Importance of HRM in organizational performance
This report helps in understanding about the importance of effective HRM within an organization and how does it help in achieving the desired goals and objectives. Human resource management is associated with utilization of human resources effectively while focusing on boosting the productivity of organization (Boon et al., 2019). It focuses on understanding about the HRM issue faced by the organization and its impact upon the efficiency of organization. This report is based upon organization Tesco which is a British multinational groceries and general merchandise retailer based in UK and it is facing the HRM issue of underpayment to workers which would lead to negative impact on the organization (Tesco, 2022). In addition, this report help in identifying the HRM function which could help in resolving the issue and implementing changes which could help organization in achieving the objectives.
The HR issue or challenge within the organization make negative impact on the productivity of organization as employees within organization are considered as the asset for organization which help them in effectively conducting their operations and help organization in achieving the desired goals and objectives (Olson et al., 2018). Tesco is one of the top organizations in the UK market and it have high market share among its competitors and its employees are key driver in boosting the growth and performance of the organization. Tesco provide quality products and it have wide product range which help them in satsifying their consumer need while focusing on retaining them inn long-term and using their assets effectively to boost the organizational performance. Tesco does face HR issue which is associated with employee dissatisfaction due to the unequal pay and lower wages to its workers which resulted in various lawsuits which are filed against the organization by its workers. In different instances, the organization has faced HR issue of dissatisfaction of employees due to lower wages and which made impact on the productivity and profitability of organization. For instance, in 2021 the workers of the Tesco supermarket filed case against by the organization which is based upon the underpaid and the employees who made the claims are mostly women which thinks claimed that they are underpaid in relation to men (ABC News, 2021). The employees of Tesco won the legal argument against the organization and such lawsuits doe made impact on the image of organization in the market which would lead to the fewer employees’ attraction to the organization (Independent, 2021). In another instance in 2016, Tesco faced another lawsuit from the employees claiming that they faced age and gender discrimination and also the pay and benefits of the employees has been reduced without any prior reason and the pay rates for the night and weekend shift has been reduced significantly. The issues is raised by the employees which has joined the organization before 1999 and it was believed that 38,000 employees would be affected such cutting in costs (The Guardian, 2016). Such instance showed that Tesco does face HR issue of underpayment to its employees and which would lead to the employee dissatisfaction. The impact of such issue on the organization would lead to the negative image of organization and it makes negative impact on the employee engagement which is not beneficial for organization. The key aspect of this HR issue is that employee would feel demotivate and would likely not deliver the performance according to the expectations of the organization. Such issue is associated with lower wage of employee and it leads to the dissatisfaction of employees and would require effective strategy to increase the employee engagement. It would lead to the lack of employee engagement and employees would focus on leaving the organization for better opportunity and it would make negative impact on the Tesco employee retention and engagement strategy.
HRM issue faced by Tesco: underpayment to workers
HRM functions are associated with recruiting the potential candidates while focusing upon managing their human resources effectively and utilizing the resources within organization for the growth and development of employees by providing the appropriate training to them. The functions of the HRM are based upon effective and efficient utilization of resources and helping employees in reaching to their full potential and help organization in achieving their goals and objectives (Piwowar?Sulej, 2021). The functions of human resource management are mentioned below:
Recruitment and hiring – This function is based upon hiring the employees which are best suitable for the job profile and based upon the skill and knowledge of the individual, organization focuses on hiring the candidate which could use their skill to fulfil their roles and responsibilities. Hiring the right candidate for the position would help organization in effectively utilizing their resources and the HR department focuses on attracting and hiring the right candidate for the organization (Shenoy & Aithal, 2018). It is associated with the hiring plan for the organization which could help organization in achieving the long-term competitive advantage.
On boarding training and development – The organization focuses on providing the appropriate training and development to its employees which could help them in understanding about the mission and vision of the organization and it could help employees in providing the internal policies and procedures. The HR department focuses on providing such training for employees to contribute towards the performance of organization.
Employee and employer relationship – Every organization success depends upon its human resource and it is only possible when employees have healthy relationship with its employer and it could help in gaining the positive outcome both for the organization and for employees (Mira et al., 2019).
Rewarding culture – The HR department focuses on encouraging rewarding culture in organization which would help in boosting the morale and confidence of employees. The rewarding company culture within organization helps in boosting the performance of employees and develops positive image of organization among its employees (Aman et al., 2018).
Disciplinary action – The HR department should focus on taking appropriate actions against the employees which have done harm to the organization either by leaking the confidential information or engaging in the activities which are against the organization policies. Taking such action would help in building the healthy environment within organization.
The relevant HRM function which could be utilized by Tesco to overcome the issue of underpayment to its worker and employee dissatisfaction would be the rewarding culture. Tesco could focus on implementing the policies which would help in rewarding the employees which are delivering high performance and it would help in encouraging the employees to perform effectively and using such culture to earn the rewards. The rewarding culture within Tesco could be given in terms of recognition and incentives which are beneficial for growth and development of organization. Such function would help HR department of Tesco in framing the policies for rewarding the employees for their performance.
Tesco is one of the top organizations in the retail market and does have higher market share in comparison to its competitors which helped organization in boosting its productivity and profitability. Tesco does face HR issues which is affecting the growth and development of organization and would lead to the problems which is affecting their sustainability in the market. The benchmarking of the Tesco could be done with the organization Sainsbury which is also the organization operates in the retail market and closely competes with the Tesco.
Impact of HR issue on organizational productivity
Sainsbury is considered as one of the top organization in the UK which operates in the retail sector and it is also known for the providing the environment for its employees which can lead to the personal and professional development (Sainsbury, 2022). Sainsbury focuses on providing the training and development programme to employees which are helpful in engaging the employees at work and 86% of the colleagues agrees with feeling positive at the work and fulfilling their role and responsibilities. Sainsbury has also won the 2020 workforce disclosure initiative supply chain data award and being committed to towards its employees which helped organization in developing long-term relationship with its employees. Tesco has to focus on developing the training programme according to the need of organization which could help in developing their skills and making them capable to achieve the desired goals and objectives of organization (Sainsbury, 2022). The organization should focus on providing the environment which helps them in boosting their confidence and retaining their employees in long-term scenario. Sainsbury has also taken initiative of increasing the wages of its employees by 5.3% as the cost of living is increasing and the employees of organization does face difficulty in maintaining their lifestyle and standards of living. Tesco could focus on taking initiative of increasing the wages of its workers which would help in developing the positive image of the organization among the employee and they would contribute more towards the goal of organization while focusing on maintaining the effectiveness and efficiency in organization (Retail Insight Network , 2022).
Tesco has managed to gain the top spot in the market by providing quality products to its consumer and its employees contribute in the growth and development of organization. It is important for Tesco to keep its employee satisfied by providing the healthy work environment and ensuring that need of its employees should be fulfilled. Tesco could focus on developing and implementing the rewarding policies within organization for high performance employees and providing incentives to such employees. It would help in encouraging employees to deliver quality performance while achieving the desired goals and objectives. The organization should focus on developing similar pay structure for its workers without any discrimination and providing benefits to employees which are significant in retaining them. Such initiatives would help in attracting new talent in the organization and also help in retaining the skilled employees of organization.
Conclusion
This report concludes about the importance of effective utilization of Human resource within an organization and its importance in achieving the goals and objectives. It concludes about the organization Tesco which is facing HR issue as employee feel underpaid and it would result in lack of motivation in employees which is making negative impact on the performance of employees. Tesco is engaged in different lawsuits which are filed by employees due such issues which is affecting the performance of organization. Tesco is benchmarked with the Sainsbury which is operating in the same market and could help in adopting the HR practices which are beneficial for organization which is also concluded in this report.
ABC News, 2021. Workers win round in equal pay lawsuit against Tesco. [Online] Available at: https://abcnews.go.com/International/wireStory/workers-win-round-equal-pay-lawsuit-tesco-78065116 [Accessed 27 April 2022].
Aman, Q. et al., 2018. The impact of human resource management practices on innovative ability of employees moderated by organizational culture. International Journal of Organizational Leadership, 7, pp.426-39.
Boon, C., Den Hartog, D.N. & Lepak, D.P., 2019. A systematic review of human resource management systems and their measurement. Journal of management, 45(6), pp.2498-537.
Independent, 2021. Victory for Tesco workers in equal pay dispute. [Online] Available at: https://www.independent.co.uk/news/business/news/tesco-equal-pay-claim-2021-b1858945.html [Accessed 27 April 2022].
Mira, M., Choong, Y. & Thim, C., 2019. The effect of HRM practices and employees’ job satisfaction on employee performance. Management Science Letters, 9(6), pp.771-86.
Olson, E.M., Slater, S.F., Hult, G.T.M. & Olson, K.M., 2018. The application of human resource management policies within the marketing organization: The impact on business and marketing strategy implementation. Industrial Marketing Management, 69, pp.62-73.
Piwowar?Sulej, K., 2021. Core functions of Sustainable Human Resource Management. A hybrid literature review with the use of H?Classics methodology. Sustainable Development, 29(4), pp.671-93.
Retail Insight Network , 2022. Sainsbury’s salary bump shows commitment to employees and improves brand reputation. [Online] Available at: https://www.retail-insight-network.com/comment/sainsburys-salary-employees-reputation/ [Accessed 27 April 2022].
Sainsbury, 2022. About Us. [Online] Available at: https://www.sainsburys.co.uk/ [Accessed 27 April 2022].
Sainsbury, 2022. Better with Everyone. [Online] Available at: https://www.about.sainsburys.co.uk/sustainability/better-for-everyone [Accessed 27 April 2022].
Shenoy, V. & Aithal, P.S., 2018. Literature review on primary organizational recruitment sources. International Journal of Management, Technology, and Social Sciences, 3(1), pp.37-58.
Tesco, 2022. About Us. [Online] Available at: https://www.tesco.com/ [Accessed 27 April 2022].
The Guardian, 2016. Tesco workers take company to court over alleged discrimination. [Online] Available at: https://www.theguardian.com/business/2016/oct/16/tesco-workers-take-company-to-court-for-discrimination [Accessed 27 April 2022].
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