A Detailed Analysis of ZARA's Strategic Human Resource Management

This report provides a comprehensive analysis of ZARA's strategic human resource management (HRM). It begins with an introduction to HRM and its importance in achieving organizational objectives, followed by an internal and external analysis of ZARA using SWOT and PESTEL frameworks. The SWOT analysis highlights ZARA's strengths, such as unique designs and quality products, alongside weaknesses like high prices and limited advertising. The PESTEL analysis examines the political, economic, social, technological, and environmental factors affecting ZARA, including legal frameworks, economic conditions, consumer behavior, technological advancements, and environmental concerns. The report then delves into ZARA's HRM policies and procedures, covering equal employment opportunities, break times, and overtime compensation. Finally, it offers recommendations for employee retention, aiming to improve the company's HRM practices. The report emphasizes the importance of adapting to market changes and maintaining a positive work environment to maximize employee performance and achieve organizational goals.

Strategic Human Resource
Management

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Internal and external analysis of ZARA......................................................................................1
TASK 2............................................................................................................................................4
Human Resource Management policies and procedures............................................................4
TASK 3............................................................................................................................................6
Recommendations for retention of employees............................................................................6
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9
.......................................................................................................................................................10

INTRODUCTION
Human resource management is controlling administration of human resources. It is
established to maximise the performance of employees in such a ways that organisational
objectives can be achieved. As it is known as important aspect of any business that would help to
develop and manage every department all together. Under this project report one of the
important company Zara is being taken to known about their human resource management
system and how they are using it in their operation. Project first part is consist of internal and
external environment of Zara (Abdelhak, Grostick and Hanken, 2014). Various methods and
tools are wisely used by company in utilising resources of company in effective and efficient
manner. The second part of project is summarise of various analyses and recommendation that
are collected from various department those are managed and controlled by human resource
department. All methods and differences are being implemented properly in order to remove
various grievances those are arise in organisation.
TASK 1
Internal and external analysis of ZARA
In order to evaluate surrounding of cited business SWOT and PESTEL analysis can
provide a great help as through this management can get to know various factors through which
it gets affected. This way it can also plan their strategies and accordingly take various decisions.
Internal analysis of ZARA:
Strength – It consist of all those factors in which the company is good at. As the cited
organisation is dealing in a food business it has to be very effective in carrying out its various
operations so that it can stand in the external environment. This organisation is now for its
unique designs and quality of products as its products are liked by all of its users. It has given
major efforts to maintain their product quality so that it can maintain long time relation with its
customers. Another major strength of the cited company is that it doses not spend much amount
on advertisement and in this way it saves much cost which is further utilised by the same in
investing it in more productive activities so that the scale of its operations gets improves (Chen
and et. al., 2010). It keeps on updating its total stock if it is observed that customers are not
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liking the new variety which helps in maintaining the interest of potential consumers in visiting
the strength again and again.
Weaknesses – Main drawback of this company is that its prices are such that it can not
be afforded by all. Due to its product quality and differentiation from other brands leader of
ZARA charge high price which effects the purchasing power of various customers. Another
weak point of same is that it does not take help of the advertisements in order to promote their
products in the market and this way customer remain unaware about any change made by them
in their existing products. Also these stores of this company are generally preset only on the
prime stores of different items therefore customers finds it difficult to reach their if chosen
location is far from their place. If the same stock is not cleared in two weak than it is totally
removed which leads to loss f production cost to the business as than the same items are sold at
reduced price to the other retailers (Buller and McEvoy, 2012).
Opportunity – ZARA can start investing in the different marketing activities like
promotion and advertisement so that this way it can cover more market and can increase its total
share. When customers get to know about the changes and innovation made by the company than
they can accordingly change their buying decisions. It should also work on its research team so
that it provides the most innovative and effective ideas to the production team of ZARA which
will result in more customer attraction. Also it can work on exploring more markets by
increasing the scope of its operations in the international market. By working on their product
variety company can enter into more segments of the total market for which it is not doing any
production in present.
Threats – Company faces maximum competition from high merchandise as continuous
changes are made in this sector. With the change in trend and fashion it has to wok on their sites
so that public interest is maintained. Apart from this natural calamities like change in the existing
economic conditions. If it is observed that the external market is experiencing a downfall than it
will have its direct impact on the sales (Bratton and Gold, 2012). Sales will surely get reduced as
than customers will have less disposable income which effects their buying decisions.
Discussed above is the analysis of those factors which are present within the boundaries
of the business but apart from this there are various factors which are present outside the
business but has direct impact on the operations on operations of ZARA. Given below is the
PESTEL analysis of ZARA:
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Political – The legal framework is provided to all the companies by the present
governing authority. In order to operate in the external environment it is necessary that all the
political factors are maintained so that it can remain free from any legal action. It makes the
structure for the business entities within which organisations has to perform their activities. All
the task performed in ZARA go through the notice of the present ruling authority. By making
changes in the present tax rates companies total profitability gets affected also its operations gets
affected if polices are changed regarding the export and import than the total market gets
affected. Cited company is a big brand having its store in various countries which makes it very
important for Zara to maintain an effective track on any modifications made by government in
respect to the textile industry (Boxall and Purcell, 2011). Different countries has distinct
situations and while carrying out operations in another company management has to ensure that
all the rules and regulations of that country are maintained. For instance, cited company faced
difficulty in Brazil when it was asked to pay fine because employees were not provided with
good working conditions their. Hence this shows how care has to be given to the various laws in
order to continue the operations without any difficulty. It is better if the political situations are
stable so that the management do not gets disturbed again and again.
Economic – In order to set the prices of different products it is very important to consider
the present conditions of the market. This is the section which affects the business by changing
the rate of interest and other exchange values. Increase or decrease in any of these sections will
directly effect the policies of cited company. At the time of inflation prices gets increased which
has their effect on the cost of production due to which purchasing power of customers decreases
as there are chances that the increased value can not be afforded by the customers (Bloom and
Van Reenen, 2011). Also the export and import for Zara may gets effected when change in the
rates of exchange is done. As this company is operating in the international market it becomes
important for cited company to be updated with the variety of values (interest, inflation, tax,
exchange rates) as this way it can take the decision of targetting the potential market.
Social – It is the combination of various factors which includes the spending habits of the
different customers. The demand in the market is very much elastic as it changes very frequently
with the change in total price of the product. Whenever any unnatural calamities occur in the
market it gives direct impact on the business like in case of recession most of the people were
made unemployed due to which their income got reduced and therefore their purchasing power
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also gets affected. Apart from this change tin the present fashion also effects the running of
business. As the fashion industry experiences maximum fluctuations it becomes important for
this company to remain updated with their market. For instance, customers of Bangladesh
demands colourful clothes whereas in other parts of country people ask for sober and trendy
clothes. Therefore, according to the needs ZARA has to make changes in its production styles so
that need of customers are fulfilled (Armstrong and Taylor, 2014).
Technological – It is a change that take place in process of doing different operations as
with the expansion in the textile market the technology is also developing to a great extent.
Therefore, it becomes easy for the management to provide the business operations to be carried
out effectively as through adopting the advance code of conduct management can do the same
task more effectively and can save much cost. With the increase in the present technology ZARA
can reach to more market by using effective mode of transport as now making things available at
different places is more easy. This company is achieving so much of height in the fashion
industry as it has utilized the up dated code of conduct in such a manner that it becomes capable
of giving effective results. All the outlets of cited company are maintained and regulated with the
help of software as all the data is recorded and stored online which can be further utilised at any
time. Also with this new technology company become more capable of providing its customers
effective services (Budhwar and Debrah, 2013).
Environmental – It is important that companies should take care of the external
surroundings so that it does not effect the society. It should be ensured that material used in the
production process is environmental friendly otherwise legal action can be taken against the
party at fault.
TASK 2
Human Resource Management policies and procedures
In order to provide the personnel an effective working environment different policies are
formulated by the management of ZARA which ensure good working conditions for all those
who are working with it. There is need to develop equality and fair working scenario in the
business so that everyone can work with their maximum dedication and do not get affected by
any external force. Developed employees related code of conduct helps in communicating the
required information to all those who are associated with it so that they can carry out their work
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and ensure consistency (Jackson, Schuler and Werner, 2011). There are variety of polices and
procedures which are discussed in detail below:
Equal employment opportunity act – All those who are working with the organisation
needs to be given equal chance of development. No discrimination on the basis of caste creed or
any other basis so that no one develops negative attitude towards the work place. If any person
in the business is given more privilege than it may lead to feeling of dissatisfaction among others
which will have direct impact on the business too.
Meal periods and break time – Human beings can not work effectively if not provided
with effective time breaks as working continue may lead to fatigue. Also when workers perform
their work continuously without any rest time it has its major effect on the performance as the
quality of their work is highly effected.
Overtime compensation – Whenever any person work with any business entity he/she
expects to be paid fairly as it is the ultimate goal for all the employees. Apart from the regular
working hours if a person is giving his extra efforts to the business than in that case he expect
returns according to his work done. Therefore he should be given extra pay for his efforts so that
it encourages them to continue their dedication in the given entity (Guest, 2011).
Payroll deductions – At the time of joining companies give the details of the criteria
how deductions from the total salary will be done if an employee fails to appear in the
organisation. Different paid leaves criteria are adopted by the management. Therefore, in case
any person takes an off from the office than he should be provided about the details of how much
amount is being cancelled.
Performance appraisal – Everyone like to be appreciated for the work done by them.
Whenever an employee is praised for his working it motivates him psychologically which has
direct effect on his future. Apart from this it also motivates other employees to give their best
efforts so that they they also fall in the same category and get the recognition.
Termination Policies – No one working with ZARA or any other organisation can be
dismissed from his job without prior notice or with no valid reason. Whenever any person is
asked to discontinue the job he should first given a notice for the same which should include the
details behind the action taken by the management (Huselid and Becker, 2011).
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TASK 3
Recommendations for retention of employees
Recruitment is a way to attract more and more employees in organisation for a vacancy
which is there in company. Zara can adopt various ways to attract and retain employees in its
premises. The company first have to advertise the vacancy at various platforms which will help
to reach the potential people who really are searching for the same. Retention of employees in
the company can be done by Zara by maintaining employees relations with the. Employees
relationship management is a way of providing all the facilities to employees so that they are
fully satisfied and feel good to be a part of the organisation. Both of these measures will help the
clothing giant to have best performance with long term retention of people in it which will also
reduce the need for new talent as their would be less risk of employees switching to other
companies (Wright and McMahan, 2011).
New approaches to management in HRM of Zara by this can be maintenance of
employees by having proper relations with them. This might initiate execution of various
techniques for this which might not have been in the company previously. Informal way or
discussion can be one such new technique of retention of employee or they may be provided with
some facilities which they were not provided before which will help the company to improve
performance. A company can also set standards for performance which will help in measurement
of actual performance of employees to get an idea where changes are required (Armstrong and
Taylor, 2014).
Implementation of any new practice in company or HRM management in a company
always have some barriers out of which some are listed below:
 Cultural
There are several kind of employees in a company which belongs to various backgrounds
this states that it can cause problem for HR manager to manage these people which justifies that
it have to be considered properly in an organisation so that risk associated with can be
minimised.
 Working practices
The working style of each employee varies as every one cannot perform a task same as
the other. This specifies that HRM have to manage various people which can cause complexity
in the practices of business. Hence, this is a hurdle for HRM which has to be overcome.
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 Legislations
Government of a country implements various legislations which are mandatory to follow
by every company. Hence, Zara also needs to have these practices in its operations while human
capital management such as employment act, discrimination act etc. This will only help the
company to have proper function (Daley, 2012).
Recommendation for attracting and retaining employees
In every business it is very important to hire the most skilled and professional individuals
so that the objectives and targets can be achieved which are planned at the initial stage of
business. For the same company can use the various alternatives which can help in attracting the
employees and also retaining them in the long run. For this purpose company can take use of
different incentives which can be monitory as well non monetary (Tooksoon, 2011). Also the
employees will be provided with safe and friendly working environment so that they can work
with their maximum dedication. This will also help in maintaining control over the total labour
turnover ratio as when employees like to work with the business they maintain continuity and
also avoid absenteeism (Stahl Björkman and Morris, 2012).
Methods of retaining:
 Training – it is a process through which the skills and capabilities of an individual are
increased so that they can be proved as a long term asset for the business.
 Mentoring – this is a way of providing understanding to the different freshers as through
this method all the new recruits are made aware with their working environment so that
they they do not find it difficult to use the resources (Mc, Williams and Siegel, 2011).
 Use communication to build creditability – Effective process of interactions should be
used between the various levels so that everyone is made aware about the relevant
information so that they can plan their future projects accordingly.
 Provide growth opportunity – Everyone who is giving their better efforts in the business
organisation should be given good chance of development so that they can see
themselves to a higher stage in future.
CONCLUSION
From the above mentioned project report it has been concluded that human resource
management is play a dominant role in fulfilment of various requirement that are needed in
development and growth of Zara company. It help to deliver quality work performance and
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administrative control of the company. Basically, this project outcome is comprises of various
methods and tools those are used by a human resources manager in overcoming problems of
employees and other members. According to internal environment that consist of strength and
weaknesses of department are to be solve by HR. and likewise, external factors are also be taken
into consideration before making any kind of decision. All the methods and tools are being
analysed because that are used to take effective decision in development of business. All the
aspects of department are critically evaluated and analysed in order to make business more
profitable.
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REFERENCES
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differentiation and strategic human resource management.
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ONLINE
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