Tesco's HRM Strategies: Impact on Profitability and Employee Relations

This report provides a detailed analysis of Human Resource Management (HRM) practices within Tesco plc. It begins by outlining the purpose and functions of HRM, emphasizing its role in employee recruitment, selection, training, and development, as well as its contribution to organizational goals. The report then delves into the strengths and weaknesses of various recruitment and selection approaches, including internal and external methods, and explores the benefits of HRM practices for both employers and employees, such as improved motivation, training, and conflict management. Furthermore, the report evaluates the role of HRM practices in raising organizational profits and efficiency, highlighting performance appraisal and compensation strategies. Key elements of employment legislation and their impact on HRM decision-making are also identified, along with the importance of employee relations in influencing these decisions. The report concludes by illustrating the application of HRM practices in a work-related context, offering a comprehensive overview of HRM's critical role in Tesco's success.

HUMAN RESOURCE
MANAGEMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Explain purpose and functions of HRM that are applicable on workforce............................1
P2 Explain the strengths and weaknesses of various recruitment and selection approaches.....3
TASK 2 ...........................................................................................................................................5
P3 Explain benefits of HRM practices for employer and employee ..........................................5
P4 Evaluate the role of HRM Practices in raising organisational profits and efficiency............6
TASK 3 ...........................................................................................................................................7
P5 Identify the importance of employee relations in influencing HRM decision-making.........7
P6 Identify key elements of employment legislations and their impact on HRM decision-
making ........................................................................................................................................8
TASK 4 ...........................................................................................................................................9
P7 Illustrate the application of HRM practices in work related context.....................................9
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Human resource management is the concept of managing employees in an effective
manner. This consists of several processes such as recruitment, selection, training and
development, remuneration, motivation, etc. It assists in enhancing the efficiency and skills of
workforce by ensuring proper utilization of these people (Brewster and Hegewisch, 2017). Main
aim of this process is to retain key personnel and attracting new talent in order to facilitate
company's growth. This report is about Tesco plc which is a multinational grocery store in the
UK. There are various functions of human resource management that are applied on employees
of this organisation. This study will identify various strengths and weaknesses of different
recruitment and selection methods. Along with that, there are some benefits of these practices to
employer and employee. This report will evaluate the effectiveness of various HRM activities in
enhancing profits of company as well. Further, key elements affecting decision making for
human resources will be discussed along with stating the ways in which these practices could be
applied in work related context.
TASK 1
P1. Purpose and functions of HRM that are applicable on workforce
Human resource management is a vital part in Tesco. It is a process in which employees
are recruited and trained for the purpose of their personal and professional development
(Knowles, Holton and Swanson, 2014). Main task in this process is to plan, develop and design
programmes as well as policies to make proper use of human resources of company. It is that
part of management which is focussed towards workforce and their relationship with
organisation. Objectives of HRM are as follows:
 To make effective and proper utilization of human resources
 Maintain healthy relationship between members and organisation
 Ensure individual development
 Development of employees to attain desired objectives and goals of company
Functions in human resource management
There are several functions which are performed in HRM that are applied on employees
of this enterprise. Major areas are related with skills, abilities, knowledge and experience
required for workforce in order to achieve the organisational goals effectively. Main functions
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include planning, staffing, development and maintaining personnel. These functions are
explained as below:
Human resource planning- It is the most important activity in HRM as it is related with
number of employees required to accomplish company's goals properly. This function is based
on research which includes collection and analysis of information (Cascio and Boudreau, 2010).
This data is used to forecast and predict the need of human resources in future. In this activity,
several strategies are developed for the purpose of staffing and training of people.
Job analysis- In this function of HRM, job vacancies are identified that are to be filled.
This process includes assessing the requirement, skills, knowledge and experience needed to
perform this work. Human resource manager prepares the job description which is a statement
including duties and activities of employees. It is an important source of information for job
seekers, employees and management of this company. This is very helpful in influencing those
candidates who are as per this description in terms of their skills, knowledge and abilities.
Staffing- Another important function of HRM is related with recruitment and selection of
human resources for this enterprise. It is concerned with hiring employees who are the best
suitable for vacant job positions. Recruitment is an activity of attracting qualified persons
whereas selection is related with choosing the able ones and rejecting others who are not
appropriate. People are selected on the basis of various criteria such as personal interview,
aptitude test, group discussion, etc.
Orientation- It is the most important activity as it is related with helping the newly
appointed workers to get adjusted in new job and workplace. This is a technique in which these
employees are provided with information regarding various aspects in new job such as pay scale,
work benefits, working hours, policies and rules of organisation.
Training and development- This function is related with enhancing the skills and
abilities of workers so that they can perform their job effectively. It includes designing training
programmes for new and experienced employees in order to increase their productivity and
ensure personal growth. These sessions provide useful modes of information that are needed for
workforce to work as per the standards.
Performance appraisal- It is very important to have productive workforce in order to
attain the goals of company in stipulated time period (Fulton and et. al., 2011). This function of
human resource management is related with monitoring the performance of employees through
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various appraisal systems. It is very helpful in identifying the deficiencies in their working and
taking corrective actions against it. This is essential for providing the base for giving promotion
to employees in future. It includes process of motivating the employees to improve their
performance.
Compensation- This function is related with remuneration and pay scale of employees. It
includes determining the value to be paid for specific job. It is a cost for company due to which
human resource department tries to generate higher performance from workforce in return of the
remuneration paid to them.
Labour relations- It is the most vital function of HRM practices. Labour relations are
related with employees represented by trade unions. Maintaining effective interaction is required
in order to avoid chances of disputes related with work conditions, wages, benefits, etc.
P2. Strengths and weaknesses of various recruitment and selection approaches
Recruitment is an activity of attracting fresh talent with high skills and knowledge base.
Tesco hires its employees through several methods to judge their abilities and attitudes. Some of
the important techniques used in this context are as follows-
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Illustration 1: Functions of HRM
Source 1: Surbhi S,2015

Internal recruitment- In this method, vacant positions are filled within the organisation by
appointing existing employees. It is the most common method adopted by this company. It
includes activities like promotion, job rotation, etc. Apart from this, there are several strengths
and weaknesses of this type of recruitment.
Strengths
 Such methods of recruitment are very cost effective as there is no need for advertising to
attract outside candidates.
 It brings confidence in the process of recruitment as company is aware about the people
they are hiring (Glendon, Clarke and McKenna, 2016). This method is important for retaining key personnel for long time.
Weaknesses
 Internal recruitment many times leads to conflicts amongst employees as they feel
demotivated for not getting promotion.
 It reduces the chances of getting fresh talent and ideas in company.
 This technique creates negative competition at the workplace.
External recruitment- It is a process of hiring employees from outside. It includes offering job
opening in which candidates give their applications to get a specific job. This method includes
certain strengths and weaknesses that are required to be kept in mind before going for external
sourcing.
Strengths
 It helps in expanding the talent pool in organisation as candidates hired from outside can
give fresh ideas and working style to make company’s functioning more effective.
 This helps in pushing existing employees to work harder in order to get promoted. It results in better workforce diversity which is required for the long term growth of
business.
Weaknesses
 External recruitment is a time consuming activity as there are so many procedures
involved in it.
 It is a costly process as there is the need for huge amount to be invested in recruitment
process.
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 This sometimes leads to damage of existing employee’s morale and motivation as new
person’s gets chance of promotions.
 Hiring new persons requires training and development for them which is again a costly
process for firm.
Selection
It is an activity of selecting the best candidates amongst all applicants. Its methods are as
follows-
Screening- In this method, resumes of applicants are deeply analysed so as to understand the
level of their skills and capabilities.
Strengths
 It is a helpful method to know the abilities of candidates. This assists in getting background information about them.
Weakness
 It is a costly and time consuming process.
Interviews- In this method, personal interaction between employer and candidates takes place.
Interviewer identifies the skills, knowledge and abilities of job seekers through various questions
(Daley, 2012).
Strengths- It helps in meeting candidates personally in order to identify their knowledge
base and level of confidence.
Weaknesses- It is a time consuming process and there are no written records for the
interview.
Group discussion- In this method, candidates are given with some topic on which they have to
discuss in a group. It is a technique to observe the communication skills and knowledge of
applicants.
Strengths- It is important to eliminate unsuitable candidates as it provides information
about the candidates.
Weaknesses- Sometimes, it leads to conflicts as participants become aggressive and
dominant while discussion.
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TASK 2
P3. Benefits of HRM practices for employer and employee
Human resource management includes various practices that are for the benefit of overall
organisation. There are several policies and strategies that are required for improving workplace
conditions by managing the workforce. This concept is very useful for both; the employer and
employees of Tesco.
Benefits to employer
Promoting positive behaviour- It is important to have positive working condition in an
organisation. This could be done through HRM practices by providing motivation, workplace
satisfaction and various other benefits to employees (Scullion and Collings, 2011). It is very
helpful for the employer to maintain positive behaviour in company in order to increase
productivity of overall business.
Developing employees- HRM practices are also beneficial in developing employees by
encouraging them to work hard. This also includes offering training and development to
workforce so as to enhance their skills. This helps the employer and organisation to achieve
competitive advantages through higher performance.
Flexible workplace- HRM practices are highly beneficial in building a flexible
workplace by designing a healthy working environment, assignments, schedules, teams, and
communication format. This brings higher level of efficiency in the organisation.
Benefits to employee
Motivation- These practices are very helpful in motivating the employees. There are
various activities to meet personal needs and desires of people in order to encourage them to
perform better. This enhances their performance standards which is very useful for the future
growth.
Training- HRM practices include training and development sessions to enhance the
knowledge and skills of employees. This helps in increasing their ability to perform a particular
job role in an effective manner. Such programmes are very useful for their career growth.
Manages conflicts – These practices are also beneficial in the conflict resolution of
employees. Human resource manager uses several techniques to avoid any type of dispute or
malpractices in the organisation. This helps in providing a secured and better workplace to them
where they could have good relations with colleagues and superiors.
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Performance appraisal- These practices include regular appraisal of performance of
workforce in order to maintain the efficiency. This helps in increasing their performance level
and making them more hard working.
P4. Role of HRM Practices in raising organisational profits and efficiency
Human resource management is highly important for the success of an organisation. It
helps in attaining short and long term objectives of Tesco. This is a process related with
management of employees to make them more efficient to contribute in the success of company.
It also ensures proper utilization of human resources by managing their performance. Effective
human resource management helps in raising the profitability and efficiency of organisation.
There are several benefits that a company can avail by having effective HRM practices. These
are as follows-
Skilled workforce- Human resource management is focussed towards recruiting and
selecting highly skilled workforce to fill the vacant positions in company. This helps in bringing
pool of talent in organisation (Aswathappa, 2013). These employees’ work effectively with their
creativity and fresh ideas that contributes to the profitability of business concern.
Performance appraisal- HR personnel is continuously involved in evaluating the
performance of workforce. This helps in analysing deficiencies in their working in order to
identify the training needs. These practices work towards making them more capable in their
roles. It results in the improved efficiency of company and higher performance contributes more
to revenue generation.
Conflict resolution- HRM practices are focussed towards avoiding the chances of
disputes. It works towards making positive environment at workplace where employees will
work in integrity (Anderson, 2013). These factors lead to the sense of coordination amongst
employees which results in better outcomes from various departments of this company. When
there is proper coordination in working then there will be smooth functioning of the business.
Maintains goodwill- Effective HR practices help in creating a positive image of business
in the market. This attracts new talent to come and join this organisation. It makes a strong
corporate image of company which attracts many investors to invest in this company. These
elements are beneficial for raising the profitability and efficiency of organisation.
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Reduces employee turnover- Effective human resource management helps in retaining
existing employees for long period of time. It is done by providing them satisfaction at
workplace. This reduces number of employees leaving the job. High employee turnover is a cost
for company which could be reduced through effective practices. Amount of recruitment and
selection could be invested in other profitable activities in order to enhance the profits of
business concern.
Therefore, these are several benefits of effective HRM that contributes in improving the
profitability and efficiency of this company.
TASK 3
P5. Importance of employee relations in influencing HRM decision-making
Employee relations is related with bonding between employees and employers. There is a
huge need for strong relationship at workplace as it helps in developing strengths in order to deal
with several issues that might arise in an organisation (Marchington and et.al., 2016). Human
resource management works towards managing proper co-ordination and cooperation between
workers. These factors help in effective decision-making for human resources as employer is
familiar with the needs of workforce. It also ensures good relations of workforce with
organisation as manger is able to identify their training needs. This helps in more satisfied and
motivated employees. These factors are essential for achieving the organisational goals and
objectives in an effective manner. Employee relations reduce the chances of conflicts and
disputes that are common at workplace. Such issues affect the profitability and efficiency of
workers as their focus shifts towards these things. There is huge need to maintain effective
employee relations in order to create healthy work conditions (Purce, 2014). Along with that, it
ensures integrity and equality in the business concern. It helps in retaining key personnel for long
period of time and also attracting new and fresh talent to join this organisation. There are several
strategies that could be adopted by Tesco in order to manage the employee relations.
Provide rewards- Tesco can maintain effective employee relations by offering incentives
and rewards for effective work done by the workforce. This builds high motivation amongst
them to achieve the desired goals and objectives in an effective manner.
Developing career strategies- Another important way in this scenario is related with
future growth of employees. If this organisation will form appropriate policies for the
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development of employees then it will help in building their morale and they will feel privileged
in the organisation.
Develop sense of cooperation- It is very important to motivate employees to cooperate
with co-workers. This is an essential tool in maintaining the employee relations. Workers are
informed about the benefits of working in a team and the way it will help in their personal
growth.
Maintain proper communication- It is another effective strategy that includes ensuring
proper interaction of employees with employers and co-workers. This creates proper
misunderstanding and confusion due to which chances of disputes get reduced. It also helps in
sharing ideas, views and thoughts that are required for attaining the desired goals.
P6. Key elements of employment legislations and their impact on HRM decision-making
Employee legislations are employment laws that are formed by the government and legal
bodies for the purpose of worker’s welfare and security at workplace (CHUANG and Liao,
2010). It is very important for the HR department of Tesco to work as per these laws to ensure
ethical business organisation. Such legislations affect the decision making process in HRM as it
is required to perform HR practices in the limit of these rules and regulations. Some of the
legislations affecting this organisation are as follows-
Equal wage act- According to laws of this act, there should not be any type of
discrimination in remuneration of employees working at same position. Their salary should not
be biased by age, gender, caste, race or nationality, etc. of workers.
Minimum payment act- As per this legislation, there is minimum rate of wages
prescribed by the government for particular work (Chelladurai and Kerwin, 2017). Company
should at least pay the prescribed amount to workers otherwise it will be a breach of law.
Employee's right act- This legislation is related with safety and security of employees at
workplace. There are certain rights that are necessary to be given to workers working in a
company.
Workmen's compensation act- This act is related with the payment of compensation to
employees if they get injured at workplace. Employer is bound to pay prescribed amount of
compensation to the injured person.
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Working time regulation act- As per this law, employer should fix working hours as per
the time prescribed in this act. If employee is working for extra time then employer is liable to
pay them overtime remuneration. Along with that, this act also prescribes time for rest in
between the work.
These are some legislations that affect the HRM practices. Such rules and regulations
influence the decision making for human resources. Policies and plans for employees are to be
made by keeping all these acts in mind. It is an ethical responsibility of organisation and its HR
department to work as per these rules and regulations.
Apart from these, trade unions also influence the decision-making in HRM. These are the
organisations dealing with issues arising against workers in terms of remuneration, working
hours and working conditions (Meredith Belbin, 2011). They work for protecting the rights of
workers at workplace. Practices of these employment welfare organisations affect the decision
making of HRM.
TASK 4
P7. Application of HRM practices in work related context
Human resource management is an important activity in all organisations. It includes
recruitment of employees and ensures their performance and development in order to attain
organisational goals effectively. Practices of HRM could be applied on the working of Tesco in
following manner:
Job analysis- In this activity, vacant job positions are identified and job description is to
be prepared to attract the suitable candidates.
Job description
Organisation name
Tesco PLC
Job profile
Human Resource Executive
Location
UK
Reports to
Human Resource Head
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