Human resource management can best be described as the function of the organization
that focuses on recruitment, hiring, management, benefits, safety, motivation, training,
communication, and ultimately organizational development. A strong and healthy management
of human resources can be the difference between success and failure, being first in the industry
and always taking second place. In terms of the value of human resources and their management
Home Depot, Inc. currently seems to be providing the industry standard. That has not always
been the case.
The Wall Street Journal reported in April of 2008 the restructuring of Home Depot’s
human-resources department. The change eliminated about 1,000 jobs and affected over 2,200
people. The shift from having HR supervisors in each store allowed the retailer to put additional
workers in stores. The HR supervisors were replaced by a centralized service center near the
company headquarters. This was the latest in a series of HR issues that has plagued Home Depot
since the hiring of CEO Robert L. Nardelli in 2001. Nardelli was driven by data, the HR
decisions made during his time as CEO were driven by data, Nardelli believed that efficiency
could be aligned with a human-centered management creating a formula for success. This
success was short-lived Nardelli resigned January 2006; the current CEO, Frank Blake replaced
Nardelli. Blake has spent the past 2+ years working to repair the HR cultural upheaval that
occurred seven years ago when Nardelli initiated his first sweeping changes to the company. The
same HR executives that were hired under CEO Nardelli to go into the stores and develop
partnerships at the store level shared in the ultimate decision to streamline their organization. By
streamlining and shifting resources this would allow for a greater number of associates to be
available in each store. Under current CEO Blake there is a clear message being sent to the
workforce, it is aimed at improving morale, and increasing both the numbers and quality of the
associate at the stores. Despite the current economy Home Depot, Inc. included this message to
their shareholders:
Our associates carry our service culture to our customers everyday. For 2008, we
issued success-sharing checks in excess of $88 million to our hourly associates.
This is a Company record, and it is a source of pride that we can take care of
associates in economically difficult times like these. Furthermore, associates
under the officer level will receive performance based merit increases and our 401
(k) matching program remains intact. Taking care of our associates is an
important part of taking care of our customers.
Annual Report 2008
Home Depot, Inc. was founded with the philosophy that customers and the associates that serve
those customers is key to success. There was support for entrepreneurial spirit and creativity
among the employees, recognition for sales performance included financial rewards and stock
benefits. Nardelli shifted the focus, imposing rigorous standards, reducing benefits to associates
while developing a bureaucratic control. Blake is working to return to the philosophy that made
Home Depot number one.
Current hiring practices require that HR managers have at least three years of experience
in HR as well as experience in a retailing area similar to Home Depot’s. The focus is back on
human resources as Home Depot puts its restructuring plans in place. Home Depot is keeping
their HR call center while other retailers are outsourcing this function.
In comparison, Lowe’s continues to keep a full time HR presence at the store level. In
contrast Lowe’s has had very little published about its HR. While Home Depot has had company
layoffs, Lowe’s is hoping that by using a different strategy it will be able to maintain its
workforce or at least minimize layoffs. Lowe’s is choosing to freeze the salaries of all vice
presidents and above for 2009 and reduce raise levels for all other employees. The company has
also chosen not to fill about 400 positions at the corporate offices that have been vacated through
attrition. Lowe’s has also decided to cut the number of new stores that will open this year from
80 to 60 and that number is subject to change again according to CEO Robert A. Niblock.
Lowe’s limits its information regarding employee benefits and perks in contrast to the explicit
outlines of benefits that Home Depot creates. For anyone seeking employment based on benefits
and bonuses as well as knowing the culture and climate of the employer it is clear that you can
readily find all that information about Home Depot but would have to interview and get hired to
find out what to expect from Lowe’s. Lowe’s has about 75% of their associates that are
employed full time, while Home Depot maintains about 50% of their associates as full time
employees. One thing is clear, Home Depot and Lowe’s each have a different view of their
human resources.
Resources
Jen Aronoff. (21 February 2009). Lowe's trims raises, freezes execs' pay:
Feeling the downturn. McClatchy - Tribune Business News. Retrieved May 1, 2009,
from ABI/INFORM Dateline database. (Document ID: 1649147761).
Robert J Grossman. (2008, November). remodeling hr at home depot.
HRMagazine, 53(11), 67-72. Retrieved May 1, 2009, from ABI/INFORM
Global database. (Document ID: 1585167231).
Gina Ruiz. (2007, February). HOME DEPOT'S NEW HR LEADER FACES
TALL ORDER. Workforce Management, 86(3), 4. Retrieved May 1, 2009, from
ABI/INFORM Global database. (Document ID: 1219120501).