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, Prime sets vision, mission and value . To understand corporate strategy, firms need to realise firstly its strategic issues.
[Task1]
4.0 HR Strategy is limited by Corporate strategy:
A major conflict that the Human Resources Department faces is the conflict between the Corporate Strategy at Prime’s. For Prime’s to provide effective and efficient training and development to their employees Prime’s must also be able to provide the money to finance the training and development. As training and development can be very expensive depending on the types of training and development that is provided. Prime’s provide a wide range of training and development for each different area of the Prime’s business. Prime’s finance department may not be able to fund the training and development completely; therefore this causes a conflict between the two Strategies and HR strategies is limited day by day. The finance department believe that the money could be spent on other areas of the Prime’s business rather than on so much training and development.
When appraisal meetings are conducted, targets are identified and set in these meetings, also budgets and long and short-term needs are identified. When performance management is carried out, Prime’s H.R. department uses appraisal systems. As a reward to employees for good performance, Prime’s reward them with performance-related pay. The Finance Department has to arrange the performance-related pay; this is another conflict, as the Finance Department may not have the budget to finance the performance-related pay.
There also is a conflict between the Human Resources Department and Prime’s Corporate management. As Prime’s management may not agree with decisions made by the Human Resources Department. When the H.R. Department employ new staff, Prime’s management may not agree with the decision to employ those certain staff. The management will disagree; they may have found some fault or reason why that employee may not be suitable for working with Prime’s.
Another conflict is between the Internal Labour Market and the Finance Department at Prime’s. This is because in West London there are many jobs available, as West London is quite large. The jobs that are available offer highly competitive notes of pay. Therefore the Corporate Finance Department at Prime’s need to compete with these notes of pay, forming a conflict between the Internal Labour Market, which is part of the Human Resources Department, and the Finance Department.
Overcome of the problems:
The Human Resources Department at Prime’s can resolve the limitation that they face in many ways, using a range of methods.
Prime’s already use quality assurance systems. Like nearly every organisation Prime’s also feels that quality should be at the top of the list when it comes to aims and missions. Prime’s also abides by the four Total Quality Management principles. Prime’s have a high commitment in making sure that their customers’ needs are fulfilled to the most that they possibly can.
In every store they have a customer service department that deals with customer complaints and problems. Also Prime’s staffs are fully trained to treat customers in the right way, and to look after them. They are also trained to listen and respond to any complaints or views the customers share with the staff. Prime’s staffs are continuously making improvements on their products and the services they offer. Prime’s are improving their brand name by improving their packaging, and the quality of their product. Prime’s are also continuously offering new services to existing and new customers. This is an overview of how Prime’s works, this was identified using TQM, Total Quality Management.
Another approach that the H.R. Department could use to be effective and efficient and be able to resolve conflict is the use of Quality Circles. A quality circle consists of a small group of people, therefore Prime’s management could organise a small team of people that could form a quality circle. It would be preferable if the team consists of people who are trained to make effective decisions, and solve problems. So it would be ideal if Prime’s Human Resources Department could arrange the team so that the team is made up of volunteers who want to help work on specific issues, that are causing problems within the H.R. Department and within Prime’s itself, in a Prime’s store. Every Prime’s store should have to have their own quality circle made up of the supervisors. This would be good for Prime’s because each supervisor will know how their department works and to what quality their department works at.
Prime’s Human Resources Department could try improving the communications system they have with each department. This will not only resolve conflicts, but help Prime’s H.R. Department in the future when they are trying to get their views and ideas across to the other departments in Prime’s. The Human Resources Department at Prime’s can improve communications in many ways; one way is by incorporating the use of ICT in their communication. They could also discuss all decisions and ideas they have with every other department at Prime’s before taking further action on them ideas and decisions.
5.0 Porters 5 Forces
i. Potential Threat of New Entrants
Economies of scale – Prime is going to reduce the threat of new entrants by setting targets for reducing costs by 25%, defects by 50% and order-to-delivery time by half to ten months for its production. This will achieve through massive investments in IT, first with the development of the customer service system.
Capital Requirements – The huge investment required to build service facilities to compete with large commercial space by create ting a significant barrier to entry for any competitor challenges.
ii. Bargaining Power of Buyers
Prime is able to reduce the threat of its competitive market and commercial buyers with the merger of production and services. In an effort to meet its defense commitment in providing good customer facilities the store requires to enhance the buyers power. Prime has to install a Catalyst software for its warehouse support system, thereby resulting in an increased number of daily work orders being processed and considerable labour cost savings.
iii. Bargaining Power of Suppliers
Prime store is able to reduce the bargaining power of its product suppliers, because it offers the quality products from three manufacturers; General Food Co., Pratt & Whitney, and Poker. These three types of store are designed to the different specifications but offer nearly identical performance giving each product the option of using the manufacturer of their choice.
iv. Threat of Substitute products
As the market evolves, its seems that both production and service are going in very different strategic directions with Prime store continuously staying with their product development because the other giant store always try to develop the new products.
In response to this threat, Prime is able to reduce the threat of Substitute products by its decision to utilize Information systems in cutting costs and make product cheaper to customers.
v. Industry Competitors
However with the products new emphasis on cost and with Prime store new Information systems design parameters, which have shifted from being performance based to being cost based; these changes should substantially stabilize its manufacturing process and maintain the current market share.
[task1, task2]
6.0 International expansion plan:
As part of its international expansion program, Prime store, is currently in the planning stages of establishing production facility overseas. I am going to present a proposal to the steering committee comparing the advantages and disadvantages of starting operations in France.
There are many factors to consider in this comparative analysis. Such as discussion of the different countries' currencies, trade policies, and cultural variables that may affect operations and profitability in each country. I have tried to mention the situation by concluding with a recommendation and supporting rationale as to business facilities in France.
Barriers:
The following barriers are going to consider if Prime store required expanding their business at France. They are:
Political and legal influence: The political relations between Prime’s country of headquarters (or other significant operations) and another one may, through no fault of the Prime’s, become a major issue. Certain issues in the political environment are particularly significant. France has relatively strict government, whose policies may change dramatically if new leaders come to power by democratic or other means.
Culture: Culture is part of the external influences that impact the consumer. That is, culture represents influences that are imposed on the consumer by other individuals. Although France employees perceive prime as being more employee-orientated than average France employers, some of the cultural issues were the fact that the manager roles in Prime are subtle and that Prime managers tend to have a long term approach to management.
Country entry- decision and strategies:
Segmentation, Targeting, and Positioning: Segmentation, in marketing, is usually done at the customer level. However, in international marketing, it may sometimes be useful to see countries as segments. This allows the decision maker of Prime store to focus on common aspects of countries and avoid information overload. Segmenting on income is tricky since the relative prices between countries may differ significantly (based, in part, on purchasing power parity measures that greatly affect the relative cost of imported and domestically produced products).
[task3]
7.0 Recruitment and selection:
According to Compton, Morrissey and Nankervis (2002, p.17) “The main function of recruitment is to ensure that organization is a adequately and effectively staffed at all times. The purpose is to attract suitable people to apply for employment vacancies by making them aware that such vacancies exist. Before a business starts recruiting new employees the human resources department compiles a job description and person specification for the specific job they have a vacancy for. The job description gives potential candidates a taste of what is expected of them in the job. The job description is also used after the vacancy has been filled to ensure that the job is being carried out properly.
Process went wrong in recruitment and selection:
The following causes are mainly responsible for the failure of recruitment and selection in Prime store:
- There are no job description tools
- There are no templates in use to document work trials properly
- No scoring criteria to demonstrate an individual’s level of success
- More use is unable to make of international links
- The current international transfer system has no real value
- Prime does not proactively encourage societal diversity. There are no links to other sources such as the prison service and homeless back-to-work schemes
- Internal recruitment process is poor as it is unstructured, untimely and there lacks a clear assessment process. Colleagues are often ‘cherry-picked’. If a colleague is successful development plans are not written
- Employees are also always seen within the capacity of their current role
Good selection procedure according to HR:
A human resource plan need not be highly complicated. A straightforward plan will help organisations to:
- assess future recruitment needs
- formulate training programmes
- develop promotion and career development policies
- anticipate and, where possible, avoid redundancies
- develop a flexible workforce to meet changing requirements
- control staff costs whilst ensuring salaries remain competitive
- Assess future requirements for capital equipment, technology and premises.
Management is responsible for producing the human resource plan, senior management for supporting it. Implementation is likely to be most effective if it carries the support of the workforce, normally achieved through consultation with trade union or other employee representatives.
Producing a human resource plan involves:
- forecasting staffing requirements against business objectives
- assessing the available supply of people to meet those requirements
- matching available supply against forecast demand
[task 4]
8.0 Staff management:
Prime store management plan redundancies for as early as the next two months and in order to proceed with this, there is a requirement that if an employer proposes to dismiss employees as redundant, at least 10 employees at one establishment, it is over a period of two moths and less for the decrease of significant profit in the business.
HR management view:
HR believes that, even during periods of high demand for labour, it is unrealistic to suggest that redundancy can always be avoided by a combination of human resource planning and employment flexibility. The future can never be forecast with total accuracy. Unexpected events may necessitate enforced workforce reductions and individual redundancies may also effect on the moral of the existing staff. However, HR expects the management to:
- encourage Prime to take all reasonable steps to avoid the necessity of redundancies
- develop planning and employment strategies which enable their organisations to deal with the requirements of short-term labour fluctuations, minimise the risk of enforced redundancies and maximise alternative opportunities
- manage redundancies legally and in a way that minimises the inevitable adverse impact both on those who lose their jobs and on the 'survivors'
- Implement communication strategies to ensure everyone in the organisation has the correct information about the reasons for redundancies.
HR acknowledges that even the most carefully handled redundancies are likely to result in damage to the psychological contract with the staff and falls in negative organisational culture. It always makes sense, therefore, to view redundancy as a last resort. This will also give a clear message to employees that they can trust the organisation not to make unnecessary redundancies.
[task5]
9.0 Performance appraisal:
Performance appraisals are a highly important measure of an organizations efficiency rating, an investigative tool used to determine if an organization`s objectives are being met in accordance with the organization`s culture. Despite many endeavours to make performance appraisals successful for both managers and employees, it is still a system which has problems and common pitfalls if it is not structured properly. Performance appraisals have four main objectives. They are principally; performance evaluation, performance reward, development and feedback. Performance evaluation is a method used by the mangers of a company to calculate each employee’s effectiveness within the company.
Performance appraisal helps to develop employee relationship:
Performance appraisal helps to develop employee’s relation and being critical when giving feedback, it is important to be constructive. The endowment of constructive feedback to employees is of key importance for a business to reach its company objectives.
Performance appraisals began as a measure which to adjust employee`s salaries. To determine if there is an inherent problem with performance appraisals or if a new system needs to be developed, an investigation of the former methods is required. Positive elements of the former systems are as stated by Schraeder, Becton & Portis (2007, p. 20-21) Performance appraisals can help organization effectiveness and productivity. It has been suggested that employee uncertainty can be reduced with a review of their performance and gives an opportunity for communication between managers and employees and what is expected from them. When a performance appraisal is structured appropriately, they can play a crucial role in reducing the amount of environmental distractions and can lead to greater trust within the organisation. They can provide a means for the employee to discuss issues they have or things that they are uncertain of what expectations they required to meet.
Reward systems
Bratton & Gold (2003) define a reward system as ‘the mix of extrinsic and intrinsic rewards provided by the employer and it also consists of the integrated policies, processes, practices and administrative procedures for implementing the system within the framework of the human resources (HR) strategy and the total organisational system.’
(M Armstrong 2006) suggests (the 4P’s) that a reward system consists of:
Policies that provide guidelines on approaches to managing rewards.
Practices that provide financial and non-financial rewards.
Processes concerned with evaluating the relative size of jobs (job evaluation) and assessing individual performance (performance management).
Effect of reward system in Prime store
The key effect of reward system can be summed up as follows:
- Recruiting and retaining quality labour in line with human resource plan increases.
- Motivating individual and team performance increases, to maximise return on investment from the human resource.
- Supporting organisational culture will be greatly valued, by conveying messages about the values, behaviours and outcomes that the organisation prizes
- Supplementing flexibility, by responding to changing organisational skill and performance requirements.
Reward and Punishment effect company’s performance:
Rewarding and punishing performance is the second major pillar of the Prime store structure. Those associates that meet or exceed their performance targets are incented with monetary and nonmonetary rewards. These awards range from salary increases, cash bonuses, and retirement benefits to prestigious job titles, office locations, and executive entitlements. The bottom line is that these benefits are proven to motivate peak performance and inspire associates to succeed in a mutually inclusive work environment that rewards teamwork. Punishment is of equal importance to reward. It would be impractical to think that every associates acts with integrity and performs at an exceptional level all of the time. Managers must be consistent with one another and use their discretion and judgment to fairly assess which level of punishment best suites those associate's that fail to follow guidance or perform. These escalating levels of punishment can lead up to and include possible termination in certain cases.
10.0 Conclusion:
It is the fact that an organization cannot survive without its employees. As long as employees contribute the organization`s culture and its objectives (which are the aims of human resource strategies employees) and organization are not a separate entity from that point of view. Therefore a system of performance appraisal is key to looking out for the employees. Although performance appraisals have inherited problems accordance to its context, it is still in use all around the world. Above and beyond, all organizations need a proper performance measurement which strictly meets the organization`s culture and pre-set objectives. Critics may have valid points against the system itself; however they also assume some conditions and circumstances. Hence, organizations sooner or later can create an appropriate performance appraisal method that fits their objectives and culture, along with good communication.
This report concludes that HR is making an effective contribution within Prime store across all of the operational areas. However, improvements can always be made. At a national level, vital recruitment tools such as job descriptions are lacking and HR still has limited involvement in manpower planning. Prime as a whole has excellent systems and policies in place for performance management.
11.0 References:
[1] Barrett, D.J 2002, ‘Change communication: using strategic employee communication to facilitate major change’, Corporate Communications: An International Journal, vol. 7, no. 4, pp 219-234.
[2] Boxall, P & Purcell, J 2003, Strategy and Human Resource Management, Palgrave, New York.
[3] Cacioppe, R 1997, ‘Leadership moment by moment!’, Leadership and Organization Development Journal, vol. 18, no. 7, pp 335-345.
[4] Connolly, C 1996, ‘Communication: getting to the heart of the matter’, Journal of Management Development Review, vol. 9, no. 7, pp 37-40.
[5] Handy, C.B 1976, Understanding Organisations, Penguin Group, London.
[6] Schraeder M., Becton J.B. & Portis, R. (2007). A Critical Examination of Performance Appraisals. An Organization's Friend or Foe? [Electronic version]. The Journal Participation, Spring 2007, 20-21
[7] Performance Apprasial Methods: Rating Scales. (n.d.). Retrieved April 24, 2009, from
