Human Resource Management 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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