Human Resource Management and Lean Manufacturing

Question: Discuss about the Human Resource Management and Lean Manufacturing. Answer: Introduction The company that is selected for the study while describing various aspects of human capital and strategic human resource management is Tesco PLC. Tesco is a supermarket multinational giant based on United Kingdom. The industry that is chosen for describing the human resource capital of the company is supermarket and retail industry. Globally many supermarket retail giants are ruling in their country of their origin but also in the other countries of the world. However, Tesco is listed under London Stock Exchange FTSE 100. Tesco is expanding its business operations in Germany. It is a vital decision of the strategic management department of Tesco in the process of business operations expansion. Globally supermarket sector is very competitive in nature. Many companies are expanding their operations in order to attract more customers by developing quality products at an affordable price. Price war is a vital aspect that is the driving the industry of supermarkets on a global basis. In the last five years, it is seen that the trends of the industry has been drastically changed. The nature of the products and the values of the companies are different. Apart from that, the taste and preferences of the customers regarding in the various ranges of products are also changing in the last five years. It is an important fact that in the economic recession, Tesco along with other supermarkets with the help of advanced technologies is successful in accepting the change in the market and fulfil the demands of the customers worldwide. Evaluation of International business environment Internalisation is the current trend that every business is adopting in order to achieve economies of scale. Apart from that, the main motive is the revenue generation along with increased brand image. In this context, Tesco at present has its business operations in 11 countries of the world. However, Tesco is in verge of expanding its market in Germany. Internalisation process includes many processes such as selection of appropriate modes of entry, market analysis, competitor analysis, value chain analysis. There are many theoretical frameworks, that companies usually use in order to formulate their appropriate form of internalisation strategy (Ulrich 2013). The theoretical frameworks include value chain analysis, porters five forces, porters diamond model, Porters generic strategies, Ansoff matrix, etc. The above-mentioned theories will help Tesco on doing business operations in the German market. A proper market research about the external market analysis is described in this sect ion of the study. Through PESTEL analysis, Tesco will help to gather a knowledge of the market environment of Germany and its developments from the last five years. Regarding external market, it is seen that the trends of shopping is changed a lot. Apart from that, the level of customer service of the supermarkets is increasing and has been changed a lot. All the supermarkets present in Germany such as Aldi, Lidl, etc. are using modern technologies in order to provide excellent customer service while attracting more customers towards their company. Apart from them, price war between the companies of the supermarkets is the main area of competition in terms of revenue generation as well as customer attraction (Budhwar and Debrah 2013). Tesco in German market not only implements cost leadership strategy but also it maintains an economy of scale in the process of manufacturing, distribution, marketing, etc. However, PESTEL analysis will help the company to gain an understanding of the different aspects o f the external market challenges. Tescos strong point of focusing the customers and improving their shopping experience will help the company to overcome the challenges and utilizing the opportunities available in the external market. PESTEL Political factors: Tesco is a company that operates on global basis. It is the biggest multinational supermarket giant in UK. Hence, performance of Tesco is highly favoured by the legislations of UK. Similarly German political condition is favourable for continuing the business operations of Tesco. As Tesco will employ huge number of German employees, German government will provide support to the company. Economic factors: Economic factors of Germany are stable. The growth of German economy is stable. Tesco will be able to generate huge profits from the German market. The food and grocery market of Germany is improved which will support the business operations of the company. International business of the company will be the benefitted by the favourable economic conditions (Mondy and Martocchio 2016). Socio-cultural factors: Socio cultural factors include the behaviour of the customers while purchasing goods. The decision-making factors of the consumers come under the socio cultural factors. The trend of rising of buying products is changing. German trends of shopping have been changed from one stop to bulk shopping due to wide changes in the society. Demographic changes are also prevalent in Germany. Technological factors: Germany is technologically advanced. Tesco will avail the benefits of using modern technologies of retail market. It is seen that Germany has leading supermarket chains that are spread in many countries of the world. Companies such as Aldi Lidl, etc, have a deeper reach in the perspective of technology but also in terms of technological aspects (Kramar 2014). Environmental factors: Environmental factors include sustainability in terms of protecting the environment. German government is very concerned about the environment and its effect from the companies. Tesco will have to abide by the rules framed by the German regulatory bodies. Tesco must focus on their strategic management department of the company so that they can cover the all-possible sustainable strategies in their business operations. Legal factors: Legal factors include the employment laws, human right laws, consumer protection laws, laws related to marketing, etc. that Tesco has to abide by while providing privilege to the German workers in their company. It will help in building trust with the employees as well as with the consumers (Brewster et al. 2016). Company profile Tesco is one of the largest retailers of the world that serves millions of customers through its online and offline stores. Every year Tesco is successful in accomplishing its business and strategic goals. However, the three values of Tesco are that Tesco treat people about their actual way of treatment, it tries hard to satisfy their customers and its every little help is responsible for creating a huge difference to the consumers. Main motive of Tesco is to continuous improvement of the experience of the shoppers by providing excellent customer service. The core business objectives of Tesco are to simplify the price of the products while improving ranges through continuous innovation of products (Truss Mankin and Kelliher 2012). It will lead to deliver excellent customer service by improving the shopping experience of the consumers. The business priorities of Tesco are to regain the competitive advantages not only in the markets of UK but also in the German market, to strengthen and protect the balance sheet and rebuilding transparency and trust. In this perspective, the regaining of competitive advantage in the German market is most important. The highlighted themes in this context are making the German shoppers trip easier, better availability of everyday products and stable, lower prices so that German shoppers can build trust on Tesco. Another aspect is trust and transparency both in terms of customers and employees of the German branch of Tesco. The strategic human resource department of Tesco will have to focus on the performance management systems of the employees so that it can meet the goals set for the business operations (Armstrong and Taylor 2014). It is seen that in many branches of Tesco, outside UK, the expected outcomes regarding the employee performance is not matching the actual performance of the employees. Finally, it leads to unexpected level of customer service. In the new branch of Germany, these activities will not be entertained. Hence, many changes are to be done that are mentioned in the recommendation section of the study. Evaluation of HRM theories Organizational culture is a vital aspect that is important for every company which are adopting different methods of internalization. Strategies of strategic human resource management and organizational culture are related with each other. Companies that are going global must adopt the culture of the target country. Cross-cultural dimension are to be maintained in order to get the maximum productivity from the employees working in the different strategic business units of the company. Adopting the new culture will help the company in building trust not only to the employees working in it but also to the customers of the company. The company to improve the element of culture in the organizational context can apply many strategic human resource models. They are described below. Harvard model: The model is used as a strategic map while concentrating on the softer part of the HRM aspects. Harvard model focuses on employee commitment. The model can be categorized into six categories such as situational factors, stakeholder interest, human resource outcomes, long term consequences, feedback loop, choice of human resource management policy. Michigan model: This model put emphasis on the harder aspect of HRM practices. It implies that people will be managed with the availability of the resources. As per the model, appraisal, rewards, selection and development are aligned to the organizational performance (Jackson et al. 2014). Guest comparative model: It is an integrated HRM practices that lead to superior organizational performance and individual performance. The model includes different types of strategies such as innovation, differentiation, focusing on cost reduction and quality that will lead to increase of good practices that influence commitment, quality of outcome and flexibility by selection, training, job involvement, job security, etc. The outcomes of the model are increased productivity, fewer conflicts, lesser complaints from the customers, etc. Warwick model: It is a model of human resource management that has an analytical approach that recognizes different impacts of the various roles of various personnel functions on different context of human resource strategy. The context are defined as inner context, outer context, HRM context, business strategy context, etc. Motivational theory: The theory explains various factors which affect a behaviour that is goal directed. It influences various approaches that are used in different strategies of HRM while enhancing employee engagement. It is a situation where people are focused in their work. The organizations are motivated in achieving higher levels of performance (Knies et al. 2015). Human capital theory: Human capital theory of human resource management illustrates the way that companies follow in order to utilize the skills, capabilities, and abilities while enhancing the capability of the organization and their impact on contribution to the productivity of the employees. Organizational values in terms of economy is related to the efficiency of the workers while achieving the organizational outcomes and accomplishing organizational goals. Tesco in its every branch of operations also uses human capital theory. However, it helps in utilizing different skills and abilities of the newly recruited people in the new branch (Marler and Fisher 2013). Recruitment and selection process Recruitment and selection methods of an organization are the main area of focus of the company while improving organizational process. Tesco is a multinational supermarket retail chain that is focused on delivering values to its customers. The organizational values can be provided to the customers only when the employees have a proper and in depth understanding of the organizational goals and objectives. Recruitment and selection methods are the strong areas of Tesco that is responsible for recruiting quality candidates from the German talent pool. Apart from that, Tesco is following many methods and strategies of rewards and recognition for their employees so that they can form the asset of the organization (Storey 2014). The process of recruitment is defined as the pool of qualified applicants that are selected for working with Tesco. Tesco applies various types of recruiting process while recruiting candidates such as internal processes of recruiting, external recruiting, and alte rnative ways. Internal approaches of training include promoting transfer, job-posting, union through assigning, dependents of decreased retired employees. On the other hand, external approaches of training include employment agencies, advertising, walk-ins, e-recruitment, employee referrals, college recruits, etc. Apart from that, alternative ways of recruiting methods include overtime, leasing employees, temporarily workers, part time workers, and outsourcing (Morgeson et al. 2013). In terms of recruitment, Tesco at first considers internal recruitment plans in order to fill their vacancies by employee referrals and other mentioned approaches. After that, if any suitable employee is not being selected from the internal management then the company focuses on internal e-recruitment methods while advertising their available vacancies in the intranet of Tesco. In terms of selection, the applicants are chosen in a way so that the company can get the best output from the selected candidates from the country (Bratton and Gold 2012). Apart from that, the participation and reward strategies of Tesco are lucrative that helps in talent management of the different levels of employees. Different approaches of training Training and development is considered as very crucial for the success and organizational development. Training approaches are beneficial for both Tesco and its employees. As a result of training, the employee base of the organization will be stronger in terms of efficiency and productivity. After the process of orientation, training will take place. Tesco follow the processes of training in order to enhance skills, knowledge and capabilities of the newly recruited employees of Tesco in its German branch (Alfes et al. 2013). Tesco has a different set of values that the employees of the new branch must know so that they can understand the organizational culture and organizational values in a proper way. It will lead to provide excellent customer service. However, there are different approaches of training and development that Tesco will have to adapt in the German branch such as in-house training, on job training, off job training, etc. In Tesco, on job trainings are provided to the employees of all departments in the everyday working basis. On-job training of Tesco will provide benefit to both semi-proficient and in-proficient employees. The newly recruited employees are trained in the practical working scenario so that they can be aware of the problems and challenges in their work areas. The motto of on-job training of Tesco is learning by doing (Buller and McEvoy 2012). On the other hand, off job Tesco in the German branch of operations will newly start training. As the main head office of Tesco in United Kingdom, hence the important decisions related to human resource department and other strategic management department of the company. New employees of Germany will be provided training in few areas from the corporate head office of Tesco in order to provide excellent customer service by improving the shopping experience of the German customers (Paill et al. 2014). There are differences in both types of training approaches in terms of results and way of providing the training. Cultural difference is an aspect that is important for managing the organizational performance in different branches of operations. Performance Management System Performance management is defined as the goal oriented process that direct towards ensuring different organizational process that helps in maximization of productivity of the teams, employees and organization as a whole. Performance management is considered as the major player that will help Tesco in achieving the organizational goals while enhancing the value of the employees (Jiang et al. 2012). Different types of performance management systems include incentive goals and improvement of the performance of the employees. Modern businesses focus on the performance management systems so that their productivity can be improved. In the perspective of performance management system, every workers of the organization is equally important. Organizational culture of Tesco is an important aspect that the company focuses so that they can serve better to the customers. If the performances of the employees are not up to the mark, then they are not be able to serve the customers by meeting their demands. Hence, Tesco will implement Integrated Learning and performance management in order to accomplish the goals and objectives set for the business objectives. German employees should be measured as well as the customers of the company should be checked (Renwick et al. 2013). Different kinds of performance appraisals as well as automated solutions are to be formulated by the company while developing the careers of the employees. Individuals of the company must be aligned with the corporate goals of the company. In Tesco, both operational performances of the department as well as the performance of the company towards the community are concerned because the company values are aligned with focusing the customer needs. Internal audit is done on the perspective of measuring the organizational performance as well as individual performance. German employees will be more in number in terms of employees from UK (Obeidat et al. 2016). The strategic management department of the company along with the human resource department of the company will be responsible for maintaining all the steps of performance management systems. Relation between HRM and organizational performance Many issues are faced by the organizations that are adopting the process of internalization especially in the aspect of strategic human resource management. Tesco will also face in the aspect of strategic human resource department. There is a direct and indirect relationship between organizational performance and HRM. Employees of the organization sometimes faces lack in understanding regarding the understanding of the process in which strategic HRM is responsible for creating increased performance and organizational performance (Stahl et al. 2012). Little understanding is required about gaining a proper knowledge of the mechanisms of the strategic human resources practices. Black box model in this situation will help the company in mitigating the issues in HRM. The black box acts as a mediator between the HRM practices and organizational performances. There are many concepts that are included in the different aspects of the black box. The model acts as a casual pathway between the organizational performance and the HRM practices of the organization. The relationship between different aspects of the HRM aspects is complex in nature. Different practices of HR include training, selection, rewards, appraisal, involvement status, job design and job security. The mediating variables of these aspects are abilities of the employees, skills of the employees, understanding the role of the workers, skills of the employees, structure of work, motivation of the work, opportunities of work, etc. The HR related issues are all mentioned in the black box model (Stone and Dulebohn 2013). Organization goals of Tesco are focused on the commitment of the employees in improving the different types of shopping experiences of customers. Organizational commitment is an aspect that should be considered by every employee of Tesco in order to provide his or her best to the organization. As a multinational retail giant, the company not only focus on to the development of new products while serving the demands of the German people in the market but also to the level of service provided by the employees to the shoppers (Jabbour et al. 2013). Importance of compensation and benefits Compensation is defined as the systematic approach that will provide both monetary and non-monetary approaches while putting emphasis on the values of the employees. Benefits are provided to the employees in return of their work done. Compensation in Tesco is a tool which is used to by the management department of the organization in order to use resource capabilities while improving the performance of the company by encouraging employees to perform well in their respective fields of work (Hendry 2012). Compensation in Tesco is used for achieving various purposes while assisting the human resource department in the field of job satisfaction, job performance and recruitment. Tesco will adjust the compensation as per the business objectives, goals, requirements and other available resources of the company. Compensation is used in many purposes such as: Recruiting and retaining qualified employees Increasing or maintaining morale satisfaction of the employees Rewarding and encouraging peak performance Achieving internal and external equity Modifying practices of unions through negotiations (Shields et al. 2015) Improving job performances, job evaluation, job satisfaction Retention and recruitment of talented and qualified employees is one of the goals of the human resource department of Tesco. The cost and availability of the qualified candidates that have applied for the open positions available in Tesco Germany is also determined by the external market factors. However, Tesco will introduce many compensation plans for their German employees in order to boost up the performance of the companies while enhancing competitive advantage to the employees (Chuang et al. 2013). Ideal compensation has so much benefits and is responsible for having a positive impact on the performance of the employees of Tesco. The employees of Tesco will be encouraged by the systems of performance management and compensation while driving excellence in their field of work. However, benefits of Tesco will enhance job evaluation process while setting up a standard for the job in order to create unique standards of the job assigned to the new German workers (Sourchi and Liao 2015). Conclusion: Tesco is a supermarket giant that has a well reputation in Britain as well as in its other 11 locations in 11 countries of the world. The company is in the verge of expanding its business operations in Germany. There are many challenges that are mentioned in the study both in terms of internal and external environment. In terms of external environment, it is seen that the Germany is very competitive in terms of supermarkets. Tesco will face tough competition from Aldi and Lidl that has a huge market share as well as high reputation in the market. Apart from that, they are also having a well maintained supply chain and distribution channel between their facility sites and the departmental stores. Besides these there are also other issues related to the human resource capital management that Tesco might face while expanding its business operations. Supermarkets of Germany are competitive in nature. They are serving the customers at their level best not only in terms of best quality pro ducts but also in terms of excellent customer service. Apart from these activities, the government laws and regulations of Germany are also responsible for modification of some of the business operations. Tesco will have to abide by the laws and regulations of the government of Germany in order to maintain its business operations smoothly. Regarding the external environment, Tesco must choose the suppliers and distributors widely so that it can utilize the best from them in order to maintain a low cost in the perspective of manufacturing. Lower cost manufacturing along with selling goods to the customers of the target by maintaining a standard quality will be the future strategy of Tesco while penetrating German market (Stredwick 2013). Tesco will have to conduct market research not only in terms of product development but also in terms of competitive human resource advantage. Competitive advantage in terms of human resource capital is a vital aspect that will help Tesco in gaining an increased market share in the supermarket industry. Human capital measurement in this aspect is necessary for increased customer satisfaction (Shatouri et al. 2013). Strategic human resource management i ssues of Tesco are also related to the external environment that are explained in the study. Retail industry is based on both products and excellent customer service. Human capital is a factor of consideration of Tesco when it is not operating on its home country. Recruitment of German people is more profitable for Tesco than recruiting people from UK. Apart from that, the methods of compensation and benefits of the employees must be modified as per the employment regulations of Germany (Boella and Goss-Turner 2013). Non monetary benefits can be added in order to motivate the new German workers of the company. Tesco must build trust to the consumers of the Germany in order to recruit quality people for the company. Different types of performance measurement techniques that are discussed above must be implemented at regular interval so that the real talents of the company will get highlighted (Nickson 2013). 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