Human Resource Development and Recuitment/Selection in Relation to Tesco Company - Essay Example

Critically consider human resource development and recruitment/selection in relation to Tesco company. Evaluate the extent to which these areas of strategic human resource management have been significant in helping your organisation (Tesco) to achieve its objectives Abstract The present discourse critically evaluates strategic human resource management prospects and challenges involved in its practices. This evaluation is carried out on HRD and recruitment and selection procedures adopted at Tesco Plc. In this process, the challenges involved in strategic HRM are studied from literature. The relation between strategies and business goals has been elucidated. Literature and findings indicate that the glowing facet of strategic HRM is also shadowed by certain challenges, especially from employee perspective, which management specialists are still trying to resolve; thus, strategically oriented HRD activities such as training, coaching, performance management, growth etc and recruitment and selection procedures remain nothing but whims of management. Introduction Organisations that adopted strategic human resources management (SHRM) approach have experienced immense growth and success in the form of profits, expansion, and share value. One such corporate giant is Tesco Plc, a UK-based grocery and general merchandise. The focus of management has shifted from business policies and practices towards employees or human resources, and strategic management reinforces this concept to a large extent. Hence, human resources development (HRD) and recruitment and selection processes are given high importance in contemporary organisations in an effort to attract and retain the best talent available in the market. These processes are systematized through polices and procedures; however most of these approaches have certain drawbacks that are of concern to the business. The present composition attempts to elaborate the significance of strategic HRM and its impact on overall business. For this purpose, Tesco has been chosen for study in terms of effectiveness of its HRD and recruitment and selection procedures. Tesco is one of the largest and oldest grocery and general merchandise in the world with its presence in more than 10 countries. This giant supermarket was the initiative of Sir John Cohen who started it as a small market stall in East of London in 1919. Since then, Tesco has grown immensely with strong foundation laid by carefully chosen strategies and a grand vision; Tesco’s vision, as declared by its CEO, is to create value for customers to earn their lifetime loyalty (Clarke, 2011). Tesco’s annual fact sheet boasts 500,000 employees in their more than 5000 stores spread across the world. Presently, TESCO has expanded its business into various streams other than grocery and general merchandise, some of which include finance, technology, education etc. TESCO’s values are focused towards their customers and their employees. Tesco’s seven strategies are oriented towards its growth and market capitalization along with building a great team. According to Fox and Vorley (2004), Tesco has the capability to match its competitor Wal-Mart in terms of business and spread (as cited in Matusitz & Leanza, 2011). These overarching achievements are attributed to Tesco’s core business strategies that are closely linked with its vision. In general, HRM encompasses a comprehensive range of HR practices including HRD, recruitment, selection, wages and compensation policies, rewards systems etc; in addition, organisational policies and practices meant to drive desired organisational culture and HRD are also a part of HRM. Besides these, HR philosophies such as organisational values or codes of conduct that are meant to attract, develop, motivate and retain employees also form critical part of HRM (Jackson & Schuler, 1999). This conventional notion of HRM has been replaced by strategic HRM that provides better focus and alignment to business objectives. Strategic HRM refers to the framework derived after integrating HRM with business strategy. This strategic integration requires planning, logical approach and specific design in addition to traditional HRM. Strategic HRM puts greater emphasis on ‘employees’ as the core resources for achieving organisational goals (Brewster, 1994); this emphasis specifically relates to HRD through learning, training, coaching, growth, performance management and continuous professional development. While classical HRM functions in isolation from other business operations, strategic HRM attempts to integrate other operational procedures with HRM, and in turn with main business strategies. One such integration is that of HR strategy and business strategies. Welbourne (2003) defines HR strategy as a set of decisions a company makes about the humans with whom it does business. This implies that strategic HRM practices enhance company’s growth and profitability. This integration was emphasized by Guest (1987, 1989a, 1989b, 1991) in his Harvard model, which emphasizes extent of cohesion between HR strategies and organisational policies and practices in order to be efficiently implemented by managers in critical decision making activities (as cited in Armstrong, 2000). Guest’s model highlights four policy goals for effective HRM, strategic integration, high commitment, high quality and flexibility. Other models were that of Legge, with emphasis on ‘hard’ HRM; Hendry and Pettigrew that proposed a multidimensional view of HRM; Prucell’s emphasis on making HRM more practical than ideal; Sisson’s four features of strategic HRM that emphasize employee commitment and leadership; and, Storey’s four-point concept of meaningful HRM that emphasizes strategies, leadership involvement, and policies to shape employment relationship (as cited in Armstrong 2000). Legge (1995) classified HRM into soft and hard types; soft HRM is concerned with employee commitment, skills, motivation, leadership etc and hard HRM refers to HR and business strategies meant to manage human resources. Employee learning and development directly contribute to advancement of the organisation, a concept promoted in resource-based view (RBV) of the firm. Resource-based view of the firm views human resources as the vital components of an organisation that can yield sustainable competitive advantage (Barney et al., 2001). Recruitment and selection procedures, performance management and learning and development practices employed by organisations fit into hard HRM, whereas leadership support, motivational practices, rewards and recognition etc form soft HRM. Successful organisations incorporate a blend of both soft and hard HRM practices. From HR perspective, Tesco’s success and growth rate is attributed to its ability to choose the right blend of HR strategies as well as its core values. Its corporate strategy is the driving force behind its operational success. An ideal business strategy is that which can incorporate an integrated HR strategy capable of producing consistent, interconnected and mutually reinforcing system (Kearns, 2010). Effective SHRM requires flexibility in approach; however, frontline employees and leaders hardly find opportunities to exercise flexibility in decision making or in altering the way work processes are organised according to the situation or the need. Tesco believes that the success of any retail outlet depends upon the ability to recruit and train people that match with the service and quality standards of the company (Finne & Sinoven, 2009). This directly links all of its business strategies with its HR strategy concerning recruitment based on competencies. Tesco uses online recruitment to attract large pool of talent available in the market for its vast range of openings. Online recruitment through internet and intranet is surely a time-and-cost saving method; this also saves administrative costs and manpower in the HR department. On the other hand, its impact on creating a human connection with the candidates is almost absent. Its impersonal approach can cause substantial reputational loss for the company as well as leave the rejected candidates psychologically low. While online recruitment is meant to attract larger pool of applicants, screening applications from such large numbers can be extremely cumbersome. When software-based screening approach is adopted, search and refinement becomes too narrow, which can either result in selecting candidates with not-so-appropriate profiles and/or missing out most suitable candidates whose bio-data or resumes did not contain technical words that are used for screening the profiles. For instance, job-descriptions for frontline vacancies that specify customer service experience can choose hundreds of profiles, which may include profiles of candidates looking for jobs at higher management positions. Further screening might require more time than manual screening and recruitment methods. Selection procedures following recruitment include face-to-face interviews with the short-listed candidates. Tesco evaluates candidates’ competencies in its interview system to ensure the right candidates are recruited and selected (Yeung, 2010). Testing competencies helps to identify candidates’ skills, traits, qualities and behaviours so that the most suitable ones can be selected. At Tesco, the most important competencies required at the store level are customer service orientation, teamwork and communication. However, these competencies change with the nature of the work. Competencies must be tested appropriately in order to avoid selecting wrong candidates. The interviewer must possess right interviewing skills like asking the right questions, ability to cross-check candidates’ responses by counter questioning. Possibilities of faking the competencies are high, especially in face-to-face interview. Theoretically, HR strategies bring together all employee-related activities into an integrated programme to meet the strategic objectives. Strategies are the connecting blocks between HRM and organisational goals. However, strategic management requires strategic thinking, planning and learning (Bryson, 2004). In general view, formulation of strategy results in a framework that is conceptual and analytical. Kearns (2010) asserts that strategies should be flexible enough to accommodate changes brought about in future and future challenges. Tesco’s initiative for learning and development has been aligned to its demand for labour in certain locations where Tesco provides training to young candidates in order to be eventually employed within Tesco (Redman & Wilkinson, 2002). These practices are certainly beneficial for Tesco and the employees initially; but, after some time, these employees would require skill enhancement training in order to move to newer roles. A few highly critical roles of HR department include recruitment and selection, training and development, performance management, total rewards, and communication (Mayrhofer & Reichel, 2009). Strategic HRM focuses on long-term goals and is related to the interests of executive leadership, mostly focused towards employer reputation and brand; strategies to strengthen employer-employee relationship include all HRD activities, a concept otherwise meant to improve brand but showcased as employee engagement (Rosethorn, 2009). But, implementation of these strategies happens at middle management and frontline levels, which requires working knowledge and awareness related to impact of wider business goals on performance of frontline employees. The frontline employees should be able to relate strategic practices to their job responsibilities. This entire process comes with challenges such as differing interests, ineffective communication and leadership, and differences attached to employees’ background, culture, ethnicity etc. Skills and abilities of frontline leadership are crucial for employee development because most of the coaching, training, mentoring and monitoring roles are performed by the frontline leadership. Tesco claims that people are the main focus in their group, be it customers or employees (Our Strategy, n.d). At Tesco, employees’ talents, commitment, ideas and energy are given highest importance. With these qualities, Tesco claims to barter employees’ future by investing in them through appropriate growth and learning opportunities through talent management. Tesco has its own learning centre to create opportunities towards employee learning and development. Employees’ motivation and commitment to make use of these opportunities will decide the success of these programmes. Applying Vroom’s Expectancy Theory of motivation, employees would opt for these educational programmes only if anticipated outcomes of the learning courses match with their expectations or be something that they value (Mullins, 2005). Considering Tesco’s expansion and growth, it is extremely difficult for employees to find free time to dedicate towards their learning and development. The person-job fit approach adopted in recruitment and selection processes at Tesco requires clear job specifications and descriptions (Recruitment and Selection at Tesco, 2008). This process requires clear job analysis of vacant positions. Job descriptions help in attracting the right candidate for the job; on the other hand, they can create rigidity in the employees by not preparing them for other activities when required. Moreover, job descriptions limit recruiters from exploring employees’ other skills that may be applicable elsewhere. For instance, Tesco’s diversified businesses can offer jobs to individuals with diversified skill set; however, inviting candidates based on job descriptions can cause some potential candidates’ fit with Tesco unidentified. Another perspective is the job-organisation fit, which focuses on selecting candidates that are in sync with the organisational objectives, values and culture. Most of the successful companies adopt this approach because such candidates are flexible. The drawback of such approach is that most of the employees selected for uniformity in their values and culture tend to be from similar ethic, social and cultural backgrounds. This approach thus brings issues of lack of diversity, or possible discrimination in rare cases. Tesco uses various other methods to recruit candidates for their vacant positions. The first step is to check for willingness of existing employees to move to other roles. These vacancies are posted on their intranet for about two weeks during which interested candidates may apply by sending their resumes and contact information. These vacancies may be filled by existing employees only if the employees’ skills and knowledge meet the vacant positions’ job description. Restricting employees’ employability to specific jobs is in itself a hindrance to employment growth opportunities as this process enables hiring of employees with specific skills. In such cases, employability may be increased only if the hired employees are provided with opportunities to acquire new knowledge and skills. At Tesco, these opportunities are provided through various educational programmes, knowledge management procedures, and operational excellence. The Success Story (2009) published by Tesco’s IT partner, Cisco highlights that Tesco’s wide presence across many countries has been achieved through its operating model and by moving its employees across the globe. Tesco’s IT systems, collaborative network, better decision making and knowledge sharing platforms along with significant improvements in productivity. Knowledge sharing is embedded in Tesco’s value system and also has strategies in place to facilitate knowledge sharing. From strategic integration perspective, Tesco’s Corporate Steering Wheel built on Kaplan and Norton’s Balanced Scorecard, provides a comprehensive framework for cascading its performance management philosophy (Henry, 2011). According to Tesco’s previous CEO, this steering wheel facilitates strategic management at Tesco by creating a shared language, a shared way of thinking and a common blueprint for action (as cited in Henry, 2011). This corporate wheel, which is the strategy map of Tesco, however, does not identify where recruitment and selection of employees are placed in the wheel; learning and development, from people perspective, is not mentioned. Their business strategies emphasize the need for maximizing profits, earning lifetime loyalty of customers, providing great staff, not making customers wait, consistent performance, simplifying jobs, save time and money, providing interesting job and opportunities, and respect for all. Undoubtedly, Tesco has achieved immense applause and success for its strategic framework. Tesco claims to make their employees’ jobs interesting and valuable by hiring the right people and providing them competitive pay. All the strategies and practices are formed by the top management with hardly any involvement from the frontline management or employees. Evidences only suggest thrusting of these strategies, in the form of steering wheel strategies, from the executive leadership onto the employees at bottom. The basic drawbacks of any strategy formulation emerge from lack of involvement by frontline leadership that actually implements the strategies; challenges arise when the organisation and its processes need to be aligned to the strategies; designing meaningful metrics to measure performance; and ability to use the metrics to facilitate learning and continuous improvement. Failure of employment-related strategies is often due to lack one or more of these necessary job characteristics: stimulation, variety, continuous learning, collaborative and supportive work environment, control over goals, methods and processes, and value (Dychtwald, Erickson & Morison, 2006). Theoretically, Tesco adopts various strategies to inculcate these work characteristics, however, failures or misses cannot be avoided. For instance, Tesco claims to create value for all its employees and customers through various practices. For employees, Tesco claims to create value by providing them with the right job, competitive pay and pension benefits, supportive leadership, learning opportunities etc. Tesco also provides opportunities for employees to move to other roles within Tesco whenever there are open positions. Dychtwald et al., (2006) highlight that only 64% of Tesco employees felt valued as per a survey conducted, and that employees’ reference to value differed considerably. Despite strong recruitment and selection procedures, based on job description and person-job fit, an employee survey revealed uninteresting job content as one of the major reasons for employee attrition at Tesco. This could be because of lack of continuous learning opportunities in reality. Moreover, not all employees interested in taking up newer roles would be prepared for internal movements without receiving sufficient information and time for preparation in terms of learning new skills. Considering the rapidly changing nature of jobs that are introduced into the market, it becomes all the more difficult to retain people when they find enormous opportunities of their interest in the market; these employees do not prefer to wait for those opportunities within Tesco. A classic example of such instances is job openings for IT professionals, which is highly competitive. Employees that were hired in Tesco stores with an interest in IT sector would not really wait for Tesco technology to hire them, but would be willing to move whenever they get an opportunity. No matter how best the recruitment and selection procedures are, employee retention always remains a question considering external competition and changing nature of employee needs influenced by various external and internal factors. Tesco strongly supports and encourages diversity in its business and employment practices, as depicted in its core strategies (Tesco Online, n.d). In relation to this, Foster (2007) argues as to how such statements can be operationalised, especially when implementation of such practices are contextual and situational. Foster’s (2007) study interprets diversity management as an organisational approach that recognizes, values and harnesses a broad range of individual differences in customers and employees and by treating people differently according to their needs. Such an approach can be useful to address employee turnover in retail chains, like Tesco. However, recognizing individual differences and using them for business advantage remains an unclear strategy. Moreover, such recognition can in fact lead to issues such as discrimination, biasness and favouritism. In addition to these issues, diverse workforce come with diverse interests, habits and cultures thereby carrying potential conflicts of interests that could erupt negative consequences at workplace, especially when the workforce is required to display and follow teamwork. To address such issues, organisations formulate specific policies and procedures that are common to all employees. But, these policies and procedures are more often aligned to the national culture and thus do not consider diverse workforce that come from different cultures. Although diversity management is put in place to harness the potential of diversified workforce, keeping this diversified workforce motivated is impossible if their motivational factors are linked to cultures, habits and interests. In such instances, strategies meant to facilitate diversity management do not fit well with organisational objectives. In summation, on one side, Tesco’s immense success is attributed to its strategic integration of organisational policies and practices with its business goals and the integration between HR-strategies and business strategies; on the other hand, this integration has not been effective to an ideal state. This proves Legge’s (1995) argument about effectiveness of integration of strategy and HRM to be lengthy, complex and repetitive process, and the difficulty in its widespread integration. The top-to-bottom approach adopted in formulating strategies and strategy maps, like the Corporate Steering Wheel of Tesco, adopt a directive approach to conducting a business; other aspects like leadership, motivation, learning, and employee involvement remain as mere plans that need to be followed by employees, mostly by virtue of their position and binding to employment contract. 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