Human Resource Management Practices at Lidl UK: A Report

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ICON College of Technology and Management
Faculty of Business and Management Studies
BTEC HND in Business
Human Resource Management
Tutor: Dr Reza Aboutalebi
Submitted by:
Full Name: …………
ID No: …………
Session: April 2019
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Table of Contents
Introduction...................................................................................................................... 3
LO1.................................................................................................................................. 4
LO2.................................................................................................................................. 8
LO3................................................................................................................................ 11
LO4................................................................................................................................ 13
Conclusion..................................................................................................................... 17
References.....................................................................................................................18
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Introduction
The tenets of human resource management (HRM) include the procedure of deploying,
hiring, recruiting and managing the workforce associated with a business institution
(DeCenzo et al., 2016).The subsequent study will observe the main function and
purpose of HRM that enables the management to enhance their workforce planning in
order to increase their profitability. The weaknesses and strengths of various selection
and recruitment methods would be analysed in the study as well. A brief explanation
about the benefits that efficient HRM approaches for employees and employers would
be identified in the study. The ways of increasing organisational productivity and profit
through the implementation of various HRM practices would be evaluated as well.
Various internal factors such as employee relations and employment legislations would
be examined in regards to the HRM decision-making process within the business
institution. Further, an application of HRM practices within the organisational context
would be presented.
The study will focus on the internal operations of Lidl UK in order to develop a better
understanding of the HRM tactics that enhance the brand image, productivity and
profitability of the retail organisation. Established in 1994, Lidl UK provides their UK
consumers with high quality products and attractive prices. Currently the company
employs more than 22000 staffs across the country through 760 stores (Lidl UK, 2019).
The estimated annual revenue for Lidl UK is £85billion and their major competition are
Aldi, Tesco, Sainsbury and other key players in UK’s retail market.
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LO1
Introduction
This section of the report will provide a general overview of Lidl and discuss about the
purpose and function of the Human Resource Management in the company. In addition,
the role of the HRM in achieving the objectives of the business organisation will be
discussed. This section will also discuss about the different recruitment and selection
procedures of the company.
Overview of the company:
Lidl Stiftung & Co. KG is German based supermarket chain that operates with the trade
name of Lidl all around the globe. The company has almost 10,000 stores in Europe.
Josef Schwarz founded the company in 1930. Headquartered in Neckarsulum,
Germany, this company consists of almost 315,000 employees (Lidl UK, 2019).
According to Noe, 2017, Human Resource Management is the effective management of
the people in a company or an organisation in such a way that they ensure profit for the
organisation. In this ever-changing dynamic business environment, efficient human
resource management is very important for every organisation to achieve success
(Hassan, 2016).
Purpose of HRM in Lidl:
 Internal customer management: The HRM maintains and formulates the policies
in a business organisation to ensure proper hiring and high quality of employees.
 Matrices: The HRM uses efficient procedures of matrices to ensure proper
costing and work efficiency in the organisation. The HRM also uses this to
enhance the communication between the individuals in an organisation (Shields,
2015).
 Staffing: The HRM is solely responsible in the management and maintenance of
the employees that work in the organisation.
 Employee Relations: The main concern of the HRM is to ensure a healthy
relation with the worker in the company. Social and cultural awareness of the
employees is also a main purpose of the HRM.\
 Legal Laws: The Company follows a proper set of rules in organizational
structure. The HRM is in charge to efficiently update these laws and ensure that
the company follows them.
Functions of the Human Resource Management in Lidl:
Managerial functions:
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 Planning: The role of the HRM is to formulate and plan proper strategies that will
the help the company to achieve its goals. HRM collects, analyzes, and identifies
the current and the future demands and goals of the company.
 Organizing: The HRM is responsible for organizing all the individuals in the
company, and allocate them proper roles, so that there is efficient functioning in
the company.
 Directing: The HRM is responsible for ensuring that all the employees are
working at their full potentials in the organisation. The prime focus must be to
constantly motivate and command the employees.
 Controlling: This the process where the performance of all the individuals in the
company are checked, compared with the goals, and verified. The HRM
measures the actual performance and therefore, formulates proper control
measures.
Operative Function:
 Recruitment and Hiring procedures: The HRM recruits the candidates with the
required and proper skills form a pool of candidates to ensure proper functioning
of the organisation (Zhang, 2015).
 Job Analysis & Design: The HRM is responsible for providing an insight of the job
and the organisation to the selected new candidates. The Job designs are
created by the HRM, which include proper duties, responsibilities, and tasks of a
single unit in the company.
 Performance Appraisals: HRM department conducts analysis of performance of
the employees in the company.
 Training and Development: One prime function of the HRM is to train and
develop the skills of the new candidates in the company. The target of the HRM
is to prepare the candidates for higher responsibilities.
 Salary allocation: The pay structure of al the candidates in the company are set
by the HRM department. They are also responsible for allocating benefits,
rewards, and incentives to the employees.
 Employee Welfare: This is the function where the HRM department looks after
the concerns of the employees working in the company. This includes employee
benefits, and different facilities provided to them.
 Maintenance: The HRM always aims to minimize the employee turnover and
sustain the best performance from the employees.
 Labor relations: The HRM department ensures the effective communication of
the labor workforce with the higher authority in the company (Brown, 2015).
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 Personal research: The research is a vital function of the HRM. This is done to
check the employee opinions on the work culture, salary structures, promotions,
leadership styles, and many other different issues in the company.
 Personal Record: The HRM records and maintains the different personal data of
the employees in the company. This data consists of employment history, work
hours etc.
HRM functions to satisfy Business objectives of Lidl:
Survival is the biggest challenge of a company is to adapt with the changing business
environment. The HRM plays a big role in this. They ensure that the employees are
trained according to the environment. Increase in sales is the prime objective of the
company. The HRM ensures high sales by keeping a proper check on the use of the
inventories, employees, and resources in the company. Increase in profits is the
Company aims at earning suitable profits and higher revenues over the production cost.
The HRM ensures this with the help of proper planning and organizing in the company.
Growth of the company in terms of its competitors in the market is the key objective of
the HRM department in the company.
Recruitment procedures in Lidl:
Best-fit approach: This approach states the HRM should conduct the recruitment
processes with agreement to the policies of the company. This is referred to as the
vertical alignments of the HRM strategies with the principles of the organisation.This
technique helps the company to select the individuals who suit for the ongoing current
environment. The biggest drawback is that this technique is applied after the change in
the environment. In addition, this does not satisfy the demands of the company in the
dynamic environment nature.
Best-Practice Approach: These are the predefined set of principles of recruitment,
which can satisfy the demand of the company up to some extent in this dynamic
business nature. This can help the company in different business environment.
Achieving the best practices is almost impossible. Therefore, these have some
functional gaps and have a negative impact on the individuals in the company
(Farndale, 2014).
Internal Recruitment: These recruitments take place inside the organisation.
Employee transfers and promotions are mainly termed as the internal recruitments.
These recruitments help to increase the motivation and skills of the employees. The
consumption of money and time is generally less in this procedure. These processes do
not introduce new skills and ideas in the workplace. In addition, the need of the work
labor cannot be met through this technique.
External Recruitment: These recruitments are done outside the organization to meet
the demands of the manual labors and the educational institutes. This technique has a
positive impact on the work rate in the production department of the company. In
addition, new skills and ideas are introduced in the company. This process requires high
amount of money and consumes a lot of time (Armstrong, 2014).
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Selection procedures in Lidl:
Structured Interviews: These are the tests conducted HRM department of the
company that measure the communicative skills and abilities of the candidates. These
indicate the level of the skills of the candidates and help the company to select the
perfect candidates. Fails to measure the ability of the candidate to adapt with the
working environment and the candidate’s operative skills (Mohammadi, 2016)
Videos and telephones interviews: These interviews are generally conducted to
employ candidates from overseas or from a different region. This is a comparatively
easy process and there is low consumption of time and money. This technique fails to
provide proper authentication and there is a chance of false identity of the candidate.
Psychometric tests: These tests identify and measure the operative skills and
knowledge of the candidates. Helps the company to identify the skills of the candidates
and select the required ones to fill the gaps in their organisation. Fails to provide
information about the personality of the individual (Griffin, 2015)
Conclusion
This section of the report provided a general overview of Lidl and discussed about the
various purposes and functions of the HRM in the organisation. Moreover, the role of
the HRM in achieving the objectives of the business organisation has been mentioned.
This section also focused on the different recruitment and selection procedures of the
company.
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LO2
Introduction
The following section will provide detailed information regarding the various benefits that
are acquired by Lidl UK management through the implementation of different HRM
practices. The section will study the benefits drawn from various HRM approaches for
employers and the employees. The section will also evaluate the type of effectiveness
that the different HRM approaches in increasing organisational productivity and
profitability.
Benefits of HRM approaches to the employees and management of Lidl UK
The internal operational practices within the organisational framework include the
prospects of effective job designing, development and training to employees,
performance management within the workforce and availability of flexible working within
the business environment. The implementation of these HRM practices within the
business framework of Lidl UK would benefit the organisation by increasing the
efficiency of the workforce and enhancing their operational activities.
The practice of job designs includes the process of developing the content of tasks
associated within a particular job role in alignment with the organisational objectives and
satisfaction of the employees. It is practiced in two major ways within an institutional
environment such as enrichment and enlargement tactic. The benefits associated
with enrichment method of job design include the vertical addition of responsibilities
for increasing the scope of enhancing personal growth for the employees. This method
of job design enhances the motivation among the staffs as per the theoretical tenets of
Herzberg’s two-factor framework (Lazazzara et al., 2019). The employees are able to
gain satisfaction from their job roles as well. As observed in case of Lidl UK, the
management seeks marketing employees to possess efficient communication skills for
increasing communication with the consumers and achieving efficiency within their job
roles. The disadvantage to job enrichment tactic is that extremely professional
employees may not gain satisfaction from the type of enrichment that is implemented
within the organisation. It is recorded that Lidl UK provides a flexible job enrichment
offer to skilled employees that is different from the new recruited employees.
The tenets of job enlargement include adding tasks within a specific job role in order to
increase the efficiency of the staffs. The benefits associated with this technique are that
it reduces operational cost for the organisation and increases employee efficiency and
satisfaction. The major disadvantage experienced in this type of job design is that it
increases the cost of training staff in different job roles as well as it enhances difficulty in
introducing new techniques within the job role (Berdicchia et al., 2016). For example,
Lidl UK’s decision to integrate the responsibility of identifying individual supplier
demands within the responsibility of sales department employees provides relevant
information about the integration of horizontal loading.
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The Lidl UK management and the employees gain benefits through the implementation
of effective job designs within the institutional framework. The scope of gaining
experience through the job roles increases employee satisfaction among the staffs. The
opportunity of developing better skills through their job performance encourages and
motivates employees to function efficiently within the company. The management of Lidl
UK acquires the opportunity to develop their business operations by generating skilled
labour from their workforce planning. The quality of work provided by the staffs is
effective in enhancing the brand image of Lidl UK hence the employers are satisfied
with the type of job design they implement within their institution.
The strategy of training and development provided by the organisation to their
employees enhance the operational functions and increase efficiency of the staffs. The
implementation of techniques such as simulation, role-playing and coaching the
staffs enhance their skill development within the job role. Ability of the management to
simulate various situations in order to garner experience for the staffs to handle any
type of issue that may arise during their daily activities increases the staff efficiency in
the job roles (Bournois et al., 2017). Coaching the staffs and enhancing their skills
through role-play allows management of Lidl UK to enhance their operational success
through better business development. Lidl UK management applies the techniques of
simulation and coaching in their training sessions for the sales department employees
and store operators in order to increase their efficacy in dealing with any situation within
the business environment.
The various development and training activities benefit the staffs of Lidl UK in gathering
experience and improve their skills while employed within the organisation. The training
and development sessions enhance the motivation level within the staffs and enhance
their work performance in the organisation. The management gains benefits from the
integration of training and development as it increases skilled labour internally and help
the company to gain profits through better quality of work exhibited by the staffs. For
example, an increase in employee motivation was observed within the marketing
department of Lidl UK after the company introduced social media training to the staffs
and increased customer relations tactics.
Effectiveness of HRM practices in raising organisational productivity and
profitability
According to Buckingham and Goodall (2015), the implementation of performance
management enables the management of organisations to identify the ability and skills
of the staffs within their job roles. It ensures the employers are aware of the skill,
dedication and efficiency of the staffs within the organisation and provide rewards to the
staffs accordingly. As per the opinion of De Menezes and Kelliher (2017), flexible
working enhances employee satisfaction within the institution as it enables them to
work as per their convenience.
Effective performance management techniques would provide the Lidl UK
management to develop a comprehensive knowledge regarding the skill level of the
employees. Through the tactics of performance management, the Lidl UK employers
would be able to frame better training and development activities and enhance
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employee motivation levels (Noe et al., 2017). The terms of evaluating performance of
the staffs would encourage them to perform efficiently within their designated posts.
This affects the productivity of Lidl UK as it enables the staff to increase their
productivity through performance. The improvement of quality in employee performance
also benefits the organisation in improving their profitability as it increases the brand
image of the firm.
The terms of flexible working time and schedule allow the staffs to function within their
job roles efficiently. Satisfaction of the staffs is ensured by Lidl UK management through
the implementation of flexible work times and roles. Satisfied employees, who are
efficient in their job roles, enhance the efficiency of the organisation in achieving their
business objectives (Inkinen, 2016). The productivity of Lidl UK is increased through
the increased efficiency of satisfied employees functioning within the institution. Lidl UK
gains profitability from their business operations that are conducted by the staff in an
efficient manner.
Conclusion
Thus, it can be stated that by maintaining staff retention through training, development,
performance evaluation, rewards and flexible work timings, the management of Lidl UK
to generate productivity and profitability of the organisation. Integration of effective HRM
practices such as job design and performance based promotion to the staffs enhances
the ability of Lidl UK management to gain profits through their business activities.
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LO3
Introduction
This section of this report will analyse the significance of employee relations in the
decision-making procedures of the Human Resource Management in the company. In
addition, different employment legislation and policies of employment will be mentioned.
The affect of these reforms on the decision-making of the HRM will also be discussed.
An organisation is unable to achieve success if the employees in the organisation fail to
work in proper collaboration. The relationship between all the individuals in the
organisation is referred to as employee relationship. The Lidl ensures healthy
relationships between their employees to initiate a proper functioning and achieve their
goals successfully.
Analyse the importance of employee relations in influencing HRM decision-
making.
The Human resource department are able to make quick decisions because of their
extensive trainings. This leads to effective growth of the organisation. The selection of
the new candidates form a pool of individuals is a tough task and requires efficiency.
This procedure should be precise and any form of guesswork should be prevented
(Jeet, 2014). To initiate proper selection, the company requires proper and efficient
technologies and minds. During the process of recruitment and selection, there are
many alternatives available; the HRM must be able to make the right decisions in this
situation. In fact, the procedures of planning, organizing, and directing require the
correct decisions and management. In this scenario, the HRM plays a very important
role by figuring out the ideal approach toward these commitments. The key role of
decision-making is to choose the ideal course of action to tackle the different challenges
in the workplace (Chelladurai, 2015). Further, it is the responsibility of the HRM
department to bring out the best performance out of every individual in the organisation
by motivating them and providing different types of benefits.
In a workplace, various individuals have different personalities and approach towards
their work. Due to difference in their personalities, there is a high chance of conflict in
the workplace between individuals or groups. This will provide a negative impact on the
workplace culture and environment. The HRM plays a big role in these scenarios. The
main objective of the HRM is to bring every participant in the conflict on the same
grounds or a mutual decision. To successfully tackle with this challenge, the HRM
management needs rich experience and high quality decision-making. Moreover, these
scenarios provide the HR managers with important experiences. The HRM also
conducts regular activities to improve the relationship between the employees. The
main target is to bring a positive collaboration in the workplace and achieve maximum
profits.
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For example, Lidl has conducted a recruitment procedure to employ new candidates in
the finance sector of the company. Therefore, the selected candidates must have sound
and efficient knowledge about finance managements of business. The HRM is further
responsible for selecting the appropriate candidates from the pool of individuals. This
will require high knowledge and efficient decision-making ability of the HR managers.
You are required to identify the key elements of employment legislation and the
impact it has upon HRM decision-making in your chosen organisation.
National Minimum Wage, 1 April 2018: This implements that the employees working
under the organisation should have salary over a proper margin. The HRM departments
do the allocation salary to the employees in an organisation. Therefore, the HRM
department should abide by this law before allocating wages to the different employees
working in Lidl.
Compensation Limits, 6 April 2018: This law safeguards the rights of an employee in
the workplace. According to this, the employees are to be paid a certain amount of
money in case of unfair dismissals. This law grants employees certain leaves,
allowances, and benefits. However, this might not be profitable for the company. The
HRM needs to accurate in decisions making in this situations.
Restricting employment allowance for illegal working, April 2018: This law states
that the companies hiring employees without proper documentation will be penalized
immediately. The employees must acquire proper rights to be employed in the country.
Equal Pay Act: This law prevents any company to discriminate among their employees.
The HRM department should ensure that the payments and the treatments of the
employee are not different based on their gender. The women and men employees of
Lidl should be entitled equal rights and benefits in the company based on their skills.
Conclusion:
This section of this report analysed the influence of employee relations on the decision
making approach of the HRM department in the company. Moreover, various
employment legislation and policies of employment are mentioned. The affect of these
reforms on the decision making of the HRM have also been discussed.
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