Business Report: H&M
Introduction to H&M
Purpose of report
Relevant employment relation and health and safety legislation
Performance Management tools
Relevant employee Legislation
Findings and analysis
Introduction to H&M
H&M is one of the leading retail stores that designs and distribute wide range of sustainable fashion products in various categories such as women, men, children as well as teens. They offer products in various categories such as trendy clothes, sports apparels as well as formals and casual wear. Further, they offer various additional accessories such as women bags, scarf’s, cosmetics as well as jeweler which is distributed through their multiple stores located across globe. Since their inception, they have seen tremendous growth in terms of number of stores and revenue that has expanded their prospect of further growth to national and international markets. They operate through dedicated workforce that has helped them to create and deliver more value to their customers required for long term sales and profits (H&M, 2019).
The primary focus of this report is to state and describe various models and theories in the context of motivation, performance management as well as legal legislation that tends to affects H&M as well as the way in which they conduct their business activities. In addition, this report tends to identify and analyze all weakness and strengths thereby helping H&M to draft policies and strategies for the same required for addressing issues faced by them. This is of utmost important for improving performance of employees as well as overall performance and productivity of organization which is required for gaining competitive edge over other players as well as to expand business operations beyond their existing national and international. Hence as far as this report is concerned, the primary objective is to evaluate various theories related to different business setting right from job ability, rewards system to legislation and statutory compliances. In addition, the report tends to give certain recommendations in the context of business settings so as to minimize impact of any loopholes which is required for capitalizing market opportunities on the basis of strength of their employees. Hence, this report will help H&M to make sure they continue to grow through enhancing their overall efficiency aligning their strategic goals with goals of the employees which will help to nurture positive work culture that will further motivate employees for performing beyond their existing limits thereby increasing overall efficiency of the organization. However the report is based on exclusive data collected through corporate, annual as well as sustainability report which has provided all required data for successfully evaluating business setting of H&M.
Purpose of report
The primary objective of this report is to state and describe various models and theories in the context of motivation, performance management as well as legal legislation that tends to affects H&M as well as the way in which they conduct their business activities. In addition, the report will make efforts to identify all weakness and strength in above mentioned context thereby helping them to devise strategy for overcoming the same required for long term growth and development of business activities. Further, the report tends to identify all those gaps that exist in business systems which are identified through evaluating business setting thereby helping to devise strategies for bridging this gap required for long term growth and development of business and its activities.
Job ability is nothing but various different skills and abilities as well as competencies and knowledge required for excelling at job as well as to perform day to day job duties in effective and efficient manner. There are large numbers of theories and models that validates same as well as provide various insights into the concept. One such model in the context of job ability is job characteristics theory which is commonly known as work design theory which states and describes various practices and principles required for performing job duties and roles in effective manner which is in the context of different cultures and business settings. The same is founded on major five principles or core job skills and characteristics which are variety, skill, autonomy, feedback and identification of task. The theory is based on these aspects due to the fact that these factors are most significant for any type of work and job that shapes up motivation as well as performance of employees thereby having impact on their work outcome. Hence according to this theory, a positive work culture built on these five factors will act as motivator which will not only increase their performance but will also help to reduce overall rate of absenteeism and attrition. Further the theory states that these factors are based and achieve through having certain psychological state of mind which is form through combination of three broad factors which are meaningfulness, awareness and knowledge of result as well as responsibility delegated on employees. Hence this theory states that these five core job characteristics for H&M will help to create and nurture psychological state which tends to acts as motivator thereby enhancing overall performance of employees. Hence as far as H&M is concerned, they need to design their strategies in such a way which will help them to maintain balance between these factors and required physiological state which will create positive impact on employee performance which will ultimately increase overall productivity of organization required for further growth and expansion of business (Lumen, 2019).
Further, another theory related to same is proposed by Hackman and Oldham which is known as Job characteristics theory which defines importance of assigned task as well as importance of task itself which within itself is an excellent motivator. According to this theory, doing same work on daily basis that is monotonous nature of job although act as motivator but challenging task assigned to employ acts as excellent motivator which motivates employee to push their limits which ultimately enhances his performance and productivity based on excellence on assigned task and duties. However, the foundation of theory is based on three psychological states that gives certain meaning to task assigned which are responsibilities allotted, meaningfulness of work assigned as well as awareness related to knowledge of work assigned. However, these psychological states are result of certain job characteristics that is allotted to the person. For instance, H&M can give more meaning to work allotted through enhancing certain factors such as different skill set for the same, task identification as well as overall value or significance of task allotted which gives certain meaning and importance to task thereby establishing certain physiological state that acts as motivator thereby motivating employees in the long run (Young, 2018).
Hence in the context of H&M, the most suitable model for H&M is Hackman & Oldham job characteristic model which will help them to understand their employees as well as the way through which they assigned certain meaning to allotted task thereby establishing certain physiological state that acts as long term motivator. This will make sure H&M motivates their employees required for long term productivity and performance.
As far as motivation is concerned, motivation is defined as willingness of any employee or person to excel and perform certain tasks and actions so as to meet individual goals and objectives. This is very critical from workplace point of view which can be validated through large number of theories that provide various insights about how motivation is built and sustain. One of the widely accepted theories is two factor theories which identifies and defines those entire organizational factors that affects satisfaction as well as dissatisfaction thereby affecting overall work performance and productivity. These factors are categorized in X and Y factors which are different from each other wherein one factor acts as hygiene factor whereas other factor act as motivator although both exist in same business settings. For instance, factor X commonly known as hygiene factor includes all organizational factors such as workplace policies, practices, wages and compensation, working environment as well as top level management to name a few which are those factors which either motivates or de motivates employees. On the other side, factors such as achievement, awards and appreciation, job security and promotions which are intrinsic factors tends are linked to motivation in real sense which might not be the case with hygiene factors. Hence as far as this theory is concerned, these factors particularly Y factors acts as excellent source of motivation besides helping managers to identify all those motivation points and factors thereby devising strategy for the same which will help them to serve their customers by creating and delivering more value based on motivation of their employees (Mind Tools, 2019).
Another major accepted model in the context of motivation is Maslow’s Hierarchy of needs which states and defines various order needs required for attaining highest order needs such as self-actualization in orderly manner. This theory relies on the fact that basic needs of human acts as foundation for higher order needs through motivating person to achieve their lower order needs. This is due to the fact that humans always strive to achieve highest order needs which acts as excellent motivator thereby increasing performance at individual as well as overall performance of the firm. Hence as far as H&M is concerned, use of such model will help managers to identify all gaps in the needs of employee’s thereby formulating strategy for the same which will boost their sense of belongingness required for excelling at allotted task and activities. Moreover, this theory is highly applicable to H&M which operates in retail industry which is changing very fast with changing needs of employees. However, the major disadvantage of the same is that it is very difficult to measure and quantized these needs which can affect formulation of strategy for the same. In addition, the theory seems to be unsophisticated which is due to various factors such as no empirical background as well as there is no solid evidence for occurrence of these needs as described in the model which doesn’t consider any type of cultural differences. Hence such ambiguity tends to affect motivational level of employees thereby affecting their performance and productivity (Saul McLeod, 2018).
This is one of the most critical aspect of any business setting which is well describe by large number of theories and models which gives evidence on how reward systems helps in achieving individual as well as overall goals of the company. One of the theories that validate the same is incentive theory which states that motivation of employees are built through reinforcing certain reward systems which motivates employees to perform beyond their existing capabilities. The same is based on principle that motivation shapes up behavior of employees at workplace through certain external rewards that helps in achieving overall job satisfaction and productivity. This is due to the fact that people tends to adopt all those behavior that lead them to certain rewards whereas people move away from all those behavior that can cause negative or unwanted rewards. Hence, this theory states that different people have different tendency to behave even in the same situation wherein rewards plays very critical role in shaping and forming their behavior. Hence, as far as H&M is concerned that operates through 70 stores with 1000 of workforce; the same can be used to motivate employees that will help to perform beyond their existing capabilities thereby increasing their performance required for career growth and development. Moreover, major disadvantage of the same is that it considers only external rewards with no consideration for external rewards which also plays very critical role in motivating employee in the long run (psychestudy, 2019).
Relevant employment relation and health and safety legislation
New Zealand has sound and well formed legislation related to motivation as well as other key settings of business which is required for safeguarding interest and health of employees as well as to build long lasting relationship of trust required for getting right participation and involvement in business activities. One of the legislation given by the government is Health and safety act 2015 that gives various rules and policies related to health and welfare of employees which helps in getting required performance through creating certain physiological state of mind. For instance, according to this act, any firm including H&M should focus on reducing overall risk faced by their employees through aligning their risk management plan with needs of business. This is particularly true as they operate through 50 production plants which pose certain risk to the employees. Further, it is required by businesses along with stakeholders as well as their board of directors should formulate strategies for safeguarding and protecting health of their employees. In addition, the legislation also gives rules related to any visitor visiting premises should make sure that their actions and activities doesn’t cause any harm to employees health and must act in responsible manner. However, it is required by business to conduct health audit which will help them to identify any gaps that exist in their systems and policies thereby taking necessary actions whenever required to ensure highest level of safety and health measures are achieve and implemented in the company (Government of New Zealand, 2015).
As far as employee are concerned, the country has made amendment to various rules and regulations especially in the context of trade unions and employee rights that has helped them to protect overexploitation of vulnerable employees and labors working in the country. One of the amendments is in context of Employment Act 2018 which redefines boundaries of rights of trade unions and employees by giving them certain more power which forms basis for further strengthening of relations that exist between these business entities. For instance, this amendment have given certain more right to trade union to enter firm premises without any consent but only in the context of all those employees which comes under agreement of collective bargaining (Employment New Zealand, 2018). In addition, the amendments and legislation itself describes various terms and conditions of employment such as pay scale, number of working hours as well as all other hygiene factors which needs to be taken care of so as to safeguard health and interest of employees as well as to avoid any legal consequences. This is required for long term growth and expansion of business in national as well as various international markets ( Government of New Zealand, 2019).
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Performance Management tools
A performance management tool is systematic and orderly process of identifying, measuring, evaluating as well as analyzing performance so as to devise and reform their organizational culture accordingly which is required for enhancing overall performance of an individual. Hence, a performance management is a strategic tool which helps in managing performance of employees which are made up of following components:
The primary aim of any performance management is to identify any performance gaps thereby formulating strategy for the same required for effectively meeting individual as well as overall goals of the organization. Every performance management consists of various developmental components which are as follows:
Any performance management has to be objective in nature as well as consistent over entire organization. The same can be done through use of evaluation form that will identify all those critical areas thereby formulating strategy for the same. This is due to the fact that highlighting and narrowing these areas will help managers to focus on these areas which will make entire process relevant and meaningful. Hence having a consistent and standard form will help H&M to identify all performance gaps and issues thereby formulating strategies accordingly. Hence in the context of various job areas, the same should focus on skills and abilities as well as overall needs of an employee thereby allocating task accordingly.
Measures of performance
This would be an important element of developmental plan which is having defined performance measures against which performance of employees would be evaluated. For instance, one of the measures that H&M can use is job description and specification which list all the required duties against which performance would be measured and analyze. Hence as far as H&M is concerned, according to their annual report, it is highly evident that they make use of both subjective as well as objective measures against which performance of their employees are evaluated and measured.
Defining guidelines for feedback and suggestions
This is one of the integral parts of performance management of H&M wherein they make use of structured and well define performance management which relies on 360 feedback system that collects and gives feedback back and forth. In addition, they have certain well defined boundaries that identify who, when and where such programs will be conducted. This has helped H&M to continuously improve thereby helping them to meet their individuals as well as overall goals of the company.
Disciplinary and termination system
The last step of disciplinary action is to take necessary actions against those employees that fail to generate required level of performance despite training and developmental efforts with no appropriate improvement in the performance. Hence as far as H&M is concerned, the entire disciplinary action would be given in written format that will include process as well as various disciplinary actions which would be taken in case of lower performance (aafp, 2019).
This is yet another important component of performance management which makes use of large number of methods and systems which provides data for measuring and appraising an employee. Hence as far as H&M is concerned, one of the methods used by them is 360 feedback methods that review and rates an employee based on feedback received by managers, co workers as well as trainers that collectively lead to formulation of certain feedback. The primary focus of such feedback is to understand an employee from various different perspectives which helps in better understanding of his performance in terms of individual and overall team performance. In addition, another model that validates the same is self assessment which relies on questionnaire so as to access own performance, the result of which is evaluated against performance and feedback given by manager. This leads to in depth discussion with managers which results in identification of all those gaps which is required for formulating strategy for the same. Hence as far as H&M is concerned, the most suitable method for the same is 360 degree feedback which gives overall picture of entire performance of employees working in store as well as production of H&M. However major disadvantage of such method is that it is highly time consuming so as to collect feedback from so many people that tend to make entire process a time affair (Raja, 2013).
Sometimes certain employees fails to perform in effective manner even after giving them timely training and development. Hence such employees continue to exhibit decreasing performance which needs to be addressed for increasing effectiveness of entire firm. Hence as far as H&M is concerned, they make use of progressive discipline model which gives well defined and structured disciplinary actions and termination procedure in case employee fails to perform consistently low even after taking various steps for improving the same. Hence in the context of H&M, the same would be done through giving verbal warning afterwards a written warning if employee still exhibit decreasing performance. Moreover, even after written warning, if employee still continues to show decreasing performance, a termination letter would be issued, that would be last option for H&M human resource department.
As far as verbal warning is concerned, the feedback is shared in private face to face with description of problem thereby highlighting the same to employees with reason for undertaking training and development. Despite a verbal warning, if employee tends to continue to show decreasing performance, a final written warning would be issue which will define all necessary actions that would be taken wherein written warning will include all of the following points:
A brief explanation of behavior of employee exhibited over period of time.
A brief statement describing certain action and expected behavior from their employees.
A description of all types of assistant that would be provided from employer so as to address issues in performance faced by the employee.
However if problem still continues, the last option for H&M is terminating employee which will be objective in nature thereby describing points directly which otherwise can put employees in defensive position. In addition, an employee will be validated as a person thereby highlighting all necessary positive points which in terms of termination; can help him get job outside on his own.
Another model which is being used by H&M is constructive feedback model which makes use of constructive feedback which helps in performance improvement by giving timely feedback and suggestions through use of two way communication. This helps in identifying all those strategies that can be used for addressing various performance issues of an employee. For instance, one of the agenda of the same would be to describe impact of performance of employee on overall performance and productivity of their own as well as overall organization. This will help employees to identify their weaker areas thereby formulating strategies for the same thereby effectively meeting their own as well as overall corporate goals and objectives.
Hence as far as H&M is concerned, the suitable model for them is use of progressive disciplinary model which will help them to improvise performance at employee’s level through devising necessary plan of action for the same. Moreover, the same could decrease morale of their employees in case of any warning which can have negative impact on overall performance and productivity (Mayhew, 2019).
Relevant employee Legislation
New Zealand always makes use of well designed and defines approach towards performance measurement and management. For instance, in case of those employees that exhibits continuously low performance, the firm cannot terminate them instead, they need to devise a structured plan with statements for various actions and steps that would be taken in case of decreasing performance over period of time. Hence as far as H&M is concerned, they conduct the same with high degree of faith which gives employees to put forward their explanation as well as all instances for increasing their performance by giving all required feedback and assistance required for the same. However any type of warning is concerned, there is no define specific rules related to termination and dismissal of employee from the service. However as far as performance management is concerned, they same should make use of certain verbal as well as written warning which is required by employees to gauge effectiveness of the same and its impact on organization over period of time. However as far as H&M is concerned, they conduct the same according to rules and regulations based on legislation as well as according to agreement of employment wherein all systems and practices are followed without breach of any legal rule. For example, in those cases wherein overall numbers of warnings in any form aren’t specified, in such cases, the employer should firstly give verbal warning followed by written communication before taking any decision for terminating or dismissing an employee from the company. Moreover, the firm should take into consideration various factors such as nature and complexity of work as well as effect of low performance on individual as well as overall organization before deciding on termination of any employee. However during such period, employee tends to go through high level of stress which needs to be maintained so as to protect health of employee during such period of performance management. The same could be achieved through implementing stress management plan which will identify various causes of the same thereby devising effective strategy for overcoming the same such as coaching which will help in effective management of stress thereby safeguarding health of their employees (Employement New Zealand, 2019).
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Findings and analysis
The major findings which can are evident from the above data is as follows:
Job motivation and skills
This is perhaps one of those factor which helps in performing job duties and excelling at assigned task and duties. In addition, based on various models and theories, it was found that the task itself is an excellent motivator that pushes employees to perform their duties in better way. This is highly evident in job characteristic model by Hackman and Oldham which states and describes that complexity of task is a great source of motivation that continuously motivates employees for performing better. According to this theory, the daily monotonous work although acts as motivator, but assigning challenging role acts as real time motivator that ultimately increases their performance and productivity through long term motivation for excelling at job. This makes sure they achieve their individual as well as overall goals and objectives of corporate. Further, the same is validated by another globally accepted theory which is followed by H&M, is two factor theories that identifies and describes two factors that acts as motivator and de motivator which are categorized as X & Y respectively. Hence as far as H&M is concerned, they motivate their employees through use of both of these factors that is hygiene and motivating factor which has played very critical role in achieving higher performance of employees over period of time. This has helped them to effectively meet varying needs of their employees which will help in achieving highest order need that is self actualization which can be validated through Maslow’s hierarchy of needs. However, the hierarchy given in the theory is not well validated as there is no full evidence which states that such hierarchy of needs occur in the same way.
Rewards system and components of performance management
Another major findings of evaluation of models and theories is reward and reward systems which are integral component of any performance management system besides acting as motivator which helps in motivating employees to perform further so as to achieve their own as well as overall goals of H&M. This is due to the fact that motivation is an important factor that guides and shapes up behavior of employees especially external rewards which pushes employees to perform better so as to get more rewards for the same. However, various steps and procedures of performance management tend to have large scale impact on performance as well as the way in which performance issues are resolved and addressed. For example, 360 degree feedback helps to get required information as well as give suggestions whenever required that helps in enhancing overall performance of employee which is based on collective feedback from managers as well as co workers.
As far as H&M is concerned, the entire process of firm is based on legislation of country in which they operates especially legislation related to employment as well as safety aspects of employees. For instance, H&M makes use of well designed stress management process as various business settings especially performance management is highly stress process which requires effective coaching and assistance during such times. This has helped them to build trust relationship require for long term growth and expansion of business besides avoiding any legal consequences.
As far as strength and weakness is concerned, it helps to plan for motivating employees that is required for overall growth and development of employees based on performance as well as use of performance management tools. This can be validated through theories related to the same which are highly relevant in this changing nature of business as well as increase in complexity of task assigned to employees. However, the major disadvantage of the same is that it is very difficult to measure and quantized these needs which can affect formulation of strategy for the same. In addition, the theory seems to be unsophisticated which is due to various factors such as no empirical background as well as there is no solid evidence for occurrence of these needs as described in the model which doesn’t consider any type of cultural differences. Hence such ambiguity tends to affect motivational level of employees thereby affecting their performance and productivity.
Hence as far as above findings are concerned, one of the areas that H&M needs to focus is their performance management tool which needs to be revise and updated as per as global context and changing global industry. Hence as far as H&M is concerned, they should make use of their leadership by tagging it with performance management which is required for overall improvement in individual as well as overall performance of corporate (H&M Groups , 2018).
As far as identified gaps are concerned, one of the steps that H&M can take is integrating their strategic objective with changing technological landscape such as use of virtual reality for their business processes especially in performance measurement and development which can be used for devising performance matrix which will align all activities as well as goals of the company with the same. Further, H&M for effective management can tagged their firm targets with overall needs of business and individuals which will help to grow and move their organization towards strategic goals. Hence to conclude, aligning individual needs with performance needs of employees will give certain meaning to employee reviews which will further motivate them to perform and excel at job (Basu, 2018).
This is due to the fact that effective performance helps in maintaining efficiency of organization required for long term growth and development of business in national as well as international markets. The same can be enhanced through use of certain strategies such as two ways communication which will enable employee to understand what is needed from them as well as will help them to give suggestions whenever required that will enhance overall performance and productivity at individual and organizational level. In addition, H&M can make best possible use of their workforce by building participative work culture wherein they would be involved in all types of strategy formulation and implementation which will help them to nurture homogenous culture required for long term growth and efficiency of the company (centralchristian, 2016). The same can be further enhanced by effective goal setting through various methods such as coaching and training which will help in identifying all weaker areas thereby formulating plan of action for rectifying the same.
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Raja, U. (2013, September 4). Different types of performance appraisal system. Retrieved from blog.synergita.com: https://blog.synergita.com/2013/09/different-types-of-performance-appraisal-system/
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Young, J. (2018, March 14). Heroes of Employee Engagement: No.8 Greg R. Oldham & J. Richard Hackman. Retrieved from peakon.com: https://peakon.com/blog/future-work/hackman-oldham-job-characteristics-model/
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