Increasing employee engagement through HRM
A Harrods case study

Page 2: Human Resource Management (HRM)

Harrods 18 Image 7Human Resource Management is a process of valuing and developing people at work. It covers all aspects of developing employees, including three important steps:

  1. Recruitment and selection - attracting suitable new employees.
  2. Performance - enabling employees to perform their roles to the best of their ability by keeping them informed and providing relevant training opportunities.
  3. Development - developing all employees to build their careers with Harrods through identifying career progression opportunities.

In 2009 the MacLeod Report, ‘Engaging for Success’, was published which has been very influential in Human Resource Management. One of its major findings was to highlight how businesses benefit by involving employees in all aspects of decision making. This involvement is commonly referred to as employee engagement or participation. This prompted managers at Harrods to investigate its employee relations, in particular its employee turnover.

Employee turnover

Employee turnover measures the rate at which employees leave their employer, usually over a one year time period. The statistics indicated that Harrods needed to take action to improve employee engagement and reduce its employee turnover. A high employee turnover rate has significant cost and performance implications to a business. These include the costs of recruitment, the loss of expertise and the increased need for training new employees.

Harrods 18 Image 5Following this investigation, Harrods carried out its first comprehensive employee survey to find out what they thought about working at Harrods. The employee survey has now become an integral aspect of Harrods’ Human Resource Management programme. The survey results were used to create strategic plans for change focused on improving employee engagement and trust. The four main elements were:

  • Changing organisational structure. Senior managers felt that the organisation was too hierarchical i.e. had too many layers. The new structure is flatter with employees taking on more responsibilities. This enables job enrichment, providing opportunities for an employee to take on further responsibilities to enhance their job satisfaction.
  • Changing leadership. Creating an environment where employees are encouraged to make more decisions themselves. Senior managers create the business vision but ground level employees are delegated more leadership responsibilities, for example, in dealing with customers. The model employed is one of transformational leadership where the vision is built at the top but everyone engages with the vision through personal leadership.
  • Improved communications. Better communications inform all employees about the strategies of the company. These outline the aims and direction of the business. They also inform employees about operational (day-to-day) plans which directly affect their work. A radical improvement was to encourage employees to inform management of their views.
  • Living the brand values. Making sure that everyone understands and models the brand values.
Harrods | Increasing employee engagement through HRM

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