STRATEGIC HUMAN RESOURCE MANAGEMENT

Abstract
In Human Resource Management (HRM) there are several types of practitioners and researchers are exists as in all other discipline. In this report the HRM of Tesco is analysed to find out the expected outcome. Tesco is the worlds third largest retailer in respect to revenue and it is the second largest retailer in respect to profit. There is a knowledge gap between Human Resources Practice and Researches. Another issue is that researchers do not take into account the facts that are faced by the professionals in the practice. The view from this task is clear that academics and professionals should work together in a positive direction. Evidence shows that the gap of communication between practitioner and professionals make difference between the theory and practice.

Contents
Introduction ................................................................................................................................ 3 Literature Review....................................................................................................................... 4 The Long Term Gap in Theory & Practice ........................................................................ 4 Link between Theory and Practice .................................................................................... 5 Better Science lead to Better Practice ................................................................................ 5 How it Change the Practitioners Behavior......................................................................... 6 Critical Analysis......................................................................................................................... 7 SHRM and the Resource Based View ............................................................................... 8 Criticism of Resource Based View .................................................................................. 10 Best Practice HRM Thinking ........................................................................................... 11 HR practice at Tesco ................................................................................................................ 11 Personnel Management and HRM ................................................................................... 11 Recruitment and Selection ............................................................................................... 12 Monitoring Performance .................................................................................................. 12 Rewarding ........................................................................................................................ 13 Implications...................................................................................................................... 13 Conclusion ............................................................................................................................... 14 Recommendation ..................................................................................................................... 14 References ................................................................................................................................ 15

Introduction
In Human Resource Management (HRM) there are several types of practitioners and researchers are exists as in all other discipline. This is resulting in what; there is a gap or difference between theory and practice. The difference between theory and practice is viewed as the gap in communication. The reason behind this difference is the different platform of the academics and practitioners. This report discussed basically the divide between the academics and professionals. In this report the HRM of Tesco is analysed to find out the expected outcome. Tesco is a British multinational company. Tesco usually deals with grocery and merchandise. Headquarter of is situated in Cheshunt, United Kingdom (Walker, 2006). Tesco is the worlds third largest retailer in respect to revenue and it is the second largest retailer in respect to profit. Tesco has stores in 14 countries around the world including Asia, Europe, and North America. Tesco was founded by Jack Cohen in1919 as a group of stalls (Potter, 2011). Tesco build up on the basis of little help. It is not only marketing slogan of Tesco but all the staffs and management believes it. From the very beginning of operation Tesco management believe that each and every employee of Tesco understand theirs role in achieving the goal of the organization. All of the employees of Tesco are very much willing to broaden their experience and work in variety of areas. Tesco management also appreciate such mentality of the employees and encourage them to do so. Objective of Human Resource Management is to play a positive impact on organizational performance. The responsibility of the managers is to provide secured work environment, proper training and positive communication about change in organization. Managers always try to hire most qualified employees for their organization so that they can ensure high employee satisfaction rate, less absenteeism and more productivity. Theory of HR states that managers should provide comprehensive support to the employees. The major objective of the HR professionals is to maintain the best interest of the employees. In practice, professionals treat the employees as their business partner and manage changes and monitor the transactions related to the benefits of the employees (Dave, 2009). Organizations use their Human Resource or workforce to achieve competitive advantage. Here the term completive advantage means the advantage that the organizations achieve over the competitors in the market. In his study (Porter, 1985) explains that employees of an organization apply their unique talents (flexibility, superior performance, innovation,

personal attractiveness, and productivity) as ingredients to develop firms competitive position. In the study of (Chiavenato, 2001), he stated that employees are the source of activities and its the responsibility of the management to utilize the intelligence of the employees. So it is the responsibility professionals to follow the theory of Human Resource Management and bring up the best output from their employees (Barney & Wright, 1998) (Jackson, Hitt & DeNisi, 2003) (Akhtar, Ding & Ge, 2008).

Literature Review
There is a knowledge gap between Human Resources Practice and Researches. As per (Daniel, 2007) managers often consider the academic researches less understandable and less practicable. Another issue is that researchers do not take into account the facts that are faced by the professionals in the practice. Problem is that what is done by the researchers is not always useful for the professionals. The gap of academic theory and practice is also varying because of the culture of organization and organizational settings. Difference between research and practice in HRM

There is difference between academic literature and practice in HRM. The reason behind this is the difference between Academic literature and practitioner literature (Bennis & OToole, 2005). In HRM it is not likely a great deal that of what passes as best practice. There are no measurement criteria that indicate any literature as best practice and to indicate any literature as inferior practice (Cummings, 2007). The HR managers do not always follow or practice the evidence based HRM. This ignorance of evidence based HRM resulting in less performance, than the potential possibilities of their major stakeholder, investors, employees and the community (Grossman, 2007). The Long Term Gap in Theory & Practice In the seminal thesis of (Jamrog & Overholt, 2004), on the development of HR function they stated that over past 100 years more and different responsibilities has been changing, evolving and adding by the HR professionals. HRM function has been evolved through many stages that are shows in the Authors account. From very beginning of the organizational culture through industrial revolution, the human relations movement, the scientific management, etc. to the present condition of strategic business model.

In the study of (Starkey, 2001), he stated that the major objective of the researchers is to develop more theory; on the other hand professionals are focuses on minimizing problems and maximizing productivity. The sources of information or theory used by the professionals are investigated by (Buchanan, 2005). In his investigation Buchman found that the information from the academic researchers is almost useless to the professionals in case of making decisions. Buchman also recommended that the academic researcher should more focus on the practical corporate situation. Link between Theory and Practice Some of the scholars are not willing to differentiate between traditional HR and Strategic HR. According to (Rowden, 1999) & (Wei, 2006) traditional HR is basically concerned with providing administrative support in respect to recruitment, benefits, staffing, and compensation. In the study of (Ulrich, 1997) he argues that, personnel who are related to the cost control and administrative activities has been responsible to HR function as it is an administrative function. Employee management is the responsibility of HR managers. So HRM is nothing but a formal system of managing of workforce within the organization (Bateman & Zeithaml, 1993). According to (Inyang, 2001) the term HRM is basically related to developing, attracting, and maintaining an efficient and effective workforce. There are several transactional activities are involved in managing the human resource of an organization. Staff motivation, training and development, staff commitment, employee compensation, quality measurement etc. are meant to be carried out to enhance the achievement of corporate goals and objectives (Inyang, 2008).

Better Science lead to Better Practice From the previous discussion it is clear that present system of HR which is Strategic Human Resource Management is more systematic than traditional approach. SHRM has extends beyond managing people and human capital. The activity of management is to manage human factors and drive them to the goal and objective of the organization. Modern HR policy helps to value addition of the organization by making contribution to the competitive advantage. Though traditional system is widely used, professionals are facing lots of problem which is minimized by using modern HR approach (McMahan et al., 1999). According to (Piore & Sabel, 1984) the concept of SHRM is related to the theory flexible specialization, and also the so called approach socio technic to work in organization. This approach discards the idea of Taylorist system that is to use a combine strict adherence is a

best way of doing a task with a separation from execution. In other terms scientific management principles incorporating practices such as job flexibility, team working and minimizing status differentiations (Wood, 1999).

How it Change the Practitioners Behavior

Role of HRM Theory and Research in Changing Practitioners' Behavior and Decisions The emergent business partner model is the responsibility of HR professional and is very much challenging role to perform under SHRM. Traditional HRM is transactional in nature which is concerned only with the administrative activities of an organization. But with development of scientific system SHRM is dealing with core responsibility of value addition in the HR system, policy and practices along with the strategy of business to achieve constant competitive advantage of the firm. The task of performing human resource in an organization is very tough. So the HR professionals must think out of traditional approach and should establish more systematic and various approach to manage human resource effectively and to drive them towards the successful achievement of business objectives. HR manager have to understand the position and competitive direction of the organization in the market and implement the business partner role effectively (Lawler, III and Mohrman, 2003). HR professional should perform two additional roles that are strategic partner and change agent. New knowledge gathered from HRM theory help the managers to best achieve the organizational goal with confidence. HR managers should play their role as change agent to manage organizational change, assess the potential, and to collaborate with the line managers to overcome upcoming barriers.

Critical Analysis
In previous the traditional HR was followed by the managers. In this system managers are not very much careful about the human resource. They think investment in human resource is nothing but waste of money. But with the change of time this thinking is destroyed. Managers understand the importance of human resource and become careful about the management of human resource after that the HR management system evolved (Mathur, Jugdev & Fung, 2007). But in this system managers only think that proper salary and job instruction is everything. But with time goes Strategic Human Resource (SHRM) Theory evolved. This theory described that human resource is the essential element of organizations success. Proper utilization of human resource can bring competitive advantage over other firms. Resource Based View (RBV) is newer view SHRM. SHRM basically emphasized on the external factors that means it depends on outside in view. But RBV is emphasising on inside out view (Lewis, 2002).

Figure 1: Logic of SHRM Theory Source: (Lovell, 2009)

SHRM and the Resource Based View Resource Based View (RBV) of firms is based on the idea of Penrose (1959). According to him firm is a collection of productive resources and is a structured business process. The main facilities of a firm human resource are that it can help to achieve competitive advantage (Hamel & Prahalad, 1989). Other researcher also suggests aligning the HR system with the firms strategy to create competitive advantage (Barney, 2001). Resource heterogeneity is the underlying assumption of Resource Based View of a firm. The meaning of this is that the resource that various firm have are distinct from other firms resource. The resources that help the firm to achieve competitive advantage have to fulfil four requirements. These requirements are:

Rare

Valuable

Nonsustainable

Unique

Figure 2: Requirements to achieve Competitive advantage over other firms Source: (Jaap & Paul, 2002) So it can be said that the human resource of a firm should use these resource to gain competitive advantage over another firm. Otherwise other firm will easily take competitiveness. HR practices, policies, strategies of Firms are very much unique and these are not possible to reproduce. Kinnie, Rayton & Swart (2003) point out that the values of HR policies and practices are not reproducing able resources and these should be implemented and enacted effectively. Competitive advantage is measured by what the firm provide to its customers and what the competitors provide to its customers. Such competitive advantage can be best achieved by following RBV. RBV ensures that: 1. The firm is consist of better quality people than its competitors

2. Inimitable capital is possessed by the firm and nurtured 3. Organizational learning is encouraged and 4. Organization is consists of distinct values and culture. RVB of a firm is alarmed with enhancing the strategic capacity, ensuring adequate investment in human resource of the organization, for more value addition. Managers allocate their resources effectively. (Armstrong, 2004) said that the core aim of RBV is to improve the capability of resources to achieve the strategic fit between resources and opportunities and to obtain added value for the firm.

Figure 3: Allocation of resource to RBV Source: (Lovell ,2009)

Over the past decade Strategic human resource management (SHRM) is become more popular basically in respect to the contradiction on HRM and performance of HRM. For example the overview of (Boselie et al., 2001) can be observed. As per Delery and Shaw (2001) i) investment on human resource can be a source of competitive advantage ii) the complex characteristics of HRM process can enhance the inimitability of the system iii) HRM practice can best influence the human capital of a firm. Along with this Wright and McMahan (1992) gave a brief overview of theories (theory of transaction cost, theory of resource dependency, agency theory, institutional theory) which fit the HRM issues. In the debate of SHRM resource based view perspective is one of the most dominating theories. In this resource based view (e.g. Wernerfelt, 1984; Lado and Wilson, 1994; Barney and Wright,

1998; and Purcell, 2000; Wright et al., 2001) the objective is to achieve clear competitive advantage on competitor by using effective and efficient utilization of the resources of a firm.

Resource based view brings a differentiation in Strategic Human Resource Management process. SHRM thinks outside in but RBV thinks inside out approach. In this new approach of thinking, internal resources are playing an important role in measuring the organizational success other than old approach of outside-in thinking. In the study of Paauwe (1994), Huselid (1995), Wright et al. (1994), and Wright et al. (2001), authors basically use this theory to HRM field and described that it is people that incorporate the requirement assumption of rareness, unique, value, and non-substitution, which are the necessary condition for success of organization (Barney, 1991).

Criticism of Resource Based View As per (Delery and Shaw, 2001), researcher choice the resource based view to afford the several advantages in investigating the strategic nature of HRM. Researcher also acknowledges that there are several criticism of resource based view approach. Major criticism is that resource based view does not fulfil the standards for an actual theoretical perspective and resource based view contains several tautological elements (Priem and Butler, 2001). It is also not applicable in the situation like predictable circumstance in which specific resources of an organization may gather continuous competitive advantage. Other criticism is that the inside out process of resource based view tends to overlook the contextual factors importance, along with Porter-based factors (e.g market entry threat and suppliers threat), and also the institutional setting, which is very much crucial from HRM view point. So to understand clearly SHRM in different firms perspective additional theory is needed.

These are Theory of Traditional HR and SHRM. The implication of these theories in the selected company Tesco is compared below.

Best Practice HRM Thinking Assumption: In SHRM theory it is assumed that best practice literature is the best practice and increases the shareholder value. This best practice or high-commitment HRM was first identified in the US models of HRM. The main reason behind adopting this best practice HRM is that managers think this adoption will enhance the performance of organization, helps to improve employee attitude and behaviours, decrease the percentage of absenteeism and turnover, uphold skills and overall high productivity, improved quality and efficiency. Model: Best practice is related to some components. These components are selective recruitment, job security of employees, internal promotion, training and development of employees, employee satisfaction, reward for better performance etc. (Marchington & Wilkinson, 2002).

HR practice at Tesco
Personnel Management and HRM Tesco is providing various types of goods and services. Tesco is growing in a large scale. This huge scale growth has an impact on the companys recruitment style. But the human resource practice of Tesco is largely depending on every little help from its all staff and employees. As a practitioner of HR the role that Tesco maintained are: Looking for employees with all types of quality to attract consumers Hiring suitable employees for suitable place. The main objective is that to make sure that everyone are working in their comfortable circumstance HR managers employed individual who have the capability to meet the organizational goals and bring competitive advantage for the organization Train the workforce to be competitive In line with legislation try to develop and communicate the policies of industry Implement employment procedure and termination Management of organizational environment and climate and the relationship of the organization.

 Create proper compensation strategy for the organization Maintain overall labour cost

Tesco tries to follow SHRM policy. For this it develops its strategy in such way. Tesco try to motivate its employees to bring out the competitive advantage from them. Tesco named their HR process talent planning. They always try to fill the gap in the organization from the existing employees. The reason behind this is the utilization of experience of the employees. As per SHRM strategy Tesco try to make their employees as assets for the organization. Recruitment and Selection As per SHRM planning HR managers of Tesco are very much cautious about employee recruitment. In case of selection managers follow the steps: At first design the HRM management system Analyse the environment of workplace Demand for HR should be forecasted Supply analysis Plan and reconciliation Person charge with governance tries to recruit the right workforce for right place. For this reason such recruitment and selection process is followed. Monitoring Performance For the better achievement of the firms goals and objective Tesco HR managers follow some monitoring process. The major objective of monitoring is to make the employees best fit for the work and bring out the potential to achieve competitive advantage over other firms. Organizational employee job management includes: Planning activities of the employees and setting expectation Continuous observation of performance Capability improvement of the employees Rating the task of the worker as per result Encourage good performer by appreciating

Rewarding After monitoring the performance Tesco offer reward for the employees. To ensure perfect working condition and to motivate the workforce Tesco managers allow some rewarding system. For this the task of employees are evaluated first. Job evaluation is a systematic basis of determining importance of different job. For rewarding Tesco follows some procedures. These are: Share the success of the company Privilege card for the successful employees Pension Scheme Extended leisure time. Implications This section basically reflects the implication of newer thoughts and practices in HRM. First of all there a number of gaps are existed in HRM theory and practice. Reason behind such gap is the level of relationship between employee and employers. In recent time a number of questionable practices of HR in firms, and there are confusion in practice. The theme is that the practice of HR needs to be changed as it is not fulfilling the theory. Another problem is that there are no cooperation between HR practitioner and academics. Academics are not always thinking about the circumstances of practical working condition. Better cooperation is needed to reinforce the link between practitioner and academics. Different role players in the organization should be more cautious and should be more cognisance. Another possible reason of gap between the theory and practice is that of HRM field is full of paradoxes. Evidence shows that statutory rules and legislation hamper the freedom of the public worker. So it should be kept in mind that the employees should be free from any mental pressure. Its the responsibility of the manager of HR department is to encourage the worker as they are the part of the organization and organization is the family of the employees. For this managers should follow the theories and try to practice it in the organization for the betterment of the organization. Though by practicing the theories in the organization the gap between theory and practice will reduce and organizations achieve best possible result.

Conclusion
The preliminary objective of this assignment is to focus on the theory and practice of HRM and gap in this theory and practice. The view from this task is clear that academics and professionals should work together in a positive direction. Evidence shows that the gap of communication between practitioner and professionals make difference between the theory and practice. So the academics and professionals should work together to innovate user friendly and practicable theories and professionals should implement it properly. In traditional practice human factor were totally ignored. To make workforce as asset new HRM policies evolved. The traditional HR practices contribute to the bottom line of organization. HRM offers the administrative and organizational support by managing staffing, training, and compensation benefits. HRM policy is generally deals with attracting workforce to the achievement of organizational goal and objectives. Innovation SHRM theory generated new value added responsibilities and emphasizes on the integration of HR practice with business strategy. SHRM refers to a strategic business partner model and the core idea is that core organizational capabilities of the worker are necessary to attain the goals and objectives. SHRM is a systematic approach to manage the human capital and it emphasize more on organizational performance than individual.

Recommendation
In recommendation it can be said that: To ensure balanced service sector managers or those who charged with governance should follow the theories of HRM. A system should be developed where strategic leadership exercised in connection to the theory of HR. Result oriented management should be followed strictly. Result oriented professionals should follow SHRM as it is focused on organizational performance not on individual performance and develop some features to focus on efficiency and effectiveness. As per strategic approach strategic HRM is becoming more important. A standard vision should be achieved in the area of HRM the way of accomplishing it is required.

HRM has to go a long way. IT should go behind anything as the primary assumptions brought out earlier. Time is required to make change in new theories and its implication. So an attempt should be made to make cooperation between academics and practitioners to best achieve the organizational goal.

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