Human Resource Management Report: Shell Corporation HRM Analysis

This report provides a detailed overview of Human Resource Management (HRM), focusing on its functions and applications within the context of Shell Corporation. It explores core HRM areas such as human resource planning, recruitment and selection, performance management, learning and development, career planning, function evaluation, rewards, industrial relations, participation and communication, health and safety, personal wellbeing, and administrative responsibilities. The report further examines the 'best fit' and 'best practice' approaches to HRM, as well as the distinctions between hard and soft HRM strategies. It also discusses the advantages and disadvantages of both hard and soft HRM models, and concludes with an examination of workforce planning. This comprehensive analysis offers insights into how HRM principles are applied in a major corporation like Shell.

HUMAN RESOURCE MANAGEMENT
Shell
Royal Dutch Shell (often referred to as Shell) is one of the world's largest corporations, with
massive earnings generated through the extraction of oil, gas, and other fossil fuels. The Royal
Dutch Petroleum Company and the Shell Transport and Trading Company merged in 1907 to
form the Royal Dutch Petroleum Company and the Shell Transport and Trading Company, with
headquarters in The Hague and England.
LO1
Human Resource Management
Human resources management is the practice in which an organization’s employees are
recruited, employed, deployed and managed. HRM is usually just called human resources (HR).
A HR department of a corporation or organization is generally responsible for creating,
implementing and supervising employees' policies and relationships. In the early 1900s, and later
more broadly in the 1960s, the phrase human resources were initially used to represent the
people who worked for the organization in general.
Function of HRM
In the organization, HR has several essential functions. Recruitment, management of
performance, learning & development and many other things.

1. Human Resource Planning
The most important functions of the Department of HR are human resources planning.
Human resources planning is often referred to as employee planning, which would be a
strategic decision-making method that anticipates a company's future plan. By properly
reviewing and analyzing the future demands of the organization, HRD can connect with the
firm's objective through good human resource planning. Human resource planning can
contribute to the development of HRD's future recruiting overall, selecting, performance
management, development and learning as well as other HR functions.
2. Recruitment and Selection
One of the key functions of the Human Resource Department is recruitment and selection,
which attracts people to apply for positions and selects qualified people to work for the
company. Some organizations are now using recruitment technologies to help with faster and
more efficient recruitment. Some firms, on the other hand, rely on third-party recruiters, and
that is an expensive procedure. To take advantage of recruitment strategies, the HR
department should follow the instructions of the selection process.

3. Performance Management
A performance management system assists organizations in engaging people and assuring
productivity. The performance management system is effective in identifying performance
gaps so that they can be filled through the training process. It also assists organizations in
identifying the quality requirements of prospective personnel. Though there have been
various performance management systems, organizations can choose the finest based on their
preferences and overall needs.
4. Learning and Development
HR is responsible for enabling employees to gain the skills they will need in the future. This
is indeed similar to the first HR function, wherein the HR bridges the difference between the
current workforce and the workforce that will be required in the coming years. Every
organization must establish a budget for learning and development, which is subsequently
allocated for the growth of its staff.
5. Career Planning
Because of the combined role of career guidance and development for employees, the HR
career planning function is also known as career pathing. This major duty of the Human
Resource Department demonstrates to workers how their personal interests can be matched
with the firm's future objectives and assists staff in engaging and retaining them. Greater
succession planning and increased productivity are additional advantages for the
organization.
6. Function Evaluation
The difficult and more technical key function of the Human Resource Department is function
evaluation, which compares actual various aspects of worker credential, quality, and
availability, job location, working hours, work responsibilities, the economic situation, and
also how much benefit this job contributes to the company. The concept behind function
evaluation is that jobs that are comparable should be compensated equally.
7. Rewards
Rewarding employees for their efforts is a critical duty of the Human Resource Department
that cannot be overlooked. Salary is perhaps the most apparent way of rewarding, but so are
possibilities for growth and career opportunities, status and recognition, a positive workplace
culture, and a pleasant working balance.
The complete rewards framework demonstrates that rewards are much more than amount of
money. In some circumstances, they can indeed be relational and psychological
consequences.

As a result, rewards are so much more than just money. The below is a non-exhaustive list of
rewards:
 Base salary
 Performance-based-pay
 Bonuses
 Social environment
 Job refuge
 Status
 Alternating work
 Independence
 Growth opportunities
 Feedback
 Formal and informal development opportunities
8. Industrial Relation
Maintaining and cultivating partnerships with labor groups and other collectives, as well as
their employees, is another important duty of the Human Resource Department. Building
excellent relationships with workers will assist the HR department in rapidly identifying and
resolving possible disputes. It will also be advantageous in more tough economic times when
layoffs or other steps are needed.
9. Participation and Communication
One of the key functions of the Human Resource Department, as per Dave Ulrich, is to be a
trustworthy activist for the employees. Employees must be informed and represented on a variety
of topics that are important to them. Communication refers to the dissemination of relevant
information to staff.
10. Health and Safety
HR is essential for developing and managing workplace health and safety standards. One of
the primary duties of HR is to make these policies a part of the workplace culture.
11. Personal Wellbeing
The HR department must play an important role in supporting and caring for employees who
are experiencing personal difficulties. Personal well-being is about assisting employees when
situations don't go as expected and productivity suffers as a result of a personal issue.
12. Administrative Responsibilities
Administrative responsibility is viewed as one of the key functions of the Human Resource
Department, which contains personnel procedures and Human Resource Information
Systems. Personnel procedures include the managing of promotional activities, resettlement,

self-control, improved performance, sickness, regulatory requirements, racial and cultural
diversity, unnecessary intimacies, harassment, and many more. Policies and procedures must
be developed and deployed in each of these instances in order to effectively cooperate with
the queries or overcome the challenges.
Best Fit and Best Practice
Best fit and best practice are two well-known methods to human resource management.
According to the best fit approach, HR strategy becomes increasingly efficient when it is
connected to the business world. It investigates the intimate relationship between strategic
management and human resource management by examining the extent where an
organization's business strategy and HRM policies and practices are vertically integrated. The
best practice principle indicates that specific best human resource practices will result in
increased organizational performance, as evidenced by better staff attitude, fewer employee
turnover, greater levels of skills for increased productivity, increased quality, and
effectiveness. As a result, the best practice method is often known as a high commitment
approach.
Best Fit
The best-fit model is a variation of previous models from Harvard, Michigan, and York and
is referred to as the “matching model” for HRM. It is defined as the development of HRM
policies in accordance with the business plan. Strategy entails planning future operations,
performance objectives, and policies in order to achieve business goals. HRM strategy needs
to be developed and implemented in order to support the stated corporate strategy. The best-
fit approach calls into question the best-practice perspective's universality premise. It
highlights the situational fit between HR operations and the organization's developmental
stage, as well as an organization's structural elements and its external environment, which
includes customers, suppliers, competitors, and labor markets. The best fit approach is also
heavily criticized. To begin with, in a changing business world, firms and their plans are
subject to various alternate risks, and it is only conceivable to often change complete HR
systems to new problems. Second, when firms progress through their life cycles, HR policies
must be synchronized, which results in alternating behavior of workers, which can be
demotivating and demonstrate consistency in company culture.
Best Practice
According to the best practice approach, several bundles of HR activities emerge which
consistently assist organizations in achieving a competitive advantage irrespective of
organizational context or industry. Best practice models indicate a close relationship between
human resource practices and organizational success and are frequently connected with high
commitment management. According to research in the best-practice industry, similar sets of
HR policies are very effective for enhancing performance regardless of product market
strategies.
Hard and Soft HRM

There are two techniques to managing your staff using HR: hard and soft. Hard HRM focuses
on more traditional corporate outlooks, while soft has a more progressive standpoint.
Hard HRM
The goal here is to assess workforce requirements so that you may hire and manage as
needed, including employing new staff or making others redundant. The following are the
main characteristics of this approach:
 Employee numbers fluctuate on a regular basis.
 There is little business transparency.
 Wages are being reduced.
 Employees are rarely empowered.
 Performance appraisal systems that emphasize positive and negative performance.
 A more traditional leadership approach.
Soft HRM
This approach views workers as a critical resource in your company, if not the most significant
one. As a result, it has a more progressive viewpoint. One in which you treat employees as
individuals. The soft HRM model is centered on your employees' needs, including motivation
and job satisfaction.
 Concentrating on long-term plan for your company and its staff.
 A business model that is transparent and open, with effective communication.
 Pay is competitive, with a focus on wage comparison and bonus programs.
 Employee empowerment is important.
 Appraisal methods that identify training and growth possibilities.
 Leadership that is more democratic.
Advantages and Disadvantages of Soft and Hard HRM
Hard HRM
One of the main advantages of a hard HRM approach for an employer is that you have
complete control over your firm. Based on industry, you may be able to be more severe in
your approach.
As a result, you may implement more cost-effective laws and make faster decisions among
management. And besides, the word suggests a "tougher" attitude to business.
The disadvantage is that it may irritate employees because the approach is more akin to
micro managing.
It is frequently disliked among employees. This, in fact, can result in high turnover rates,
which can raise recruitment costs because you must constantly replace departing personnel.
Soft HRM

The main advantage of a soft HRM approach is better employee satisfaction. With this
strategy, your employees will feel extra respected and appreciative of your company's efforts.
This can result in increased levels of motivation and production for your company. In
addition to a long-term commitment from workers who will be delighted to continue to work
for you. As a result, you will save money on recruitment because you will have a greater
turnover rate.
Your company will also benefit from great word of mind, with equal possibilities and
rewards for employee hard work. This will foster a positive business culture and attract
workers that share your values.
On the other hand, there are a few drawbacks to this strategy. Your emphasis on training and
professional growth will cost your company money. However, you may balance it off by
understanding that there is a return on investment (ROI) from employees upskilling.
This can often slow decision making because there is a more positive strategy with the
requirement for several departments to submit comments.
Workforce Planning
Workforce planning is the process that an organization uses in its workforce analysis and in
its preparation of future personnel demands. workforce planning is necessary. Every business
plan is designed to handle resource requirements, as well as the business plan must ensure
that the proper mix of staff is available to achieve the specific goals. In employee planning,
the organization systematically evaluates the contents and the composition of employees and
determines the measures needed to meet future requirements. The measures to be performed
may rely on both external and internal causes. These factors may influence if either future
skill requirements are addressed by recruitment, training, or outsourcing.
Either handled individually or as part of the business strategy, employee planning entails four
problems:
 The personnel mix and content needed to place the firm effectively to achieve its
potential future and business aims.
 The gaps that emerge between the future "model" organization, along with any
particular abilities that may be necessary for future use.
 The recruiting and training programs for permanently and contingent employees that
must be implemented to fill those gaps.
 The identification of external sources capable of meeting the skill requirements for
outsourced functions or processes.
While many people consider workforce planning to be solely a staffing tool for forecasting
employment needs, it may also be an important tool for employee training and development as
well as succession planning. To be able to succeed, organizations must complete a detailed
workforce planning assessment on a regular basis so that staffing needs can be analyzed, training

and development goals can also be formed, and contingent workforce options could be used to
develop an efficiently staffed and trained workforce capable of responding to business
requirements.
Steps in the Workforce Planning Process
 A supply analysis, often known as a supply model or staffing evaluation, is an
examination of an organization's present labor supply.
 A study of future business plans and objectives is included in the market research, often
known as the demand model.
 The gap analysis evaluates the disparities between the supply and demand models,
identifying skill surplus and gaps.
 The solution analysis focuses on what to fill existing and future staffing gaps through
recruitment, training and development, contingency staffing, and outsource.
Supply analysis
The supply model's objective is to assess the organization as it already exists—that is, the supply
of labor and performance levels that are essential to an organization. This analysis should include
not just the number of staff and their capabilities, but also workforce demography and the
presence of protected characteristics.
Demand Analysis
The demand model's goal is to predict the organization's future personnel composition. This
prediction should incorporate a wide range of company challenges, such as new product lines,
competitive forces and expansion/contraction in global marketplaces, projected workforce
availability across geographic borders, and a slew of others.
Gap Analysis
The third phase in the process compares the supply model to the demand model to discover gaps
between the existing workforce composition and projected workforce demands. The workforce
planning specialist may want to classify a number of future situations and then choose the
highest likely future case, including contingency planning for alternate possibilities. When
completing this analysis, the planner must discover the additional number of staff who will be
required with the necessary skill sets, including the staff who will no longer be required due to
limited specific skills.
Solution Analysis
The formulation of strategies to bridge the gaps revealed in the preceding step is what solution
analysis involves. Recruiting, training and retraining, contingency staffing, and outsourcing may
be used to fulfill future workplace requirements. The options chosen will be determined by
whether the firm has to extend, contract, reform, or rely on temporary workers to fulfill new
workplace needs.
Succession planning

Succession planning is another part of good workforce planning. Organizations use succession
planning to discover and prepare eligible candidates to fill important positions when existing
employees leave their careers. An effective workforce planning approach will include an
assessment of important leading and business-critical jobs, as well as the identification of
important incumbents capable of advancing into these roles. Having a succession plan in place
often supports the seamless continuing of business when important personnel leave due to
retirement, resignation, or graduate assistantships. The roles included in a succession plan differ
depending on the company.
Labor Market
The labor market is where all the supply and demand for jobs interact, with employees or labor
supplying the skills that employers require. The worker might be anyone who wants to give his
services to a client, whereas the employer might be a singular entity or an organization that needs
someone to execute a specific job or accomplish a task. The worker is then analogous to a seller,
while the employer is analogous to a purchaser.
The salary or wages promised to be obtained by the worker from the employer is a common
component that binds the two organizations. In brief, this is where employees can locate work
that matches their abilities and credentials, and also where both parties can negotiate on salaries,
benefits, and other types of payment for the employee.
Workers are supposed to move to where there could be a desire for their abilities in the labor
market, whether it is in their home region or elsewhere. Furthermore, they are replaceable, which
implies that a worker who can do the job much better can be called in to replace over the position
of the other person.
Labor is a physical, mental, and social effort for producing products and services in the
economy. It offers know-how, workmanship and service to make finished products and services
of raw materials.
In return, workers earn a salary to purchase the items and services that they themselves do not
generate. Those who have no desired skills or abilities are generally paid no living salary.
Several countries have a minimum wage to ensure that their workers are sufficiently paid to pay
living expenses.
In many different ways, labor can be classified.
First, the skill level.
The most basic is unskilled labor without training. While manual labor like farm labor is usually
the case, it could also be service work, like janitorial work.
The next is semi-skilled work, which needs some training or education. The manufacturing jobs
is an instance.
The relationship with the employer also categorizes labor. Most of the staff are salaried. That
suggests that the manager watches them. They earn wages and perks, either weekly or bi-weekly.

When the contract outlines the job to be performed, contract work is contractual. It is the
worker's job to determine how this is done. The payment will either be a commission or a fixed
work charge. No benefits are paid.
PESTLE
Political
All these concerns how a government intervenes in the marketplace, and to what extent. It might
include policy on government, stability or instability on the foreign markets, external trade
policy, fiscal policies, labor law, environmental legislation, trade restrictions etc.
From the list above, it is evident that political factors often affect organizations. Organizations
must be able to comply and adapt their marketing policy in accordance with current and expected
regulation.
Economic
Economic factors have a major effect on when and how profitable an organization does business.
Factors include: expansion, rate of interest, exchange rates, inflation, consumers and business
disposable income, etc. These factors can also be divided into macro and micro economic
aspects. In any given economy, macro-economic considerations deal with demand management.
Governments employ their major mechanisms to influence interest rates, tax policy and
government spending.
Microeconomic elements all relate to people's income spending. It has a significant impact on
specific on B2C organizations.
Social
The areas that include the common beliefs and factors include – population growth are also
known as socio-cultural aspects. Which include population growth, age distribution, health
awareness, career attitudes, etc. This is particularly interesting as it directly affects the
understanding and guiding behavior of consumers by marketers.
Technological
We all know how quickly the technological landscape evolves and how this affects our products
marketing. Marketing and management are affected by technological variables in three different
ways:
 New forms of goods and services
 New ways through which products and services are distributed
 New communication methods with target markets
Environmental

These variables have just recently risen to the fore, perhaps in the last fifteen years. They have
grown in importance as a result of the increasing shortage of raw materials, pollution targets,
conducting business in a fair and responsible way, and government-set carbon footprint targets.
These are a few of the challenges that marketers face when it comes to this component. Clients
are gradually expecting that the things they purchase be sourced ethically and, if feasible, from a
sustainability aspect.
Legal
Health and safety, equal opportunities, advertising standards, consumer rights and legislation,
product labeling, and product safety are all legal considerations. It is obvious that in order to
trade profitably, businesses must understand what is and is not lawful. When an organization
deals on a worldwide scale, this becomes a particularly difficult sector to master because each
country has different rules and laws.
Ethical
The addition of an E to PESTEL has resulted in PESTELE or STEEPLE. This abbreviation
stands for ethical, and it refers to ethical values as well as moral or ethical issues that may occur
in a corporation. It takes into account factors like fair trade, slavery acts, and child labor, along
with corporate social responsibility (CSR), which is when a company contributes to regional or
societal goals like volunteering or participating in philanthropy, activist, or charity work.
Internal Labor Markets
Internal labor markets (ILM) are administrative units within a company that manage labor
pricing and distribution through a set of administration rules and regulations. The remaining
positions within the ILM are filled by promotion or transfer of existing employees.
Skill specialization has two key implications on ILM generation: it raises the fraction of training
expenses incurred by the employer as opposition to the learner, and it raises the absolute level of
such expenses. Businesses are looking for persons with special skills who can contribute to their
firm. Firms that demand highly skilled workers seek a reliable labor supply.
Many businesses are prepared to teach internal employees for new roles. They seek to promote
new workers and teach them on-the-job because they have no demand for people with experience
from other organizations. Firms want to keep their investment, so they provide job stability and
structured promotions to their staff. Because of the necessity of on-the-job teaching, promotions
are frequently provided based on seniority. Also, because the elder worker is not frightened of
being replaced by the younger worker, this method of promotion promotes on-the-job training.
Employers gain from a more solid partnership since it lowers training costs.
Internal Labor Market Analysis is concerned with the causes of a firm's or
geography's workforce dynamics - attraction, growth, and turnover – as well as the incentives

that motivate them. Because internal labor markets are a complex system of connections between
workers, corporate management practices, and labor market dynamics, statistics models are
frequently employed to explain and forecast outcomes.
At work, custom is an unwritten system of regulations based primarily on past practices or
precedence. Such rules can control any part of the professional relationship, from discipline to
pay. Work traditions result from a combination of job stability throughout internal labor markets.
Customary law is of particular importance in the research of internal labor markets because of its
stabilizing influence it has on workplace regulations and also because the rules controlling the
price and allocation of labor within the market are especially susceptible to the effect of custom.
The internal labor market has numerous facets. The first are ILMs, which are groups of jobs that
are linked by the skills and abilities necessary for optimal performance. Second, the skills
required for one work cluster are comparable yet distinct from those necessary for other job
clusters. Third, inside each given job cluster, there is indeed a hierarchy of skills and abilities
such that demands for applying skills on certain tasks enable the growth of other talents needed
for other jobs.
Turnover, stability and retention
This also costs you money and lost skills. Each time an employee leaves your business, you must
spend money to replace them.
 A turnover rate is the percentage of employees who leave an organization during a given
time period. A high turnover rate can be costly to a business because departed staff must
be replaced on a constant basis. When an employee is let go from a job, this is an
example of involuntary turnover. Excessive amounts of this can be detrimental to the
organization, leading in
 Unbalanced workloads
 Staff morale and engagement are at an all-time low.
 Corporate knowledge and memory loss
Employee turnover is the percentage of your staff that leaves during a specific time period
usually per year. The percent of employees who stay is referred to as retention.
Measuring data for both turnover and retention is a good guideline to follow if you want to
manage turnover and retention efficiently. Measuring data can assist you in identifying issues
and setting goals for improvement.
The number of workers with a certain length of service (often one year or more) represented as a
percent of total workforce numbers indicates the extent to which a company retains its personnel.
Retaining outstanding personnel is a key priority in almost every business, industry, and region
of the world. To assist with a high turnover rate, the Hr department may take the following
measures with employees who wish to resign.
The degree of change or stability in the workforce is measured by an employee stability index.
As a result, it can improve a firm's abilities to create educated decisions on workforce planning