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Case Study of Contemporary Issues in Human Resources Management

Contemporary Issues in Strategic Human Resources Management case study
Words: 2,000 words
Your Wine Co case study report: (The case details is in the following page, please scroll down)
You have asked your staff and fellow directors to give you their thoughts on issues you should address in your role. You will need to prepare a report addressing the following requirements.

Your first task, after reviewing these memos, is to write yourself a performance plan, prioritising the things you should be doing in your first year of appointment, and justifying why these are the important things for you to be doing. You can rank some priorities equally if you wish.
Your second task is to (a) identify where you think this firm presently sits in terms of competitive advantage through its HRM; (b) identify where it might be able to develop competitive advantages in the future; and (c) how you could most help to achieve

Assessment marking criteria:

The key issues for the organisation are identified
Analysis and synthesis of relevant strategic management and strategic HRM literatures.
Ideas and assertions substantiated through use of high quality reference material and key academic perspectives/views have been used
Explicit linking of the literature to addressing the issues
Appropriate (and practicable) recommendations and strategy are proposed
Appropriate Harvard style referencing (in-text and list of references)
Clear and comprehensive written style (spelling, grammar, syntax etc.)

A good quality report is likely to use at least 20 high quality academic sources (e.g., peer reviewed journal articles, edited book chapters, university or reputable institute whitepapers…)
Writing format:
Report Structure:
Title page (Your name, student number, and the topic title. Contents page not required.)
Executive summary (150-200 words)
In your introduction you outline what you are going to do. An introduction needs to outline the purpose, context, background rationale. You need to ensure you identify issues specifically related to what you have been asked to cover.
The body of your report
What we are interested in is your capacity to synthesise, and communicate well researched analysis of the issues at play for Wine Co. Your report will need to integrate suitable academic quality literature to support your observations and assertions.
This where you write what you have concluded based only on your research – this is where you can base your opinion on your research and express an opinion. The conclusion is not a summary.
References: Harvard referencing please.
Font and spacing: Times New Romans or Arial 12 font.
Case study: Wine Co
The company and its background: This is a case about a retail chain employing 3150 staff (FTE), engaged in the wine trade, and presently owned by a large private- equity firm. Organic and biodynamic wines are something of a specialty for the firm but it is actually very strong across the board in wine, having built up an extensive network of suppliers over the last 30 years. The chain has a head office, where 350 staff are located, and owns two warehouses and a mix of leased and owned shops in prime locations for retail traffic. It sells wines, both in-store and on-line, from 15 wine-making countries. Sales have been stagnant because of the long recession and high household debt levels, but are now picking up.
The chain is breaking even because of recent efforts to reduce costs but is not presently profitable. It was bought two years ago from the family of the CEO, Jack Hodgkins, in a highly leveraged deal (the private equity firm paid cash but borrowed 70% of the money to do so). A condition of the sale was that Jack would remain as CEO for five years and was restrained from competing against the firm for another five years. Jack is something of a ‘retailing god’ and the private-equity owners, who have stakes in 25 different companies, have no experience in the wine trade. Jack is paid well in his 5-year contract and is now a very wealthy man because of the sale, as are his children, who benefit from his family trust, and his ex-wife.
Your position and background: You are the newly appointed HR Director, reporting to Jack. The organisation also has a Director of Sales and Marketing, who controls the on-line sales function (located at head office) and the store managers through three regional sales managers, a Director of Purchasing and Supply Chain, and a Director of Finance and Information. Along with you, the other three directors report to the CEO and form the senior management team. The HR function is centralised because no store is big enough to have its own HR specialists. It is not a big HR department because a lot hangs on how the store managers, who are critical to the operation, manage people. The store employees they employ are predominately casual workers although there are some permanent part-timers, who, like the permanent branch managers, are more highly valued. Senior appointments, as in your case, are handled by the CEO working with an external HR consultant. Your predecessor took early retirement 3 months ago and the Finance Director has been the acting Head of the HR Department. You are an HR professional of 15 years standing and have a Master’s degree in organisational psychology.
You were, in fact, made redundant from your last role (as no. 2 in the HR department of a major fashion chain) because of the global financial crisis and were glad of a chance at another top job. You are pleased to have your first HR Director role. Once you have one of these, others will follow. Three people report directly to you and another 8 report to them.
Your staff:
Frances Smith: your head of employee training, holds a degree in Marketing, 10 years with the chain in various head office roles, including 8 in training.
Janice Sutherland: recruitment manager, 15 years’ experience with the chain, including 9 years as a payroll clerk in the finance department, part-qualified in accounting.
Marie de Lucas: your PA, secretarial qualifications, 5 years with the chain, all in clerical roles in head office.
Initial issues for you to think about

As you know, we were forced to take action to reduce overheads last year but I am concerned about the morale in the head office after the 20% retrenchment of HO staff that we carried It was a huge wrench for me. I knew everyone personally and it really went against the grain to lay them off. I know this happened before your time but what do you think we can do about the lingering feelings?


Our owners say that we lack a good pay-for-performance system for senior executives (i.e. me and my direct reports, including yourself). They want a specific at-risk component rather than a system of salaries without contingent And they want it all linked to the ROI goal they have for us. We do have our branch managers on a bonus system (up to 20% of their pay) but I’ve never been comfortable with that at higher levels because we try to work as a team and take collective responsibility. I aim to make sure all senior executives are paid at or above the median in the annual salary survey. However, the private-equity CEO, Simon, whom you met over that dinner I hosted during your recruitment, tells me he is getting tired of my ‘procrastination’ on this one. Drawing on your experience, how should we play this?


As mentioned, I will need you to keep a strict eye on your cost There’s no reason why you shouldn’t start new projects to improve things. We hired you for your experience in retail, and I want to take full advantage of that, but everything you do will need to be cost neutral (or, at the least, cost-neutral overall). By the way, I know the union is looking for a deal and I have had them in for drinks. We have never been unionised and I am not very keen. I have always looked after our people. It’s not just the money, we do pay the going rate in every centre, and everyone gets the staff discount after 6 months with us, which is very valuable if you’re a drinker. This is pretty damn good but working for me is like being part of my family. I guess that’s taken a bit of a beating because of the lay- offs, but we restricted those to head office, and I do want to re-establish that family feeling.

Thoughts on key HR issues
As you know, we run induction training (sales techniques, financial processing, stock handling) and advanced training courses for sales staff (mostly about product knowledge but a bit of sales psychology and management training, too). As mentioned to you the other day, we are running flat out simply to stand still. There is currently 25% labour turnover per annum in the stores among our core staff (the managers and permanent part-timers) and 50% among the casuals. We strongly feel that the training function within the HR department should be given more staff. The store managers are continually telling us we are not keeping up with their needs and that this threatens customer service.
Future priorities in the HR Department

Recruitment is operating I am working closely with the store managers. All our jobs are on the best websites and applications are acknowledged the same day. The average period from application to appointment is 9 days. This is very good, I’m told, in terms of benchmarking. So you can be assured that this part of the HR operation is running very smoothly.


Our own website is now really We have a clear statement of our ‘employment value proposition’, explaining what the company stands for and how it is fun to work in the wine trade. The visuals are excellent (well, wine districts and wine makers are very photogenic!). My HR friends at other firms are envious of our on-line impact. They tell me our website really looks like ‘best practice’ in the industry.


I do wonder about the skills of the store managers, We have heaps of candidates at the moment. We screen their cvs at Head Office (and you can imagine how awful some of them are) and then link the store managers with our chosen short-list. They then interview them, picking the ones they want. I don’t interview anyone, so they can only blame themselves if they don’t get it right.

Personnel issues
As you know from our discussions over coffee, we are currently sourcing wine from 15 countries. We have good supply agreements in most of them with good margins, and suppliers who know we must have the quantities we want when we want them at a price that will work for us. Some deals are direct with wine makers, others through major supply houses. However, I worry about the biggest contract we have in Australia. We have to offer well-priced ‘New World’ wines and the Australians are key to this but we are under-performing with the most important of their brands. I would like to terminate their contract and move to another supplier but Jack disagrees. He is actually a longstanding friend of the owner of the Australian company and they have holidays together in Bali every year. Susan is going along now, too, by the way.
HR stuff

As you know, we only have a small team in HO sales and marketing and we don’t have many problems but I am really worried about the Jack was kind enough to see that our part of HO needed to be shielded from the wretched redundancies: well, he knows about selling! I thought it was only fair that supply chain and finance took the brunt of it.


I do, however, need to have your training staff ‘on-call’ for branch Our branches are regularly being visited by mystery shoppers (including Jack and me) and HR staff are important in helping us ensure staff greet and treat customers well. My branch managers have their performance bonuses based on margin contribution per branch. Well, as you can imagine, they have been getting nothing for a while and this means we are now losing good managers because they are getting a chance to move.


Oh, I should note, we haven’t received your response to the cocktail function on the 18th of next month after I’m back from I have ordered that case of reds from the Rhone valley that you mentioned you liked ….

Personnel issues in the future

As you know, I’m retiring in 5 months and there’s the issue of my Not wanting to stick my oar in where it’s not wanted but I do think I should be replaced from within rather than from without. This is not a criticism of your appointment, by the way, but I do think people need to see internal opportunities for development after the retrenchment. But, whatever I think, there are a couple of top people left in my department and I hope one of them will get the job. If you have any influence over this, I think it would help.


The union didn’t know who was taking up your job and wrote to Jack two months ago saying they now have 402 members in the chain and want to meet to discuss negotiating a collective He had them in for drinks and then passed it on to me, while saying we were waiting for a new HR person. I told them last week when they rang to see what was happening that you would be in touch but had just arrived. As you know, we are all presently employed on individual employment contracts. We pay the going rate in each part of the country and the discounts for staff are good. Obviously, we have the store managers on salaries that reflect their experience and they get a bonus when their store is profitable. Each store’s profitability is monitored weekly, monthly and annually. I think the union has got hold of a few of our casual workers and revved them up. They see us as a ‘(so-and-so) private equity company’ now, exploiting the little people, not a family business. They know all about the private-equity people, and they think we are now a good target for a campaign.


From: Marie, PA to the HR Director To: incoming HR Director

Hey, welcome aboard! Look, I really appreciated our first chat over I was really impressed because you are the first person who has recognised that I could do more in HR than simply make the coffee, find the forms and run the diary appointments. I really want to grow in the HR area, which is my passion.


Now, as we were discussing the other day, the case against Susan for constructive dismissal of Karl, one of her regional managers, goes to the tribunal next I have been liaising with Karl’s lawyer. Susan really spat her dummy after the conciliation, which she said was a farce. She tells me she doesn’t want to go to the next hearing: it’s all one-sided. I heard her talking it over with Jack in the cafeteria the other day and he was really sympathising with her. He has had a low view of lawyers since his divorce settlement. Jack was also scathing about the union secretary and wondering why on earth we have to bother with them: ‘they are just trying it on’. He also says Simon doesn’t give a **## what we do with the unions: ‘just get back to profitability’.


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