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Human Resource Practices Of Tesco

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Question:

Discuss about the Human Resource Practices of Tesco.
 
 

Answer:

Introduction

Human resource or HR practice is the strategic use of human resources to meet the objectives of the organisation, while ensuring the satisfaction of all the employees.  HR management of human resources involve planning, organising, controlling, and directing. These four elements are useful for development and maintenance of human resources. HR management is important as employees and their skills, abilities, knowledge ensures organisational success. The HR practices are important in guiding the operations of human capital (Armstrong and Taylor 2014). The report deals with the discussion on HR practices of Tesco in Ireland that conducts grocery business. It was formed in 1997 by the supermarket group Tesco plc. In Ireland there are 148 Tesco stores operating currently. It is the leading food retailer in Ireland and has employed (Chen 2014). As a role of HR consultant, the  HR aspects of Tesco  that will be discussed are recruitment and selection of employees, achievement of high performance from the new employees, achievement of commitment from the new employees, potential issues on cross cultural management and other challenges.   

Recruiting and selecting our new employees

According to Armstrong and Taylor (2014) recruitment and selection of new employees in retail stores is mainly based on the qualifications matching the job profile and experience in similar industry. Retailers benefit from employees actively participating in walk-ins. It is because the retail business is highly dependent on front end sales. Front desk service staff plays a crucial role in interacting with customers. Therefore, store mangers engage in recruitment through asking customers, open interviews, other stores, and referrals (Harney and Monks 2014).

While in Tesco, jobs are advertised in different ways. Initially it opts for internal job posting using “internal talent plan” to give opportunity to enthusiastic employees, seeking opportunity.  The job post is available on intranet. For external recruitment, the vacancies are posted on www.tesco-careers.com. The prospective employees can also register themselves through “jobcentre plus”.  Further, Tesco goes for intense advertisement for specific jobs such as online and offline media, radio and television, and magazines. It is evident that Tesco engages in international recruiting efforts that are more intense than the traditional HR practice in this sector (Finance 2018).

 For final stages of selection, retail store mangers screen employees for best fit for the job role. Skills looked for are customer service skills, problem solving during conflicts with customers, dynamic personality, positive body language and ability to respect client’s needs. The selection of employees involves review of resumes, followed by telephone interviews and screening, interviewing, selection involving HR feedback, as well as personality test (Harney and Monks 2014). Tesco screens employees those are most suitable and demonstrates CV that matches the job specifications. Tesco saves huge time by 'job type match' tool on its website to allow employees know their eligibility. Followed by screening, Tesco conducts assessment of each employee to ensure consistency. The employees are tested for problem solving skills and those qualified are taken for interview.  It is conducted by the line mangers in coordination with HR managers (Finance 2018).  Thus, the selection of employees in Tesco follows the pattern that is common to industry, but very stringent. The company uses both hard and soft measures in recruitment and selection. There is not much need of improvement in this area. However, Tesco needs sound strategies to sustain the competition in the cut throat market. The company must retain the old employees, with substantial experience and reduce casual employees as much possible (Hayre 2015). 

 

Achieving high performance from the new employees

To achieve high performance from the employees, the HRM should promote every opportunity of growth and learning. The HRM must further develop objective pay policy, create anonymous feedback mechanism, ensure effective communication, and establish an open book management system (Armstrong and Taylor 2014). HR practices in Ireland for ensuring high performance from new employees are investing in learning and development, creation of attractive ambience, up skilling of current practices, pay benefits, to ensure talent pipeline for future. Talent management is central to HR practice as it address skills shortage, ensure flexibility from employees. Another method to ensure high performance in this industry is leadership development. It reflects good people management practice that is central to retails sector employee skills (Harne and Monks 2014).

Tesco ensures high performance from new employees by respecting diversity, providing equal opportunity to all the employees, and good training and development opportunities. Tesco in Ireland is recognised for its attractive pay and performance benefits to drive high performance from new employees. Eventually, employees at Tesco give more productivity as they feel valued (Walsh 2015).   Tesco provides training and development to new employee to serve customers better. Tesco offer school leaver programme for people with higher school leaver’s qualifications. It also offers graduate programme. In collaboration with the “Ireland’s National Training and Employment Authority”, Tesco has developed two national training awards.  Therefore, the company addresses any skills gaps among new joinees. The HR managers work hard to ensure that 95% of the retail staff is trained to bronze level and 75% to silver level. It allows majority of the front and back office staff to achieve targets (CIPD 2018).

In order to drive performance, Tesco tracks any health and safety issues in workplace. The HR management was effective in last decade to reduce the workplace accident and there are adequate measures to report the accidents (Bach 2013). The HR at Tesco Ireland motivates its employees for performance through attractive rewards and benefits. The company clearly communicates the retirement plans and allows the employees to earn by participating in share purchase. The company shares its success with new and old employees that drive high performance and commitment (Bach 2013). It reflects good people management practice that is common to this industry. The HR practices engage in open communication with new and old employees. The various channels of communication are intranet hub, face-to-face briefings, questionnaires, and staff newspaper to present new features or news or staff views (Hayre 2015). Thus, in addition, to the objective pay policy HRM has been successful in open book management that allowed high performance from new employees.  It is consistent with the industry practice in Ireland, in terms of communication and consultation. However, in this area, HR practices in Tesco needs further explicit linkage between the rewards and recognitions with organisation’s overall profit (Finance 2018).

 

Achieving affective commitment from the new employees

Employee commitment is essential for gaining competitive advantage and is central to HR practice. Employee commitment and engagement are the priority of the HR management in Ireland.  Various strategies are used to achieve new employee commitment such as respecting needs, effective feedback system and clear cut strategies for employee engagement such as Diploma in client relationship management or hospitality that is nationally recognised (Armstrong and Taylor 2014). To ensure effective commitment from the employees, Tesco offers wage rate that is higher than common to the industry. In addition the company pays the employees with wide range of competitive benefits. The benefits are in line with the national regulations and labour laws of Ireland (Finance 2018).  Further, the company links bonus schemes to the profitability. New employee’s stays committed owing to its long term reward plans and clarity on investment in performance pay. The HR managers have also introduced staff discounts to allow them to gain higher rewards than the customers. The new employee treatment at Tesco is fair, simple, competitive and sustainable. In Ireland the HR practices have been appreciated for giving employees opportunities to join various schemes. In conclusion the new employees feel that the loyalty is rewarded and is successful approach in Tesco in retaining 80% of the employees (Briône and Nicholson 2012). 

According to www.bitc.ie (2018), employees of Tesco are satisfied and their loyalty has increased.  They feel more involved in the company.  It is attributed to the “Save As You Earn (SAYE) offers” where the employees can buy the Tesco shares at a discounted rates. At the end of the saving contract, the employee receives the tax free bonus. Such scheme has benefitted more than thousand employees financially and they are enthusiastic in working. The HR practices of Tesco are commitment based model in contradictory to the HR practices in Ireland in retail sector, which is control based. In this industry, there are challenges to retaining talent and addressing the skills gaps (Ellinger et al. 2013). Other retail companies in Ireland are struggling to increase employee engagement or commitment. To ensure commitment from new employees, Tesco HR practices demonstrate increase investment in maternity and paternity benefits and offering of well being programme. Ireland HR practices are far more way to go towards achieving full commitment from new employees in most of the retail and non-retail companies. On the contrary, the HR practices of Tesco too do not demonstrate clear strategies for new employee engagement. It is against what is common to the industry (CIPD 2018). This is the area needing better strategies for improving commitment from new employees. It is recommended to create agile workplace, complying with labour laws of Ireland. The HR must recognise the legitimacy and nature of the stakeholder’s interests to reduce turnover (Walsh 2015).

 

To highlight any potential issues on cross cultural management

HR management plays an important role in cross cultural management. It is central to international HR mangers to drive the performance of expatriates. In this regard the role of the HR is to ensure cross cultural training program to meet the different needs of employees. It will help accept the difference in opinions and prevent cross-cultural shock due to stereotyping, stigmatisation and others (Hayre 2015).  The HR practices in Tesco however do not fully reflect the respect to inclusion and diversity. In 2014, the journal.ie published, employees were discriminated due to different nationality. The Equality Tribunal then compensated the same with €12,000 for employee who underwent discrimination (McNamee 2014). In 2017, security guard was racially abused by store manager. The employment appeals tribunal then compensated the issue with €24,000 (Deegan 2017). Also in 2017, Tesco was accused of discrimination against Polish passport as ID in Dublin stores (Adams 2017).  These practices are against the HR practices common to industry. Cross cultural training is area of greater focus to prevent ethical issues. HR practices to promote stringency in cross cultural management and train employees on various policies on passport acceptance. The organisation benefits with increasing cross culture competence of the staff (Adams 2017).

 

Any other challenges you feel relevant to mention

The common challenges in this industry include, lack of understanding of strategic role by senior management, increase in working hours and voluntary employee turnover (Harney and Monks 2014). In 2017, Tesco had faced ethical issues with its employees complaining denial of rights. The organization denied the rights of the long serving Tesco workers. The HR had to face the strike at large supermarket and central to issues were respect and decency.  The strike continued in 16 stores in Ireland. The employees were asked to leave or stay and adjust or accept the cuts in pay. The HR practice in these areas failed in terms of solidarity (O'Halloran 2018).  The old workers were asked to move to the new contracts. It was called as “project black” as it was shedding employees through the process of voluntary redundancy.  These practices however, reflect compliance to the labour court in Ireland since 2016 (Walsh 2015). However, the employees described anonymously the culture of fear and hostility. However, the company defend itself based on the terms and conditions set before 1996. The trade unions were found to be derecognised (Brennan 2018). This area of improvement implies for the HRM to maintain solidarity and reduce hostility in Tesco stores, without deviating from national legislations. It implies to cut down leadership strategies that slavishly meet one target (Walsh 2015).

 These challenges faced by the Tesco are in alignment with the HR practices and challenges in Ireland. In conclusion, the HR practices of Tesco are not against of what is common in this industry. It is common in this industry to build employee trust and create environment, where employees feel valued, voices heard, and safe (Finance 2018). Hostility in Tesco is against this practice. It demonstrates the lack of understanding among HR mangers to perform strategic role. It is recommended for HR practices flexible enough to ensure stakeholder’s satisfaction and create value for stakeholders. Stringent policies must be formulated to prevent discrimination against customers (Felsted, 2015).

Conclusion

In conclusion, the HRM in Tesco Ireland recruits and selects employees, train and develop them to deliver best service. It involves in effective communication system and ensures information sharing with employees.  Tesco uses commitment based HRM model for active participation of employees. The use of various benefits and rewards are attractive enough to drive high performance from new employees as well as sustain their commitment. The HR practices are consistent with HRM in Ireland in this industry. However, the matter of concern is failure of Tesco’s HRM in preventing cross-cultural issues and is against the normal industry practice in Ireland. It implies better understanding of strategic role by the HR.

 

References

Adams, C. 2017. Tesco Ireland accused of discrimination after shop refuses Polish passport as ID. [online] irishmirror. Available at: https://www.irishmirror.ie/news/irish-news/tesco-accused-discrimination-after-dublin-9637312 [Accessed 26 Mar. 2018].

Armstrong, M. and Taylor, S., 2014. Armstrong's handbook of human resource management practice. Kogan Page Publishers.

Bach, S., 2013. Performance management. Managing human resources: Human resource management in transition, pp.221-342.

Brennan, C. 2018. Inside Tesco Ireland's 'Project Black' - and the reasons why it has the unions so worried. [online] Fora.ie. Available at: https://fora.ie/eversheds-project-black-tesco-2-3238438-Feb2017/ [Accessed 26 Mar. 2018].

Briône, P. and Nicholson, C., 2012. Employee ownership. Retrieved from: https://www.centreforum.org/assets/pubs/employee-ownership.pdf

Chen, Z., 2014. The Effect of Consumers’ Lifestyle on Trade Area Size--A Study of TESCO in Ireland and the Czech Republic (Doctoral dissertation, Department of Geography, University of Wisconsin-Madison).

CIPD 2018. HR Practices in Ireland January 2017. [online] Cipd.ie. Available at: https://www.cipd.ie/Images/CIPD-HR-Practices-in-Ireland-Survey-2017-Final_tcm21-21290.pdf [Accessed 26 Mar. 2018].

Cooper, C.L., Liu, Y. and Tarba, S.Y., 2014. Resilience, HRM practices and impact on organizational performance and employee well-being: International Journal of Human Resource Management 2015 Special Issue.

Deegan, S. 2017. Security man awarded €24,000 after being racially abused by Tesco store manager. [online] TheJournal.ie. Available at: https://www.thejournal.ie/security-man-awarded-tesco-ireland-3599674-Sep2017/ [Accessed 26 Mar. 2018].

Ellinger, A.E., Musgrove, C.C.F., Ellinger, A.D., Bachrach, D.G., Ba?, A.B.E. and Wang, Y.L., 2013. Influences of organizational investments in social capital on service employee commitment and performance. Journal of Business Research, 66(8), pp.1124-1133.

Felsted, A. 2015. Cultural pressure at Tesco to over-reach caused crisis. [online] Ft.com. Available at: https://www.ft.com/content/75bd6bf2-781e-11e5-a95a-27d368e1ddf7 [Accessed 26 Mar. 2018].

Finance, P.A.M. 2018 Human Resource Management HRM-TESCO. Retrieved from: https://istudyhub.net/assets/uploads/course_work_hub1511_12_151449829725.pdf

Harney, B. and Monks, K., 2014. Introduction-strategic HRM: research and practice in Ireland (pp. 1-13). Orpen Press.

Hayre, A., 2015. Human Resource Management. Roles of Line-Managers and Stages of HR Planning. GRIN Verlag.

McNamee, S. 2014. Polish Tesco worker awarded €12,000 for racial discrimination after taking a day off work. [online] TheJournal.ie. Available at: https://www.thejournal.ie/polish-day-off-work-taking-equality-1784083-Nov2014/ [Accessed 26 Mar. 2018].

O'Halloran, M. 2018. Seanad supports motion urging Tesco to respect workers’ rights. [online] The Irish Times. Available at: https://www.irishtimes.com/news/politics/oireachtas/seanad-supports-motion-urging-tesco-to-respect-workers-rights-1.2984271 [Accessed 26 Mar. 2018].

Walsh, M., 2015. An exploration of Employee Turnover of Front Line employees in Tesco (Doctoral dissertation, Dublin, National College of Ireland).

www.bitc.ie 2018. Tesco Ireland: Sharing our success with staff - Business in the Community Ireland. [online] Business in the Community Ireland. Available at: https://www.bitc.ie/csrcasestudies/tesco-ireland-sharing-our-success-with-staff/ [Accessed 26 Mar. 2018].

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