HRM Report: ZARA's HRM Practices, Banded Pay, and Motivation

This report provides an in-depth analysis of ZARA's Human Resource Management (HRM) practices, with a specific focus on the effectiveness of their banded (tiered) pay systems. The report explores how ZARA utilizes these pay systems to motivate employees and ensure relative fairness within the organization. It examines the different types of tiered compensation, including wage and benefits tiers, and their impact on employee satisfaction and performance. Furthermore, the report integrates motivational theories, particularly Maslow's Hierarchy of Needs, to understand how ZARA addresses employee needs and fosters a positive work environment. The analysis also covers the application of Guest's model to HRM functions and discusses the challenges ZARA faces in managing its human resources, such as adapting to changing regulations and maintaining effective leadership. The report concludes by highlighting the importance of HRM functions in achieving organizational goals and fostering employee well-being.

Managing Human
Resource

INTRODUCTION
Human resource management always performs very much important functions into the
organization such as training and development, monitor and selection performance and so on.
Along with this HRM can be defined as the practices, policies and programmes which is
prepared for designing personal and organizational goals in an effective manner. It is a good
process which helps people and organization to make effective bound together in order to
achieve their goals and objectives within the particular time frame. Present assignment is based
on ZARA which is one of the famous retailer industry and deals with different kind of products
like shoes, clothing, accessories, beauty and perfumes etc. this company was formed in the year
of 1975 by Amancio Ortega and headquartered in Arteixo, Spain. Further discussion will be
based on effectiveness of 'Banded' (tiered) pay systems with proper focus on specific relative
fairness and proper satisfaction for employees by using motivational theories. Lastly, functions
of HRM will get discussed (Brewster, Gooderham and Mayrhofer, 2016).
MAIN BODY
HR is one of the best approach as well as sum total of individuals who always make the
proper organization, workforce, various business sectors and economy. Along with this
management is the art of getting things done by individuals. On the other side in terms of
business and organization management plays very important function like coordinates the efforts
of individuals for fulfilling goals by using effective resources properly. In context with ZARA
they are effectively using Banded or tiered system which is used to identifying band (range) of
compensation and given for particular roles of employees within the organization. On the other
side these sort of bands organized for salary compensation plan, system and programs as well.
Within the organization these bonds focuses on the level of compensation in order to give higher
range jobs to employees with effective pay. Some times company faces different kind of barriers
which demotivate employees such as insufficient pay, lower satisfaction towards job and so on.
Therefore, company needed to have better motivational level within the working place to achieve
effective goals (Buckley, Wheeler and Halbesleben, 2018). So that manager of this respective
company is responsible to manage pay bands for employees by which they can increase
employee responsibilities towards the particular work.
1

Apart from this there are different types of Tiered compensations which is divided in two
parts that is permanent and temporary. Along with this there are different kind of forms that
comes under the tiered compensation such as Wage Tires it refers to the various scale for
employees in terms of jobs classification by which employees can get contract with limited time
duration so that it influence them because in this manager will give extra wages for their
appropriate performance. Along with this Benefits tiered is the best one aspect which generally
applied on the employees benefits in this new and freshers employees able to get better benefits
by giving their performance well. On the basis of their performance they can get lots of benefits
within the ZARA such as holidays, vacations, clude compensation in regards with employees
health care and life insurance as well (Buller and McEvoy, 2012). This strategy in relation with
pay bands much influence positively to employees so that they can easily work and focus on
their targeted work as well as particular goals. Thus, this aspect of benefits fixed employees
wages and their seniority level in order to give them proper time of vacations in a specified
manner for fulfilling employees requirements in a stipulated way. By having this kind of tiered
and bonds system ZARA can easily achieve their goals and able to give better salary to
employees as per their effective and attractive performance. On the behalf of this all employees
are able to show their various activity towards the firm and achieve their organizational goals. By
giving all kind of benefits this respective organization can focus on their relative fairness that
attract employees and increase their confidence at working level.
In order to manage human resource management, ZARA applied Guest's model that aim
to develop different between HRM and personnel management within the organization. This
model is effectively based on HRM functions and commitment (Renwick, Redman and Maguire,
2013). Along with this HRM is not only responsible for hiring and selecting people even that is
needed to manage organization functions in a perfect manner. Therefore, HRM refers to the
strategic approach in order to give satisfaction to employees and gaining goals. During the time
of using this model ZARA can make good strategies and tools for their employees and fulfil
their needs. Therefore, this model is very helps for companies to formulate new things in
business operations and able to achieve their goals effectively (Cascio, 2015). With the help of
this model employees can give their better performance to management so that manager of
ZARA is able to change their organizational structure in terms of implementing on new and
unique HR policies perfectly. Therefore, this can be said that manager is only the one aspect of
2

different companies who is always responsible to manage their vision and goals in an effective
manner. With the help of these functions company can easily communicate with other people
within the market and meet employees needs for achieving their goals. From all of this above
discussion ZARA also applied motivational needs by which employees can get impress in a
perfect way. For making better motivational needs for employees manager of this respective
brand has been selected Maslow's Hierarchy of Needs that determine the need hierarchy concept
which is very famous and popular in management studies. Together with it is based on four
points like first oh fall it helps people to get satisfaction towards the work so that company can
motivate employees perfectly. After this it fulfil the human needs like lower to higher needs such
as water, shelter and food as well by utilising good hierarchy within the workplace. Apart from
this there are five levels of employees needs that satisfy them at higher level and also arranged
same hierarchy of importance. First level of fulfil employees needs that is Psychological needs
which refers to the basic needs of employees like air, water and ignorance of pain. It also
attempts different things in working place so that employees can easily eliminate few threats to
physical safety (Chelladurai and Kerwin, 2018).
Safety and security are one of the best to motivate employees. In context with ZARA this
process is much necessary for all individuals and reaches it self actualization level. As per this
every individual have various needs so that company required to offer some policies like life
insurance, retirement programmes and so on. Whereas, social and belonging requirements
depends upon the friendship, relationship, companionship and so on. If company will develop
good culture in the industry then they can easily motivate to their employees and they are able to
increase their working skills in a perfect way. Belonging needs mainly satisfied the employees
by using few combination of community relationship and outside workplace on the specific job.
Esteem and ego needs are the next level of hierarchy firstly it is related with independence, self
confidence and knowledge of people other one it is related with people status, reputation,
recognition and so on (DeCenzo, Robbins and Verhulst, 2016). This level is totally based on
different conditions of capacities and achievements of employees within the organization. On the
other hand esteem needs are very helpful for employees by which they can meet organizational
goals by recognising superiors and peers. At last self actualization and self fulfilment is one of
the highest level of needs which specifically defines the requirements for fulfilling like potential
abilities, enhance employees working capacity and knowledge etc. self actualization needs can
3

be tough because as per this managers are needed to promote climate wherein self actualization
can be possible. Along with this it also helps them to manage their work by making different
types of opportunities for betterment of future. Therefore, these sort of needs are much
important for each and every employee for making better future within the organization.
Together with they can learn so many things and knowledge in order to fulfils their wants and
desires in an appropriate manner. That's why ZARA is applying these motivational theories for
enhance their employees skills and knowledge so that they can achieve targeted goals and
objectives in a perfect way. Apart from this they are also able to gain better profits towards the
company and reaches at higher level.
There are different kind of challenges during operating various HRM functions within the
organization which can be includes in laws and regulation, developing leadership, management
changes, compensation, benefits packages and recruiting talented employees and so on. Wherein,
laws and regulation can be change any time because of different scenario in environment so that
herein, manager faces lots of challenges and issues (Figueiredo, and et.al., 2016). Therefore, in
order to overcome these factors company needs to apply foreign law and arrange some effective
plan for effective law guide towards the employees. Along with changes in management due to
some factors that directly influence employees, structure of company and their developing
process. Therefore, manager of ZARA needed to make good solutions, they should concentrates
on their benefits by which they can change few aspects for employees betterment. Together with
this respective company should also understand their employees needs and fulfil them in an
effective manner. In order to develop leadership can be difficult for manager because of another
companies as they are implementing on different aspects so that this company should take care
of their data in a particular way for motivates the employees. By this they can manage their work
and responsible to manage future aspects in a different ways. During the time of conducting
training and developments employees can be create problem because of not gaining accurate
topic within the organisation therefore, manager of ZARA is responsible to manage their overall
programmes by taking sufficient money and time so that they can monitor all employees in a
same way and able to achieve appropriate goals (Jiang, and et.al. 2012). During the time of
adapting innovation technology can be change any time so that it increases the risk factor in
which employees don't feel good and not able to use new techniques. For this managers are
required to understand all kind of situation and give training to employees accordingly. In the
4

time of compensation there are so many firms who always try to make their each and every
system perfect. In reference with ZARA, they are giving effective kind of banded pay system by
which employees can get motivated and work properly. When company will give higher amount
of salary to employees than company can get their goals and objectives in a perfect way.
While recruiting talented employees attract talent of time and money towards the
investing these things, but some times it can be give negative results to employees and
interviewer because they are not able to communicate with each other and candidate are not able
to take better facility within the firm. For reducing these issues there are some people who
always influence their employees by providing them good facilities and identifying overall
strategies of their organisation. Apart from this company also makes diversity in workplace by
evaluating different kind of culture and differences (Kavanagh, and Johnson, 2017). There are
another factors which creates the different challenges in companies so that they can not reach
their goals. Now human resource manager is needed to have good and effective team work so
that they can develop good working environment in working place and able to achieve standard
goals for increasing accountability of firm within the proper way.
As per the above analysation of different concepts there is one more important thing that
Human Resource Functions which is one of the best thing for every company to achieve their
goals and target within the short period of time. HRM functions generally includes in managerial
and operative functions wherein, managerial involves in planning it is really good function which
defines the large number of employees requirement and fulfilling goals by making effective plan
to analysation of present information across the globe. After this organising is the another step to
gathered overall skills of employees and candidate achieve their proper goals. On the other side
directing includes in the various levels and company contributes to gain better potential
employees for reach desired objectives. Last function of managerial aspect is controlling in this
manager of an organisation make clear goals and checked the employees performance or
activities for accomplish the goals. On the basis of this function manager can influence
employees towards the work to operate business effectively (Marchington, and et.al., 2016).
During the applying of operative functions which is generally includes in hiring and
recruiting wherein hiring is process to bring higher skilled person who can help company to
reach their goals perfectly. After this job analysis is one of the best function explains the nature
5

of job such as skills, qualification, work experience and so on along with job design mainly
involves in duties, roles and responsibilities to attain certain objectives. After this performance
appraisal help HR manager to check their overall action of employees by which they can perform
good work in the company (Mello, 2014). Conducting training and development function within
the company HR manager able to develop different roles and responsibilities for employees so
that they can work easily and achieve good feedback from others. After this salary administration
define various kinds of jobs that includes in bonus, benefits, incentives, compensations etc.
therefore, HR manager is also responsible to running their business functions in regards with
employees welfare by giving them better facilities in a perfect way. Wherein, maintenance is
much important for employees turnover which is based on the employees performance to achieve
their goals and objectives. Apart from this labour relations is also good function which is
generally related with workforce within the trade union and as per this employees have capability
to make proper decisions to reach higher goals. Wherein, personal research is an effective and
essential part of an organisation which is performed for examine employees opinion about
promotions, wages, conditions, welfare,leadership,activities and different issues. At last personal
record is good function which maintain and retrieve the information which is related with
employees that involves in working hours, employment history and so on. Therefore, all these
functions, models of HRM is much important for making effective organisation in front of others
so that ZARA can get better opportunities in future to expand their market at higher level (Noe,
et.al. 2017).
6

CONCLUSION
According to the above respective assignment it has been analysed that HRM is one of
the better way to achieve organisational goals in an effective manner. In this present assignment
ZARA has been chosen as an organisation that deals with different kinds of clothing varieties to
impress people in a perfect way. For providing better facility to employees within the workplace
respective company ZARA is applying different kind of functions and models by which they can
easily understand proper rules and regulations of country and it is much helpful for gaining better
goals in a future. Apart from this there is tiered pay system which helps employees to get good
pay from company by giving better performance effectively.
7

REFERENCE
Book and Journal
Brewster, C., Gooderham, P.N. and Mayrhofer, W., 2016. Human resource management: The
promise, the performance, the consequences. Journal of Organizational Effectiveness:
People and Performance, 3(2), pp.181-190.
Buckley, M. R., Wheeler, A. R. and Halbesleben, J. R. eds., 2018. Research in personnel and
human resources management. Emerald Publishing Limited.
Buller, P. F. and McEvoy, G. M., 2012. Strategy, human resource management and
performance: Sharpening line of sight. Human resource management review, 22(1),
pp.43-56.
Cascio, W. F., 2015. Managing human resources. McGraw-Hill.
Chelladurai, P. and Kerwin, S., 2018. Human resource management in sport and recreation.
Human Kinetics.
DeCenzo, D. A., Robbins, S. P. and Verhulst, S. L., 2016. Fundamentals of Human Resource
Management, Binder Ready Version. John Wiley & Sons.
Figueiredo, E., and et.al., 2016. Human resource management impact on knowledge
management: Evidence from the Portuguese banking sector. Journal of Service Theory
and Practice, 26(4), pp.497-528.
Jiang, K., et.al. 2012. How does human resource management influence organizational
outcomes? A meta-analytic investigation of mediating mechanisms. Academy of
management Journal. 55(6). pp.1264-1294.
Kavanagh, M. J. and Johnson, R. D. eds., 2017. Human resource information systems: Basics,
applications, and future directions. Sage Publications.
Marchington, and et. al., 2016. Human resource management at work. Kogan Page Publishers.
Mello, J. A., 2014. Strategic human resource management. Nelson Education.
Noe, R. A., et.al. 2017. Human resource management: Gaining a competitive advantage. New
York, NY: McGraw-Hill Education.
Renwick, D. W., Redman, T. and Maguire, S., 2013. Green human resource management: A
review and research agenda. International Journal of Management Reviews. 15(1), pp.1-
14.
8