Analysis of Human Resource Management Impact on Mercedes Benz

This report investigates the impact of human resource management (HRM) on the performance of Mercedes Benz, specifically focusing on its operations in the United Kingdom. The study examines employee performance, organizational effectiveness, and HRM strategies, exploring both the advantages and disadvantages for the company. The literature review emphasizes the significance of HRM in fostering effective management within organizations. The research employs a thematic analysis methodology, utilizing secondary data to assess employee conditions, company performance, and HRM practices. The findings reveal that the UK subsidiary lags behind other global entities, indicating a need for significant changes in HRM policies. The report covers key areas such as the concept and functions of HRM, its impact on organizations, the structure and social responsibilities of HRM, and an analysis of HRM practices within Mercedes Benz. The research also addresses employee performance, working conditions, and overall company performance, concluding with recommendations for improvement in HRM strategies to enhance Mercedes Benz's competitive advantage in the automotive industry. The report aims to shed light on how HRM policies affect employee and organizational performance, offering valuable insights into the role of HRM in driving business growth and sustainability.

Running head: HUMAN RESOURCE MANAGEMENT
Human resource management
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Executive Summary
The report has examined the role of human resource management in Mercedes Benz in
the United Kingdom. The study had aimed to examine the performance of the employees,
performance of the organization and the human resource strategies to examine the pros and cons
for Mercedes Benz in United Kingdom. The literature review has effectively depicted the
importance of human resource management in developing effective management in any
organization. The research methodology has been developed to conduct thematic analysis where
secondary data sets has been gathered as per the need of the study. The findings show that
compared to the performance of the other subsidiaries and the global headquarter, the business is
lagging and considerable amount of changes is required in the human resource policies.

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Table of Contents
1.0 Introduction................................................................................................................................4
1.1 Background of the study........................................................................................................4
1.2 Significance of the study.......................................................................................................6
1.3 Research Aim and objective..................................................................................................6
1.4 Research question..................................................................................................................7
1.4 Summary................................................................................................................................7
2.0 Literature review........................................................................................................................8
2.1. Introduction...........................................................................................................................8
2.2. Concept and Functions of Human Resource Management...................................................8
2.3. Impacts of Strong Human Resource Management in Organizations..................................11
2.4. Structure and Social Responsibilities of HRM in Organizations.......................................13
2.5. Analysis of HRM Practices in Mercedes Benz...................................................................14
2.6. Research Gap......................................................................................................................16
2.7. Summary.............................................................................................................................17
3.0 Research Methodology............................................................................................................18
3.1 Research Philosophy............................................................................................................18
3.2 Research Approach..............................................................................................................19
3.3 Research Design..................................................................................................................19
3.4 Data collection.....................................................................................................................20

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3.5 Data analysis........................................................................................................................20
3.5 Sampling..............................................................................................................................21
3.6 Reliability and Validity........................................................................................................22
3.7 Ethical consideration...........................................................................................................22
4.0 Data..........................................................................................................................................23
4.1 Analysis...................................................................................................................................39
Theme 1: Performance of employees of the organization.........................................................39
Theme 2: Conditions of employees in the organization............................................................41
Theme 3: Performance of the company as a whole...................................................................41
Theme 4: Human resource management of the company.........................................................43
5.0 Conclusion...............................................................................................................................45
References......................................................................................................................................48
Appendix........................................................................................................................................53
Reflection log.............................................................................................................................53
Professional statement...............................................................................................................54

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Topic: Impacts of Strong Human Resource in Mercedes Benz, London
1.0 Introduction
This report will examine the impact of effective human resource management on the
overall performance of the employees and the organization in Mercedes Benz. Globalization has
changed the operating scenario of the companies in the global market due to the increase in level
of competition due to the free trade. Marketing orientation had been the key focus of the
companies for a long time but it has changed with time and managing the workforce effectively
has been one of the major factors for gaining sustainable competitive advantage.
1.1 Background of the study
A rapid changing economic all over the world consisting of factors such as globalization,
deregulation of markets and change in the needs and wants of the consumers in the market has
become the operating environment for majority of the companies. In order to gain competitive
advantage, organizations are looking to reduce their operational cost by improving the
organizational performance and improving the quality of the products and processes (Anitha
2014). Human resource management is the key aspect of enhancing these above mentioned
activities as it increases in employee productivity and efficiency. Effective human resource
management also reduces the turnover rate in the organization which facilitates in reducing the
operational cost. The above mentioned statements shows the gravity human resource
management has on the organizational performance. This means that human resource
management contribute to efficiency and revenue growth of the organization.
Guerci et al. (2015) states that human resource management is just a means of cost
reduction and does not create any value for the company. Therefore, human resource

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management cannot be considered as a source of value creation for the companies. On the
contrary, Jiang et al. (2017) argues that human resource management act a strategic lever that not
only has significant impact on the first bottom line of the organization that is increase in revenue
generation but has shifted their focus on value creation. The workforce in every organization are
essential for adding value to the services or products offered so factors such as employee
retention, level of satisfaction and employment creation are key for organizational success.
Talent management is another aspect of human resource management which has gained
importance in the global market due to the shortage of the high number of skilled workforce in
the market. The companies in the automotive industry also face issues due to high turnover rate
as lack of experienced and skilled employees hampers the production and comprises quality.
Automotive industry is highly competitive in nature and companies are in fierce battle to gain
majority of the shares in the market.
Mercedes-Benz is the global brand of the German company named Daimler AG which
is one of the major brands in the automotive industry. The product line of the organization
consists of products such as coaches, vehicles, buses, Lorries and luxury vehicles (Mercedes-
benz.com 2018). The brand started in the year of 1886 when Karl Benz developed the fastest car
in the world. Innovation is the key identity of the brand and they have explored different forms
of technology and design to reinvent their products. Mercedes-Benz has experienced a downhill
trajectory during the mid-2000s where the company’s growth was stagnated for a long period of
time. The competitors in the market such as Audi and BMW were 40-50% ahead of Mercedes
but the implementation of the growth strategy in the start of the last decade improved the growth
of the company in United Kingdom (Mercedes-benz.com 2018). The major issue that the
company faced in UK that it had excessive red tape where there were too many back-ups for the

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backup processes which were redundant and time consuming. On the other hand, there were less
number of processes at the point of service and point of sales. The company was able to increase
their growth by reducing the level of bureaucracy in the organization which made the businesses
easier to conduct. Human resource management has been the key enabler in improving the
conditions in the organization in United Kingdom. Therefore, the study will aim to shed a light
on the impact of the human resource policies on the employee and organizational performance.
1.2 Significance of the study
Human resource management has been one of the major factors responsible for
improving the bottom line of the organization and sustain in the United Kingdom market. The
study is highly significant as Mercedes Benz in United Kingdom as it is one of the best example
that portrays the importance of human resource management in any organizational setting.
Moreover, the study will able to evaluate the importance of the value creation in an
organizational setting and the way human resource management is essential for value creation in
the market.
1.3 Research Aim and objective
 To analyse the performance of Mercedes Benz in London over the years, in terms of
employment creation, employee retention and level of satisfaction of the employees
 To examine the human resource management practices implemented in the concerned
organization and the changes in the same over the years
 To analyse the positive as well as negative implications which the human resource
department of Mercedes Benz, London, has on the employees, their productivity,
motivation, retention and level of satisfaction and also on the overall performance of the
company

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1.4 Research question
How does the presence of a strong human resource department affect the performance
and operations of Mercedes Benz Company as a whole, in their operational framework in
London?
The secondary questions which the concerned research proposes to study are as follows:
1. What are the current human resource management practices in Mercedes Benz, London and
how have the practices changed and modified over the years?
2. How have the human resource management practices affected the employee performance,
level of satisfaction, motivation, easiness and retention of the employees in the concerned
organization?
3. What are the implications of the human resource department on the overall performance of
Mercedes Benz, London?
1.4 Summary
This chapter of the study has introduced the research problem along the background of
the research. The objectives and the research question which needs to addressed and evaluated in
this research has been defined effectively. The remaining part of the study has been developed
based on the assumptions made in the first chapter of the study.

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2.0 Literature review
2.1. Introduction
Albrecht et al. (2015) revealed that with increasing global business scenario dynamics
along with increasing level of competition in the business surrounding all over the world has
increased the requirement for effective along with productive operational framework along with
per use of human resources. This in turn has also asserted the considerable roles played by the
aspects of human resource management. There has been several reasechers regarding the
importance of various aspects related with strong human resource management along with its
need, implications, problems, benefits and prospects (Al-Sarayrah et al. 2016). Considering the
same, the literature review will focus on analyzing and discussing scholarly evidences those exist
in global organizations human resource management.
2.2. Concept and Functions of Human Resource Management
Bednall, Sanders and Runhaar (2014) explained that in order to understand the concept of
human resource management within the global business along with commercial context, it is of
great importance to realize the importance and meaning of “human resources”. The term “human
resources” has been explained and depicted by several researchers to be the employees or people
those are included within the workforce of any company particularly within the commercial
sector. In contrast, Brewster (2017) has elaborated that the human resources existing within any
organization includes the most vital resources or production means within the business
framework that contribute to the effectiveness of utilization along with allocation of several
productive resources in consideration to their expertise and skills. This can in turn facilitate the
companies in developing effective operational frameworks for their companies along with their

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employees. It is also suggested by these reasechers that human resources existing within the
companies that contributes to the effectiveness of use along with allocation of productive
resources in consideration of skills and expertise that facilitates them in attaining their objectives.
Chowhan, Pries and Mann (2017) has explained human capital to be major human resource for
companies whose knowledge and skills contributes to 85% of the total productive assets of any
specific business organization in international scenario. These reasechers also indicated that
within any business organization it is evident that human resources serve as an important
component of production and operational process along with maintaining, monitoring along with
allocating them effectively is important. This can also facilitate in making sure of productivity,
profitability, competitiveness along with long term substantiality of the organizations. Collings,
Wood and Szamosi (2018) explained that such increasing need has resulted in the development
of “human resource management” concept within international business scenario.
The major objective of the human resource department is to maximize employee
performances along with ensuring organizational success. In addition, it must also ensure
employees welfare maximization that can further enhance their satisfaction and motivation level
in their respective workplaces. According to the views presented by DeGeest, Follmer, Walter
and O’Boyle (2017) it is evident that the major functions and roles played by the human resource
management department of the organizations within the general framework that is elaborated
under:
 Selection and recruitment: Guerci et al. (2015) have explained this one of the major
functions of human resource department of any company and one among them is
recruitment important and needed human resources. These reasechers also explain the
concept of “recruiting” as a technique of attracting, screening along with choosing

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suitable candidates with necessary skills for distinct job roles in the organization. This is
conducted in this manner that the skills of the employees match suitably with the needs of
the organizations.
 Employees orientation- Jackson, Schuler and Jiang (2014) indicated that just recruiting
the suitable employees that does not make sure of increased productivity of the company
as the staffs hired, requires to adjust themselves with their new jobs, work environment
along with requirements of employers. These reasechers also stated that other major
function of the human resource department is focused on orienting workforce in their
new workplaces along with making them realizing the organizational objectives and
goals and the ways in which they can contribute in attaining the same.
 Workplace environment and safety: Kramar (2014) elaborated that the aspects of
human resource management within the companies also ahs the accountability of
developing a productive along with better work environment that can motivate workforce
to give best efforts in attaining common organizational goals. In order to motivate the
workforce, the human resource management are focused on developing monetary along
with non-monetary motivations along with advantages for increasing employee welfare
and satisfaction.
 Employee relations: Ma Prieto and Pilar Perez-Santana (2014) elaborated in their
research that employees being the foundation of the companies it is of utmost importance
for the company’s management that an effective relationship is maintained at
professional and personal level. This can facilitate in promoting a healthy along with
contributing relationship among employers and employees that falls under vital roles of
human resource department of all the business organizations.

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 Training and development: Mostafa, Gould Williams and Bottomley (2015)‐ stated that
employees’ skill and training development also serves as major functions of the human
resource department. This can also facilitate in making sure that there is a constant
increase in workers effectiveness and productivity that contributes to profitability and
competitiveness of the companies.
2.3. Impacts of Strong Human Resource Management in Organizations
Paillé, Chen, Boiral and Jin (2014) explained that the strong human resource management
is generated through dedicated along with expert human resource professionals those greatly
focus on the aspects related with suitable maintenance, management along with development of
human capital and resources in the company. With the growing years, the complexities related
with legislations and regulations is observed to be increasing all through the world within
commercial factors. Moreover, a strong human resource department is deemed to be leaders in
such aspects as it deals with the taxation laws, hiring, administration, employments, training,
terminating and certain other human resource management-based factors within a company in a
better manner. Schuler and E. Jackson (2014) indicated that the major impacts of strong human
resource department existence can be can also result in development of work environment within
the business organizations that is characterized by free flow of ideas, wealth maximization of
employees along with the employers. This can result in increasing productivity of employees,
increased profitability, competitiveness, prosperity along sustainability of companies along with
attaining the organizational objectives.
Sheehan (2014) also elaborated that there is a positive relationship between the human
resource department and organizational performance. Through maintaining effective human
resource engagement, the common goals of the companies can be shared and applied by means