A REPORT INTO HUMAN RESOURCE MANAGEMENT AT SAINSBURY'S

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A REPORT INTO HUMAN RESOURCE MANAGEMENT AT SAINSBURY’S

TUTOR GROUP: W110

HARROW COLLEGE

NOVEMBER 2003

BY KANAK PATEL

Contents Page

                                                                PAGE NO.

Introduction                                                                        1

Role and Responsibilities of HRM                                        2

Human Resource Planning                                                5

Recruitment and Selection                                                21

Training and Development                                                35

Motivation and Performance Management                                43        

Contribution of HRM to improve competitiveness                        56

Potential Conflicts between HRM activities                                58

Bibliography                                                                60

Introduction

This is a report into Human Resources Management (HRM) at Sainsbury’s PLC. The report will cover the following aspects of HRM:

  • Human Resource Planning
  • Recruitment and Selection
  • Training and Development
  • Performance Management

Sainsbury’s is a leading UK and US food retailer with interests in financial services and property. It has branches throughout the country selling a wide range of products. It has diversified into banking, selling electronics and financial service.

        Sainsbury’s operates a much centralised Human Resource policy in which all major decisions are set, by top management at head office with locally based personal managers carrying them out.

        The group’s objective is to meet its customer’s needs effectively and thereby provide shareholders with good, sustainable financial returns. Sainsbury’s aims to ensure all colleagues have opportunities to develop their abilities and are well rewarded for their contribution to the success of the business.

The Sainsbury’s supermarket that I am reporting on is located in South Harrow.

The founders' principles and values guide Sainsbury’s as strongly today as they did at the outset - to be the customer's first choice for food shopping by providing high-quality products, value for money, excellent service and attention to detail.

Sainsbury's Supermarkets employs over 145,000 people .Of these, 60% are part-time and 40% full-time. 62% of employees are women.

A large Sainsbury's Supermarket such as the one I am basing my report on offers over 23,000 products - 40% of these are Sainsbury's own brand. In addition to a wide range of quality food and grocery products, many stores offer bread baked on the premises, delicatessen, meat and fish counters, pharmacies, coffee shops, restaurants and petrol stations.

Role and Responsibilities of Human Resource Function

        Human Resource Management was previously known as Personnel Management. Sainsbury’s PLC like other major firms has renamed its personnel department to human resource department, and it is led by a Director of Human Resources. HRM is concerned with acquiring the Human Resources that are needed if the firm is to remain competitive and successful in the market place. The main purpose of Human Resource Management is to ensure the company has the correct quantity of labour with the right skills and the right amount of motivation. HRM ensures that the company is able to achieve success through people.

The Role and Responsibilities of the Human Resource department at Sainsbury’s involves the following:

  1. Human Resource Planning
  • Ensuring that Sainsbury’s has the right number and type of workers to achieve its objectives. Planning is important so that vacancies are filled as staff leave
  • Matching up the right type of employees to the needs of the business
  • Sainsbury’s will work out its labour requirements, its demand and make sure that an appropriate supply is planned

  1. Recruitment and Selection
  • Ensuring that the best candidate is chosen for the job as this will lead to company’s objectives being met as profits will increase
  • Getting the recruitment process right. Very important as the HRM is responsible for this. Money will be lost if the process is done wrong or badly.

  1. Training and Development
  • To equip employees with the skills required now and in the future. This will save money in the future as the employee will be ready to show and apply their skills.
  • To train individuals in the workplace for the required skills. This would lead to the individual feeling motivated to work.

  1. Performance Management
  • Motivating staff to ensure high performance for the firm. This would also enhance the output by the employees as they will be motivated.

At Sainsbury’s there are many key areas of work covered by Human Resource Management such as:

  • Human Resource Planning
  • Recruitment and Selection
  • Training
  • Employee Appraisal
  • Consultation
  • Collective Bargaining
  • Wage and Salary systems
  • Fringe Benefits
  • Disciplinary and Grievance procedures
  • Health and Safety issues
  • Employment Legislation
  • Welfare Role

  People add value to the organisation by:

  • Increasing productivity
  • Improving Quality
  • Innovating
  • Improving customer services

Sainsbury’s corporate objectives such as filling vacancies, for growth of business, changing roles, new technology all are responsibilities of HRM. Sainsbury’s need fully trained, (if not then will be trained by Sainsbury’s), reliable workers who also possess good interpersonal skills which meet corporate objectives. A friendly supermarket can easily increase sales, makes more profit and increase market share.

The Human Resource Management is a key essential for Sainsbury’s to be successful.

Sainsbury’s have many rival firms competing in the same market and therefore competitive advantage is vitally important. Sainsbury’s ensure that emphasis is put on key factors such as:

  • Attracting the right number of employees
  • Attracting the employees with the right skills and attitudes for the job
  • Developing the individual’s skills so that then they would be able to meet challenges, now or in the possible future
  • Being able to provide the employees with Health and Safety
  • Special care into the environment so that accidents would not be able to occur
  • Enabling all the employees to contribute equally
  • Ensuring that no employees would be discriminated against by other employees

Sainsbury’s ensure all these points are met in order for it to achieve its full potential and make the business a success. People are Sainsbury’s most important resource.  

Sainsbury's Supermarkets employs over 145,000 people (including Savacentre). Of these, 60% are part-time and 40% full-time. 62% of employees are women.

A large Sainsbury's Supermarket offers over 23,000 products - 40% of these are Sainsbury's own brand. In addition to a wide range of quality food and grocery products, many stores offer bread baked on the premises, delicatessen, meat and fish counters, pharmacies, coffee shops, restaurants and petrol stations.

“The role of HRM is fundamental in strengthening the organisation's capability, and maximising everyone's potential right across the business. It's an incredibly exciting time as the company's new strategies get into full flow."

This is a quote from the Sainsbury’s website.

The human resource management process at Sainsbury’s is shown below:

Human Resource Planning

HR Planning seeks to ensure the firm has the right number and type of workers for the firm to achieve its objectives. The action part of the plan seeks to balance labour with labour requirements. The main reasons for Human Resource Planning are:

  • It encourages employers to develop clear links between their business plans and their HR plans so that they can integrate the two more effectively.
  • Sainsbury’s can control staff costs and number employed far more effectively.
  • Employers can build up a skill profile for each of their employees.

Workforce Planning

Workforce planning entitles forecasting future human resource requirements and translating those requirements into actual needs in terms of numbers of employees. It helps Sainsbury’s to foresee change, identify trends and implement human resource policies.

Ineffective human resource forecasting can lead to:

  • Recruitment and selection problems which could mean appointing the wrong applicant
  • Inadequately trained employees would mean the employees would not be performing to the required standards
  • Morale/motivation problems- employees would be de-motivated to work
  • High levels of stress
  • High levels of labour turnover- Sainsbury’s would then have to analyse the labour market to recruit
  • High levels of absenteeism
  • Redundancies
  • High costs
  • Crisis management

Bad planning ultimately results in problems.  

Below is a diagram showing the steps involved at Sainsbury’s when making plans for the workforce:

Sainsbury’s might be looking for individuals with basic ability’s where the cost will be low, but if they are looking for a more advanced individual then they must ensure that they get the right person as it will cost to recruit this individual. Sainsbury’s look to recruit staff locally rather than nationally. The way in which Sainsbury’s aim to attract the best employee possible is by offering higher pay rates.

The main reasons why Sainsbury’s demand labour is because

  • Sainsbury’s need employees to achieve there objective. The objective is making a profit
  • To produce quality goods
  • When Sainsbury’s want to expand in the future, they need to recruit early because the demand for labour could be high and rivals may take advantage of that.

Supply and Demand

Demand

Sainsbury’s demand for labour will depend on the plans that Sainsbury’s have for the future.  Sainsbury’s demand for human resources must be estimated by analysing its future plans and by estimating the levels of activity within the business.

 

Sainsbury’s use 2 methods for forecasting demand. They are:

  1. Management estimates- Mangers at Sainsbury’s may be asked to forecast their staff requirements. They will do this on the basis of past, present and likely future requirements.
  2. Work study techniques- Work study specialists work out how long various jobs take, using available machinery and equipment.

Supply

Sainsbury’s must examine the numbers of people available to work, how long they can work for, their ability to do the required jobs, their productivity to work out the supply of labour available to work.

The supply side is made up of two sources

Internal Supply

Statistics and information need to be collected on employees already at Sainsbury’s. This will cover the following main areas:

  • The number of employees in particular job categories.
  • The skills available
  • Skills analysis
  • Performance results
  • Promotion potential
  • Age distribution and length of service

It is important for Sainsbury’s to be able to plan retirements within Sainsbury’s so that you keep a good balance between people who have been at Sainsbury’s for a long time and people who are bringing new ideas into the organisation.  

External Supply

External supply refers to:

  • Size of the labour force
  • Unemployment
  • Skills shortages
  • Opportunities for education and training
  • Competition
  • Geographical considerations

The External Labour Market

The external labour market for any particular organisation is made up of potential employees, locally, regionally or nationally, who have skills and experience required at a particular time.

Sainsbury’s are well aware of the labour market factors for Human Resource planning such as local employment trends, local skills shortage, competition for employees, availability of labour, population statistics, age distribution and many more. Sainsbury’s consider these factors when they are recruiting, as it may be quite hard to recruit depending on the results.

Resident Population and Age

Sainsbury’s will use information on changes in age distribution and population in South Harrow to anticipate any shortfalls in types of workers i.e. School leavers, older workers, women workers. Many retail businesses rely on school leavers to fill vacancies for employment and Sainsbury’s is no different. Sainsbury’s will have to consider how they can compete with similar organisations in attracting the school leavers and what they can offer to say women or older workers to encourage them to apply for jobs at their company.

Below is a table showing the age distribution in Harrow.

The resident population of Harrow was 206,814, of which 48 per cent were male and 52 percent were female.

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By looking at the stats in the table above, a problem that Sainsbury’s may face in the future is that of recruiting fresh and young employees. The age group 16-19 has only 5.1% in harrow. Sainsbury’s look to employ young individuals in this age group in the future.  A way that Sainsbury’s could amend this problem is by looking elsewhere in another area.

Economic Activity (% of people of working age)

Sainsbury’s uses information on unemployment rates to get a picture of how easy or difficult it will be to recruit. If employment rates are high then there will be plenty of available labour, however this labour may not have the skills Sainsbury’s requires. As a result it may have to try to recruit from other regions, this might mean having to offer travel allowances, more flexible hours. If employment is high and there is a shortage of available labour then the company will have to think of ways of attracting recruits i.e. higher wages, job perks, longer holidays etc. Sainsbury’s may even need to poach from rivals to recruit.

Below is a table showing the economic activity in Harrow. Numbers 1, 2 and 3 are economically active. Numbers 4-8 are not seeking work.

Students and Qualifications

Sainsbury’s will use information on education and training to predict skill shortages to prepare training strategies. They need to keep up to date with Government legislation and identify any government incentives that may reduce the costs of labour. Certain jobs demand specific qualifications where there is a shortage of recruits with these qualifications then there will be increased competition between companies to attract these recruits. Below is a table showing students and whether or not they had qualifications in Harrow.

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Sainsbury’s can use the below information to give everyone equal opportunity. Sainsbury’s can recruit some people from all the types of ethnic groups and different religions to create a multicultural environment within the business.  

     

Ethnic Group

Religion

Employment Up


Increase of 63,000 for 3 months to July 2003

Survey data for the three months ending in July show a rise in the working age employment rate, no change in the unemployment rate and a higher growth rate in average earnings. In August, the number of people claiming Jobseeker’s Allowance (the claimant count) decreased.

The labour market trend assessments this month show that the employment rate is increasing and the unemployment rate is levelling off. The claimant count trend is falling slightly. Growth in average earnings remains moderate.

The employment rate for people of working age was 74.6 per cent, up marginally on the previous quarter. The number of people in employment rose 63,000 over the previous three months to a record 27.93 million. The number of men in employment rose 60,000 to 15.08 million. The number of women in employment rose 3,000 to 12.85 million.

There was a rise of 91,000 full-time workers to 20.75 million, but a fall of 28,000 part-time workers to 7.18 million.

Workforce jobs for June 2003 were at a record 29.7 million, up 47,000 from March 2003 and up 203,000 from June 2002.

Total hours worked per week rose 8.5 million hours over the quarter to a record figure of 901.6 million hours.

All of this information about the stats has come from the internet. The website is called  
. I have used the census.

External labour market factors

As well as the continuous analysis of the internal staffing resources, HR planning must also be supported by monitoring the availability of labour from external resources.

Local external sources

Sainsbury’s know that local external sources have a big impact on the business. The local external sources are constantly changing and Sainsbury’s are keeping track of it constantly. Factors that need to be taken into account are:

  • Demographic trends, with particular emphasis on the overall size and age structure of the local working population. Sainsbury’s will assess these trends and stats to plan for the future
  • Developments in the local transport system that determine the effective catchment area for labour
  • Housing and the availability of different types of accommodation
  • Environmental developments, that influence the attractiveness of the area as a place in which to live
  • The local effect of any changes in the government’s regional and urban development policies
  • Unemployment rates, and the availability of workers with particular skills, qualifications and experience
  • The availability of  part-time and casual labour
  • Local competition for labour, and its impact on pay rates and fringe benefits
  • The quality of local education and training providers.

National external sources

National policies, demographic trends and developments can affect the ability of Sainsbury’s to recruit certain types of labour, and can have implications for salary levels and the conditions of employment. Therefore Sainsbury’s must take into account:

  • National demographic trends, particularly any implications for the growth of the working population
  • Economic trends which affect the demands for different types of labour.
  • Education and training trends
  • New legislation including government policies and European Union directives on wage and salary negotiations
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If people are badly managed at Sainsbury’s, it would lead to:

  • High absenteeism rates
  • High labour turnover
  • High accident rates
  • Low productivity
  • Low quality
  • Poor customer service

Sainsbury’s can use these to plan for the future in terms of training and recruitment and selection.

Forecasting Internal Employee Supply:

Sainsbury’s are a firm constantly expanding. New stores are being opened in different areas and therefore new workers will be needed. Before Sainsbury’s go out and start advertising for jobs, they first evaluate labour turnover, labour stability, sickness rates, absenteeism rates and productivity within the ...

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