Strategic Human Resources Management Report: Aldi's Performance Review

This report provides an in-depth analysis of Strategic Human Resource Management (SHRM) practices within Aldi, a British multinational retailer. The report examines how Aldi utilizes SHRM to enhance employee performance through various strategies, including performance-related pay (PRP), performance appraisal techniques, clear goal setting, budget management, problem-solving measures, employee training, and competitive compensation packages. The report explores circumstances under which IPRP stimulates employee motivation and the situations where it may not be as effective, such as when salary pools are limited or when economic conditions impact the perceived value of pay differentials. The analysis highlights the importance of communication, diversification of the workforce, and a supportive work environment in fostering employee motivation and achieving organizational goals. The report concludes that effective SHRM is crucial for developing and executing human resource programs that contribute to long-term business objectives and workforce development.

STRATEGIC HUMAN
RESOURCES
MANAGEMENT
Table of Contents

INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
TASK 2 ...........................................................................................................................................3
Circumstances under which IPRP stimulates the level of employee performance through
motivation ..............................................................................................................................3
Circumstances under which IPRP tends to motivating employees & situations in which it does
not work so well.....................................................................................................................6
CONCLUSION ...............................................................................................................................7
REFERENCE...................................................................................................................................9

INTRODUCTION
Strategic human resource management refers to course of actions & process that aid
entities of HRM to carry out function effectively for the accomplishments of organisational goal.
Attracting and influencing highly skilled candidates is crucial task but it is essential for company
as they bring innovation and give new unique ideas to company for surviving in competitive
world. So it is considered as a core function of company in order to select talented peoples.
However, there is no any effective and appropriate approach for this. In that situation SHRM will
help enterprise to effectively mange peoples along with resources. To attain the goal of company,
it is highly crucial for enterprise to continually define their won aptitude & initiatives for
remaining competitive in the market. Another key factor on that SHRM aid company is it make
sure that the culture of company along with method, structure will be qualitative, obliged and
empower (Skorkova and TARIŠKOVÁ, 2018). The following report is based on Aldi
organisation, which is a British multinational retailer firm and operates its business globally.
This company deal with home products, food products and so on. Further, it covers the
evaluation of individual performance related to higher performance level of employees & the
circumstance which arises needs of motivation for performing well.
MAIN BODY
TASK 2
Circumstances under which IPRP stimulates the level of employee performance through
motivation
Employees of Aldi are awarded with remuneration and benefits according to their
performance level and position in the organisation. It is the duty of employers that they pay
employees on time as it keeps them motivated. Also the workforce come up with an increase in
their inner potential enhancing productivity of the company (Bawa, Jantan and Ali, 2020). For
accomplishment of key objectives, selected firm has created scales of pay to employees as per
their roles and responsibilities. Payment related issues are faced by the entity when there are
conflicts among employees working at the same position and organisation regarding different
salaries. People working in the organisation should therefore know that they are provided with
distinct payout as per their performances.

Aldi has come up with solutions rising individual differences among employees related
to performance related pay. One way is providing the employees with additional financial
rewards by measuring the performance of each individual motivating them to work more
effectively. This performance measurement is done as per the set standards of chosen company
for correct decision making. Performance appraisal method is one to increase the employee
performance and productivity.
Aldi uses PRP method for motivating the employees discussed below as:
Performance appraisal techniques: Higher performance signifies increased
productivity directly resulting in rising profitability is one technique followed by Aldi.
Organisations apply PRP Policy which includes various rewards and recognition programmes for
raising performances (Pattanayak and Sahoo, 2017). Effective working of employees ensures
company success. Therefore, the managers should be aware of the functions actually performed
by employees in the corporation. Long term positions with single responsibilities and no
integrated tasks ensures stability of job and help the staff get maximum rewards without any
clumsiness in work performance schedules.
Clear goals and directions: For improving the performance level of workers in Aldi, the
company should know that its is very important to have clear objectives. As they create clear
directions to employees explaining them what exactly they have to work on resulting in
profitability of the firm. There is no room for ambiguity in Aldi as every task per role is less and
well defined.
Setting correct budgets on profits and expenditures: Right budget of the company is
important as it helps in analysing total incomes and expenditures of the company which in a way
affect salary of employees too. Aldi should make sure that the manager has the right budget
made showcasing blueprint of all expenditures for paying performance related benefits
accordingly. Negative budget sometimes also give a fall in the process of performances as
expenditures are more than the revenue earned. The company creates budget by considering
individual methods for amount allocation by the process of PRP. The process make sure that
amount is rendered to each and every individual or not.
Appropriate measures to solve problems: Sometimes employees of the company do
not involve themselves in activities going on, to resolve such issues Aldi takes up corrective
measures to solve such problems (Delery and Gupta, 2016). The actions taken helps in increasing

participation, productivity and high performance in the organisation. Non-performance may
affect the quality of work . Therefore, employees should know that they are important to chosen
company and they should be motivated towards participating in many functions of the company.
Simple management structure of Aldi with small working environment has created a sense of
importance and easy understanding for the staff to perform. With the help of 360 degree
feedback model , employees are assessed and also rewarded with good salary packages with
benefits outstanding.
Training to employees: Aldi while its recruitment and selection of employees choose
highly motivated people with a “ can do” attitude for energetic performances. There is an
efficient system of HRM delivering training packages to employees for their career progression.
The trainings provided are industry leading for betterment of the workforce understanding level.
Employees are also promoted internally within the organisation increasing their motivation. Each
retail stores of Aldi has a limited no of employees so that they are not counted just a number but
focused upon (Salim, 2020). This affects psyche of each employee in a positive manner. Limited
people face less barriers in fostering communication too among subordinates within organisation
at all levels.
High compensation and suitable leaves: Aldi focusses on strategic human resource
management considering employees as one of the most crucial asset of the entity. “ Australian
first” is one of the major initiatives taken by the company being first retailer to provide maternity
leaves to its employees. With friendly environment , company also has been paying employees at
high pay scale compared to other grocery retailers in the market competition. HR system has
identified many approaches and strategies for gaining best operational efficiency.
Hence, Communication plays a very significant role in connecting different levels of
management. A strong link among all levels and departments enhances employability skills in
workers promoting team work contribution at every stage. Judging the employees performance
on the basis of achieved targets by them within considered time can be effectively done through
PRP process. Time being a crucial factor can also be considered as a factor based on which
employees are rewarded with incentives if they complete given task before deadline. In this way
the growth aspects of the company can be easily achieved as rewards will boost up the morale of
the employees motivating them to work with efficacy. As soon as targets are completed by

employees, they are rewarded with short time pays by the HR department that measures the
performances of each one.
Diversification of workforce as per their level of efficiency is done at Aldi aiming at
constructing a dynamic change management in the organisation (Macke and Genari, 2019). The
company is successful in retaining its current employees by offering them with incentives
encouraging them to work more. PRP process therefore focus on the effective working of
employees by properly train them through programmes and a good professional working
environment. Proving employees with knowledge and skills boost their motivation to achieve
productivity and growth prospects.
Circumstances under which IPRP tends to motivating employees & situations in which it does
not work so well
Motivation refers to inspiring the personnels or individuals within firm for zeal to carry
out work effectively as well as for accomplishment of organisational goal (Wood and Kispál-
Vitai, 2017). In which where entities of company measure and highly observed the efficiency of
employees during that they adopt employee motivation and energy in order to pursue objective
of company by distributing the financial rewards in effective and equal manner. When equity of
company will increase that time the employees of company feels that they are very precious
resources of company as well as highly valuable at the same level by company. Therefore,
entities strives to attain the pre defined objective of firm by performing well wit the help of
motivation. The gap between employees which is often a demotivation factor is also eliminated.
For this rewards management and performance appraisal is need to be implemented and
managed in efficient way by addressing all desires of employees.
As financial rewards are visible due to this many of company will not disclose the
amount of compensation to employees (Pattanayak and Sahoo, 2017). By this they do not have
greater efficiency for motivating employees by performance related to pay. Disclosing
compensation really shows the fairness of system that the are offering equal amount to each
individual who posses at same level. Therefore, personnels will be motivated towards achieving
the goal of firm as they have awareness about certain rewards. In context of chosen firm it has
been analysed that rewards are not possible feel to be in worse conditions than the actual one
hence demotivation will occur. Non- monetary rewards need to be conducted in order to

maintain the motivation level of individuals as these are also visible to all worker and enhances
the degree of fairness of reward systems.
Where compensation decision are reversible. Reward system need to be formulated in
such manner that it can be reversed or modified so that it does not have be that the same
personnel will rewarded always. For instance the bonus that are being offered by higher
executives to top performers in specific year needs to be different to following year. These
changes will definitely bring motivation in employees and encourage them to puts more efforts
for performing well.
Circumstances under which IPRP does not work so well.
In relevance to this it has been analysed that where company which have lower pools of
salary, these firm consumes more time in rating and ranking employees which tends to high
expectation by worker and due to this disappointments will occur. In that case performance
related with pay is important as it become insufficient that is in efficient. For this the rewards
sizes needs to be effective (Arora, 2016). The major factor that considered before addressing
performance related to pay. For instance workers who puts more efforts but receive minimal
increment in pay might get demotivate and ever quit in extreme circumstances.
Aldi company offers rewards system that are different from managers to other staff and it
may be varies from level of managements in which senior executives are evaluated and
compensated in comparison to junior managers. This is because it can be credible I order to
motivate new & junior staff as well as inspire them for achieving greater heights in company by
gaining attractive reward package.
When economic situation is adverse & pay differentials seem huge, during condition of minimal
inflation payment give to employees seems smaller and employees will not able to recognise the
gap between salary. During high inflation period the payment differences seem to be high and
noticeable values that significance raise in salary (Mirkamali, 2016). These challenges occur to
due low budget on wages hence effective management is substituted for performance related to
pay and my be arises when managers assume that concept of effective management &
performance relate to pay is same.
CONCLUSION
From above discussed report it has been analysed that strategic human resources
management is considered as a future oriented function in order to develop and execute human

resource program which resolves all problem of business unit effectively and instantly
contributes towards long term business objective. It is a different method for workforces of
corporation in term of attaining and gaining the benefits of rivalries with the help of effective
strategies of operations. As well as it also defines the circumstances that are beneficial for
company in term of encouraging the workforce & other situations which admonish workers for
performing the allotted task effectively. So motivation and encouragement helps them to
compete with this problem and aid company to accomplish the goal of company within small
period of time.

REFERENCE
Books & Journal
Arora, R., 2016. Role of performance improvement and instructional design in strategic human
resource management. Journal of Strategic Human Resource Management. 5(1).
Bawa, M. A., Jantan, M. and Ali, J., 2020. The Impact of Strategic Human Resource
Management Practices on Productivity: The Case of the Malaysian Oil Palm
Industry. Malaysian Management Journal. 4(1&2). pp.65-73.
Delery, J. and Gupta, N., 2016. Human resource management practices and organizational
effectiveness: internal fit matters. Journal of Organizational Effectiveness: People and
Performance.
Macke, J. and Genari, D., 2019. Systematic literature review on sustainable human resource
management. Journal of cleaner production. 208. pp.806-815.
Mirkamali, S. M., 2016. The Study of the Effect of Strategic Human Resources Management on
Organizational Performance with the Mediating Role of Human Capital in Faculties of
Physical Education and Sport Sciences of State Universities in Tehran. Journal of Sport
Management. 8(3). pp.453-465.
Pattanayak, T. K. and Sahoo, K., 2017. Strategic Human Resource Management (SHRM)
initiatives for organisational effectiveness: A case study of a process unit. Siddhant-A
Journal of Decision Making. 17(4). pp.343-350.
Pattanayak, T. K. and Sahoo, K., 2017. The Strategic Human Resource Management (HRM) and
Its Impact on Organisational Excellence. Training & Development Journal. 8(2). pp.113-
120.
Salim, A. M., 2020. In-service Trainings and Desired Performance of Academic Staffs in Higher
Learning Institutions: Challenging Strategic Human Resource Development
Perspective. International Journal of Innovation and Applied Studies. 30(2). pp.468-476.
Skorkova, Z. and TARIŠKOVÁ, N., 2018. STRATEGIC HUMAN RESOURCES
MANAGEMENT IN SLOVAKIA. Ad Alta: Journal of Interdisciplinary Research. 8(2).
Wood, G. and Kispál-Vitai, Z., 2017. Strategic human resource management–concepts, practices
and trends. Strategic human resource management—an international perspective. pp.83-
84.