Strategic HRM and Employment Relations: A Case Study of Tesco PLC

This report provides an in-depth analysis of strategic human resource management (SHRM) and employment relations, using Tesco, a multinational retailer, as a case study. It begins by defining SHRM and its alignment with business strategy, emphasizing the importance of vertical alignment and horizontal integration. The report then explores the theoretical basis and models of SHRM, including innovation, quality enhancement, and cost reduction strategies. Specific HR practices, such as performance management and reward systems, are examined, along with recommendations for redesigning performance management. The report also delves into the nature and theoretical perspectives of employment relations, including unitarist, pluralist, and Marxist perspectives, with a focus on the pluralist perspective as most applicable to Tesco. Finally, the report evaluates the roles of actors within the employment relationship and offers recommendations to improve employment relations within the context of Tesco's operations.

Strategic HRM

Contents
INTRODUCTION ...........................................................................................................................................4
TASK 1..........................................................................................................................................................4
Relationship between business strategy and the human resource strategy..........................................4
Vertical alignment and horizontal integration across the organization...................................................5
Theoretical basis and models of strategic Human resource management..............................................5
Specific HR practices of performance management and reward.............................................................6
Recommendations for redesigning the performance management system ...........................................7
TASK 2..........................................................................................................................................................8
Nature and theoretical perspectives of Employment Relations--500......................................................8
Critically evaluate the roles of the actors within the Employment Relationship with analysis of the
changing nature of employment relations...............................................................................................9
Recommendations to improve employment relations..........................................................................10
CONCLUSION.............................................................................................................................................11

INTRODUCTION
Strategic Human resource management is defined as the connection between human resource of
an organization with goals, objectives and strategy. The main objective of strategic human resource
management is to enhance flexibility, innovation and competitive advantage. This helps in making
positive organizational culture (Hill, 2017). Companies are able to run their business successfully when
all teams are working for achieving a same goal and objective. Employment relationship is defined as the
legal link between employees and employers. This is formed when an individual performs service or
work under specific conditions in return for remuneration. The following report discusses about the need
of strategic human resource management and employment relationship. For better understanding of the
concept, an organization is considered naming Tesco which is a multinational groceries and general
merchandise retailer. This was founded in the year 1919. The headquarters are located in England, United
Kingdom. This report explains the relationship between business strategy and the human resource
strategy. Further, this report explains the nature and theoretical perspective of employment relations.
TASK 1
Relationship between business strategy and the human resource strategy
Human resource management is defined as the process of bringing people and companies
together and ensuring the achievement of goals and objectives in specified time frame (Lasserre, 2017).
The human resource strategy of the company must be aligned with the business strategy for better
outcomes for the company.
HR strategy as business strategy
Human resources are an essential part of a successful business strategy (Meyer, Neck. and Meeks,
2017). There must be well trained and motivated individuals working in the organization so that financial
goals of the company can be achieved in less time. The employment and management should realize that
a cooperative relation is necessary for success of the company.
Communications – Organization is responsible for communicating with the goals , production targets and
objectives of the company. The managers of organization should ensure to make employees feel valued
and recognized. This will increase the motivation of employees and ultimately goals and objectives of the
company will be achieved in specified time frame.
Demographics, Social Trends and Technology – The perspective towards job satisfaction is
different of young and old employees. The changes in social trends and demographics reflects that leaders

of business should adapt changes in social trends for running business successfully (Jenkins, and
Williamson, 2015). The HR departments is responsible for educating new joiners and employees and
helping them to recognize their role in supporting business strategy, budget requirement, operations and
objectives of the company.
Developing strategies and solutions - The human resource department and management of
company should collaborate and develop effective program for employee training and development,
employee rewards and performance appraisal. The development of management is an important aspect of
this process. Management training provides various key components such as employee selection,
organizational development, manpower planning and recruitment.
In Tesco, the business leaders and HR department work together for designing consequences for
workforce which cannot do their job appropriately (Karadag, 2015). The HR management of Tesco
focuses on different laws like labor laws, training procedures, good business practices, disciplinary steps
and company policies while making the strategic planning of the company.
Vertical alignment and horizontal integration across the organization
The vertical integration is a competitive strategy which helps company to take complete control
over different levels in distribution or production of the product. An organization like Tesco adopts
vertical integration for ensuring full control over the supply of raw material and manufacturing the
products (Chen, Delmas, and Lieberman, 2015). This also employ vertical integration for taking over the
reins of distribution of the products. On the other hand, horizontal integration is a competitive strategy
which is used by organizations. The horizontal integration is defined as the acquisition of business tasks
which are at same level of the value chain. For instance, a food chain restaurant merging with same
business in different country for gaining market of foreign country.
Theoretical basis and models of strategic Human resource management
The strategic human resource management is based on various strategic theories that were
developed in 1970s.According to Schuler and Jackson, there are three generic organization strategies
which consists of innovation, quality enhancement and cost reduction with philosophies of human
resource management like accumulation, facilitation and utilization. The utilization strategy and cost
reduction aims for minimizing labor costs and it does not focus on employee training or mobility. The
company which has innovation facilitation strategy emphasizes on collaboration and creativity. This
strategy emphasizes on flexibility, creativity and cooperation. Such companies are wide and there is a lot
of employee interaction. The management of the organization focuses on team work and develop
employees by providing them training and sessions. Another strategy is accumulation or quality strategy

that emphasizes on selection of candidates on the basis of personality. This type of organizational
structure provides employees for adapting the environment and updating skills and abilities of employees.
According to this strategy, employees are made to follow a routine for their betterment. This has a strong
emphasis on quality and cooperation (Slack and Brandon-Jones, 2018). Boxall and Purcell have given a
basic framework for strategic human resource management which is critical HR goals, non critical HR
goals and ultimate business goals.
Critical HR Goals Critical Non HR Goals Ultimate Business Goals
Desired types and levels of
labor productivity
organizational flexibility
Social legitimacy
Desired outcomes for
Market share
Sales
Social legitimacy
Return on capital employed
Viability with adequate returns to
shareholders and sustained
competitive advantage
Critically analyze the strategic perspective of best fit/contingency, Best practice
For a company like Tesco, it is important to apply a good strategy planning in human resource
management for achieving the goals and objectives of the company. Tesco operates and ensures that it
should maintain good image in front of customers and stakeholders so that it will have enough budget to
accomplish the targets of the company. The best practice for Tesco is quality or accumulation strategy
that will help managers to motivate employees for adopting the business environment and work
efficiently.
Specific HR practices of performance management and reward
The performance management and reward system are important for any organization as it helps in
motivating employees in doing their work appropriately. There are several performance management
strategies that are adopted in Tesco which are described below-
Define and communicate company goals and performance objectives

It is important for the management to take care of the expectations of the employees for better
results and outcomes. The leaders and managers clarify the goals and objectives of the company to
employees for meeting the targets in less time.
Utilize performance management software
It is advisable for Tesco use a performance management software in the organization for
analyzing the employee engagement, motivation level of employees and strengths and weaknesses of
employees (Peppard. and Ward, 2016. ). A good performance management software system is necessary
for company as it offers traditional reviews and 360 degree appraisal of the employee.
Offer Frequent Performance Feedback
A business must clarify the goals and objectives to employees and analyze the needs of
employees for motivating them in doing good work. Tesco should organize a timely performance
feedback so that management should know about the demands of employees.
Peer reviews
The utilization of peer reviews is a great way for an effective performance management. This is
also known as 360 degree reviews. The peer reviews are important as they allow the employees to praise
their colleagues. This helps workers to work together and build good communication among employees.
Preemptive Management and Recognition
The implementation of rewards and practice preemptive management is a good way for making
positive culture at workplace. This reflects that employees are knowing the expectation of the company.
Recommendations for redesigning the performance management system
The recommendation for Tesco to improve the performance management system is given below-
Set regular meetings and discuss outcomes and results of the business
Meetings like progress meetings and reports must be organized in Tesco for making strategies for
good results of the company (Chen, Delmas, and Lieberman, 2015). These meetings help in evaluating
the profit level as well as the threats business is experiencing while operating. The objectives of these
meetings should include-
 Follow up on peer reviews

 Discussing praises and areas which require team work
 Recognition of team members for meeting the goals and objectives of the meeting with incentives
and rewards
 Discussion of plans for the next phase of project
 Discussion of data of company like revenue, marketing, customer involvement and success of
campaign, etc.
TASK 2
Nature and theoretical perspectives of Employment Relations--500
Employee relations are considered as the efforts of business organisation for managing and
developing their relationship among employees and employer. It can be said that if an
organisation is having effective employee relations then definitely it offers fair and bias free
environment to its employees so that they can work effectively with the company and work hard
for attaining their goals and objectives (Pawlak, 2017). In addition to this, effective employee
relations also help company in retaining its employees for longer period of time in the company.
Furthermore, employee relations also help company in improving its productivity of employees
by motivating them at regular basis in order to keep their morale high. While evaluation of
employee relations, it has been analysed that this term is considered as the growth of opportunity
for company as it helps them in attaining quick goals and objectives.
Nature of employee relations
Nature of employee relation is very complex and multidimensional. This is because, it
includes both the employer and employee who are working together in order to obtain business
objective. The relationship is not only limited to the companies but it also includes other related
entities like government, and other industries. In context of TESCO, it can be said that it is
essential for its HR managers to focus on maintaining their as well as top management teams
relations with employees so that they can work effectively with the company for longer period of
time.
Theoretical perspectives of employee relations

Theoretical perspectives of employee relations are classified into three types such as
Unitarist perspective, Pluralist perspective and Marxist perspective. Some essential of them are
stated as below:
Unitarist perspective: In this perspective, overall organisation as well as its employees
shares mutual loyal relationship with one another. This reflects that they work collaboratively for
one common objective in order to gain quick success (Noe and et. al., 2017). Along with this,
both the employer and employee give importance to mutual cooperation. In this company gives
importance to employees and also values their decision in order to realise them their importance
in the company. Here trade union is not required as there are less chances of conflict among
employer and employees.
Pluralist perspective: This perspective mainly involves two sectional groups which are
loyal. These sectional groups are trade union and management team of company. In this
management team cannot force and control employee as they are observed by trade union at
regular basis (Kim and Bae, 2017). In this situation management team have to cooperate with
both employees and trade union in order to maintain employee relations at workplace.
By evaluating above stated different perspective of employee relations, it can be said that
pluralist perspective is seen as the best feasible one for British companies like TESCO. It has
been analysed that this perspective supports both management and employee as conflicts are
observed and resolved by trade union. With reference to employees, trade union helps them in
protecting their legal rights. On the other hand, according to employer trade union supports them
in convincing employers in emergence situation to corporate with company effectively in order
to secure them from loss.
Critically evaluate the roles of the actors within the Employment Relationship with analysis of
the changing nature of employment relations.
Employment relationship includes role off different actors of company which plays an
essential role in the changing nature of the employment relations. In context of TESCO, it can be
said that its various actors within employment relationship are employer, employee, government
and trade union. All of these actors equally contribute in the changing nature of employee
relations. Explanations of all of them are stated as below:

Employer: Employer plays an essential role in the employment relationships as they gets
collecting opportunity of bargaining from this relationship. It can be said that trade union reduces
number of issues in front of company in the perspective of single employee. This is because,
union only support common issue of employees with the employer. This ultimately saves time of
employer as well as employees (Shields and et. al., 2015). Along with this, further it has been
also seen that employer also owns capability of affecting employee relations as they owes
capability of hiring and firing employees. In this, management team also has power to relocate
employee without asking them. This could result in creation of negative relation among them. As
a result, it might influence employee relations.
Employee: With reference to employee of TESCO, it can be said that they are one who
exchange their positive ideas with the company but they also joins trade unions in order to
convince management team about their decisions effectively. This role of employees as an actor
of employment relationship might affect employee relations and its nature.
Government: The influence of government or state legislation could be seen in employee
relations in terms of rules, laws, legislations, awards, agreements etc. It can be said that sudden
change in governmental law might affect employee relation (Rees and Smith, 2017). For
instance: Government have added some more provision in terms of additional working hour
which are against TESCO but are in favour of employees. This would definitely develop
negative relations among employer and employees as productivity of TESCO will directly slow
down due to less working hours. As a result, it directly influences nature of employee relations.
Trade union: Trade union generally works as mediator between employer and employee.
They also owe capability of building as well as affecting in between relationship of both of them.
It can be said that Trade union of TESCO can provoke employees towards managerial decision
which will affect working activities of employees and it might also reduce trust of employees on
company. As a result, their relationship gets disturbed from employer which definitely influences
employee relations.
Recommendations to improve employment relations
On the basis of above made discussion on employee relations, its nature, theories and role of
actors for changing nature of employee relations it has been evaluated that all them

collaboratively state that company is required to focus satisfying employees by providing them
effective and positive environment. This is because, only satisfy employee can work for the
company with all possible efforts in order to meet organizational goals and objectives. As a
result, company grows more quickly (Collings, Wood and Szamosi, 2018). By evaluating overall
scenario, there are few recommendation for HR manager of TESCO for improving their
employee relations at work place in order to improve company’s performance at marketplace.
Some of the core recommendations for employee relation improvement are stated as below:
 At first, it is advised to HR manager to TESCO to focus on engaging employees in decision
making process in order to make them realize that they are essential part of company and
their advises are valuable for the company. Along with this, it will also help TESCO in
getting better ideas from employee’s side which are beneficial for company in terms of
improving their profits. This will also result in improvement in relationship between
employee and employer.
 At next, it is suggested to HR manager of TESCO to conduct some brain storming session in
the company so that employees gets chance to analyze their internal capability which
develop themselves. It will also develop relationship between employee and management
team as these sessions are helpful for both of them.
 Further, HR manager is also suggested to assign work to employees in teams so that they
can interact more with team members. This interaction will develop bond among employees
and employer. As a result, this initiative of HR manager will definitely result in positive
improvement employee relations.
On the basis of above stated recommendations, it can be said that by following this HR
manager of TESCO can easily improve employee relations in the company which will result in
positive growth of company performance and contributes in profit enhancement.
CONCLUSION
From above mentioned report, it has been concluded that strategic human resource
management helps business organization in growing faster as they adopts better strategies which
contributes in enhancement of company’s sustainability as well as profitability. It has been
further analysed that effective hr manager of the company focuses on applying various models

and HRM theories for improving business environment and performance of company. Along
with this, effective employee relations also helps organization in developing their relations with
the employee which contributes in retaining them for longer period of time. With appropriate
employment engagement HR manager can easily motivate employee and persuade them to work
for the company in effective manner.