Best Fit / Contingency
Best fit model describes that HR strategy will be more effective when it is integrated with its specific organisational and environmental context ( Boxall and Purcell, 2003 ). Armstrong ( 2001 ) describes that there are two types of fit, that is external and internal fit. External fit means that “HR strategies are congruent with business strategies, match the firm’ stage of development, take account of organisational dynamics and are in line with the characteristics of the organisation. It can be classified as contingency model”. Internal fit means ensuring HR policies are designed to fit with and support each other and it can be achieved by using shared process such as competence analysis, performance management, employee development and reward. Pilbeam and Corbridge (2002) describe that best fit models focus to align HR policies and practices with the business strategy and assume that different HR strategies are suited to different business strategies.
However Boxall and Purcell ( 2003 ) express that fit is defined by the firm’s competitive strategy than its stage of development. It is innovation ( i.e. selecting and developing people with required skills and assessing performance ), quality-enhancement ( i.e. rewarding people according to their performances and giving training for achieving quality targets ) and cost leadership ( i.e. reducing the cost through productivity planning and finding and developing skilled people ) ( Armstrong 1999 ). J and J (2003) also describe that in matching HR strategy with overall business strategy; organisation can gain competitive advantage from innovation, quality and cost reduction. However Resource-Based view of HR describes that sustained competitive advantage cannot be achieved by just aligning HR to corporate strategy. To achieve those, organisations need to develop human capital resources ( Pilbeam and Corbridge 2002 ). Pfeffer (2003) also describes that there are 16 practices for achieving competitive advantage through people. (Appendix 8).
Let us discuss HR activities of M&S.
HR strategy of M&S
M&S’s HR strategies are to recruitment effective people and to train those people by motivating (rewarding) in order to achieve the best organisational performances.
HR activities of M&S
Recruitment and Selection
“Recruitment and selection is a matching activity between applicant and job and it is important to the function of an organisation. Inappropriate selection decisions reduce organisational effectiveness” ( Pilbeam and Corbridge, 2002 ). To recruit effective people and improve recruitment methods, M&S used GASS (Graduate Application Screening System) since 1988. Its aim is to reduce interviewing time load on management staff. M&S recruitments about 230 graduates from many universities and polytechnics for management careers. M&S offers placement programs for those students to achieve effective people. M&S also use on line recruitment and selection method.
Training and Development
“ Training is a means of making better use of human resources in the organisation by developing people to meet the requirements of the job to be done ” ( Reid and Barrington, 2001 ). M&S provide employees with all the structured formal training and practical on-the-job experience to develop into motivated, skilled and customer-focused employees. M&S also offer manual handling and equipment training since 60% of workplace illness is related to muscular stresses and strains. M&S’s philosophy is ‘To provide regular, focussed and engaging training interventions, which develop the talents and capabilities of 60,000 unique individuals ’.
Performance Management
Researchers describe that to achieve sustained success for organisation, managing employees performance effectively is important. M&S reconginses everyone needs a flexible and diverse range of skills to perform effectively. For this M&S makes teams. Specialists across the company help team leaders to develop career plans of all employees. All employees can review their performance progress with their line manager, using agreed objectives.
Rewards and Benefits
Rewarding employees consists of base pay, individual performance-related pay, bonuses, incentives, commission and allowances depends on their contributions to organisations ( Armstrong, 1999 ). M&S attracts, motivates and retains the best people by rewarding and treating fairly. Its reward system is to get the balance between promoting teamwork and rewarding individual achievement. It also offers greater incentives for personally achieving superior results. It includes ( i ) fixed pay, i.e. a basic salary plus an extra amount for personal performance, ( ii ) variable pay i.e. a sliding scale of pay based entirely on business and personal performance, ( iii ) benefits, i.e. 20% discount for its employees, interest-free loans for transport season tickets, preferential loan rates from M&S’s financial services, save-as you-earn share options, profit sharing, access to preferential car leasing, generous pension, and holidays scheme. M&S spends £60 million to 60,000 employees as bonuses. But if performance targets are not achieved, no bonuses are paid to all including top level directors.
Work-life balance/family friendly policy
Vloeberghs (2002) points that “ most women an men wish to combine a professional job with their private and family life balance. Balance means different things to different people and can change during one’s career”. It is simple to understand that to recruitment and retain the best people; firms have to find innovative ways of helping employees to achieve a balance between work and personal life. M&S understands the need to support staff who need to balance their caring and working commitments. M&S recognises the importance of working parents and the need to balance their works and family lives. M&S ensures for both mums and dads to get helps they need. M&S offers time off for antenatal, midwife, health visitor and parent craft classes as well as maternity pay and leave. Health teams are also available to carry out health checks anytime before and after the birth. M&S offers a child2 break scheme for up to 5 years at supervisory level. It also offers a range of options for flexible working, part-time work, job sharing or term-time working. Besides it supports f up to nine month’s unpaid leave for staff who wish to study.
Pension scheme
M&S review pension scheme annually based on the Retail Price Index (RPI). Its pension scheme is adjusted with Inland Revenue and the cost of living increases.
Health and Safety at work
M&S understands to achieve better results, Health and Safety at work is important . M&S maintains employees health and safety at work by treating safe and pleasant working environment.
Support
M&S has a welfare program to give advices and support for employees. Giving supports covers such area as disability and caring for the eldery, financial problems and stresses.
Communication and Consulting
M&S develops how are we doing? survey to know the employees needs for communicating effectively. M&S announces regular information to employees to make sure its colleges hear about important information. It consults formally employees to get effective communication between company and employees, among employees and between customers, employees and suppliers.
Comparing M&S HR activities with Best Practice and Fit
M&S’s HR activities match best practice model. Concerning best practice, M&S recruitment, train, motivate and retain employees effectively to achieve the best organisational outcomes. M&S also recognises employees are assets for company, so it solves employees problems by forming consulting and help teams as disused above. M&S not only focus on the employees within the firm but also emphasis on stakeholders’ interests. After designing recovery strategy, M&S informed shareholders by sending letters to confident on M&S. M&S frequently informs to its stakeholders concerning its activities. M&S tries to give benefits to its stakeholders and customers through designing effective HR policy as discussed above. Therefore, we can say that M&S is very good in best practice approach. Concerning best fit, M&S can try to design competitive strategy ( innovation, quality enhancement, cost leadership ) by using employees effectively and efficiently. But the main reason why M&S closed its stores around the world was lack of matching HR strategy and corporate strategy. It means M&S lacked to design HR strategy and adjust it with corporate strategy. In other words, aligning M&S’s HR strategy and corporate strategy were poor. Concerning the former, M&S could not design HR policies effectively as discussed above. Concerning the latter, M&S lacked to recognise that to be effective corporate strategy, strategic analysis ( SWOT ) is firstly important. M&S did not apply SWOT analysis and monitor environmental factors. Therefore, we can say that M&S’s matching corporate strategy and HR strategy were poor. In other words, M&S’s best fit approach were ineffective.
Conclusions and Recommendations
In conclusions, all researchers expressions are true. As discussed above we can conclude that M&S’s strategic HRM approach follows HRM theory. It treats employees fairly and so M&S does not need trade union. In order to lead customer-oriented retailer, M&S should watch customers’ ever-changing needs and wants, competitors’ activities, stakeholders’ expectations and environmental factors. M&S should prepare its strategies according to findings of those factors. M&S needs to learn from the previous losses and design the strategies. To achieve competitive edge, M&S should maintain its present HR activities which are discussed above and should open its stores weekends by hiring secondary labours, part-timers and labours from agencies. M&S needs to integrate its HR strategy with its corporate strategy to achieve the best synergetic effect. M&S should create HR mission, vision and strategic goals which reflect the organisation’s corporate direction. To achieve competitive advantage over competitors, M&S should train employees to be multi-skilled employees to perform different tasks. HR department should conduct customer’ survey, followed by action and change. M&S should design HR strategies which satisfy its product markets and organisational structure. M&S’s strategies should be flexible for different situations in different regions. M&S should have contingency plans for emergency issues.
Appendix 1
Group Locations Summary at 30 September 2003 of M&S
Marks and Spencer Marks and Spencer Franchises
Number of Outlets Number of Outlets
United Kingdom 348 Bahrain 1
M&S Direct 1 Bermuda 1
Republic of Ireland 5 Canary Islands 4
Hong Kong 10 Gran Canaria 3
Total 364 Tenerife 1
Channel Islands 3
Guernesy 1
Jersey 2
UK Regional Stores Croatia 1
England 303 Cyprus 8
Northern Ireland 7 Czech Republic 3
Scotland 25 Gibraltar 1
Wales 13 Greece 30
Hungary 4
Outlets 15 India 3
Simply Food 28 Indonesia 10
Kuwait 1
Malaysia 2
Malta 3
Philippines 11
Poland 2
Qatar 1
Romania 2
Singapore 6
Saudi Arabic 7
South Korea 12
Thailand 10
Turkey 6
UAE 3
UK Simply Food 8
Total 153
Kings Supermarkets Group worldwide locations
USA 27 Total 544
Appendix 2
Number of employees in M&S
http://www2.marksandspencer.com/exec/MsmGo.exe?grab_id=73452330&extra_arg=&page_id=791&host_id=1&query=number+of+employees+in+Marks+and+Spencer&hiword=NUMBER+EMPLOYEES+MARKS+SPENCER+MARKET+NUMBERS+MARKING+EMPLOYEE+MARKED+SPENCERS+MARKSMAN+MARK+MARKER+NUMBERING+NUMBERED+SPENCE+
Appendix 3
Profit and Loss Account of M&S
2003 2002 2001 2000 1999
£ m £ m £ m £ m £ m
52 52 52 52 52
weeks weeks weeks weeks weeks
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Appendix 4
Vision, Mission and Values of M&S
Vision
To be the standard against which others are measured
Mission
To make aspirational quality accessible to all
Values
Quality value, service, innovation and trust
http://www2.marksandspencer.com/exec/MsmGo.exe?grab_id=73452330&extra_arg=&page_id=143&host_id=1&query=Mission+vision+and+values&hiword=MISSION+VISION+VALUES+VALUE+VALUED+VALUERS+MISSING+
Appendix 5
SWOT Analysis of M&S
Strengths
1.M&S’s two marketing unit that is marketing strategy unit and brand design and
delivery unit make sure to build customers relationships, to manage brand and to design
store by making marketing research. M&S appoints Walker Media as retail media
planning and buying agency to work closely with above marketing units in order to
design and implement new and exciting advertising for the brand.
2.M&S’s distribution methods include rail and road. Because of its effective distribution,
M&S achieved Urban Distribution Vehicle of the year 2002 award. It can enhance
M&S’s brand among competitors and customers.
3. Effective supply chain management that produce new product innovation, through
working partnerships with 1500 suppliers in over 70 countries.
4.M&S’s new management teams contribute fresh ideas to strengthen M&S’s future
activities.
5. M&S’s effective employee relations ( we will discuss it later ) guarantee employment
security.
6. M&S’s audit committee ensures internal financial control and risk management.
Weaknesses
1. M&S’s closed its stores around the world because of poor management.
2. Poor best-fit approach. Because M&S closed it stores around the world because of lack
of watching environmental factors and identifying employees’ capabilities within the
firm.
3. Ineffective strategies. Because M&S suffered losses continuously because of poor
designing in overall strategies.
Opportunities
1.M&S can learn previous losses and take opportunity from it to design effective
strategies for future.
Threats
1.M&S suffers threatening from strong existing competitors such as Sainsbury, ASDA
and Tesco in terms of value and quality.
2.M&S may loose its market share from threatening of new powerful competitors who
enter the market with different product ranges and different prices for quality.
Appendix 6
Culture web of M&S
Appendix 7
BEST PRACTICE MODEL
.
Appendix 8
Pfeffer’s 16 practices for competitive advantage through people
-Employment Security -Training and skill development
-Selecting in recruiting - Cross utilization and cross-training
-High wages - Symbolic equalitarianism
-Incentive pay -Wage compression
-Employee ownership -Promotion from within
-Information sharing -Long term perspective
-Participational empowerment -Measurement of the practices
-Teems and job design -Overarching philosophy
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http://www2.marksandspencer.com/exec/MsmGo.exe?grab_id=73452330&extra_arg=&page_id=596&host_id=1&query=5+years+profit+and+loss&hiword=5+YEARS+PROFIT+LOSS+YEAR+PROFITS+LOSSES+PROFITABLE+PROFI+YEARLY+
http://www2.marksandspencer.com/exec/MsmGo.exe?grab_id=73452330&extra_arg=&page_id=143&host_id=1&query=Mission+vision+and+values&hiword=MISSION+VISION+VALUES+VALUE+VALUED+VALUERS+MISSING+