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