The Role of Human Resources Revision Notes for HSC SSCE Business Studies

The Role of Human Resources

Introduction to Kathmandu's HR approach

Kathmandu is an outdoor adventure brand with a clear core purpose: to inspire and enable people to live their dreams of travel and adventure. The company recognises that its workforce is central to achieving business success. Human resources at Kathmandu focuses on creating opportunities for employees to develop skills and pursue their aspirations, which forms the foundation of the company's HR management strategy.

infoNote

Kathmandu's approach demonstrates how HR strategy can be directly aligned with a company's core mission, making employee development integral to achieving business objectives.

The strategic role of HR at Kathmandu

Human resource management (HRM) at Kathmandu plays a critical role in connecting individual employees to broader organisational goals. The HR team works to bridge the gap between individual performance and company-wide achievement through strategic planning and implementation.

This strategic approach involves:

Establishing lasting connections between Kathmandu's purpose and objectives through strong team relationships
Aligning HR policies, procedures, programmes and services with corporate goals
Supporting the company's five-year Best for the World sustainability plan

chatImportant

The Best for the World Plan: Five Key Stakeholder Areas

Kathmandu's sustainability plan focuses on balancing the needs of multiple stakeholder groups:

Governance — ensuring effective leadership and decision-making
Customers — delivering value and quality service
Community — contributing positively to society
Environment — minimising ecological impact
Workers — prioritising employee wellbeing and development

Management recognises that workers are a crucial stakeholder group, particularly after they demonstrated resilience, flexibility, commitment and passion during challenging periods such as COVID-19.

HR goals and targets

Kathmandu's management has set ambitious targets to strengthen the role of human resources:

$100\%$ of team members should embody the company purpose and values
Achieve top quartile ranking for employee engagement as a leader in diversity and inclusion
Ensure staff access to programmes aligned with company purpose

These targets demonstrate management's commitment to creating a workforce that is fully engaged and aligned with organisational values.

Employee development initiatives

Gear Up Curriculum

The Gear Up Curriculum represents a strategic approach to workforce capability development. This initiative supports core skills and competencies that facilitate team success and aligns with the company's 'Next Level' business strategy.

infoNote

Key Competencies Developed Through the Curriculum

The Gear Up Curriculum focuses on building three critical competency areas:

Leadership skills — empowering employees to guide and influence others
Influencing skills — enabling staff to effectively communicate and persuade
Critical thinking — developing analytical and problem-solving abilities

These competencies are not developed in isolation but are integrated into employees' daily work and career progression.

Individual development plans

Team members collaborate with managers to create individual development plans (IDPs). These plans identify specific development objectives for each employee, ensuring that learning and development activities are organised strategically rather than ad hoc. This personalised approach allows HR to align individual growth with organisational needs.

Interdependence with other business functions

Human resource management does not operate in isolation at Kathmandu. Instead, it functions as an integral component that works cooperatively with all key functional areas to maintain company success.

Organisational structure

The General Manager of Human Resources holds equal standing with general managers responsible for:

Retail stores and operations
Supply chain management
Marketing (international and online)
Finance
Product and merchandising

Each general manager bears responsibility for ensuring strategic goals are met. Their remuneration is linked to their ability to influence the achievement of strategic objectives and business plans that enhance shareholder value.

infoNote

The equal status of the HR General Manager within the organisational structure demonstrates that human resources is viewed as a strategic function rather than simply an administrative support service.

The remuneration committee

Kathmandu has established a committee with specific HR-related responsibilities:

Ensuring the remuneration programme aligns with the company's business plan
Verifying that compensation supports shareholder and customer value
Overseeing development and application of HR strategy
Confirming that the remuneration framework motivates high performance across all employee levels

This structure demonstrates how HR strategy integrates with financial planning, performance management and overall business strategy.

Outsourcing and supply chain HR management

Kathmandu outsources production globally to China ( $80\%$ of production), Vietnam and Taiwan. While this decision creates cost advantages, it also presents significant HR challenges, particularly regarding worker rights and conditions in supplier countries.

Management's approach to supply chain workers

Management has identified human rights as the single most important priority for the brand. This commitment extends beyond direct employees to the more than $50,000$ people involved in delivering Kathmandu products through its $99$ factories worldwide.

chatImportant

Turning Challenges into Competitive Advantage

The company has transformed potential staffing difficulties into a competitive advantage by prioritising the wellbeing of supply chain workers. This approach has earned stakeholder support and strengthened the brand's reputation, demonstrating that ethical HR practices can create business value.

Policy updates and initiatives

Kathmandu has updated its Code of Conduct and Terms of Trade policies to:

Emphasise performance and partnership over policing and compliance
Increase transparency in supplier relationships
Build sustainable partnerships with suppliers
Protect human rights and improve worker conditions

The company has employed two full-time workers dedicated to ensuring better working conditions within the supply chain. Additionally, Kathmandu has established closer relationships with outdoor apparel competitors to share best practices.

Freedom of association and collective bargaining

Despite the challenges of operating in China, where individual worker rights and independent unions have limited influence, Kathmandu supports freedom of association and collective bargaining. The company's corporate social responsibility team actively works to protect these rights and improve conditions for workers.

Case study: TGI factory in Vietnam

Management visited supplier factories in Vietnam to monitor progress of new initiatives. The TGI factory demonstrates how Kathmandu's HR approach extends to contracted workers through four key programmes:

lightbulbExample

Programme 1: Mindset Training

Kathmandu implemented a comprehensive mindset training programme at the TGI factory with measurable outcomes:

$700$ workers received training in strategies for organising daily lives and developing self-confidence
Workers became more positive about promotion opportunities rather than refusing them
Skills helped workers overcome personal obstacles
Improved collaboration at work and home

Impact: The training changed workers' attitudes towards career advancement, helping them see opportunities rather than obstacles. This demonstrates how investment in employee development can shift workplace culture and improve retention.

lightbulbExample

Programme 2: Train the Trainers

Following the tragic deaths of $39$ Vietnamese nationals in a refrigerated truck in the United Kingdom, Kathmandu partnered with a local non-government organisation (NGO) to deliver modern slavery prevention training.

Training Components:

Modern slavery prevention strategies
Circumstances that increase vulnerability to exploitation
Child abuse prevention
Sexual exploitation awareness
Protecting children from online predators

Significance: This initiative demonstrates Kathmandu's commitment to protecting workers from serious exploitation risks, going beyond legal requirements to address emerging threats.

lightbulbExample

Programme 3: Debt Bondage Prevention

Debt bondage occurs when people sell their labour in exchange for a loan (often for family housing or weddings) but find themselves unable to repay the loan or escape the arrangement. While illegal, local enforcement in Vietnam is rare, and the debt can become crippling.

Kathmandu's Response:

Created interest-free loans for employees on a case-by-case basis
Helped workers avoid exploitative lending arrangements
Provided financial support without trapping workers in debt cycles

Impact: By offering ethical alternatives to predatory lending, Kathmandu protects employees from financial exploitation while building loyalty and trust.

lightbulbExample

Programme 4: Golden Heart Charity

Kathmandu established the Golden Heart charity to provide financial assistance to employees facing hardship.

Programme Features:

Grants ranging from $500 to $10,000
Company contribution of $30,000 to support the fund
Case-by-case assessment of employee needs

Purpose: This initiative demonstrates the company's commitment to employee wellbeing beyond standard employment conditions, providing a safety net for workers experiencing unexpected hardship.

Exam focus: Analysing the role of HR

When analysing the role of human resources at Kathmandu, consider these critical dimensions:

chatImportant

Integration with Business Strategy

HR at Kathmandu is not a standalone function but is integrated with overall business strategy through the Best for the World plan and Next Level strategy. This demonstrates strategic HRM rather than merely administrative personnel management.

chatImportant

Stakeholder Focus

The company recognises multiple stakeholder groups, particularly workers both within the company and throughout the supply chain. This extended stakeholder approach expands HR responsibilities beyond direct employees to include supply chain workers.

infoNote

Strategic Approach to Development

Rather than simply administering personnel functions, HR takes a strategic approach by developing programmes like the Gear Up Curriculum that align with long-term business goals. The use of Individual Development Plans (IDPs) ensures that employee growth is strategically planned rather than ad hoc.

chatImportant

Corporate Social Responsibility

The company extends its HR responsibilities beyond legal requirements to address ethical issues like modern slavery and debt bondage in the supply chain. This demonstrates how HR can be a vehicle for corporate social responsibility initiatives.

infoNote

Functional Interdependence

HR works collaboratively with other business functions, with the HR general manager holding equal status to other functional managers. This structure ensures that HR considerations are integrated into all major business decisions rather than being treated as an afterthought.

Remember!

bookmarkSummary

Key Points to Remember:

Human resource management at Kathmandu focuses on bridging the gap between individual employees and company goals through strategic planning
The Best for the World plan identifies workers as one of five key stakeholder areas alongside governance, customers, community and environment
The Gear Up Curriculum develops key competencies including leadership, influencing skills and critical thinking through individual development plans
HR demonstrates interdependence with other business functions, with the general manager of HR holding equal status to other functional area managers
Outsourcing production creates HR challenges, but Kathmandu has turned this into a competitive advantage by prioritising human rights in the supply chain
The company supports freedom of association and collective bargaining even in challenging environments like China
Supply chain initiatives at factories like TGI include mindset training, modern slavery prevention, debt bondage assistance and the Golden Heart charity
More than $50,000$ people across $99$ factories worldwide are involved in delivering Kathmandu products, demonstrating the extensive reach of HR responsibilities

The Role of Human Resources (HSC SSCE Business Studies): Revision Notes