Range of organisational stakeholders
Discuss About The Relations Between Different HRM Practices?
Best buy is a leading American company in providing technology products, services and technology. Now it’s merchandise is expanded into gadgets such as DVDs, video games, software and household appliances such as hair dryer, washing machine and refrigerator. The head quarter of the company is located in USA. It is the largest retailer of U.S. consumer electronics retail industry. Best Buy gained importance from it’s first music store in 1966. The annual sales of company have reached to 40 billion dollars in 2012 and it continuously keeps on increasing as long as people are relied on technology. The company is seeking for proficient human resource management, one of which is ROWE (Results Only work Environment). In this system, employees are not restricted to work in formal working hours. They can complete tasks by their own anywhere. They do not have need to go out for work. To develop effective plans, SHRM (Strategic Human Resource Management) advice is given to HR managers to analyse interest of organisational stakeholders and environmental factors that would impact Best Buy (Rauch & Hatak, 2016).
Stakeholders are persons who have interest in company. They are affected by the performance of company. The stakeholders of Best buy are government, employees, customers and shareholders. The government is performing well due to the large contribution made by company in the form of funds. The part of the profits of company is deducted in the form of various taxes by government. The smooth functioning of company leads to the good performance of government (Banfield, Kay & Royles, 2018). The customers heavily rely on the performance of company. It harms interest of customers if the performance of company goes wrong. Best Buy has a wide global network with great number of suppliers and creditors. These parties will face difficulties if the company runs into trouble. The internal stakeholders of company are employees and stakeholders. The bonus and incentives depend on the productivity of employees. The factors related to the lives of employees are controlled by managers. The shareholder who influences by financial performance of company puts money with the aim of making profit (Kontoghiorghes, 2016). They lose the amount of capital when results do not live up to the amount of expectation. Sometimes they even have to sacrifice own money to pay liabilities of company.
There are no hidden economic conditions in U.S. and most of the operations of Best Buy are in U.S. only. The company is affected by the economic slowdown and is facing challenges related to consumers at various points of market. The fatal crisis happened four years ago resulted in stable growth not speedy. The global demand for the products of Best Buy has been increased by 3.1% in 2015 and 3.4% in 2016. There is opportunity for people to invest and generate profits on national and international scale. The persons who have larger budget shows interest in buying convenience goods, luxury goods and commodities which they only like and do not actually need it. According to a survey conducted in California, Circuit City is one of the main competitors of Best Buy. 60% customers revealed that they came to buy electronic goods that they did not use actually. The customers who have maintained better living standards have benefited the company in the past years (Storey, 2014).
Environmental factors influencing Best Buy
The company faces change because of the gradual growth of market. It lowers price for energy and commodities. If the company were producer of electronic goods, it could take advantage of gradual growth with lower cost. It leads to lower price and helps in attaining competitive strength in market (Jorgenson, Gollop & Fraumeni, 2016). Best Buy is the biggest retailer in U.S. and lower prices of products can put burden on the profits of company.
The social factors discusses about value, belief and lifestyle of persons. Best Buy uses customer centricity model to conduct activities of it’s business. It helps to understand customer needs and behaviors. Now a days people are becoming more dependent on technology and out of which big machines like cars, televisions, dish washers and small machines like smartphones and laptops. The travellers can be hardly seen to read newspapers instead they stick to the phones and surfs websites and social networks on the subways. Children are more exposed to online material and uses electronic equipment at an early age. The specialised products of company receive highest attention from old and new customers. The company need to be sure about demand and focus on exploiting it’s resources in production (Armstrong & Taylor, 2014).
The consumers are showing awareness on spending money whether it’s truly spent or not. It is because some people do not stop when they have already purchased a product. People tend to grow favour for brands that funds for charities and social events. Even if the customers do not go to store to buy anything of that brand. If the companies generating huge amount of profits do anything to increase number of customers and pay no notice to society. They may end up being criticised and rejected. For instance, Vedan factories illegally dumped wastage in Vietnam in the year 2005. The housewives immediately shifted to Ajinomotto which has a better clean background.
Technology helps in assisting performance of Best Buy. It helped company to increase number of orders by 35% in 2011. It was made possible only after internet began to work, as the company received increased number of orders through internet. Technology made promotion and marketing easier for Best Buy. The whole process from receiving order to delivering products is done by computer (Stone, Deadrick, Lukaszewski & Johnson, 2015). The company can put it’s database into a locked account online. It can save cost of delivering renting warehouse. The customers can express their opinions by the online feedback system available by Best Buy. The company receives hundreds of feedbacks without conducting any interview or questionnaires.
BestBuy.com is the sixth largest ecommerce website of U.S.SWOT analysis of Best Buy shows how it survives with it’s competitors like Circuit City and Radio Shack.
Strength
Best Buy has good reputation which makes customer buy electronic goods in U.S.
The company has proved ability to maintain customer loyalty.
It has strong marketing expertise in the electronics sector.
The company has good relationship with popular brands like Apple. It became the second store in U.S to sell Apple watches after Apple store.
SWOT Analysis
There is growing market in U.S economy for consumer electronic goods such as smart phones and video games.
Weakness
Best Buy keeps limited profit margin that is 1.92%.
It depends heavily on supplier credit. A large percentage of products in the company are not paid immediately. The manufacturers get the cash only when the goods are sold. If the products does not sell than the company has to pay after a specific period of time.
The company has higher operating expenses than the online retailers in the form of rent, taxes, utilities and employee salaries which are supposed to meet each month.
The company depends more on the sale of luxury items such as video games. The demand of such items can easily fall when the changes occur in economy.
Best Buy can generate attention of media by releasing new companies such as Apple, Google and Samsung. The companies can freely do publicity of it’s products on Best Buy.
There is growing market for electronic products such as smart phones and video games.
The growing popularity of ecommerce and disappearance of competitors like Circuit City and Radio Shack has made Best Buy major consumer electronic retailer.
The growing popularity of Black Friday sale creates publicity and increases interest of consumers in electronic products.
Threats
Highest discount offered by online retailers creates threat for the company such as Amazon.com and eBay.
Aggressive discounts offered by large retailers such as Walmart and Target on electronic goods. These retailers are cutting price of company.
Youngsters prefer to shop online than to visit stores as it is believed that the online products are cheaper.
Declining loyalty of customers is threat for the company as customers like to shop around and visit number of stores to make a final decision.
Changes occurring in technology make some products obsolete such as tablets and smartphones has replaced personal computer and laptops.
SHRM (Strategic Human Resource Management) includes organisational performance and practices to manage labour efficiently. Such practices involve recruitment and retention. It focuses on the methods to retain talents by incentives and rewards. SHRM theories include two models known as Guest model and Compensation and rewards model.
Guest model was introduced by David Guest. It provides six aspects to readers to keep in mind while analysing human resource strategies. These aspects are strategy, practice, human resource outcomes, behaviour outcomes, performance outcomes and financial outcomes. In the Compensation and Reward model remains same in past as today. The rewards are considered important motivation to employees. These are equally important tool for employers for an efficient management (Knies, Boselie, Gould-Williams & Vandenabeele, 2015).
The researches have different ways to define characteristics and processes of SHRM. It is a human resource system works to create and maintain reliability within company. It puts more stress on the value of group work than the individual value of each employee (Albrecht, Bakker, Gruman, Macey & Saks, 2015). The strength, weakness, opportunities and threats are listed before creating human resource strategy. The main purpose of strategic management is to generate strong competitive advantage. For this, the activities of human resource manager are focused to maximise strengths and minimise weakness (Andresen, 2015).
Selection methods ensuring most appropriate candidatesIt is never missing part of recruitment process. To judge performance of a candidate an employer can directly raise questions in an interview. A person cannot hide true personality by facing and sitting in front of human resource manager and staff. It is the ideal situation for interviewers to judge true knowledge of candidates by their way of dressing and talking. The commitment and professionalism of candidates cannot be judged in tests (Perlow & Kelly, 2014).
Candidates who are seeking to apply in high profile enterprises such as Microsoft and Google can download the questions which are often asked from internet. Interviews have become irreplaceable in the recruitment process (Sparrow, Brewster & Chung, 2016). .
Interviews are useful in connecting parties through direct talk. It also provides an ideal environment which helps to improve image of the applicant. However the working efficiency of a candidate can only be judged by their behaviour in certain working situations and interview lacks it.
According to this method the candidates are put in rapid situation which reflects real one in reality. A person’s problem solving skill can only be represented only when he is put in a realistic problem. The judges will also have consistent factor to consider before taking any decision (Cascio, 2018).
The employers make use of specialised tests since knowledge and moralities are considered requisite for any employee to work in the department he chooses. It is realised that knowledge is not everything in good working performance (Gonzalez-Mulé, Mount & Oh, 2014). For instance, Bill Gates dropped Harvard to pursue his dream of generating software for the computer. The software which every household can have it’s own in near future. He did not obtain much specialised knowledge as other students. All graduates are not richer and more successful than Bill Gates at present.
There are so many methods which are formulated and come under the form of tests but questionnaire are considered more diversified and it can judge general abilities of candidates. The GMA tests the mental ability of candidates which is related to every kind of tasks in every kind of industry. The test can be taken within half an hour and consist of familiar questions. The results depend on specified job and can be explained in many ways (Kluemper, McLarty, Bishop & Sen, 2015).
The company has successfully applied flexible working hours approach and has received positive response in attitude and productivity of employees. The employees feel comfortable and stress-free when they are not bound to perform duty of 8 working hours. They can choose to work whenever they feel like or has encouragement to do job as long as they can meet goal (Sekaran & Bougie, 2016).
For instance after applying ROWE (Results Only Work Environment) in Netflix employees do not count time spent in office as proxy for productivity. The employees are assigned proper time and deadline in which they have to achieve goals. They are given freedom to attain goals in a way found suitable by them. It makes vacation policy irrelevant in an organisation.
The employees prefer to shift to the jobs from which they can learn and develop multiple skills than the usual easy jobs. Other than the remuneration the employers should provide such working environment to employees in which they can ask questions freely and can receive the satisfactory response (Hill, Jones & Schilling, 2014).
For instance, the employees at Facebook shift to another department after gaining experience in a certain field. They used to attain new knowledge and never get bored from their jobs. Google is also well-known for deducting working hours to provide training session because the company considers teaching to employees is better and profitable investment in future (Marchington, Wilkinson, Donnelly & Kynighou, 2016).
There are employees who work passionately irrespective of the amount they take back. It is unquestionable that salary and benefits at work are sources of potent motivation to employees. So, employees devote their health and time to work hard for their employees to have a better life. Money is the tool that can help employees to complete their wishes (Shields, et. al. 2015).
Some companies put emphasis on financial rewards than motivations. It causes employees to create unfair plan to get as much as money possible. For instance, in 2010, a factory of a shoes brand NYK in Ohio decided to practice a bonus scheme on the basis of production volume as NYK was not able to meet demand at that time. At the end of same month, the productions of shoes get doubled and the employees got substantial rewards. But only a third of those volumes were qualified to sell in market as the employees rushed to reach target without showing concern for quality. Hence, an appropriate reward system should be made financially and non-financially based on the need of employees (Bratton & Gold, 2017).
The business results of Best Buy have been amazing. ROWE is good for Best Buy because the persons following ROWE feels every day like Saturday.
The employees can have control on every single day.
There is no judgement on the time spend by employees. It reduces the workload of HR manager.
HR manager do not have need to keep track of attendance of employees.
The company do not have need to prepare work schedules.
The employees do not have need to take permission for how and where to work. They can do work when and where they want.
Conclusion
The reputation of Best Buy brand reminds of how human resource should be managed at organisations. Despite having busy schedule the employees of Best Buy focus on their jobs with positive attitude. It is the result after applying ROWE that employees can freely choose when and where to work and how to complete task before deadline. However the company need to orient it’s employees in training process because they hardly spend time in office and lacks communication with staff and it may lead to differences and unfamiliarity. The company can follow steps of technology companies like Google, Apple and Google. These companies highlight the improvement of employees.
References
Albrecht, S. L., Bakker, A. B., Gruman, J. A., Macey, W. H., & Saks, A. M. (2015). Employee engagement, human resource management practices and competitive advantage: An integrated approach. Journal of Organizational Effectiveness: People and Performance, 2(1), 7-35.
Andresen, M. (2015). Assessing the added Value of human resource management practices. In Human Resource Management Practices (pp. 1-13). Springer, Cham.
Armstrong, M., & Taylor, S. (2014). Armstrong’s handbook of human resource management practice. Kogan Page Publishers.
Banfield, P., Kay, R., & Royles, D. (2018). Introduction to human resource management. Oxford University Press.
Bratton, J., & Gold, J. (2017). Human resource management: theory and practice. Palgrave.
Cascio, W. (2018). Managing human resources. McGraw-Hill Education.
Gonzalez-Mulé, E., Mount, M. K., & Oh, I. S. (2014). A meta-analysis of the relationship between general mental ability and nontask performance. Journal of Applied Psychology, 99(6), 1222.
Hill, C. W., Jones, G. R., & Schilling, M. A. (2014). Strategic management: theory: an integrated approach. Cengage Learning.
Jorgenson, D., Gollop, F. M., & Fraumeni, B. (2016). Productivity and US economic growth (Vol. 169). Elsevier.
Kluemper, D. H., McLarty, B. D., Bishop, T. R., & Sen, A. (2015). Interviewee selection test and evaluator assessments of general mental ability, emotional intelligence and extraversion: Relationships with structured behavioral and situational interview performance. Journal of Business and Psychology, 30(3), 543-563.
Knies, E., Boselie, P., Gould-Williams, J., & Vandenabeele, W. (2015). Special issue of International Journal of Human Resource Management: Strategic human resource management and public sector performance.
Kontoghiorghes, C. (2016). Linking high performance organizational culture and talent management: satisfaction/motivation and organizational commitment as mediators. The International Journal of Human Resource Management, 27(16), 1833-1853.
Marchington, M., Wilkinson, A., Donnelly, R., & Kynighou, A. (2016). Human resource management at work. Kogan Page Publishers.
Perlow, L. A., & Kelly, E. L. (2014). Toward a model of work redesign for better work and better life. Work and Occupations, 41(1), 111-134.
Rauch, A., & Hatak, I. (2016). Human Resource Management in Small and Medium Sized Firms: A Meta-Analysis of the Relationships between Different HRM Practices and Firm Performance. Journal of Business Venturing, 31(5), 485-504.
Sekaran, U., & Bougie, R. (2016). Research methods for business: A skill building approach. John Wiley & Sons.
Shields, J., Brown, M., Kaine, S., Dolle-Samuel, C., North-Samardzic, A., McLean, P., … & Plimmer, G. (2015). Managing Employee Performance & Reward: Concepts, Practices, Strategies. Cambridge University Press.
Sparrow, P., Brewster, C., & Chung, C. (2016). Globalizing human resource management. Routledge.
Stone, D. L., Deadrick, D. L., Lukaszewski, K. M., & Johnson, R. (2015). The influence of technology on the future of human resource management. Human Resource Management Review, 25(2), 216-231.
Storey, J. (2014). New Perspectives on Human Resource Management (Routledge Revivals). Routledge.
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