NATIONAL INSTITUTE OF FASHION TECHNOLOGY, KANGRA

Deapartment of Fashion Technology

Human Resource Management

“H&M”

Submitted to: Submitted By:

Shipra Sharma Anurag Verma
( Associate Professor) BFT/17/1190
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Acknowledgement

In performing my assignment, I have taken the help and guideline of many persons, who
deserve my greatest gratitude. The completion of this assignment gives me much pleasure. I
would like show my heartiest gratitude to Shipra Sharma for giving me good guideline for
assignment throughout making it. I would also like to expand my deepest gratitude to all
those who have directly and indirectly guided me in writing this assignment. Many people,
especially my classmates, group members and seniors have made valuable comment and
suggestions on this proposal which gave me an inspiration to improve my assignment.

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TABLE OF CONTENT

S.NO. DESCRIPTION PAGE NO.

1 Executive summary 4
2 Human resource management 4
3 Aim of the study 5
4 Background of the company 5-6
5 Values of H&M 6-7
6 Mission statement of H&M 7
7 Main competitors 7
8 Strategic human resource management 7
9 Strategic human resource management challenges 7-8
10 Strategy of H&M 8-9
11 Human resource cycle 9
12 Human resource in H&M 9-10
13 Recruitment and selection 11-12
14 Recruitment and selection process of H&M 13-14
15 Training and development function 14-18
16 Training & development in H&M 18-20
17 Reward management 20-22
18 Performance management 22-23
19 Role of HRM in success of H&M 23-26
20 Proposal for Training and Development of H&M 26-33
References 33-34

1 – Executive Summary
This study consists of strategic human resource challenges, leadership, reward management
and team management. All the data is collected from various internet sources, journals,
magazines and books on the competitors, company, and market factors. In this the process of
identification, evaluation and analysis is followed to know the various human resource
challenges and various theories that are used by H&M. The study also includes the various HR
policy and functions of H&M. There are various recruitment and selection policies that are also

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taken into consideration. The management intends to explore the complexities involve within,
outside and internationally –of these envisaged challenges, and requires advice on the possible
strategy for the application of a change management initiative for H&M. It is believed that a
comprehensive understanding of the idea behind each criticism and strategies will help inform
better judgment on the subject.

2- Human Resource Management

Human resource management is the process of acquiring, training, appraising, and

compensating employees, and of attending to their labor relations, health and safety, and
fairness concerns. HRM includes five major functions:

 Planning: establishing goals and standards

 Organizing: giving each subordinate a specific task
 Staffing: determining what type of people should be hire
 Leading: getting others to get the job done
 Controlling: setting standards and comparing the actual performance with actual
standards.

‘Human resource management is a strategic and coherent approach to management of an

organization’s most valuable assets. The people contribute individually and collectively to
the achievement of the object’ .

Human resource management helps in hiring the right person at right place, want their people
to do their best, proper utilization of time and helps to give proper training to their employees.
HRM helps in employing right person at right place with right skills. HRM encourage the
employees to achieve the organizational goals and high performance of the company.

3 - Aim Of The Assignment

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The main aim of the study is to critically analyze and valuate the strategic human resource
management of H&M. The study include the HR function and policy of the company. I also
study the recruitment and selection procedure of the company.

4 - Background Of The Company

Fig 1 Logo of H&M

H&M was established in 1947 by Erling Persson in Sweden. The first H&M offer high quality
fashion and quality at its best price. The company deals in fashion for men, women, teenagers
and children. H&M also deals in cosmetics, accessories and footwear. They have around 2000
stores across the world. Online shopping is currently available in Sweden, Finland, Norway and
other 30 countries . All the stores are refreshed with new items on daily basis. The collection is
created by around 100-in house designers together with pattern and buyer makers. The
company has around 28 production offices around the world. The company does not have its
own production unitsm , instead have around 700 suppliers mainly in Asia and Europe from
where it buys its goods. They have around 16 production units around the world. H&M has
about 76,000 people working in the company. H&M’s employees are very dedicated and
focused for their work which makes a major contribution to company’s success. The company
provides proper training and special courses to their employees which is paid out of the
company’s budget. Moreover the company believes in individual ability and motivates them to
grow further. The turnover for the year 2019 was SEK 31,825 m (29,164)million(Half Yearly
Report).

5 – Values of H&M

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H&M is a complete value-driven company. Its values reflect the heart and soul of H&M. They
define what it takes to work here and how we do things. When a person communicates globally
with colleagues and customers this value helps them to develop and grow. H&M has seven
values. They are:

 We believe in people
 We are one team
 Constant improvement
 Straight forward and open-minded
 Entrepreneurial spirit
 Keep it simple
 Cost conscious

People are H&M‟s success, and are committed to being a good employer. By providing a fun,
creative and dynamic workplace, they all grow together. H&M‟s offers each individual
employee fair wages, freedom of association, fair working hours and to equal opportunities It
has a strong ethical approach. This means that the company takes a clear stand against
discrimination and harassment wherever it operates. Their workforce holds great variety in
terms of gender, age and ethnicity which are great assets for H&M. At H&M, they endorse the
“open door principle”, which gives every employee the right to discuss work-related issues
directly with management. Their employees also have the right to collective bargaining. It
constantly strives for good relations with employees as well as employee associations and trade
unions.

6 - Mission Statement Of H&M

‘Fashion and quality at the best price’ is the company’s mission statement.

7- Main Competitor’s

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 Zara
 Gap
 Unitted colors benetton
 New look
 Next
 River island

8 - Strategic Human Resource Management

Strategic human resource management means formulating and executing human resource
policies and practices that produce the employee competencies and behaviors the company
needs to achieve its strategic aims. For example, one of FedEx’s strategic aims is to achieve
superior levels of customer service and high profitability through a highly committed workforce,
preferably in a nonunion environment. SHRM link’s HRM to achieve the strategic goals and
objectives of the company.

9 - Strategic Human Resource Challenges

 Need to support corporate productivity and performance improvement efforts.

 Employees play an expanded role in employer’s performance improvement efforts.
 Human resource must be more involved in designing- not just executing- the company’s
strategic plan.

Three Main Strategic Human Resource System Components

 High performance work system

 Measuring HR’s effectiveness
 New strategy

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10 - Strategy Of H&M

The main strategy of H&M is to provide fashion and quality at the best price. The annual report
of the company for the year 2019 mainly emphasize that ‘quality’ relates to two things,
products of the company exceeding expectation of the company and the second is that the
customers are being satisfied with the company. Commercial mindset, simplicity, constant
improvement, cost consciousness and entrepreneurship are the main strong values of the
company.

(a) Long Term Strategic Goals Of H&M

In the annual report for the year 2019, the CEO of H&M Rolf Ericsson said that the long term
goals of the company is to “Make fashion available to everyone, give the customer a fashion
experience that strengthens H&M brand”. They also state that the goal of the company is also
to increase the number of stores to 10 to 15% every year while focusing on continued profits
and quality of the products. In 2020 the company plan to add around 240 more new stores.

(B) Execution Of The Strategy

To achieve the targets H&M has to focus on the following main aspects of its business concept:

 Price: the price can be controlled by limiting the middlemen, buying the right product
from right production markets, effective distribution procedures, reducing economies of
scale by buying in large volume.
 Design: in-house designing of the products and then completely outsourcing it.
 Quality: quality conscious with extensive testing with least damage to environment.
 Merger and acquisitions: continue acquisitions and mergers will be helpful in growth of
the company.

11 – Human Resource Cycle

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The human resource manager has to perform some functions in any organization. The human
resource managers carry out various distinct functions like line function, coordinative function
and staff functions. From the below diagram we can see that performance is the main function
of all human resource components. The best suited people are selected to perform the
particular task. Then motivating the employees to work hard and then rewarding them for their
performance. Reward, appraisal and development in human resource system are based on the
concept of ‘corporate culture’ so as to sustain the values of the company and to support the
system. The below table explains the concept of human resource cycle.

Fig 2 Human Resource Cycle

12 - Human Resource In H&M

The corporate objective of H&M is to expand worldwide and hence with the continuous
increase in the employee strength. The staff H&M is spread approximately across 33 countries
which come from different cultural background. Their strategy is to recruit local people
whenever they open they open the new store. The main policies of H&M can be categorized as:

 Overall policies and values: the website of the H&M indicates that the company’s main
objective is to be a good employer. At H&M, the HR activities are guided in such a way
that every individual have equal fundamental rights. This means that every one will have

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fair wages and working hours. They all will have full freedom of association to the
opportunity for overall growth and development within the company.
 Employee relation and voice: H&M’s employees have equal right and opportunities to
discuss any work related issues directly with the management. Every employee have the
right to choose and to decide who should represent them in the workforce. H&M have
good relations with the trade union and they welcome such relation where ever they
operate. The company thinks that such relation are essential for the betterment of the
company.
 Promotion: Mr. Pär Darj, head of HR at H&M said that, “Internal recruitment and job
rotation enable the company to grow quickly”. This states the H&M policy related to
promotion.
 Employee development: H&M gives its employees full and equal opportunity to grow
and develop within the organization which in turn will help the company to grow more
quickly.
 Rewards: H&M not only reward the employees through promotion and job titles but
also focus on rewarding people by giving them more opportunities and responsibilities.

13 - Recruitment And Selection

Recruitment is all about choosing ‘a right person for right job’. Recruitment is defined by
various authors:

 Recruitment is the discovering of potential applicants for actual or anticipated

organizational activities.
 Recruitment is the term applied to the phase of personnel management that involves
reaching out and attracting a supply of people from which to select qualified

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candidates for job vacancies. An effort is thus made to attract potential employees
with the necessary characteristics for the jobs available.

Recruitment is mainly the major steps in selection process in any Organization. It is as an

activity which is directed to obtain the appropriate human resources whose skills and
qualifications matches functions for the relevant posts. It can also be well described as ‘heart’
of the organization.

(a) Three Types Of Recruitment Needs

 Planned: An organization always need new employees this may because of new
recruitment policy of the company or due to some other changes.

 Unexpected: There may be any unexpected happening in the company like death of an
employee or some accident or may be due to illness etc. These all leads to unexpected
recruitment.

 Anticipated: The need of such recruitment is required by seeing the internal or external
environment.

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Fig 3 Factors Affecting Recruitment

These are the major recruitment factors which are taken into consideration before doing
recruitment in an organization.

Fig 4 Source Of Recruitment

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These are the main sources of recruitment from where an organization can hire its employees.
The main priority of an organization is to recruit internally and then take into consideration the
external sources.

14 - Selection And Recruitment Process Of H&M

H&M group has around 179,000 employees in over 73 markets. The ability of an employee and
their entrepreneurial spirit make them the best assets of H&M. The corporate culture of H&M
has been one of the major factor in enabling them one of the world’s largest fashion company
and at the same time enjoying the high profitability.

In H&M personal qualities are given more preference than formal qualification. According to
the head of HR department of H&M all the university credits and great grades in the world does
not give any guarantee of getting a job or a fast-track career. The company look for people with
right personality, more than anything else. H&M belief that skills can be gathered as you go, but
you cannot taught personality and right attitude to a person.

Since the tempo of the company is always high and is a fast growing company, therefore
employees who are self driven and who have the capability of direct communication are the
main requirement of the company. Hence people who likes decision making and responsibility
are recruited by the company. Therefore information provided by the career sites, and from the
interviewed candidates shows their love for fashion with their focus on sales.

These are the basic requirement for H&M to recruit the employees and drive its basis for
selection process. This feedback from candidates indicates that the interview is mostly
‘structured situational based’ , which include latest fashion trends and customer service.

The selection is followed by panel of interviews and sample test. Candidates are filtered at each
stage of selection process.

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(a) Internal Recruitment: This means when the company hire from their own staff. This is
mainly the first choice of recruitment by the company.

(b) External Recruitment: Outside people are encouraged to apply for the job in the stores,
from the career website. The company doesn’t offer any work experience placement or
summer jobs. H&M mainly recruits local people for their new store.

Employees
full time employees part time employees

45%
55%

Fig 5 Percentage of Employees

15 - Training And Development Function

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Training is the process of teaching new employees the basic skills they need to perform at their
job. Robin writes that:‘Training is the process of learning a sequence of programmed behaviors.
It enables a person to solve the repetitive problem. We trained bricklayers, television
repairmen, typist and hospital admission clerks. The activities of these jobs can be precisely
defined, broken down, analyzed and a ‘one best way’ determined. Training is the application of
knowledge. It gives people an awareness of the rules and procedures to guide their behavior.’

Glueck writes that:

‘Training is the systematic process of altering the behavior, knowledge and/or motivation of
employees in a direction to increase organizational goal achievement.’

(a) Importance Of Training And Development

 Increases the morale of the employees

 Reduces absenteeism
 Reduces complaints and grievances
 Optimum utilization of resources
 Increase in productivity
 Increases efficiency of the employees

(b) Process Of Training

The training process involve five steps:

 Need analysis: the first step is to identify the specific job performance skills required by
the employees.

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 Instructional design: in the second step the organization compile and produce the
training program content, which include workbooks, activities and exercises.
 Validation step: a small presentation is made by the manager to address the trainees.
 Implementation: in this step the training program is implemented on the target
employees.
 Evaluation: the success or failure of the program is evaluated.

(c) Training Methods

Training must be provided by all the personnel, whether or not academic education at a
university, college or technician was a prerequisite of employment. The following are the
various methods of training:

 On-the-job training: it means having a person to learn a job by actually doing it. Every
employee whether he is a mail room clerk or a CEO of he company gets on the training.
Managerial on the job training include job rotation, coaching approach and action
learning.

Types of on-the-job training

 Apprenticeship training
 Lectures
 Programmed learning
 Audiovisual- based training
 Computer based training
 Internet-based training

 Off-the-job training: there are many off the job training and developing managers.

Types of off-the-job training

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 The case study method

 Management games
 Outside seminars
 University-related programs
 Role playing
 Conferences

(d) Training & Development: A Management Prospective

Within an organization training and development have many applications. This include:

 Induction of new employee

 Initial job training

 Subsequent job training
 Training on transfer or promotion
 Training of special groups
 Development
 Professional development
 Job termination training

(e) DEVELOPMENT:

Development is only possible if the person concern is willing to develop. According to Glueck
the purpose of personnel development is, “to maintain or improve the effectiveness of
managers and professionals”. It act as a motivator and enable the employee to reach its
potentials.

(f) TRADITIONAL AND MODERN APPROACH OF TRAINING & DEVELOPMENT :

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(i) Traditional approach:

According to this approach there was no training facilities given to the employees as it was
thought that managers are born not made.

(ii) Modern approach:

According to this approach the companies have realize the importance training and
development. They have turn out to give fruitful results

Fig 6 Beneficiaries Of Training Objectives

16 - Training And Development In H&M

Each employee in H&M has to undergo a training process. The training period depends on staff
to staff. In 2019, for a new staff the average number of days are 10, for existing sale staff it is 1
and for existing management positions the training period is 5. All the training in H&M is mainly
in-house (classroom, stores and one to one) which is written and produced by the H&M staff.

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For some areas like ‘buying’ external training is provided. E-learning concept is also initiated as
a new subject.

However, H&M mainly focuses on “just-in time”, on-the-job and hands on learning. For
instance, when the company open its first store in Japan, the employees who were locally
recruited were sent to Norway and Germany. This is done basically to gain experience and to
learn the existing operations. H&M claims that they provide structured opportunities for hands
on, work place and on-the-job based training.

To summarize, it appears that today H&M focuses mainly on Self-directed learning, though the
company is moving towards e-learning and latest technology.

(a) Whistleblowing Policy

H&M followed highest possible standards of openness, integrity and accountability. They take
every effort to avoid any improprieties that may result in serious consequences for the
company or its employees. However, despite all these efforts malpractice in any part of the
business may occur.

One of their core values is "Being Straightforward". Thus, they have an Open Door Policy that
grants all employees the opportunity to openly discuss any work-related issue directly with
their managers. If for any reason, discussing with the manager would not be possible,
employees can contact their designated HR contact person or senior manager.

In case of very serious malpractice or misconduct all employees are able to use the
Whistleblowing Procedure.

The purpose of the Whistleblowing Policy and Procedure is to encourage employees to

disclose any serious malpractice or misconduct of which they become aware.

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With the Whistleblowing Policy H&M undertakes to act in accordance with legislation on
disclosure of malpractice in the workplace as well as in accordance with the Swedish Personal
Data Act (1998:204) on personal data protection.

Overall authority for this policy sits with the Head of Security.
Managers are responsible for ensuring that all employees are aware of this policy and are able
to raise concerns (in accordance with the procedure below) without fear of reprisals.

All employees are responsible for the success of this policy and should ensure that they take
steps to disclose any serious malpractice (under this policy) of which they become aware.

(b) H&M To Offer Paid Parental Leave To Part-Time Employees

H&M will offer six weeks of paid parental leave to eligible part-time employees beginning in
January.That policy has been in effect for the company’s full-time employees since last year, but
starting in the new year, all of the company’s employees including part-timers who meet the
requirements of one year of employment and 1,250 hours worked can receive the six weeks of
parental leave.

The move extends its leave policy significantly as the majority of H&M’s employees — 10,000
people — are part-time workers

H&M is hoping the new benefit will be a differentiator in a retail market that is struggling to
hold on to talent in a hot job market. Data from the Bureau of Labor Statistics indicates that
only 7% of retail workers had access to paid family leave in 2017.

“These benefits aim to create a positive impact and further ensure that H&M puts its
employees first, aligning with our strong belief in people,” says Martino Pessina, president of
H&M North America. “We want to offer opportunities for our employees that will put a focus
on both their professional and personal needs.”

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(c) MORE BENEFITS FOR EMPLOYEES OF H&M

 The prices at H&M are great – but as an employee, they’re even better. Their employees
are entitled to receive 25% from all H&M brands including H&M, &Other Stories, and
COS.
 H&M employees can take advantage of a range of paid personal days for vacations,
wellness, and even birthdays

 Medical, Pharmacy and Vision Coverage* – The H&M medical plans offer our employees
options with low co-pays, low employee contributions and low deductibles. The H&M
medical plans also include options for transgender coverage, bariatric surgery, and
increased fertility coverage.

 Dental Coverage* – The employee portion of the dental contribution is free to the
employee!

 H&M Parental Pay* – H&M offers 8 weeks of paid parental pay to both new mothers
and fathers. In addition, H&M offers other parental-related leave and disability options
such as pre-partum maternity disability, additional parental leave, adoption assistance,
and a healthy pregnancy/healthy babies program.
 They also provide pet insurance .

17 - Reward Management

“Reward Management is concerned with the formulation and implementation of strategies

and policies that aim to reward people fairly, equitably and consistently in accordance with
their value to the organization”

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Fig 7 Total Reward Model

Everyone want to be recognized for his or her work and their contribution make in the
maintenance, establishment and development of the company. This involve not only the basic
pay, but include many incentives like fringe benefits. This may differ from employee to
employee depending on their post. Every organization have different criteria of measuring the
performance of the employees. Some involve length of service while other involve performance
appraisals or it may be type of job or company performance. The modern approach is gradually
replacing the traditional approach.

(a) OBJECTIVES OF REWARD MANAGEMENT

 Recruitment and retention of employees.

 Motivation to employees
 Provide financial strength
 Efficiency in administration
 Support to organizational strategy

(b) Types Of Rewards

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There are two types of rewards: intrinsic and extrinsic. Extrinsic rewards are mainly for
satisfying the basic needs, survival and security. They are mainly given to lower level
employees. Intrinsic rewards are mainly for the higher level employees like directors and the
managers.

(C) Reward Management Strategy Of H&M

The career website of the H&M indicates that the company offers many benefits like incentive
bonuses, staff discounts, company sick pay, pension scheme and private health care schemes.
The HR head of the company indicates that they do not considered pay structure and titles as
motivational tools. Though more and more opportunities for the fulfillment of employee’s
aspirations are provided more. Apart from these employees satisfaction is the main reward as
derived from the career website and the annual report of the company. Thus H&M gives more
emphasis on relational work along with transactional reward. H&M reward management
strategy is link with HR strategy of ‘job rotation’, ‘open doors’ etc in consistent with other HR
areas which includes recruitment/selection, organizational culture etc. this becomes essential
for the fulfillment of H&M strategy of fast growth.

18 - Performance Management Of H&M

H&M has adopted an integrated and strategic approach for achieving there organizational goal
through the improved performance of the employees. The growth of the employees and the
organization are inter related. The practice of the shop manager it is to review the daily
business with their subordinates is the part of performance management activity. This indicates
that H&M has been successful in bringing the managers and subordinates as a team. Delegation
of authority to manage the shop’s activity is the key factor for the success of an organization.

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19 - Role Of Hrm In The Success Of H&M

This section basically includes how HRM practices have made the contribution in the success of
H&M as an organization. H&M is a successful multinational company. The main success of H&M
basically lies in the business model of the company. All the designing procedure is being done
internally and centrally. The whole manufacturing is being outsourcing with no compromise on
the quality of the product. The company has their local retailing with hired places, and that to
with local staff and local shop mangers with full power to take the decisions. The reason behind
the success and growth of the company lies in H&M’s formatted strategy in line with corporate
strategy. While entering into the new market the company does not lose their core values
which can be seen evaluated from their annual report. The company is successful in managing
all the core values in respect of country and cultural differences.

The elements of HR strategy, like in house training, improving performance through local
recruitment, job rotation, increasing commitment and total rewards have been in HR
procedures and strategies and are practiced by the company. Thus the HR strategies of the
company are one of the reasons for the success of the business.

(a) Managing Diversity In Teams And Groups

H&M is expanding its business in almost all the countries. By their HR procedures and policies,
all the staff for their new store is recruited locally. Moreover the company also practices job
rotation and movement of their employees from one location to another by internal
recruitment like promotions. This help in bringing the people of different culture to work
together as a team for the success of the organization. The HR strategy as stated in the annual
report is as:

 To fulfill the people’s expectations of H&M, company has develop the global guide lines
on equal rights, diversity and against discrimination.

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 The objective of H&M is to be a good employer, not only in a particular country but the
countries whose laws and regulations are very strict. This may include law regarding
wages, freedom of association to opportunity for overall development and growth of
the company and working hours.

 H&M has good relations with trade unions and they maintain such relations where ever
the company operates.

The success of the company indicates that the HR practices have been successful in managing
the diversity in groups and teams.

(b) Performance Of H&M In 2019

(i) First half-year (1 December 2018 – 31 May 2019)

• The H&M group’s net sales increased by 11 percent to SEK 108,489 m (98,165) in the first
half-year. In local currencies, net sales increased by 5 percent. The ongoing transformation
work has contributed to continued positive sales development with more full-price sales, lower
markdowns and increased market share.

• Profit after financial items amounted to SEK 6,977 m (7,275). The group’s profit after tax
amounted to SEK 5,372 m (6,010), corresponding to SEK 3.25 (3.63) per share. Profit after tax
in the previous year was positively affected by one-off tax income of SEK 408 m as a result of
the US tax reform (Tax Cuts & Jobs Act).

(ii) Second quarter (1 March 2019 – 31 May 2019)

• The H&M group’s net sales increased by 11 percent to SEK 57,474 m (51,984) in the second
quarter. In local currencies, net sales increased by 6 percent compared with the corresponding
quarter last year.

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• Gross profit amounted to SEK 31,825 m (29,164). This corresponds to a gross margin of 55.4
percent (56.1).

• Profit after financial items amounted to SEK 5,934 m (6,012). The group’s profit after tax
amounted to SEK 4,569 m (4,638), corresponding to SEK 2.76 (2.80) per share. As customer
satisfaction and sales increase, the group has intensified its transformation work even further,
which had a dampening effect on earnings development.

• In April H&M became the first big fashion brand in the world to provide detailed information
concerning the factory and material for individual garments to help customers make more
sustainable choices.

• Successful launch of H&M’s online store in Mexico during the quarter.

• Sales of the summer collections got off to a very good start. Net sales in the month of June is
estimated to increase by 12 percent in local currencies compared with the corresponding
month the previous year.

• The composition of the stock-in-trade continues to improve.

• The company assesses that the costs of markdowns in relation to sales will decrease by
around 1.5 percentage points in Q3 2019 compared with Q3 2018. This would be the fourth
successive quarter with a reduction in markdowns.

• The company is accelerating its adaptation to customers’ changed shopping patterns and has
therefore revised the number of new stores downwards in favour of even more digital
investments. The net addition of new stores for full-year 2019 will therefore be around 130,
which is 45 fewer than previously communicated.

• Thailand, Indonesia and Egypt will become new H&M online markets via franchise during the
second half of 2019.

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20 – Proposal for Training and Development of H&M

For businesses to survive in the 21st century they should be committed in implementing the
most effective operational and managerial practices .Human resource development is one of
the aspects that firms should consider in their pursuit to nurture competitiveness with regard
to human capital. Currently, human capital is considered as a fundamental organisational asset.
In addition to the quality of the product, customers are increasingly becoming concerned with
the quality of customer service, which is paramount in promoting unique customer experience.
Therefore, it is essential for the firm to close the gaps in skills amongst employees in order to
promote the firms’ success in service delivery Employees’ training and development underscore
one of the fundamental organisational development elements that organisations should pursue
in an effort to achieve sustainability in their operations

Subsequently, it is imperative for H&M’s Board of Directors to understand the view that the
capacity of the firm to achieve its desired competitive advantage will be subject to the quality
of its workforce with regard to competency. Therefore, failure to invest in effective employee
training and development affects the productivity of its workforce adversely.

The aspect of employees’ training and development promotes the level of job satisfaction
amongst managers in different levels of management. Moreover, it provides them with an
opportunity to progress through their career path . Therefore, it is essential for H&M to ensure
that its human resource management practices and strategies align with the firm’s vision and
goals.

Employees’ training and development is one of the most effective strategies that the director of
training and development at H&M should incorporate. This move will improve the likelihood of
the firm achieving competitive advantage in an industry that is increasingly becoming
competitive.

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However, the firm’s success in employee training and development will only be successful if the
firm allocates a substantial amount for employee training and development in its annual
budget.

(a) Training needs analysis

The retail industry has undergone remarkable changes since the beginning of the 21 st century.
Some of the most notable changes relate to intensity of competition, changes in information
communication technology, changing consumer needs, and labour force demands .H&M is
committed to undertaking continuous expansion of its workforce. For example, in its 2009
annual report, H&M announced its intention to increase its human resource base with an
additional 7000 employees. The firm intended to achieve this goal by expanding into 33 new
countries.

In an effort to achieve social sustainability in the international market, H&M has incorporated
recruiting from the local market as one of its human resource management policies.
Subsequently, the firm has adopted external recruitment as one of its human resource
management practices. This move has sufficiently positioned H&M as a culturally diverse
organisation.

H&M is committed to developing competitive advantage with regard to human capital. This
vision arises from the recognition of the role of human capital in promoting its competitiveness
in the global fashion clothing industry. Investing in employees’ training and development will
enable H&M to achieve operational efficiency and this assertion arises from the view that the
firm will become innovative in its operations.

However, the firm’s long-term success will depend on the extent to which the firm is committed
in ensuring that its employees knowledge and skills align with the prevailing market demands
The McKinsey 7S model underscores the importance of ensuring a high level of
interdependence amongst the various internal organisational elements, which include strategy,

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systems, shared values, skills, staff, style, and structure as illustrated by the figure below. The
hard elements include the organisation’s systems, strategy, and structure while the soft
elements include the shared values, style, skills, and staff.

Investing in employees’ training and development will improve the probability of the firm
achieving the desired competitiveness. This assertion arises from the view that the employees’
training and development strategy adopted will affect the employees’ skill level, shared values,
operational style, and systems either directly or indirectly. Using the McKinsey 7S model will
enable H&M to understand the skills’ gaps within its workforce.

Fig 8 McKinsey 7S model

Moreover, the firm will be in a position to understand the most important skills and knowledge
amongst its workforce. Subsequently, the firm will be in a position to formulate the most
effective employees’ training and development strategy. Subsequently, the firm’s board of

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directors and the management team have an obligation to ensure that the firm invests in
human capital development in order to achieve its vision.

Findings of previous empirical studies show that the level of employee motivation is a
fundamental factor that organisations should take into account in formulating an employees’
training program. One of the theories that best illustrate the contribution of employees’
training and development towards employee motivation is the Vroom’s expectancy theory.
Lunenburg contends that expectancy theory is based on the view that there is a strong
relationship between the employees’ performance and the expected rewards of their
performance.

Employees’ believe that they are likely to be motivated if they perceive that they their
contribution to the organisation is rewarded adequately and fairly. Lunenburg further argues
that people ‘join organisations with expectations about their personal needs, motivations, and
experiences’. The theory contends that the employees’ behaviour is a conscious choice
.Subsequently, employees are likely to behave in a manner that aligns with their expectancy
calculations. Furthermore, the theory asserts that employees have diverse personal needs at
the workplace; for example, career advancement and challenging tasks .

The expectancy theory provides organisational managers with the guidelines for improving
their level of motivation by adjusting the employees’ effort-to-performance expectancy.
Therefore, it is essential for organisational leaders to improve the employees’ level of
motivation through training and progressively assigning them challenging tasks. Nurturing
effort-to-expectancy rate demands organisational leaders to seek the employees’ opinion on
how best to adjust the organisation’s performance.

Furthermore, it is imperative for organisational leaders to consider the possibility of coaching

employees who do not have self-confidence. The figure below illustrates the basic expectancy
model.

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According to Vroom’s expectancy theory, it is imperative for organisational leaders to steer

their organisations towards the desired organisational objectives by implementing the
necessary and desirable strategies.

(b) Proposed training and development offer

In order to position itself in the global retail industry effectively, it is imperative for H&M to
focus on improving the skills and knowledge of its workforce. However, the extent to which the
organisation succeeds in promoting business performance is subject to the success of the firm
in identifying the core areas of employees’ training and development.

The contemporary business environment is characterised by a high rate of change emanating

from the macro-environmental and micro-environmental business environments. Therefore,
the importance of developing a skilled and experienced workforce cannot be underestimated.

In order to survive in such an environment, it is imperative for H&M to formulate

comprehensive employees’ training and development program. Some of the aspects that the
firm should consider include improving the employees’ technical skills, management skills, and
leadership skills.

(c) Management development, leadership and technical skills

It is imperative for H&M’s director of training and development to focus on developing optimal
leadership and managerial skills. Management development refers to the process of ensuring
that the employees’ development aligns with the organisation’s goals. By focusing on
management development, H&M will ensure that its employees have developed diverse skills
to enable them to execute diverse tasks.

Subsequently, the workers will execute the delegated tasks successfully. Additionally, the
likelihood of the employees achieving the desired career goals is enhanced. Investing in

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management development will enable the employees to develop adequate problem solving
skills, hence improving their capacity to deal with challenging situations at the workplace .

(d) E – Learning

In order to improve the level of employee motivation and satisfaction, H&M should focus on
improving the employees’ technical skills, which will play a remarkable role in promoting their
career development. Career development is achieved through continuous acquisition and
refinement of the employees’ technical skills such as job mastery and professional skills.

In order to improve the employees’ technical skills effectively, H&M can adopt the simulation
strategy, whereby training is undertaken away from the work environment. Additionally, H&M
should consider adopting e-learning concepts.

Employees’ training and development can be costly. Therefore, it is imperative for

organisational leaders to adopt the concept of e-learning.

One of the ways through which the firm can achieve this goal is by implementing effective
information communication systems such as video conferencing. Using e-learning will provide
employees with a high degree of flexibility in their learning process. This assertion arises from
the view that employees will have the discretion to determine when to study .

(e) Coaching and mentoring

Developing effective leadership skills amongst employees will promote H&M with
competitiveness regarding human capital.

Through acquisition of effective leadership skills, H&M will be in a position to implement

project-based approach in its operation, as firm will enhance its teamwork culture by
promoting a high level of collaboration amongst employees. Moreover, the firm will be in a
position to deal with various workplace issues such as conflict amongst the team members.

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In order to support management development and leadership development, H&M should

consider implementing effective employee training and development strategy. One of the
strategies that the firm should incorporate is coaching and mentoring.

Coaching and mentoring aim at stimulating learning ability of subordinates by consciously

matching the firm’s management style with the learners’ readiness to accept what is being
taught. In order to succeed in coaching, it is imperative for H&M to develop effective
interaction between employees and individuals in the different levels of management.

Coaching and mentoring will improve the effectiveness and efficiency with which H&M’s
employees take charge of their personal development. Subsequently, they will be in a position
to achieve their desired results.

One of the coaching models that H&M can incorporate in its management development effort
is the GROW model. The model assesses the employees’ goals, the reality of the prevailing
situation in the workplace, the employees’ options, and will to accept the available options as
illustrated by the figure below.

With regard to mentoring, H&M should develop a mentorship program whereby employees in
the different managerial levels share their experience with their subordinates.

For example, the firm’s managers should share some of their technical expertise with the lower
level employees .However, the ‘mentoree’ does not have to undertake similar responsibilities
like those in the managerial level.

In order to benefit both the organisation and employees, H&M should adopt both
developmental and sponsorship mentoring models. Adopting sponsorship model will enable
employees to achieve their desired career success while the development model will contribute
to a high level of personal development.

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Implementing developmental model requires the mentor to be experienced on issues that are
relevant to the employees needs. Therefore, using the two models will enhance the probability
of employees acquiring the desired skills.

(f) Evaluation

H&M should evaluate the contribution of the coaching, mentoring, and e-learning to the
employees’ training and development strategies in improving skills and knowledge. The firm
should conduct a comprehensive employee appraisal in order to determine the employees’
level of skills. One of the models that the firm should implement is the Kirkpatrick’s Hierarchical
model.

The model assesses the effectiveness of employee training and development by examining four
main aspects. One of the issues that the firm should assess is the employees’ reaction to
training and development program. The second aspect entails evaluating the extent to which
employees have learnt new techniques, logics, and methodologies coupled with their relevance
at the workplace.

This goal can be achieved by evaluating the knowledge and skills acquired through the training
program. The fourth step entails reviewing whether the employee training and development
has contributed to the development of the desired employee behaviour. Finally, the firm should
assess the contribution of the training and development program to the overall organisational
performance.

(g) Risk management

In the course of implementing the employee training and development program, H&M should
be cognisant of the possible risks that might affect the implementation of the project.

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Some of the risks that the firm should be aware of include lack of adequate resources such as
financial and human capital. This risk may arise due to resource scarcity. Additionally, some of
the resources devoted for employee training may be diverted to other areas.

In a bid to deal with financial constraints, H&M should be proactive, for example, by allocating
a substantial amount for employee training and development every year in its budget.

Considering the significance of employee training, the firm should also develop a contingency
fund that will address possible financial constraints. On the other hand, H&M should consider
adopting the concept of outsourcing human resource management experts.

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REFERENCES:

Books:

 Dessler, G., Varkkey, B., Human Resource Management, 11 th edition, South Asia:
Pearson Education

 Armstrong, M., 2006, A handbook of Human resource management practice, 10th

edition

 Armstrong & Murlis, 2004, Reward Management

 Chen, H & Kao, C 2012, ‘Empirical validation of the importance of employees’ learning
motivation for workplace e-learning in Taiwanese organisations’, Australasian Journal of
Educational Technology

Reports:

 H&M’s Annual report 2018 part 1

http://www.hm.com/gb/investorrelations/financialreports/annualreports__investorann
ualreports.nhtml
 H&M’s Annual report 2019 part 2

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https://hmgroup.com/media/news/financial-reports/2019/6/h-m-hennes---mauritz-ab-
six-month-report.html
 H&M’s Sustainability report 2018
https://about.hm.com/content/dam/hmgroup/groupsite/documents/masterlanguage/C
SR/reports/2018_Sustainability_report/HM_Group_SustainabilityReport_2018_
%20FullReport.pdf

 Job availability at H&M

https://hm.myvurv.taleo.net/main/careerportal/

 Research and SWOT analysis of H&M

Available at
http://www.researchandmarkets.com/reports/555050/h_and_m_hennes_and_mauritz
_ab_swot_analysis

 https://www.benefitnews.com/news/h-m-to-offer-paid-parental-leave-to-part-time-
employees

 https://career.hm.com/content/hmcareer/en_in/workingathm/what-can-you-do-
here/corporate/human-resources.html

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