PEST Analysis and HR Strategies for Ottcos

Critical analysis of the external environment of Ottcos using PEST analysis

In order to critically analyse the external environment of Ottcos, the use of PEST analysis is being made. PEST is a strategic management tool which comprises of aspects such as Political, Social, Economic and Technological. The application of the tool for Ottcos have been identified as follows:

Political: The political environment has remained a complicated factor influencing the operations of Ottcos. This can be contributed to the exist of Britain from the Union which has led to increase in regulations and further trade laws which have made business costlier for Ottcos. In addition to this, hiring of the employees has become even more complicated due to the Brexit regulations. In addition to this, the decision regarding the international lockdown and other social distancing norms have also affected the operations of the enterprise.

Social : The social environment can be rightly identified as the overall customer choices. The customers now prefer safer options where they would not required to visit stores. Moreover, since February 2020, the interest of the different customers within the online shopping has increased. This reflects the changed customer behaviour.

Economical: The entire world economy has been experiencing a recent slump which thereby reflects that the costs for Ottcos have increased greatly. Pertaining to this,  the rents and other expenses for the firm have increased considerably.

Technological: The technological factors affecting the operations of the firm can be identified to be the increase in online business and other trends which have attracted the customers towards online purchases. In this context, it is critical to understand that, customers have now been preferring online purchases and use of artificial technology in business.

The use of SWOT analysis can be made to identify the different strengths and weaknesses of Ottcos. However, only Strengths and Weakness would be applied for the firm’s purpose:

Strengths: The strengths can be identified as the key beneficial factors which a firm’s possess and assist the enterprise in facing the different external environment factors. The key strengths of the firm are as follows:

-The firm has a large number of stores which bring about large range of revenues for the enterprise.

-The firm has a strong human resource department which looks out of employee issues.

-A majority of the members of the firm have been employed in the enterprise for more than  years

-The online sales of the business has been performing well.

Weakness: The weaknesses of the business can be identified to be certain shortcomings as possessed by a business which create barriers for its success. For the enterprise, the following weaknesses can be identified:

SWOT Analysis of Ottcos

- The business’s sales have been going down due to the pandemic and the expenses have been increasing due to the increased rent.

- The performance management as an organizational practice is not engaged in well by the enterprise.

- Currently the enterprise has been facing issues associated with employee layoffs which may lead to issues associated with unions.

- The morale of the employees is also very low.

A Human resource strategy can be rightfully identified as the key strategies which generally tend to help an enterprise in managing the different employees of the firm and overcome the key human resource issues being faced by the enterprise (Boon, Den Hartog and Lepak  2019). The human resource strategy serves as a key technique which deals with the different gaps as identified within the enterprise. Some of the key human resource issues which have been identified within the enterprise are as follows:

- Low employee morale: Firstly, Ottcos has been facing issues regarding the poor employee morale. Here it is significant to understand that as there existed a considerate threat of lay offs and the decreased benefits as provided by the firm which have led to a poor employee morale. The employee morale’s are believed to have a very strong influence on the overall operations of the enterprise and in this concern, when the employee morale is considerably low then the firm’s performance is also poor.

- Poor performance management within the firm: The performance management can also be identified as a critical engagement which is adopted by the enterprise to review the performance of the different members of the firm. Here it can be identified essential to take a key note of the fact that when the performance management and review procedures are not carried out effectively, the different employees who have been performing poorly cannot be identified and hence, talent management strategy can be secured.

- Employee layoffs: Another human resource issue being faced by the enterprise can be identified as the employee layoffs. Here it is evident to understand the fact that due to store closures , the employee layoffs has increased.

- Union concerns: In a scenario where the firm would be facing issues in relation to the employees or the employee payoff considerations, the firm has been facing Union concerns where the Unions might create issues related to poor benefits and pay.

HR issues faced by Ottcos

- Poor Human resource management: Although the firm has a designated Human resource department, it becomes effective to understand that the grass root level of management of the enterprise can be identified to be very poor. In regards to this, it becomes evident to understand that the retail managers and operations managers are required to manage the employees which loses out on the essence of employees.

- Sickness and absence rates: The sickness and absence rates of the enterprise have been increasing. Here it is evident to understand that, as the employees have become demoralised, this has led to an increase in the overall sickness and absence rates. This indicates increased employee turnover.

-Grievance and disciplinary issues: Recently, the grievance as well as disciplinary issues associated with the enterprise have been increasing whereby the employees have been reflecting disciplinary concerns which is bound to have a strong influence on the customers as well.

As a result of the problems, the following human resource strategies can be designated for the Ottcos:

Performance appraisal: The performance appraisal can be identified as the key engagement adopted by the human resource manager which engages in the performance review of each employee so as to examine the shortcomings, strengths as well as the scope of development of the particular employee which would facilitate better talent extraction and management. Every employee would be required to undergo a performance appraisal program on a regular basis which would facilitate better performance management and results for the organization (Fenech,   Baguant  and Ivanov  2019).

Benefits and recognition: The benefits as well as the recognition can be rightly identified as another Human resource strategy which facilitates better management of the human resource. In this concern, it is critical to underline that when the different employees as present within the enterprise are provided with a considerate level of benefits and recognized for their benefits, then in this regard, the overall performance of the firm is bound to increase. Currently the staff discount has decreased from 15% to 10% which has led to a sense of dissatisfaction. Moreover, the absence rate of the firm has also increased to a greater extent which can be resolved by recognizing the efforts of the employees and providing them with benefits for good performance. Recognition and rewards also help in boosting employee motivation.

Human resource planning : The human resource planning as a human resource strategy can be identified as a technique using which the overall performance management at the firm can improve. In this regard, it is critical to take a key note of the fact that at the grass root level, the enterprise has been facing certain issues such as management of the human resource by the retail and operational managers who essentially do not understand the key employee concerns and manage the operations on a regional basis. However, with the increasing concerns of the enterprise, it is important that the focus on the key human resource issues is engaged in a comprehensive manner whereby the specialists are employed to look after individual store problems (Carnevale  and Hatak  2020).

HR strategies for Ottcos

Development and training: The development and training can be identified to be another human resource strategy which can be applied by the enterprise so as to see to it that the related behavioural and disciplinary issues which are being faced by the enterprise can be resolved. Pertaining to this concern, it is critical to identify that when the employees are trained well, their skill sets improve and the related performance can be monitored well.

Compensation: Lastly, the compensation can be identified as another concern which has to be improved. Currently at the enterprise there have taken place several concerns associated with the pension plans and the salaries and in this regard, the Ottcos would be required to see to it that the compensation has to be improved. The firm has to come up with a systematic compensation strategy so that all employees can be paid well as per the industry standards which would ensure that issues related to the Unions can be mitigated and the employees can be encouraged to perform well.

The recovery and resilience plan can be prepared in a systematic manner so that the current issues as related to the different human resource problems which are being faced by the enterprise can be mitigated. Some of the key engagements which have been recommended for the better management of the current issues can be identified as development of the compensation strategy, rewards and benefits strategy, training and development strategy alongside the performance management strategy. These strategies have been developed so as to ensure that the organization is being able to survive well and is able to pass through the tough times. However, as underlined by Fenech,   Baguant  and Ivanov  (2019), the related recovery and resilience plan which can be developed by the Ottcos has to be made in alignment with the organizational vision , corporate values and culture.

The corporate values and culture can be recognised as the overall beliefs and culture as set by the founding members of the enterprise which may contribute to the management of organizational operations. Here it is evident to understand that although the resilience and recovery plan is being made to save the enterprise from the different issues it is bound to face during a pandemic and the human resource concerns which are faced by a firm, they have to align  well with the different cultural values of the organization.

Hence, firstly, the management at the Ottcos would be required to review the recovery and prescience plan and ensure that they are ethical. Although the business enterprise has been undergoing a tough phase currently, it would be required to see to it that all engagements are taken within the scope of the ethics. Ottcos swears by ethical dealings and hence, facing every issue ethically can be identified to be a smart plan.

In addition to this, the enterprise would be required to see to it that the plans taken have to be undertaken in regards to the employee and customer welfare. In this context, it can be identified significant to understand that the recovery plan has to be taken so that minimum disruption is caused to the different employees of the firm. Ahammad,   Glaister  and Gomes  (2020) mentions that it is the purpose of the firm to see to it that the different employees are well supported and hence, employee welfare being a key value of the firm, the recovery and resilience plan must take into consideration their welfare. Another key aspect which the recovery and resilience plan would be required to consider can be identified to be the fact that the customer concern also needs to be managed effectively. The recovery and resilience plan must be such that adequate offerings and facilitations are made for the customer offerings which would help in developing a sustainable relationship with them.

Therefore, through a mix of online and offline innovative strategies and considering ethical operations, the Ottcos would be required to come back to regular operations and build a suitable competitive advantage for itself.

References

Ahammad, M.F., Glaister, K.W. and Gomes, E., 2020. Strategic agility and human resource management. Human Resource Management Review, 30(1), p.100700.

Boon, C., Den Hartog, D.N. and Lepak, D.P., 2019. A systematic review of human resource management systems and their measurement. Journal of management, 45(6), pp.2498-2537.

Carnevale, J.B. and Hatak, I., 2020. Employee adjustment and well-being in the era of COVID-19: Implications for human resource management. Journal of Business Research, 116, pp.183-187.

Fenech, R., Baguant, P. and Ivanov, D., 2019. The changing role of human resource management in an era of digital transformation. Journal of Management Information and Decision Sciences, 22(2), pp.1-10.