Analyzing HRM Strategies and Organizational Performance at Nissan UK

This report provides an in-depth analysis of Human Resource Management (HRM) practices within Nissan Motor Corporation, UK. It examines various HRM areas such as job analysis, recruitment, compensation, performance management, and employee relations, highlighting their impact on organizational performance. The report emphasizes the significance of strategic HRM in aligning human resource management with long-term organizational goals, especially in a changing corporate environment. It evaluates the importance of effective recruitment and employee retention, and identifies both internal factors like organizational strategy and culture, as well as external factors such as economic, social, and technological influences, that affect HRM decisions. The analysis underscores how these factors support organizational success, with a focus on how strategic HRM can enhance efficiency, improve employee morale, and ultimately boost productivity and profitability. The report also addresses the interplay between strategic HRM and organizational outcomes such as market share, productivity, and customer satisfaction. Finally, it concludes by summarizing the key findings and emphasizing the role of HRM in the overall success of the organization.

This report is in context with Nissan Motor Corporation, UK., which is a multinational automobile
manufacturing company. This Japanese company’s vehicles are sold under brands like Nissan,
Infiniti, Datsun, etc. This report will draw a comparison on the different HRM areas and their
impact on the organizational performance. It will also examine the importance of strategic HRM for
the changing effects on organizations and the corporate environment. The report will also evaluate
the significance of effective recruitment and selection of employees and will highlight the strengths
and weaknesses of HRM that contribute to organization’s success. Further, the report will identify
the internal as well as external factors that have an impact on the HRM decisions. The report will
also analyse the role and support of these factors for the organization’s success.

HRM is a strategic approach to manage the human resources of an organization. HRM focuses
majorly on the following areas-
 Job analysis and job design
 Recruitment and Selection
 Compensation and Benefits
 Performance Management
 Employee and labour relations
 Employee training and development
 Succession planning
 Industrial relations
 Health and Safety Regulations
 Communication and engagement of employees

The areas and functions of HRM has a prominent role in the performance of the
organization. As human resource is a crucial element in working of the organization and
business, an effective HRM that manages the human resource i.e. the employees of the
organization can improve the overall performance of the organization. As HRM designs
job advertisements that attract potential candidates and their recruitment and selection is
also done by HRM, so the more careful and effective the HRM is in hiring appropriate
employees, the better the organization performs. Training and development programs
carried out by HRM for employees help in improving their skills and trained employees
are more motivated to perform better. As HRM decides on the compensation and
benefits, it can affect employees’ morale as fair wages and rewards encourage the
employees to perform better. HRM maintains the relation among the employees and
with other personnel so that there is an effective flow of communication. HRM also
maintains industrial relations that can help the organizations to avoid conflicts to some
extent. It also looks after the health and safety regulations for the employees to avoid
dissatisfaction among them. It also tries to ensure that the employees get a good working
environment and do not feel discontent. All these functions are directed towards
improving the morale and for longer retention of the employees so that they are
motivated to perform to the best of their abilities and there is no chaos in the
organization. All this will ultimately boost the organization’s performance and
productivity leading to better profitability too.

Strategic HRM is a framework that links management of human resources and practices for their
development to the long term goals of the organization. Strategic HRM encompasses all the
functions of HRM like recruiting, selecting, compensating in alignment with the organizational
strategies to achieve the goals and success. Framing a strategic HRM approach starts with a plan
which is based on the strategic goal of the organization. In this constantly changing era, the
approach of strategic HRM is very significant to achieve competitive advantage in the industry. The
main focus of strategic HRM is to ensure efficiency in all the processes and improve the overall
performance of the organization. By doing so, it promotes the following benefits –
 Benefits related to Human Resources or Manpower
 Financial Benefits
 Market related Benefits
 Organizational Outcomes

Market related Benefits
increase in market share and
growth
Organizational outcomes
increase in productivity,
improved quality, efficiency,
service and higher customer
satisfaction.
 Benefits related to Human
resource or manpower
 reduction in absenteeism, lower
staff turnover and the
related costs, higher job
satisfaction among employees,
increase in employee
commitment and their retention
Financial Benefits
lower production costs
and higher profits due
to increased efficiency
and productivity,
reduction is expenses
related to staff turnover

RECRUITMENT
As manpower is the prominent element in the operations and success of
the organization, hiring appropriate employees becomes a crucial task for
the HRM and the organization. HRM makes job descriptions and
advertisements to attract more and more candidates as more the number
of candidates that apply for the job, the more are the chances to hire an
efficient and skilled employee. Hiring talented employees from the
available market place ensures the increased productivity of the
organization and reduces the need of frequent trainings. Skilled and
talented employees are generally more motivated and tend to stay longer
in the organization which reduces staff turnover and improves retention in
the company.

RETENTION
The issues related to retention starts from the recruitment itself. As the staff turnover
increases, costs related to it also increases as new employees have to be recruited for the
vacancies which disrupts the operations of the organization for the time being. It leads to
wastage of money and time that could have been utilized in other important processes.
Hence, effective recruitment leads to increased morale of the company and ensure longer
retention of the employees in the organization. Motivated staff who have also have a job
security tend to be more efficient and productive. Thus, leading to overall boost in the
organizational performance.

There are generally two categories of factors that influence HRM decisions. The two categories are-
Internal Factors
 Organizational Strategy
Organizational Culture
Organizational Financial Position
Trade Unions
External Factors
 Economic Factors
Socio-cultural Factors
Technological factors
Political and Legal Factors
Professional Associations

Significance of internal factors –
The factors that are present within the organization that affect human resource management and their
decisions are called internal factors. These factors can be controlled by the organization to some
extent.
These are also called organizational factors and include factors like –
 Organization’s strategy – The ways in which an organization reacts to its environment for using its
principal resources and guides its efforts towards the business’ core purpose are called
organization’s strategies.
HRM practices and decisions are based on the corporate strategies, business level strategies and
functional level strategies.
 Organizational culture – It is the set of values, beliefs, norms and assumptions of the employees of
the organization.
HRM has to make decisions based on the beliefs and values of the employees and manpower of
the organization.
 Organization’s financial position - The cash flow and financial position of the organization deeply
affects its decisions.
The decisions regarding wages, compensation and bonuses and other related expenses are based
on the financial position of the organization.
 Trade Unions – A collective and regulatory body formed by the employees of the organization to
work in interest of the employees also affects the HRM decisions.
The decisions of HRM are affected by the wishes and preferences of the trade unions.

Significance of external factors
The factors that are present outside the organization and affect the decisions and functions of human
resource management are called external factors. These factors are beyond the control of the
organization. External factors are –
 Economic factors – These factors are responsible for the form and shape of economic activities and
its development and includes economic policies, economic conditions of the region or nation,
nature of economy and economic system, etc. Factors like population and the workforce or
manpower of the organization, market condition of the workforce, national income, inflation, etc.
influence various decisions of HRM and the organization.
 Social or Socio Cultural factors – These factors include expectations, attitude, philosophy, view,
desires of the society. These factors determine society’s expectations from the organizations, views
towards achievement of work, job status, etc. The organizational culture should be in accordance
with the characteristics of the socio-cultural environment. Hence, many decisions or HRM are
affected directly by the social and cultural factors of the society.
 Technological factors – These factors include the innovations and inventions in techniques or
equipments that affects designing, manufacturing or distribution of the goods and services.
Technological advancements and innovations derive new processes and methods to complete the
task and introduction of AI affects the workforce of the organization, hence the HRM has to take
into consideration the technological factors before making decisions. Decisions on various aspects
like recruitment and selection, training and development, communication, supervision, etc. are
impacted with the advancement of the technology.
 Political and Legal factors – These factors include government’s role in business and its operations,
policies of the government related to operations of the business, laws and regulations of the
government and considers both state and central government. The rules and regulations of the
government and various policies related to the operations and employees of the organization control
the decisions of the HRM and policies like no discrimination on the basis of caste, region, sex, etc.
and fair wages, etc. introduced in the organization for the human resource.
 Professional associations – A representative body that consists of individuals and organizations
from common technical, professional or scientific aims is formed to regulate the professional
activities. The policies and beliefs of these professional associations also have an indirect impact on
the HRM decisions.

This presentation highlighted the different HRM areas and their role in the organizational
performance. It also outlined the importance of strategic HRM is this changing organizational
and business environment. It also evaluated the role of recruiting and retention of the
employees from labor markets and the strengths and weakness of the HRM in relation to
success of the organization. The factors that affect the HRM decisions were also evaluated
along with their significance and support to the organizational development.

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