Strategic Human Resource Management at H&M: Evaluation & Improvement

This report provides an in-depth analysis of strategic human resource management (SHRM) practices at H&M, a global fashion retailer. It uses various HR models and theories to evaluate the effectiveness of H&M's HR strategies, particularly focusing on recruitment, diversity management, and information flow. The report identifies issues such as the misalignment of third-party recruitment with organizational needs and discrepancies between rhetoric and reality in employee expectations. Based on these issues, the report recommends adaptive policies, the development of suitable information systems for candidates, and the creation of in-house recruitment teams. The aim of these recommendations is to mitigate recruitment challenges, improve employee retention, and ensure that H&M's HR practices align with its strategic goals and diverse workforce needs. Desklib offers similar solved assignments and study resources for students.

Running head: STRATEGIC HUMAN RESOURCE MANAGEMENT
Strategic human resource management
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Abstract
This report discussed about the overall process of strategic human resource management being
practiced in H&M. Different models and theories are being used to evaluate the effectiveness of
the human resource management of H&M. It is identified that H&M is effective enough in
managing their global and diverse workforce across their global operations. However, on the
other hand, a few issues are also being identified in terms of their recruitment strategies and
these issues are also having negative long term consequences. Based on these issues, a few
recommended steps are discussed in this report. The recommendations that are enumerated in the
research aimed at mitigating the issues that might be faced by an organization while undertaking
recruitment of fresh talent. The HR manager of an organization must develop a suitable
Information system in order to reduce the gap between the perceived value and the actual value
of the job role and thereby minimize the rate of staff turnover. On the other hand, the HR
manager must also take steps to develop a recruitment board of their own for ensuring the
recruitment of correct talents in accordance to the needs of the business.

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Table of Contents
Introduction......................................................................................................................................3
Strategic human resource management approach of H&M.............................................................4
Hard and soft approaches of H&M..............................................................................................5
Evaluation of current activities........................................................................................................6
Recruitment process.....................................................................................................................6
Identification of the issues...........................................................................................................8
Flow of information.....................................................................................................................8
Identification of the issues...........................................................................................................9
Managing diversity....................................................................................................................10
Identification of the issues.........................................................................................................11
Recommendations..........................................................................................................................11
Adaptive policies.......................................................................................................................11
Designing suitable Information systems for transmitting information to the candidates..........12
Developing recruitment teams in the individual offices............................................................14
Conclusion.....................................................................................................................................15
Reference.......................................................................................................................................17

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4STRATEGIC HUMAN RESOURCE MANAGEMENT
Introduction
In the current business scenario, human resource management is one of the major
considerations for the contemporary business organizations. This is due to the reason that with
the help of the effective human resource management approaches, the gross productivity of the
employees in the workplace will get increased along with reduction in the issues related to them.
In this case, it should be noted that recruitment is one of the elements of human resource
management, which should be given the major concentration (Jackson, Schuler & Jiang, 2014).
This is due to the reason that recruitment is the first step of the human resource management and
effectiveness of the requirement process will determine the efficiency of the entire human
resource process in the long term. However, it should also be noted that each of these of
approaches are different in different organizations based on different circumstances.
H&M is one of the leading fashion chains in the world with having their presence in
different countries across the world. They are also having extensive presence in New Zealand
with two stores already running and the third one will get opened in 2019. It is reported that
H&M is the second largest fashion retailer in the world with having more than 4500 stores in
more than 60 countries (hm.com, 2019). In addition, they are also having the online presence
being available in more than 30 countries. Currently, H&M is having approximately 132000
employees across their global operations. In terms of the human resource management also, they
are known for their extensive approaches. However, managing the global workforce of this size
is a challenge itself and there are number of issues being faced by H&M.
This repot will discuss about the major issues being faced H&M in terms of their
strategic human resource management. Moreover, recruitment process of H&M will be majorly

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focused. In doing so, different theories of human resource management will be discussed
evaluated. Based on the identified issues, a few recommended steps will also be discussed.
Strategic human resource management approach of H&M
Strategic human resource management is the new age approach of utilizing the theories
of the human resources in getting the maximum benefit from the workplace. Thus, this concept
refers to the effective management of the employees along with the meeting the organizational
requirements and objectives. In the case of H&M, the approach of the strategic human resource
management is maintaining the employee satisfaction and retention along with ensuring the
maximum productivity from them (Kramar, 2014). It is reported that H&M is having dedicated
departments to look after the employee management processes and practices. The major
objective of H&M in terms of their human resource management is enhancing their employer
branding and having the positive word of mouth in the industry. This is helping in them in
attracting more potential candidates along with having high level of employee retention ratio.
There are number of elements being followed in H&M in terms of their human resource
management and they are diversity, equality and ethics. Based on the elements, the employee
management process is being initiated. It is also reported that the recruitment process of H&M is
being designed in such a way that it will be acceptable to the larger sections and right employees
can be chosen for the right jobs. Moreover all the element of human resource management of
H&M is different in different regions of their operations based on the diverse external factors.
Even though the human resource approach of H&M is effective and efficient but still there is
number of issues identified. The following sections will identify these issues based on different
theories.

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Hard and soft approaches of H&M
As per the McGregor’s theory X and Y, there are major two types of human resource
management approaches are hard and soft approaches. According to Mohamed and Nor (2013),
employees from the theory X are considered unmotivated and demoralized and they need to be
controlled in the workplace. On the other hand, employees from the theory Y are considered as
positive, flexible and motivated for work. Thus, as per this model, it is important to have
different approaches of human resource management in managing them. Hard approach should
be initiated for the employees under theory X and soft approach for the theory Y employees. In
the case of H&M, it is identified that they are following the both the approaches in managing
their workforce. This is due to the reason that elements such as rewards, incentives and employee
empowerment are being followed for the employees. On the other hand, autocratic style of
leadership and management is being followed during the challenging business situations. It is
identified that employees in H&M are given specific targets to accomplish and based on that
their performances are being evaluated. This is the example of hard approach. It is also identified
that employees in H&M are also rewarded for their performances along with periodical growth
and increment. This denotes that sifter approaches are also being maintained. It can be concluded
that H&M is practicing both hard and soft approach.

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HRD needs analysis
Objective strategy
Developing tactics
Evaluation process
Performance criteria
Figure: 1 (human resource system approach)
Evaluation of current activities
Recruitment process
Warwick model of human resource management is one of the most effective and
successful models being followed by the contemporary business organizations. According to
Savaneviciene and Stankeviciute (2013), Warwick model of human resource management states
about the coordination between the external and internal business factors in having the maximum
utility from the employee management. This is due to the reason that in the current business
scenario, external factors are getting changed rapidly. Thus, it is important for the business
entities to consider the change in the external factors in initiating human resource management
approaches. Moreover, the authors have also stated that according to the Warwick model,
business and human resource strategies should be in line to the external and internal factors. In
this case, it is identified that they are following multimodal approach of attracting more talent
pools. This is due to the reason that they have involved third party recruiting agencies, campus

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hiring and online job portals in their recruitment and selection process. With the help of the third
party recruiting agencies, H&M is being able to have the expertise in selecting new employees.
Moreover, involvement of the third party vendors is also helping H&M in having lower sets of
the responsibilities in respect to recruitment.
On the other hand, it is stated by Sinha and Thaly (2013), initiation of the campus
recruitment is also helping H&M in adhering to the changing external factors. This is due to the
reason that with the change in the external factors such as legal and political factors, expectation
and requirements of the organizations are also changing. Thus, students graduating on yearly
basis will be aware about the new industry trends and H&M is getting the access to the
candidates with updated knowledge and expertise. Thus, it can be concluded that as per the
Warwick model of human resource management, the recruitment process of H&M is in the line
of both internal and external business factors.

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Identification of the issues
It is identified that one of the major issues for H&M in terms of terms of involving the
third party recruiting agencies is not being strategic. This is due to the reason that involvement of
the third party vendors will help to initiate the recruitment process in more extensive manner but
it will not be specific. It is important for the recruitment process to align with the change in the
organizational requirements periodically. As per Starineca (2015), if H&M is having own
recruitment process, then they can be able to change the objectives of the recruitment process
based on the changing scenario. However, in the case of the involvement of the third party
vendors, recruitment objectives cannot be changed in frequent manner. This is causing issues for
H&M in having the right employees as per the requirements.
Flow of information
According to the Guest model of human resource management, there are number of
elements of human resource should be maintained in order to have the effective process of
recruitment as well as the flow of information. This is due to the reason that effectiveness in the
flow of information from the recruiters to the candidates will help to ensure the retention rate.
According to Mahmood (2015), it is stated that a total six major components of the human
resource management should be maintained in having the effective flow of information in the
recruitment process. Guest model stated that based on the human resource management
practices, the outcomes will be determined and in the long term, positive behavioral outcome can
be achieved. These hiring practices include training, relation and compensation. In regards to the
employee relation, it is stated by Poyhart and Weekley (2014) that flow of the information
should be proper and effective. This is the due to the reason that the employees should have

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proper information about the organization and about the job description. This will enable them to
make the decision about working or not. Moreover, the more will be the flow of the information
between the stakeholders; the better will be the relationship between them. It is also stated by the
authors that if the employees are being recruited by providing them all the relevant information,
then the long term outcome will be positive. This is due to the reason that employees will be
aware about the job requirements and performance expectations prior to their commencements.
Identification of the issues
In terms of the flow of information, the major issue for H&M is the difference between
rhetoric and reality expectation from the employees. This is due to the reason that expectations
from the newly appointed candidates are always in the higher side and they are being perceived
as more effective compared to the existing sets of employees. However, due to the lack of proper
flow of information from the organization to the candidates, difference and performance gap
between the rhetoric and reality is getting more. This is further increasing the of employee
attrition rate for H&M. This issue is getting worse due to the reason that performance of the
newly appointed candidates in the real world situation is much lower than that of the rhetoric
performance.

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Rhetoric performance
Reality performance
Performance gap
Figure: 2 (Performance gaps at H&M)
Managing diversity
Managing the diversity is another major challenge for H&M due to the reason that they
are operating in different regions across the world along with having a diverse workforce. Thus,
it is more important for H&M to review the situational factors in designing the human resource
strategy. According to Harvard model of human resource management, it is important for the
business entities to consider the external situational factors in initiating their human resource
strategies. This is due to the fact that the more aligned will be the human resource strategies with
that of external situational factors, the more effective and favorable will be the long term
consequences. As per Guest (2017), H&M can be considered as fit with the Harvard model of
human resource management from the perspective of their recruitment process. This is due to the
reason that concepts regarding fair wages, working hours, employee benefits and development
are being communicated to the candidates. Moreover, it is also identified that H&M maintains
open door policy of offering the equal job opportunities for the candidates irrespective of
religion, caste and creed. Thus, it can be concluded that they are practicing diversity in their
recruitment process. Moreover, in the Harvard model, it is also being stated that human resource
strategy should also be effective enough to have the favorable long term consequences. In this

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case, it is reported that ethical principles are being followed in the recruitment process of H&M,
which includes the work systems, equal recruitment processes and practices.
Identification of the issues
As per the Harvard model of human resource management, it is identified that H&M is
following the majority of its elements. However, in terms of their recruitment process, it is
identified that initiation of the standardized training and development process is causing issues
for the diverse workforce. This is due to the reason that H&M is having standardized process of
recruitment for all their new employees across the world. This is in line to their providence of
equal opportunities and practices to all the employees. However, on the other hand, this practice
is also causing issues due to the reason that diverse employees are having diverse sets of
requirements and thus initiation of the standardization is not resolving the diverse issues majorly
for the newly appointed employees. Thus, as per the Harvard model, this issue is having negative
long term consequences for H&M.
Recommendations
In the above sections, there are number of issues being identified in regards to the
recruitment policies of H&M. The following sections will discuss about a few recommended
steps for mitigating these issues.
Adaptive policies
It is recommended that adaptive policies should be taken in terms of recruiting the new
employees. This is due to the reason that recruitment drive of H&M is being conducted from
different locations and thus the level of expertise and requirements for the candidates is different.

13STRATEGIC HUMAN RESOURCE MANAGEMENT
In this case, it is recommended that they should be adaptive recruitment process including the
training and development programs. This will help H&M to have more flexibility towards the
different requirements of the candidates and initiating training programs as per the individual
requirements and expertise (Marler & Fisher, 2013). Moreover, it should also be noted that
initiation of the adaptive recruitment process will help H&M to have the better retention ratio
from the employees. This is due to the reason that if the employees are getting exact training as
per their requirements, then they will be more effective in dealing with their challenges, which
will have positive impact on their satisfaction level. As per the Harvard model of human resource
management, effective human resource strategies including adaptive recruitment training process
will have positive consequences in the long term.
Designing suitable Information systems for transmitting information to the candidates
The HR manger must take steps to make the new candidates fully aware of the job role
and the expectations of the organizational management. In most of the cases, the lack of proper
information of the job role, payroll and remuneration might create dissatisfaction among the
employees and thereby result to higher rate of staff turnover ion the organization. Obeidat
(2012) stated that the informed decision making of the candidates helps in improving the job
experience resulting to satisfaction. The development of the HR Information system will be
helping the concerned HR personnel in adhering to the information related needs of the
candidates while making them aware of the specific job role. As per Maslow’s Hierarchy of
needs the candidates hold certain expectations relating to the job role relating to self-
actualization, esteem and safety (Chang, Gong, Way & Jia, 2013). In this scenario, the HR
manager must make the potential candidates aware of the different aspects of the job role. The
Information system will help the HR manager in transmitting important information to the

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candidates and thereby upholding the efficiency of the recruitment process through minimization
of staff turnover rates in the organization.
Lack of proper information to the candidates might affect the loyalty of the same,. In this
relation, the HR manager might create brochures sharing the job responsibilities, remuneration
system, incentive slabs and the policies of the organization. It will be helping the candidates in
undertaking an informed decision during the recruitment process. On the other hand, the process
will help the HR manager in maintaining the efficiency of the staffing operations of the
enterprise through the selection of the right candidate for the right job. It will also help the HR
manager in minimizing the rate of staff turnover in the venture. Alshibly (2014) stated that the
staff turnovers affects the overall productivity of the business while operating in diverse global
markets. Moreover, the staff turnovers create an imbalance in the workforce due to the shortage
of skilled personnel interrupting the flow of operations. Chang, Gong, Way and Jia (2013)noted
that in 74% of the cases the employees resign from their posts due to dissatisfaction which
occurs due to the lack of proficient information of the processes or the policies not meeting their
expectations. The differences between the perceived value and the actual value of the job
proposition might create ambiguities in the mind of the candidates resulting to maximization of
the staff turnover rates. Jerome (2013) stated that the major gaps between the perceived value of
the job and the actual value of the job affects the psychology of the candidates which results to
lack of loyalty among the same. Therefore, the HR managers in an organization must take steps
to develop suitable IS processes in order to offer the candidates with full information on the job
and thereby assist in the decision making process.
The informed recruitment process of the organization will also help the same in
undertaking the operations on the ethical grounds. The development of the Information Systems

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in the HR management process of an organization will be helping the same in retaining the
skilled workforce and thereby uphold the smooth functioning of the systems. Obeidat (2012)
noted that the job satisfaction among the employees helps an organization in maximizing the
production systems through uninterrupted functioning of the systems. Therefore, the HR
managers in organizations must take steps to make the employees aware of the different
processers that might be undertaken by the same in order to maximize the rate of retention.
Developing recruitment teams in the individual offices
The development of the recruitment boards in the organization might help organizations
in maintaining the efficiency of the organization in choosing and screening the preferred
candidates for the respective job roles. Jeske and Shultz (2016) stated that the recruitment
process is undertaken by the organizations based on the employee requirements of the same. In
this relation, the involvement of the third party vendors and consultancies might not be able to
identify the specific requirements of the organization while interviewing the candidates. In this
position, the organizations must take steps to develop recruitment boards inside the venture for
enabling suitable screening of the skilled personnel as per the job requirements. The enumeration
of the expectancy theory, in this connection, will help an organization in understanding the needs
of the same relating top performance through the proper recruitment of skilled personnel
(Hangarki, 2012). The development of the recruitment board in the organizational processes will
be helping the business in maintaining the efficiency of the recruitment process as per the needs
of the business. On the other hand, the establishment of the recruitment board will be helping
the organization in making the candidates aware of the job responsibilities more vividly over the
third party vendors.

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The development of the recruitment board will be helping organizations in maintaining
the transparency of the recruitment process. Alshibly (2014) noted that the transparency in the
recruitment process helps an organization in minimizing the rate of staff turnover through lucid
transmission of important information. The board of recruiters of an organization holds suitable
knowledge of the recruitment needs of the business. Therefore, it supports the processes of an
organization relating to suitable screening and profiling of the desired talents in the
organizational context. Jeske and Shultz (2016) stated that in 56% cases an employee who is
selected through the third party vendors resign from the job post due to lack of capabilities of the
same to stick on to the process. Most of the third party vendors and consultancy agencies aim at
fulfilling the target of recruitment given to the same by concerned organizations. In this relation,
the third party vendors fail to screen the talent of the candidates and align the same with the
needs of the organization. It results to recruitment of wrong talent in the organizational context.
Therefore, organizations must take steps to develop recruitment boards in order to choose the
right candidate for the post in accordance to the needs of the venture.
Conclusion
It is concluded that H&M is having effective and efficient process of human resource
management in their global operation. However, in terms of their recruitment process, there are
number of issues and limitations being identified in this report. These issues are being identified
on the basis of different models of human resource management. Moreover, it is also identified
that due to the issues in their recruitment process, H&M is facing further challenges of
maintaining the retention rate of the employees along with high level of motivation. Thus, there
are number of negative long term consequences being faced by them. This report also concludes
that H&M is having both hard and soft approaches being practiced in their human resource

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management processes. On the basis of the issues identified, a few recommendations are also
being discussed in this report. Effective implementation of these recommended steps will help
H&M to mitigate the identified issues and have positive long term consequences. Apart from
their recruitment effectiveness, the entire human resource management approach will become
more effective for them.

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