Example Of Recommendations For Tesco In Their Strategic Management Essay

Introduction

Modern business environment requires the managers to adopt strategic reforms in every operational area. In order to build long term trust while achieving competitive advantages, organisationshave to continuously monitor the delivery system and ensure quality. The contribution of employees in the strategic management process being the most significant factor, business organisationshave to acquire and stabilize a quality workforce in the strategic process. For the companies with direct access to the customers such as retail business should guarantee that the employees are competent enough to handle the pressure resulting from the high intensity market competition. In the process of developing such a workforce, companies like Tesco have shown envious progress. This paper will introduce the retailer giant Tesco PLC and evaluate its strategic human resource management policies and provide recommendations on the basis of modern workforce management devices.

Tesco PLC

Tesco is one of the biggest names among the corporate retailers in the world with its franchises spread across twelve countries and well over half a million employees. The company serves several millions of satisfied customers every week throughout its worldwide locations by providing the best quality products in groceries and general commodities. The rise of Tesco from a small stall in East End of London to an unchallenged retailer giant of the present might has covered a long and successful journey that started in 1919. The founder of Tesco, Jack Cohen had presumably envisaged that Tesco would grow into a monstrous size to be the world’s second largest profitable retailer and the third among the top revenue earners from corporate retail business. The company is a conglomeration of the best talents in the retail marketing and consumer merchandise trade. The executive committee of Tesco consists of the valued leadership of a team of excellent managers headed by the CEO Dave Lewis (Tesco, Board and Executive Committee). The committee has big names like John Allan ad the non-executive chairman, , Alan Stewart as the CFO, Richard Cousins, Mark Armour, Stuart Chambers, Ken Hanna, Mikael Ohlsson and Deanna Oppenheimer as non-executive directors and Paul Moore as the company secretary (Ibid). The company has expanded its retail business across the world over the years in extensive trade of commodities like clothing, electronics, stationery, furniture and petrol etc and offers telecommunication services and financial services apart from its original trading in grocery. The elite position held by the company today is the result of the hard work of a committed team of leaders that coordinates and directs the interests and endeavours of the diverse workforce towards its organisational objectives.

Values and Approaches

Being the largest private sector employer in the United Kingdom, Tesco stands on the efficiency and commitment of its workforce. Retail business enterprises generally involve in the engagement of diversity in its HR practices. The Hertfordshire office of the company centralizes the HR management of the company’s diversely proportionate workforce across the multiple franchise locations in the world. Tesco is a preferred destination for professionals because of the company’s rationality in the remuneration and performance analysis systems. The company has incorporated its values such as environmental protection, customer loyalty and highest level of satisfaction through innovative approaches. The most significant values of Tesco include, trying harder than anyone else for the customers, understanding and responding to the customer needs responsibly, treating the people at the best of their expectations and creating employment opportunities while promoting public health etc (Tesco, Core Purpose and Values). In order to meet its vision to be the highest valued organisation by the joint participation of its customers, local communities, business colleagues and the shareholders, the company keeps experimenting the practices for effectively managing its finance and workforce. The actualization of Tesco’s vision involves the strategic aspects such as finding opportunities, creating ideas, achieving skills, creating demand and building trust among the stakeholders. In simple words, Tesco states its vision, “To become our customer’s strategic partner in eliminating Non-Productive Time (NTP)” (Vision, Mission and Values). The Company believes that the journey towards the vision is a tedious walk because of which it has made an avenue of cultural values which relies on the core elements of discipline, service and teamwork all of them offering due respect for the customers. With this value based strategic framework, the company is fast approaching its mission as it says, “We make what matters better, together” (Vision, values and business strategies). The amalgamation of the company’s vision and mission makes a strategic platform for the leadership to govern the workforce and direct their committed participation towards the organisational objectives of the company.

Evaluation of Strategic HRM System

Tesco has an effective system of strategic HR management at its core management. The company treats its workforce as a fundamental and long term asset rather than an exploitable pack of employees. Strategic HR management aims at meeting the long term objectives of the organisation through and with the employees and always looks beyond finding solutions for the miniscule issues in the HR practices. Tesco gives opportunities to employees at almost all levels on its way of accomplishing the strategic mission of providing the best service to the customers earlier than the competitors. The workforce requirement covers positions ranging from salespersons to top level managers. The strategic system of the company’s HR practices requires the top managers like directors to be prepared the handle the pressure of extensive mobility of their employment (Litvinov, 2012, p.31). Despite heavy pressure and the extensive mobility of employment, the employees are highly enthusiastic to join the Tesco group and consider it as their most prestigious goal.
One of the major turning points in the strategic system of HRM in the Tesco history was its 1997 alignment with the Union of Shop, Distributive and Allied Workers (USDAW) which aimed at ensuring the employee commitment and maximum retention. Despite the initial benefits in achieving the objectives of this alliance, the USDAW started exhibiting a deviant behaviour with the support of the Labour Party government in 1990s. As a result, Tesco amended the agreement for good with new strategic proposals. The strategic partnership between Tesco and USDAW covered the nine pillars of alliance such as employee representation, training, consultation, understanding issues, communication, increased focus, external influence, conscience and values and culture (Case study: Employee relations at Tesco). With the strategic alignment of all potential features of employee management measures, the company offers several hundred-thousands of positions to the employment market in the UK itself. The company performs in the similar or even in a better way at all other centres and continues to lead the share in the global employment market.
The strategic HR management of the company looks beyond just filling the vacancies but calling the deserving people with due respect and reward for their excellence. The company says that it focuses on making a personnel structure that guarantees the satisfaction of the colleagues through the practices like building an inclusive human culture, ensuring equal opportunity, valuing individual contributions in team works, and minimizing risk (Tesco Careers). The Company encourages and constantly requires the workforce to do everything in the best interest of the colleagues on the basis of the core skills such as understanding, teamwork, novelty, flexibility and openness. With the strength of these guidelines, Tesco manages its employees and maintain the effectiveness of the diverse environment in the HRM structure. According to reliable reports, Tesco provides opportunities to individuals of all ages in which the 25-54 occupying the major share in the employment. The company addresses the diversity factors in ethnicity, race and gender in a reasonable manner. Around 16 percent among the employees belong to Black, Asian or other ethnic minority groups while at the same time, nearly 6 percentage of the senior level management belonging to these minorities. More than a half of Tesco employees are females with an over 35 percent female share in the top level management in the positions of directors or senior managers. All these features indicate the strength of Tesco’s strategic workforce structure.

Strategies for Current HR Scenario

The effective management of diversity is the key factor for success and sustainability of companies in the current environment. The HR strategies of Tesco such as high performance and human capital work collectively with this core focus. In the changing global environment of HR management, the need for HPWS is highly important as the modern environment needs the participation of brilliance rather than physical strength at all levels of employee engagement. High performance strategy aims at improving the competitive advantage of the organisation with the betterment of workforce effort and quality through programs like high performance work systems (HPWS). According to Snell, Morris and Bohlander (2015, p. 631), the HPWS can establish a pay culture based on individual performance at diverse skill level requirements which is more compatible for retail business. The HPWS in Tesco aims at analyzing the work environment on the basis of existing arrangements and detect the gaps. It helps in describing the employee roles and designing a work culture in which mutual cooperation works as a bonding agent. As part of the HPWS, the company has to assess the practicality and define the project objective based on the expectations. The strategic success of the HPWS is possible through the higher motivation employees ensure by their participation in the strategic process, mainly in strategic and financial communication (Ibid).
With the human capital management strategy, an organisation aims at allocating the ‘provision of guidance on effective people management by the systematic analysis, measurement and evaluation of how people policies and practices create value (Lecture notes, slide1) The direction individual capacities towards the organisational goal in an effective way integrates the social responsibilities of each employee. Precisely speaking, the researches in HR practices associated with CSR principles can help a company to guide its employees to contribute to the economic, environmental and social liabilities (Chartered Institute of Personnel and Development, p, 2002, p. 5). In order to meet the expected workforce quality, Tesco arranges half yearly reviews and extensive training programs which ensure the commitment and engagement of the leadership in developing the workforce (Tesco, corporate responsibility review, 2005).
The expansion of Tesco towards the United States has seen a tremendous response from the colleagues and employees across the country. The amount of trust the company claimed derived from its successful race in the international employers’ list by offering a better package to all its employees. However, the company has failed to meet the expectations in the US where the remuneration generally fell below the standards of the national fair wage ordinance. Beside this, the employees of Tesco Fresh & Easy are not entitled to overtime pay or sick pay while their health insurance benefits are meagre (A UNI Global Union Country Report, 2009, pp.6-7). This kind of a scenario forces a majority of the employees to either quit the job or take the extra burden of doing one more job concurrently for meeting their basic revenue expectations. Tesco’s interest in taking the employees to its CSR programs is sometimes a debate topic for the critics. The Company must adopt strategic plans to reach the customers without giving chances for the employees to suspect their roles in the CSR practices. This objective can be achieved when the managers are capable of communicating the strategies effectively to the entire workforce.

Conclusive Recommendations

Applying strategic management principles becomes an increasing priority for the organisations that aspire to place themselves in tough and competitive market conditions. The intensity of the competition requires the managements to adopt the optimum method from the array of multiple options that come along the planning process. Tesco can recheck the fact that effective utilisation of human capital is when the company can integrate the intellectual capacities of the employees and their contributions towards the social responsibilities with the organisational objectives. Tesco can transform its human capital to organisational capital when the CSR practices are strategically incorporated with the HR functions. Even though the HPWS and Human Capital Management Strategies are better rewarding, the alignment of reasonability in remuneration is an increasing need for Tesco. The company can eliminate the concerns about the workforce quality by extensive local talent acquisition programs. Besides getting the right people at right time, it can reduce the cost in training the employees in local cultural environments. Implementing strong systems of performance management system with a clear strategic communication process can bring better changes in the strategic HR management process of the Company. The modern scientific tools like strategic performance management and strategic talent management systems can ensure the individual evaluation of employee performance and address their problems through training and communication methods.

References

Chartered Institute of Personnel and Development (2002) Corporate social responsibility and HR’s role. [online] available at: http://www.cipd.co.uk/NR/rdonlyres/D5E6B917-DBC7-4326-A651-1EE17ADE976B/0/csr_hr_role.pdf
Litvinov, A (2012) Human Resource Management and its alignment to the strategy of a Company. Thesis. Unicorn College, [online] available at: http://www.unicorncollege.cz/european-it-center/litvinov-alexander/attachments/Bachelor_Thesis_Litvinov.pdf
Purcell J (2012) Building employee engagement. Acas. [online] available at: http://www.acas.org.uk/media/pdf/s/1/Building_employee_engagement-accessible-version-Jun-2012.pdf
Snell S, Morris S & Bohlander G (2015) Managing Human Resources. Cengage Learning.
Tesco, Board and Executive Committee. [online] available at: http://www.tescoplc.com/index.asp?pageid=79
Tesco, Core Purpose and Values. [online] available at: http://www.tescoplc.com/index.asp?pageid=10
Tesco, Vision, Mission and Values. [online] available at: http://www.tescocorp.com/bins/content_page.asp?cid=4-1167
Tesco, Vision, values and business strategies. [online] available at: http://www.arthurmckeown.com/bmg345/tesco.pdf
Tesco careers. [online] available at: http://www.tesco-careers.com/Jobs-in-our-Office/Career-Path/Personnel.aspx
Tesco, corporate responsibility review, 2005. [online] available at: http://www.tesco.com/csr/f/f2.html
A UNI Global Union Country Report (2009) Tesco’s employment practices in the USA. [online] available at: http://laborcenter.berkeley.edu/pdf/2009/tesco09.pdf