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Module Title: HRM in Practice
Module Code: HR4038
Word Count: 2953
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Table of Contents
Part 1..........................................................................................................................3
Introduction............................................................................................................3
Overview of the Organization................................................................................4
Organizations’ Overall Strategy and its HRM Strategy.........................................4
Nature and Characteristics of HRM.......................................................................7
Main features of People Management Strategies...................................................8
Feature1: People Resourcing...............................................................................9
Feature 2: Talent Management............................................................................9
HR Practice-Based Challenges.............................................................................10
Alternative Approaches to Managing and Leading People within the Business
Context.................................................................................................................11
Conclusion............................................................................................................13
Part 2........................................................................................................................13
References...............................................................................................................14
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Part 1
Introduction
Human resource management or HRM is one of the most important factors for the success of any
organization. The performance and sustainability of a business depend on efficient HR practices.
The report is based on the critical examination of HR practices and the role of human resource
management in the context of Tesco plc. HRM plays an important role in Tesco and its
performance. The report reflects the overview of Tesco plc. Its overall strategies and HRM
strategies will be identified in this report. Along with this, the nature and characteristics of the
HRM practices in Tesco plc are also focused on. Two of the given topics are selected to show the
features of people management strategies in the organization. The two topics on which the report
focuses are People Resourcing and Talent Management. There are HR practice challenges in the
organization as well. the challenges are also described here. The alternative approaches of
leading and managing people in the organizational context of Tesco plc are reflected in the report
as well. The report as a whole discusses the HR practices, their challenges, and impacts upon
Tesco plc.
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Overview of the Organization
Tesco plc is a public limited company in the UK operating in the retail industry. The company
was founded in 1990 by Jack Cohen. The company has currently expanded its operations
worldwide. The company has diversified operations through supermarkets, convenience shops,
hypermarkets, etc. Currently, the company is operating 4673 locations with 367,321 employees
(Chen, 2022). The company’s net income was £6.147 billion in 2021 and its equity was £12.325
billion. Tesco plc offers products ranging from the lowest to the highest prices. It is a strategy for
the business to attract more customers from every social group. According to the vision
statement of Tesco plc, the company desires to become the most valued business by its
customers, communities, employees, and shareholders (Tesco PLC, 2022). And the mission
statement of the business states that Tesco is looking forward to serving a little better to the
shoppers every day.
Organizations’ Overall Strategy and its HRM Strategy
Organizational strategies refer to the plans of utilizing the resources of the organization to gain
profitability and competitive advantage (Amos et al., 2019). Porter’s Generic Strategies include
four such strategies that help an organization gain a competitive advantage. The competitive
strategies of Tesco plc are evaluated below using Porter’s Generic Strategies view.
Porter’s Generic Strategies:
The strategies included in the generic strategies are differentiation, cost leadership, focus cost
leadership, and focus differentiation. According to Michael Porter, a company should select and
incorporate one of the four strategies to gain a competitive advantage (Ivancevich & Konopaske,
2013). Tesco has established a combination of differentiation and focus cost leadership strategies
in its operations. The company provides a range of different products and services that makes the
organization unique and helps attract customers. For instance, Tesco plc was the first retail chain
that established the Clubcard system in which the buyers gain points with each purchase, and the
points can be used for further purchases from any outlet of the company.
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Figure 1: Porter's Generic Strategies
Source: (Milkovich & Boudreau, 2017)
The company is also known for its affordable products. They sell premium-priced products also
known as Tesco Finest as well as low-cost products which are called Tesco Value products
(Imrie & Dolton, 2014). The company focuses on a specific social class and certain products and
keeps the product prices affordable for the customers which indicate the focus cost leadership
strategy.
Marketing Strategy:
The marketing strategy of a company can be defined using the 4 Ps of the marketing mix these
are Product, Price, Place, and Promotion (Mondy & Martocchio, 2016). These four elements are
equally essential for a company to gain success in its marketing strategies. Tesco plc focuses on
these elements and makes sure its marketing strategies attract customers’ attention. The company
introduces unique products and services, it also provides products of different price ranges from
lower to higher, the company is operated in 4673 locations and provides services to the doorsteps
of people, Tesco also promotes the business through print media and social media. All these help
the business get more engaged with its customers, get feedback and improve performance.
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Figure 2: 4Ps of Marketing
Source: (Nel et al., 2021)
Growth Strategy:
The growth strategy of a business is relevant to its expansion and Tesco plc has expanded its
business worldwide. And for this, the company focuses on four different strategies while its
expansion. Ansoff Matrix describes these strategies for organizational growth. These are as
follows:
Market penetration: Market penetration refers to the strategy of selling existing products in the
existing market (Price & Price, 2015). Tesco plc has adopted competitive pricing strategies and
often provides different offers on its products. In this way, the sales rise.
Product development: Tesco sells several products from different companies and also produces
many products of its own. A product development strategy brings about sustainable growth to
the business.
Market development: Market development is introducing existing products into a new market
(Stone et al., 2021). Tesco has expanded its business in many regions and it helped the company
in market development.
Diversification: Diversification refers to selling new products in a new market (Tyson et al.,
2016). Tesco had initiated its business as a retail grocery shop. Later, it expanded the business in
many other sectors and diversified the business.
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Figure 3: Ansoff Matrix
Source: (Valentine et al., 2020)
HRM strategy:
Tesco plc has adopted and implemented many HRM strategies for improving its skills and
competencies. The employee turnover of the company was 3.42% in 2022 which was 13.18% in
2021 (Macrotrends, 2022). The company is focusing on taking measures to reduce employee
turnover and motivating them. The company focuses on providing employees with the necessary
training and knowledge. The company implements Commitment-based HRM. It provides the
employees with bonuses, financial benefits, recognition for their performance, and so on. Tesco
plc ensures a safe work environment for the employees.
Nature and Characteristics of HRM
HRM or Human Resource Management involves recruiting, training, and positioning employees
in an organization in a way that helps the organization reach its goals (Amos et al., 2019). The
nature of HRM practices in Tesco is quite positive and employee-friendly.
Hard vs Soft HRM: Hard HRM focuses on achieving organizational goals by any means and it
does not motivate employees to perform their best rather it forces them to attain the goals. On the
other hand, soft HRM motivates employees in many ways so that they tend to think of
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themselves as a part of the organization and can perform their best (Ivancevich & Konopaske,
2013). Tesco has adopted soft HRM practices. It provides a friendly and safe environment to its
employees. It ensures that the employees are motivated and happy at their workplace. In this
way, the profitability and growth of the business are increasing and its employee turnover is also
decreasing.
Commitment-based HRM: Tesco plc practices commitment-based HRM as well. It involves a
commitment to the employees regarding incentives such as performance bonuses, salary
increments, profit sharing, and so on (Milkovich & Boudreau, 2017). Tesco promises various
financial and non-financial benefits to its employees based on their performance. It motivates the
employees and encourages them in their respective fields. It also enhances proper
communication among all levels of the organization.
Annual Workforce Planning Process: The workforce planning process of a business includes
hiring new employees, firing employees if needed, promoting employees to higher positions, and
so on (Mondy & Martocchio, 2016). Tesco undertakes an annual workforce planning that begins
at the end of February. Tesco also gets feedback from the employees annually on the
environment of the workplace, co-workers, etc. All these help the company in its workforce
planning.
Recruitment method: Tesco plc uses the Internal Talent Plan as well as External Recruitment as
their recruitment method. The organization analyses the performance of its existing employees
and promotes them accordingly (Nel et al., 2021). It also recruits from external sources by
providing advertisements on social media and print media. This helps the company recruit skilled
employees who can perform to enhance its growth.
Using Information Technology in the recruitment process: Tesco plc uses e-recruitment
through its intranet for internal talent planning. In 2014 company also started using Tribepad
ATS, a system that helps organizations analyze job applications and shortlist the ones with
higher potential (Imrie & Dolton, 2014). It takes much less time than a manual system. It also
saves recruitment costs for the company. The system also analyses internal HR data and helps
HR managers in taking improvement measures.
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Main features of People Management Strategies
The processes undertaken to improve employee potential and organizational growth as a whole,
are called people management strategies. Tesco plc is one of the largest retail businesses in the
world and to keep its performance up to the mark, it needs to ensure that the employees of the
company are being managed properly. The skills and competencies of the employees of an
organization pave the way for the success of the organization. The features of “Talent
Management” and “People Resourcing” are described below in the context of Tesco plc:
Feature1: People Resourcing
People resourcing refers to the process of recruitment and selection of people in an organization
(Ivancevich & Konopaske, 2013). This is one of the most important activities of human resource
management. Tesco recruits employees with much care so that the employees can be able to
support the mission of the business. The company advertises recruitment on its intranet as well as
on its website and social media pages. Interested candidates can apply through the internet and
the candidates who are shortlisted are called for an interview.
The company uses Tribepad ATS in its recruitment process. The system helps in analyzing the
applications of the candidates. It saves time and cost of recruitment for Tesco plc. In this way,
the recruitment process gets much smoother. Tesco recruits employees from external sources
through advertising of the vacancy in the organization (Cushman & Burke, 2014). The company
also recruits from internal sources. The existing employees are eligible to apply for some
positions. They can get information about recruitment from the organizational intranet. The
existing employees can be positioned at higher posts based on their previous performance.
The recruitment process of Tesco plc helps the business source employees who help the business
grow. The recruitment and selection process helps the company establish a strong workforce.
After the recruitment, the company focuses on providing the employees with the necessary
training. The company ensures a safe and healthy organizational environment for the employees.
Feature 2: Talent Management
Talent management refers to the methodology of bringing the best talents to the organization and
correctly utilizing them to achieve organizational goals and objectives (Nel et al., 2021). Tesco
plc has a continuous system for talent management. The company focuses on planning for
bringing the talents necessary for the organization, it attracts the talents, selects and develops
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candidates, positions them at the right place, and assesses them continuously. The organization
also provides incentives to encourage employees to showcase their talent for the well-being of
the company.
For developing talent management Tesco also organizes workshops for the personnel managers
of the company. The workshop “Building Talent and Capability” by FPG was attended by 1000
of the personnel managers of Tesco (Chen, 2022). There they were trained to lead and provide
simple training solutions as well as deal with complex problems.
Tesco also organized transformational coaching and behavioral coaching for the employees in
Tesco stores (Cushman & Burke, 2014). It has helped the employees in talent development and
become confident in their fields. All these talent management approaches have led Tesco to the
path of growth and success.
HR Practice-Based Challenges
Human resource management involves different challenges for HR professionals as well (Price
& Price, 2015). These challenges can hamper HR practices and their impacts on organizational
performance. The challenges Tesco plc faces in its HR practices are as follows:
Globalization: Tesco plc is a global brand and it has expanded operations in many countries
around the globe. The global presence of the organization brings a diversified workforce to the
business. It is a challenge for HR managers to undertake similar HR practices for every
employee in the workplace (Amos et al., 2019). Employees of different regions and cultures
prefer different treatment in their workplaces. And not understanding the needs and preferences
of the employees can cause damage to the firm as a whole. Motivating the employees and
encouraging them to perform well requires an understanding of their needs. HR managers of
Tesco plc have to work on it to overcome the challenges of globalization.
Changes in the environment: The internal and external environment of Tesco plc affects the
company and its operations a lot. It sometimes requires changes in HR policies and practices. It
creates challenges for the business to continue its HR practices (Ivancevich & Konopaske, 2013).
The HR managers of Tesco need to be aware of the changing environment and take measures to
continue HR practices effectively.
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Discrimination: Tesco is an international brand and people from different cultures and religions
work for the business in different countries. Although the company tries to establish equality
among the employees, there have been events of discrimination. The workers of Tesco filed a
case against the company in 2016 for cutting their pay rates for working extra shifts (Chen,
2022). The pay rate was cut by more than 20%. The dispute was later settled and the company
compensated the employees. In 2012, the HR managers of the company were alleged for forcing
two Muslim employees to resign. Later, the workers won the religious discrimination case and
took responsibility for the damage.
Emerging technology: Technological development is getting to new heights every moment. To
cope with technological advancements, employees of an organization need to be trained
accordingly. It becomes a challenge for HR managers to deal with this changing situation and
maintain performance. Technological improvement requires the installation of new systems and
it increases the maintenance cost for the system as well (Milkovich & Boudreau, 2017). Skilled
employees are needed to operate the system and bring about the best results. Tesco plc needs to
focus on this challenge and ensure proper training and development for its employees so that the
company can enhance growth and sustainability.
Leadership: Leadership is another important factor in human resource practices. If the leader is
not supportive and encouraging enough, it will lead the employees to lose interest in their jobs.
Poor leadership can harm the workforce of a company as well as its performance (Mondy &
Martocchio, 2016). Tesco needs to focus more on its leadership approaches. The company
continuously takes initiatives to improve the skills of its leaders through training and workshops.
Positive leadership reduces employee turnover and motivates employees to work for the
betterment of the company.
Alternative Approaches to Managing and Leading People within the Business
Context
Tesco plc is concerned with its HR practices and their impacts on the people within the
organization. The company has taken some alternative approaches to ensure the best HR
practices in the organization. The alternative approaches are:
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Decentralization: Tesco employs a huge number of employees who contribute to the success of
the business. The decision-making process in the company is mostly decentralized. In a
centralized system, only the top management has the authority to make a decision and the
subordinates are bound to work on that to achieve the goals set by the leaders (Mondy &
Martocchio, 2016). But in decentralized decision-making, the employees can also participate in
decision-making activities. It makes the employees feel that they are a part of the organization
and it leads to better performance. Decentralized decision-making also helps generate more ideas
and scope for achieving the goals of the business.
Teamwork: Tesco puts more emphasis on teamwork in the organization. People working
together can contribute more to the company. They tend to solve problems efficiently and
generate better ideas as well. The team includes a leader who controls the team activities. It also
creates a strong relationship among employees at different levels (Nel et al., 2021). In this way,
the performance of the organization gets improved and profitability enhances as well.
Democratic leadership: Democratic leadership refers to a leadership approach that involves the
participation of the people (Price & Price, 2015). In autocratic leadership, the leader focuses only
on the outcome and forces his decisions on the subordinates whether they are willing to perform
the activities or not. On the contrary, democratic leadership involves the collaboration of people
to make the best decisions. It improves communication and team participation as well. Tesco has
established democratic leadership in the organization. It helps the company build a cooperative
system and achieve the most out of it.
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Conclusion
The report focuses on the human resource practices of Tesco plc and their impact on
organizational profitability and sustainability. The organization’s overall strategy is described in
the report along with its HRM strategy. The nature and characteristics of HRM in Tesco are
discussed here as well. the report reflects on two main features of people management strategies.
These are, People Resourcing (recruitment and selection) and Talent Management. No business
is free from challenges, Tesco plc also has to face challenges regarding its HR practices. The
challenges faced by the business are described in the report as well. The report also reflects upon
the alternative approaches to leading and managing people at Tesco. All these examine the role
of Human Resource Management (HRM) in Tesco and its performance in the market.
Part 2
HR Practice Recommendations
Figure 4: HR Recommendations for Tesco plc.
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References
Amos, T. et al. (2019) Human Resource Management. Cape Town: Juta.
Chen, J.J. (2022) “Tesco plc,” International Cases of Corporate Governance, pp. 27–44.
Available at: https://doi.org/10.1007/978-981-19-3238-0_3.
Cushman, D. and Burke, J. (2014) “Introduction: Tesco plc — an open business,” The 10
Principles of Open Business, pp. 10–23. Available at:
https://doi.org/10.1057/9781137347046_3.
Imrie, R. and Dolton, M. (2014) “From supermarkets to Community Building: Tesco plc,
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