Managing Human Resources: Analysing the Case Of Harrods

Executive Summary

This report mainly highlights the importance of human resource management. Although, human resource management is a broad term, still this study mainly concentrates over human resource practices. The ways by which, human resource practices enhanced the prosperity and motivation of the employees of Harrods is focused in this study. Along with this, importance of Guest model, flexible working practices are also highlighted. Moreover, the impact of flexible working practices over Harrods is also highlighted and in what ways it enhanced the profit margin. Moreover, the distinction within HRM, PR and IR along with the effectiveness of PR and IR over organizational productivity and profitability is also described effectively. Other than this, various methods and procedures of performance management as well as health and safety measures are also highlighted in this part.


Modern day leaders are facing increasing difficulties in managing human resources within work environment as the nature and perception of the workforce are continuously changing by time. Guest and King (2004) acknowledged that organisational leaders nowadays emphasises on a certain degree of sensibility in order to ensure effective employee relations within the work environment. The current study is attempt to stress on human resource management practices in contemporary organisations such as Harrods, a leading departmental store chain in the UK. The overall study is focusing on four tasks. Task 1 focuses on different perspectives of human resource management. Task 2 evaluates the process of developing flexibility within workplace. Task 3 determines the impact of equal opportunities within workplace while task 4 investigates the approaches to HRM within Harrods.


1.1 Effectiveness of Guest Model on the HRM practices followed at Harrods:

 In this dynamic environment, human resource is considered as the driving force of any organization. With the help of human resources, an organization successfully satisfies the changing requirements of the customers. Due to this regard, human resources are managed and controlled in the most effective way. Hence, the aspects of the Guest’s model are offered high concentration. Guest model is introduced in the year 1989 by David Guest that clearly specifies the differences between human resource management and personnel management process. As per this theory, the performance of an organization depends entirely on the commitment and devotion of the human resources. However, in order to accomplish such desires, it is extremely essential for the organization to enhance workforce well-being. In against to the latter statement, it may be noted that if a marketer fails to accomplish the interests of the workforces in an effective way then the organization may not prosper. Due to this regard, most of the global firms desire to concentrate over the six pillars of employee performance as per Guest model. The six pillars are HRM strategy, HRM practices, behavioural outcomes, HRM outcomes, performance outcomes and financial outcomes. Moreover, as mentioned by Bechet and Maki (2008) that Guest model also helps the organization to focus more on employee performances so as to improve its overall objectives. In lieu to this Gilmore and Williams (2009) stated that improvement in employee performance might result in intensification of quality, flexibility and dedication towards organizational objectives. This clearly specifies that behavioral motives might also get enhanced resulting in the improvement of productivity as well as financial outcome of the concern.

Keeping all these facts in  mind, Harrods also decided to offer highest attention over HRM practices rather than organizational objectives. Since, improvement of HRM practices such as training, recruitment, selection, appraisal process, compensation, relationships might enhance HR outcomes (commitment). Due to improvement of commitment, motivation and cooperation among organizational members might also get enhanced. Enhancement of behavioral outcomes might also result in improvement of performances and productivity of the employees. Hence, as supported by Cavanaugh et al. (2010) that proper HRM practices and flexible work flow presented a positive impact over the employees and it increased the devotion rate towards Harrods.


1.2 HRM, PM and IR initiatives differences between Harrods and Marks and Spencers

As mentioned by Jackson and Schuler (2003) that Human resource management is a broad aspect mainly focusing on the commitment and performance of the workforces. However, John Storey created a clear distinction of hard and soft aspects. Although, HRM broadly describes the improvement of workforce productivity, but it need to be supported by each and every employee of the organization. This means, organizational productivity and image is entirely dependent over combined employee performance, dedication and confidence (Koys, 2008). Otherwise, it may not be possible for the organization to enhance the overall productivity and profitability in this competitive era among others. Little (2004) argued that, if the level of devotion of the employees lacks then the organization may not retain its image and reputation. However, in order to enhance the reputation, most of the global firms offer a significant concentration over personnel management and IR management practices. The personnel managers and IR managers of an organization desire to maintain a proper relationship and communication among the entire hierarchy. This may enhance the motivation and commitment of the employees towards the desired tasks of the organization. Hence, the organizational productivity might get enhanced to a significant extent among others. On the contrary, Karpaz (2005) deciphered that lack of communication may result in failure of coordination and relationships. Therefore, the organizational profitability and brand value might get hampered considerably. Due of this above mentioned fact, most of the global brands focus over PR or IR practices rather than HRM practices. Since, PR or IR practices enhance employee loyalty and commitment along with organizational growth in the long run (Boxall and Purcell, 2003). 

Considering this fact, Harrods is also trying to implement customized training facilities, varied types of recruitment policies and reward systems within the organization (Hannon et al. 2006). Doing so may enhance the motivation and commitment of the employees towards the assigned tasks resulting in the intensification of organizational profitability and equity. Similarly, another existing retail player, Marks and Spencer implemented the policies of PM and IR. The proper relationship among the employees enhanced the devotion rate and organizational revenue. Hence, the market share of Marks and Spencer enhanced by 10% among others.

1.3 Implications of the line managers and employees to develop a strategic approach at Harrods

In this recent era, proper management of human resources is extremely essential for attainment of sustainability and competitive advantage of an organization. Due to this regard, proper staffing, developing and managing of human resources is extremely essential. All such responsibilities are presented to the line managers of the organization. The line managers are entirely responsible for mentoring, improving and motivating the down-level staffs or employees in order to enhance organizational profitability. As mentioned by Kelloway and Day (2005) that line managers motivate and develop the employees to satisfy the day to day organizational challenges in an effective way. Considering this fact, the line managers of Harrods tried to maintain a good relationship with all the employees so as to analyze the skills and competencies. Since, line managers are entirely responsible for delegating the jobs and tasks to the employees. Therefore, if the underlining skills are known then the allocation may be done accordingly and it may enhance both employees and organizational efficiency. Apart from this, with the help of proper communication, the line managers may effectively analyze the feedbacks of the employees as well. Such type of communication may prove extremely effective for the organization of Harrods in future era. Thus, Rosenstock et al. (2006) noted that proper communication within the line managers and employees created a ‘feeling of valuable’ that enhanced the devotion rate towards the tasks. Hence, proper coordination and devotion of the employees acted as a catalyst for Harrods that augmented the brand image and position in this competitive market. 


2.1 Impact of model flexibility in organizational behavior of Harrods

Model of flexibility is extremely essential in this age, for the organization to enhance the sustainability and competitive advantage.  Due to this regard, the concept of flexible work environment is accepted and implemented within numerous global organizations. Moreover, as cited by Truss et al. (2008), the bonding and communication are the prime aspects flexibility model and it enhances the devotion of the employees. However, due to improved communication, the skills and talents of the employees enhances resulting in the intensification of the organizational profitability and productivity. Thus, due to the implementation of the practices of flexibility model, the level of retention and satisfaction of the employees enhanced to a significant extent as compared to many other employees. On the contrary, Schuler (2007) mentioned that if an organization fails to implement the concept of flexibility, then it may not retain its position and productivity. Considering this fact, Harrods recruited low-skilled workers within the organization so as to satisfy the changing requirements of the customers. Moreover, Harrods recruited highly skilled professionals as per flexibility model to judge the underlining skills and competencies of the employees. Doing so, the organization may enhance the dedication and commitment of the employees resulting in the intensification of the profit margin (Toulson and Dewe, 2004).

Hence, Flexible model proved extremely effective for Harrods.

2.2 Different types of flexibility

In this ever-changing age, Harrods might try to implement different types of flexibility  in order to intensify the market value and image. Some of the worth mentioning are numerical flexibility, temporal flexibility, functional flexibility and wage flexibility.  In order to enhance the market share, Harrods may implement the concept of numerical flexibility. As per this flexibility, Harrods may implement both full-time as well as part-time employment contracts. Along with this, temporal flexibility may attract numerous talented and skilled workforces and as a result the profitability might get improved. With the implementation of the concept of functional flexibility, varied types of individualized training programs are introduced. As a result, the inner skills and talents of the employees increased that enhanced the devotion and commitment of the employees. Moreover, it also increased the performance and coordination of the employees towards the specified tasks of the organizations. Apart from this, wage flexibility helped the organization of Harrods to enhance the motivation and encouragement of the employees. Along with this, a system of rewards and incentives also stimulated the inner impetus that improved the quality of work. Thus, as mentioned by Khatri (2009) that implementation of different types of flexibility within Harrods enhanced its image and profitability.

Hence, it may be clearly revealed from the above mentioned facts that the concept of flexibility not only enhanced the reputation but also the prosperity of the organization. So, it needs to be offered highest attention by the management of Harrods.

2.3 Assessing the utilization of flexible working practices

In order to enhance sustainability and profitability of an organization, flexible working practices is the most essential requisite. Without which, an organization may not become successful in enhancing the motivation and commitment of the employees. However, due to lack of motivation of the employees, the quality and performance of the employees might get hindered. As a result, the profitability and productivity of the organization may not get enhanced to a significant extent among other rivals. Due to this regard, most of the organizations are implementing the strategy of flexible working practices. Doing so, the employer may attract a wide range of skilled and talented work forces within the organization that may enhance organizational profitability. Along with this, flexible working practices also prove effective for an organization to retain the existing skilled employees for a longer period of time as compared to its rival players. In against to the latter statement, Leibowitz (2008) mentioned that if an organization fails to implement flexible working practices then it may not position it as a global brand. This is mainly due to lack of expert and skilled workforces within the organization.

Considering this fact, Harrods also introduced the strategy of ‘flexible working schedules’. This tactic proved extremely effective for the organization as it increased the motivation and confidence of the employees. However, due to the improvement of the motivation of the employees, the quality and performance of the tasks might also increase to a significant extent.  So, the concept of flexible working practices proved extremely worthy for the organization operating in global scenario.

2.4 Impact of changes in labour market:

In order to cope with the changes, most of the organizations are implementing varied types of inventive concepts. Similarly, Harrods also implemented the practice of flexible working concept within the organization. As a result of which, the employees of the organization became successful in  enhancing the confidence and commitment towards the assigned tasks. Hence, the quality and performance of the employees might get enhanced resulting in the intensification of the brand value and position of the organization among others (Milkovich et al.2009). Apart from this, due to varied types of changes in the labor market, numerous issues aroused such as impact of technology, decentralization, franchising, teamwork, coordination and many others. However, in order to compensate such type of issues, Harrods implemented the concept of participative decision making.  As a result of which, the organizational cost reduced significantly that enhanced the total revenue and profit margin of the organization. Other than this, in order to mitigate varied types of the above mentioned issues, wage and functional flexibility practices are also implemented within the organization of Harrods. This enhanced the motivation and performance of the employees leading to the improvement of the organization among other rival players (Gomez, 2004). On the contrary, Armstrong and Armstrong (2011) noted that if Harrods failed to implement flexible working practices, then it may not retain the prosperity and position in this dynamic market. Moreover, the switch over costs of the employees and customers might get enhanced resulting in the downfall of the reputation and brand value of Harrods significantly. Thus, in lieu to this statement, it may be enumerated that flexible working practice is a strategy to improve motivation of the employees to increase organizational equity.

Task 3:

3.1 Forms of discrimination within Harrods:

Contemporary business organisations experience a range of discrimination within the work environment. Discrimination within workplace could either positively or negatively influences the workforce productivity (Dyer and Heyer, 2004). The case of Harrods is no different as the organisational work environment accounts several forms of discrimination that often influences workforce morale. Considering the case of Harrods, discrimination could be experienced in terms of culture, age, gender and religion. Based on these categories different work groups have been formed within the workplace. Although these sub groups might not affect workforce performance drastically, the discriminations often lead to workforce conflicts. As mentioned by Lawler (2007), workforce performance could be significantly influenced by the nature of discrimination within the organisations.

Harrods is prioritising several discrimination policies in order to tackle issues emerging from discrimination. The brand has prioritised equal employment policy in order to counter the gender discrimination scenario. Thus the organisation has been trying to develop a workforce comprising of equal number of male and female employees. Lam and White (2008) cited that resolving gender discrimination is needed to be a top priority for modern day organisations as right combination of male and female employees could optimise workforce performance. On the other hand, the organisations has particularly emphasised on the cultural differentiation. Since the workforce of Harrods is comprised of people from different cultural backgrounds and speaks different languages, a cross cultural training mechanism has been followed to manage cross cultural diversity.    

3.2 Equal opportunities legislation within Harrods:

In order to ensure equal opportunity for the employees, Harrods has followed a range of initiatives both formal and legal. The brand has developed the Code of Conduct emphasising on the Employment Equity Act 1998. In reference to the proposition of Starcke (2006), the European Union has been prioritising equal employment opportunity across the continent so and business organisations need to comply with the policy so that conducting ethical business could be feasible. It seems Harrods has set a benchmark for the leaders when it comes to ethical management practice and the provision of Employment Equity Act helps maintaining a certain degree of transparency within the workplace.

In order to ensure proper implications of the Employment Equity Act 1998, Harrods has modified the Code of Conduct accordingly. The training and development function has been revamped in order to facilitate the employees performing assigned responsibilities. All the employees are given equal training avoiding biased treatment. On the other hand, a special management team has been formed for performance management of various departments. The team has been given responsible to evaluate department initiatives in practicing equal opportunity strategies. As stated by Walker and Armes (2009), ensuring equal opportunity management would depend significantly on the performance of the organisational leaders. Adding to that, the board has followed the ‘Share your voice’ philosophy to ensure transparent management policy. Employees are encouraged to share thoughts so that unbiased conflict resolution strategy could be maintained.   

3.3 Harrods initiatives to manage equal opportunities and managing diversity:

Harrods has been prioritising equal opportunities and diversity management policies so that effective human resource management strategy could be ensured. In the words of Thomas and Garava (2007), mitigating biasness and resolving diversities could help organisations maintain a certain degree of transparency in the HRM strategies. Similar situation can be found in Harrods as the brand has experienced improved employee relations prioritising equal opportunity and diversity management strategies.

When it comes to the equal opportunity initiatives of Harrods, the brand has followed shared provision, liberal approach and a high radical mechanism to ensure an unbiased management policy. In reference to the liberal approach of Harrods, the brand has been trying to maintain a balance between the compensation structures of the employees. Chowanec and Newstrone (2011) acknowledged that differentiation in compensation structure could demotivate employees to a severe extent. Therefore, the HR managers at Harrods develop the compensation structure based on the ability of the employees in addressing the core competencies. The approach ensures an unbiased compensation policy and a legally sound reward mechanism of the organisation.

The sharing philosophy prioritised by Harrods has turned out to be an effective approach in enhancing employee relations within work environment. The management encourages the employees to share thoughts on the ongoing management practices so that continuous monitoring of the management operations could help enhancing work environment. As mentioned by Roseman (2005), evaluating employee insights could help in developing innovative management solutions.

Harrods has been maintaining a high radical system in order to facilitate the business transition process. The brand has identified flexibility to change could help in achieving a competitive edge over the rivals and therefore a high radical system is prioritised so that a dynamic workforce could be established. Srimannarayana (2010) criticised that majority of the organisations in the modern era fail to assess the significance of change management which ultimately cause trouble for business. However, the dynamic workforce at Harrods ensures the employees are capable of delivering results even in stiffest of business situations.

Apart from the equal opportunity policy, Harrods has been prioritising proper diversity management for ensuring high morale among the employees. Considering the words of Smith and Bath (2006), workforce diversity if effectively controlled, could lead to enhanced profitability. However, organisations need to nurture diverse talents and skill set accordingly to utilise the workforce diversification (Armstrong and Armstrong, 2011). Harrods has particularly emphasised on the gender discrimination policy. During the recruitment process, the HR managers are given strict orders to ensure proper balance between the male and female employees within the organisation. Adding to that, a cross cultural training mechanism has been prioritised by Harrods in order to effectively manage cross cultural diversity.

Task 4:

4.1 Different methods of performance management at Harrods:

The performance management process followed at Harrods aims to assess the strengths and weaknesses concerning the employees and thus keeping tab on workforce performance. As per Walker and Armes (2009), a proper performance management process helps in monitoring workforce performance while at the same time maintaining workforce morale through appropriate reward strategy. Considering the performance management process at Harrods, the brand has been following a range of strategies while the self assessment and 360 degree appraisal process being the most preferred initiatives.

Self assessment has turned out to be an effective initiative at Harrods as it has helped tracking workforce performance effectively. Employees at Harrods are encouraged to conduct self assessment programs to evaluate self performance against the agreed KPIs (key performance indicators). Walker and Armes (2009) referred the self assessment process as an effective option in measuring self performance based on job responsibilities. In this process, the employees evaluate self performance against the core competencies and the immediate supervisors compare the performance in a balanced scorecard approach. The KPIs are set against innovation, sensation, service, British culture and luxury. Based on the outcomes from the self assessment process relevant appraisal process is followed.  

Along with the self assessment process, a 360 degree appraisal process is followed during performance management mechanism at Harrods. Considering the words of Armstrong and Armstrong (2011), the 360 degree appraisal process is a common phenomenon in modern day business environment in which, the appraise, the appraiser and a management representative conducts the appraisal process in a neutral way. Similarly, employees at Harrods are engaged in the 360 degree appraisal process under supervision of the immediate supervisor and a top management staff. The two way communication mechanism during the 360 degree appraisal process ensures avoidance of biasness while at the same time promoting neutral appraisal process.   

4.2 Approaches of employee welfare management at Harrods:

Employee welfare management is being prioritised at Harrods. The board has focused on three specific HR functions including performance management, employee development and recruitment. Leibowitz (2008) strongly agreed with the fact that employees deserve certain welfare schemes for the efforts and commitments. The recruitment and selection process followed at Harrods aims to develop a culturally diverse workforce. Candidates from different cultural background are sort listed during recruitment sessions and thus, effective employee relation is managed within the work environment. Conducting a proper selection process assures that only the right sort of candidates are selected for the workforce so that the employee turnover scenario can be enhanced.

Harrods has emphasised on the employee participations as well since the management assesses the significance of employee morale. The brand has followed the ‘Engaging for success’ policy to improve employee engagement scenario. However, Armstrong and Armstrong (2011) contradicted that proper training and development strategies are needed to be followed to ensure better commitment of the workforce. Harrods is therefore providing effective training to the employees so that employees could get the required skill set to complete the assigned tasks. As a consequence, employees successfully manage to deliver desired performance and the motivation level remains high.

4.3 Health and safety provision at Harrods:

Harrods considers employees as the most crucial asset and the management protects the employees through proper health and safety provisions. The management prioritises the work-life balance mechanism ensuring a high morale within the work environment. According to Leibowitz (2008), keeping the right balance between work and social life can be critical as it could influence the job stress. Therefore, the HR managers at Harrods are directed to follow proper delegation process so that employees could get enough time for social life. A safety precaution initiative has been undertaken to avoid hazardous situation. The compensation structure includes health and safety benefits along with the monetary benefits. Employees are provided medical facilities while there is life insurance scheme for each of the employees.   

4.4 Impact of one topical issue on HRM in reference to Harrods:

Harrods has often been praised for the effective HR initiatives and regarded as one of the most preferred employers across the UK. However, the brand is heavily criticised recently due to the gender discrimination policy. Armstrong and Armstrong (2011) criticised that gender discrimination promotes biased HR management and could significantly affect organisational brand image. Such has been the case for Harrods. The organisation has recently regulated disciplines regarding the dress code of the staffs. While there is no specific regulation regarding the dress code of male employees, the female employees would require to wear makeup during working hours. Such discrimination has caused workforce conflicts. The approach contradicts the Equal Employment Act 1998. As a consequence, the brand image of Harrods has been affected significantly.


Harrods has been following an effective SHRM initiative in order to manage the organisational human resources. Findings from the study promote the fact that the provision of equal opportunity could enhance the employee motivation level. A flexible communication process could help maintaining a certain degree of transparency within the workforce. Proper discrimination and diversity management can help organisations improving the process of managing human resources. However, Harrods needs to emphasise on the gender discrimination policy as the issues is affecting the organisational brand image.    


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