Human Resource Management in Aldi: A Comprehensive Analysis

This report provides a detailed analysis of Aldi's human resource management (HRM) practices. It begins with an overview of Aldi, including its product lines and corporate social responsibility initiatives. The report then delves into the core functions of HRM, such as recruitment, selection, and orientation, examining their importance within the organization. It evaluates the strengths and weaknesses of different recruitment approaches, including internal, external, and third-party sourcing, specifically in the context of Aldi's operations. The report further explores the benefits of various HRM practices, such as work-life balance and training, for both the employer and employees, and assesses their impact on profit and productivity. It also emphasizes the significance of employee relationships and the influence of employment legislation on HRM decision-making. Finally, the report examines the practical application of HRM practices within Aldi, including workforce hiring, training, and performance management. The report concludes by summarizing the key findings and their implications for Aldi's HRM strategies.

Running head: HRM OF ALDI
HRM of Aldi
Name of the Student:
Name of the University:
Author Note:

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Table of Contents
Introduction:....................................................................................................................................4
An overview of Aldi:.......................................................................................................................4
Product line:.................................................................................................................................4
Corporate Social Responsibility:.................................................................................................5
Task 1:.............................................................................................................................................5
P1: Purpose and functions of human resource functions:................................................................5
i) Recruitment and selection:......................................................................................................5
i) Orientation:..............................................................................................................................6
ii) Maintaining good working relationship:.................................................................................6
P2: Strength and weaknesses of different approaches to recruitment and selection for Aldi:........7
i) Internal sourcing:.....................................................................................................................7
Morale:.....................................................................................................................................7
Cost effectiveness:...................................................................................................................8
Revitalisation:..........................................................................................................................8
Intensify internal conflict:........................................................................................................9
i) External sourcing:.................................................................................................................9
Increase in quality of capital:...................................................................................................9
New Qualified candidates:.....................................................................................................10
Limited understanding of the company:................................................................................10

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High cost:...............................................................................................................................10
ii) Third party sourcing:.......................................................................................................11
Candidate relationships:.........................................................................................................11
Reduction of cost:..................................................................................................................11
Lack of control:......................................................................................................................12
Communication issues:..........................................................................................................12
Task 2:...........................................................................................................................................13
P3: Benefits of different HRM practices within Aldi to employer (Aldi) and the employees:.....13
i) Advantages of recruitment and selection to employers:.....................................................13
iii) Advantages of work life balance to employers like Aldi:...............................................14
iv) Advantages of Work life balance to employees:............................................................14
v) Advantages of training and development to employers:.......................................................14
vi) Advantages of training and development to employees:....................................................15
P4: Effectiveness of HRM practices in raising profit and productivity:.......................................15
i) Recruitment and Selection:....................................................................................................16
ii) Work life balance:..................................................................................................................16
iii) Training and development:.................................................................................................17
Task 3:...........................................................................................................................................17
P5: Importance of employee relationship in respect to influencing HRM decision making:........17
P6: Key elements of employment legislation and its impact on HRM decision making in Aldi:. 18

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Task 4:...........................................................................................................................................18
P7: Application of HRM practices:...............................................................................................18
Hiring and training workforce:..................................................................................................18
Supervises Performance Management System:.........................................................................19
Conclusion:....................................................................................................................................19
References:....................................................................................................................................21

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Introduction:
The paper aims to apply principles of human resource management and its importance in
attracting, recruiting and retaining talent. Human resource management plays a very significant
role of acquiring, staffing, managing and retaining employees. The study considers Aldi, the
German multinational retail chain as the background of study. The paper starts with an overview
of Aldi and is then divided into four parts or tasks. The tasks delve into the importance of human
resource management in the organization with reference to Aldi. The paper also shows the
various types of human resources practices like recruitment and training and their role in
ensuring high productivity and profits for Aldi. The paper also has mentions of acts like the Fair
Work Act 2009, which govern employment policies of international retail chains like Aldi.
An overview of Aldi:
Aldi is a German brand of supermarket having over ten thousands outlets in more than
eighteen countries. It is one of the largest super market chains in the world having strong
presence in countries like Australia, Austria, Belgium, the United Kingdom, the United States of
America and Switzerland. The multinational chain of supermarket is headquartered in
Germany(Aldi.us. 2017).
Product line:
The product line of the supermarket can be divided into food items and non food items.
The food items consist of meat, eggs, vegetables, whole food items, desserts and alcoholic
products. The non food poroducts consist of household cleaners, laundry, pet care and gardening
articles. the supermarket chain also sell skin care products and toiletry products. the supermarket

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chain sells products at its outlets and also online. The buyers can browse the official website of
Aldi to order and purchase products online.
Corporate Social Responsibility:
Aldi views itself as a responsible member of the society and has a very strict corporate
social responsibility. The super market chain sources its food items from sustainable suppliers,
which confirms to its sustainable codes of supply chain. The supermarket is actively involved in
supporting social causes and social development (Lund-Thomsen and Lindgreen 2014).
Task 1:
P1: Purpose and functions of human resource functions:
Human resource functions refer to several functions like recruitment, staffing and training
which lead to the acquisition and maintenance of employees in organizations. The human
resource departments in the organizations play a significant role by providing them with talented
and efficient workforces capable of delivering high level of performances. The following are the
purposes of human resource functions:
i) Recruitment and selection:
Recruitment is the process of capturing, screening and selecting potential and qualified
candidates. The aim of this process is to attract ad acquire qualified candidates for the
organization and exclude ineligible candidates. The human resource departments before starting
the recruitment process first creates a plan to recruit human resources aligned to the business
needs of the organizations like Aldi, the multinational chain of grocery stores. This leads to
acquisition of appropriate human resources capable of serving the customers in the most

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professional way and deal with their complaints satisfactorily (Vickers, McDonald and Grimes
2014). Thus it can be analyzed that appropriate recruitment and selection is important in
international retail chains like Aldi because it ensures hiring of appropriate work force, which
contributes, to the growth of the retail chain in the international market (Vickers, McDonald and
Grimes 2014).
i) Orientation:
Orientation is a very important function of human resource management and workforce
planning especially in the international chains of super markets like Aldi. The purpose of human
resource management in orientation is to educate the newly hired employees on their job
responsibilities, job role and their relationship with other position. It is closely related to
recruitment because it leads to employees recruited getting familiar with the organisational
polices and work culture of the company. The human resource management department informs
the employees about the expectations the management has from them and what can they expect
from the organisation. This analysis shows that orientation is an important human resources
management function because it gives the employees a clear idea of their role in the organisation
and encourages them to attain high degree of performances (Barry and Starr 2015).
ii) Maintaining good working relationship:
The human resource management creates a positive and healthy work environment in the
organizations which encourages the employees to perform higher. The human resource
department plays a very important function by motivating the employees to achieve higher
degrees of performances using various financial and no financial methods of motivation. For
example, the human resource department at Aldi offers incentives to employees to over-achieve

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their targets (Glavas and Godwin 2013). These measures encourage employee performances,
which in turn goes into enhancing their job satisfaction. Thus, human resource management
contributes towards healthy relationship between the employers and employees. This healthy
relationship motivates employees to attain high level of performances, which ultimately
contributes high organizational performances. Thus it can inferred from the discussion that
efficient human resources management contributes high organizational performances(Reader et
al. 2017).
P2: Strength and weaknesses of different approaches to recruitment and selection for Aldi:
The different approaches to recruitment and selection lead to acquisition of highly
efficient staffs capable of delivering high level of performances. Aldi is a multinational chain of
retail chain, which follows different approaches to recruitment and selection. Some of these
approaches are internal sourcing, external sourcing, and third party sourcing. The following are
the strengths and weaknesses of these approaches in reference to Aldi:
i) Internal sourcing:
The internal sourcing approach to recruitment and selection refers to system of
advertisement of vacancies within an organisation. The super market chains like Aldi prefer this
method of recruitment and filling up of vacant positions. The following are the advantages of
internal recruitment:
Morale:
Recruitment of employees from within the organisation through internal promotion
results in placing candidates that are more appropriate in responsible position. The candidates are
selected within the organisation so does not require induction. they already aware of the

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organisational culture and start performing easily. For example, when an existing employee of
Aldi is recruited internally, he is already aware of the business environment of the company. He
thus starts performing more effectively compared to a new employee. This shows that scope of
recruitment to higher post internally also boosts the motivation of the present employees and
encourages performing higher to gain the higher positions(Sarker 2017).
Cost effectiveness:
Recruitment of employees from within the organisation is less expensive compared to
external or third party recruitment. This method results in recruitment of employees from within
the organisation and saves cost of hold recruitment drives. International retail chains like Aldi
often recruit employees from within the organisation, which saves their cost of recruiting from
outside soures (Alam 2016). Thus, it can be analysed that internal recruitment can be more cost
effective and save the cost of Aldi compared to external recruitment.
Internal recruitment has several advantages like cost effectiveness but has several
disadvantages as well. The following are the disadvantages of internal recruitment with respect
to the German multinational retail chain Aldi:
Revitalisation:
Internal recruitment results in employees to higher positions from within the organisation
and does not allow the organisation to recruit from external sources. Aldi is a multinational retail
chain whose operation requires innovation to maintain its competitive position in the
international market. Employees recruited from external sources like from other organisation
come with innovative ideas and techniques of operations. These innovative ideas enrich the
knowledge capital of the retail chain. Thus, by recruiting employees internally, the company is

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devoid of these innovation ideas and techniques it can get from externally recruited employees
(Lamba and Choudhary 2013).
Intensify internal conflict:
Recruiting employees from within the organisation can result in internal conflict among
the existing employees. The old employees may not accept the authority of the junior employee
promoted and who is authorised to direct them. This conflict may lead to politics and unethical
practices with the organisations, which jeopardises their productivity. For example, if an
executive posted at store is promoted to the position of store supervisor at Aldi, the employees
who were his peers in the past but are now compelled to report to him may not cooperate with
him. This may give rise to internal conflict among the employees, which would jeopardise the
productivity of the store (Barma and Gupta 2015). Thus it can stated that though internal
recruitment saves cost, it can lead internal struggle among the employees for power.
i) External sourcing:
External sourcing refers to acquiring employees from outside organisation like job boards
and newspapers. The following are the advantages of external sourcing of employees with
special reference to Aldi:
Increase in quality of capital:
The external candidates come with fresh knowledge, ideas and capabilities, which in turn
contribute, to the growth of knowledge capital of the organisation. For example, new employees
join Aldi with their knowledge and talent from other organisations like other international retail
chains. Aldi can use their knowledge and skills to gain higher level of expertise. Thus, external

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sourcing of employees contributes to the knowledge capital of the organisations (Tödtling and
Grillitsch 2014).
New Qualified candidates:
New candidates come with their knowledge and qualifications and add to the strength of
the operations of their new employers. Thet contribute to the growth of the organisation using
their talent and qualification. The multinational shopping malls today require highly qualified
and talented staff members who are capable of dealing with customer complaints more
efficiently. Newly acquired talented employees are able to meet the customer complaints more
efficiently, thus contribute to the standard of customer services offered by Aldi.
The following are disadvantages of external recruitment:
Limited understanding of the company:
The new employees have limited understanding of the operations of Aldi and as a result
need time to acclimatise themselves with the company. This lack of awareness about the
company influences the productivity particularly if the externally recruited employees holds a
decision making position. His lack of understanding of the company impedes his decision-
making capabilities, which hampers the productivity of the company (Kang and Kang 2014).
This analysis shows that new employees may have new ideas and knowledge, which can help in
the operations of the company; they often fail to take appropriate decisions due to their lack of
knowledge about the company, its employees and organisational culture.
High cost:
Recruitment of employees from outside sources is very expensive and adds to the cost of
the company. For example, in order to acquire employees, Aldi has to give advertisement in

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newspaper and job portals. Then the human resource department require holding interview of
candidates. Thus external recruitment of employees are extremely cost which add to the cost of
the company (Beck and Schenker-Wicki 2014).
ii) Third party sourcing:
Third party sourcing refers to the sourcing of employees by companies through
consultancies. The following are the advantages of third party sourcing of employees by
organisations like Aldi:
Candidate relationships:
The companies are able to obtain employees having required talent and knowledge
through recruitment consultancies and do not have to bear the cost of recruiting tem. They are
able to acquire talented employees and then place them in various positions according to their
eligibility. Thus, in case of third party recruitment the companies do not have to take the trouble
of finding out talented employees (Jamil and Neem 2013).
Reduction of cost:
Recruitment using third party sources saves the companies from incurring expenses like
advertising the vacancies on newspapers and job portals. This helps them to save the cost of
searching for candidates as the job consultancy firms do it. The companies can use this saved
capital towards training of the employees hired by third party sources. Thus, it can be analysed
that third party recruitment helps the companies reduce their cost of recruitment because it is
done by consultancies. The company can use the saved amount to offer training to the newly
hired candidates and induce them to its work environment.