HR STATEGY

1. Company: TESCO
Company Type: Public Limited Company
Industry: Retailing
Founded: 1919 (East London)
Founder: Jack Cohen
Headquarters: United Kingdom, England
No of locations : 6351 stores
Key People: Sir Richard Broadbent (chairman), Phillip Clarke (ceo)
Revenue: £64.539 billion (2012)
Net Income: £2.806 billion (2012)
Total Assets: £50.781 billion (2012)
Total Equity: £17.775 billion (2012)
Employees: 519,671 (2012)
Subsidiaries: Tesco Stores Ltd, Tesco Bank, Tesco Mobile
Website : www.tesco.com

2. History:
Tesco, the largest retailer in UK as well as the third biggest in the world in terms
of revenue, was founded in 1919 by Jack Cohen. In 1924 the brand Tesco was first
started its journey and in 1932 it became a private limited company. Now Tesco
is operating in 14 countries all over the world. There are 6351 Tesco stores and
almost 519,671 people working in the company across the world. It had a market
capitalization of approximately £24.4 billion as of 15 January 2012, the 15th-
largest of any company with a primary listing on the London Stock Exchange
Business Strategy:
Tesco’s business strategies are mainly focusing on huge domestic market of
financial services, telecoms and non-food. One of the main objectives of Tesco’s
business strategy is to create sustainable long term growth and according to the
company this could be achieved by expanding into global market.
The company initially focused on Asia and central Europe. Most recently it has
made its entry into the US market. In 1997 Tesco first decided to diversify and
according to the company itself this was the basis of its recent success. As a result
of this strategy several new businesses have been created by Tesco for the last 12
years andmost of these businesses are profitable and competitive.
Tesco has developed its strategies which are primarily focusing on five important
factors, 1) its core UK business, 2) community, 3) non-food, 4) retailing services
and 5) international market.
There are four different types of Tesco stores in the country. These are 1)

3. express, 2) metro, 3) superstore and 4) extra. In UK there are almost 960 express
stores, 170 metro stores, 450 superstores and over 175 extra stores. Apart from
these four there are ‘Home plus’ where non-food products, including clothing,
areavailable.
According to Tesco, fulfilling corporate responsibility and creating values for
community are crucial for achieving growth.
Tesco’s various retailing services include: -‘Tesco personal finance’ (TPF),
‘Tesco.com’ and ‘Tesco telecoms’. In UK, TPF is the most successful supermarket
bank. Initially TPF was a joint venture between Tesco and RBS, but in 2008
Tesco decided to buy the fifty percent share of RBS in TPF. All the financial
products of TPF are available online. Developing ‘Tesco.com’ was a strategy of
keeping pace with the modern trend. Almost one million people are today using
‘Tesco.com’ for online shopping. Currently it is country’s one of the leading
telecomserviceproviders
HumanResourceManagement of Tesco:
The HR department carries out recruitment which involves steps that are
followed:
 For instance, there is a call for application after which a criteria is utilized
to shortlist those to be interviewed.
 After the interview, there is a negotiation of salary to be given and finally
job allocation for the qualified.
 After recruitment, the candidates are taken through a series of training
especially by use of available resources so as to end up coming up with
quality employees.
The company uses two kinds of training:
 One is process training in which the employee is made aware of his or her
duties as well as the all process of the work.
 The second category is the on the job training. In this category an
employee is given after the first criteria of process training. The new
employee is then inducted into the job by the most experienced in the job.
Tesco understands the relationship between good quality products as well as
affordable prices; it therefore trains its employees perfectly.
The components of Tesco’s training procedure involve:
 Core skill program: This is a basic training meant to equip the employees
on knowledge of handling customers.
 Winning in Europe: This is training in Tesco Company that aims at
reaching-out to other countries outside the United Kingdom.
 Excel program: This category of training addresses all the kinds of
training given from basic to the managerial training program.The training
given at Tesco is accompanied with pay especially to those who perform
well and this leads to effective performance at the end of the training.

4. For good employee relations the company also encourages its workers to work
near their homes thus cut down on time wastage due to transit. The company also
gives their employees freedom of transfer thus encouraging employee retention
than frequent recruits of new employee’s.There is use of shift to promote unity in
the company as well as exchange of ideas. As a result of a multicultural society,
the HR department also works towards creation of a healthy work environment.
Tesco works towards this by ensuring that every employee knows his or her
rights in the organization. To promote healthy environment both for the
customers as well as the employees, Tesco prohibits alcohol and other products in
the same category.
It also trains its employees on disaster management so as to improve safety in the
premises. Such disaster management includes control of fire outbreak or in case of
burglary.
Tesco has committed itself to use commitment based model which does not force
employees to meet frameworks. In this model still, psychological approach to
employees is emphasized. Employee opinions are taken into consideration and are
normally used even during problem solving process. This model taken by Tesco
puts the employee on the fore front so as to ensure that they are satisfied and can
be motivated to work. Thecomplaints that are normally raised by the employees
are taken into consideration as well as their suggestions thus promotion of
healthy working environment.
Payment procedure is the task of the HR department in Tesco Company. It pays
its employees as per the ‘National Minimum Wage Act’ requirement. It also
motivates its employees through pay increment after a thorough procedural
evaluation has been done in the work place. Promotion is also another aspect of
motivation in the company.
Contribution of various Components of HR towards:
 Business strategy:
Tesco has adopted a comprehensive business strategy which entails attaining
consistent growth and increasing the scale of operation in the international
market. The business strategy also involves attaining a competitive edge in terms
of its human resource. This strategy has enabled the firm to strengthen its core
business in its UK domestic market.
 Mission statement:
The management of Tesco is committed to ensuring that it develops sustainable
customer loyalty. To attain this, the management of the firm ensures that all
operations of the firm are focused on satisfying the customer. This enables the
firm to deliver value to its customers by understanding them in a better manner.
The management is also committed to integrating the concept of innovation and
ensuring that it has a wide range of human resources, and creating a good
working environment for its employees.

5.  Tesco overall human resource strategy:
The management of Tesco has formulated a comprehensive human resource
strategy. The firm’s overall human resource strategy entails integrating employee
training as part of the organization culture. The objective is to attain a
competitive edge in its operation. The firm’s human resource strategy revolves
around challenging rules that are not in the firm’s human resource policy – work
simplification, performance management and ensuring that all the firm’s
employees in all its head offices have the necessary core skills. In addition, the
human resource training also considers employees at the lower level.
Vertical Integration:
Ways in which the firm’s human resource practices enable Tesco to attain vertical
integration:
 Resourcing:
Tesco undertakes comprehensive recruitment in the process of increasing the size
of its human resource. Both ‘internal’ and ‘external’ sources of human resource are
considered during recruitment to ensure that the firm becomes competitive in
relation to human capital.
The firm’s ‘external’sources in human resource are the external market by
posting the vacancy on the internet, offline mediums, radio and television.
Comprehensive recruitment and selection enables the firm to deliver
services effective to the customers and also to undertake product and
service innovation.
‘Internal’ recruitment is aimed at ensuring that the employees are
motivated to move up in their career. Internal recruitment is based on the
performance of the employees. This ensures the employees become more
focused at delivering quality service to the customers. Internal resourcing
enables Tesco to incorporate the concept of reward management in its
operation. To ensure that internal recruitment is effective, the management
has formulated a Talent Plan. The talent plan lists the firm’s employees
who are seeking to move for a promotion.
 According to Recruitment and selection strategy at Tesco:
If the talent plan does not have the necessary candidate, the vacancy is posted
internally for a period of two weeks in the firm’s intranet. Internal recruitment
enables the firm’s employees to be loyal to the organization since there are high
chances of career development.
 Human resource development:
The management of Tesco has formulated an effective employee training
program for all its employees. According to Recruitment and selection strategy at
Tesco, the training program has resulted in effective human resource
development and a good working environment. This is due to the fact that
employees decide their training needs which enable them to be in control of their
individual career paths. Employee training enables the firm to attain its business
strategy.

6.  Employee relations, rewards and performance:
To ensure that the employees are satisfied and productive within the
organization, the management of Tesco has developed a good relationship with
them both in the domestic and foreign market.
According to Tesco, this is achieved by developing an employee relations team.
The team is charged with the responsibility of developing policies that enable
effective management of the firm’s employees. In addition, Tesco rewards its
employees based on the value that they create to the organization.
Horizontal Integration:
Ways in which the firm’s human resource practices enable Tesco to attain
horizontal integration:
As be mentioned before, there are three part of the HR strategy.
The biggest part of HR strategy in Tesco is Training and Developing.
The second one is communication and consolation.
The third one is reward and benefit.
HR strategy is an important issue of HRM in a large organization. Especially as
the international organization, Tesco is a good example. There are about 470,000
employees around the world. In addition, although there are different strategies,
they work for the overall HR goal. In Tesco, the overall goal is for developing the
culture of organization. The HR managers need to use the different HR strategies
to support the same goals.
 Training and developing:
Training:
Tesco pay more attention on training and developing program. This program is
for everyone who works in Tesco. There will be a huge number of new employees
for Tesco every year, some of them have no the working experience. Tesco will
train them before they start their work. In those training, they can get some skills
which they need for the future work, and they will understand the culture of
Tesco. After the training, they will feel their value been improved, that result in
they will more committed work for Tesco. This is positive for Tesco to keep the
useful employees, and that may help Tesco saving some money from recruitment,
though recruitment cannot be ignore.
Developing:
Except the training which be held by the organization, the employees can develop
them skills which they prefer to improve. This will increase the employees’
interesting on work, therefore, that can develop their as much as they prefer,
result in, the individual development will impact for the organization
development which can improve the organization’s level.
However, there are some negative impacts for Tesco:
Firstly, although the training is for everyone, they cannot take the training
in the same time. Therefore, there are some employees unsatisfied when
they will take the training. There will be some negative competitive.
Secondly, some employees will leave Tesco when they get the skills which
they need. Actually, this is not good for Tesco. They pay the employees’

7. development program, which is in order to improve their level. If some of
them leave Tesco that will be double worth for Tesco. They need to
employ more employees, may pay for the interview fee, and they have to do
the training again. That will increase the cost.
 Communication and Consolation:
This part is also important for HR goal. That can reduce the unsatisfied of the
employees. Sometimes, communication is a part of the training and individual
developing. Because after the training, the manager need to get some feedbacks
for them to improve their next training. And when they arrange the training,
there will make some conflict or unsatisfied. Therefore, the manager has to
understand what the conflict is made by, and how to deal with them.
In other way, it is an independent part of HR strategy. That because it is not
every conflict which is broke out by arrangement of training. Therefore, the
manager has to understand every way of the employees’ needs.
Reward and Benefit:
This is a basic and direct strategy of HRM. That can let the employees work
hard, that because sometime this is link to their salary and their own portfolio.
The discount for the employees is very kindly for them. In addition, training and
individual developing can be seen a kind of the reward.
In other hand, some employees want to get more bonus, but the level of them
cannot get more, they will unhappy, they may do not hard work as before. In
addition, the discount is not for the employee, but also for his/her family and
friends. That would be the potential threaten for Tesco.
Conclusion:
Although those strategies are different, and those are influence the different
target. All of them are work for HRM. There will be a link between those
methods. The manager will mix them to manage the HR in Tesco as much value
as they can. There are some different between each one. They have the different
value for the employees. The manager will due to the different responsibility to
operate the HR strategy.
Bibliography:
 www.ukessays.com
 www.slideshare.com
 www.wikipedia.com