, 2014).
The core characteristics of the job design theory are enhancing skills, task identity,
task significance, autonomy and feedback. This in turn leads to the psychological states of
meaningfulness, responsibilities and knowledge of the results. The outcomes are employee
motivation, improved performances, job satisfaction, less absenteeism and more beneficial
outcomes. In addition to this, H&M can apply certain reward management theories that
encompasses the policy statement, payment policies, compensation and incentive policies and
others. The reinforcement and expectancy theory is based upon the assumption of the
employee and the way he/she is motivated to gain the desirable outcomes (Bratton & Gold,
2017).
The equity theory refers to the uniformity of the pay structure of the employees’
remuneration. However, these are the typical reward management theories, which the
human resource management of H&M Company should apply in order to motivate the
workers for giving their best (Van Dooren, Bouckaert & Halligan, 2015). The development
component, appraisal component and disciplinary component falls under the responsibility of
human resource managers, who should monitor the performances of the employees. In
addition to this, as per the corporate governance and sustainability report, it can be said that
the company has relevant employment retention and health safety legislations
(About.hm.com, 2018).
According to the policies of H&M, it can be stated that the company has a number of
policies for the welfare of the employees. Their animal welfare policy ensures that no

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animals are harmed during the manufacture or production of the materials. There are other
policies as well namely, chemical restrictions policy, child labor policy, code of ethics,
home working and many more. However, it can be said that these policies will enhance job
ability motivation. The home working policy of the company allows the suppliers and the
employees to work from their homes and utilize specific production processes under the
guidance of the supervisors (Kearney, 2018).
In addition to this, the global grievance policy aims at ensuring that all the
employees have sound knowledge as well as accessibility to an effective procedure of solving
their grievances. These policies help in motivating and encouraging the staff members in
giving their best to the organization. However, there are certain strengths, weaknesses,
opportunities and threats of the company, which are being discussed in this part of the report
through SWOT analysis.
Strengths
First and foremost, H&M has a huge brand image and reputation. Their popularity is
immense and the store provides its customers with quality clothing at much affordable range.
Moreover, the human resource policies are also at place, with performance management
policies and grievance policies.
Weaknesses
H&M Company has certain weaknesses and the most noticeable one is that is
encounters the fashion company targets. The company mainly designs clothing for the young
customers. Moreover, the shopper base can also be influenced by macro environment in the
most negative manner. These weaknesses de-motivate the workers to a large extent.
Opportunities

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H&M uses organic cotton which is one of the biggest strength of the company. It is
among the top twelve global retailers and brands using the material for the production of the
products. Therefore, the biggest opportunity of the company is to expand its business through
e-commerce.
Threats
The biggest threat of the company is recession as the retail industry gets mostly
affected due to this. Moreover, during the economic recession the shoppers tend to spend less
on clothes. It affects the employment policies of the company as well (About.hm.com, 2018).
Improvement, Innovation and Development
Taking the global economic recession into consideration, it can be said that the human
resource managers need to handle the effects in the most professional manner possible. The
company can cut the additional costs of recruitment by motivating their existing employees
and incentivizing them. Incentivizing the existing employees will cost less than hiring new
ones. Moreover, it will help in motivating and encouraging the employees to perform better
(Shields et al., 2015).
Recommendations
It can be recommended that the identified gaps can be bridged by enhancing
organizational effectiveness as well as efficiency. In addition to this, for achieving the
organizational mission and goals, the human resource managers are required to conduct
sessions and regular trainings for around twenty to thirty minutes every day. In such training
sessions, the employees should be motivated and encouraged to a huge extent. Moreover,
regular sessions on employee grievances should also be held in order to understand their

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issues. The reward management policy should also be taken into consideration and proper
compensation as well as incentives must be given to the employees for motivating them.

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References
About.hm.com. (2018). Retrieved from https://about.hm.com/en/about-us/corporate-
governance/corporate-governance-report.html
About.hm.com. (2018). Retrieved from https://about.hm.com/en/media/news/general-news-
2018/HM_Foundation_Annual_Report_2017_A_Catalyst_for_Change.html
About.hm.com. (2018). Retrieved from https://about.hm.com/en/media/news/general-news-
2018/hm-sustainability-report-2017.html
Armstrong, M., & Taylor, S. (2014). Armstrong's handbook of human resource management
practice. Kogan Page Publishers.
Bratton, J., & Gold, J. (2017). Human resource management: theory and practice. Palgrave.
Kearney, R. (2018). Public sector performance: management, motivation, and measurement.
Routledge.
Shields, J., Brown, M., Kaine, S., Dolle-Samuel, C., North-Samardzic, A., McLean, P., ... &
Plimmer, G. (2015). Managing employee performance & reward: Concepts,
practices, strategies. Cambridge University Press.
Van Dooren, W., Bouckaert, G., & Halligan, J. (2015). Performance management in the
public sector. Routledge.