HUMAN RESOURCE MANAGEMENT

Assignment 1

HUMAN RESOURCE
Submitted by - Sonia Joseph
MANAGEMENT Register No - BFT / 17 / 428
Human resource management is the process of acquiring, training, appraising, and
compensating employees, and of attending to their labor relations, health and safety, and
fairness concerns. HRM includes five major functions:

 Planning: establishing goals and standards

 Organizing: giving each subordinate a specific task
 Staffing: determining what type of people should be hire
 Leading: getting others to get the job done
 Controlling: setting standards and comparing the actual performance with actual
standards.

‘Human resource management is a strategic and coherent approach to management of an

organization’s most valuable assets. The people contribute individually and collectively to
the achievement of the object (Armstrong 2006).’

Human resource management helps in hiring the right person at right place, want their
people to do their best, proper utilization of time and helps to give proper training to their
employees. HRM helps in employing right person at right place with right skills. HRM
encourage the employees to achieve the organizational goals and high performance of the
company.

AIM

To study two HR functions applied in the clothing brand H&M :

(1) Selection and Recruitment Process and

(2) Training and Development Function

BACKGROUND OF THE COMPANY

H&M was established in 1947 by Erling Persson in Sweden. The first H&M offer high
quality fashion and quality at its best price. The company deals in fashion for men, women,
teenagers and children. H&M also deals in cosmetics, accessories and footwear.

They have around 2000 stores across the world. Online shopping is currently available in
Sweden, Finland, Norway, Denmark, Germany, Austria and UK. All the stores are refreshed
with new items on daily basis. The collection is created by around 100-in house designers
together with pattern and buyer makers.

The company has around 28 production offices around the world. The company does not
have its own production units; instead have around 700 suppliers mainly in Asia and Europe
from where it buys its goods. They have around 16 production units around the world. H&M
has about 76,000 people working in the company.

H&M’s employees are very dedicated and focused for their work which makes a major
contribution to company’s success. The company provides proper training and special
courses to their employees which is paid out of the company’s budget. Moreover the
company believes in individual ability and motivates them to grow further. The turnover for
the year 2009 was SEK 118,697 million. Germany is H&M’s number one market producing
more than 25% of the sales.
MISSION STATEMENT OF H&M

‘Fashion and quality at the best price’ is the company’s mission statement.

MAIN COMPETITOR’S

 ZARA
 GAP
 UNITTED COLORS BENETTON
 NEW LOOK
 NEXT
 RIVER ISLAND

STRATEGIC HUMAN RESOURCE MANAGEMENT

Strategic human resource management means formulating and executing human resource
policies and practices that produce the employee competencies and behaviors the company
needs to achieve its strategic aims. For example, one of FedEx’s strategic aims is to achieve
superior levels of customer service and high profitability through a highly committed
workforce, preferably in a nonunion environment. SHRM link’s HRM to achieve the
strategic goals and objectives of the company.

STRATEGIC HUMAN RESOURCE CHALLENGES

 Need to support corporate productivity and performance improvement efforts.

 Employees play an expanded role in employer’s performance improvement efforts.
 Human resource must be more involved in designing- not just executing- the
company’s strategic plan.

THREE MAIN STRATEGIC HUMAN RESOURCE SYSTEM COMPONENTS

 High performance work system

 Measuring HR’s effectiveness
 New strategy
Strategy of H&M

The main strategy of H&M is to provide fashion and quality at the best price. The annual
report of the company for the year 2008 mainly emphasize that ‘quality’ relates to two things;
products of the company exceeding expectation of the company and the second is that the
customers are being satisfied with the company. Commercial mindset, simplicity, constant
improvement, cost consciousness and entrepreneurship are the main strong values of the
company. (AR1 2009)

Long term strategic goals of H&M

In the annual report for the year 2008, the CEO of H&M Rolf Ericsson said that the long term
goals of the company is to “Make fashion available to everyone, give the customer a fashion
experience that strengthens H&M brand”. They also state that the goal of the company is also
to increase the number of stores to 10 to 15% every year while focusing on continued profits
and quality of the products. In 2010 the company plan to add around 240 more new stores.

Execution of the strategy

To achieve the targets H&M has to focus on the following main aspects of its business
concept:

 Price: the price can be controlled by limiting the middlemen, buying the right product
from right production markets, effective distribution procedures, reducing economies
of scale by buying in large volume.
 Design: in-house designing of the products and then completely outsourcing it.
 Quality: quality conscious with extensive testing with least damage to environment.
 Merger and acquisitions: continue acquisitions and mergers will be helpful in
growth of the company.

HUMAN RESOURCE CYCLE

The human resource manager has to perform some functions in any organization. The human
resource managers carry out various distinct functions like line function, coordinative
function and staff functions. From the below diagram we can see that performance is the
main function of all human resource components. The best suited people are selected to
perform the particular task. Then motivating the employees to work hard and then rewarding
them for their performance. Reward, appraisal and development in human resource system
are based on the concept of ‘corporate culture’ so as to sustain the values of the company and
to support the system. (Bratton, j. and Gold, J.2007). The below table explains the concept of
human resource cycle.

Reward

Performance Appraisal
Selection

Development

HUMAN RESOURCE IN H&M

The corporate objective of H&M is to expand worldwide and hence with the continuous
increase in the employee strength. The staff H&M is spread approximately across 33
countries which come from different cultural background. Their strategy is to recruit local
people whenever they open they open the new store. The main policies of H&M can be
categorized as:

 Overall policies and values: the website of the H&M indicates that the company’s
main objective is to be a good employer. At H&M, the HR activities are guided in
such a way that every individual have equal fundamental rights. This means that
everyone will have fair wages and working hours. They all will have full freedom of
association to the opportunity for overall growth and development within the
company.
 Employee relation and voice: H&M’s employees have equal right and opportunities to
discuss any work related issues directly with the management. Every employee have
the right to choose and to decide who should represent them in the workforce. H&M
have good relations with the trade union and they welcome such relation where ever
 they operate. The company thinks that such relation are essential for the betterment of
the company.
 Promotion: Mr. Pär Darj, head of HR at H&M said that, “Internal recruitment and job
rotation enable the company to grow quickly.” (AR1, 2009). This states the H&M
policy related to promotion.
 Employee development: H&M gives its employees full and equal opportunity to grow
and develop within the organization which in turn will help the company to grow
more quickly.
 Rewards: H&M not only reward the employees through promotion and job titles but
also focus on rewarding people by giving them more opportunities and
responsibilities.

RECRUITMENT AND SELECTION

Recruitment is all about choosing ‘a right person for right job’. Recruitment is defined by
various authors:

1. ‘Recruitment is the discovering of potential applicants for actual or anticipated

organizational activities’.
2. ‘Recruitment is the term applied to the phase of personnel management that involves
reaching out and attracting a supply of people from which to select qualified
candidates for job vacancies. An effort is thus made to attract potential employees
with the necessary characteristics for the jobs available’.

Recruitment is mainly the major steps in selection process in any Organization. It is as an

activity which is directed to obtain the appropriate human resources whose skills and
qualifications matches functions for the relevant posts. It can also be well described as ‘heart’
of the organization.
THREE TYPES OF RECRUITMENT NEEDS

PLANNED: An organization always need new employees this may because of new
recruitment policy of the company or due to some other changes.

UNEXPECTED: There may be any unexpected happening in the company like death of an
employee or some accident or may be due to illness etc. These all leads to unexpected
recruitment.

ANTICIPATED: The need of such recruitment is required by seeing the internal or external
environment.

Factors affecting recruitment

External factors Internal factors

 Supply and demand  Recruitment policy

 Labour market  Human resource
 Image/goodwill  Planning
 Political-social-legal  Size of the firm
environment  Cost of recruitment
 Unemployment rate  Growth and expansion
 Competitors

These are the major recruitment factors which are taken into consideration before doing
recruitment in an organization.
 Source of recruitment

Internals Externals

 Transfers  Press advertising

 Promotions  Educational institutes
 Upgrading  Placement
 Demotion agencies/outsourcing
 Retired employees  Employment exchange
 Retrenched employees  Labour contractors
 Dependents & relatives  Employee referrals
of decreased  Recruitment at factory
employees gate

These are the main sources of recruitment from where an organization can hire its employees.
The main priority of an organization is to recruit internally and then take into consideration
the external sources.

SELECTION AND RECRUITMENT PROCESS OF H&M

H&M group has around 76,000 employees. The ability of an employee and their
entrepreneurial spirit make them the best assets of H&M. The corporate culture of H&M has
been one of the major factor in enabling them one of the world’s largest fashion company and
at the same time enjoying the high profitability.

In H&M personal qualities are given more preference than formal qualification. According to
the head of HR department of H&M all the university credits and great grades in the world
does not give any guarantee of getting a job or a fast-track career. The company look for
people with right personality, more than anything else. H&M belief that skills can be
gathered as you go, but you cannot taught personality and right attitude to a person. Since the
tempo of the company is always high and is a fast growing company, therefore employees
who are self driven and who have the capability of direct communication are the main
requirement of the company. Hence people who likes decision making and responsibility are
recruited by the company. Therefore information provided by the career sites, and from the
interviewed candidates shows their love for fashion with their focus on sales. These are the
basic requirement for H&M to recruit the employees and drive its basis for selection process.
This feedback from candidates indicates that the interview is mostly ‘structured situational
based’ (Armstrong (2006), p.447), which include latest fashion trends and customer service.
The selection is followed by panel of interviews and sample test. Candidates are filtered at
each stage of selection process.

INTERNAL RECRUITMENT: This means when the company hire from their own staff.
This is mainly the first choice of recruitment by the company.

EXTERNAL RECRUITMENT: outside people are encouraged to apply for the job in the
stores, from the career website. The company doesn’t offer any work experience placement
or summer jobs. H&M mainly recruits local people for their new store.

employees

full time employees

part time employees

TRAINING AND DEVELOPMENT FUNCTION

Training is the process of teaching new employees the basic skills they need to perform at
their job. Robin writes that:
‘Training is the process of learning a sequence of programmed behaviors. It enables a person
to solve the repetitive problem. We trained bricklayers, television repairmen, typist and
hospital admission clerks. The activities of these jobs can be precisely defined, broken down,
analyzed and a ‘one best way’ determined. Training is the application of knowledge. It gives
people an awareness of the rules and procedures to guide their behavior.’

Glueck writes that:

‘Training is the systematic process of altering the behavior, knowledge and/or motivation of
employees in a direction to increase organizational goal achievement.’

IMPORTANCE OF TRAINING AND DEVELOPMENT

 Increases the morale of the employees

 Reduces absenteeism
 Reduces complaints and grievances
 Optimum utilization of resources
 Increase in productivity
 Increases efficiency of the employees

PROCESS OF TRAINING

The training process involve five steps:

1. Need analysis: the first step is to identify the specific job performance skills required
by the employees.
2. Instructional design: in the second step the organization compile and produce the
training program content, which include workbooks, activities and exercises.
3. Validation step: a small presentation is made by the manager to address the trainees.
4. Implementation: in this step the training program is implemented on the target
employees.
5. Evaluation: the success or failure of the program is evaluated.

TRAINING METHODS

Training must be provided by all the personnel, whether or not academic education at a
university, college or technician was a prerequisite of employment. The following are the
various methods of training:
  On-the-job training: it means having a person to learn a job by actually doing it.
Every employee whether he is a mail room clerk or a CEO of he company gets on the
training. Managerial on the job training include job rotation, coaching approach and
action learning.
Types of on-the-job training
 Apprenticeship training
 Lectures
 Programmed learning
 Audiovisual- based training
 Computer based training
 Internet-based training

 Off-the-job training: there are many off the job training and developing managers.

Types of off-the-job training

 The case study method

 Management games
 Outside seminars
 University-related programs
 Role playing
 Conferences

TRAINING & DEVELOPMENT: A MANAGEMENT PROSPECTIVE

Within an organization training and development have many applications. This include:

 Induction of new employee

 Initial job training
 Subsequent job training
 Training on transfer or promotion
 Training of special groups
 Development
 Professional development
 Job termination training
DEVELOPMENT:

Development is only possible if the person concern is willing to develop. According to

Glueck the purpose of personnel development is, “to maintain or improve the effectiveness of
managers and professionals”. It act as a motivator and enable the employee to reach its
potentials.

TRADITIONAL AND MODERN APPROACH OF TRAINING & DEVELOPMENT :

Traditional approach: according to this approach there was no training facilities given to the
employees as it was thought that managers are born not made.

Modern approach: according to this approach the companies have realize the importance
training and development. They have turn out to give fruitful results.

Designer

Trainer Beneficiaries of training Trainee

objectives

Evaluator
TRAINING AND DEVELOPMENT IN H&M

Each employee in H&M has to undergo a training process. The training period depends on
staff to staff. In 2009, for a new staff the average number of days are 10, for existing sale
staff it is 1 and for existing management positions the training period is 5. All the training in
H&M is mainly in-house (classroom, stores and one to one) which is written and produced by
the H&M staff. For some areas like ‘buying’ external training is provided. E-learning concept
is also initiated as a new subject.

However, H&M mainly focuses on “just-in time”, on-the-job and hands on learning. For
instance, when the company open its first store in Japan, the employees who were locally
recruited were sent to Norway and Germany. This is done basically to gain experience and to
learn the existing operations. H&M claims that they provide structured opportunities for
hands on, work place and on-the-job based training. (career site).

To summarize, it appears that today H&M focuses mainly on Self-directed learning, though
the company is moving towards e-learning and latest technology.

CONCLUSION

The Human Resource Department (HR) is a strategic partner to the business H&M company.
The HR department helps in recruitment, implement training and, support the development
and growth of our entire organisation. All to ensure to have the right people with the right
skills in the right positions – and at the right time.

Our goal is to be a fair partner to our

employees, and to act with integrity and
respect towards everyone who contributes
towards our success. H&M should be a place
where everyone feels valued and able to
develop.

In other words, Human Resources continue to build the success of the company by
developing and encouraging their employees to reach their full potential.