H&M’s Human Resource Management

functions and practices

By Eirini Tougli

Human Resource Management

Penny Vlagos
New York college
Athens

22/01/20
The human resource of a company is considered one of the most important parts of an enterprise. Successful

companies invest in the continuous training of their staff to improve their efficiency. Theories of HRM are

related to employee training as well as recruitment and engagement. Additionally, HRM practices can enhance

employee interactions or collaborations with other employees to create their skills and knowledge. The present

paper examines H&M's current practices to describe and analyze its implemented HRM functions and propose

improvements.

Human resource management (HRM) is not a single homogeneous practice but involves a variety of roles and

activities that differ from one business to another. This difference in management can be traced to different

levels of a business as well. An HR system consists of strategies, policies, and processes. Today's businesses

apply different human resource practices, such as employee development, and reward. However, when

businesses try to improve their HRM practices, they usually intend to create a Human Resources Strategy. The

HR strategy defines what a business wants to do in terms of its HR management policies and how achieving

them, it will help accomplish its overall goals and respond to changing conditions of the environment that they

operate.

Cumberland and Githens highlights that Human Resource management practices include outsourcing, such as

teamwork, motivation for knowledge, incentives for knowledge sharing, internal communication. At the same

time, HRM practices also refer to employee training (internal and external) as well as recruitment and

engagement. Additionally, HRM practices can enhance employee interactions or collaborations with other

employees to create their skills and knowledge (Bal, Kooij, & De Jong, 2013). These workplace interactions

can encourage employees to improve also their skills and knowledge. Consequently, the employee's ability to

share, apply and create new knowledge is the basis for gaining competitive advantage in the workplace. (Abdul-

Jalal, Toulson & Tweed, 2013).

Company’s Analysis
H&M Background
H & M is a Swedish retail enterprise established in the fashion industry in 1947. It has a strong brand name and

a global presence with long-term development in existing and emerging markets. Today, the company launched

many fashion brands. Additionally, H&M operates 50 online stores and 4900 physical stores in 73 markets. It

employs 177,000 individuals from all over the world. The company shares a values-driven way of working

aligned on the customer. The company’s personnel work in teams promoting innovation and creativity

(h&m.com, 2020). However, in order to increase the use of its human resources and ensure that the right

number of employees work in each store, H&M applies an employee- scheduling system.

The implementation of the system has achieved significant results through planning, as sufficient personnel

work during the busy hours of the store and consequently, it helps to improve sales. This system is also

connected to the company’s human resources and payroll systems, which allow the store manager to regulate

workforce costs more precisely (h&m.com, 2020). Thus, the company aims to deliver clothes to as many as

possible people worldwide. H&M is followed by strong values such as minimalism, constant improvement, and

cost-consciousness. In particular, the company intends to launch quality, inexpensive and fashionable clothes.

Moreover, the company's strategy is orientated to effective operations which affect positively people and

environment (h&m.com, 2020).

Organization Behaviour and Structure

The corporate management of the company is located in Stockholm, where the main departments of H&M are

located such as design and buying, interior design and display finance, accounts, HR, expansion,

communications, advertising, logistics, security, IT and CSR. Additionally, H&M has approximately 16

national offices that are responsible for several departments in each sales country. And the organization has

about 16 production offices that take care of relations with the around 700 independent suppliers that H&M

corporates. H&M operates in 73 markets and has a workforce that belongs to these markets since it prefers to

hire locally. However, H&M, it is a multinational company in a multicultural market, where it shows great

respect for the individual (h&m.com, 2020).

The main culture of the company seems to be primarily work-oriented. This is why they pay much attention on

Recruitment process. Recruitment, focuses on finding candidates with the right fit for the organizational culture
regardless of the local culture. The company selects experienced staff for its new stores, follows reward

programs aligned with the organizational culture to develop its human resources and teamwork. Despite this,

H&M emphasizes on personality development and employees' opportunity to evolve within the business.

Moreover , the organization’s HR strategy is directly related to employee motivation, with emphasis on an

overall reward. Significantly, all of H&M’s activities are characterized by genuine respect for the individual.

and H&M’s main organizational culture encourages teamwork, supports effective leadership, providing dequate

growth opportunities for employees. These HRM strategies contribute importantly to the organizational goals of

continued growth and profitability. (h&m.com, 2020).

Human Resources Polices

It is worthy mentioned that H&M encourages and helps its human resources to achieve the goals of the

company while trying to maintain the interest of the customers and the company. However, the company’s HR

is guided by essential respect for the employee in terms of working hours, freedom of collaboration, fair wages

and the opportunity to grow its skills within the enterprise. Consequently, the company follows specific policies

in areas of employee development, health and safety, equal opportunity, and diversity. Additionally, H&M

applies an open-door strategy allowing its personnel to discuss in a straight line with managers any work-

related issues. Also, it supports the right of employees to decide who will represent them in their working

environment (h&m.com, 2020).

Selection & Recruitment

According to H&M’s policy, recruitment and selection are based on recruit local personnel when it opens a new

store in a new area or country. Future employees are assessed and selected based on specific standards applied

by H&M, according to the company’s culture. The recruitment and selection practices can emphasize how

candidates can promote the culture of the enterprise (Cabrera, & Cabrera, 2005). As a result, the company

recruits candidates who only meet the job criteria. Nevertheless, the basis H&M’s recruitment requirements

appear to be the responsibility, decision-making, love of fashion and sales.

In this way, H&M selects interviews as an approach of selection. More specifically, the company prefers face to

face interviews and mostly structured situational based interview. According to Bal, Kooij and De Jong (2013),

the company focuses on several situations or incidents in which the behavior of the individual can emerge. In

this way, the HR managers can comprehend how the individual might behave and react in his/her working

environment. Therefore, they apply panel interviews and work sample tests. As a result, candidates are filtered

at each stage of the process before they start working in H&M. The company follows internal and external

recruitment. Nevertheless, the company’s first choice is always internal recruitment and they proceed in

external recruitment only if internal options are not offered. Potential employees can apply directly from the

careers website or a local store (h&m.com, 2020).

Managing Diversity

H&M expands its operations by opening new stores in countries where it is not currently present. As mentioned

above, when a new store is opened, the company prefers local recruitment. In addition, the company prefers to

move employees from one place to another built on internal recruitment. In this way, it brings together

individuals from different cultures in the same team. Successful management of such a team is vital to the

success of the company. The company’s HR strategy ensures that the company meets the expectations of its

employees by developing international guidelines for equal rights and diversity decreasing discrimination

(h&m.com, 2020). However, it is fact that working with a diverse workforce is very important because the

management of company using diversity strategic in the right path can increase the employees’ skills, develop

unique qualities and enhance performance. Through organizational diversity the organization has the

opportunity to be developed in different markets and to be pioneer in products, services and strategics.

(Wilkinson, 2019).

Reward Management

Employees comprehend that recognition and reward are connected to equality and transparency in the working

environment (Manzoor, 2012; Humayun, et al, 2014). A reward system can be one of the main fundamentals of

human resources management practices that can increase employees’ knowledge and motivation (Manzoor,

2012). However, H&M offers a wide-ranging package, which includes personnel discounts, incentive wages,

private health care & pension. In this way, H&M seems to provide reward management, focusing on reward
relationships (Humayun, et al, 2014). The company’s rewards management is linked to other parts of human

resources, such as recruitment, and the selection and organizational culture. At the same time, it is in line with

the HR strategy for job replacement and growth and open- doors as well. As a result, the company has

successfully applied the concept of total reward management (Manzoor, 2012) by providing a financial bonus,

job satisfaction as a reward. H&M motivates employees to be more committed to the organization and

contribute as much as possible by ensuring business success, increased sales, and customer satisfaction.

Recommendations & Conclusion

According to H&M's human resources strategy, the opportunity for learning and development is inherent in its

personnel management practices. However, the company focuses on experiential methods of learning since it

recruits internally its experienced staff to support new groups. The main challenge that it faces, is to maintain a

balanced relationship with its employees by constantly providing motivations. The nature of its operations is

another challenge as H&M needs to employ well-informed and experienced staff to provide the best customer

service and accomplish customer commitment. Although the current HRM policy could be described as

successful, further recommendations could be useful.

The directors of each department could delegate a certain number of tasks to their employees, depending on the

position of each employee. In this way, they will be able to handle different tasks assigned to them and do their

job with pleasure. Even though H&M’s HRM practices are characterized by an up-to-date and strong corporate

culture, the company needs to increase its practices. More specifically, it could enhance its training at all levels

of its employees by informing them through short-term seminars on topics such as sales tactics, fashion trends,

customer service. The use of systematic and planned instruction and development activities can promote

learning and motivation. Moreover, training opportunities enhance personnel engagement. Overall, the chance

to contribute to decisions and have a sense of participation is valued by most employees and increase their

motivation as well as their commitment.

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