Critical Analysis Of HR Strategies, Employee Development, Employment Relations, And Training At Tesco

Background of the company

Business organizations with their global presence nowadays are increasingly dependent on effective human resource management. This often serves them as a strategic approach for overall performance management of business and employees engaged in the development of the business. Therefore international human resource management has gained huge importance among corporate for managing their employees in ensuring that competitive advantage of business is not impossible to achieve and sustain for a long run in an industry. The retail sector in the UK entails competition which is the reason human resource management has been a widely accepted approach for business performance development. In this article, a case study of Tesco has been discussed.    

1.1 Background of the company          

Tesco Plc runs its business as Tesco and is based in England, UK. Its headquarters is in Hertfordshire in England. Tesco is a very prominent name in the field of retail groceries and other merchandises. The firm now is a third biggest retailer in the world. This firm is a leader in the retail market in the UK, Ireland as well as Hungary. Back in 1919, the firm was founded by Jack Cohen. The basic business of Tesco was grocery and since 1990’s early years the firm focused on the diversification of its business and products geographically (Al Ariss, Cascio and Paauwe, 2014). Many new diversified products options like clothing, books, electronics, software, petrol, toys entered into its retailing options.

The company also tried to reposition its brand name and this was the cause the firm transformed itself from low-cost high volume retail firm to a business entity that has many appeals to social groups. Products of the firm are Tesco value products and Tesco finest products. This expanded product portfolio helped the company to increase the number of shops across the countries the businesses are operational in (Armstrong and Taylor, 2014). Tesco is a London stock exchange listed company and also is a part of the FTSE 100 Index.  

1.2 Company Objectives (Vision/Mission)

Tesco looks for making its business better by creating value for its stakeholders. The final objective of business is to meet with the demands and expectations of customers before competitors are satisfying them. The mission of the firm is to be champion for valued customers. The firm always has its effort to make sure that products are as per the choice of customers and these are delivered to them in the right way with right quality. The mission statement of the firm is ‘We make what matters better, together.’ The vision of the firm is to understand customer and fulfill responsibility towards them as well as a community by being a valued and responsible business entity.

1.3 Current business performance

 Financial performance of the firm based on group functions as per result 2017/18

1H 2017/18

Group sales were £25.2bn.

Revenue was £28.3bn and operating profit was £885m. During the period the profit was £562m. The company achieved growth in the volume of fresh foods and the growth is measured by 1.5 percent due to improvements made in the offer of food items. In central Europe and Asia, the profit margin improved. There was an increase in stan statutory revenue by 3.7 percent and the volume was £28.3bn. Profit (before tax) also increased and it was £562m (Bratton and Gold, 2017).

Company Objectives (Vision/Mission)

2. Body of Discussion

2.1 HR strategies

HR strategies embedded in strategic management approach of Tesco has several performance aspects. These are assurance of better operating environment, implementation of hiring experts, and development of employee motivation programmes to make it certain that talented employees are handled better and underperformers are also entitled to opportunities of performance development. Tyson (2014), argued that these aspects are comprehensive and at the same time important for employees but it does not necessarily mean that employees feel appreciated. Even optimist scholars like Storey (2014), remarked that employees’ satisfaction causes the growth of business but scholar-like. Wilton (2016), argued that if employees being colleagues within their work setting are trying for outperforming each other then the purpose of amicable job environment remains limited.

However overall beneficial aspects are the main sides the company is reliant on and that is to increase the performance of employees and their motivation level. This is helpful for the firm to gain business growth.  Riley (2014), stressed the importance of the better cooperative environment rather than operating environment as the latter completely relates to working cooperation and relations among staffs and management of Tesco.  Workplace equality is the pivotal ground based on which an individual is encouraged by Tesco’s HRM to work at his or her best for serving the business of the firm.  Thereby Tesco management believes in reducing working intimidation among employees and upliftment of employees’ confidence.

But this needs to be always taken care of by Tesco since employees particularly who have high needs of performance development must not take a carefree approach because of working leniency caused by HRM through its strategic approach. High-quality recruitment is a central HRM part of the company. In the line with this, the firm puts stress on recruiting best talents from colleges that are top in imparting education. This remains important for the company as the new talents are nurtured by training and put into practical job performance.

But this does not always provide business with better results. Purce (2014), opined that companies’ efficacy level in talent management is largely proportionate with the degree of focus on searching and developing new talents from the existing workforce. But the firm has important ground in this respect since a feature like choice improvement plan is in an offer by HR strategies. As per this plan Tesco team chooses skills and knowledge that have to be constantly upgraded for becoming strong performance provider within the company.

R strategy of Tesco is aligned with the overall corporate strategy and the amalgamated planning gives an idea which circles around business analysis and performance derivation from employees and overall staff management. This makes the firm more competent in a competitive industry like the retail sector.

2.2 Employee development

Tesco realizes the importance of employee development for enabling them to excel in their workplaces. In this search of professional excellence, the firm believes that performance development and employee development are both related which undertakes motivation as a useful measure for a firm’s growth achievement. Tesco always tries to ensure that the development of employees is of great support for work performance and personal life support in terms of better living standard. In employee development initiatives Tesco always includes its focus to educate its employees about their roles and responsibilities and privileges they are entitled to.

Current business performance

In addition to this Tesco also holds knowledge development as a most vital basis for achieving growth in the company. According to Kramar (2014), Knowledge development is the primary source of employee development which is nullified by Purce (2014), saying that knowledge is an alone element but other is to development of positive mindset. In connection to this, it can be said that Tesco’s initiative of employee development includes both knowledge and mind frame development to have a positive effect in the workplace and in personal and professional lives of employees.

Resource base view is now conceptualized in many organizations and HRM is placed as a separate department which powers employee base considering the perspective that is the basis of competitive advantages (Brewster, Chung and Sparrow, 2016). In this respect, Tesco Plc is also a follower of this concept which helps the firm to achieve and maintain a competitive advantage.   

The above-mentioned framework is helpful for Tesco to analyze its functional strength based on resource. As per resource-based strategic approach, Tesco concentrates on employee development with the support of an investment of available resources and already achieved a competitive advantage. The amalgamated competence level is perceived to be of continual competitive advantage for Tesco in markets.

2.3 Employee relations & grievance handling

Tesco does consider that grievance among employees and their negative thoughts can be negated by invoking workplace satisfaction. This is the main basis on which the employee relations and grievance handling of Tesco get into complete shape. Tesco practices bottom-up feedback as an approach to building up employee relations and grievance reduction. Employees are empowered to exchange feedbacks among them and their higher authority in the entity for the development of the business. This makes them feel parts of the firm. Tesco also offers flexibility in works for its employees and they are allowed to work near their houses (Brewster et al, 2016).

Management directly gets to know about their grievances and these are addressed keeping employees satisfied. Some important functions undertaken by the firm are employee engagement, pride development among them, the development of programmes that create fun and business-oriented activities and all employees are encouraged to feel inclusive. These altogether are helpful for the firm to handle grievance as this becomes minimum and employees feel better always. In reference to this discussion, it can be said that Tesco’s policy of grievance handling is most related to Human relations theory (Chebbi et al, 2015).

Human Relations Theory basics

Adoption of this approach by Tesco is useful for minimizing internal confusions and tensions by developing satisfaction among employees about their work and workplaces.

 2.4 Training

Tesco has a structured and flexible approach regarding its training and knowledge development programs. This is based on the needs of employees regarding how much they require to upgrade their skills and knowledge. On the job and off -job training curriculums are both preferred by Tesco HRM professionals.  During on-job training programs employees are monitored and in course of the problem, the solution is delivered by the training team (Dickmann, Brewster and Sparrow,  2016).

HR strategies

Direct feedbacks sharing with employees are also a preferred aspect of this training programme. Off-the-job training is also conducted by Tesco and this is only for employees who require to develop specific skill such as communication skill and team building attitude. Riley (2014), argued that off-the-job training is always costly in comparison with on-job training but Storey (2014), opined that on-job and off-job training are beneficial in specific situations.  Tesco practices system model as a training approach.

By following this training model Tesco focuses on each segment of training broken down into several stages ranging among analysis to the final evaluation of the training programme.

3.1 Conclusive Thoughts on Tesco’s Practice

Human resource management has always been a topic of study which helps many firms to prepare themselves in the line with the corporate requirement. Challenging environment in a sector like retail causes several challenges like manpower attrition, cost of additional recruitment of employees, increasing pattern of competitors’ advantageous position in the market. These create many concerns for organizations like Tesco in the retail sector. They need to embrace a suitable human resource management approach. This is no matter the volume of competition and challenges existent in the industry.

This report presented herein denotes several aspects of human resource management. The entire discussion, therefore, has been split into some parts like strategy included in human resource management, training curriculum and development of employees along with measures taken by the firm to achieve certainty that workforce is a competent and competitive advantage is within the capacity range of the firm. The selection of case study, therefore, is considered most suitable for making this report a logical outcome depending on knowledge preparation caused by knowledge presentation requirement. At the end of this analytical discussion, some recommendations have been presented for the firm to ensure more development in the HRM segment down the line.

HRM practices by Tesco is beneficial for its management to cause growth in its retail business. Tesco has enviable growth right from its day of inception and the firm has opened up many stores across its home country in the UK along with several Asian countries (Jackson, Schuler and Jiang, 2014). Human resource management strategy of the firm is to justify its vision and mission. Tesco has several options to make its HR strategy better and in search of benefits for employees, the firm holds a belief in making the working environment better and reduction of conflicts among employees. This is supported by a cooperative working culture of the firm.

Additionally, the firm also launched choice improvement plan that puts the HR functions of the firm in the line of skill requirement identification (Morschett, Schramm-Klein, and Zentes, 2015). The model of strategic HRM of Tesco includes the gamut of functions like external environment analysis, corporate and business strategy development and staff management like recruitment and selection, performance management and so on. Employee development plan of Tesco is supported by VRIO model since the firm believes to invest its resources for the development of employees. Therefore the competitive advantage of resources is embedded in the functional aspects of the firm to increase the more competitive advantage.

Employee development

Human relations theory has an influence on employee relations and grievance handling functions of Tesco. According to this theory, the firm tries to ensure that employees are satisfied with their working environment and alongside they are engaged in development work of their firm. Training gets arranged by the firm on-the-job and off the job basis and both are useful for the firm in meeting specific training needs among employees. Therefore system model training is perceived as a suitable training framework for the company. In the training arrangement functions, the firm firstly does analytical work followed by the design and development of training programs. The later stage of training is the implementation of training programs along with an evaluation of training effectiveness (Nel et al, 2014)

3.2 Critical analysis in comparison to Sainsbury’s

Retail industry experiences stiff competition with no dearth of competent firms. Apart from Tesco, there are several retail organizations which are on the frontline in measures of reputation and business profits. Sainsbury’s is another name that has also achieved remarkable success in the industry. The firm also has a comprehensive set of HR strategies. Comparison between the HRM functions between Tesco and Sainsbury’s set this analytical report ahead in the logical base. Therefore case studies of Tesco and Sainsbury’s in this report have made for an evaluative pattern of analysis of HRM approach adopted by the firms.

While quality in the recruitment process is always an urgent lookout the differences are apparent in the processes adopted by the two firms. Tesco believes in recruiting talented from top colleges while Sainsbury’s is more inclined to online advertisements for reaching to prospective employees with required volume of talents. Unlike Tesco, it is believed by Sainsbury’s to recruit talented people for filling suitable positions for existing and talented employees worth a promotion. Even job shuffling is not uncommon among HR strategies of Sainsbury’s.

Tesco’s workplace satisfaction for employees, development of cooperation among employees are fragmented tactics of wide-ranging motivation process (Paillé et al, 2014). But Sainsbury’s is a bit different as the firm independently looks to ensure motivation in the first place and the efforts like regulating better compensation programs for talented performers of the firm is the most vital. It cannot be said that Sainsbury’s maintains austerity through its HRM strategies branching off into employee development, training and employee relations approach. Storey (2014) argued that recruitment process and training and development are some areas which cannot be compromised at cost of quality. Sainsbury’s talented workforce is always ready to perform their jobs set by management.

Tesco monitors the performance of employees through on-job training while Sainsbury’s is more keen to evaluate employees’ skills through task allocation and face to face discussion. It has been asserted by Tyson (2014), that discussion among seniors and subordinates if fails to deliver desirable outcomes then the development of employees and employee relation become difficult to get into expected shape. But (Reiche et al, 2016) said that when employees lack confidence and sense of attachment the measure like discussion and feedbacks exchange among top level and juniors staffs cause employees’ empowerment.  

Tesco’s bottom-up discussion option strengthens employee’s moral confidence and eagerness to work and this is unlike Sainsbury’s programs of a personal development plan to strengthen employees’ performance and loyalty towards the firm. Tesco’s evaluation of jobs of employees is based on direct monitoring of performance and satisfaction level among them. Sainsbury’s in contrast to this has job evaluation method on basis of job structure, pay and allowances for a particular job category followed by analysis of actual performance achieved from employees (Reiche et al, 2016). There are some similarities and contrasts in respect of HR strategies adopted by the two firms and these are shown below in the table:

Comparative HRM strategies

3.3 Recommendations

Human resource management is always challenging in the retail sector. Some recommendations in the field of HRM are given here for further development. As the frontline workforce of the company work in retail stores, their feedbacks are important for the company. Therefore the HR team needs to plan for a regular visit once or twice a week for making or modifying HR related strategies.HRM department of Tesco needs to focus on cross-training of employees and this could enable employees to assume important positions in absence of main employee responsible for performing a particular task (Schumacher et al, 2016).

The practice of diversity and innovation are great factors which elevate the overall performance of the workforce. Identification of talented employees for supporting diversity and innovation in the firm could be a better focus of HRM of Tesco. In this regard, the HR department of Tesco needs to have efficiency in competency mapping which keeps them better informed about employee’s performance standards and possibilities. Tesco’s HRM needs to look at whether the expectations of the firm and employees match with each other. The productivity of employees is not the direct responsibility of the HR department but manpower development needs to be on a continuous basis (Snell, Morris and Bohlander, 2015).   

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