- Already many manufacture and outsourcers are from Asian and European countries which enable them to manage the diversity of labour force across the globe.
- Secondly, H&M providing mass customisation to customers which equally benefit for the company as well as consumers such as it enable the more closer relation with customer, reduced waste of material, production of optimum quality goods, higher labour flexibility, improved production process, lower overhead cost, integrating innovation and production & higher sales turnover (Okonkwo 2007).
- Shared responsibility strategy also helps to combat the global economy shift in the way that it ensures the usability of resources in more efficient manner and trying to reduce the wastage. In short, corporate social responsibility (CSR) unit of H&M look after H&M conscious actions including strengthen communities which transcend the equality bound among various unit across the globe. This act like a signifier when there is some shift in the economy of a country take place, it probe the shift of responsibilities towards other part of the company which located apart from current.
STRATEGY OF H&M AND SHRM:
The long term strategy of H&M is to make fashion available to everyone , with 10-15% increase in the number of store every year (AR1 2009). Three key aspects which act as a pillar for achieving this long term strategy is price, quality and design for H&M. In H&M, strategic HRM is used as a tool for obtaining and strengthen these pillars. For example, Quality practices among the employees are welcomed and appreciated by a different set of reward practices in an organisational context such as job rotation and job satisfaction used as key parameters.
Performance Management in H&M
Performance is the main function of all human resource components. The best suited people are selected to perform the specific task as it is mentioned in H&M annual report (Interview by HR head) (AR1 2010). Then motivating the employees to work hard and then rewarding them for their performance. Reward, appraisal and development in human resource system is based on the concept of ‘corporate culture’ so as to sustain the values of the company and to support the system (Bratton & Gold 2007). The below figure explains this concept, which incorporate various components of SHRM with the central theme of performance.
Figure 01: Tools of Strategic HR
In a nut shell, performance is the corner brick for all other HR functions to regularise the over all organisational outcome.
H&M AND CROSS CULTURAL MANAGEMENT:
As H&M is multi national organisation which have strong roots in Sweden, there is utmost requirement by company’s HR to manage the cross culture (as H&M currently operating in more than 38 markets across the globe). Some cultures have high power distance while other is low power distance (Hofstede & Bond 1984). Another significant culture dimension is the context of communication which may high and low. (E. T. Hall & M. R. Hall 1990), the difference between them is the degree of importance attached to the context of any message. H&M successfully manage this cultural difference by using SHRM tools such as commitment and responsibility. According to head of HR, it is ‘H&M sprit’.
R&S IN H&M:
Recruitment and selection are the initial inputs of performance in any organisation. H&M promotes the internal recruitment wherever possible by job rotation, promotion etc which motivate employees to perform well. This also serve as fulfilment to recruitment advertisement which claims there are possibilities for working abroad, furthering education and learning new things. H&M recruit locally when their new stores in operation.
According to HR head of H&M, “internal recruitment and job rotation enable the company to grow quickly” (AR1 2008). Here, from statement above it is quite obvious that the company is focusing on internal marketing more rigorously as compare to rely on outsourcing in case of its designing unit. Where as production are totally outsource which is known as ‘internalisation of sourcing’, one of the various form of retail internationalisation (Bruce et al. 2004)
REWARD MANAGEMENT IN H&M:
Though the Employee stock ownership plan (ESOP) are not provided in H&M, but it successfully manage the total reward framework including intrinsic and extrinsic rewards. The main relational reward is job satisfaction in H&M which have potential influence in organisation.
Reward management practices in H&M also linking people with strategic business needs. Another compelling relation is with labour market and in the form of employee relation and voice. H&M has close relation with trade unions. H&M follows the main objectives of total reward management which are recruitment and retention of employees, motivation to employees, providing financial strength, self-efficacy which ultimately support the overall organisational strategy (Armstrong 2006).
OVERALL ANALYSIS OF STRATEGIC HR IN H&M:
H&M focuses on experiential self-directed learning which as result created self-managed teams and individuals which H&M claims as entrepreneur (AR1 2010) though they are shop managers or other line manager even. The main themes, which literature pointed out for enhancing the process of learning with in the organisation, may include knowledge diffusion, knowledge capturing and accumulation: are catches the significant importance while HR strategies are being an exercise within organisation. (Blacker 1995) pointed out the five different types of knowledge repositories which helps an organisation to be a learning organisation it includes embrained, embodied, encultured, embedded and encoded knowledge which encompasses the blend of tacit and explicit knowledge altogether. Among these types, embrained and embodied knowledge individually situated explicit and tacit form respectively which enables the individual to participate in overall organisational learning, if knowledge repository properly embraces with enough motivation.
Constructive engagement and member solidarity are two main components of (Jacky et al. 2006) social learning theory which engage the employees for active participation (Orlikowski 2002) who recognise this as competence. Furthermore, open experience sharing is another key component of any organisational learning as well as constructive engagement where members exchanges their ideas, share their tacit knowledge (Wenger 1998). Whereas, the most significant part of this social theory of motivation is member solidarity which creates the sense of mutual trust and accountability enhance motivating individuals with in the organisational context to share their embodied and embrained knowledge with each other as in the case of H&M.
(Crossan et al. 1999) suggested the 4 I framework for a learning organisation (LO) which includes intuition, interpreting, integrating, and institutionalising as key methods for LO at individual, group and organisation level. The application of 4I model is visible in the H&M i.e. global learning for an organisation with in such cross cultural environment can only be possible while these factors (4 I) are implemented and synchronise, for example, Shop level manager act as entrepreneur itself rather than the employee which initiated the process of employee empowerment which was the first step towards self-managed teams. This process required a high level of involvement, since it worked in team fashion in which team leader was rotated every three months in the segmented job rotation as describe in the case study. Without using individual correct intuitive and interpretation power, one cannot execute the role of team leader and after that integration is done by the manager which called their selves as facilitators in the context of employee empowerment, this ultimately institutionalise and practice the self-managed teams at the end. Furthermore, this enable organisation to practice the shared vision, personal mastery, systematic thinking, and managing diversity in organisation (P. Senge 1994; PM Senge et al. 1994), which overall enhance the employee motivation. For example, in H&M, the job satisfaction used as the key motivator which leads the process of ownerships to self-managed teams reflecting its true application.
Further from case study, another factor which contributes to the high level of employee involvement and learning in H&M is employees’ self-efficacy (Porter et al. 2003). Self-efficacy believes that one can executes certain task or set of tasks in to achieve the goal, this can be also witnessed from career website and H&M official annual report 2010 that H&M can only grow if individual rendering their services for organisation will grow and this can be only possible if and only if there is self-efficacy present because H&M also claims than they won’t make a career plans for individuals but will provide them only tools to groom their self. As self-efficacy is the integral part of social cognitive theory which acknowledges that employees action depend on both(intrinsic and extrinsic) motivation, therefore employees act on their self-efficacy believe that how well they can execute the specific behaviour for a successful attempt towards goals. In case of H&M, manager used employees’ self-efficacy content to align their culture specific HR practices which contributed in overall organisational culture as well as employee behaviour. This can also supported by literature, (DeVoe & Lyengar 2004) concluded that “ managers supposed their employees as being more intrinsically than extrinsically motivated, which is significantly correlated with performance appraisal and involvement in organisational processes”.
Furthermore, this can be elaborate in the context of expectancy theory of motivation. Victor Vroom (1964), who firstly put forward an expectancy model, indicated the expectancy is the factor of force or extent of motivation which individual may perceived in organisation setup along with valence or anticipated satisfaction. In Accordance to his theory, H&M managers also worked in a similar way to enhance the employees involvement in organisation learning and overall performance, Firstly they created the relation of every employees with colleagues (as part of extended family), this act as first level of valence (motivator) which probe the overall cooperation in highly task oriented culture resulting the successful self-managed work teams.
For the learning organisation, it is necessary to become accustomed with every level of decision making by every employee. To deal with this, employee empowerment is initiated in step by step fashion. Each step outcome (tangible for example productivity and intangible for example performance and increased involvement) used as input to next stage. This can be view as motivating factor for encouraging the overall learning. (Porter & Lawler 1967) motivation model for management is the extended and more complete version of Vroom(1964) works which suggested that the amount of effort generated may depends upon reward’s value, required amount of effort, and probability of receiving the reward. In the light of this model, above efforts of achieving self-managed teams were organised is such a way that each steps outcome is associated with tangible and intangible set of rewards which motivate employees to put all their efforts, skills, ability and personality for achieving the higher level of performance.
H&M AND FAST FASHION:
Fast fashion is the term that is used to represent the various strategies that fashion companies use in order to respond commercially to the latest fashion trends. In the past, the fashion cycle was split into two principal phases: Spring/Summer and Autumn/Winter. The development cycle from when a product was designed to when it was available for sale in the store was typically upwards of 6 months in duration (Bruce et al. 2004). However, the young fashion market has been changing drastically. The primary sign of their influence has been the shrinking of the design-to-retail cycle to as little as 4 weeks. While in the past, the leading fashion trends generated by the best fashion designers was not available to the mass market until the following season, firms such as H&M, pride themselves.
H&M AND ZARA: (COMPETITOR ANALYSIS)
H&M and ZARA are two business extremes in clothing and fashion industry. H&M business model primarily focuses on outsourcing whereas the ZARA’s business model focuses on in-house production. There are several advantages of outsourcing H&M may take over ZARA such as cost efficiencies, Improve focus on core business, access to world class capabilities etc (Gorranson et al. 2007). Whereas, ZARA ‘s advantage is a long vertical integration. On the basis of different business model following tables demonstrate their similarities and differentiate values in terms of low or high for example ‘need to overcome the market imperfection’ is LOW for H&M because of its outsourcing which leads H&M to select the best market players where as for ZARA it is HIGH, since ZARA concentrates its internal market by controlling almost every step of production.
Table 01: Chart of Characteristic (Gorranson et al. 2007)
CONCLUSION:
Overall study shows that H&M successfully managing the current shift in the global economy by utilising strategic HR’s tools to keep employees’ loyalty and commitment. Their main motive is to achieve the organisational goal via successful motivational practices among employees such as job rotation and job satisfaction are the essential tools of motivation. Furthermore, for the upcoming years, there CSR department is align with each department and region to work in close loop for ‘H&M spirit’ and ‘H&M conscious’ goals as stated in annual reports (AR1 2010). As compare to other competitors, H&M are more sensitive to the environment because of their outsourcing strategy in production; this will bring them cheap and up to the standard with state of the art technology stuff.
Furthermore, on the basis of study, a theoretical model is presented which demonstrate the framework for over all HR strategy of H&M aligns with business strategy. Model also suggest the reward management, performance management, motivation and training & learning work together as Strategic HR tools to achieve the personal growth which leads the organisational sustainability (as from HR head of H&M), employees involvement, motivation, commitment along with overall progress organisational culture which is highly participative in nature.
Figure 02: Theoretical Model of H&M strategic HR in working
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