1.

0 INTRODUCTION

In todays competitive ever-changing business environment; organizations need to focus more on developing their human resources. Human resources can be defined as the pool of human capital under the firm's control in a direct employment relationship (Wright & McWilliams, 1994). If managed properly these human resources can lead to a competitive advantage. Ricardo (1817), Schumpter (1934) and Penrose (1989) argued that internal resources of the firm are the major determinant of competitive success (Wright & McWilliams, 1994).

Tesco is one of the worlds largest retailers with operations in over 14 countries around the globe, employing over 492,000 people and serving millions of customers (Tesco 2011). Its main operations are in the UK, however, it also has stores in the rest of Europe, Asia, and has recently expanded into North America. It also provides online services through its subsidiary, Tesco.com. Tesco sells approximately 40,000 food products in its superstores, as well as clothing and other non-food lines. Tescos own brand accounts for approximately 50% of its sales.

The Strategic Human Resource Management (SHRM) tool will be applied to Tesco and relevant recommendations that surround the issue of workforce diversity and the implementation of policies and practices will be given. Research will be conducted in order to identify the internal and external forces affecting the organization Pressures from the internal environment include the globalisation and the impacts it brings

along with it. Externally Tesco is directly affected by the diversity of its workforce and how issues such as discrimination and communication affect employee performance. Cultural tension within communities, economic, legal, and political factors all affect Tesco.

2.0 SHRM Organizations must undertake human resource practices, which are organizational activities directed at managing the human capital at the organizations disposal and ensuring that the capital is employed towards the fulfillment of organizational goals and objectives(Becker & Huselid, 2006). Strategic human resource management is the process of human resource management which involves linking human resources with strategic organizational objectives to improve performance (Hartel et al., 2007). SHRM focuses on organizational performance rather than individual performance (Becker & Huselid, 2006).

The role of HR management systems as solutions to business problems rather than individual HR management practices in isolation (Budhwar & Aryee,) . Strategy is about building a sustainable competitive advantage that in would in turn lead to performance gains. HR strategies are essentially plans and policies that address and solve strategic issues related to the managing human resources of an organization (Massey, 1994). An organisations HR practices, policies and programmes should be aligned with corporate and strategic business unit plans (Hartel et al, 2007). Strategic HRM thus links corporate strategy and HRM, and emphasises the integration of HR with the business and its environment. Earlier human resources management models, have shown that organizational effectiveness depended on a tight 'fit' between organizational strategy and HRM policies and practices ( H i l t r o p , 1 9 9 6 ) . SIHRM approaches and policies are influenced by the overall corporate international strategy or internal fit. Hartel and Fujimoto, (2007) highlight the importance of fitting HR policies with local legal,

political, economic, and cultural factors. Nevertheless, a firm must maintain flexibility in its SIHRM system to respond to various demands from a complex competitive environment (Wright & Snell, 1997).

2.1 Motivation Theory

Research has shown that a motivated workforce will work harder and achieve greater output more efficiently. Motivated employees require less supervision and demonstrate pride and zeal in doing their work, making a greater impact on the customer (Hartel et al, 2007). Motivation of employees leads to greater levels of concentration, thus reducing the likelihood of on-job accidents and conflicts.

Motivation may stem from personal interest such as keeping safe or from external factors such as intrinstic and extrinsic rewards . Taylors motivation theory has suggests that employees are purely motivated by money. However, this not true as monetary reward is not the only way to effectively motivate employees. People are not only motivated by material rewards but by a desire to increase their power position in the corporate hierarchy ( McNerney, 1996). Employee motivation levels change with time, promting HR managers to continually monitor the workplace to determine the reasons for such drops in the level of motivation. The HR manager faces a task of formulating new employee motivation strategies that are in line with the organisations overall corporate strategy. For example offers various awards such as : free shares in the company after a year, a save as you earn shares scheme, 4

employee discount cards, gym membership, holiday discounts, and contract free phones (Tesco, 2011).

2.2 Environment

Organizations are constantly faced with environmental contsraints that need to be overcome. Organizations constantly monitor and analyze their operating environment which includes both the internal and external factors . Tesco will need to analyse these factors and identify them as potential threats or opportunities. Organizations wishing to develop effective SHRM systems must make an assessment of their current position and compare it with a vision of the future (Hartel et al., 2007). It is suggested that environmental scanning of both the external and internal environments is a necessary prerequisite stage to strategic formulation.(edit)

2.2.1 Internal Environment

The organizations assessment of its environment must involve an analysis of its internal environment or its organizational strategy, structure, and culture. Organizational strategy involves taking action to meet the basic long-term objectives of the organization in question. An assessment of organizational strategy can reveal an organisations ability to maintain its current strategy. Strategic decision making has far reaching implications on HRM practices or strategies (Hartel et al. 2007). Other

factors that may affect the organizations direction is organizational culture and structure .

Tesco places the customer at the heart of its values. Providing customers with value and service overrides all other objectives (Tesco, 2011). The seven part strategy that Tesco implements aims to broaden the scope of the business to enable strong sustainable long-term growth. As a part of its growth strategy Tesco has embarked in internationalization to gain a larger market share. By expanding overseas Tesco now faces a variety of human resource issues. This type of strategy may have an impact on ISHRM policies such as hiring and staffing, renumeration, and localization. Tesco had to combine deep local knowledge of culture with global experience, this in turn lead them create international management teams that comprise of a mixture of host country nationals and people from the UK business (Tesco, 2011).

2.2.2 External Environment

Jackson and Schuler (1995) state that a number of macro-environmental characteristics may have an influence on the adoption of particular HRM practices and policies. Organizations need to analyze and interpret external factors in its operating environment that are beyond its control in order to be proactive rather than reactive. Various factors such social and cultural, diversity, economic, political, and technological - that take place in the organizations operating environment are likely to be of critical importance for the organization (Barry, 1983).

Tesco has operations in 12 countries outside the UK, including China, South Korea, and Malaysia and has recently opened stores in the United States. This international expansion is part of Tescos strategy to diversify and grow the business (Tesco 2011). Tescos global expansion increases its exposure to the external environmental threats. For instance Tesco operates in areas with varying demographics and cultures. This is also reflected in its diverse workforce, which is composed of different individuals with different gender, race, age, personalities, and work ethics (Hartel et al., 2007). Workforce diversity is an important issue that Tesco has to manage carefully through SHRM policies and practices. Managers managing a culturally diverse workforce need to understand that these individuals have differing needs, wants, and expectations; that may affect their work ethic, view of co-workers, and the way they are motivated (Hartel et al., 2007).

Through the implementation of key human resource functions of recruitment and selection, training and development, performance appraisal and remuneration, organizations can successfully manage workforce diversity (DNetto & Sohal, 1999). Tesco has initiated diversity training programs that aim to The organization has, invested in the Tesco Academy as a part of its ongoing commitment to building capability. The academy supports the development of employees through training courses, networking opportunities and mentoring (Tesco, 2011). To make sure it has the people it needs to help it meet its business objectives, Tesco has developed a structured recruitment programme. It is also using workforce planning to plan ahead( www.thetimes100.co.uk/studies/)

3.0 Recommendations

Yang and Konrad (2011) , argue that the best practices for diversity management focus on selecting for diversity, reducing workplace

discrimination, and generating financial effectiveness.

By improving its employer brand proposition, Tesco can improve its ability to attract the right kind of talent( Mosley & Kunerth, 2011),

Cross training of employees to give them a wider array of skills and insure that they remain interested in their job.

Inclusion of employees in decision-making process in issues that directly affect them.

3.1 Evaluation of Plan After the implementation of new policies and initiatives, it is vital to evaluate and review whether the new plan has met what it set out to achieve (Hartel et al., 2007). Ultimately, it is measuring the effectiveness or inefficiency of the plan. Evaluations and surveys should be handed out to employees of Tesco at all levels for better evaluation.

4.0 Conclusion

By creating workplace diversity and embracing it, Tescos organisational culture can be improved. Employees will have a better understanding of differing cultures and beliefs, therefore enhancing their performance due to the organisation better reflecting diversity in the community. To effectively manage diversity managers at Tesco need to recruit and staff employees who are culturally aware and not just diverse. The implementation of a training and development program may also aid in improving performance and overcoming environmental threats. By effectively managing diversity, a firm can obtain human capital that is valuable, rare, inimitable and non-substitutable (Hartel et al., 2007).

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