Introduction
The ABASCO’s management team should appreciate that the contemporary business environment has become very dynamic due to influences of diverse macro and micro environmental forces. Thus, the firm should adopt effective HRM practices to achieve optimal competitiveness in the retail fashion industry. One of the areas that the organisation should consider in the pursuit of competitiveness entails improving its human capital capability. Thus, the relevance of integrating optimal HRM strategies cannot be underestimated. Stredwick (2013) is of the view that the HR practices adopted should contribute to the improvement of the employees’ productivity, and thus the overall organisational performance.
In a bid to achieve this goal, firms must encourage the development and acquisition of relevant knowledge, skills, and attitudes [KSAs]. Armstrong (2012) contends that organisations should transform themselves into learning entities by incorporating the concepts of learning and development. Armstrong (2012) defines learning and development strategies as the process through which a firm ensures that its workforce has the necessary skills, competence, and knowledge to execute the assigned roles and responsibilities effectively and efficiently.
Learning and development in organisations are achieved through the integration of various learning programmes, such as employee coaching by line managers. Moreover, learning and development are also attained through the personal initiatives undertaken by individual employees. ABASCO should adopt a strategic approach to learning and development. This goal can be achieved by integrating effective learning and development strategies, practices, and policies in its strategic HRM practices. Currently, ABASCO does not have the HR department. To formulate and implement learning and development strategies successfully, the firm should develop an effective HR department, which should be charged with the responsibility of implementing learning and development strategies.
Additionally, the firm’s HR department should collaborate with the external HR consultants such as Planet 24. This move will increase the likelihood of formulating and implementing HR strategies successfully. The HR department, in collaboration with an external consultant, should evaluate the effectiveness of the learning and development strategy continuously and produce progress reports periodically [quarterly].
Current environment
Wilson (2005) argues that the intensity of competition in the business environment has increased considerably, which highlights the importance of developing a competitive advantage. ABASCO’s operations are subject to diverse environmental forces affecting the global retail industry. The main forces include economic, political, economic, social, technological, and legal forces. The impact of these forces on ABASCO’s operation varies as explained herein.
First, the firm is subject to economic cycles such as boom, recession, and recovery. The occurrence of the 2008 global economic recession affected the firm adversely due to a decline in the consumers’ disposable income. Additionally, the decline in sales revenue can be explained via the negative price movements arising from the recession. Most retailers in the global fashion industry experienced a remarkable contraction in their sales revenue (Mintel, 2014). The industry’s average growth in 2009 was estimated to be 1.4% and 1.5% in 2010, which illustrates a relatively low rate of growth. However, the firm is likely to rebound due to economic recovery efforts that are currently being implemented. Additionally, the high rate at which retail firms are integrating the concept of the concepts of market expansion is likely to boost performance in the future.
Moreover, the global fashion industry is experiencing considerable technological changes. Over the past few years, technology has become the basis for attaining competitive advantage. Companies are increasing integrating e-commerce techniques such as online retailing. The concepts of online retailing have increased the likelihood of accessing the international market, hence the probability of maximising sales revenue. Additionally, technology has become a source of market intelligence. Truss, Mankin, and Kelliher (2012) argue that organisations are leveraging on technology in conducting market research. This goal has been facilitated by the emergence of diverse technologies, such as market research software. Consequently, organisations appreciate the role of technology in understanding the consumers’ behaviours.
ABASCO Limited is also subject to changes emanating from the legal environment. In 2013, the UK government reinforced the Consumer Contract Regulations to protect consumers. The new regulations increase the responsibility of suppliers regarding goods returned after purchase. Additionally, the UK government is also committed to protecting the welfare of all employees. This move has arisen from increased criticism of the poor working conditions especially in the high street retail chains such as Mark & Spencer, Next, Gap, Tesco, ASDA, and Primark Warehouse (Action Aid, 2010).
The poor working conditions are mainly evident in overseas factories, which are mainly located in low-income countries. For example, the employees’ compensation policy adopted by most retail firms is below the minimum wage, which is set by law. This aspect shows that firms have not appreciated the importance of equity in compensating their workforce.
According to Armstrong (2012), treating employees fosters job satisfaction equitably, hence the level of motivation. Conversely, inequitable treatment leads to negative employee behaviour, and thus the level of motivation. In its pursuit to protect employees, the UK government has stipulated that all organisations must avoid unethical labour practices (Action Aid, 2010).
In addition to the above factors, ABASCO’s success in attaining business excellence will be influenced by its commitment to developing an effective internal environment. According to Durai (2010), the internal environment affects the level of satisfaction and the employees’ commitment to executing their job tasks. Thus, ABASCO needs to improve the internal environment. Currently, the organisation’s internal environment concerning the human resource component can be described as ineffective, as evidenced by the lack of a formal HRM policy, strategy, and philosophy. Additionally, the firm’s reward system is ineffective. For, example, the firm has experienced numerous cases where employees who have left the organisation are overpaid, whereas new staffs are not paid for months.
The firm has over-delegated the employees’ recruitment and selection process to a third party [Planet 24]. According to Cheese, Thomas, and Craig (2008), over-delegating the employee recruitment and selection process to external firms may increase talent gap within an organisation because of lack of adequate understanding on the skills gap required within an organisation. Moreover, the employees selected might not fit with the organisation’s culture and thus lead to culture clash.
ABASCO has also failed to adopt an effective employee compensation structure. Thus, the firm is characterised by considerable internal pay differentials across its different stores. For example, the salary range of its employees at the St. Albans warehouse ranges between £18,000 and £22,000, while the pay structure applicable at its Huddersfield Design Offices range from £25,000 to £40,000. On the other hand, the salary of the staff at its London offices ranges between £30,000 and £ 45,000 in addition to other benefits such as bonus pay, car allowance, and annual leave. Furthermore, the firm has mainly based its employees’ compensation on length of tenure as opposed to performance. This move might lead to loss of motivation amongst employees, hence affecting the organisational performance. Deb (2009) affirms that merit pay, “which entails paying employees based on their performance, is highly effective in motivating employees to perform better to get a higher pay” (p. 336).
Purpose and vision of the L&D strategy
The above analysis shows that ABASCO has not developed adequate appreciation on the competitive advantage that it can derive from its human capital. Moreover, an analysis of the prevailing internal environment shows that the attractiveness of the firm in the labour market may be threatened. One of the major source gaps entails a lack of effective HRM practices. For example, the firm has not appreciated the importance of employee development. In a bid to address these gaps successfully, the firm’s management team must formulate and implement effective learning and development strategy.
The vision of the L&D strategy should be to transform ABASCO successfully into a continuous learning organisation. Armstrong (2012) defines organisation learning as “a coordinated systems change with mechanisms build in for individual and groups to access, build and use organisational memory, structure and culture to develop long-term organisational capacity” (p. 138). Thus, ABASCO should develop its resource-based capability by focusing on developing its human capital. In a bid to succeed in transforming itself into a learning organisation, the firm must consider the human capital theory, which postulates that an organisation improves the stock of its productive capital by bettering the knowledge, skills, and ability of its workforce through training and education.
The learning and development strategy formulated should also serve as the basis upon which the firm formulates the learning and development activities. For example, the learning and development activities will be based on business needs. Moreover, the L&D strategy will play a fundamental role in securing a budget and allocating resources. The firm should integrate the concepts of single and double-loop learning. According to Armstrong (2012), single-loop learning involves learning targets and standards.
Conversely, double-loop learning involves adjusting the learning actions to align with the prevailing external environment. These concepts will enable ABASCO to adjust its learning and development activities, depending on whether the intended business need has been achieved. Therefore, the firm will be in a position to undertake the necessary corrective actions (Daft, 2010).
The successful formulation and implementation of the learning and development strategy will enable ABASCO to improve its organisational culture. For example, the organisation will succeed in fostering a high level of collaboration amongst the various departments located in different parts of the world. This purpose will be achieved by integrating disparate units, hence nurturing information, knowledge, and skills sharing.
Audience
The learning and development strategy will target different internal organisation audiences. Some of the core audiences include the senior managers, lime managers, the HR Units, strategic planning units, and the learning and development unit. The decision to incorporate these audiences in formulating the L&D strategy arises from the view that the process of implementing the strategy will be a collaborative approach. Thus, targeting diverse audiences will lead to the integration of input from different stakeholders, hence improving the effectiveness with which the organisation operates as a unit.
Key drivers
The process of formulating the learning and development strategy will be based on several drivers, as outlined herein.
Strategy statement
ABASCO intends to improve its operational efficiency continuously by fostering the level of competence and capability amongst its employees. Subsequently, the firm will be in a position to impart new knowledge amongst its workforce, hence promoting its effectiveness and efficiency in responding to changes emanating from the business environment.
Learning and development needs
The firm recognises that its success is dependent on the extent to which the organisation operates as a system. Thus, the input of a particular department influences the overall organisational output. Therefore, the firm will focus on ensuring that its employees possess the requisite competencies and capabilities in executing their duties. The firm will conduct a training need analysis [TNA] continuously to determine the skills gap.
Identifying L&D needs
ABASCO Limited is experiencing remarkable challenges that might hinder its operational efficiency, and thus it should develop a comprehensive understanding of its training needs. This goal can be achieved by conducting a Training Need Analysis. Ekerman (2006) asserts that TNA “enables an organisation to bridge the gap between its actual level of performance and the desired level of performance” (p. 93).
First, firms do not have the HR department, which affects its effectiveness in keeping employees records. The responsibility of keeping record in some of its branches is delegated to the Directors’ Personal Assistant. Subsequently, the firm has suffered financial losses due to lack of well-kept employee documents. Moreover, ABASCO has not incorporated a system that could enable the organisation to track the level of skills and expertise amongst its workforce. This move limits the firm’s effectiveness in competing for the available market opportunities.
To deal with this challenge, ABASCO should develop a Performance Management and Development System [PMDS]. The PMDS ensures that employees are assigned roles and responsibilities that align with their skills (Curristine, 2008). Furthermore, lack of employee recruitment and selection skills has limited the firm’s ability to develop a workforce that is aligned with the organisation culture. Thus, the organisation has occasionally experienced a high rate of employee turnover.
Based on the above information, the following priority areas should be considered in the process of formulating the learning and development strategy.
- ABASCO should train its employees on how to conduct a comprehensive employee recruitment and selection process.
- The firm should train its employees on the concepts that should be considered in developing an effective reward system.
- ABASCO should also consider training its workforce on how to scan the environment to assess the prevailing industry changes.
Addressing the learning and development needs
To address the above learning and development needs, ABASCO should consider several aspects as evaluated herein.
External coaching
Currently, both the top executives and the line managers at ABASCO are experiencing remarkable challenges in fostering organisational performance due to the existence of the skills gap. In a bid to address this gap, the firm should outsource the services of external coaches. Daft and Marcic (2013) argue that most organisations “first engage with coaching or mentoring when they discover that some of their executives have developmental needs that cannot be met through internal HR provision” (p.130). External coaching will provide the firm with an opportunity to address the skills gap successfully. Furthermore, the knowledge and skills gained by the organisation’s directors will be transferred to the lower-level employees at a relatively low cost (Daft & Marcic, 2013).
However, the firm must consider outsourcing external coaching services from credible and well-established consultancy firms. Some of the firms that the company should consider include Price Waterhouse Coopers [PWC], KPMG, and Deloitte and Touche. The organisation should seek external coaching on how to formulate and implement effective HRM systems such as employee reward and motivation systems (Stredwick, 2013).
Individual training
It is also imperative for the firm to conduct individual training. This goal can be achieved by conducting a performance appraisal to skills gap amongst employees. Subsequently, the firm will be in a position to design an effective employee-training program. Some of the strategies that the firm can consider in implementing individual training entail on-the-job training or off-the-job training (Jacobs, 2003). The line managers should undertake the responsibility of conducting on-the-job training. Subsequently, the subordinates will develop adequate skills to deal with work-related challenges. Conversely, off-the-job training can be implemented by providing identifying an institution that has implemented effective HRM systems. By adopting this method, ABASCO’s employees will gain firsthand knowledge and skills in effective HRM practices.
To improve the effectiveness of on-the-job training, it is imperative for the firm to integrate the concept of job instruction training. Saks, Haccoun, and Belcourt (2010) assert that job instruction training entails a systematic and structured training approach that involves preparing employees, offering instructions, executing the instructions, and follow-up. Adopting this method will contribute to positive behaviour modelling within the firm. Alternatively, the firm should incorporate the concept of apprenticeship, which involves a combination of practical on-the-job training and classroom instructions.
Action learning
Currently, ABASCO’s workforce does not have sufficient skills and knowledge on HRM, which explains why the firm does not have a formal HR policy. To deal with the prevailing knowledge and skills inadequacy, it is fundamental for the firm to integrate the concept of action learning, which involves testing the existing HRM theories and models. For example, the firm should test the Oldham’s Job characteristic theory, which emphasises the importance of effective job design in a bid to ensure that employees are assigned roles and responsibilities following their skills, talent, and level of knowledge (Saks et al., 2010).
Value for money
ABASCO will incur a substantial cost in the process of implementing the learning and development strategy. However, the firm must incorporate the concept of cost-minimisation in implementing the strategy to attain value for money. Therefore, the firm should consider leveraging on the concept of on-the-job training and external executive coaching. The line managers will be in a position to impart the knowledge and skills gained from the external coaches to the lower-level employees. Conversely, on-the-job training will ensure that the employees are trained in-house. In a bid to succeed in its in-house training, ABASCO should identify incumbent employees with exceptional skills and train them on becoming effective trainers (Naik, 2007).
Evaluation
Combs, Salvatore, and Falletta (2000) corroborate that organisations should evaluate the performance of their workforce to determine the effectiveness of the intervention measures implemented in adjusting organisational performance. In this case, ABASCO should evaluate the effectiveness of the learning and development strategies implemented by considering the Kirkpatrick model. The model is comprised of four main stages, as illustrated below.
Source: (Mertens & Wilson, 2012)
The firm should assess the reaction of the employees regarding the training and development methods adopted. For example, the organisation should evaluate the employees’ perception regarding the relevance of the training program, the method used, and the trainers’ level of knowledge. The firm will examine whether the learning and development methods adopted have contributed to the improvement in the employees’ knowledge and capability. This goal will be achieved by assessing the skills, attitude, and knowledge gained and its relevance in assisting employees in dealing with work-related challenges. Furthermore, the firm will examine whether the training and development methods adopted have achieved the predetermined learning objectives (Dyck & Neubert, 2010).
Implementation
The contribution of the above learning and development strategies, activities, and policies to the organisation will be limited if the necessary internal stakeholders are not involved.
Roles and responsibilities
Considering the internal stakeholders will aid in the effective allocation of roles and responsibilities during the implementation process as illustrated herein.
Senior management/Directors
The organisation’s top management should ensure that all employees are involved in the process of formulating the learning and development strategy. Involving all employees during the strategy formulation process is an essential motivation strategy because their input is considered. Additionally, the organisation’s directors will be charged with the responsibility of conducting training need analysis to identify the priority training needs. Moreover, the senior management will be required to evaluate the behavioural changes amongst employees to determine the effectiveness with which a culture of continuous learning has been developed.
Line managers
The likelihood of line managers understanding the employees’ learning and development needs is high due to their interaction with lower-level employees. Thus, they are in a position to understand possible changes in the employees’ behaviours. The organisation’s line managers should ensure that the formulated learning and development strategies align with the employees’ needs.
Lower-level employees/jobholders
Employees should ensure that their personal training needs are considered adequately in the training program. Therefore, employees should be responsible for their personal training needs. Furthermore, jobholders should participate in the performance appraisal process actively to assist the senior managers in identifying the skills gap.
Objectives, actions and indicators
The following chart illustrates a summary of the objectives, actions and indicators in implementing the learning and development strategy.
To improve the level of job satisfaction amongst its workforce, ABASCO should adopt the job characteristics model, which focuses on improving the core job characteristics, the employees’ psychological perception regarding the job, and the outcome as illustrated below.
Conclusion
ABASCO’s long-term success might be affected adversely by the lack of effective HRM practices. The firm has not appreciated the importance of leveraging on its human capital as a source of competitive advantage, which explains the existence of gaps in its HRM. For example, the firm does not have a formal HR policy outlining its commitment to employee development.
Recommendations
In a bid to improve its long-term sustainability, ABASCO should consider the following aspects.
- The process of formulating the learning and development strategy should be developed in a collaborative process amongst the various internal stakeholders such as the senior managers, line managers, and the lower-level employees.
- The firm should evaluate the learning and development needs of its workforce continuously by conducting a performance management appraisal, and training need analysis. This move will improve its effectiveness in addressing the challenges emerging from the internal and external business environment.
- The firm should incorporate off-the-job and on-the-job training techniques in its learning and development strategy. This move will enable the firm to leverage external capabilities and minimise the cost of implementing the L&D strategy.
References
Action Aid: ASDA; poverty guaranteed. (2010). Web.
Armstrong, M. (2012). Armstrong’s handbook of human resource management practice. London, UK: Kogan Page.
Cheese, P., Thomas, R., & Craig, E. (2008). The talent powered organisation; strategies for globalisation, talent management and high performance. London, UK: Kogan Page.
Combs, W., & Falletta, S. (2000). The targeted evaluation process; a performance consultant’s guide to asking the right questions and getting the results you trust. Alexandria, VA: ASTD Press.
Curristine, T. (2008). Ireland; towards an integrated public service. Paris, France: OECD.
Daft, R. (2010).Management. Mason, OH: South-Western Cengage.
Daft, R., & Marcic, D. (2013). Understanding management. Sydney, NSW: South-Western.
Deb, T. (2009). Managing HR and IR. New Delhi, India: Excel Books India.
Dubrin, A. (2011). Essentials of management. New York, NY: Cengage Learning.
Durai, P. (2010). Human resource management. Chennai, India: Dorling Kindersley.
Dyck, B., & Neubert, M. (2010). Management; current practices and new directions. Boston, MA: Houghton Mifflin.
Ekerman, G. (2006). X-kit undergraduate; human resource management. Cape Town, SA: Maskew Miller Longman.
Jacobs, R. (2003).Structured on-the-job training; unleashing employee expertise in the workplace. San Francisco, CA: Berrett-Koehler Press.
Mertens, D., & Wilson, A. (2012). Program evaluation theory and practice; a comprehensive guide. New York, NY: Guilford Press.
Mintel: Fashion; impact of the recession. (2010). Web.
Naik, G. (2007). Training and development; text, research and cases. New Delhi, India: Excel Books.
Saks, A., Haccoun, R., & Belcourt, M. (2010). Managing performance through training and development. Toronto, ON: Nelson Education.
Stredwick, J. (2013). Introduction to human resource management. New York, NY: Routledge.
Truss, C., Mankin, D., & Kelliher, C. (2012). Strategic human resource management. Oxford, UK: Oxford University Press.
Wilson, J. (2005). Human resource development; learning and training for individuals and organisations. Sterling, VA: Kogan Page.