Strategic Human Resource Management Report - Morrisons Supermarket

Contents

Executive Summary

Theory

Morrisons Company Profile

Morrisons SHRM History

Identifying Core SHRM Strategies at Morrisons

Conclusions on Biggest SHRM Issues:

Morrisons Current Business Strategies

Critical Analysis Using Porter’s Model

Morrisons Pestel and SWOT Analysis

Conclusions on Biggest Strategic Issues

Identification of relevant regulatory factors that impact Morrisons and HRM practice in general

Environmental factors that might impact Morrisons’ HRM practices

Recommendations for Morrisons regarding the Strategies they should be pursuing

Recommendations on how these strategies could be operationalised

Conclusions

References

Executive Summary

This report shows an overview and analysis identifying the current SHRM and business strategies by Morrisons. Further analysis reviews employees comments in comparison to the propounded corporate strategies and recommendations are made to improve and operationalise the proposals.

Theory

SHRM is not just a function of the Human Resources (HR) department as all managers and executives need to be involved, as the role of people is so vital to a company’s competitive advantage (Becker, 2006).

To paraphrase Armstrong: Strategic Human Resources concerns implementing and monitoring of strategies, so as to ensure that the organisation's objectives are achieved, and its values are put into practice (Armstrong, 2008).

This report will show that Morrisons’ SHRM strategy appears to be rhetorical rather than reality. Feedback from www.glassdoor.co.uk^[1], the employment version of trip advisor, compared to Morrisons public statements evidenced a discrepancy (Glassdoor, 2015). Recommendations made are to combat the current issues.

Morrisons Company Profile

Morrisons has grown from a Northern budget pie /cut price crisp seller via organic growth through the acquisitions of Safeway and Somerfield stores. It is now the fourth largest supermarket in the UK with 127,403 employees (Marketline, 2015). To attract, motivate and develop staff Morrisons have identified key elements to strengthen their position in the sector and with a business model that is rather more complicated than their competitors, albeit delivering a competitive advantage. Their four areas of focus have shifted in the Annual Report from 2009 to 2014:

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Table 1

Morrisons state that their employees are the most important asset of their business model to deliver their high standards. It is ironic that Emily Lawson, the HR Director, left 17th June 2015 the eighth executive board member to do so since March 2015. The last two CEO’s Bolland and Philips were recruited from outside the business rather than via an internal succession plan. Reports on the Chartered Institute of Personnel and Development CIPD website have a rather gloomy perspective littered with cost cutting, store closures and staff paying for management mistakes, etc. (CIPD, 2015).

Morrisons SHRM History

Norman Pickavence joined Morrisons in 2007 as HR Director and found that Morrisons did not have a HR department as such; they had a large Personnel team, whose main role was administrative. They recruited staff and kept records but did very little else at this time. His first task was to re-organise this team into HR as per the Ulrich model (Ulrich, 1987). This consisted of HR business partners facing the business, change agents and centres of expertise (in areas such as talent, learning, recruitment) with administrative underpinning. However despite this www.glassdoor.co.uk refers to HR managers as personnel managers (Glassdoor, 2015).

Having acquired Safeway in 2004 and Somerfield stores in 2009, there was a considerable culture clash between the organisations. Safeway, for example, was more advanced in its processes and systems, and the HR technology was varied consisting of different systems. During this period, HR systems were analysed, and it was assumed that what was being debated was purely a payroll system. Payroll as a responsibility fell between HR and Finance. At this time, there was no learning, succession planning, and talent management, recruitment, or performance management systems in place.

Identifying Core SHRM Strategies at Morrisons

Current HR Technology

One of the key SHRM issues is “out of date” internal systems. For a business of their size, it contracted Oracle to supply an Enterprise Resource Planning (ERP) solution to cover manufacturing, supply chain, finance, logistics and distribution. A second deliverable was a HRM system, dubbed the HRizon project. The Oracle project grew quickly and by 2009 it was a multi-million pound project involving not just Oracle but dozens of contractors from India but failed to deliver.

The business orientated features took priority. The HR team complained that when asked if any HR functionality would be made available it was always “18 months away”. They would wait six months and ask again, and the answer was "18 months away". The system eventually went live with some HR functionality in 2012. However, it ran so slowly they had to switch it off as the problem was delivering a service to hundreds of stores without the system capacity.

A talent management and succession planning system supplied a software as a service (SAAS) system. In systems architecture terms, they purchased a previous generation product, centrally controlled monolithic system aimed at automating and supporting functional professionals in their traditional roles rather than being an enabling tool for members of staff to revolutionise the way they ran the business. Morrisons have a challenge in providing access to systems for all store staff (HQ is relatively easy). However, store management is quite adventurous and willing to move with the times if given a chance. HQ’s view is that shop floor staff are not IT literate. However, most of them will have experience using Facebook, Ebay, Twitter, Amazon, etc. therefore they are unlikely to be technophobes.

Recruitment and Selection Strategies

Morrisons offers a variety of jobs for a range of talents over the following areas:

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Table 2

It is evident from www.glassdoor.co.uk that Morrisons do not hire sufficient staff. Therefore recruitment and selection is a priority over merely trying to boost profits via low wages and insufficient staff.

Reward system strategy

There is no overtime, and staff on the shop floor receives poor pay.

Training, Development and Talent Management

Morrisons put 40 of its HQ employees through the CIPD Experience Assessment qualifying employees as Chartered Fellows, Members and Associates of the CIPD (CIPD, 2015). They have a training and development program and state that they have talent management programs. However the reality is that there is poor and insufficient shop floor training in comparison to HQ.

Trade Union Position

The Union for Shop, Distributive and Allied Workers (USDAW) is Morrisons' trade union. USDAW have an expectation that the organisation carries out relevant practices, changes, etc. And implements those to operationalise new strategies and practices negotiated between Morrisons and USDAW. Providing they do not have a detrimental impact on the companies operating objectives and practices (Sloman, 2009).

Corporate Social Responsibility Strategy

Page 12: Environmental Factors.

Conclusions on Biggest SHRM Issues:

1. Unclear strategic plan.
2. Culture: can they break away from top down, head office-centric command and control?
3. Roles: the organisation does not appear to know what roles they need to deliver the strategy and how should they be organised?
4. Process: how do the new roles use the new technologies under the new culture to make a difference?
5. Convenience offering store closures, therefore the need to consider redundancy issues, retaining, and relocating staff.
6. All employees need to be treated with respect.
7. Reward: as a minimum to pay the living wage plus overtime.

Morrisons Current Business Strategies

The biggest cultural issue is inertia as everything is slow and cumbersome, driven by committees and meetings, hierarchies and inter-functional politics. Head Office largely operates in a “world of its own”, barely touching the actual day-to-day business being driven through store operations together with manufacturing, logistics and distribution. In the current environment, it is harder still to keep to the strategy as there are abandoned strategies throughout the organisation and new directors plus cost pressures in competing with Aldi/Lidl ( whom are growing with a clear strategy) and Tesco/Asda (whom are larger with greater firepower but with similar confusion over direction). Morrisons are not a direct competitor for Waitrose and M&S, and only partially compete with Sainsburys (positioning and geography).

Morrisons have an issue with the demographics of their workforce. At HQ, there are the usual corporate functions: Legal, HR, Finance, IT, etc. HQ would fit in if they moved to say, BP or IBM. Culturally they pay lip service to working in a retail environment (they have to visit shops occasionally) but in many ways it is a corporate head office through and through. There are also conflicts of interest due to the limitation of resources with the cut-backs in staff, closure of convenience stores, and allocation of limited resources. If the organisation is ill-performing financially, resulting in even more cutbacks and in turn more limits to recourses, then more conflict may arise (Mullins, 2007). This is evident in the feedback posted on www.glassdoor.co.uk.

Morrisons own their supply chain and manufacturing plants. Therefore, it is a complicated business to manage albeit gaining a competitive advantage through this differential. Morrisons Vertically Integrated Business Model:

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Table 3

Critical Analysis Using Porter’s Model

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Table 4 (Porter, 1980)

With its unique strategy and differentiation in the supply chain creating a cost leadership position and differentiation of unique products, this creates a complicated set of HR issues that need to be managed. There are the managers who run the business; making, storing, moving and selling food. This is where the fault line occurs as per the Black Box theories (Boxall, et al., 2011). They are the intermediaries between HQ and actual workers. Their worst nightmare is to be patronised by a new graduate, whom have little to no experience. Finally, there are the workers: which range from warehouse supervisors, deputy store managers, to shelf stackers which consist of approximately 95% of the employees. The exposure to the middle layer (shop managers and warehouse supervisors etc.) appears to be at crisis point according to the feedback on www.glassdoor.co.uk.

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^[1]To be found under: https://www.glassdoor.de/Bewertungen/Wm-Morrison-Supermarkets-Bewertungen-E10276.htm