UNLOCKING HUMAN RESOURCE MANAGEMENT CHAPTER 14: 14: STRATEGIC HRM Case study: Employee relations at Tesco Tesco is the largest multiple retail grocery supermarket stores group in the country, with over a quarter of the grocery retail market It has a longstanding union recognition agreement with USDAW, the shop workers’ union, and the union claims density in stores of between 60−70 per cent In 1998 the company signed a partnership agreement with the Union of Shop, Distributive and Allied Workers (USDAW), although this is currently under review, and has just signed a partnership agreement with the administrative arm of USDAW (SATA) for Tesco’s 600 call centre employees In the mid 1990s Tesco began to see the benefits of trying to secure employee commitment through the process of involvement and communication, and established an Involvement Director who ensures compliance with legal developments in the employee relations field, including consultation and information It was also concerned that existing union/management arrangements were not conducive to getting the best from staff The changing external context and particularly the election of a Labour government committed to a partnership approach also influenced the company’s thinking in moving forward The company saw annual pay negotiations with USDAW as symptomatic of adversarial-style industrial relations and wished to move away from this and the annual ballot on acceptance/rejection of any deal struck In addition it was concerned at the lack of representation of those who were not members of USDAW, particularly as it was committed to consulting with all staff This said, relations with the union were good The union was perceived to have helped in gaining agreement to Sunday working in particular and even the company accepts that union density is over 50 per cent © Routledge UNLOCKING HUMAN RESOURCE MANAGEMENT In reviewing its relations with staff in the late 1990s, the full range of options was considered, including removing recognition, but Tesco decided to review and revise its relationship with USDAW and establish a long-term partnership agreement In late 1997, the parties reached agreement on ‘nine pillars of partnership’, these are as follows: • Representation − all staff have the opportunity to put views to their elected representative on a staff forum The forum is intended to be ‘challenging but not confrontational’ • Training − reps receive training in industrial relations ‘best practice’, employment legislation, company culture and values and Tesco’s terms and conditions They also receive additional training in personal skills • Consultation − the company has the right to make decisions about the business, with the union having a ‘say’ in managing the impact of change Joint areas for consultation include health and safety, acquisitions/redundancies/TUPE, company performance, competitor activity, staff/customer research, pensions, discipline and grievance procedures • Understanding issues − encouragement to raise issues, for company to listen and act where appropriate • Communication − to provide regular information about developments in the business • Business-focused − Acknowledging the importance of change for business performance Union involvement seen as increasing its understanding of the role and management of change • External influence − promotion by USDAW and Tesco of the company and of retailing as a career for people • Values and culture − these need to underpin the partnership and work together to meet the needs of Tesco staff and customers © Routledge UNLOCKING HUMAN RESOURCE MANAGEMENT • Conscience − social responsibility of the company and role of union and individual to help ensure the company lives up to its values and culture The partnership agreement itself is underpinned by a new consultation and communications framework that runs from store level to national level through what are termed forums At store level, elected representatives (not necessarily union members) are consulted on how changes are to be made in the stores − the changes themselves are made by management These meet every three months and are seen as a major development, run by ‘staff for staff’, permitting all staff to be represented Above store level the indirect forum is supported by regional forums (one for each of the three Tesco regions), with elected representatives meeting with regional managers and the union’s divisional officer and the area organiser The Regional Forum meets three times a year and covers issues raised in the staff forum and consults on National Forum issues The National Forum meets twice a year, with nine elected members, all of whom are union members, plus the union’s national officer, a divisional officer and an area organiser and they meet with the retail managing director, and the retail HR director The key function of the national forum is to negotiate pay and conditions but it also engages in consultation about major company changes, including corporate policy matters − a fusing of two areas that only operates at national level In the event that the National Forum cannot resolve an issue, it can refer it for consideration by a group comprising the USDAW general secretary and deputy general secretary, the Tesco HR director and the retail operations director There is also a facility for ACAS to conciliate where this is deemed appropriate It should be noted that outside the stores and particularly in the area of distribution the experience has been rather different The culture in the warehouse environment is very different, more adversarial, younger and predominantly male The response to information provision was more guarded and sceptical about the extent to which they were being given a real chance to participate and shape events The basic lack of trust here required a different © Routledge UNLOCKING HUMAN RESOURCE MANAGEMENT approach, more emphasis on training and problem-solving techniques (CIPD, 2003) In addition, direct involvement at store level operates through a separate team briefing arrangement (known as ‘Team 5’) on a weekly basis where messages on the corporate business, store business and department business are dealt with through these arrangements There is also a staff suggestion scheme that operates at the store level and proposals referred to 'rapid-action teams' to take forward if necessary © Routledge