HRM in Marks & Spencer

Introduction
In the face of increasing competitive environment organizations have to focus on the value of investments in human resources as a major source of competitive advantage. Although business strategy as a means of competition is common conversation in the executive suite, taking a strategic approach can be especially beneficial for staff functions within companies, as they often are required to justify their need for resources and their contribution to the company.

The following report presents the analysis of human resource management (HRM) issues provided in the case study on Marks and Spencer’s (M&S) organizational change. Discusses strategic HRM issues facing the company in deciding to create business units and adopt structural change, and the extent to which M&S needs to overhaul HRM and its core business. The author also emphasizes the importance of HRM styles and approaches for the company’s medium term business practices, being integrated into an overall organizational strategy.

2.0 Strategic HRM Issues for M&S’s Organizational Change
The received wisdom in the literature on organisational change is that employee involvement is crucial to successful change, especially in situations that require attitudinal and cultural change. Therefore, any rapid organisational transformations can only be successful if they focus on structural as reverse to cultural change. The case with M&S is a scenario of rapid organisational transformation, which was based on a vision imposed on the company in a mainly directive fashion, down from the top, by its management and CEO, but which could potentially lead to a widespread change of attitudes and behaviours in the company. This change in the middle of the trading period was a risky action and would bring a big confusion for the staff, putting a high pressure on their performance. It was an emergent change where staff had to develop and adjust to new ways of a flatter organisational structure and new ways of operations under new business units.

In the case of M&S, it can be seen that the company deliberately set out to change the basis on which it competed by reinventing itself as a service-based organisation. One of the standard perceptions for successful organizations is that they should know their own strengths and weaknesses, their customers’ needs and the nature of the environment in which they operate. Hence, by introducing new business units M&S aimed to create them fully profit-accountable, putting more emphasis on the individual performance of the departments. This would enable M&S to effectively control their operations and show where the improvements need to be implemented. Hence, by this new approach to business practices, the company had to closely consider strategic issues of HRM.

One of the reasons behind the proposed change is to modify the attitudes and behaviours of the staff. People are being required to reconsider their attitudes towards how work is performed and their attitudes to their counterparts externally. Whatever form it takes, if it is to be successful, there are three people-related activities that need to be undertaken: creating willingness to change; involving people, and sustaining the momentum (Doorewaard and Benschop, 2003; Burnes, 2004). M&S in seeking to create willingness and a readiness for change need to be aware that stressing the positive aspects of the proposed change may have much a negative impact on the company’s performance. Therefore, M&S have to make people fully aware of the pressure for such change during the trading period, giving them an on-going feedback on the performance and areas of activity within the organisation, and understanding staff’s fears and concerns. A constant communication and involvement will have to be present, providing resources and explanations for change. Aligned line managers will have to give all support needed to the change agents, develop new competence and skills and reinforce desired behaviours, such as increased pay or bonus.

The new changes to business units and flatter company structure are likely to increase employee empowerment and responsibility, increasing more of the direct contacts with customers and building new knowledge. Post-Modern theories suggest better flexible strategies, accommodating change in the structure of power relationships, where they specialise in their field of tasks (Johnson and Scholes, 2002; Francis, 2003), To become more flexible M&S decided to apply a more horizontal management organization style. Through a clear leadership role of appointed heads of business units, centralisation will also be high only to a certain degree, not to prevent adaptability and flexibility of staff. Coordination will need to be in a form of a clear structured hierarchy and division of labour. To encourage job enrichment and staff satisfaction, M&S may establish one or more specific coordinating roles. Liaisons, individual or departmental, committees, task forces, project groups, and the like are all examples of possible structural coordinating devices.

Many modern theorists believe that in order to succeed business culture needs to be change-oriented and, hence, M&S need to adapt to differentiating changing environments and internal workforce diversity.

3.0 HRM Approaches for M&S’s Medium Term Performance
The interpretation of HRM is based on incorporating either a “soft”, developmental humanist approach or a “hard”, situational contingent approach (Liao, 2005). Schneider (1994) has suggested that in the “soft” approach, effective HRM is seen necessarily to involve a focus upon fostering employee motivation, commitment and development. It is an approach that acknowledges the importance of HRM to the aims of the business, whilst reflecting attempts by management to create a work environment that emphasises employee development, through practices such as training, participation and communication, and the importance of having innovative, flexible, committed employees who are valued resources.

“Hard” HRM is, as Liao (2005) has noted, closely aligned with what is often termed strategic HRM. In these instances, HRM is closely linked with business strategy. Accordingly, it views employees as resource to be used dispassionately and in a formally rational manner. As such, HRM effectiveness can be more contingent upon cost minimisation measures rather than upon significant investment in human resources. A “hard”, contingency-based approach to HRM is often seen as an essential part of a cost-minimisation strategy. However, in the case of M&S it is suggested that for a successful implementation of changes, there is a more need of ” soft ” approach for the medium term success, as everyone within the company needs to cooperate and understand the importance of the changes.

For M&S the commitment of senior management and the assigned heads of the business units to HRM are crucial to company’s effective operation. It would be essential to possess the knowledge and skills necessary to implement a credible HRM programme within the organisation. For a medium term success, M&S needs to consider the following HRM approaches:

• A clear understanding and commitment of the management to the desirable change need to prevent any conflicts and operational barriers;
• Good dynamic and effective leadership will have to take place and be supported by the managers of M&S;
• It is also importance to consider teamwork in decision process. The employees have to be integrated into the change process management;
• To become more service-focused company, M&S will have to look at a culture of communication, so that people can use the advantage of a good working team for the progress and the company’s success. Mayo’s motivation theory also suggests that effective communication is an essential part of organisational changes and an effective foundation of modern organisations. Hence, M&S has to put greater emphasis on improvement of interpersonal communication skills of all organisational members;
• As McGregor’s theory proves, employees are likely to be motivated by the goals of achievement and ” self-esteem “. By rewarding staff and by leading people, M&S would build a good management for a medium-term success;
• Staff involvement and participation are likely to contribute to a sense of responsibility and ownership and, hence, organisational commitment and loyalty. The norms and beliefs that enhance an organisation’s ability to receive, interpret, and translate signals from the environment into internal organisational and behavioural change will promote its survival, growth and development;
• It may be important to clarify the strategy throughout the hierarchy to every employee (Huang, 2001). An effective two-way flow of information and communication has to take place, so that everyone will be aware about the goals and visions of the company’s growth. Face-to-face, one-to-one communication through to routine bulletins on notice boards and circulars sent around the organization might take place for effective communication of the message. Staff meetings have to take place to inform everyone about the changes and prevent misunderstanding and dissatisfaction. In order to get a feedback on the changes, two-way communication approach has to be encouraged;
• A good strategy for dealing with conflicts and contingency system is also essential form for the operational process.

4.0 HRM and Core Business of M&S
One of the challenges for managers having to introduce change in the company is to determine the strategy that will produce the best results. In a situation of excellence, a company has to be able not only to adapt in an outstanding way to its market conditions, but also to develop internal practices that clearly set it aside from the competition.

Change can be costly, not only in financial terms, but in terms of management time. The question should arise whether M&S has enough capabilities and is ready to manage change and, more importantly, readiness to achieve the scope of change.

It is not enough to adjust the performance management processes to support changing business strategies. Managers of M&S need to be able and willing to envisage a future where the strategies and performance of the company are transformed by stretching the staff’s capabilities of the organisation better than their competitors. The primary goal of M&S management has to be in overhauling an integrated relationship between HRM and the core business to successfully implement the changes.

Strategic capability is essentially concerned with how the resources (including people) are deployed, managed, controlled and, in the case of people, motivated to create competences in those activities and business processes needed to run the business (Huang, 2001). Bergenhenegouwen (1996) states that the concept of core competences goes beyond this in a search for those few activities that underpin competitive advantage. Nevertheless, the starting point of successful strategies for M&S is acquiring, retaining and developing human resources. Much of the “hard” side of HRM is concerned with ensuring that this baseline is maintained in the company. Such HRM activities as audits to assess HR requirements to support core business strategies, goal-setting and performance assessment of individuals and teams, the use of rewards, recruitment as a key to improve strategic capability, and training would assist M&S management in delivering about the proposed change in the most effective way for business outcomes.

M&S has been always renown for the strength of linking business and human resource strategies. This tends to bring clarity from the business planning process. However, operating in a highly competitive environment, with a constant pressure from stakeholders and external forces impacts the decisions of the management Board, as it was in this case.

In general, a strategic approach to HRM involves the designs and implementations of a set of internally consistent policies and practices that ensure a firm’s human capital to contribute to the achievement of its business objectives. Fundamental to the strategic HRM perspectives, there is an assumption that firm performance is influenced by the set of HRM practices a firm has in place. M&S line managers can enhance productivity by building a sound HRM system having a set of specific HRM practices in different ways. This necessitates the development of an approach to investigate the correlation between a firm’s productivity and strategic HRM factors. Based on that understanding, managers can adopt appropriate strategies to improve company’s HRM so as to increase the business units’ total productivity. According to strategic HRM, the HR strategy should be developed alongside the general strategy of the organization, to acquire cultural fit within and with the outside environment.

5.0 Conclusion
Every organisation wants to be successful and depends upon its employees to make that happen. Success should be viewed over the long term. A healthy organisation can go the distance and the best metric of success should be the health of the employees.

The most important issue of M&S is to build upon the company’s already existing strengths and try to overcome the threats of the change. One of the major benefits claimed for organizational learning is that it enables organizations to manage change in a timely and effective manner. The organizational learning and individual development movement was largely a response to the need for organizations to seek to sustain competitiveness and survival in a discontinuous environment. Management practice today is still largely driven by a closed systems view that relies on planning, on a consensual, top-down implementation of change interventions. M&S’s change requires time and energy for learning new approaches, but it is necessary to develop new skills and capacities. M&S has a long history of change management and HRM excellence, but even for them, resolving their present tensions and changes represent a considerable challenge.

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