In today’s world of cut-throat competition and continued financial difficulties, businesses have learned to adopt new strategies to satisfy consumer demands and at the same time achieve their objectives. In the case study, Aldi, a grocery retailer in the United States, seems to be getting it right. The company has a unique human resource development strategy that aims at maximizing performance and meeting unique customer unique demands. Aldi is known to be innovative in the retail industry. In 2008, at the time of economic recession in the United States, the company broke its tradition of selling branded products and instead, resorted to retailing its own packaged, in-house brands, or generic versions of various products sold under specific supermarket brands (Kapferer 2008). This paper examines how Aldi uses various principles such as organizational learning and development to develop the company’s human resource and harness production.
Training Programs at Aldi
The training programs at Aldi are divided into two categories: there are on-the-job training programs and off-the-job training programs. Both of them are meant to provide employees with the required skills and competencies for their respective jobs and for the future roles that they may need to fill in the company. Off-the-job training aims at creating and acquiring knowledge as an asset or rather investment for the company. This shows that the company appreciates the importance of its employees in its business strategy and is willing to invest in their training to ensure efficiency and high levels of expected service delivery (Amstrong, 2009).
The training programs offered off the job include courses on recruitment, interviewing and selection, performance reviews (appraisals), employment law, influencing skills, , and Aldi Management System which is basically concerned with performance management. Off-the-job training is usually based on an on-going analysis of the company’s performance on all relevant fronts and on the future projections of the business. Like at the moment, the company is undergoing rapid growth and expansion, hence the need to hire about 4,000 more personnel within the next 12 months. This means that there will be more recruitments and promotions in the company which results from more training programs on recruitment, interviewing and selection processes, employment law, influencing skills and Aldi Management System. All these are meant to create more managers within the company’s personnel and create space for the new recruits at various entry levels (Armstrong 2009).
All new recruits are taken through a comprehensive structured training plan that is expected to fasten their learning about the philosophy of Aldi and what the organization expects of them. This enables the new employees to quickly fit in to the large Aldi family. These recruits are given the type of training that is appropriate to their specific entry level roles, thus it may take place in one of the Aldi stores or at an Aldi regional office, as deemed necessary.
On-the-job training basically involves knowledge sharing and mentoring. It ideally takes place after the recruitment process. These activities provide employees with practical knowledge on how to deal with real tasks and challenges as they face them in the work-place (Argyris 1999). These programs usually include coaching, job rotation, ‘sitting next to Nellie’, and mentoring. Store managers act as coaches and are charged with training new recruits on-the-job so as to get them well-acquainted with their responsibilities and the company’s expectations of them. The employees are then taken through a job rotation exercise where they are expected to perform tasks required of them in whichever department they have been placed. This is done in order to prepare them for an eventual transfer and to familiarize them with the workings of the company’s other departments.
‘Sitting next to Nellie’ is a program that requires the novices to work alongside the experts. At Aldi, this is done to provide real time study sessions for their recruits where they watch and learn, as opposed to reading an instruction manual. In organizational learning, this creates a system of knowledge sharing that creates more experts within the organization without cutting on working hours or having to pay for the lessons from an external expert. The company not only identifies its personnel as knowledgeable people, but it also utilizes their knowledge to develop them individually and consequently develop the company as a whole. Recognition of the abilities of the associates also makes them feel appreciated and motivates them to continue doing their best on the job.
Organizational Development at Aldi
Aldi is basically a learning organization that invests in actively creating, capturing, mobilizing, and transferring knowledge that can enable it to adapt to the ever-changing grocery retail business environment. One of its organizational development objectives is to improve its capacity so as to be able to have improved interpersonal relationships (great team spirit), effective communication systems (knowledge sharing), effective decision making, and more appropriate or practical leadership styles. The company creates an exciting and challenging working environment where all employees have a chance to be promoted based on their commitment and individual career development. The company pays attention to and values the needs of its employees, so it offers competitive pay packages which are so far the best in the industry. This is coupled with the excellent opportunities for career advancement and experience in a number of fields within the company ranging from store operations and management to logistics and financial planning at the regional offices.
Providing opportunities for employees to make decisions regarding their work enables best decision-making processes, as efficient decisions are usually made based on the source of information as opposed to a board room or a manager’s office. This empowers the concerned employees and causes them to own the decision. Thus they commit themselves to successfully effecting it.
The company not only seeks to improve its own potential as a business, but it also seeks to develop its employees’ skills. The courses offered in the training programs are recognized throughout the industry, and this gives the employees a lot of chances in the job market. While this could pose a disadvantage to the company, the latter still takes the risk in order to satisfy its personnel thereby guaranteeing their job satisfaction and increasing their productivity in the work place.
By focusing on improvement of the long term capabilities of its workforce, the company ensures that it is well set for the future. It increases the number of employees through yearly apprenticeship programs while continuously training the employees for managerial positions and interviewing others for its various employee entry levels. This not only ensures that it has enough staff to handle the ever-increasing customer base, but it also contributes to the situation when the staff is motivated to work hard by the individual growth opportunities that are presented due to the organizational growth.
Not only does the company not only seek to prepare itself for increased future market demands, but it also wants to prepare its personnel for increased job market demands. This ensures that the employees grow with the company through impressive employee retention statistics. The company has a development program which provides its employees with transferable qualifications that are of great benefit not only for the individuals but also for the business. These qualifications ensure efficiency in operations, and highly skilled workforce is the pride of any organization. It gives the workers a much greater value in the job market.
To support individual development, the company, through its managers, assists the employees in setting realistic and relevant personal goals. These goals are identified during the appraisal process when a particular employee sits down with their line manager to evaluate their past and current performance, to consider what skills are needed for their future progress and to set goals for the future, both short-term and long-term. This sometimes involves identifying and recommending further training or development opportunities for the employee. The company thus improves its organizational immunity to industry challenges by empowering its employees with relevant knowledge and capacity to deal with the ensuing challenges. It also positions its workforce in such a way that they are able to perform exceptionally well now and in the future through their frequent refresher courses and upgrading systems. This ensures an all-round organizational growth that is inclusive of all departments.
Strategic Factors Influencing Training and Development Programs in Aldi
Aldi’s training and development programs for its employees are paramount to the company’s business strategy. Their training is meant not only to increase the company’s business efficiency but also to motivate the employees by increasing their job satisfaction and competitiveness in the job market even at the risk of the company’s future. Training is basically focused on making the company more efficient and effective in the short term, while employee development focuses more on creating and reinforcing the long-term capabilities of the members of the staff (Payne 1998). The case study shows how Aldi’s training and development programs are tailored to ensure that the company’s employees have the relevant skills and competencies required by business both at present and in the future with looming company expansion and business sector growth.
In order to meet its labor requirement today and in the future, the company has taken up a workforce planning process which is meant to find out how the business can meet its labor requirements. The process has enabled Aldi to forecast its future personnel needs precisely to avoid emergency recruitments in the future. It has enabled the company to plan how many workers will be required and the particular skills that those workers have to possess. This information has enabled the company to design relevant training and development programs that will enable it to satisfy these needs (Jones & Seraphim 2006).
Currently, the company’s future needs are based on its ever-growing customer base and increasing demands of the grocery retail business. It currently needs to go up to 4,000 new recruits in as soon as 12 months. This has caused it to drastically step up its recruitment and training programs. Also, the grocery retail business is currently going through global advancement as competition is increasing and more retail businesses are differentiating their products while others are going into specialization in grocery (Treacy & Wiersema 1993). The company therefore has to train more of its employees specifically on grocery retailing as it seeks to capture more of the grocery retail market share. The company has only twelve months to create or acquire competent personnel both as new recruits and in-house promotions in order to serve the new store openings and to provide the additional staffing requirements of the existing stores that are being overwhelmed by the exceptional sales growth experienced currently.
The Recruitment and Selection Process for New Staff
Aldi employs an open Human Resource Management system. This implies that the skills and abilities possessed by employees are treated as environmental inputs, as defined by Wright and Snell. This means that employees are important to the overall organizational performance. When recruiting new members of staff, the company’s managers carefully consider what skills and abilities the candidates bring to the organization and how these will impact their productivity levels (Keller 1998). When considering candidates for various levels, their skills and abilities are the main determinants of which entry levels they will qualify for, if they do. This is because the recruitment plus selection is a process under human resource management that aims to create an environment which will be favorable for the organization’s overall development. The recruits should therefore possess skills and abilities that are relevant to and required by the company.
In an open HRM system, employee behaviors are considered as throughputs. These are necessary factors of the smooth running of the company operations and peaceful co-existence of the organization’s workforce. Behaviors include interpersonal relations, team spirit and employee attitude, and work outlook. All of these play a big role in how the staff members interact among themselves, and have an impact on their attitude towards their work and the management. During the recruitment and assessment process, managers at Aldi stores are careful to evaluate the candidates so as to evaluate them and ensure that they are team players and are willing to learn and work together with others. This is in line with the fact that teams are the building blocks of organizational learning, thus the need to build cohesive teams within the organization (Porter 1998).
The HRM system employed by Aldi also considers employee satisfaction as an output alongside organizational performance. This means that other than having the right attitude and the required skills and abilities, a candidate should be willing to meet the job requirements stated in his or her job description. They should furthermore be willing to work hard and give their best in order to grow together with their organization (Robbins & Hunsaker 2003). Other than this, the candidates are required to be content with their remuneration and initial benefits, as these are expected to grow as they advance in the company. Managers are therefore more likely to recruit candidates who show willingness to work efficiently in the company’s prevailing environment and work towards career advancement. Thus, the major elements of the recruitment and selection process at Aldi are employees’ skills and abilities, their behaviors in terms of social attitudes, and their requirements for job satisfaction.
Interview and Assessment
The candidates are identified via an interview and assessment process, where the managers have been trained to identify whether the potential employees possess the skills and competencies indispensable for the job. In these interviews and assessment processes, managers are careful to select keen, ambitious, and business-oriented persons who are friendly and willing to learn. It is during this process that an individual is considered for any of the available entry points based on his or her qualifications (Argote 1999).
After passing the interview and assessment, Aldi expects the new workers to contribute to the business immediately. The novices can also receive further training and consequently promote their careers while working in the company. Aldi’s entry levels ensure that all qualified recruits can get a place as store assistants, apprentices, assistant store managers, deputy managers, trainee store managers or even graduate trainee area managers. In recruiting a large number of its directors from within the company, Aldi ensures that its new and junior staff members are constantly challenged and motivated to work harder and eventually qualify for promotion. It also ensures that it gets the best management team since the new directors are well-versed with the operations of the company. This policy is in line with the company’s objective of improving its capacity to successfully handle both internal and external functions. Promoting from within the task force ensures that the knowledge previously created or acquired is used for the benefit of the company. It also reduces time and resources that would otherwise be wasted recruiting and training new managers and directors (Esterby-Smith, Aruajo & Burgoyne 1999). Furthermore, the company has a number of development options that enable its apprentices to choose working in various departments for the purposes of obtaining various qualifications and acquiring various experiences, thus placing them as competitive members of staff upon qualification. They are then put up for promotion.
Aldi is a very competitive name in the grocery retail sector, and it attracts the best taskforce in the industry through its effective open human resource management system. The company builds itself from within and has development strategies that enable it not only to grow as an organization but also to encourage and support its employees to pursue career advancement and acquire additional skills that are relevant to the business. This is in order to have the best and most highly qualified team working in the company (Henry 2008). Despite the risk involved in having employees who are highly competitive in the job market, the company strives to groom its employees in a bid to achieve its objectives and both long-term and short-term goals. The company ensures that it gets the best of the best through its thorough recruitment and training processes that enable it to get highly competent employees at all times.