This report provides a detailed analysis of HR practices at Sports Direct, UK. The success of an organization widely depends on its Human Resource Management, as it plays a crucial role in meeting the organizational objectives. HRM is a significant organizational function, which usually deals with the issues related to people; particularly in the section of performance management, benefit, employee motivation, safety, communication, compensation and in some other related areas. The present report identifies the challenges in these sections at Sports Direct. The purpose of the report is to identify the challenges in the current HR department and develop solutions about how a functional HR department can resolve the current HR issues experienced by Sports Direct.
Two people management issues Sport Direct is currently facing and discussing how functional HR department can proactively manage them effectively
The case study on Sports Direct implies that even though SD (Sports Direct) achieved a tremendous growth in the business expanding in Europe and UK, the performance of the firm is on the fragile stage, due to series of allegation regarding unfair wages, unethical workplace, unpaid time taken and penalizing ill staff. Another significant issue found in Sport Direct’s work practice is the racial discrimination at the workplace, where a staff claims that SD is prohibiting them to speak Welsh language, as company’s official language is English. These issues are vital to managerial practices in Sport Direct, as although the organization has a competitive position in the market, employees’ dissatisfaction and improper HR practices would take no time to pull the organization down to its toe. This is because human resource is the backbone of any organization (Kitching and Smallbone 2012).Thus, discrepancies in the HR department in a large organization like Sports Direct could be a “corporate shame”, which certainly tarnishes the public image of the brand and further leading to loss of loyal customers.
The case study clearly indicates that employment relation at Sport Direct has to be developed with an extending focus, as the above-mentioned issues are associated with the workforce only. Thus, being in functional HR department, HR heads of Sport Direct needs to come into the discussion with employee union considering two significant variables- employment relation and welfare management. Sports Direct, in order to strengthen employment relation and welfare policies, should negotiate with employee union heads, where the needs and demands of two parties would be discussed. More specifically, the management needs to involve the union heads; so that whenever a new HR policy is formed, it can immediately be conveyed to the employees through union heads. The issues presented above imply that there is a lack of communication between HR management and employees. Consequently, employees’ needs are unheard and there is a robotic culture at the workplace, where employees only follow the commands of management. Moreover, due to the layers of management in Sports Direct, workers find it difficult to approach the management for sharing their views. However, it is not easy for management to reach 18000 employees individually to hear them.
Thus, organization needs a convenient channel- which union, approved by both HR department and employees. Whenever, an employee encounters a workplace challenge, he/she can directly contact the union leader to pass the message to the management. Likewise, whenever a new policy is formed by management – such as the incentives for additional hours should be conveyed to the employees through the union leaders. Similarly, employee welfare policies such as healthy workplace, earned leaves, health benefits should be formed considering employee’s opinions. On the other side, union leaders also have to agree with management’s policies such as additional efforts during seasonal holidays when the customers crowd at the mall. Furthermore, for the compliance to policies regulations, HR department has to aware of employee responses and this can be done through communication channels (Guest 2011). Here, the role HR department is to form policies and regulations in a document and share the handouts to the workers.
Outlining with example how HR department within Sports Direct can successfully implement a viable HR planning process
Analyzing organizational objectives: Among several business objectives in Sports Direct, the major objective is to invest in its people as well as significant third party brand partners to lift up its retail proposition to achieve a new level of growth and excellence across its multi-brands delivering to customers. However, Alfes et al. (2013) mentioned investment is not the only solution to the workforce issues occurred to Sports Direct, as objectives of the investment are not linked to its current workplace situations. Organizational objectives must include the human resource needs. Maslow’s hierarchy of needs theory discussed below helps to understand how the growing staffing needs can be met.
Biological and physiological needs: In order to take care of the basic needs of employee such as food, water and shelter, HR department of the firm should look after whether the employees are having their lunch on time, whether there is an available water supply for drinking for workers.
Safety needs: According to Maslow, safety needs may include physical, environmental, emotional safety and protection (Sadri and Bowen 2011). HR department of SD needs to ensure that employees have workplace safety- such as when an employee is ill during the work hours, he/she is provided with appropriate medication or an emergency shift to hospital. In addition, if a fire is observed in the building, the human resource department needs to make sure that all employees are evacuated safely from the building.
Figure 1: Maslow’s hierarchy of needs
(Source: Sadri and Bowen 2011)
Social needs: To take care of social needs such as love, affection, care, belongingness and friendship, HR department needs to make sure that there is healthy and friendly relationship between the supervisors and employees (Crook et al. 2011). This is important, as a friendly relation between supervisors and subordinates further leads to the practice of open communication, where employees directly come up to supervisors and share their concern.
Esteem needs: Esteem needs include respect, achievement, recognition and attention. A functional HR department of Sports Direct needs to supervise whether its employees receive appropriate recognition for their achievement. HR manager should praise and reward employees for their achievement of performance.
Self- actualization needs: This need may include the urge to become the person what they are actually capable of becoming (Jerome 2013). This means based on talent and skills, the employees should be provided appropriate career growth opportunities.
Inventory of present human resource: As per the case study given, Sports Direct is said to be one of the largest clothing retail shop with the largest workforce (18000 employees). Sports Direct categorizes its overall workforce into several departments; here the departments are determined on the basis of category of products it sells (Sparrow, Brewster and Chung 2016). The department includes casual workers, people at the licensing group, people at the health and safety committee, people at the wellbeing service, people at the retail trust and people at training and development. Besides these departments, a mass number of people are hired as the sales assistants, and people at the service quality improvement department. In addition, almost 298 people work in the IT department of the organization (Sportsdirectplc.com 2018).
Forecasting demand and supply of human resource: The case study indicates that Sports Direct has some significant workforce issues such as employee dissatisfaction caused by unpaid work hours, racial discrimination and deduction of wages of employees falling sick. Consequently, the percentage workforce turnover is increasing. As put forward by Nickson et al. (2012) an individual working in the retail industry wish to grow their career in retail sector only. Thus, the demand of human resource is higher but due to inappropriate work culture, the supply would go down.
Estimate manpower gaps: Even though Sports Direct has a large workforce, the skills and competencies are not equal in some of the departments. The brand is running the operation in a global environment but it experiences a significant manpower gap as employee turnover rate is increasing. To run the operation in branches successfully or expand the operation to all EEA nations, the firm needs to recruit around 5000 people but it is forcefully managing the operation with existing number of workforce; eventually, the situation leads to increased work pressure.
Formulation of human resource action plan:
|
Methods |
Identified issues |
Areas requiring improvement |
|
Monitoring |
Due to limited workforce, Sports Direct is putting additional pressure on workers such as asking them to work for extra hours, unpaid work hours and wages deduction for falling sick during work hours |
HR department needs to review and design alternative employment policies, which helps to assign candidates as per their skills and capabilities. More specifically, based on the capabilities, employees should be assigned with stipulated work hours. |
|
Control |
It is certain that due to lack of communication with the management or supervisors, employees violate the rules at the workplace and go back to their own habit of working which may not be appropriate |
A set of clear regulations and policies should be formed to control workforce under a systematic and effective culture. |
Table 1: Action Plan
One developmental activity a functional HR department within Sports Direct can implement to effectively enhance employee performance -500 words
Specified training activities: Due to the increased work pressure, employees’ work practices are being hampered and the situation is leading to number of strikes and eventually, employee performance is being hampered. To keep employee under control, Sports Direct needs to develop suitable training activities such as convincing skills development, conflict resolution program and workforce collaboration.
People convincing skills: Workers should be provided with the training on people convincing skills. This means, for example, whenever a customer is not satisfied with the service or he/she is having a query, quality service assistant needs to convince customer about the issue about why and how it is occurred and how it would be resolved (Raffiee and Coff 2016). The employees should be taught about the ways that such customer has to be approached in a particular manner so that the person keeps hope that their brand is concerned about the issue. In addition, the supervisor needs to collect frequent feedback from the employee such as the updates about the context. So, the employee does not feel left alone.
Conflict resolution training: The employees should also be taught about how conflict in the workplace can be resolved. Conflict can arise from both internal and external environment (Halperin 2014). For example, if one of billing staffs is absent, the conflict can arise, as who would take care of the billing counter that day. In such context, employees should have the understanding that one has to take the responsibility to avoid unnecessary customer queue at the counter. Through training and development session, employees’ understanding about the job responsibilities should be increased.
Workforce collaboration: HR department has to build a cooperative culture among the workers. For example, if one worker is observing a trouble in the computer at the billing counter, another employee can help him/her out in resolving the issue instead of wasting time in waiting for the IT employee to come.
Motivation activities: As discussed above, employee dissatisfaction occurs at Sport Direct due to lack of motivational elements such as inadequate pay structure or unfair wages. To resolve such issue, the HR department of Sports Direct needs to communicate with employee union leaders who are aware of employee needs and industry’s pay structure. By negotiating with the union leaders, the firm could come into an agreement of developing a pay structure that is acceptable to both parties. For example, if £1000 is the overall remuneration budget, then, almost 85% of the amount should be spent on salary, and 15% should be spent on benefits –such as 7% on health benefit, 8% should be spent on reimbursement.
Other recognition and rewards programs: To motivate employees, Sport Direct could develop an annual bonus plan, where they could reward employees by offering them a certain amount of annual bonus, which should be an addition to the existing remuneration program. Besides, the bonuses, the company could develop individual reward program, where each employee for their individual achievement can be rewarded with certain amount of monetary or non-monetary benefit. For example, Apple offers iPad, iPhone gadgets as reward to its employees for their achievements (Gibson 2014). When it comes to employee recognition, Sport Direct can develop few programs such as best seller of the month, best performer of the month which should be reflected on their annual appraisal.
Implication of employment legislation on the current practices of Sports Direct –
Pay Related: The current pay structure at Sports Direct is not adequate enough compared to New Wage Living (NLW) formed in April 2017 (Wills and Linneker 2014). According to the principles of this new legislation, employer in retail industry is supposed to pay £7.50 an hour. Now Sports Direct, who used to pay minimum wage for the non-managerial roles, will have to decide to meet the additional costs of higher wage bill (Prowse and Fells 2016). On the other side, according to the principles of National Minimum Wage, the employers must pay their employees fairly based on the age and the type of work. According to the amendment in October, 2011 workers and aged between 16 and 17 are entitled to receive £3.68 per hour and employees aged between 18 and 20 are entitled to receive £4.98 per hour. According to these legislations, the current pay structure at Sport Direct differs. According to BBC News (2018), minimum wages rate at Sport Direct is lower than rate mentioned in National Minimum Wage legislation. Consequently, Sport Direct has to pay back a total of £1.1 million to their workers.
Contracted Working times: According to Working Time Regulation (1998) amended in 2007, an employee is entitled to annual leave in each year to a period of additional leave determined in the legislation (Fahlén 2014). However, the case study indicates that Sports Direct does not provide annual leaves to its employees; instead, their wages are deducted even for accidental or medical leave. According to this amended legislations, the employees are not supposed to work for long hours, especially in the retail sector. The principles also indicate that employers do not cross the limit of 48 hours a week. Moreover, as per amended Working Time Regulations, more shifts and part-time working should be implemented or introduced to minimize the long hours shift. However, people at Sport Direct work under two-work shifts- morning and evening shift. At the time of Christmas in 2014, employers in Sports Direct had to work for 11 hours a day under a single shift (Henly and Lambert 2014). This practice is certainly against the amendments done in 2007 in Working Time Regulation.
On the contrary, Yu, Ramanathan and Nath (2014) mentioned that around 31 firms in construction and engineering sector now have system of variable hours over a standard week, which is known as “Min-Max” for the largest occupational group. Arguably, Triantafyllou Cherrett and Browne (2014) mentioned that the major purpose for the changes in the working time regulation was to increase flexibility and reduce costs. Nonetheless, in the case of Sport Direct, inflexibility increases due to additional force for working extra hours for the newly mentioned wages per hour. However, as the regulation, £7.50 an hour is the minimum wage that employer has to pay for working in normal shift hours, which means the organization needs to pay additional wages for the extra hours.
Conclusion and Recommendation
The above presented report indicates that Sport Direct, UK, in the recent time have observed a set of workforce issues caused by unethical human resource practices. The issues are effectively identified and stipulated solutions have been developed with employee motivation theories. In order to develop an effective employment relation, the firm has been suggested to develop an effective employment relationship where union leaders and functional heads of human resource department would be involved and develop a mutual agreement. Likewise, other discrepancies have been critically discussed in the report. However, Sports Direct strictly needs to comply to the regulations of employment. In order to protect its corporate image, Sports Direct needs to pay more attention to its workforce and apply the legislations appropriately to avoid employment conflict.
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