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Human resources (HR) plays a vital role in the running of any business. It is the glue that holds together, nurtures and takes care of an organisation’s best assets: its people. It is universally acknowledged as a fundamental component of a business’ mechanics, whether a company has a fully-formed in-house HR department or outsources its HR functions to an external provider.
Nevertheless it can be easy to get even the simplest HR functions very wrong, and when this happens these blunders can turn into catastrophic HR nightmares. These issues can be extremely sensitive for employees and cause disruption, distraction and dismay across the workplace. Here are some of the most prominent examples of bad HR practices that we have heard about over the years:
Fortnum & Mason
In December 2016, the London retailer known as ‘the Queen’s grocer’ caused controversy by asking its members of staff at its London Heathrow location to accept a reduction in their basic pay. The Fortnum & Mason bar at Heathrow’s terminal five automatically adds a 12.5 per cent service charge to its customers’ bills. Currently, this service charge is not shared with employees however Fortnum & Mason bosses have sought to introduce a system that counteracts this – but only if staff accept a cut in their basic pay first.
Understandably, the situation has attracted a great deal of scrutiny with the trade union Untie commenting that the actions demonstrated Fortnum & Mason’s “utter contempt” for its employees. We think this is a perfect example of a poorly-handled HR blunder. It’s understandable that businesses often have to seek ways to control their finances, but doing this by reducing employees’ basic pay is unethical. However, throughout times where businesses may be forced to put in place such systems, it’s imperative that this is communicated to staff in the most compliant and sensitive manner.
No stranger to controversy in the business world, back in 2013 Yahoo! raised eyebrows when it was revealed that the company had implemented a new employee ranking system. The policy allegedly forced managers to rank employees on a bell curve, subsequently firing those individuals who were at the low end. Implementing such a system creates bad morale in the workplace as well as negatively incentivising employees as the stakes are high for those who might not please their managers.
In our eyes, any system which creates negativity among employees is a poor HR practice, not to mention that such a ranking system also invites a number of inaccuracies, as the human element will introduce opinions and prejudices into the mix. Regular one-on-one sessions with senior members of staff, establishing clear goals and a progression plan is the most productive way to engage staff and monitor their performance.
In 2015, employees of Urban Outfitters were in up in arms when the clothing retailer’s parent company URBN asked salaried employees to volunteer their weekend time to work in the company’s fulfilment centre. The plea came at one of the busiest times of the year for the retailer – preparing for the festive season – and was presented as a team building activity. However, asking employees to work an unpaid six-hour shift picking and packing goes well beyond their contractual obligations, belittling the value of their time and also the effort they put into their contracted role.
Our advice to the company would be to consider how to better incentivise its staff and put in place real rewards and bonus schemes should it decide to ask its employees to work for free again in the future.
The world of HR can feel complex, however it is incredibly important to strike a balance between making decisions for your business and decisions for the welfare your employees. At the end of the day your employees are your business, and HR will always play a critical role in ensuring things run smoothly. So, avoid making HR blunders and put in place effective HR functions that will help keep your employees feeling positive and productive in the workplace.
“"We have worked with P3 for over 3 years and have found the service we have been given to be invaluable. As a growing organisation, the HR element was taking up more and more of the Board's time. HR are always present at our Board meetings and the time we have saved ourselves allowing this key business function to run smoothly, efficiently and as it should do has paid huge dividends for our growth and our staff retention. Our people and culture have not looked back since we made this decision. "”
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