Human Resource Management

Introduction

Researchers describe that today; many successful organizations are increasingly tying Human Resource Management closely to the business practices. Hollinshead and Leat (1995) also describe there should be a link between HR policy, strategy and practice and overall corporate strategy in its competitive environment. Coopers and Lybrand ( 1992 ) also express that corporate strategy sets the agenda for HR strategy and HR strategy exists to support the achievement of the corporate strategy. Therefore, integration between corporate and HR strategy is necessary so that the latter supports the accomplishment of the former. In this report, we will discuss about the link between Marks and Spencer’s Corporate Strategy and HR strategy. Firstly we will start discussing about strategic issues and corporate strategy of Marks and Spencer by using SWOT analysis and culture web. Secondly we will discuss about best practice and fit ( Contingency ) theory. Thirdly HR strategy and activities of M&S will be explored. Fourthly  we will critically analyse the findings of M&S ‘s HR against best practice and fit models. Finally, conclusions and recommendations will be followed. The reason why M&S is chosen is because of its reputation among competitors such as Tesco, Sainsbury and ASDA.

Strategic HRM

Armstrong ( 2001 ) describes that “ strategic HRM is making decisions on the plans of the organization concerning the employment relationship and its HR policy ”. It is an essential component of the organisation’s corporate strategy. It aim is to generate strategic capability by having skilled, committed and well-motivated employees within the organization to achieve sustained competitive advantage. Later we will discuss whether M&S’s HR activities follow this principle.

Marks and Spencer

M&S, formed in 1894, is one of the world’s leading retailing groups, over 300 stores in the UK and more than 500 outlets around the world ( See Appendix 1 ). It is one of the UK's leading retailers of clothing, foods, home ware and financial services, and serving 10 million customers a week in over 300 UK stores.  It employs over 62,000 staff in the UK ( See Appendix  2 ). Because of sales declines and losses, M&S changed its Chairman position from Peter Salisbury to Luc Vandevelde in 1999. M&S suffered losses until 2002 ( See Appendix 3 ). Because of losses, M&S announced Recovery Strategy to deliver faster recovery in March 2001. It includes ( i ) total focus on UK retail, to restore the trust and confidence of core customers, ( ii ) value realisation and closure of loss-making business around the world and ( iii ) improve capital structure and return £ 2 billion of cash to shareholders. Chairman ( Luc Vandevelde ) also says that recovery strategy is to regain leadership and build on unique customer relationships with new products and services. After setting effective strategy, M&S gets the profit in 2003 ( See Appendix 3 ).

 

Corporate Strategy and Strategic Issues of M&S

“ Corporate strategy is concerned with an organisation’s basic direction for the future: its purpose, ambitions, resources and how to interacts with the world in which it operates. It is the identification of the purpose of the organisation and the plans and actions to achieve that purpose ” ( Lynch, 2003 ). To achieve purpose effectively, M&S sets vision, mission and value ( See Appendix 4 ). To understand corporate strategy, firms need to realise firstly its strategic issues. To understand it, firms need to use strategic issues tools that is SWOT analysis and culture web.

SWOT analysis

SWOT analysis is identifying strengths and weaknesses which exist within the firm and examining opportunities and threats in the firm’s environment. “ It aims is to identify the current strengths and weaknesses are relevant to and capable of, dealing with the threats and opportunities in the business environment ” ( Johnson and Scholes, 2002 ). SWOT analysis of M&S is in Appendix 5.

Culture Web

 “Organisational culture is beliefs, attitudes and values that exist in an organisation”. “The cultural web is a representation of the paradigm of an organisation and the physical manifestation of organisational culture” ( Johnson and Scholes,  2002 ). The cultural web of M&S is in Appendix 6.

Let us discuss about M&S’s HR strategy and activities. Before we will discuss it, we will discuss firstly about Best Practice and Best Fit ( Contingency ) HRM thinking. Later on, the comparison will be made between those concepts against the outcomes of M&S’s HR activities.

Best Practice

J and J ( 2003 ) describe “ best practice is the idea that a particular bundle of HR practices has the potential to contribute to improved attitudes and behaviours, lower level of absenteeism and labour turnover, and higher levels of productivity, quality and customer service, ultimately generating higher organisational performance and profitability ”. Boxall and Purcell ( 2003 ) agrees that all firms will see organisation’s performance improvements if only they identify and implement best practice . It includes emphasising on  ( i ) enhancing employee abilities and skills through good recruitment and strong training, ( ii ) motivating through strong incentives, ( iii ) opening up opportunities to contribute employees ideas through work redesign and employee participation. Pilbeam and Corbridge ( 2002 ) describe best practice model assumes that HR policies and practices accomplish to achieve high organisational performance by increasing productivity, quality and reducing absent rates and wastages. Best practice’s HR policies include flexibility of organisational structure, employees’ commitments to organisation, flexible employees’ performances to achieve high quality, integrating HRM into strategic planning and employees’ working life quality.

J and J ( 2003 ) describe best practice consists of ( i ) employment security and internal promotion, ( ii ) selective hiring and firing, ( iii ) extensive training, learning and development, ( iv )employee involvement and voice, ( v ) self/managed teams and team working, ( vi ) high compensation on organisational performance, ( vii ) reduction of status differentials and ( viii ) harmonisation. Best Practice model ( Appendix 7 ) consists of making fundamental choices based on external stakeholders ( i.e. shareholders, government, unions ) and situational factors ( i.e. the state of market ).Hollinshead and Leat ( 1995 ) also agree that stakeholder interests and situational factors influence  HR policy choices.

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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 ...

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