Strategic Analysis And HRM Plan For Cotton On

1. Organizational Strategic Analysis

1.Perform an organisational strategic analysis: Examine the strategic and business plan including the vision, mission, values and challenges facing the organisation and conduct a PEST and SWOT analysis?

2.Building on the results of Step 1, examine the role HRM will need to play to acheive the business issues facing the organisation?

3.Identify and explain five HR functions being performed in the organisation (such as recruitment, selection, performance management etc.), critique how these are managed and offer commentary on any ethical considerations?

4.Building on the results of Step 3, prioritise and examine at least four HR techniques, procedures and / or systems challenges affecting the organisation?

5.Draw up the HRM Plan?

Human resource management (HRM) is the formal system of managing the employees of an organization. It includes all aspects of recruitment and selection, training, motivating, appraising performance, developing, marinating payroll and managing employee confliction of the employees (Jackson et al., 2014). The organization chosen for this study is Cotton On.  It is an Australian retail chain, which is popular for its fast-fashion clothing for men, women, kids and teenagers (Cottonon.com, 2017). The study will perform a strategic analysis for the organization and identify the challenges face by the organization. The study will describe the role of HRM for mitigating those challenges. Moreover, the study will identify 5 HRM function of the organization and based on these HRM function, it will also identify 4 HRM challenges. Lastly, the study will develop a HRM plan for overcoming those HRM challenges.

Vision

The vision of Cotton On is to be one of the most loved fashion brands in the world and rendering assistance to the cotton farmers (Cottonon.com, 2017).

Mission

The mission of Cotton On is to provide most innovative and responsive fashion brand to the customers without compromising with the value. The mission of the organization is also to provide most fashionable clothes and accessories as most affordable price (Cottonon.com, 2017)

Values

Values of Cotton On
Integrity	The organization possesses the worldview and focus on the real needs of the customers.
Accountability	The organization maintains accountability in the business with courtesy and proper understanding of customer demand. They are also transparent in all their business practice.
Quality	Providing top quality in the fashion clothes and accessories is the highest priority of the organization.
Passion	The organization is passionate from its heart and mind towards providing the best product to the customers.
Leadership	The organization poses courage to shape its better future through effective leadership.

Table 1: Organizational Value of Cotton On

(Source: Mitchell, 2017)

Challenges in Cotton On

Cotton On is quite capable of providing quality and genuine fashion products to the worldwide customers. Apart from operating in Australia, the organization also operates in other 12 international countries. Having the globalized nature, the organization is facing challenges in controlling its global units (Kramar, 2014). Moreover, due to the decentralized nature of the management, global units of the organization are facing lack of effective leadership towards achieving organizational success. Moreover, the collaboration among the team members is being hampered in the organization, which is actually hampering the team performance (Sheehan, 2014). Moreover, employees of the organization are being de-motivated with the increasing pressure of the organization. In this way, this motivation is actually hampering the productivity of the organization. Some of the new employees in the organization are incapable of meeting the organizational standards. The quality of the organization is getting hamper through the work of these new employees (Marler & Fisher, 2013).

PEST Analysis of Cotton On

Pest Analysis of Cotton On

PEST Analysis of Cotton On
Political	·         Political instability of Australia lead to its ineffective business condition ·         Flexible trade policies assist Cotton On in smooth international business ·         Frequent changes in labor law hamper the business condition ·         FDA assists the organization towards its business development
Economic	·         Decreasing economic growth of Australia hampers its domestic market ·         Differentiation in exchange rate hampers the operational cost of the organization in running international business ·         Frequent inflation rate of Australia often hampers the business condition
Social	·         Increasing fashion trend among the customers creates positive scope ·         Increasing consumer income also seems to be a positive scope ·         Tendency of customers towards wearing casual dress is also beneficial
Technological	·         Cotton On uses modern mechanism towards achieving greater productivity ·         It also uses media technology for reaching the target audience

Table 2: PEST Analysis of Cotton On

(Source: Low, 2017)

SWOT Analysis of Cotton On

SWOT Analysis of Cotton On
Strength	·         Strong brand image attracts the customers ·         Strong global reach with presence in over 12 international countries ·         Different product categories for different age group ·         Competent supply chain network ensures effective global distribution ·         Strong financial condition
Weakness	·         Lack of cooperation among global business units of the organization ·         Lack of employee skills can prevent the organizational effectiveness ·         Tough competition from Forever 21 and H&M
Opportunity	·         Wide global scope having international nature of the business ·         Strong global reach leads to scope for product diversification
Treats	·         The organization faces difficulties in complying with different Government rules and regulations of different countries ·         Cotton On has to face with frequent economic slowdown, inflation and political instability of different countries ·         Strong competition can lead to reduced market share

Table 3: SWOT Analysis of Cotton On

(Source: Hatch, 2017)

HRM Role in Achieving Business Issues
Effective Leadership	The organization should initiate effective leadership in all their global business units. Effective leadership in all the organizational unites will assist in having proper control over the activities of the employees (Kehoe & Wright, 2013).
Foster Team Collaboration	In order to enhance the team performance of Cotton On, it should foster team collaboration. The HR managers should encourage trust and cooperation among the global teams (Hoch & Dulebohn, 2013). It would ultimately help in enhancing team performance.
Motivating Employees	With the increasing work pressure, the employees of the organization are being de-motivated in their job role, which is hampering their performance level (Wright et al., 2014). In such situation, the HR team should motivate and support the employees towards better performance.
Enhancing Employee Skills	The HR managers also should provide training to the new employees for enhancing their skill level (Collings, 2014). It would help in maintaining the quality of organizational standards.

Table 4: HRM Role in Achieving Business Issues

(Source: Al Ariss et al., 2014)

Recruitment and Selection

One of the most important HR functions practiced in Cotton On is recruitment and selection. Through this process, the organization wants to attract and select the best employee for the success of the organization. The human resource managers identify the needs of human resources through consulting with the managers of other departments. It helps the managers to identify the exact numbers new employees for each department within the organization (Nyberg et al., 2014). Moreover, it also done in global basis for indentifying the global HR needs of the organization. Moreover, the HR managers source candidates in global basis through providing job advertisement in different media channels. Furthermore, the HR managers also set the selection criteria of the candidates through consulting and jointly working with the different organizational department and as per their needs. Moreover, the HR managers provide equal employment opportunity in recruitment and selection process towards maintaining ethical consideration.

Training and Development

With the dynamic needs of the global customers, Cotton On is to adjust their product features for meeting those needs. In such situation, the employees need to enhance their skills towards adjusting with new business process for modifying product features. Therefore, the HR department of the organization performs training and development for the employees. In employee training and development function, the HR managers consult and jointly work with each departmental managers of the organization for identifying their specific skill needs. It helps the HR manager towards arranging specific training program for enhancing the skills level of the employees in different departments (Alfes et al., 2013). The training and development manager of the organization maintains accountability in the training program through conveying the actual value of the organization.

Performance Management

Cotton On also practices performance management for assessing the performance level of the employees towards achieving organizational success. It helps in monitoring the progress of the employees and focus of overall success of the organization. In this process, the HR managers of the organization take the help of operational mangers for setting the criteria of measuring the success of the employees (Carmeli et al., 2013). Moreover, the HR managers also consult with the divisional managers of the organization for collecting the information of the employees from different departments. The HR managers maintain transparency in the performance appraisal process maintaining ethical standard in the performance management function.

Conflict Management

SWOT Analysis of Cotton On

The human resource managers of Cotton On also perform conflict management function for resolving the conflicting issues of the employees. Moreover, the HR managers of the organization try to resolve the employee conflicts at the initial stage so that it cannot leads to disappointment for the employees. The HR mangers of the organization jointly work with respective departmental managers of the employees raising confliction. It helps in identifying the actual issues faced by the employees and thus, HR manager can take the necessary steps towards mitigating the specific confliction (Björkman & Welch, 2015).

Compensation and Benefits

The HR managers of Cotton On practice the activities of setting compensation and benefits for the employees. Compensation and benefits are provided the employees in monetary as well as non-monetary terms in return of their work performed for organizational success. Through this function, the HR managers provide fair value to the employee against their work done. This function motivates the employees towards their better performance for organizational success (Marchington, 2015). In this function, the HR managers jointly work with the upper level managers for setting the types of compensation and benefits for the employees. The HR managers of the organization maintain equal pay act for fair employee treatment and avoid any ethical issue.

Lack of Proper Source for Talented Employees in Recruitment and Selection

The recruitment and selection managers of the organization face huge challenge regarding the sourcing of talented employees. Moreover, limited job advertising of the organization limits the organization towards sourcing proper employees for organizational success (Singh & Singh, 2013). Furthermore, the organization is to source employees for their global business having knowledge of global consumer taste. Therefore, limited sources of talented employees do not meet the global needs of human resources for the organization. In this way, it actually hampers the organizational efficiency of Cotton On due to lack of efficient employees.

Lack of Proper Measurement in Performance Management

The performance appraisal managers of Cotton On face challenges in managing the performance level of the employees. The management of the organization often sets target for the employees but does not set the exact measurement for measuring the success of the organization (Singh & Singh, 2013). Therefore, the complex measurement criteria create problems for the HR manager towards effectively assessing the success of the employees as per the organizational standard. Moreover, the HR managers also face challenges in maintaining transparency in the performance appraisal process due to lack of proper measurement criteria.

Lack of Effective Training Professional

In case of providing training and development to the employees, the HR managers of Cotton On face huge challenges. The organization needs to provide training to the employees regarding the global taste of the customers. However, the organization does not have effective training professional for providing effective training and developing the employees. The existing training managers of the organization do not have proper knowledge reading the global value (Collings, 2014). Therefore, it is quite difficult for the organization to develop its employees as per the organizational needs.

Differing Values and Interest in Conflict Management

2. HRM Role in Achieving Business Issues

The HR managers of Cotton On also face HR challenges in managing the confliction of the employees. The HR managers of the organization are to deal with employees in global basis, as the organization operates in global basis. Therefore, the HR managers are to face employee issues having different values and interest. Most of the confliction arises from the differences in values and interests of global employees (Alfes et al., 2013). Therefore, it becomes quite difficult for the confliction-handling managers to manage the employee confliction.

Hr Challenges	Parameters	Explanation
Lack of Proper Source for Talented Employees	Objective	1.      Collecting referrals from existing potential candidates 2.      Designing press advertisements 3.      Reaching out to E-recruitment websites
Implementation Strategy	Ø  Referrals: HR Manager will have to create new referral policy, through which existing employee base can communicate with external environment and source new candidates. For each confirmed referral, certain amount of financial benefits will be awarded. Ø  Press Advertisements: Detail about of the job will be declared in a form, which will include job description and specification to general public. Ø  E-recruitment: Contract with E-recruitment websites will be made from which latest resumes can be reviewed
Responsibility	HR Department will be solely responsible (HR manager, Senior HR Executive, HR Professional)
KPI	SMART Specific: Assessing average lead time to recruit employees Measure: Achieving 25% of target through internal recruitment Attain: 50% increase in the number of interviews Relevant: Talented employees will contribute in business development Timely: Measurement within first 6 months
Lack of Effective Training Professional	Objective	1.      Hiring trainers from retail training institute such as ARA Retail Institute 2.      Creating training schedule at Saturday of each week 3.      Reviewing departmental performance
Implementation Strategy	Ø  Trainers: Short Course retail package will be selected, which will last for six months. Departments such as sales, support and designer will be included in this package Ø  Training Schedule: Short Course will be delivered on weekly basis particularly on Saturday, which will be divided in shifts with hundred percent attendance Ø  Review: After each month departmental performance will be reviewed and progress rate will be reported to operational managers
Responsibility	HR Manager, Operational Manager, Store Manager and Financial Head
KPI	SMART Specific: Gaining enhanced business outcome Measure: Assessing increase in customer satisfaction Attain: Reputed and authorized professionals will deliver training Relevant: Increase in employee potentiality will increase revenue Timely: Short Course for 6 months (3rd to 9th month)
Lack of ProperMeasurement in Performance Management	Objective	1.      Introducing performance appraisal scheme 2.      Ensuring productivity tests 3.      Using traditional 360-Degree feedback
Implementation Strategy	Ø  Appraisal: After every 12 months, appraisal will be processed where based on the performance metrics, salary of employees will be hiked Ø  Productivity Tests: Quality assurance procedures will be measured by feedback from clients specifically for customer support, sales and service department Ø  360-Degree feedback: Training modules will be prepared for managers, supervisors and employees to provide input about colleagues and new objectives
Responsibility	HR Manager, Senior HR Executive, Training specialist
KPI	SMART Specific: Measuring increase in employee performance Measure: Increase in customer satisfaction and retention Attain: Can be measured through reports using MS Excel and recorded Relevant: Increase in employee performance will increase revenue Timely: Within first 12 months
Differing Values and Interest in Conflict Management	Objective	1.      Encourage individuals to work in diverse group 2.      Create organizational decisions based on objective criteria
Implementation Strategy	Ø  Encouragement: Each of the department such as sales, support, finance, marketing and operation will consist of diverse range of candidates and varying values will be settled during team forming stage Ø  Decisions: Employees will be driven by objectives and collective performance from all departments will be unified and addressed
Responsibility	HR Manager, Operational Manager, Store Managers
KPI	SMART Specific: Managing workforce diversity for better organizational outcome Measure: Condensed differences among individuals regarding values of interest Attain: Easily attainable through team formation Relevant: Objective driven performance will lead to organizational stability Timely: Within 6 months (6th to 12th month)

Table 1: HRM Plan

(Source: Created by Author)

Conclusion

While concluding, it can be said that Cotton On will be having a great future ahead as it will be able to strengthen its human resource base. Considering the human resource plan, it can confirm that the organization will have best talented employee base with accurate performance measurement metrics. Moreover, the employees will be trained by reputed trainers, which will eventually lead to effective service delivery and product designed. Finally, it must be said that as the organization is expanding, it will face plenty of human resource issues but will need to train, award and motivate its employees for long run.

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