Managing Human Resources in Marks & Spencer.

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REPORT TITLE: MANAGING HUMAN RESOURSES IN MARKS & SPENCERS

Terms of Reference

I will be producing a report on how Mark and Spencer manages human resources, the report I will carry out will be a full detailed reports looking at the process of the human resources is carried out by Marks and Spencer.

Procedure

I will carry out my research by using the Internet for information on Marks and Spencer

2 I will also be using the Heinemann AVCE Business book.

3 I will visit the Marks and Spencer stores in my local area to find out how they operate in the human resources function.

Introduction

This report has been written in order to show how successfully the company - 'Marks and Spencer' is in running its human resources department in order to meet its business objectives. The report has been divided into four parts to ensure a comprehensive coverage of Marks and Spencer has been researched and also to give the report a main structure of the human resources departments. Part 2 will be discussed in depth.

Part 1 = Planning

Part 2 = Recruitment & Selection

Part 3 = Training & Development

Part 4 = Performance Management

This unit provides an insight into how businesses recruit and manage their human resources. It shows that if businesses are to achieve their objectives, they must plan their human resource function so that they have the right number of employees with the appropriate qualifications and training to meet the needs of the business.

Successful human resource management requires that a business takes account of changes in the labour market and employment legislation to keep its employees motivated, to monitor their performance and to help them continuously develop through additional training.

.0

What are human resources?

Summary - Human Resource Management is a much broader term than just simply 'Personnel Management' as it encompasses the development of workers within a team that contributes towards the business's objectives. Accordingly, the Human Resources Management department incorporates the Personnel department functions and develops them. The role of HRM is to enable workers to contribute to their maximum efficiency towards the objectives of the business. In order to do that, a variety of functions are incorporated within the overall functions of Marks and Spencer Human Resources Manager. In this part we will discuss:

* Definitions

* The objectives of Human Resource Management

* Human Resource Management functions

Definition

'Human Resource Management concerns the human side of the management of enterprises and employees' relations with the firms...'

Source: Graham & Bennett 'Human Resource Management' (7th edition)

As workers become more empowered, it is argued, there is less need for the management of relationships. As each worker becomes more responsible for their own quality of output, then there is less left for the Personnel department to do.

This empowerment is not just the HRM showing his acquiescence to the needs of the workers as they struggle against the boredom of work. Rather it is the constant pressure to cut costs, improve quality and productivity. With a reduction in the need for supervision there are thus fewer needs for supervisors - and hence there will be a cut in wage costs.

With the reduction in middle managers there has been a shift in power, a disempowerment from the Human Resources professionals to the line managers. Policy related issues will go to directors, but the team leaders of autonomous work groups may take day-to-day decisions.

The objectives of Human Resource Management

. As with all departments, the overall role of the Human Resource Department is to contribute towards the company objectives.

2. 'The bottom line in Human Resource Management is profitability and financial performance'

Source: Fernie & Metcalfe: London School of Economics

3. 'To help a company achieve its business strategy by maximising the performance of its employees. Better management-employee relations are not necessarily a sign of success. The assumed validity of the notion of management-employee relations is indicative of the continued prevalence of command-control management style. Individuals empower themselves when they recognise the self-interest in the job they are performing. Individuals do not take a job just to further the business goals of the company - they take a job to further their personal GOALS. Only when the two coincide can a company hope to maximise the commitment of its people and thus facilitate the attainment of its business objectives'

Source: Tom Barry Managing Director of Blessing/White Performance Improvement, Windsor)

Responsibilities of the human resources functions

Human Resource Management functions

.1

Motivation

Not only must workers work as hard as possible, but they should also be happy in their work. Happiness often stems from security; without this security, ill health will result. According to a report by the Joseph Rowntree Foundation ('Job Insecurity and Work Intensification') in July 1999, workers' fears of losing their jobs are at their highest level since the Second World War, and the stress is taking its toll on their physical well being.

According to the study, two thirds of employees said they regularly worked overtime. 30% of full-time male employees claimed they worked more than 48 hours a week. The cause of the stress was staff cutbacks. The same amount of work being done by fewer people leads to extra stress.

The report found that those admitting to the greatest feelings of insecurity were five times more likely to be in poor health. Supportive relationships between managers and staff relieve the pressure, which will in turn lead to better health. The Human Resources function in this case would not just be to try and motivate the workers but also to encourage Directors and below to be supportive of their staff. Such support would include improved communication and greater transparency in management decisions.

There are two basic theories of motivation; content theories and process theories. Content theories focus on what actually motivates people; they study the needs that must be satisfied in order for the employee to be motivated.

The need is either satisfied by an extrinsic reward (e.g. pay) or an intrinsic reward (e.g. recognition and praise). The Classical (Fayol), the Scientific (Taylor), the Human Relations (Mayo), and the Neo-Human Relations (Maslow, Herzberg, McGregor) schools of management thought are all content theories.

Process theories, do not concern the needs which must be satisfied in order to achieve motivation, but instead they are concerned with the thought-processes that influence workers' behaviour. There are two such theories:

.2

Expectancy theory:

This states that workers will only act when they have a reasonable expectation that their work will lead to the desired outcome. If they believe that they possess the ability and skill to achieve the goal, then their level of effort will be great and they will be motivated.

Equity theory:

This states that each worker will wish to receive a remuneration package (equal to their pay plus fringe benefits) in return for his or her efforts. Each worker will only be motivated if their remuneration package is seen to be fair (or equitable) in relation to the remuneration packages received by the other workers for their efforts.

Money Motivates

Frederick Taylor wrote in 1911 that workers are motivated mainly by money. So bonuses or piecework should link workers' pay to performance and perhaps.

.2

Abraham Maslow created the following "Hierarchy of Needs"

Theory

One of the many interesting things Maslow noticed while he worked with monkeys early in his career was that some needs take precedence over others. For example, if you are hungry and thirsty, you will tend to try to take care of the thirst first. After all, you can do without food for weeks, but you can only do without water for a couple of days! Thirst is a "stronger" need than hunger.

Likewise, if you are very very thirsty, but someone has put a choke hold on you and you can't breathe, which is more important? The need to breathe, of course.

Fig 1.0

Maslow took this idea and created his now famous hierarchy of needs. Beyond the details of air, water, food, and sex, he laid out five broader layers: the physiological needs, the needs for safety and security, the needs for love and belonging, the needs for esteem, and the need to actualise the self, in that order. Maslow's idea was that workers satisfy their needs from the bottom up. So the first things that motivate them are food, water, shelter, etc. Next they want security of employment, safety in the workplace, and so on. When those needs have been satisfied, people want to satisfy their social needs, so working in a team, for example, can motivate them. Once these needs have been met, workers want praise and respect, perhaps status. The top level is about being able to reach your full potential and be creative. In Marks and Spencer the employees will have basic needs, safety needs, belonging needs.

.3

Frederick Hertzberg

He looked at things slightly differently. He said that some things did not improve motivation if they got better and better, and only discouraged workers if those things were poor. He called these things "Hygiene Factors". Other things that do motivate workers he called "Motivating Factors". Any good manager knows that happy, satisfied workers will generally perform better than those who don't feel as satisfied. However, managers have always had differing opinions about what it takes to satisfy workers.

During the 50's and 60's, a man named Fredrick Herzberg during his research; he found that certain factors tended to cause a worker to feel unsatisfied with his or her job. These factors seemed to directly relate to the employee's environment such as the physical surroundings, supervisors and even the company itself. He developed a theory based on this observation, naming it the "Hygiene Theory."

According to his theory, for a worker to be happy and therefore productive, these environmental factors must not cause discomfort. Although the elimination of the environmental problems may make a worker productive, it will not necessarily motivate him. The question remains, "How can managers motivate employees?" Many managers believe that motivating employees requires giving rewards. Herzberg, however, believed that the workers get motivated through feeling responsible for and connected to their work. In this case, the work itself is rewarding. Managers can help the employees connect to their work by giving them more authority over the job, as well as offering direct and individual feedback.

.4

Douglas McGregor's Theory X and Theory Y

Douglas McGregor's theory X is very much the same as Frederick Taylor's view of what motivates workers. His theory Y is much more like Maslow and Herzberg's views because it says that workers will be motivated by responsibility and by being allowed making decisions. Two conflicting theories regarding the human motivation to work put forward by the US psychologist Douglas McGregor (1906-64), which have relevance in human resource management. Theory X is based on the premise that people are inherently lazy, dislikes work, and will avoid it if they can. They prefer being directed to accepting responsibility; their only use for creativity is in getting round the rules of an organisation. Because they are motivated to work only by money, they require coercion and tight control to make them function adequately.

Theory Y, on the other hand, assumes that people wish to be interested in their work and, given the right conditions, will enjoy it. Motivated by the wish to achieve, and to have their achievements recognised, most people will work to the best of their capabilities, creativity, and ingenuity. They accept responsibility and the rules of the organisation they work for, imposing self-discipline on their work, given accepted targets.

The generally accepted view is that if management follow Theory Y they will achieve better operational performance.

.5

Training and education of the workforce

Training will increase the status of the workers as well as their self-esteem. Universities are now in competition as A-level passes continue to rise. With the competition for standards come also a variety of courses

.6

The Human Resource Management (H.R.M) Process In M&S

Human Resource Management is the management of the people within Marks and Spencer, by recruiting, training and retaining employees with the necessary skills and competencies to perform their jobs effectively. H.R.M. was often referred to as 'Personnel' in the past, and it covers all the following areas:

) Human Resource Planning (H.R.P).

2) Recruitment and selection of new employees.

3) Training and development.

4) Performance appraisal.

5) Remuneration packages.

6) Disciplinary procedures.

7) Grievance procedures.

8) Health and Safety issues.

9) Looking after the employees' welfare.

0) Dealing with the termination of contracts of employment.

The recruitment and selection process commences when the business realises that there is a vacancy in the organisational hierarchy, which needs to be filled.

A job description needs to be written this outlines the job title, as well as the tasks and the responsibilities that will be covered by the successful applicant. Once this is completed, then a job specification needs to be written, this goes beyond a description of the job, and it lists the physical and mental attributes that will be desirable or essential for the successful applicant (such as the level of intelligence, their disposition and their interests).

The H.R.M. department will then need to write an advertisement for the job and to place it in a variety of media (newspapers, job centres, job agencies, the internet, radio, and internal notice-boards), in order to get as many people as possible to apply for the post. Marks and Spencer also shoe their vacancies in the store.

The advertisement will include the hours of work, the pay and fringe benefits, the job title, the relevant experience and qualifications that are required, and a contact name and address.

It is likely that the job will be advertised within the business as well as through external media. The advantages of recruiting from within the existing workforce include the fact that a shorter training and induction period is necessary, as well as far less time and money being spent on the whole process.

The H.R.M. department will then need to send out application forms to, and request Curriculum Vitae (CVs) from, all those people who write to Marks and Spencer expressing a desire to apply for the job.

It is vitally important that the application form is tailored to the specific post that is being advertised, as well as asking questions that are relevant, legal, inoffensive and essential. Once these application forms have been completed and returned to the business (often with a CV and a covering letter) then the short-listing process will ensue, this involves analysing the CVs and the application forms and deciding which applicants appear to be most suitable for the post. Once this is done and then the H.R.M. department will contact the successful applicants and ask them to attend an interview.

The interview process is very time-consuming but is, nevertheless, an essential factor in getting the 'right' person for the 'right' job. A good interviewer will have studied the job description, the job specification and the job advertisement before interviewing the applicants, as well as studying their application forms, CVs and covering letters in order to know as much information as possible about the applicants before the interview commences.

A good interview needs to be well structured, uninterrupted, and conducted in a friendly manner, with the use of open-ended questions, which will give the applicants the chance to talk openly about themselves. The interviewer must listen carefully to the applicants' comments and make notes as necessary.

At the end of the interview, the applicants must be given the opportunity to ask questions about the job and about the business, and then the interviewer must inform the applicants when they will be notified of the decision.

It is likely that applicants for a job will be interviewed by a number of people. This can be in sequence (i.e. the applicant will have one interview quickly followed by another) or it can be simultaneous (i.e. the applicant will be interviewed by a panel of people). Whichever method of interviewing is chosen, the purpose remains the same, to select and appoint the 'best' applicant for the job.

It is possible that Marks and Spencer may choose to use a variety of tests to complement the interview process, in order to measure the applicants' intelligence, their performance in certain scenarios, and their personality traits.

Once a Marks and Spencer has selected the most suitable applicant for the available post (often involving much discussion between the different interviewers), then he/she will be appointed.

This will involve the new employee being given a Contract of Employment, which is a written statement covering the terms and the conditions of employment (e.g. date employment commences, job title, pay, hours of work, holiday and pension entitlements), as well as the process for disciplinary and grievance procedures.

Once a new employee has been appointed to Marks and Spencer, it is likely that they will receive induction training in order to help them settle into the new job. This induction training covers the basics of the new employee's job, as well as the background details and the history of Marks and Spencer (e.g. number of employees and the range of products).

However, training is not limited to the new employees of a business. Training courses are likely to be targeted at all employees in the business at various stages in their career (e.g. management training courses, training on how to use new machinery and technology).

There are many reasons for the extensive use of training across the workforce of a business:

) Training can improve employee productivity.

2) Training can create a multi-skilled, flexible workforce.

3) Training can increase the levels of job satisfaction and motivation of the employees.

4) Training employees increases the chances of their promotion.

Training can be classified as either 'on-the-job' or 'off-the-job'. 'On-the-job' training involves the employees receiving their training at the place of work (using such techniques as work-shadowing, apprenticeships, and mentoring). 'Off-the job' training involves the employees attending courses away from their workplace (e.g. at local colleges, conference centres and universities).

It is also imperative that all training courses that are attended by employees are evaluated in order to determine if the training course provides value for money for the business. Asking the employees to complete short questionnaires and provide feedback to the H.R.M. department often carries out this evaluation.

The final role of the H.R.M. department is to make the termination of the employees' contracts of employment as smooth and efficient as possible. There are a number of different ways in which employees can have their contracts of employment terminated, including:

) Redundancy. It will be necessary at certain times (e.g. during a recession, or a decline in the industry) for a business to 'downsize' its workforce (make a certain proportion of them redundant).

This process could be done in several ways, voluntary redundancy (where workers opt for a redundancy package), compulsory redundancy, 'last-in-first-out' (where the most recent appointments are the first to be made redundant), or retention by merit (where the least effective employees are made redundant).

2) Retirement. At the end of their working-life, employees will wish to retire and stop offering their services to the business. In return, they will often receive a lump-sum payout, as well as both their state pension and their private pension.

3) Transfers and Resignation. This occurs when an employee leaves Marks and Spencer and transfers their services to another business (the employee may apply for a more senior job at another business).

4) Dismissal. This is where the employee is deemed to have broken their contract of employment, and told that their services are no longer required by the business. Fair dismissal can be on the grounds of sexual harassment, racial harassment, bad timekeeping, sleeping on the job, and destruction of business property.

However, if an employee feels that they have been unfairly dismissed (e.g. on the grounds of pregnancy, ethnic background, or union membership), they can apply to have the case heard at an industrial tribunal.

This is a small court that deals with claims of unfair dismissal and discrimination from employees against their (former) employers. If the employee is successful in claiming that they have been unfairly dismissed, then they are eligible for re-instatement in their previous job, as well as a financial award (to cover loss of earnings, and pain and suffering).

In all areas of the activities of Marks and Spencer, but especially it seems within Human Resource Management, the business must ensure that it abides by every piece of legislation, regardless of the stakeholder group which the legislation protects (e.g. employees and customers). The main pieces of legislation affecting the successful operations of the Human Resource Management department are:

) The Employment Relations Bill, 1999 (stating that employees who have been in employment with the same business for a period of one year have the right not to be unfairly dismissed).

2) The Employment Rights Act, 1996 (covering unfair dismissal, redundancy and maternity).

3) The Public Interest Disclosure Act, 1998 (covering employees who disclose confidential information).

4) The Health & Safety at Work Act, 1974 (covering working conditions and the provision of safety equipment and hygiene).

5) The National Minimum Wage Act, 1999 (making it illegal for employers to pay less than £3.60 per hour to its full-time staff who are aged over 21).

6) The Equal Pay Act, 1970 (stating that pay and working conditions must be equal for employees of the opposite sex who are performing the same work).

7) The Sex Discrimination Act, 1975 (stating that it is illegal to discriminate against an employee or an applicant for a job, on the grounds of their sex or their marital status).

8) The Race Relations Act, 1976 (stating that it is illegal for an employer to discriminate against an employee or an applicant for a job, on the grounds of their ethnic background).

9) The Disability Discrimination Act, 1995 (stating that it is illegal for a business with 20 or more employees to discriminate against an employee, or an applicant for a job, on the grounds of their disability).

1.7

Human Resource Planning (H.R.P)

Marks and Spencer have to plan carefully to ensure they have the right number of suitable employees for their needs. To do this they need a good understanding of the labour market in the areas where the company's branches operate. Marks and Spencer consider the effects of the following labour market factors for their human resources planning:

* Local employment trends

* Local skills shortages

* Competition for employees

* Availability of labour.

Human resources planning also involves looking at how labour is organised within Marks and Spencer. Marks and Spencer take account of a range of factors when making decisions about their internal staffing. The factors include:

* Labour turnover (stability index wastage rate)

* Sickness and accident rates

* Age, skills and training

* Succession.

On the next page shows a diagram that indicates the various stages in the Human Resource Planning process. The top-left side of the diagram is concerned with an analysis of the likely future supply of the right sorts of people, while the top right-hand side looks at the expected future demand for the right sorts of people. The human resources plan is concerned with ways of matching up these two sides. Firstly Marks and Spencer will examine the demand side before going onto look at the supply conditions.

Demand side

Marks and Spencer' demand for labour will depend on the plans the company has for the future, in particular the big plans, what many businesses refer to as 'strategic plans'. For example, a company may decide to increase its market share quickly and to do this it must review its competition. It may find that to be as good if not better than its competitors it could open a great deal more branches around the UK. This expansion would be the company's strategic plan. In order to support this expansion the company would need to recruit many more employees.

Forecasting the demand for human resources

Boots's demand for human resources must be estimated by analysing its future plans and by estimating the levels of activity within the business.

There are two main ways of forecasting demand:

* Management estimates

* Work study techniques

Management estimates

Managers of any business may be asked to forecast their staff requirements. They will do this on the basis of past, present and likely future requirements.

Work-study techniques

Over the years much work has gone into work-study. Work-study specialists work out how long various jobs take using available machinery and equipment. Provided they know what output/sales are likely to be, they can calculate the numbers of employees required and the hours they will need to work.

Supply side

If Marks and Spencer is to work out the supply of labour available the company must examine the numbers of people available to work how long they can work for, their ability to do the required jobs, their productivity (output per head) and other factors.

Human Resource Planning (H.R.P) is the process of forecasting the workforce requirements of the business for future years.

It looks at how many employees that Marks and Spencer will require in the future, as well as the type of employee that will be required (e.g. graduate trainees, skilled-manual and supervisors). H.R.P. also ensures that the 'right' employee is in the 'right' job, to ensure maximum efficiency and effectiveness of the workforce.

Clearly the process of H.R.P. requires that the business make estimates of the number of workers that it believes it will require at all levels in the business in the future. This can be done in a number of ways:

) Using past data (e.g. if the workforce has grown at 4% per year over the past 3 years, this trend may well continue).

2) Analysing the expected levels of customer demand and sales (e.g. more employees will be required if the number of customer orders is estimated to rise significantly).

3) Estimating the level of labour turnover. For example, if the number of employees that are expected to leave the business next year is 50 (due to retirement or transfers), then the business will have to recruit many new employees to replace those that are leaving.

4) The views of the management (the management are often in the best position to estimate the number of new employees that will be required in their department or division).

5) Expected changes in working practices. For example, if a manufacturing business is wishing to change its production technique from labour-intensive to capital-intensive, then it is not likely to require many new employees in the future.

It is possible that a business may decide to meet any requirements for employees at the supervisory and management levels from within the existing workforce. Promoting those employees who have already demonstrated their potential and effectiveness in their current posts can do this.

These employees have the advantage of already knowing about the systems and the routines of the business, but they would still require the relevant training and development in order to prepare them for their new, more senior positions.

Alternatively, Marks and Spencer may decide to fill these (and more junior) positions from outside the business.
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There are a number of factors, however, that will affect the availability of external labour for a business:

) The rate of unemployment in the area.

2) The extent of the infrastructure in the area (e.g. price and availability of housing or availability of public transport).

3) Government incentives and subsidies (paying the training costs for the business).

4) The availability of workers with the necessary skills and qualifications.

5) The number of competitors in the area.

However, there are a number of problems associated with Human Resource Planning, including:

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