Human resources management Harrods

London School of Business and Management

Table of Contents

Introduction. 4

Task 1. 5

Personnel management and human resource management 5

Similarities and differences. 6

Centralised and decentralised HRM and effectiveness. 6

Functions of HRM and purpose at Harrods. 7

Roles and responsibilities of line managers. 8

Task 2. 9

Employee recruitment 9

Advantages and disadvantages. 9

Stages of HR planning. 11

Comparison of recruitment and selection at Harrods with local store. 12

Task 3. 14

Rewarding and motivating employees. 14

Reward management and motivation at Harrods. 15

Process of job evaluation. 16

Reward systems. 18

Monitoring employee performance. 19

Task 4. 21

Mechanism for cessation of employment 21

Impact of European Working Time Directive on HRM practices. 22

Unfair dismissal and rectification at Harrods. 22

References. 23



Human resources management is important for any organisation as employees are now considered as the most important resources contributing to competitive advantage. This is particularly true in the case of Harrods, a branded retail organisation, providing services to the customers through the employees at its store. The present report considers various aspects of human resources management such as the functions, roles, responsibilities, recruitment, rewarding and motivation and finally cessation of employment for dismissal.

The report is divided into four areas. The first section covers the similarities and differences between personal management and human resource management, the concept of centralisation and decentralisation, functions of HRM and the roles and responsibilities of line managers. The second part covers recruitment and selection of employees starting from human resources planning, the various stages and taking a comparison of the recruitment and selection methods followed at Harrods with a local corner store. The third part considers rewarding and motivating employees by the various motivational theories, the methods of rewarding which includes job evaluations, reward systems and employee performance management. The final section deals with employment termination by focusing on the various mechanisms and the impact of the new European working time directive on the human resources management of organisations in the UK.

Task 1

Personnel management and human resource management

Personal management is defined as obtaining, using and maintaining satisfied employees in the organisation (Price 2013). Personal management, dealt with the administration of many aspects connected with the employees such as welfare, Labour relations, recruitment and selection, employee training, motivation and retention. Personal management is the traditional form of managing the employees in the organisation, which is giving way to human resources management and more recently to strategic human resources management (Anon 2010).

Human resources management is defined by Torrington et al., (2002) as a function designed to maximise the performance of employees in line with the strategic objectives of the organisation. Entire idea of personal management according to Cole (2014) is based on considering employees as input to gain outputs, whereas human resources management considers employees not only as resources, but an important part of an organisation from the strategic point of view. The major function of personal managers are to ensure good employee-employee relationship and adopt various tactics and strategies, whereas human resources management ensures that the human capital is available to achieve the organisation’s goals (Armstrong 2006), while emphasising human capital or employees as a condensation of knowledge, skills and capabilities, able to contribute to the organisation.

Similarities and differences

  Human resources management Personal management
Similarities Strategies are flowing from business strategy.
Recognition of the role and responsibility of line managers for managing. Active support services enabling managers to carry out their roles and responsibilities
Ideas of personal management and the soft model of HRM are in alignment or similar which includes respecting employees, balancing company and employee needs, developing employees to reach a sustained level of competence.
The practices are similar, namely recruitment, selection, employee appraisal performance management, training and development and reward management.
Differences Managing the employees to attain organisation’s goal Administration of people, obligations and compliance
Broad focus picturing employees with organisation and strategic objectives of organisations Narrow focus, only on employees
Importance of cultural management and achieving commitment importance given to business level objectives
Important role for supervisors and line managers in implementing policies personal managers have a prime role in implementing policies

Summing up the similarities and differences and the modern academic and practical context, it appears that the term “personal management” has disappeared from the vocabulary of organisational management, replaced by human resources management which now encompasses all aspects that includes personal management and strategic human resources management. While Anon (2010) and several others considers HRM to be revolutionary, many practitioners and academicians have argued against any significant difference between both the concepts and practices.


Centralised and decentralised HRM and effectiveness

The idea of centralisation or decentralisation in HRM has been identified by Foot and Hook (2002). According to the concept, decentralised HRM is where an all-powerful HR function, mostly at the headquarters of the organisation is driving the entire strategic and tactical human resources activities. According to Leatherbarrow et al., (2011) this is especially relevant and evident in multinational companies where human resources management practices are flowing from the headquarters, which could be managing multiple divisions and geographies. In decentralised HRM, there would be certain influence of the headquarters or the corporate HR on several divisions and geographies, but the tactical level functions and especially majority of the practices are defined and decided by the local level HR functionaries (Torrington et al., 2002).

Functions of HRM and purpose at Harrods

Functions of HRM Examples at Harrods
Manpower planning Planning for the future expansion business and considering the number, skills and capabilities of the employees taking into consideration employee turnover, projected growth, changes in technology, changes in productivity, labour market conditions. Harrods is a growing organisation, with different business areas, but mainly retail, having a large departmental store and the corporate office, hence need to consider future growth prospects, seasonal variations in retail trade and other strategic functions, which requires HR managers to plan for future needs in terms of employee resources.
Job analysis and job description At Harrods HR managers need to collect and condense information about the roles, responsibilities, skills, capabilities, work environment and duties of each job roles from this job descriptions are developed which is the initial stage of recruitment. Harrods have the departmental store where the roles and responsibilities are mainly customer facing and sales and the corporate office where the roles are mainly logistics and management and hence appropriate and adequate information has to be collected to recruit skilled and capable employees.
Designing rewards HR Department conducts internal and external data collection to determine the reward strategies and policies. Harrods, a prime retailer has to ensure the most skilled and capable employees available for the organisation and hence have to design rewards, able to attract the best talent, necessitating market survey and analysis of labour market conditions.
Performance appraisal HR Department has to conduct regular review of performance through structured analysis methods to ensure that adequate information is available about the productivity of employees, which further contributes to measures and methods in improving the productivity. Performance appraisals are also used as a measure for employee planning and development.


Roles and responsibilities of line managers

Even with a separate and specialist human resources department, line managers are responsible for the day-to-day affairs of the employees, especially the implementation of HR policies and practices (Armstrong 2006). Line manager has to supervise the employees, develop employee engagement and the culture of reciprocity. Line managers conduct performance appraisal, take disciplinary actions and has the final say in rewarding the employees, especially performance related rewards (Armstrong and Taylor 2014). In the case of Harrods, employees at the departmental store are supervised by line managers, the responsibility includes open communication, improving the commitment to the organisation, and most importantly performance related pay due to the majority sales roles of the employees at the store. The supervisors and line managers at Harrods have to conduct performance appraisals to ensure unbiased ratings that could affect the rewards they get based on their performance, which could in turn affect their satisfaction and motivation.

Task 2

Employee recruitment

Human resources planning determine the employees needed by the company to achieve its objectives. According to Baron and Kreps (1999) human resource planning are the methods adopted to ensure adequate availability of human resources within the organisation to satisfy the future plans and strategies. Human resources planning are an integral part of business planning focusing on specific areas of activity within the company, where necessary forecasts about future requirements of employees, their skills and capabilities are available. In the case of Harrods, planning is conducted for seasonal variations, especially Christmas sales season, where new stalls are installed and more number of employees would be required. It is also conducted for long-term planning when Harrods consider new products to be introduced in the store which requires new type of skills and capabilities for sales.

Advantages and disadvantages

Human resources planning are important and advantageous as it provides a clear link between the business strategy and human resource plan and hence better integration. Human resources planning according to Brown and Armstrong (2009) are necessary for good control of employee costs. The growth of the company would require more number of employees, whereas a decline in the business would need redundancies and both have to be planned in advance (Goldsmith 2009). Human resources planning enable organisations to analyse the available skills and capabilities of the organisation and prepare adequate strategies for growth based on the skill and capability makes. It ensures cost effectiveness in recruitment and selection strategies and is a systematic in response to policy (Storey 2007).

While it has the above-mentioned advantages, there are disadvantages such as the time involved in the planning process, difficulty in gaining adequate accuracy for developing concrete plan and actions and the limited focus. The unpredictability in terms of economic conditions of future growth prospects, skills availability, labour market conditions are some of the difficulties identified by Corbridge and Pilbeam (2009) as contributing to the futility of human resources planning.

On the whole while there are difficulties of HR planning, it has also advantages and the advantages out do the difficulties, which are considered as disadvantages or reducing the effectiveness of the concept of HR planning. HR planning, if not conducted for the long-term, in the shot them would be appropriate and as given in the example, Harrods would need to conduct planning at least for the short term due to the seasonal variations. Peak season require more employees, which has to be planned in advance as this is a season where employee availability in the labour market reduces or diminishes.

Stages of HR planning

The above is an example of HR planning stages or processes and Harrods would be utilising it in the short-term considering the objectives and strategies when there are seasonal variations. Harrods would have to scan the external environment is to understand the labour market during peak seasons and the available employee base within the organisation. The human resources strategies and plans in alignment with the business strategy based on the sales and the number of products that would be introduced during the peak season such as Christmas would be considered for forecasting. The forecasting will contribute to the decision on the number of employees required, the skills and capabilities; and the divisions within which the recruitment would be required.

Comparison of recruitment and selection at Harrods with local store

Recruitment and selection at Harrods Recruitment and selection at local corner shop
Manpower planning As and when vacancy arises
Developing job description Qualitative non-structured
Advertising job profile  Advertising through known sources
Evaluating internal recruitment Consider walking applicants
 Selecting appropriate applicants  Advertised through local sources in the vicinity
Different stages of selection  No structured interview or test
Interviews, written tests  Focus on immediate availability
Final round of interviews Immediate selection
 Determining pay packages and benefits Pay and benefits already determined and standard
Induction and training No structured induction training

Harrods, being a large organisation, there are employees completely focused on recruitment and selection and even within this there are specialisations such as people to conduct interviews, tests and so on. Harrods consider long-term manpower requirements, conducts recruitment and selection through informal channels and has to consider a range of legislation and employment policies such as equal opportunities, non-discrimination and so on. Harrods conducts background tests, numerous rounds of interviews and written tests and evaluates the long-term retention of employees and the skills and capabilities in alignment with the objectives of the organisation before taking final decisions. In the local store the focus is on immediate availability as and when the vacancy arises and hence the recruitment and selection is basically a first-come first-serve approach to ensure that the vacancy is filled. The local store does not need to go through a range of legislation and regulations and hence is a simple process. Both have advantages and are decidedly dependent on the scale of operations. Harrods may conduct immediate recruitment based on the manpower requirements, but still has to go through certain structured processes. The local stores may also advertise the vacancy, which is as far as the formalisation process completes.

Task 3

Rewarding and motivating employees

Employee motivation according to Armstrong (2011) is the willingness to exert high levels of effort to achieve the objectives of the organisation, conditioned by the effort’s ability to satisfy the needs of the individual. All individuals and employees working in organisation have an objective of maximising the utility by pursuing objectives they value, but in the case of organisations it is conditioned by the behavioural design.

Herzberg has developed two factor theory of motivation or motivation-hygiene theory also considered dual factor theory expressing the factors at the organisation contributing to job satisfaction and dissatisfaction and hence the premise that satisfaction and dissatisfaction are independent and independently affected (Khurana 2013). There are two factors called motivators such as challenging work environment, recognition, providing responsibility, opportunities which are all contributing to satisfaction and mostly intrinsic to the job. Similarly there are hygiene factors such as security, salary, benefits, working conditions, which are all necessary conditions without which there would be dissatisfaction, but not necessarily contributing to positive satisfaction.

Maslow’s theory is a need based theory, stressing humanistic principles. According to Maslow and human needs are ordered in its report and hierarchy and the most immediate need have to be satisfied immediately to gain the attention and satisfaction, before fulfilling the next higher need (Liao et al., 2010) and the organisation have to concentrate on the needs and requirements of the employees individually, to ensure their satisfaction.

Elton Mayo has developed the theory of motivation from Hawthorn studies and considers that motivation is promoted by improved communications, teamwork, and involvement in decision-making and non-monotonous jobs (Cole 2014). Similarly there are other theories which are divided as need-based theories and process theories and also divided as content theories or cognitive theories. Alderferer expanded the content theory of Maslow creating the ERG theory or existence, relatedness and growth theory and dividing the needs into these three groups (Armstrong 2006).

The process theories of motivation concentrate on how to motivate the employees whereas the content theories or the need theories concentrate on what motivates the employees. The prominent process theories are equity theory and expectancy theory. Adams equity theory indicates that personal efforts and rewards are related; especially the fairness of rewards or outcomes has been related to the inputs or employee effort (Brown and Armstrong 2009). The expectancy theory indicates the involvement of cognitive process and the choice of the employees mainly based on the expectation of certain rewards or goals based on the effort and the desirability of the outcomes (Armstrong and Taylor 2014).

Reward management and motivation at Harrods

Reward management according to Price (2013) deals with formulating and implementing the various methods and strategies to reward the employees fairly, equitably and consistently. The expectancy theory of Vroom is very much in alignment with the idea of reward management or connected with the reward management (Sims 2014). According to the expectancy theory, the employees consider their effort and the possible outcomes (Goldsmith 2009) link the effort with the expectation of outcomes and finally modify their behaviour according to the desirability of the outcomes (Mabey et al., 1998). In other words the outcomes or the rewards should be based on the effort of the employees, consistent with them and furthermore the reward should be based on the needs and requirements of the employees. Even Adams theory suggests the need for equity of rewards where equal type of efforts has to be rewarded equally and in an unbiased manner (Torrington et al., 2002).

In the case of Harrods, the sales representatives in the shops have to be rewarded equitably, based on their effort and the reward should be consistent with their needs and requirements to ensure motivation or to improve their effort involved in the job. It is in this context that Harrods have introduced incentivised or performance related pay. Harrods method of incentivising the sales executives in the shop can be seen to improve motivation in accordance with the expectancy theory.

Process of job evaluation

Job evaluation is the establishment of relative value of jobs (Baron and Kreps 1999). According to Datta et al., (2005) job evaluation is the process of systematically comparing the different jobs to assess the importance of each to determine the pay criteria. The process of job evaluation includes job analysis and job description or a job profile is the content. The job profile would involve the key duties and responsibilities and the qualification necessary to perform at the job. The second stage is job evaluation which measures different dimensions of work and compare the work.

The job evaluation process would consider the compensable factors for each job such as the knowledge, skill, the complexity of work, the contact with other employees, leadership required, environment of work, supervision, etc. which are internal factors. There are external factors to be considered in job evaluation such as the Labour market, demand and supply, planning and so on which would contribute to other compensable factors. All these compensable factors are weighed and a numerical total is arrived at (it can also be a qualitative assessment). Based on the quantitative or qualitative assessment, each job is included under a salary range (Datta et al., 2005).

In the case of Harrods, the content of the job is measured based on several technical, administrative and service related aspects along with external elements of the job. Harrods then determines the pay scale for each job description, which ensures that Harrods is able to attract and recruit capable employees due to the pay scale.

Reward systems

Reward management is formulating and implementing strategies and policies to reward the employees fairly, equitably and consistently (Armstrong 2006). The reward management should be supporting the strategy of the organisation, should be able to recruit and retain employees, motivate employees, increase the strength of psychological contract, should be financially sustainable, compliant with legislation and should be efficiently administered. There are different types of rewards, basically divided as extrinsic or intrinsic or financial and non-financial.

Harrods have a system of providing incentive-based pay or performance related pay as a financial or intrinsic rewards and extrinsic rewards of job enrichment. Performance related pay is mostly given to the sales staff based on the amount of sales and job enrichment is provided to employees to provide them with more opportunities which involve increasing the responsibilities (Brown and Armstrong 2009).

Incentive-based pay Job enrichment
Advantages Advantages
 Easy and efficient system to influence certain behaviour Employees learn new skills and hence an opportunity to improve the knowledge and capabilities
Improves the morale and retention of high performers Reduce the monotony in the day-to-day tasks as it adds variety
 Able to attract talent Increase the skills available with the organisation
Disadvantages Disadvantages
Continuous usage can be perceived as entitlement Perceived as increased workload
Implementation could be costly, especially in jobs which cannot be quantitatively assessed Not suitable for every type of employee and job

Both performance related pay and job enrichment are important elements of the reward systems of Harrods. While job enrichment is an intrinsic motivator and directly based on the performance and effort, job enrichment is a long-term motivator which improves the skills and capabilities of the employee and hence indirectly contributing to organisational performance.

Monitoring employee performance

Performance management according to Cole (2014) is a system for employees to work together (supervisors and subordinates) with a specific plan, timely monitoring and review of the subordinate’s work, alignment of the work with the organisational strategy, contribution of the employee to the organisation and ultimately the performance of the employee. There are different methods of monitoring performance such as 360° assessment and a peer appraisal.

360° assessment Peer appraisal
Formal evaluation Formal evaluation
 Multiple sources Multiple source
Superiors, peers, customers subordinates Immediate peers
 Through surveys Through qualitative and quantitative assessment

360° assessment is a formal evaluation involving multiple sources such as superiors, peers, customers, subordinates and other individuals or elements that the employee comes into contact with. It is a complicated process and hence may not provide an accurate picture as the measure or the evaluation provided by the different elements could be confusing (Corbridge and Pilbeam 2009). Hence the design of the survey instrument for collecting the performance of the employee has to be valid and reliable. The peer appraisal collects data both qualitatively and quantitatively from the peers, who are able to measure the performance of each other, better than external sources such as customers. 360° assessment can be conducted for the top layers of management, whereas peer appraisal can be conducted at the bottom layers of management (Armstrong and Taylor 2014).

At Harrods, the employees working in the store and especially the sales staff can be appraised through peer appraisal as they would be able to better understand their colleagues job content, job characteristics, job requirements, knowledge, skill and hence ultimately the performance.

Task 4

Mechanism for cessation of employment

Employee termination is the process of dismissing the employee and there are several reasons suggested in adequate job performance, business conditions, and acceptable behaviour (Armstrong and Taylor 2014). Every organisation will have certain codes and conduct and practices which have to be followed by the employee. There would be business level factors such as declining business which might make certain jobs redundant or unnecessary (Sims 2014). In any case terminating the employee requires certain procedures similar to the procedures involved in the resignation of employees.

In the case of employment exit by the employee through resignation, the formal process is through a resignation letter, followed by a time period of notice, which is a period enabling the organisation to recruit another employee for the position and to hand over the job responsibilities. Since Harrods is the organisations with large number of employees, the responsibilities and roles played by one employee may not be immediately transferred to another and hence there may be a requirement to formally transfer all the roles and responsibilities. At the end of the notice period, the responsibilities handed over to new employees or another suitably selected and trained employee. In the case of a local corner shop, the resignation and exit procedure would be in formal, which might or might not include a notice period. Further the roles and responsibilities of the employees of the local corner shop can be immediately transferred. There is no strict legislation affecting the local corner shops employing people.

Impact of European Working Time Directive on HRM practices

The European working Time directive gives all the employees within the European Union the right to certain number of holidays, rest breaks, restricts certain type of working conditions, provides one day off per week and so on. The directive issued by European Union is an instrument to ensure the countries within Europe legislate according to its provisions. In the United Kingdom apart from the opt out of 48 hour working week and working longer hours, all the other measures have been implemented. The new directive and the associated legislation have an impact on certain types of reward policies (holiday pay), health and safety regulations and other areas. The major opposition against the new directive was the increase in documentation and hence extra cost to the businesses (Sims 2014). Further there is opposition about the limitations to flexibility of the organisation.

Unfair dismissal and rectification at Harrods

Under UK labour law, employers are required to provide fair, just and reasonable treatment to the employees even during termination. There should be fair reason provided considering the capability and conduct of the employee. Discriminatory policies should not be applied. In the case of any kind of unfair dismissal, taken by the employee, Harrods can compensate the employee for the lows of endings.


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