Analysis of HRM Practices and Their Impact on Zara's Productivity

This report provides a detailed analysis of Human Resource Management (HRM) practices within Zara, a leading retail brand. The report begins by examining the function of HRM in Zara's workforce planning, exploring the organization's strategies for recruitment, selection, and employee development. It delves into the strengths and weaknesses of different recruitment approaches, including internal and external sources, and assesses the benefits of various HRM practices for both employees and the employer. Furthermore, the report investigates the effectiveness of HRM practices in enhancing Zara's profit and productivity, emphasizing the importance of employee relations and employment legislation in influencing HRM decision-making. Through a comprehensive overview, the report illustrates the practical application of HRM practices within Zara, providing valuable insights into the company's approach to managing its human resources.

HUMAN RESOURCE MANAGEMENT
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Table of Contents
Introduction......................................................................................................................................3
TASK 1............................................................................................................................................3
P1) Function of HRM in workforce planning of Zara.................................................................3
P3) Benefits of different HRM practices in Zara.........................................................................9
P4) Effectiveness of HRM practices in raising the profit on productivity of Zara....................10
Task 2.............................................................................................................................................12
P5 Analysing the importance of employee relations in respect to influencing HRM decision-
making.......................................................................................................................................12
P6 Identifying the key elements of employment legislation and its impact on HRM decision
making.......................................................................................................................................12
P7 Illustrating the application of the HRM practices in Zara....................................................15
Conclusion.....................................................................................................................................16
References......................................................................................................................................17
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Introduction
Human Resource management is the backbone of the organisation which combines with
traditional administrative personnel function and develops the performance management in
relation to employee and the resource planning. The assignment will cover the detail study of
Human Resource Management and their function in the organisation. Zara is being chosen as an
organisation for this study to understand about the different approaches of recruitment and
selection and also which is applicable in the organisation. The workforce planning has been
explain briefly and the benefits of the HRM practices for the employer and the employee. The
evolution of the effectiveness of different HRM practices have helped in influencing the decision
making for Zara. It has also been noted that proper application of the HRM practices in the work
has helped to increase the efficiency and productivity of the organisation.
Task 1
P1) Function of HRM in workforce planning of Zara.
Zara is a retail store which was founded in 1975 for the brand of the Inditex group. It is one of
the world’s largest apparel retailers with brands such as Massimo dutti, pull and bear, Bershka,
Oysho etc. As of 2017 Zara has managed 20 clothing collections a year (Zarahome.com, 2018).
Zara has launched 15 fashion stores nationally and two separate Zara home outlet in the recent
month.
The human resource management has helped Zara to become one of the leading brand in UK by
improving their marketing plan and developing their administrative policies and programmes.
The department is quite concerned with the effective utilisation of the human resources in the
organisation for a specific outcome of establishment.
Figure 1: Logo of Zara
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(Source: Zarahome.com. 2018)
The organisation has taken action for maintaining a good relationship with the employee and the
employer for developing:
 Efficiency and effectiveness of the human resources.
 Ensuring positivity in the work and between the employees and the employees in the
organisation.
 Development of the individual in the retail marketing and also for the position in the
organisation.
The online retail marketing in UK has successfully extended the blow for bricks and Motors
brands. The UK retail with the backbone of the HRM in their works was planning has helped to
increase to profit by 2.1% true UK in January. The main motive of the organisation is now to
increase the efficiency among the employee to gain competitive advantage.
The organisation is adopting for a specific human resource function in their workforce planning
and resources:
HR planning: It is essential to have a good plan for the operations for the daily activity. The
effectiveness of HR planning has enabled the organisation to achieve the overall performance.
Identification of the nature of the job and helping with the desired candidates in the organisation
has increased the revenue (Lane et al. 2015).
Recruitment and selection: Zara is looking for creative and flexible employees who can have
enthusiasm and commitment to their passion for fashion. As the technology is changing day by
day so the organisation has focused on adapting to changes towards customer oriented and
teamwork.
Training and development: The organisation focus on the development training so that the
employees can have internal promotion by constant adoption of the business and evaluation of
the performance (Furnham, 2017). It also focus on the store, classroom, raw materials, corporate
social responsibility, and safety trainings etc.
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Figure 2: Training and development method of Zara
(Source: Bondarouk, 2014)
Compensation: HRM focus on the vacation package of four weeks in a year. It focus on the
commission, leave benefits, discounts, insurance plan etc.
Performance management: The organisation helps with the job satisfaction with different
activities in the workplace like exchanging of jobs to the different employees. It helps to broaden
the experience, knowledge and minimise the risk.
Employee relations: The fundamental value of the organisation used to motivate, innovate the
team work with humbleness and drive 1,71,000 customers with good product of quality and
service (Doherty et al. 2016). The strict code of conduct has helped to generate more revenue of
the organisation by focusing on the career opportunities of the employees.
P2) Strength and weakness of different approaches to recruitment and selection.
As a large retailer in UK Zara has adopted a good human resource department for achieving the
goals and objectives of the organisation which use internal and external source approach of
recruitment and selection for the employees.
Internal source approach recruitment and selection:
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This is an approach for recruiting the employees internally within the organisation. The
organisation focus on different strategy for recruiting and transferring the employees to fill the
desired position in the organisation (Clabburn et al. 2016). The organisation also focus to get the
applicants from the existing employees and use referrals for existing employees.
Figure 3: Internal sources of recruitment and selection
(Source: Brewster, 2017)
Strength Weakness
 HRM has contacted the recruitment
and selection process with the short
time.
 The interview is easy and will recruit
among the existing employees in the
organisation.
 The approach has an effectiveness in
the nature for hiring employees
(Brewster, 2017).
 It can demotivate the employees who
are not promoted in the organisation.
 It creates discrimination.
 It limits the opportunities for hiring
new and innovative employees.
 The applicants are limited
 No fresh talent enters the workforce of
the company
 Resentment among the colleagues
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Employee
ReferralsPromotionTransfer
Internal
Recruitment &
Selection

 There is no risk for hiring unqualified
employees.
 This process is cheaper and quicker
than that of the external recruitment
 The talent and capability of the
employee is already known
 The Strengths, weaknesses and the
business process of the organisation is
already known
 to the employee
 Promotional opportunities are
motivating for he employees
increasing the productivity
against the chosen employee may take
place as
 Decisions may be taken based on any
kind of bias.
 Creation of another vacancy takes
place (Zarahome.com. 2018)
External approach of recruitment and selection:
This approach deals with the employees from the external sources which are from advertisement
on different media, agencies or employee referrals. This recruitment and selection process is
quite time consuming and complex however brings a good outcome for the organisation.
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Figure 4: External sources of recruitment of Zara
(Source: Dumont et al. 2017)
Strength Weakness
 This sources has helped to recruit new,
young, creative and skilled employees.
 It has helped to promote the brand
externally.
 It has also help to increase the
productivity through various methods.
 New talents for the organisation
 Availability of talented, experienced
and widely skilled
 It is very time taking and costly.
 This has a high risk for unfit
employers hired for the organisation
(Dumont et al. 2017).
 Expensive process owing to
advertisements in print media and
online media like job
 portals
 This particular process is very long
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 Numerous options to choose from and
hire the best potential employee
than other recruitment processes
 The selection mat not prove to be
effective as expected
The recruitment and selection for approaches of Zara has also focused on the reliability of the
interviews. This are conducted by different taste like MCQs, aptitude test etc. It is a parallel or
alternative for method for the procedure of the recruitment which helps the organisation to
identify the desired candidate. The validation in composites like content validity, Criterion
validity and construct validity of the employee to join the organisation after this election.
Third Party Recruitment:
Strength Weakness
 Fair staffing based only on talent is
possible
 long term target in building
relationship
 Best utilisation of the talent of the
candidates
 Extra fees for the services offered by
the recruitment agency is required to
be provided incurring costs on the
organisation
 Lack of control over of the hiring
process is seen as the HR manager has
no direct control over the agencies
(Farouk et al. 2016).
 Assessment of the individual
employee by the HRM of the company
is not possible.
 Communication issues regarding the
exact requirement of the organisation
is witnessed
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P3) Benefits of different HRM practices in Zara
The effective practice of the human resources has benefited the employee and the employer of
Zara in different ways.
The hiring and training policy of the workplace has become more responsible and depending on
the reading strategies so that the right kind of people can be allocated in the organisation. Zara
has appointed the desired candidates for the weekend shop with their hard work with other
companies for the experience and for fresher they have based on their education level. The
organisation also focused on the induction and orientation process so that the employees can get
a clear picture about the work before they go for the training (Ahlvik, and Björkman, 2015).
The main aim of HRM in the organisation is to maintain the effective resources at the workplace
so Zara has applied the practices like test evolution and different rounds of face to face
interviews. This has helped the organisation to increase the efficiency of the Human Resource
Department as well as to identify the desired candidate for the different departments of Zara.
Zara has also opted for providing flexibilities to the Employees with different leave policies,
insurance policies, good pay scale and so on such that organisation can get help from the
employees for retaining with loyalty (Dumont et al. 2017).
The utmost product of the organisation is to focus on the employee satisfaction so the Human
Resource Department has satisfy the workplace with different bonus and incentives for the extra
sales. Also getting a discount of more than 25% in a particular product has motivated the
employees to be in a longer run in the company. This has also benefit in the employed as
retaining the employees (Doherty et al. 2016). The improved performance has helped to provide
with more knowledgeable training and development programs to the employee. This scheme has
focused on the loyalty and the motivation of the employee so that the employees can be better in
the performance. Zara works for the development of the customer satisfaction as well as for the
employee satisfaction and morale with proper commitment to their employees.
The organisation has a very basic rule for performing the work of the employees through
performance management and appraisal method. Zara always opt for 360 appraisal method so
that the feedback can be genuine from the top level managers, medium and senior level managers
(Furnham, 2017). For ensuring an effective Human Resource Management in all the department
of Zara implementing the external strategy of hiring innovative and creative employees has
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become one of the important method for the organisation. Thus, the strategies adopted by the
organisation has helped to maintain a good relationship with the employees and the employer by
measuring our overall performance of the company.
P4) Effectiveness of HRM practices in raising the profit on productivity of Zara
The human resource management of Zara has am to maintain a good relationship with the
employees at the workplace. This is because the productivity and the profit of the business is
through the employees. So, maintaining a good balance can increase the efficiency and decrease
the conflicts in the organisation (Doherty et al. 2016). This will lead to more dedication towards
their work and will increase the productivity which will help in the revenue of the organisation.
Zara has focused on benefits of employees so that they can get motivated easily to work and also
to give the best performances.
The effective human resource management practice has helped the organisation to enable the
employer for reducing employee turnover. The employee turnover can hamper the organisational
performance and can increase in the cost of human resource department. Zara has produced
around 450 million items in a year which has shared the volume through the supply chain and
has insured a better Logistic competitive counterparts in the UK market. Thus, to maintain the
employee turnover ratio the recruiter of Zara has focused on the fashion sense of the right
candidate by having a special aptitude test which is related to fashion and Retail Management
(Van et al. 2015). The human resource department has also focus on the right compensation and
benefits which is according to the industry package and improve the flexibility of the employees
in working schedule and bonus structure.
In each and every month, the HR Department conduct a meeting with the employees to
understand about the needs and more flexibility which can be switchable in the organisation for
the individual. However, they also keep in mind about the organisational profit. The employees
of Zara has recently increase the sale with profits in the UK stores by launching different
products of shoes and clothes which got a competition with the High Street rivals in the UK
stores. The sales at UK subsidiary of the Spanish form has raised to 8% to £535 m till the year
2017 (Brewster, 2017). This has made a pre-tax profit of £58.3m which is from £49.2m better
than 2016. The team practice has also helped in benefiting the short-term employee productivity
and turnover on the long term financial performance. The employee satisfaction has helped the
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organisation with less number of chunks policy and has also increased the profits with the
competitors like Marks and Spencer etc.
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