HND Business Unit 22 Managing Human Resources

Introduction to Harrods

In this solution of HND business Managing human resources assignment Harrods organization is chosen. In the year 1834 Charles Henry Harrod established one of the most high end or up market departmental stores in the heart of London, United Kingdom – ‘Harrods’. The departmental store serves as a home to around 330 different departmental stores and occupies a total land area of about 90,000 square meters. It is a posh 7 storey building that attracts customers from all across the globe.

The store is known for the elaborated product or service portfolio it possess apart from its exquisite interiors and exteriors. It offers products and services ranging from jewellery, shoes, clothes, bridal wear, cosmetics, stationery, pet shop, grocery, belts, electronics to hair spa, barber service, tailor, mechanic, electrician, gym, dietician, beauty clinic or beauty parlour, etc. Moreover, the store is not only popular due to the wide range of products and services it offers but also for the superior quality of the same. Owing to the same reasons the average footfall of Harrods is around 100,000 customers (Penelope., 1986, pp 42).

Today, Harrods is known as one of the most employee centric or people centric organizations of the word owing to the changes it brought about in its organizational culture (organizational structure, leadership style, communication path or communication flow, appraisal method, career flexibility options, etc.).

Introduction to the Case

The given case of Harrods starts off with an introduction to the organization highlighting the fact that all the practices followed at Harrods are directly or indirectly related to its five basic core values - British, Innovation, Sensation, Service and Luxury. Right from the attitude and behaviour of employees to the human resource policies, everything at Harrods surround around these five basic core values.

The case then emphasizes on human resource policies of Harrods and how the company transformed its human resource policies to work in its favour. The case study highlights the fact that the organization was in the maturity stage of its organizational lifecycle and how it brought about constructive changes to avoid the decline stage and maintain its prime.

LO1 - Understand the different perspectives of human resource management

P1.1 - Explain how the Guests model of HRM is adopted at Harrods

Professor David E Guest proposed ‘Guest model’ for the first time in the year 1989, but improved upon certain aspects of it and again reintroduced it in the year 1997.

Unlike most of the human resource models, the Guest Model gives more emphasis to ‘strategic management’ than ‘people management’. It states that an organization must evolve or introduce changes in its culture with changing external environment and changing internal requirements. Moreover, the model also states that in order to achieve better productivity, the organization must try to build good relations with each and every single employee so that in totality it shares a good rapport with all its employees or entire workforce. The five basic building blocks of Guest Model are –

  • HRM practices (the regular or routine practices in the organizations and the human resource policies of the organization)
  • HRM outcomes (the end result of these HRM practices and policies)
  • Behaviour outcomes (how these polices or practices shape the attitude or behaviour of the employees towards the organization)
  • Performance outcomes (how these practices or policies effect the overall productivity of each and every employee)
  • Financial outcome (how these practices or policies effect the financial performance of the company – total cost incurred, total revenue or profit earned, etc.)

Harrods’ human resource policies are based on Guest Model. The organization keeps a track of all the activities of its main competitors like Fortnum & Mason plc and tries and adopts human resource policies in response to the requirements of the external environment. Moreover, the organization tries to establish good relations with all its employees by making them a part of the change process (since it is the employees who suggest what kind of changes they would like to see in the organization) (Saka., 2003, pp 486). Such actions results in formulation of better HRM practices which yield better HRM outcomes (increased employee motivation leads to enhanced performance outcome and therefore higher financial outcome).{ Read more about HND Business Organisation and Behaviour}

P1.2- Compare the differences between storey’s definitions of HRM, Personnel and IR practices, by reflecting the HRM practices at Harrods and choose similar organizations which have adopted Personnel or IR practices.

Professor John Storey in the year 1992 explained 27 major differences between the concept of traditional people management or IR and human resource management in his book titled 'Developments in the Management of Human Resources’.

Some of the major differences given by him that can be related to the given case study are as follows –

DimensionPersonal management and IRHuman resource management
ContractHere the employees follow their employment contract very religiously.Here the employees deliver more than what their contracts demands them to – Harrods encourages its employees to work in different departments (job rotation, job enlargement and job enrichment) which leads to greater productivity
Roles and ResponsibilityHere each employee is restricted to the roles and responsibilities that have been assigned to themThe employees in this case despite having defined or specific roles and responsibilities, get involved in additional work due to their ‘can do’ approach – Harrods enable its employees to try their hand at different kinds of work (through job rotation, etc.). Moreover, since there is greater co-ordination among employees at Harrods, they share their roles and responsibilities.
RulesIn both these cases the employees are expected to base their actions and behaviour in accordance to the rules specified in the employment contract.In this case the employees are grated more level of freedom with respect to the kind of job they want to perform, the kind of teams they want to get in, etc. – Harrods gives its employees greater degree of career flexibility.
Management ActionsIn both these cases all the management actions are based on explicitly mentioned policies and procedures.In this case, majority of the management actions are governed by the current business needs –Harrods makes its employees to work in different departments or heads which in turn depends on the requirements or work load on that particular department or head.
Leadership StyleIn both these cases the management prefers transactional leadership styleIn this case transformational leadership style is given importance – Harrods follows transformational leadership style, wherein it encourages its employees to come up with new ideas (innovation)
CommunicationIn both these cases the flow of communication is not that clear or transparentIn this case the organization supports and relies on open and direct communication –Harrods altered its organizational structure from tall or vertical to wide or horizontal one to bring an end to the communication gap that existed between the management and the employees.

Rivals or major competitors like Fortnum & Mason plc, Marks and Spencer Group plc, etc. also follow the same concept of human resource management as followed by Harrods. These organizations just like Harrods give utmost importance to designing an appropriate employment contract but giving more degree of freedom to the employees with respect to the kind of work they want to perform. Moreover, these organizations also try to develop a ‘can do’ attitude among their employees. Furthermore, these organizations also have a transformation leadership style and a very clear, open and transparent communication system in place (Storey, J., 1989).

LO 2 Understand ways of developing flexibility within the workplace

P2.1- Explain how a model of flexibility might be applied in practice. Relate this to the Harrods and reflect your argument with examples

Model of flexibility refers to giving a greater degree of freedom to the employees with respect to certain aspects of their jobs (managing their schedules, etc) and therefore they feel comfortable and satisfied with their jobs. Moreover ‘Model of flexibility’ increases the level of employee engagement or employee involvement which in turn affects their productivity and profitability of the organization positivity. The three basic core components of model of flexibility are –

  • Flexible work arrangement - Under this type of arrangement, an employee has a freedom to choose for options like ‘work for home’. Moreover here the employee has the option of choosing the time of reporting to work, the number of hours he or she would spend in office, etc. This particular arrangement enables the employee to have a better work life balance and therefore feel more content with the organization (this decreases turnover rate and increases productivity).
  • Career flexibility – Under this kind of arrangement, the organization has provisions like job rotation, job enlargement as well as job enrichment for its employees which helps them professionally (since they gain more and new skill sets). Career flexibility helps an employee to realize their potential and take up tasks in which they would prove to be more efficient. Moreover, it helps them to concentrate more on career development and career management.
  • Time off flexibility – Most of the organizations have provision for Short-Term Time Off, Episodic Time Off, Extended Time Off and Time Banking, etc. so that the employees could take a small break from their work and spend some quality time with their friends and family. This energizes the latter, reduces their stress levels and they in turn add more value to the organization in the long run (Denys, Page., 1977, pp 300).

At Harrods a lot of emphasis is given to career flexibility (with introduction of like job rotation, job enlargement as well as job enrichment) with a little emphasis to workplace flexibility. However, there is no provision for time off flexibility. ( See solutionof Organizations and Behaviour Assignment )

P 2.2 – Discuss the types of flexibility which may be developed by the Harrods

As mentioned above, Harrods has provisions for career flexibility but gives less and no emphasis to workplace flexibility and time off flexibility respectively. The organization must take initiatives to introduce the latter two in its framework (especially workplace flexibility).

  • Workplace Flexibility - The organization can give its employees the freedom to choose the working hours that suit them the most. Moreover, Harrods must allow its employees to work from home in times of emergencies or some family crises. In addition to this, the employees must be given overtime pay appropriately.
  • Time off flexibility – The organization must make provisions for some minimum number of paid leaves for all its employees. Moreover, it could also make provision for Short-Term Time Off, Episodic Time Off, Extended Time Off and Time Banking, etc (, 1977, pp 299).

P 2.3 – Argue by assessing the use of flexible working practices from both the employee and the employer perspective of Harrods

Flexible work arrangements (all three types) serves as a win – win option for both the employees as well as the organization as a whole. This can also be stated by considering the increase in employee retention rate or decrease in the employee attrition rate after the organization adopted flexible work practises.

Benefits of flexible working practices for Harrods –

  • It reduces the cost of recruitment and selection since the organization through job rotation can train one single employee to handle more than one kind of job (career flexibility)
  • Options like flexible work arrangements increases employee morale. It also results in increased participation or involvement of the employee in the organization
  • Inclusion of flexibility results in higher employee satisfaction which in turn increases the overall productivity and profitability
  • It reduces the employee turnover rate
  • It leads to positive word of mouth or increased positive publicity of the organization (Tichy, N.M., 1984).

Benefits of flexible working practices for the employees working at Harrods –

  • Flexible work arrangements result in better balance between ones professional development and personal life
  • It reduces the level of stress among employees and therefore the employees stay healthier and happier
  • Career flexibility options enable the employees to realize their potential and develop their careers in a better way (Tichy, N.M., 1984).

P2.4 – Discuss the impact that changes in the labour market have had on flexible working practices at Harrods

Harrods work very hard and try to adopt every possible strategy or policy to attract and retain talent within the organization. This is so because human resource is one of the most vital component of the department store; and also because it is also one of the most cost involving assets (cost incurred in the process of recruitment, selection, training and development, etc.) of the organization.

One of the main examples which can be considered in this case study is the fact that the organization earlier had fixed working time (9 to 5) for all its employees. But slowly looking at the changes in the labour market, the department store is adopting flexible work arrangements or ‘flexi timing’ and ‘work from home’ as an option. On one hand, this would enable the employees to have a better work- life balance; and on the other hand it would help the organization to keep its employees satisfied and therefore remain associated with the organization for a longer duration (Devanna, M.A., 1984).

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LO 3 - Understand the impact of equal opportunities within the workplace

P3.1 – Explain the forms of discrimination that can take place with special reference to Harrods

Discrimination can be done on basis of various factors like caste, creed, race, religion, colour, cultural practice, gender or sex, age, parental status, marital status, political belief, pay, national origin, sexual harassment, physical appearance, etc. Time and again stories related to discrimination at Harrods have been in the news. Some of the major cases that came into light were –

  • One of the female ex-employees of Harrods had accused the organization of having a much more demanding dress code policy for the female employees. Accusing the organization for ‘sexual discrimination’ she said that the organizations asks its female employees to put up seven layers of heavy makeup every day during the duty hours whereas the male members are exempted from the same.
  • Two of the organization’s agent accused Harrods of ‘discrimination on basis of race’. They lodged a complaint under the ‘Race Relations Act of 1976’. They said that Harrods took away their license of operations from them since the former were not able to fulfil certain criteria of the organization (due to their religious sentiments).
  • One of the ex-employee accused the organization of ‘discrimination on basis of colour’. She said that her manager at Harrods asked her to do only the back office work (though she was qualified and willing to perform the front end work) only because he didn’t find her physically appealing.
  • In another case, an ex-employee accused the organization of ‘discrimination on basis of physical ability’. The woman stated that she was not given front desk work by her manger since she had a prosthetic limb.

After such cases surfaced, the organization realized where it was lacking and brought about drastic changes in its human resource policies. It made discrimination as a serious offense and punishable. Moreover, any employee found guilty of any sort of discrimination charges was terminated as soon as possible without any exceptions (Schein, E., 1985).

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P3.2 – Discuss the practical implications of equal opportunities legislation practiced in Harrods

Equal opportunity legislation demands that all the employees must be treated similarly.

United Kingdom has enacted many acts or legislations to safeguard the interest of the labour force and each and every organization/ company/ firm operating on the land of United Kingdom (domestic or foreign) is supposed to abide by these. Examples of one of such legislations are the ‘Equal opportunity legislation of United Kingdom’. This legislation makes it mandatory for each and every organization to aid the employee in his or her overall growth. Moreover, the legislation considers all sorts of discrimination against the law of United Kingdom and therefore asks all the organization to consider all their employees equal and therefore give them equal opportunities.

Harrods try its level best to follow this legislation. It does so by providing its employees the option to gain new skill sets and develop their careers through the process of job rotation. Moreover, it equal opportunity for promotion to all its employees by following a 360 degree appraisal method.

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Such legislations have enabled Harrods to portray a positive image in front of its stakeholders. Moreover, the organization is considered to give its employees a lot more freedom with respect to the jobs they want to take up. Moreover, the store is considered to be a house of knowledge and innovation that gives equal opportunity to all its employees to grow and be successful. All this has enables the organization to achieve better employee retention rate and lower down its absenteeism rate as well as attrition rate (Storey, J., 1989).

P3.3 Compare the approaches adapted by Harrods to managing equal opportunities and managing diversity

Legislation framed for the protection and development of labour force is the ‘Equal opportunity legislation of United Kingdom’. According to this legislation all the organizations operating on the land of United Kingdom irrespective of their type and size (with one condition that the number of employees should be 15 or more) are supposed to provide equal opportunity of growth and learning to its employees.

Harrods has formulated all its human resource policies keeping in mind this legislation (apart from other factors and legislations). The organization offer option for job rotation, job enrichment and job enlargement that enable employees to try their hand at new tasks and jobs and finally choose the ones that suit them the most. This helps the employees to learn more and hone their skills and have a better professional life and future.

Moreover, in order to avoid any kind of bias or partiality, the organization has adopted 360 degree performance appraisal method (which includes assessment by self, peers, subordinates and superiors).

In addition to this the organization has a total employee strength of around 1200 employees which are a mix of fresher’s, work experience, youngsters and well as aged people. In short, the organization gives equal opportunity of getting selected to all kinds or cadre of people.

Furthermore, the organization takes all the necessary steps to manage diversity. For example, it arranges for team building exercises where people from different background are made to work together which increases the level of understanding among them (Tichy, N.M., 1984).

LO 4 Understand approaches to human resource practices for the chosen organization

P.4.1 Research, Compare and comment on different methods of performance management adopted by Harrods

Harrods right from the beginning has experimented with different kinds of performance appraisal methods. However, the latest one in place is the 360 degree appraisal method. A list of all the appraisal systems adopted by the organization right from the beginning –

  • Critical incident method – In this case, the manager or the supervisor of the employee maintains a log of all the important events or important assignments handled by the organizations and the kind of behaviour (positive or negative, enthusiastic or anxious, etc.) the employees shows during the same. Based on this assessment (of behaviour and attitude), the employee is appraised accordingly.
  • Checklist – In this case the organization provides a list of attributes to its manger which it expects an ideal employee to possess. Each departmental head or unit head rank all the employees on these attributes and a cumulative score is calculated. Based on this assessment appraisal is done.
  • Confidentiality report – It is a kind of report that each departmental head or unit head prepares for all the employees working under him or her. The report highlights the strengths and weaknesses of each employee so that apart from an appropriate appraisal, the employee could be imparted appropriate training as well.
  • 360 degree appraisal method – This is by far the most effective performance appraisal method adopted by Harrods. Here an employee is assessed by his or her peer, self, seniors as well as subordinates and therefore appraised based on the cumulative result got from these four.
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P4.2 Research and assess the approaches to the practice of managing employee welfare in Harrods

Like other organizations, Harrods too considers ensuring employee wellbeing and employee welfare as one of its top priority. The organization addresses this by taking up different initiatives. For example, Harrods conducts regular stress management workshops, conflict management workshops, and training sessions regarding change management, etc. so that the employees do not feel stresses out and are able to manage each and every issue in their lives in a peaceful manner.

Moreover, Harrods also arranges for motivational lectures by inviting motivational speakers to interact with their employees. This encourages the employees to give little attention to the problems that they face in their day to day life and think positively and confident.

In addition to this, the organization conducts regular employee survey so that through it the employees are able to voice their grievances and the organization thus works to reduce or remove their problems.

Furthermore, the organization also has provision for career flexibility to make sure that the employees feel free to choose the kind of tasks or jobs they want to perform.

Also, in order to maintain cordial working relations or cordial work environment, the organization arranges for team building exercises so that the employees get a chance to get associated with each other on a personal level and develop greater understanding.

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P4.3 Discuss the implications of health and safety legislation on human resources practices with special reference to Harrods.

‘The Health and Safety Legislation’ of United Kingdom is yet another proof of the fact that the country takes a lot of steps to ensure wellbeing and welfare of the labour force.

Harrods has the following facilities in place which are in accordance to the requirements of the ‘Health and Safety Legislation’ of United Kingdom –

  • Ambulance during the working hours so that in case of any injury or emergency, the employees could be carried easily to the nearby hospital
  • First aid box at every floor or department and a central first aid room with all the possible basic facilities and a professional doctor and a nurse
  • A professional counsellor to deal with conflicts or other professional or personal issue of the employees
  • Harrods is not involved in sale of any kind of carcinogenic material or other related harmful materials
  • Provision of fire extinguishers at each floor or department
  • Before selecting an employee, the organization conducts some basic medical tests to ensure that the chosen employee is fit to work
  • The layout of the departmental store is approved by the concerned government authority (to avoid accidents)

P4.4 Evaluate the impact of one topical issue on human resources practices reflected in the case study and additional research of Harrods

One of the most topical issues pointed out in the case study under consideration is ‘importance of employee motivation in organizations’.

Employee motivation is the drive that shapes the behaviour of employees in an organization. Harrods tries its level best to fulfil the all the basic human needs (as defined by Abraham Maslow in his ‘Maslow hierarchy of needs’) of his employees so that it is able to motivate its employees to the fullest –

  • Physiological need – Harrods fulfils this need by providing its employees with appropriate compensation packages so that they are able to fulfil their needs for food, cloth and shelter.
  • Safety need – Harrods takes care of this need by enabling a cordial and safe working environment to its employees.
  • Social need – Harrods fulfil this need by encouraging team work which enables its employees to interact further with their colleagues. This also encourages the employees to develop greater level of understanding.
  • Self esteem need and self actualization need - Harrods fulfils this need by including a say of its employees in its decision making process of the store, taking their opinions regarding formulating new human resource policies and programs by conducting regular comprehensive employee surveys, giving them the options for career flexibility, etc.
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The case study at hand talks about the fact that how Harrods considers its human resource as one of the most important assets because of which it is considered to be one of the most employee oriented organizations of the world. For example Harrods conducts regular employee surveys to understand the expectations of the employees from the organization, the problems that they are facing at workplace as well as the changes that they would like to be seen in the organization. Post this, the organization tries to adopt measures or policies that would meet the expectations of the employees and lower their grievances.

The organization gives utmost attention to human resource issues like employee satisfaction, employee motivation, employee engagement or involvement, recruitment, selection, training and development, maintenance of good working environment, ensuring employee welfare and good health, etc. This makes the employees feel valuable to the firm and they feel more associated with it, which lowers down the overall turnover rate of the organization and in turn increases the overall productivity.

However, there are still certain human resource issues that need to be given more attention by the organization. For example, the organization must make provision for greater work arrangement flexibility. Moreover, the organization can also bring in place stricter policies against people who discriminate on basis of race, sex, colour, religion, nation, etc. at workplace.


Ayse, Saka., 2003. Internal change agents’ view of the management of change problem. Journal of Organizational Change Management, Vol. 16 Iss: 5, pp.480–496. Denys, Page., 1977. Action planning through force field analysis. Education + Training, Vol. 19 Iss: 10, pp.298–300. Devanna, M.A., Fombrun, C.J. and Tichy, N.M., 1984. A framework for strategic human resource management in C.J. Fombrun, N.M. Tichy and M.A. Devanna (eds) Strategic Human Resource Management. New York, NY: John Wiley & Sons. Fombrun, C.J., Tichy, N.M. and Devanna, M.A., 1984. Strategic Human Resource Management. John Wiley & Sons.

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