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Business Plan

Strategic Human Resource Management

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TABLE OF CONTENTS
INTRODUCTION .......................................................................................................................... 1
Organizations Information ............................................................................................................. 2
LO1: UNDERSTAND HOW THE STRATEGIC MANAGEMENT OF HUMAN RESOURCES
CONTRIBUTES TO THE ACHIEVEMENT OF ORGANISATIONAL OBJECTIVES ............. 3
1.1 Importance of Strategic Human Resource Management ...................................................... 3
1.2 Purpose of Strategic Human Resource Management Activities ........................................... 3
1.3 Contribution of SHRM to Achievement of an Organizations Goals ................................... 5
LO2: BE ABLE TO DEVELOP HUMAN RESOURCE PLANS FOR AN ORGANIZATION .. 6
2.1 Business factors that underpin HR planning in an organization ........................................... 6
2.2 Human Resource Requirements ............................................................................................ 6
2.3 Develop a Human Resource Plan ......................................................................................... 7
2.4 Critical Evaluation of how an HR plan can contribute to meeting an Organizations
objectives .................................................................................................................................... 8
LO3: UNDERSTAND HUMAN RESOURCES POLICY REQUIREMENTS IN AN
ORGANIZATION .......................................................................................................................... 9
3.1 Purpose of Human Policies in Organization ......................................................................... 9
3.2 Impact of regulatory requirement on Human resource policies .......................................... 10
4.2 Impact of organization culture on management of human resource ................................... 11
4.3 How the Effectiveness of HRM is monitored in an organization ....................................... 12
4.4 Recommendation to improve the effectiveness of HRM in an organization ...................... 12
CONCLUSION ............................................................................................................................. 13
REFERENCES ............................................................................................................................. 14

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 TABLE OF FIGURES

Figure 1Functions of HRM ............................................................................................................. 1

Figure 2 Purpose of SHRM............................................................................................................. 4
Figure 3 SHRM: Aligning with the Mission................................................................................... 5
Figure 4 HR Requirements of Tesco .............................................................................................. 7
Figure 5 HRM Planning .................................................................................................................. 8

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INTRODUCTION
Strategic human resource management includes the development and implementation of
HR strategies. These strategies are integrated with business strategies and enable the
organization to achieve its business goals. In other words SHRM is the process of integrating
human resource function with the strategic objectives of the organization in order to achieve
organizational goals (Armstrong, 2008). Human resources are the real capital of the organization
as it not only help in achieving organizational goals but also provide innovative ideas which can
change the entire business process. In order to achieve its objectives an organization has to take
optimum utilization of its human resources by framing strong human resource management
strategies.
Human resource management is a combination of five different functions and a HR
manager can increase the effectiveness of its workforce by strategically performing these
functions (Jackson and Schuler, 1995). Human resource management includes:

Staffing

Employee and Human Resource

Labour Relations Development

Health and Safety Compensation

Figure 1: Functions of HRM

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 Strategic human resource management combines the business strategies with human resource
functions so that performance of the workforce can be increased (Lundy and Cowling, 1996).
This present report is going to discuss on the various aspects of strategic human resource
management of two different organizations. This report will try to analyze the role of effective
strategic human resource management in real world. The major aim of this report is to know how
an effective strategic human resource management can help an organization in achieving its
business goals. In order to best possible outcomes this report will be divided into four different
parts. Each part has their own importance in providing comprehensive understanding to the
reader.

Organizations Information
The UK retail industry is the largest service industry with employing more than three
million people and it is predicted that this number will increased by 15% over the next five years.
About 8% part of GDP is generated by this industry (Farfan, 2013). There are two major players
of this industry Tesco and ASDA.

TESCO
Headquartered in Cheshunt, it is the third largest grocery and general merchandise
retailer in world. It is the grocery market leader in UK and has more than 6351 stores in 14
different countries. Company has over 300,000 employees and 3000 stores in UK and its 60% of
group revenue come from here. This amount was 42,248m for the years 20011-12. Company
has a huge of products such as Technology & Gaming, Home Electronics, Home & Garden, DIY
& Car, Sports & Leisure, Baby & Toddler, Gifts & Jewellery, Entertainment & Books, Health &
beauty and Clothing (Tesco Plc, 2013).

Wal-Mart
It is US based multinational retail corporation. Wal-Mart stores are well-known for their
huge discounted products. According to Fortune Global 500 list in 2012 it i s worlds third largest
public corporation and operating on more than 8970 locations. It has more than 2.2 million
employees working all around the world. Company has divided its products into various
departments like Electronics & Office, Movies, Music and books, home, furniture & Patio, Baby
& Kids, Toys & Video Games, Sports, Fitness & Outdoors, Auto & Home Improvement, Photo,
Gifts, Craft & Party Supplies and Grocery & Pets (Walmart, 2013).

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 Both companies are operating their operations in a huge part of the world and order to get
benefit of cultural knowledge they prefer to hire local employees.

LO1: UNDERSTAND HOW THE STRATEGIC MANAGEMENT OF

HUMAN RESOURCES CONTRIBUTES TO THE ACHIEVEMENT OF
ORGANISATIONAL OBJECTIVES
1.1 Importance of Strategic Human Resource Management
Every organization has to scan their internal as well external environment so that it can
find the key factors which effecting business performance. This scan also includes those factors
which are related to human resource. Strategic human resource management determines the long
term goals for workforce; these goals are always based on organizations business goals.
According to Regis, human resource is the key source for creating benefits for the organization
in current competitive market. Proper management and development of human resource can
provide competitive advantage in tough market place. But managing a huge force without
knowing the target is nothing more than wasting of time and money. Strategic human resource
management indicates the goal of maintaining workforce (Wei, 2006).
Tesco and Wal-Mart are world known names in retail industry which are employing more
than 3 million people in world. Maintain such a huge force of people is never an easy task. As
being a part of Human Resource Management it focuses more on long-term objectives rather
than internal issues of HR. SHRM address and solve problems which are affecting companys
human resources performance. It increases employees performance by improving their skills
and erasing business issues (Azmi, 2010). SHRM provides a track to guide people by identifying
the long-term goals. It is tough task to retain skilled employees as competitors always try to
attract them with various schemes and offers. In such situations SHRM plays a major role in
retaining them as well as attracting talent.

1.2 Purpose of Strategic Human Resource Management Activities

Every organization tries their best to formulate strong HR policies so that they can
maintain a sound number of employees with required skills. SHRM majorly includes below
activities:

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 Figure 1 Purpose of SHRM
(Source: Finntrack, 2011)

The major purpose of every activity regarding human resource is to increase the
effectiveness of employees either it can be by motivation or training. SHRM ensure that
organizations human resources are being used at right place and for right work. It analyze
internal and external environment and formulate human resource strategies based on
organizations purpose, missions and actions. SHRM the major purpose of strategic Human
resource management can be divided into four sections given below:
One-way Connection: this activity includes formulation of business plan and their
informing employees about that. After formulating business plan activities managers
implement them according to role of employees. One way connection only facilitates
flow of orders from upper level to lower level.
Administrative Connection this phrase indicates the integration lowest level where day
to day activities are focused by HR managers. In order to take optimum utilization of
workforce HR manager takes decisions regarding day to day activities of employees.
Two-way Connection in this section HR manager invites feedback from employees in
order to provide better working environment. This feedback and consideration provides
innovative ideas that also help in strategy formulation. Two-way connection includes

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 flow of order from upper to lower level as well as feedback from lower level to upper
level (Pattanayak, 2005).

1.3 Contribution of SHRM to Achievement of an Organizations Goals

Strategic Human Resource Management includes the implementation of right skills at
right place on right time. In order to archive organizations long -term objectives it requires
taking optimum utilization of workforce by assigning them duties according to their skills. In
current competitive market it is not possible for any organization to achieve their objectives
without contribution of their workforce.
Strategic Human Resource Management facilitates the involvement of employees in
achieving organizational goals by motivation and other activities. These activities are regarding
compensations, HRD, labor relationship and health & safety of employees. Staffing includes
supplying of skilled force, HRD prepare them for challenging tasks, health and safety increase
their confidence and compensation programs and good relationship motivate them for giving
their best and preparing a good working environment (Prince, 2011). All these activities help
organization is achieving their objectives.

Figure 2: SHRM: Aligning with the Mission

(Source: Communication and Information technology Commission, 2007)

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 This above figure indicates the hierarchy of accountability in an organization for SHRM.
It is important for every organization to deal with their employees in such a logical structure that
reflects the business strategy. According to this figure HR accountability must begin with basic
legal formalities, as it eventually encompasses other four levels (Hall, 1990).

LO2: BE ABLE TO DEVELOP HUMAN RESOURCE PLANS FOR AN

ORGANIZATION
2.1 Business factors that underpin HR planning in an organization
When it comes to affecting any business plan there are number of internal and external
factors which can be included. Specifically for HR planning these factors are employee &
employer relationship, working culture, working environment, labor rules, salary and rewards,
competition and economic factors (Collins and Clark, 2003). All these factors can strengthen HR
plans if they are managed properly on the other hand mismanagement or ignorance of them can
de-motivate employees and it will defiantly make negative impacts.
Other than these above factors there are few more things which underpin the HR plans of
Tesco and Wal-Mart. First thing is their business growth, which attracts skilled people towards
the organization. Other factor is the impact of technology as both the companies are operating on
world level they focus on the use of latest technology that make their tasks easy. Another one is
employees development; both companies have training and development programs for their
employees that develop their skills. Training programs help them in operating current tasks and
development programs prepare them for higher level jobs (Lawler and Moharman, 2003).

2.2 Human Resource Requirements

An organization need to increase their workforce while expanding the business or going
to make any big change. As both companies are in retail industry somehow they have common
HR requirements. Both companies look for skilled employees that can maintain a sound
relationship with their customers with. In current completive market a small mistake by an
employee can harsh the image of organization.
Tesco looks for individuals that have leadership skills such as influencing others and
decision making, operating skills like managing staff and stock managers and general skills for

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communication, planning and problem solving (Rasli and Alharthey, 2011). For different
working levels Tesco has below requirements:

Figure 3: HR Requirements of Tesco

As being in the same industry Wal-Mart also looks for the same skills in their employees
but it prefer to hire women rather than man employees as it takes lower wages. Other than these
both companies prefer to hire local people as they have the knowledge of local market and
culture so they can handle customers in much better way (Nicholson, 2003). Hiring from local
community doesnt require training regarding language or culture of customers.

2.3 Develop a Human Resource Plan

Effectiveness of any HR plan depends on managers as all decisions in this regards are
taken by them. While framing an HR plan it is very important to indentify the business goals and
current plan should support the long-term business objectives. As discussed above that there are
number of factor that can affect HR plans so in order to know these factors it requires internal as
well as external environmental scanning. On the third step of planning a gap analysis is to done
which will indicate the current and future HR requirements. On the fourth step HR priorities are
set which can help in achieving departmental goals. On the last step it requires monitor, evaluate,
and report on progress (Rothwell, 2010).

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 STEP 1:
STEP 2: STEP 3:
Determing the Business
Scan the Environment Conduct a Gap Analysis
Goals

STEP 4:
Set HR Priorities to Help
Achieve Departmental Goals
STRATEGIES
Developing a Talent Pool
STEP 5:
Work Environment Improvements
Organizational Effectiveness Measure, Monitor and Report
Competency / Skills on Progress
Development
Employee Engagement
Workplace Well-being
Recruitment / Staffing
Retention

Figure 4 HRM Planning

The above process includes five steps to formulate a strong HR plan. There are few
major points which must be taken care while formulating an HR plan, first is the ultimate goal of
the organization; another one is companies HR polices, status of current workforce and future
requirements.

2.4 Critical Evaluation of how an HR plan can contribute to meeting an Organizations

objectives
Every individual has their skills in a particular field, it is not necessary that all the
employees of an organization have the skills to manage the best level of productivity in every
department of work. So, in order to take best possible outcome from employees managers need
to allot them the work where they can do their best (Snell and Bohlander, 2012). Ultimately the
contribution of employees helps in achieving organizational goals.
A strong plan for workforce can help in achieving organizational objectives by assigning
right task to right person, at right time and on right place. In order to take better utilization of

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human resource many organizations have put into a wide range of activities in past several years
but, in real world it is not possible without identifying the skills of employees and motivating
them for give their best. So, managers have to implement a strong HR plan and strictly follow it
for getting the best outcomes.

LO3: UNDERSTAND HUMAN RESOURCES POLICY REQUIREMENTS

IN AN ORGANIZATION
3.1 Purpose of Human Policies in Organization
HR policies play a major role in managing the workforce within the organization. It is a
device to manage risk by keeping the organization inform about employment standards and
current trends in legislation (Jackson and Seo, 2010). The formulation of HR policies helps in
meeting the requirement of the organization regarding training and ethics along with its
commitment to government regulations about employees welfare. HR policies set out the
standard of behavior and corrective measures to handle the specific condition and for building an
efficient working culture within the organization. Policy formulation is a slandered system to
manage the employment matters. It supports managers in defining the role and rules along with
outlining the punishments for specific action or behavior.
One of the major challenges Tesco facing these days is to ensure that all of its employees
are aware of the role they play, and so company formulated a training policy. This training
creates a journey through the history of the organization, its core values, purpose, financial aims,
business goals, marketing and operations strategy and its commitment towards customer
satisfaction. The purpose of this policy is to introduce company values to new comers. In current
UK super market sector its strong policies lead over its rivals in the fiercely-competitive. The
aim of this strategic policy was to free up stores employees so they could do better and improve
their customer service. Company uses a group of 13 key management techniques to improve the
core skills of workforce and one of them is its HR policy (Anonymous, 2003).
As discussed above Wal-Mart believes in hiring woman rather than male so in recent
years trafficking problems became a big issue for the organization, to come out from such issues
company formulated strict policies for the workforce. Other than this the purpose of HR polices
can be defined by below points

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 Structure: it defines the structure of organization so that unnecessary confusion and
chaos can be avoided.
Fairness: HR policies are applicable on entire workforce equally that indicates the
fairness towards individuals.
Best Practices: Some time HR polices are formulated so that organization can analyse its
best practises.
Strategy: organizations formulate HR policies in order make their long term business
plans. These policies help in taking long-term decisions regarding employees.

3.2 Impact of regulatory requirement on Human resource policies

Government has been at front position in cheering employees participation and their role
in an organization more than management and employees themselves (Artis, Becker and Huselid,
1999.). Government introduce various rule and schemes in order to maintain employees interest
into the organization regarding their rights, health and safety and other applicable legislation. It
is essential for every organization to fulfill these governmental requirements regarding
employees welfare. These requirements include a set of state, federal and local law that should
be included in all the areas of HR such as recruitment, employees relation, monetary and non-
monetary incentives and termination. So, it is compulsory for HR managers to consider all these
governmental laws while formulating any HR policy of taking any decision regarding workforce
within the organization (Poulter, 2005).
In the recruitment process at Tesco managers select applicant for vacant positions whilst
keeping the employment regulations and laws. Other selection company has to provide training
to each candidate that is being assigned a specific task. It is also essential for the organization to
frame their HR policies that includes minimum pay wages to employees along with their health
and safety measures.
Issues like human trafficking have increased the burden of governmental laws on Wal-
Mart. Organization has to formulate their HR polices including provisions related to compliance
with labor laws, guarantees that labor is voluntary, hours and compensation, and freedom of
association (Sifton, 2012).
Key regulatory frameworks that impact HR polices are as below:

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 Federal Laws: It affects all HR activities starting from hiring to termination of
employees. The major regulations are governed by department of labor which affects
business as well as employees. HR standards are prescribed by federal law such as
standard of health and safety, payment, working conditions, retirement.
State Laws: State laws affects the different areas of employment, it includes transfer,
medical leave, posting requirement, security, compensations and employer notice before
termination.
Certain governmental laws prohibit the discrimination in employment on the basis of
creed, caste, color or religion. Some regulation also requires employers to take positive action to
employ and develop handicapped individuals (Guest, 1987).

LO4: EXAMINE HRM IN AN ORGANIZATION

4.1 Impact of Organizational Structure on the Management of Human resource
Organizational structure vastly affects their human resources performance. Mostly an
organizational structure is a hierarchical concept of subordination of people that works together
for achieving a common goal (Barney, 1991).
Tesco is divided into four major formats i.e. Tesco, Tesco Metro, Tesco Extra and Tesco
Express. Some of them are small in size and scale such as, Tesco Express so, decision making is
much faster than other large part of the organization. It has flat structure that facilitates quick
implementation of decisions. As the site manager explains to four duty managers about how to
handle the workload and they run the shifts (Esra, 2010).
In tall structured organizations top management does not find it so vital to include HR
managers while making any decision regarding workforce, as it results in weak strategy. It is
often happen that top managers ignore the advices of HR managers and erase the valuable
feedbacks of employees.

4.2 Impact of organization culture on management of human resource

Organizations can be defined as societies or as nations or as individuals due to
extensively differing cultures that reflects the beliefs, ideas and values. Organizational culture
indicates the working environment which is formulated by interaction of employees.
Organizations culture is determined by s trengths, educational qualifications, life experiences,
weaknesses and background of its manpower.

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 The leadership styles of top managers play a key role in identifying the organization
culture. The ability of the leader to handle conflicts and motivate the workforce can help in the
establishment of an effective working culture. In Tesco, culture of the organization is working as
a team where all the group members co-operate each other to achieve organizational goals
(Milner, 2012).
Good cultures within the organization motivate people as well as provide a good working
environment for employees on the other hand it can also make negative impacts by de-
motivating people. If employees dont like their working environment it will be though to retain
them for a long time.

4.3 How the Effectiveness of HRM is monitored in an organization

The human resource department is the greatest asset of any organization as none of the
business function can be completed without human power. So, it is essential for the organization
to effectively manage their workforce. In current competitive world numbers of opportunities are
available for skilled individuals and no organization would like to lose their productive human
resources. So in order to manage a sound quality and quantity of workforce it is must for the
organization to effectively manage their workforce (Afiouni, 2013).
The effectiveness of HRM can be monitored by the promotions, terminations and
requirements. High attrition rate is never a good sign for HR managers. It is a major drawback of
HRM and stays that employees are not satisfy. On the other hand low attrition rate with
comprehensive number of promotions and lists of recruitment applications indicates the
effectiveness of HRM within the organization.

4.4 Recommendation to improve the effectiveness of HRM in an organization

HRM includes a set of activities which are related to human resource of the organization.
HRM refers to that resource who vastly contributes in the accomplishment of organizational
goals. Constant communication with employees can help in knowing their problems as well as
innovative ideas. Any problems regarding organizations work force must be immedi ately
resolved in order to prevent unnecessary complexities (Coper, Anderson and Zhu, 2007).
In both the organizations managers should focus on the need of their workforce. As retail
business requires lots of hard work these organizations should provide them flexible working
hours and fare wages. Companies should involve their lower level managers while making any

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decision regarding human resource. The firms should conduct different training and development
sessions for improve the effectiveness of their workforce and enhance their efficiency.

CONCLUSION
Strategic human Resource Management plays an essential role in managing the
workforce as well as improving their productivity. Various activities of SHRM motivate
employees and indicate the track of success through their satisfaction. It is well-known that it is
not possible to archive organizational goals without the contribution of human resource.
Strategic Human Resource Management facilitates the strategic use of human resources. On the
basis of above discussion it can be concluded that SHRM is an essential factor that enables
optimum utilization of workforce.

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