An Evaluation of Tesco's HRM Practices and Policies

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Strategic HRM at TESCO

Table of Contents
Introduction..........................................................................................................................3
The existing Human Resource Management in Tesco in the context of the Strategic HRM
concepts............................................................................................................................... 4
External Factors and Their Influence on Strategic decision making of HRM at Tesco...........7
HRM at Tesco – Its organisation and barriers to delivery of HRM policies...........................9
Conclusion.......................................................................................................................... 11
Reference List..................................................................................................................... 12
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Introduction
The Strategic human resource management involves incorporation of HR policies and
processes that facilitates the organisational human resources with the organisational
objectives (Paauwe and Boon, 2018). The importance of human resources to an organisation
has changed substantially due to changes in the competition levels as well as the focus on
making human resources of the organisation the competitive advantage. The strategic
human resource management provides ways of making the organisational human resources
its competitive advantage. The report considers various aspects of the existing human
resource management within Tesco in the context of the strategic HRM concepts. It also
evaluates the external forces and their effect on these strategic HRM decisions. Lastly, the
report will consider the organisation of the HR function within Tesco and its mode of
delivery.
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The existing Human Resource Management in Tesco in the context of the
Strategic HRM concepts
Tesco has incorporated the elements of High Commitment Human Resource Management
model within the organisation (Paauwe and Boon, 2018). The high commitment HRM is a
theoretical concept of strategic Human Resource Management that includes a set of human
resource practices that can favourably affect the performance of the organisation. The HR
practices suggested in High commitment HRM include practices like selective hiring,
sophisticated selection, employee participation, employment security and internal labour
markets, focused and enhanced training, development and learning, self-work
management, performance-oriented wages, performance-based career progression and
appraisal, work-life balance and harmonisation. Tesco Plc has incorporated some of these
High commitment HR practices that are discussed below.
The learning, training, and development at Tesco
Tesco is a retailer and it has to face the cut-throat competition of the retail sector. Tesco
due to its policies and approach has become the biggest retailer in the UK and it has a global
presence that surpasses many of its competitors. Tesco has incorporated the training,
learning and development based high commitment human resource policy and process. The
training program of Tesco not only prepares the employee for the entry in the organisation
but also focuses on making them relate to the company by keeping the history and
development of Tesco an important aspect of the induction training program (Paauwe and
Boon, 2018).
The employee performance level is an integral part of organisational efficiency and
performance. The skill levels of the employee determine their work efficiency and
performance. Another aspect that plays a crucial part in the confidence and efficiency levels
of the employees is the level of comprehension regarding their role along with the
organisational expectation (Keep, 2014). These aspects are imparted by way of the training
programs operated by the HR function of the organisations like Tesco. The HR function in
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collaboration with managers of different organisational function designs the induction
program and the initial training of the newly inducted employee. The induction program
creates the basis through which the employees understand the organisation, its culture and
practices along with the organisational aims and objectives. It’s the basis of employees
connected to the organisation on which the framework of loyalty to the organisation is built
(Wright, et al., 2014).
In the case of Tesco, the organisational performance is dependent on customer satisfaction
levels. Majority of Tesco staff at its stores interact with the customers directly hence
customer handling plays a critical role along with the knowledge of the products being
offered by the company (Wright, et al., 2014). Tesco has incorporated an exhaustive training
and development program that addresses the knowledge and skill level gap of employees
and makes them expert in handling the customers to make customers happy and satisfied.
The training and development program of Tesco not only addresses the role specific skills
but also customer handling skills. Another aspect of the training and development program
within the company is preparing the employees for their future responsibilities. The HR
along with the managers identifies ambitious and committed employees with a good
performance track record for development programs to prepare them for their future roles.
The training and development programs include both on-the-job training and common
training elements (Keep, 2014).
Employee Participation
The participation levels of the employee in organisational practices and decision-making
process is an integral part of the performance of the organisation. Enhanced employee
participation facilitates the inter-functional communication and working thereby efficient
incorporation of the organisational business strategy that contributes to the overall
organisational performance. In an organisational environment where employee
participation is promoted, the employees actively contribute to the decision making of their
respective teams and in turn improve the team efficiency and performance (Sparrow,
2013).
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The managers at Tesco are motivated to include employees in their decision-making process
regarding the task execution. Also, the employees are consulted on the long term strategic
planning of the company making them feel empowered and a part of the organisation
decision-making framework. The employees are also empowered to take decisions within
their designated framework thereby enhancing their participation levels. This also helps the
employees understand their importance within the organisation thereby promoting their
commitment and motivation levels (Sparrow, 2013).
Best Fit HRM
There are many factors that lead to the limited incorporation of high commitment HRM
within an organisation like Tesco. These factors include high cost associated with
implementing all the practices of High Commitment HRM, impractical nature of practices in
terms of scope and size of the organisation, etc. In such scenarios, the Best Fit HRM concept
comes into play (Marler and Parry, 2016). The Best Fit HRM focuses on the fact that there
are many factors like the industrial business environment, size, and objectives and aims of
an organisation that influence the organisational HRM policies and are the cause of its
variation among different organisations. The higher employee turnover in the retail industry
makes the implementation of the practice of selective hiring and sophisticated selection an
improbability in case of Tesco. It can be applied for recruitments at certain levels and certain
roles but general incorporation becomes improbable. In such scenarios, the flexibility of the
Best fit HRM comes in handy. This concept promotes the use of successful HR practices and
policies of similar organisations within the company. So, in Tesco's case, it becomes an ideal
tool for incorporating Strategic HRM practices and policies. Tesco employs elements of high
commitment HRM along with other policies that are not a part of High commitment HRM as
a part of the organisational HR policies and processes (Marler and Parry, 2016).
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External Factors and Their Influence on Strategic decision making of HRM
at Tesco
There are factors that play an important role in the creation of strategic HR policies and
practices such as the external factors that include situational factors and stakeholder
interests (Marler, 2012). The stakeholders in Tesco can he listed as its employees,
management, shareholders, unions, investors, government, etc. The strategic HR decision
making can be understood by using the Harvard HRM framework. According to this
framework, the human resources of an organisation like Tesco should be handled differently
due to their different nature from other organisational resources (Armstrong and
Taylor, 2014). The framework further explains that the situational factors along with the
stakeholder interest drive the Human resource policies of an organisation. Thus, the
situational factors and the stakeholder interest affect the outcome of these Human resource
policies such as the employee commitment and competence and thereby these have an
influence on the long term consequences of the human resource policies being incorporated
such as the organisational effectiveness. The external factors that influence the strategic
HRM decisions and policies of Tesco are discussed below (Armstrong and Taylor, 2014).
Psychological Contracts
The extent and of Psychological contract or the employee participation level can be
considered to be a factor that influences the strategic HRM decisions and policies at Tesco
(Armstrong and Taylor, 2014). Tesco is a large organisation that promotes employee
engagement at different levels and capacities. This promotes the strength of the
psychological contract between the company and its employees. Another factor that
positively affects the psychological contract strength is the potential of career progression
within the company due to its large scale of operations and continuous expansion. A factor
that's critical to the strength of the psychological contract is the competitive wages based
on the performance of the employees incorporated by Tesco (Marler, 2012).
Nature of work
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Tesco has a variety of different types of works and areas of expertise with the organisation
(Cascio, 2015). In Tesco stores, there is a different department that looks after the sales of a
specific type of products such as food, grocery, etc. In addition, the stores have a
hierarchical structure that provides potential career progression path for the employees.
The work offered by the company involves both low skilled and high skilled works. Also,
there are ample opportunities for cross-working that allows the employees to gain exposure
to different segments and departments. This reduces the repetition of work and promotes
employee engagement and satisfaction (Marler, 2012).
Labour market and composition of the workforce
The global presence of Tesco promotes a mixed workforce on the basis of gender, ethnicity
etc. Also, in the UK the workforce composition is regulated by laws like the anti-
discrimination law that promotes a workforce with employees from different demographics,
age groups, gender, etc. The workforce of Tesco includes workers from different age groups
looking after different types of responsibilities. Most of the workers are full time with a
small percentage of part-time workers that look after specific responsibilities as per the
organisational needs at specific times. The migrants are also a part of Tesco workforce
provided they have proper documentation related to work (Cascio, 2015).
Other external factors that strongly affect the strategic HRM policies at Tesco include legal
and political factors. The legal factors include the employment laws, regulatory framework
and workplace-related laws. The political factors are also a major player due to the global
nature of Tesco operations. An example of the political factor can be the BREXIT; it has
severely affected the strategic decision making in terms of HRM due to potential changes
that can be in play after the BREXIT such as the employability status of the migrants from
the European Union and changes in the legal framework due to BREXIT (Marler, 2012).
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HRM at Tesco – Its organisation and barriers to delivery of HRM policies
Paul Kearns proposed the HRM maturity module that facilitates the determination of the
maturity levels of the HRM of an organisation (Kearns, 2014). On the basis of this module,
the HRM at Tesco is placed at the director level that leads the HR function within the
organisation. The HRM at Tesco can be considered to be at level 6 that indicates that the
organisational HR function closely works with other business functions so that the
organisational human resources align with the aims and objectives of Tesco. Tesco focuses
strongly on training and development if its human resources as a way to make its human
resource its competitive advantage (Kearns, 2014). The company believes in imparting
transferable skills that can not only make the employees efficient and effective in their
organisational roles but also have long term benefits for the employee even when they
move to other organisations. This strategy has contributed to make Tesco the number one
employer in the UK and the biggest retail player in the country. The focus on developing its
employees indicates the critical role HR function plays in the strategic decision making of
Tesco (Kearns, 2014).
The HR Model proposed by David Ulrich suggests four key roles of an effective HR function
within an organisation (Hunter, et al., 2016). These roles are employee champion,
administrative expert, strategic partner and change agent (Ulrich, et al., 2013). As discussed
earlier, the HRM at Tesco is deeply involved in strategic decision making if the company. It
suggests and influences the strategic decisions of the company due to the Tesco's focus on
employees as its competitive advantage. This role of HR at Tesco indicates the role of
Strategic partner within the organisation (Hunter, et al., 2016). Another role that's
successfully played by the HR at Tesco is the Employee champion. It involves the strong role
played by the HR at Tesco towards the development of Tesco employees by incorporation of
training and development programs focused on imparting and developing employee skills.
This role involves providing resources to the employees as well to the organisation while
listening to employee issues and resolving them (Ulrich, et al., 2013).
The HR at Tesco is also responsible for absence monitoring of employees, payroll services,
etc. Another aspect of their work is the handling of employee relations. These roles indicate
the role of HRM as the Administrative Expert as depicted in Ulrich's HR Model. The last role
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mentioned in Ulrich's HR model is the role of Change Agent (Hunter, et al., 2016). The HR at
Tesco is actively involved in the strategic decision making of the company as well as the
conduit between the management and employees by representing the employees. The
changes in the organisational strategy are incorporated by the HR by coordinating with
other business functions thereby acting as the change agent as indicated by Ulrich's model.
The delivery of HR policies and processes as well changes in them is done in a top to bottom
approach by establishing cooperation and coordination with the line managers. The basic
barriers to delivery of HR policy are it not being the designated responsibility and a part of
the performance parameters of the line managers. This makes the line managers less
inclined to work towards this end. Another barrier is the inability of the line managers in HR
matters due to lack of knowledge in this field (Ulrich, et al., 2013).
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Conclusion
The report concludes that the Tesco employs the Best Fit HRM concept of the strategic HRM
with elements of High commitment HRM. Another conclusion is the applicability of Ulrich's
model on the Tesco HRM along with the ‘stage six maturity’ on the basis of the Kearns
Maturity model. The report also concludes that the situational factors along with
stakeholder interests are a major influence on the strategic decision-making of the Tesco HR
(Ulrich, et al., 2013).
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Reference List
Armstrong, M. and Taylor, S., 2014. Armstrong's handbook of human resource management
practice. Kogan Page Publishers.
Cascio, W.F., 2015. Strategic HRM: Too important for an insular approach. Human Resource
Management, 54(3), pp.423-426.
Hunter, I., Saunders, J. and Constance, S., 2016. HR business partners. Routledge.
Kearns, P., 2014. Organizational Learning and Development: From an Evidence Base.
Routledge.
Keep, E., 2014. Corporate training strategies: the vital component?. New Perspectives,
pp.109-125.
Marler, J.H., 2012. Strategic human resource management in context: a historical and global
perspective. Academy of Management Perspectives, 26(2), pp.6-11.
Marler, J.H. and Parry, E., 2016. Human resource management, strategic involvement and e-
HRM technology.The International Journal of Human Resource Management,27(19),
pp.2233-2253.
Paauwe, J. and Boon, C., 2018. Strategic HRM: A critical review. In Human Resource
Management (pp. 49-73). Routledge.
Sparrow, P., 2013. Strategic HRM and employee engagement. In Employee engagement in
theory and practice (pp. 113-129). Routledge.
Ulrich, D., Younger, J., Brockbank, W. and Ulrich, M.D., 2013. The state of the HR
profession. Human Resource Management, 52(3), pp.457-471.
Wright, P.M., Coff, R. and Moliterno, T.P., 2014. Strategic human capital: Crossing the great
divide. Journal of Management, 40(2), pp.353-370.
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