Assessing the role of the people management function and its impact on strategic planning: The case of a multi-site high street retailer with a head office in the Midlands.
The company employs a total of 3,000 staff: 2,500 within its store network and 500 employees at its head office. The organisation has an autocratic culture, with a central power base and a managing director who appears to make all the decisions, keeping tight control of the business and ruling by what amounts to intimidation. He focuses mainly on the success of the retail side of the business, where there are two regional managers who have responsibility for 19 area managers between them. Communication is very much a downward cascade. Company policies and procedures are designed and agreed only by the board of directors before being implemented – there is no other consultation.
Morale within the head office is very low. It was particularly affected when head office staff were invited to attend a conference for sales staff at which they all heard an announcement made by the managing director to the effect that staff working within the store network would get a bonus increase of up to 25%. Head office staff are not paid any commission or bonuses and receive only a basic salary.
The HR function is based in the head office and comprises a HR manager, a HR officer and three HR administrators. They have responsibility for the HR issues of the entire company (except for payroll, which is incorporated into the finance department) and report to the legal director. There is a separate training function. The training manager reports directly to the managing director and has four training officers reporting to her. The training officers spend all of their time visiting the store staff to assess their product knowledge and offering training programmes on effective store management and basic selling skills. The training department has no involvement with, or responsibility for, the head office training requirements. This is left to individual managers to request assistance from the managing director.
Very few formal policies exist and the company’s HR practices seem to rely on trial and error – for example, when things go wrong, a guidance document is issued. There is a guidance document in existence for area managers relating to disciplinary activity, but no formal training has been provided. Most of the area managers have worked their way up in the company having started off working on the sales floor. Area managers are advised that they must always contact the HR department with any issues relating to discipline. All area managers are aware that no one can be dismissed from the company without the permission of a director of the company.
The HR department is thus necessarily reactive rather than proactive in nature and is constantly in ‘fire-fighting’ mode. The HR manager is the only qualified member of the department, and because his role is so extensive his availability to managers is minimal. Each of the administrators, on the other hand, has a very narrowly-defined role – i.e. one is responsible for all new starters, one for leavers and references, and another for issuing contracts and new starter packs. Area managers may therefore be required to speak to three different people with regard to the employees in their area.
The HR officer also acts as office manager and oversees the work of the HR administrators. Responsible mainly for head office staff, she has additionally to deputise for the HR manager in his absence.
All HR records are kept centrally, with a file for each individual employee. The HR department occasionally receives a copy of medical certificates but other than that has no knowledge of the sickness absence levels in the company. A monthly report identifying long-term (six weeks or more) sickness is produced by the payroll department but there is no formal policy for dealing with either short- or long-term sickness absence. This has resulted in extreme inconsistency in dealing with employees – it depends how the managing director ‘feels on the day’.
The managing director has high hopes for the organisation and has plans to expand the company in the coming years. He intends, for instance, to increase the store network by 50 stores over the next three years. Unfortunately, he has not communicated anything about this to the rest of the organisation, although employees are aware that recruitment is on the increase.
Each director decides when he or she needs a new member of staff in his or her section, although HR are responsible for advertising and collating the responses. All retail positions are arranged by the area management with very little input from HR. Area management are responsible for their own recruitment and are involved in all interviews – store managers do not have responsibility for recruiting staff. Neither area nor head office managers have received any formal recruitment and selection training. HR are sometimes involved in the recruitment of head office staff, but this is at the discretion of the director and depends on the level of the position. On several occasions, individuals have been appointed without HR becoming aware of the vacancy, interview process and so forth until the department is requested to issue an offer of employment.
Appraisals were not conducted until 2004. Appraisal documentation was issued to head office and retail staff and the responses collected and filed. The information gathered during this exercise has not been acted upon, which has adversely affected the morale within the company. Appraisals have not been conducted since, and performance is reviewed only sporadically, depending on the competence of the manager.
Your task- Individual Report (70 % of the total mark)
By using appropriate literature and models of motivation, recruitment and selection, performance appraisal and reward systems: Justify your answer by making appropriate references to current literature (journals, books on line sources etc.).
1. Discuss the three current people resourcing issues. Please provide a rationale for their impact on the company’s performance (25%)
2. Evaluate the current recruitment and selection process. Please provide recommendations towards to a more structured approach to recruitment and selection strategies/ procedures per different type of employees (40%)
3. What implication does talent planning have on recruitment and selection (25%)
4. Ensure appropriate presentation of your report, correct referencing, structure clarity of report, originality (10%)