Analysis of HRM Practices in Kingfisher PLC: A Case Study Report

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HUMAN RESOURCE MANAGEMENT
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Table of Contents
Introduction......................................................................................................................................3
Task 1: LO1.....................................................................................................................................3
P1: HRM Purposes and Functions regarding Workforce Planning and Resourcing in
Kingfisher PLC............................................................................................................................3
P2: Strengths and Weaknesses of Selection and Recruitment Approaches used in Kingfisher
PLC..............................................................................................................................................9
Task 2: LO2...................................................................................................................................10
P3: Benefits of different HRM Practices within Kingfisher plc for both the Higher
Management and Employees.....................................................................................................10
Training and Development....................................................................................................10
Job and Workplace Design....................................................................................................11
P4: Evaluation of effectiveness of different HRM Practices for raising the Productivity and
Profit of Kingfisher plc..............................................................................................................13
Task3: In House letter (LO3).........................................................................................................14
P5: Analyze the importance of employee relation in Kingfisher with respect to influencing
HRM decision making...............................................................................................................14
P6: Identify the key elements of employment legislation and the impact it has upon HRM
decision making.........................................................................................................................16
Task 4: Individual Portfolio Folder (LO4)....................................................................................18
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P7: Illustrate the application of HRM practice in a work-related context, using specific
examples....................................................................................................................................18
Conclusion.....................................................................................................................................23
Reference.......................................................................................................................................24
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Introduction
It can be noted that Human Resource management (HRM) is defined as the process of planning,
developing and administering the policies and programs for a company so that the goals of the
business can be achieved easily. HRM process is mainly concerned with the effective utilization
of Human resources practices that will help in bringing a better outcome. It was opined
Psychogios et al., (2016) by that, effective practice of HRM within an organization should bring
good for both the employees and the employer. Based on this, this research will focus on various
aspects of HRM where Kingfisher plc shall be considered as the case company. Further, the
research shall establish a strong analysis of HRM in Kingfisher plc so that they can easily
achieve their organizational goals and objectives in the most effective manner. Lastly, the
various elements of employment legislation shall be analyzed so that it helps them to make better
decisions for the benefit of the company.
Task 1: LO1
P1: HRM Purposes and Functions regarding Workforce Planning and Resourcing in
Kingfisher PLC
The best fit model of HRM suggests that the HR department have to adjust their strategies
according to the business culture of the organisation (Paauwe and Farndale, 2017). Since
Kingfisher plc is a large multinational retail industry that is operating in about 10 different
countries in Europe, they have to recruit employees from different cultural backgrounds from
those countries. This requires Kingfisher plc to adjust the factors such as holidays, salaries etc.
for each of those countries to maintain a cross-cultural employee base. However, Paauwe and
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Boon (2018) argued that the best practice model dictates that there are several HRM functions
like performance management, performance appraisals etc. that can prove to be beneficial in
every organisational culture. The HRM of Kingfisher plc also maintains a universal standard of
service for their store employees, and provides proper rewards for good employee performances.
The soft model of HRM is followed by Kingfisher plc while maintaining the job performances of
the store managers in approximately 1300 retail stores of Kingfisher plc. The ambitions and job
commitments of these store managers become key influences in determining the business success
of the store. However, the store employees, which numbers approximately 70000 in Kingfisher
plc are handled with the hard model, with their activities strictly standardized and organized.
As opined by Bonoli (2017), the labour market in UK has seen a drastic change after the
economic crisis of 2008, and the average qualification of candidates compared to the roles of the
vacant jobs has also increased. Researchers have shown that approximately 70% of working
people experiences job change in every 3 to 4 years. Hence, since then HRM of Kingfisher plc
has been getting approximately 30% more qualified and experienced candidates for their stores
by keeping their workforce planning oriented around storekeeper and store management
designations.
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Figure 1: PESTEL Analysis
(Source: B2U - Business-to-you.com, 2019)
The PESTEL analysis of Kingfisher plc is presented below:
Political  Beverage industry has to keep their
business policies aligned with the
political power balances of different
European countries they operate
(LEYVA et al., 2018).
 Beverage industry has to keep their
organisational operations corruption
free as much as possible.
Economic  Beverage industry has to keep tracks of
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the economic stability of the market by
analyzing its different financial indexes
like inflation rate, bank rate, exchange
rate etc.
 The cost effectiveness of their retail
products in the markets of European
countries is also important for beverage
industry.
Social  The demographics of the potential
customer base are very important for
beverage industry in order to design
their products accordingly.
 The culture of the society also plays a
large role in deciding the business
activities and marketing tactics of
beverage industry (Thompson and
McLarney, 2017).
Technological  The technological developments of the
potential market rivals of beverage
industry heavily dictate the need of
improving their technologies.
 The technologies like CRM and ERP
systems for customer management and
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information distribution are also
important for beverage industry to
incorporate and maintain in their
business infrastructure.
Legal  The employment and labour laws,
competitions laws, copyright laws and
anti-trust laws in UK and other
European countries are very important
for beverage industry to strictly abide
by while conducting their business
operations (Mashele and Chuchu,
2018).
 Beverage industry has to maintain the
standards prescribed in the health and
safety laws in all of their stores.
Environmental  The various laws regarding waste
management and product recycling are
vital for retail companies like beverage
industry to maintain in all of their
stores across Europe.
 Beverage industry also utilizes
approximately 40% of their total energy
from renewable energy, which helps the
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environment.
Table 1: PESTLE Analysis of Beverage Industry in UK
(Source: Created by Author)
According to Dipboye (2017), the selection and recruitment process of Kingfisher plc comprises
of mainly personal interviews, which allows them to evaluate the skills of the candidates. In their
retail stores, the managers are recruited by internal promotion in approximately 95% cases, while
they are externally hired only a handful of times. On the other hand, vacancies in general staff
designations are filled by external recruitment approximately 85% of times, while only a few are
transferred from other stores. The employees in Kingfisher plc also have attractive payrolls, with
the managerial grade average salaries being approximately 60,000 Euro and the general staffs
being paid approximately 24,000 Euro.
The employee relationship strategies adopted by the HRM of Kingfisher plc is carefully designed
to maintain a cordial relationship between the lower employees and higher management
(Jennings, McCarthy and Undy, 2017). This is evident from their employee turnover rate, which
has decreased by approximately 35% in the last 5 years. They also maintain various employee
relationship programs such as employee grievance management cell, employee welfare
committee etc., which increases employee satisfaction.
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P2: Strengths and Weaknesses of Selection and Recruitment Approaches used in
Kingfisher PLC
The external recruitment and selection process of employees in Kingfisher plc is comprised of a
preliminary short listing of external candidates from resumes submitted in their official website,
followed by personal interviews of shortlisted candidates. However, the internal recruitment
process consists of promotions and transfers of the existing employees. The external recruitment
process, particularly the interviews, is time-consuming and costly. Conducting so many personal
interviews requires huge effort as well, which reduces Kingfisher plc's working capacity.
However, this also allows Kingfisher plc to bring in new faces in the organisation, which also
raises the possibilities of increased efficiency and emergence of new innovative ideas for
business operations. The internal recruitment processes of transfers and promotions are usually
much hassle-free and quicker, while also ensuring the efficiency and experiences of the
employees designated in new positions (Earl, Taylor and McLoughlin, 2017). However, it also
prevents Kingfisher plc to bring in fresh employees, which results in the organisational thought
process getting stagnant, and denies Kingfisher plc the chance to include new skills in their
organisation. It may also result in the organisation not being able to remain competitive in the
ever-changing market for a long time.
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Task 2: LO2
P3: Benefits of different HRM Practices within Kingfisher plc for both the Higher
Management and Employees
Training and Development
In modern organisations, the managements are trying to reduce the cost of production and
service by reducing the expenses in the raw material and other non-human components, such as
transportation etc. Instead, they are trying to recruit more skilled employees and raise the skill
level of their existing employees through raising the difficulties for recruitment and hiring
process, and providing better training to their employees (McCarthy et al., 2017). In fact,
researches has shown that in the last year, the training expenses by the corporate organisations all
over the world has become approximately 130 Billion USD, which indicates that it is constantly
rising over time.
In case of Kingfisher plc, they also spend a large percentage of their total annual expenses
(approximately 13%) in their training and skill development programs, which are conducted in
all of their retail stores across Europe. For instance, after the development and subsequent
installation of a full-fledged ERP system in their stores, their employees and store managers had
to attend a 3-day workshop arranged by their HR department about the different features of ERP
system, and the ways to manage the information exchange between the different stores and
headquarters with the help of it. This was an example of skill development training for their
existing employees.
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On the other hand, the new recruits in Kingfisher plc, and their newly promoted employees are
trained by their superior managers about their new duties and responsibilities, and are rigorously
tested for their learning progress and competencies. In these cases, they are taught about their
basic job duties, which naturally increases the duration and expenses of these trainings (Saks,
2017). Kingfisher plc usually spends approximately 9% of their total expenses for training their
new recruits and promoted employees, which results in a substantial increase in their efficiency.
Job and Workplace Design
The HRM of Kingfisher plc gives great importance in the design of their workplace. Their
headquarter building has a great design, while its interior is spacious and is equipped with all the
modern facilities and technological conveniences such as comfortable rooms, coffee machines
etc. that makes the working hours of the employees more comfortable. The designs of the walls
are also created in a way that it boosts the employee morale and makes them more enthusiastic
about it. As for their stores, approximately 98% of them are designed in a way that both the
customers and employees can move around the store easily and without any hindrance, which
boosts the efficiency of their business operations. Their retail items are properly sorted according
to their categories, and are showcased in different racks, which make it more efficient for the
customers and employees to access them. The store buildings are also equipped with all the basic
facilities such as drinking water, toilets and other conveniences, which greatly eases the working
stress of the employees.
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