ALDI is a global food retailer. Since opening its first store in 1913, Aldi has established itself as a reputable retailer operating in international markets including Germany, Australia and the U.S. Aldi has over 7,000 stores worldwide. What distinguishes Aldi from its competitors is its competitive pricing strategy without reducing the quality of its products. In fact, in some cases Aldi’s products are 30% cheaper than those offered by its competitors. Aldi can do this because the business operates so efficiently. (The Times Case Studies, 2011)
ALDI and HR
Aldi has a very flat organisational structure. In the UK it is split into 5 regions (there are 62 internationally); each region operates individually, only sharing the purchasing function. Each region has 5 departments, and there are only 3 levels between the Store Assistants and the Managing Director of the Region.
Noticeably, there is no IT, Marketing or HR function in the structure. IT and Marketing are both outsourced to third parties. IT are called on as and when needed by whichever department needs them at the time, whether it be till maintenance, or maintaining the logistics software package. Marketing is outsourced to a company in Atherstone, and their link in the organisation is the Trading function.
HR is stripped back within ALDI, and is headed by 2 HR Managers in the Store Operations Function. All area managers within ALDI are trained in HR, and deal with all personnel issues, from Recruitment, to performance management and Training and Development. The HR managers in Head Office purely focus on making sure the Area Managers are up to date with new legislation and policies. ALDI adopt a grandfather technique, where, store managers have little to do with HR. It is their job to focus on the store, and deal with staff rotas and minor issues. This way, store employees report to their line manager for operational issues, and the Area Manager for HR issues. The only HR issue not practised by Area Managers is Payroll, which falls into the Finance Function.
ALDI is extremely focused on productivity and efficiency, and because of this, the Neston Region in the UK is trialling using a HR Agency (Kinetic), to manage a major amount of its HR function. The agency takes care of Recruitment, Induction, Payroll, Development, Performance Management, and acts as a HR Manager for the agency staff within ALDI. ALDI intend to get to a point where 70% of store staff is through an agency, with exception to Store Managers, Assistant Managers, Deputies and Full Time Staff. This saves money as it takes a lot of responsibility off Area Managers, leaving them with more time to focus on operations.
According to Righeimer (Date Unknown, p. 4), most organizations view the department of Human Resources (HR) as an administrative function and ignore the need and opportunity to align it with its strategic plans. Aligning HR and strategic plans is an important endeavour for every organisation. Studies strongly support the alignment between strategies, HR, and performance and thus show the potential role HR can play in implementing strategy and developing an organisation’s competitive advantage.
How HR activities support the organisations strategy
Recruitment and Selection, Performance Management, and Training and Development are three HR activities that support the organisations strategy. (Hameed, 2011)
Recruitment and Selection
According to ALDI’s strategy (2012), “We want every ALDI employee to have a rewarding career, with opportunities to grow and develop, whether they work in our stores, distribution centres or management teams. We expect our people to be committed, hard-working and take ownership of their responsibilities. In return, we provide salaries that are considerably above the rest of the industry.” The recruitment and selection activity supports this by ensuring the right people are hired first time....