Human Resource Management Strategies at Harrods: A Detailed Report

This report analyzes the human resource management practices at Harrods, a luxury department store. It examines the problems faced, including hierarchical organizational structure, employee turnover, and leadership style. The report details the approaches taken to increase employee engagement, such as changes in organizational structure, leadership style (shifting from autocratic to transformational), improved communication, employee feedback mechanisms, and a 'bright ideas' scheme. It then forecasts potential future challenges, including managing increased employee responsibilities, the impact of transformational leadership, potential information leakage through open communication, technological factors, and employee turnover. The report concludes with recommendations for addressing these challenges, emphasizing the importance of training, careful task allocation, consistent feedback implementation, and considering technological advancements. The report highlights how Harrods strives to improve employee engagement to reduce the worker turnover rate.

HUMAN RESOURCE
MANAGEMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
Problems faced by Harrods.......................................................................................................3
Approaches to manage changes to increase employee engagement:........................................4
TASK 2............................................................................................................................................5
Future challenges that can be foreseen:......................................................................................5
Recommendations:......................................................................................................................8
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Management of human resources is the most important thing for any organisation.
Success or failure of firm totally depends upon the efforts made by human resources. The given
case study talks about Harrods which is an upmarket departmental store in London, United
Kingdom. It is a brand that is recognised all over the world. Harrods has started its business
operations 182 years ago. It employs around 12000 employees with 330 departmental stores
worldwide. The values of Harrolds are British; Luxury; Service; Innovation and Sensation.
Harrolds is a big player in the retail industry which has competitors like Tesco, Siansburry Asda
group, William morrison. Harrods was purchased by Qatar holdings in the year 2010 from
Mohamed Al-Fayed (Buller and McEvoy, 2012) The new owners are strongly committed to all
of Harrods’ employees. They recognise that engaged employees are essential to the continuing
success of the business. In this case study, Harrods has focused on improving its employee
engagement in order to reduce the worker turnover rate.
TASK 1
The human resource management faces day to day problems in business operations. To
ensure smooth flow of business operations, management needs to solve their issues as early as
possible to survive in the long term in this competitive business environment.
Problems faced by Harrods Hierarchical Organisational Structure: Employees have been facing many problems
related to the structure of organisation. Organisational structure of Harrods was too
complex as well as the employees at bottom level have no right to approach the top level
management. There were too many layers of positions in the organisation. The managers
had numbers of subordinates working under them and responsibilities of employees were
also high. This is the reason; employees were not getting mental job satisfaction.
Workforce was lacking in terms of efficiency and effectiveness that directly affected the
performance of organisation (Bratton and Gold, 2012).

 Employee Turnover: It was another problem faced by the organisation. Employee
turnover is defined as the number of employees leaving company. In case of Harrods,
employee turnover ratio was increasing day by day. Employees were leaving the firm
because of different reasons. Some had issue related to pay scale, while on the other side,
some were having problem with the organisational structure where no manager was
listening to the thoughts and ideas of staff (Bučiūnienė and Kazlauskaitė, 2012). Leadership Style: Harrods has used autocratic style of leadership where the leader takes
all decisions without considering the opinion of team members. Under this leadership
style, no one can challenge the decisions of leader which reduces the morale of
employees. Thus, it affected the performance workers in Harrods to a high extent. They
became less efficient and ineffective. It had a direct impact on the profitability of
organisation.
 Customer Relationship: In case of Harrods, it was clearly given that there is a difference
between employee experience and cistomer experience. The employees of Harrods have
tackled these issues as a matter of urgency (Parry and et.al., 2005). The organisation
needs to provide quality products and services to the customers to build healthy
relationship with the customers.
Approaches to manage changes to increase employee engagement: Change in Organisation structure: In order to increase employee engagement, managers
of Harrods felt the need of changing structure of organisation. Earlier it was hierarchical
where there were too many layers of positions in the organisation. The structure was too
complex to understand. Organisation now is having a flatter organisational structure
where the employees have more responsibilities as compared to the previous structure. It
provides high job satisfaction to the employees as they have more responsibilities in their
hands. Management of Harrods needs to ensure that the idea of developing flatter
organisational structure has worked for the organisation. All the managers as well as
employees were needed to work together for getting success in future (Montoro‐Sánchez
and Soriano, 2011). Change in Leadership style: The organisation has changed its leadership style from
autocratic to transformational. In autocratic style, decision-making was done by the
leader only, without considering the opinions of team members. In order to increase

employee engagement, management of Harrods has decided to change the leadership
style. In transformational style of leadership, all employees were considered in the
decision-making process. In this, leader took the opinions and ideas of employees in
consideration, but the final decision was taken by the leader himself. It increased the
morale of employees when they were included in decision-making process (Theriou and
Chatzoglou, 2009). Better Communication: Management has developed an open door policy in organisation
to improve the communication between employer and employee. Business strategies and
other important information is shared with the employees. Day to day operational plans
were also shared with them. It provided assistance in giving employees an aim or
direction to work for. The employee engagement has also been increased with improved
communication network within organisation. Employee’s Feedbacks: To increase the employee engagement, management of Harrods
has developed a quarterly employee forum where each employee can present the issues in
front of management. The managers took feedbacks from employees related to issues
with respect to working environment and pattern and culture of the organisation along
with other problems. Management improved the working pattern of organisation and
increased its profitability by working on feedbacks of employees (Armstrong and Taylor,
2014). The right feedbacks from the employees can be helpful in acheving the objective
of the organisation..
 Scheme of Bright Ideas: Harrods has developed a bright idea scheme for the employees.
In this scheme, employees were encouraged to share their innovative ideas in the
organisation. It will definitely help firm in improving the performance of employees and
gaining a competitive edge over competitors in the market.
TASK 2
Future challenges that can be foreseen:
Harrods has developed many changes in order to increase the employee engagement and
achieve success, however these may be the issues or challenges that Harrods may face in the
future and the following are the recommendations from the side or researcher:

The management of Harrods has changed the structure of the organisation in order to
increase the employee engagement. The organisation has developed a flatter structure to provide
more responsibilities to the employees (McConville, 2006) The management think that it will
provide more job satisfaction to the employees but in future it may trouble the employees also.
When the employees will be give more responsibilities by the organisation, they may unable to
perform one task at a time. The overload of work may shift their focus from organisational
objective to personal objective. They may unable to manage their time, there may be mismatch
between their social and corporate life. There may be a chance that in the future, the employees
may not feel comfortable with lots of responsibilities. The manager of Harrold need to ensure
that the employees are provided proper training and necessary learning to perform the new
responsibilities efficiently and effectively. It will incur more cost in terms of providing trainings
and developing the flatter structure in the organisation. The management needs to ensure that
they should not overload the employees by allocating numbers of tasks to them. The works
should be allocated as per the the knowledge and capicity of work of the employees. It should
also be allocated as per interest of the employees (Burbach and Royle, 2014). If the employees
gets the work of their interest, they may be able to perform better with efficiency and it can be
completed in time as well.
The organisation has also changed the style of leadership in order to bring active
participation of the employees in organisational activities. Harrods has developed
transformational style of leadership in the organisation where the leader takes decisions
considering the inputs of all the employees. It will give satisfaction to the employees for some
time but if their inputs are not considered by the leaders in decision-making, they may feel
guilty. There may be a chance where all the employees are not agreed upon the decision of the
leader, it may result into conflict as well. The employees only needs to give valuable inputs to
the leader that is useful for the organisation. If the inputs given by the employees are not useful
for organisation, the leader will ignore that. All the employees needs to follow the direction
given by the leader. In transformational style of leadership, the team leader has the power to
review the output and train the employees accordingly. In order to achieve success in the future,
the employees should have faith on their team leaders. This leadership style is highly depends
upon the level of communication from the management to meet the organisational goals. It

requires participation of management in order to achieve the objective in time (Machado and
Davim, 2014).
Harrods has developed an open door communcation policy in the organisation where
each employee has rights to communicate directly with the top level employees. The
management also share important business strategies and other important informations with the
employees of the orgainsation. It may result into leakage of important organisational strategies
outside the organisation. It may remove the privacy of some important informations. The
competitors may take advantage by getting those valuable informations of the competitors. The
organisation needs to share only the valuable informations that are necessary to share with the
employees. The employees should also keep those informations within the organisation. If the
employees share those business strategies with outside people, it may harm the profitability of
the company. The change that has adopted by the organisation did not considered the
technological factors. This may cause mismanagement or miscoommunnication in the
organisation. There are chances that the message can be communicate wrongly by the staff
members. So the management of Harrolds is required to consider the technological factors in
improving the communication within or across the organisation (Mellahi, 2009) The uses of
advance technology may give a competitive edge to Harrolds from its major competitors in the
retail industry.
The issue of employee turnover may also affect the smooth flow of business opearations
of Harrods in the future. The employee turnover is a big issue for any organisation. It needs to be
controlled in time. Employees may face different issues like the pay policy, culture, pattern,
structure of the organisation and may leave the organisation. Pay policy of the organisation is the
most common issue that employees faces in different businesses. They may demand for higher
salaries and benefits. If the management is unable to fullfill their demand the employees may
leave the organisation. To overcome from this issue, the HR department need to hire those
people who are less demanding and more knowledgable. They also need to hire the right people
who can work for long period in the organisation. The management can also develop the bond
signing policy for that. If the employees signs on the bond they may not leave the organisation
before the time period mentioned in the bond (John Wiley & Sons.Storey, 2014)
Harrolds may face another issue related to the feedbacks of the employees in the future.
Harrods has developed a quarterly employee forum policy, in which the managers will take their

feedbacks on a quarterly interval. The implimentation of employee feedback may become the
major issue for the organisation. If the implementation of their feedback is not done on time, it
will be useless for the company. The employees may feel avoided in the organisation if their
opinions or suggestions are not implemented by the management. Therefore the management of
Harrolds is required to implement the valuable feedbacks of the employees.
Recommendations:
There may be a case where employees are not able to generate more new ideas that can
benefit the organisation in the future. The employees may repeat their previous ideas again and
again. For example, if an employee come up with an idea to the manager and the manger did not
accept his idea because of invalidity, the next year also he will come up with the same idea
(Schuler and Jackson, 2008). If in case, the manager consider the idea of an employee, there is a
possibility that he may lack of new ideas in the future. The management of Harrods is required to
provide necessary trainings and learnings programs for the employees. The management can
organise many activities within the organisation that may help employees in become more
creative, efficient and effective. These activities will help employees to relax a bit from their
daily schedule work and make them more creative than before.
CONCLUSION
From the above report, it can be concluded that Harrolds has done significantly well in
improving the employee engagement and reducung the employee turnover. The stated
organisation has developed many new policies and changed organisational structure in order to
develop the employee participation towards the organisational activities. Harrolds has also
changed the leadership style to provide job satisfaction to the employees (Analoui, 2007) These
are the main reasons why the company has outperformed its competitors and existing since 1834.
The organisation has a huge opportunity to grow and expand the business operations in the
future.

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