Analysis of HRM in a Retail Context: Next PLC Case Study

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Human Resources Management

Executive Summary
The following study makes an analysis of the values of a restructuring being considered
for the Human Resources Department. The efficacy of the department has been thrown
into relief. The HR typically plays a definite role in an organisation. Research has been
put forward regarding the role and the scope of the same. The main functions are of
supreme importance which has been keenly studied and highlighted. The organisation
taken into account for the purposes of the study is Next PLC.
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Table of Contents
Introduction...................................................................................................................... 3
LO1.................................................................................................................................. 4
Explain the purpose and the functions of HRM, applicable to workforce planning and
resourcing in an organisation. Identify and explain the HR functions to fulfil business
objectives (P1 and M1).................................................................................................... 4
Explain and critically evaluate the strengths and weaknesses of different approaches to
recruitment and selection (P2, M2, D1)............................................................................5
LO2.................................................................................................................................. 7
Explain and evaluate the benefits of different HRM practices within an organisation for
both the employer and employee, raising company profit and output (P3, P4, M3, D2). .7
LO3................................................................................................................................ 10
Analyse and identify the key aspects of employee relations management and
employment legislation. Critically evaluate employee relations and the application of
HRM practices that inform and influence decision-making in an organisational context
(P5, P6, M4, D3)............................................................................................................ 10
LO4................................................................................................................................ 12
Illustrate the application of HRM practices in a work related context, using specific
examples (P7, M5).........................................................................................................12
Conclusion..................................................................................................................... 21
References.....................................................................................................................22
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Introduction
The company chosen for this study is Next PLC which is headquartered in Enderby,
Leicestershire in England. It is one of the most prominent clothing, footwear, home
decor and retail brands in the United Kingdom. It has almost seven hundred stores
across the world out of which five hundred are based in UK itself. Next did overtake
Marks n Spencer in per annum sales in 2012 and 2014 (Nextplc.co.uk, 2019). It is
enrolled as listed under the London Stock Exchange. It had been founded by Joseph
Hepworth in Leeds in 1864 and made revolutionary success in the ready-to-wear suits
market in the UK. Human Resources Management is defined as the function including
proper outline, design and training.
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LO1
Explain the purpose and the functions of HRM, applicable to workforce planning
and resourcing in an organisation. Identify and explain the HR functions to fulfil
business objectives (P1 and M1)
The company has a lot of variety to offer just like the world in which it exists. As
customers even in the Asian countries one can have a reach towards this brand if one
chooses to.HR has to build a team in line with the objectives of increased levels of client
satisfaction both on and offline. More and more candidates will be encouraged for
recruitment which is part of the estimation in workforce planning who have a better
command over finances and understand the interest of the customers who pay by either
cash or credit using nextpay. The company lets the HR adopt a best-fit approach as
defined by Porter in 1985 so that they can manage expenses efficiently. Vertical
integration is what takes the company from growth to maturity. Next is very committed
to the development of principles of responsible business through addressing important
business-related ethos, social and ecologically supportive matters. The HRM has been
instructed to coordinate and follow stern ethical policies, recognise, respect and protect
the Human Rights. They are in charge of developing positive relations and maintain the
same with workforce and suppliers alike. The HRM has to work bearing in mind different
laws like Equal pay for Equal work so that there are no legal issues. The HR makes
appropriate workforce planning by forecasting and sampling methods to estimate a
future requirement of employees in the company so they can manage the employee
turnover. They keep tabs on legislation, economic forecasts and competitors during the
process. Salary forecasting, annual appraisal, job analysis and giving on-the-job
trainings are also part of the same. Employee resourcing is defined as "that part of
personnel and development, which focuses on the recruitment and release of
individuals from organisations, as well as the management of their performance and
potential whilst employed by the organisation" (Morgeson et al., 2019). Some of the
specific approaches considered by the department individually are:
Workforce planning: This is an uninterrupted process. It focuses on the managerial,
fundamental production and administrative aims of the organisation. Workforce is
outlined and includes the empirical needs of the staffing in the most efficient way using
emergent ways of technology.
Recruitment approach: Recruitment is the drive that inspires potential candidates to
apply for employment. Skilled candidates are carefully selected who fulfil the
expectations of the company.
Training and Development: The selection of candidates are trained and acquainted
with the company so they can gain more knowledge and become confident in their task
abilities. This is a sequenced process. Work-related targets and parameters are
familiarised with.
Performance Management: It is the basis of interaction at every level with the
employees. Every chance of intercommunication is turned into part of the learning
process. The HRM tries to get rid of the employee grievances. “Moreover, performance
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management approach is classified into four different parts (recognizing, regulating,
improving and adjusting)” (Stewart and Brown, 2019). If the workers get enough of
backing they will help the company grow times manifold.
Reward System: Merit pay or rewards are associated with better employees who
outperform the others and in turn are rewarded with benefits in cash or kind by the HR.
Explain and critically evaluate the strengths and weaknesses of different
approaches to recruitment and selection (P2, M2, D1)
The team of HRM makes a strategy to select their employees wherein they are in
requirement of skilled candidates ready to fulfil the prime needs of the organisation in a
given time (Bratton and Gold, 2017). During recruitment the HR must be attentive to the
fact that a wrong move or hiring defect may affect the growth of the company and
reputation in the long run. Recruitment is no mean feat as it involves entrance in the
labour market, communication of company message and garnering of interest. It is an
exercise in the public relations field. The company propels the HRM in obtaining of the
correct number and category of candidates for interviews. They have to contribute to the
organisation’s objectives and allocate human resources by finding the right candidate to
serve in the right department or position. There are two types of recruitment mainly:
Figure 2: Sources of recruitment
Source: (Cascio, 2015)
If candidates are appointed internally then it becomes internal recruitment (Brewster et
al., 2016). It comes from within the group of the already employed workforce. There are
various kinds of internal recruitments like promotions, which refer to the advancement of
the team of employees by estimation of their presentation in Next. There are transfers
where one switches from a job position to another with no alteration to rank and tasks.
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In big companies such as Next there is recruitment of former employees where the ex-
employees are hired back on an ad-hoc basis which is highly cost effective. Internal
Advertisements is the process by which advertisements go up for internal job postings
and an equal chance is offered to all employees thereby saving cost. There are other
ways of internal recruitments like Employee referrals, previous applicants etc. Internal
hiring is fast, easy and economic in the long run for Next as they do internally reallocate
resources or human capital. Further induction is not required as the candidate is familiar
already with the company. It inspires an employee to work harder for greater rewards
and familiarity within the company. Employee loyalty is augmented. New hiring if
stopped however, is a loss as they actually bring newer ideas and open up newer
avenues for the company. Promotion excessively causes unhealthy competition and de-
motivation among employees. Internal job transfers mean more and more positions
lying vacant hence bad for a company (Berman et al., 2019). Externally the company
may go ahead and draw employees through direct recruitment which is factory gate
recruitment as qualified workers are notified of vacancies and through Employment
exchanges where the Government keeps tabs of the inexpert, skilled and partially
skilled workers. There are also employment agencies that are run by public, private and
Government bodies proving information of employees to HRM. The advantage is the
chance for fresh talent in the market, organisational stamping increasing over external
sources, no biases at work while choosing, Large body of applicants available. The
negatives are lengthy process of selection, high cost incurred to company and more
income demanded by external candidates. Selection on the other hand is shortlisting,
assessing profiles and deciding who is appropriate for the job offer. There are various
processes of online screening and interviewing, psychometric testing, ability and
profiling, presentations and group exercises. IT is highly cost efficient and reduces the
time and effort, helps in reduced prejudices as the company employs only the one who
is most knowledgeable and efficient (Buckley et al., 2018). Interviews however also has
the propensity to give rise to premature decisions, personal biases, hiring quotas,
applicant order and delving too much on the negatives in candidates. It is also a huge
deal of manual labour and exertion for the selection of one candidate.
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LO2
Explain and evaluate the benefits of different HRM practices within an
organisation for both the employer and employee, raising company profit and
output (P3, P4, M3, D2)
The retaining and recruitment of responsible workers is of primary importance. A
financial overview is given to help in the understanding of the company’s esteemed
position in the market and how the HR should contribute to help in achievement of the
same. The share price of the company is five thousand seven hundred and eighty-eight
pounds at 0.63 per cent as of 30th May 2019 at 08:10 a.m. They are a high-street retail
organisation believing in high-speed internet oriented sales and delivery as it makes it
more cheap and efficient. They have experienced the online customer service storm as
they realised that offline buying is no longer the most justified option. The market status
is a threat to the retail industry but a larger opportunity for the business in the whole
(Huang et al, 2016). One of the key features of the HRM in any company would be to
attract, retain and mould the cream of the crop in talent in all levels. They are
responsible for the creation of a milieu where any individual is welcomed, thoroughly
respected and assisted. These objectives are in line with their long term business goals
and aims. They want to make sure that the shareholders get a long-term, secure and
sustainable return from investment in the company. They want to achieve dominant
growth in Earnings Per Share (EPS) and paying of the cash dividends. Over the last
decade they have increased significantly by over one hundred and seventy per cent and
their share prices have gone up by over three hundred and thirty per cent. The HR has
a lot to contribute towards the build up of a stable and secure financial base that the
company wants in the long run. Since the company is looking for a stable future the
HRM manages the employee remuneration and payroll responsibilities. The old ideas of
supply and of distribution are about to become dead-beat and old. They are always
bound to be replaced by newer more compact ideas. As the current industrial trend
goes buyers no longer prefer a separate shop for every item on the grocery list and
choices were dramatically improved along with value for money. If the company wants
to improve and further develop their range of products and area sales performance the
HRM must work doubly to hire candidates for the right profile as one does not have
control over the demand and supply of labour. Choosing people after reading their
profile is the key to ace this.
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Figure 1: Financial Overview of Next PLC
Source: (Nextplc.co.uk, 2019)
The duties of an HR officer or manager is to compensate the employees, regards
staffing and designing of duties for better work management (Brewster et al., 2016). The
different HRM practices are:
Developing employees: Development, in this case, would mean constant motivation
and patting in the back of employees to enforce loyalty and boost confidence through
positive demeanour. Intercommunication events and trainings are sponsored by HRM
for the development of skill-sets and aspects of the employees.
Promoting positive behaviour: A positive work environment is most necessary for its
concrete advantages which helps keep workers motivated (Reiche et al., 2016).
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Productive and responsive behaviour pays off for the employee as they are rewarded by
the HRs for the same.
Flexible workspace: Changes in the demographics of the workspace is actualised by
the HR (Bailey et al., 2018). There are two kinds of employees, one who is new and the
other who is a veteran or tenured having better experience than the newcomer. The
employee always wants the workplace to be resilient but also customisable so they can
change the work circumstances, plans etc in order to form an organic whole with their
lifestyle.
Next does incorporate all these activities faithfully keeping in mind the HRM and the
employee turnover rates which is stable for the company.
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LO3
Analyse and identify the key aspects of employee relations management and
employment legislation. Critically evaluate employee relations and the application
of HRM practices that inform and influence decision-making in an organisational
context (P5, P6, M4, D3)
Employee relations are involved with all areas of HRM involving relationships with the
workforce. It can be direct or via collective agreements that is where trade unions come
to surface and show its head. There is an unwritten list of expectations that the
workforce and the employers have and HR can help define or set the grounds for
defining the same (Wilton, 2016). Formal and informal workplace practices manage the
employment relationship. The informal and formal processes taking place in the form of
continued interactions among line managers, individual employee and their
representatives. The negotiation, development, application of the formal systems and
policies are there for the collective bargaining and resolving disputes (Banfield et al.,
2018). Employee relations milieu is created that is acceptable by all sides includes the
formation of mutual faith, transparency and maintenance of the relationships in
harmoniously. Employment legislation helps create certification of trade unions, labour-
management unions and unjust labour practices. It ensures workplace sanctity and
health. Employment standards are maintained including giving general holidays, yearly
vacations with pay, regulation of working hours, banishing unjustified dismissals,
payment of minimum wages, following of proper layoff procedures and allowing
severance pay.
“Industrial battles affect the socio-economic, psychological and human relational factors
of an organization” (Guest, 2017). Employee relations policies are to either recognise or
ban trade unions, the areas of collective bargaining to be covered and centralised, the
nature, scope of grievance handling, discipline and redundancy, how far the employee’s
opinions are considered, the way till which partnership approach is viable etc. The
employee relations policy also agrees to which level, terms and policies of employment
will be manned by conjugal agreements or based off of contracts of employees. This is
known as individualism versus collectivism (Albrecht et al., 2015). It decides if the terms
and conditions of the staff and daily wage earners can be harmonised. Employee
relations can also determine if managerial staff has any prerogative in determining
working arrangements.
There are specific procedures, which are based on worker’s engagement and relations
as being discussed below:
Sociological approach: It is a part of the psychological approach itself. It opines that
there are differences in behaviour of the individuals leading to internal discrepancies
and disputes. Social values are of importance along with financial as they encompass
urbanisation, culture flow, transport and lodging area issues in big cities, work-pressure
and stress (Nankervis et al., 2016).
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Psychological approach: Workforce employment encompasses people from all walks
of life so as obvious their mindsets will be different which results in problems arising
between employers and the employed. It creates variations and splitting within the same
roof.
Human relations approach: As per this significant line of thought management is
directly in relation to studying of the behaviour of the individuals in the workplace, It is
therefore the duty of the managerial staff to comprehend the purposes made to remedy
the situation (Stone and Deadrick, 2015). Human beings want the freedom to speak,
opine, be encouraged, gain from a positive atmosphere and be supported. If the
organisation interrupts with the same it causes a clash with the management and deters
the industry from growth. Next recognises the responsibility to follow Human Rights all
through the operations. Workforce is treated fairly and equally respecting internationally
recognised principles of Human Rights encompassed by Universal Declaration of
Human Rights and International Labour Organisation’s Declaration on Fundamental
Principles and rights at work.
Choice is always there in both ways. One is always advised to choose the boss not the
job by TED talk experts and entrepreneurs (Rathi and Lee, 2015). If the workers are
appointed carefully one might expect Next to flourish further and maintain flexible
working environment. Organisations like Next will only support workers who are
constantly reinventing themselves through their work methods and are dedicated. The
aforementioned approaches are significant and affect the total development and growth
in the organisation and hence are carefully adhered to in Next PLC.
Employment legislation means the laws that dictate the employment in the organisation
applying for all who are working in an organisation. There are some common laws
which are based on employment practice breaches that are in direct correlation with the
organisation:
Equal Pay: “Equal pay comes under labour rights concept, which was established in
1963” (Tay, 2017). This act supports “fair Labour Standards”, which stops employers
paying unequally as per gender bias. As per this law, men and women both are equal in
the eyes of the employer as long as they work equally therefore they get paid the same.
Employment Act 2002: encompasses novel rules on paternity, maternity along with
adoption pay and leave (Cook et al., 2016). It also encompasses the changes in the
tribunal method in the UK.
Disability Discrimination Act (1995): Anyone being disabled shall be protected by this
law which defines the term disability as “a physical or mental impairment which has a
substantial and long-term adverse effect on a person's ability to carry out normal day-to-
day activities” (Nagendra, 2015).
The HR has to come up with alternate strategies to support the line managers of Next.
The laws and employee management relations help the HRM in having a basic
guideline etched in mind for the conducting of activities. On the negative side, every
aspect highlighted may not work out fruitfully as put on their goal vision board. Every
law may not be relevant for all organisations while corruption within the HRD itself may
ruin chances of having a better opportunity for company growth. Labour quality
available and Management are internal factors while external laws and industry trends
are external factors.
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