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Increasing employee engagement through HRM
PEOPLE
Introduction This case study looks at the methods adopted by Harrods’
Human Resources department to increase employee engagement.
Harrods is a brand that is recognised all over the world. Its This involved positively changing the organisation’s culture to
Knightsbridge store has 1 million square feet of selling space with enable the business to meet the needs of its employees whilst
over 330 different departments. Its global reputation and prestige also maintaining the company’s values.
is instilled through its brand values. Brand values represent what
an organisation stands for. Harrods values are – British; Luxury; Human Resource Management (HRM)
Service; Innovation and Sensation.
Human Resource Management is a process of valuing and
developing people at work. It covers all aspects of developing
Innovation employees, including three important steps:
1. Recruitment and selection - attracting suitable new employees.
Sensation British
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
Service Luxury with Harrods through identifying career progression opportunities.
In 2009 the MacLeod Report, ‘Engaging for Success’, was
This case study demonstrates the integral role that Harrods’ published which has been very influential in Human Resource
employees play in upholding these brand values. People are a vital Management. One of its major findings was to highlight how
resource of any organisation. In the retail industry, employees are businesses benefit by involving employees in all aspects of
the public face of the company. They are responsible for interacting decision making. This involvement is commonly referred to as
daily with a variety of stakeholders, for example, customers, senior employee engagement or participation. This prompted managers
managers and suppliers, to ensure the day-to-day running of the at Harrods to investigate its employee relations, in particular its
business. Effective communication is essential for creating an employee turnover.
environment where employees and customers are satisfied.
Harrods has been in business for over 160 years. It employs 4000
employees with an additional 3,500 agency and concession
employees. In 2010 Qatar Holdings purchased Harrods from
Mohamed Al-Fayed. The new owners are strongly committed to all
of Harrods’ employees. They recognise that engaged employees are
essential to the continuing success of the business. Such employees
are likely to be happy and consistently high performers who want to
progress their careers with Harrods. Managing employee
relationships is the role of the Human Resources department.
Curriculum topics covered: • Human Resource Management
• Organisational culture • Leadership styles • Development
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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.
Following 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 Communications and cultural change
an integral aspect of Harrods’ Human Resource Management
programme. The survey results were used to create strategic The changes mentioned before have resulted in Harrods
plans for change focused on improving employee engagement developing a people-focussed culture in order to better engage
and trust. The four main elements were: with its employees. The culture of an organisation is very powerful
• Changing organisational structure. Senior managers felt that and has been described as its DNA. It has also been summarised
the organisation was too hierarchical i.e. had too many layers. as ‘the way we do things around here’ and is created through
The new structure is flatter with employees taking on more shared values, attitudes, beliefs and norms. One of the reasons
responsibilities. This enables job enrichment, providing why Harrods is so successful today is that it gives its employees a
opportunities for an employee to take on further responsibilities voice for change. All employees are encouraged to give feedback
to enhance their job satisfaction. on every aspect of how Harrods operates. The opportunities for
• Changing leadership. Creating an environment where managers and employees to be engaged in sharing their views
employees are encouraged to make more decisions and ideas is summarised in the table below:
themselves. Senior managers create the business vision but
ground level employees are delegated more leadership Engagement method Description
responsibilities, for example, in dealing with customers. The Internal employee magazine ‘Your Harrods’ - a popular and
model employed is one of transformational leadership where creative magazine for employees
the vision is built at the top but everyone engages with the with a new starter list, interviews
vision through personal leadership. with key people, personal snapshots,
• Improved communications. Better communications inform all charity features, an Agony Aunt
employees about the strategies of the company. These outline column and interesting competitions.
the aims and direction of the business. They also inform
Morning briefing Informing shop floor teams about
employees about operational (day-to-day) plans which directly what is going on that day and the
affect their work. A radical improvement was to encourage latest sales statistics.
employees to inform management of their views.
• Living the brand values. Making sure that everyone Intranet Enables sharing of information with
understands and models the brand values. employees. Employees are able to
select which aspects they focus on
(rather than having information
pushed on them).
Quarterly employee forum A group made up of employee
volunteers. Enables employees to
present issues and contribute to
company strategy.
Other forms of employee ‘Bright Ideas’ scheme which
voice encourages employees to share
innovative ideas to further improve
Harrods.
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total enthusiasm for the role must have been spotted by
Harrods. At the time I was unsure about a new opportunity so I
didn’t push myself but Harrods nudged me in the right
direction and gave me a chance to succeed’.
• Mentoring and coaching. Mentors and coaches are people
who act as advisors and guides, usually to those less
experienced than themselves. Mentoring and coaching takes
place through structured feedback and advice as well as
through informal conversations. Line managers at Harrods are
encouraged to communicate targets and advice to employees
through face-to-face interactions. This might involve sitting
down in the restaurant, or in a more formal setting, to agree
The first employee survey highlighted that a difference existed objectives and to give advice about improvements and new
between the customer experience and the employee experience. ways of working. Acting as a coach helps the line managers to
Harrods tackled these issues as a matter of urgency. A priority develop their managerial skills, build relationships and reinforce
was the modernisation of the staff restaurant, providing an inviting trust at Harrods.
eating space with high quality, nutritionally balanced food. • Support networks. Managers meet regularly with other
managers to share ideas and issues. For example the Retail
The effectiveness of this approach is summed up by one employee, Managers meet once a month with the Head of Retail to share
Hayri Volkan, who is a Retail Manager. She says: ‘My views are insights and assess retail plans at both strategic and
definitely valued, I’m always asked my opinion on things – people operational levels.
who do the job are acknowledged as a good information source’.
Each of the processes outlined above provides Harrods’
Leadership employees, both managers and front-line staff, with the
confidence that they can make a difference and that their
Leadership is important in shaping the culture of an organisation. contributions are valued.
There are two opposite poles in terms of leadership, these are
autocratic and democratic. Autocratic leaders tell employees what
to do. On the other hand, democratic leaders encourage input
from employees, listen to their ideas and enable them to make
decisions. Both styles have their place, depending on
circumstances. For instance, in a crisis situation, such as a sharp
drop in sales, immediate action is needed. In such circumstances
an autocratic approach is required. However, when there is more
time available, a democratic approach is often favoured. Harrods’
leadership focus is at the democratic end of the spectrum.
Employees are listened to and their advice and ideas are used to
make continuous improvements. The culture is thus one of trust
and respect and is the key to Harrods’ employee engagement.
Benefits of Human Resource
Harrods’ management is committed to fully developing its people Management
so that employees, the business and its stakeholders are fully
satisfied. There are three main elements of the democratic Research into Human Resource Management indicates that the
leadership approach at Harrods which encourage the factors that really motivate employees are intrinsic ones which are
development of its employees: based on meeting the personal needs of an individual. Human
• Talent spotting. This involves identifying talented people who beings have a number of key psychological needs including:
can make important contributions to Harrods. Laura Gorse • The need to feel that you can do something well.
who works in the Learning and Development Department at • The need to be part of a group.
Harrods illustrates this: ‘I had been training new starters - my • The need for respect and encouragement from others.
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HARRODS STUDY 18/9/13 16:24 Page 5
www.harrods.com
Engaged employees are committed ones who help the
organisation to achieve its targets and to live its values. Harrods
recognise that this is a democratic process. Employees are not
just a key part of the visual representation of the organisation -
they are the organisation.
The engagement of employees is admirably reflected in the following
quote from Jennifer Glyn, a Creative Team Project Manager at
Harrods: ‘I like being part of a big brand, it is stable but exciting – I
feel pride coming in on a Monday Morning. I enjoy telling people
what I do and where I work’. Similarly Laura Gorse who works in
Learning and Development states: ‘I never dread coming in to work,
These needs are typically met from non-financial rewards, for I actually look forward to coming in – you don’t want to miss out on
example, by providing opportunities: what’s going on. The values come from what we do’.
• for promotion
• to make decisions Conclusion
• to contribute to a team
• to do a variety of tasks. Human Resource Management should be seen as a strategic
function of an organisation. It helps to build a competitive edge for
Harrods recognises these intrinsic needs and encourages job an organisation by positively engaging its employees. Key
rotation, job enlargement and job enrichment to provide career ingredients of effective Human Resource Management are having
development opportunities. Job rotation involves periodically in place an appropriate leadership style and effective two-way
changing jobs and work areas to develop new skills in different communications with employees. This creates an open and
areas of the business. Cross departmental experience is viewed honest environment where employees feel that their ideas are
as important for personal development. Harrods offers a range of being listened to and that they can make a contribution to
many different types of job opportunity including face-to-face decision making. Engaged employees are more likely to be proud
customer operations, merchandising, recording and reporting of to work for their organisation and therefore will believe in and live
sales and online customer communications. Job enlargement out the values of the organisation.
involves encouraging and supporting staff to take on new and
more challenging tasks. Job enrichment involves building existing
job roles by enabling employees to engage in a wider variety of
interesting tasks, for example, taking on some team leadership
responsibility and removing unnecessary supervision.
Having an informed and engaged workforce has resulted in many
tangible benefits. There have now been four employee surveys.
Each survey has seen a higher return from employees and an
improvement in the indicators of employee engagement.
Significantly, 91% of employees have stated in the most recent
survey that they are proud to work for Harrods and employee
turnover has halved in the last five years.
Exam-style questions
The ultimate proof of the success of an employee engagement
exercise is that it needs to be lived by employees. They need to
feel that the culture has changed and that they have played a part
in the improvements. Harrods places a high importance on brand
values so it is essential that these values are reflected in how
employees behave. Employees have to live up to the Harrods
brand because customers are aware of it and expect excellence.
Harrods | Increasing employee engagement through HRM
