Performance improvement of LVMH

Task 1


LVMH is organized in five business groups watches and jewellery, wine and spirits, fashion and leather goods, perfumes and cosmetics, selective retailing. All group are perform well because they always focuses on performance improvement and all group have very experienced manager.

Best Fit Model

  • Best fit model organisation identify HR strategies that which is best for their business. Example : Markets, labour, size, structure etc.
  • External fit : The fit is linked to the operations strategy/marketing strategy etc. this is external fit drawback is that it can overlook employee interests. Some firms use HR practices mainly based on one strategy.
  • Internal Fit : HR policies and Practices must be narrative encouraging teamwork then rewarding individual performance.

Resource base model

Resource base model mainly focuses on the internal resources of organisation. B process, capital equipment, employee skills, brand names, finance and talent of Managers.

Five major step of resource base model.

  1. Companies should identify their internal resources and assets their strength and weaknesses.
  2. Companies should know their set of resources and the company should give good result of given task.
  3. Companies should make judgement set of resources and capabilities to perform better in terms of returns.
  4. Find and compete in a better industry that provides the best fit between the characteristics of the industry and company resources and capabilities.
  5. To get sustainable competitive advantage and earn good return. Company should formulate strategies.

Best Practice Model

  • All firms will see performance improvement if only they identify and implement best practice.
  • Company employee works as a team and working environment is very flexible to do work.
  • In best practice they use high performing work system and high involvement so that it enhance employee ability and knowledge through good recruitment and training and motivate them. It encourages ideas and contribution from motivates and better trained workers.
  • In best practice thinking a universal prescription is preferred.

Best practice showing a towards holistic assessments encompassing a mix of measures of cognitive, and performance qualities. The move to performance-based methods, with their adverse impact against under-represented groups, is particularly notable, as this accommodated the trend toward diversity as strategic direction, whether private multinationals or the more publicly accountable government sector.

Best fit approach than a normative one. For instance, the attributed shift alongside an organisation's strategic goals and firm facing their selection strategies in ways which they consider will attract the or enhance employee retention. The best practice model of metric model assumes that the number of applicants exceeds the positions the best applicants will always accept the jobs they are offered.

This selection can also be judged in terms of quality of social isations and other stakeholders. The treatment of applicants, their take on a more important role in ensuring they find the job and organisation whether person organisation 'fit' is achieved. Also important is the way used to further interests which often are only tenuously linked.

Within HRM, selection has been viewed as a core function essential for organisational outcomes, high performance, low level of employee well being and commitment have all been linked with selection. As argued in several HRM texts (Legge 2005), however, the reality of selection and practice seldom has matched the rhetoric and this seems equally as adoption of 'best practice' selection.

International mobility is vital part of every potential career pathway. It targets to create global managers many of them have far above the original practical move. As an example the head of HR development recall the case of a French insurance specialist in the fashion business unit who was sent to Romania to head a shoe factory. LVMH be on familiar terms with they could do with risks to develop probable impending. It needs to put them in new circumstances to help them develop new skills and set up their courage.

An employee work jointly with the business group which report to corporate headquarters. Approximately 54 to 60 % of growths are controlled by companies, the as well managed by the business groups or corporate.

There are four types of HR managers at Lvmh. Subsequent the group's structure, they operate on four levels: corporate, regional, business group and company level. The subsidiary HR Director or the person acting as such, reports to the subsidiary's President. The subsidiary's HR Director gets recommendation and shore up from his company. The business group's HR Director organizes his companies' HR Directors through monthly meetings. The purpose of these meetings is to identify vacant positions throughout the world and to study the list of possible candidates for these positions, between which are the Ready to Move. Lvmh has ready internal mobility - both geographic and functional - a basis of their human resources policy. This cross-fertilization of experience within their ecosystem under the unifying umbrella of the group creates matchless cause of proficient and personal fulfilment.

Lvmh did not send out any specialist because not have local bequest. Generally their experts fit two profiles: those sent out by the corporate HQ to control its subsidiaries and protect its interests and sent out to develop their skills. To support the international business growth relocate is growing. Though, it not means that greater than ever number of French expatriates will force this inclination. Lvmh have lake of global managers creates their order unpleasant in terms of deploying expert manager to company's aspiration plan or task given to that manager.

Lvmh did not attract experts by giving them higher perquisite in terms of their level. The group is stimulated for cost efficiency. They know that a good package is essential, but that it not the main encouragement to go abroad. The primary balance-sheet move in the direction of package is based on the target that talent should neither lost nor grow from their rearrange. Lvmh's C&B department has associated this draw near as a direct for it does remunerate package policy.

Specific country based salary is apparent for international mission. Salary will get hire during the period of mission. That is used as a vital for work out of social security and pension payments. The mobility wages are average compare to local labour market. Lvmh distinct two types of high potentials, HP1 and HP2 is an individual likely to achieve a top management position such as member of Board committees, Regional president or Subsidiary president. An HP2 is an employee likely to go up one or two steps in the hierarchy. For corporate HR this characterization of high potential is too broad and is more relevant for flat structures. It is now considering narrowing it. It would retain the definition of HP1 and include those who are considered to be experts in their field.

Task 2

Training is a learning process that involves the acquisition of knowledge, sharpening of skills, concepts, rules or changing of attitudes and behaviours to enhance the performance of employees.

It's not shows that what you want in life but it's knowing how to reach it and it's what you need to achieve it.

Development, on the other hand, helps the individual handle future responsibilities, with less emphasis on present job duties.

Need and basic purpose of training

  1. To increase productivity
  2. To improve quality
  3. To help a company fulfil its future personnel needs
  4. To improve organizational climate
  5. To improve health and safety
  6. Obsolescence prevention
  7. Personal growth

There are many ways it's benefited the organisation, it leads to improved profitability and more positive attitudes towards profit orientation. It improves the job knowledge and skills at all levels of the organization. It improves the morale of the work force. It helps people identify with organisation. It helps create a better corporate image.

The benefits of Training

  • Aids in organisational development.
  • Helps prepare guidelines for work.
  • Aids in understanding and carrying out organisational policies.
  • Provides information for future needs in all areas of organisation.
  • Organization gets more effective decision making and problem solving.
  • Aids in developing leadership skills, motivation, loyalty, better attitudes, and other aspects that successful workers and managers usually display.
  • Aids in increasing productivity and quality of work.
  • Helps keep costs down in many areas, e.g., production, personnel, administration, etc.
  • Develops a sense of responsibility to the organisation for being competent and knowledgeable.
  • Improves labour management relations and creates an appropriate climate for growth, communication.

Development refers to those learning opportunities designed to help employees grow. Development is not primarily skill oriented. Instead, it provides general knowledge and attitude which will be helpful to employees in higher positions. Efforts towards development often depend on personal drive and ambition. Development activities, such as those supplied by management developmental programmes, are generally voluntary.

In the training problem of performance deficiency caused by absence of skills or knowledge can be remedied by training. Faulty selection, poor job design, uninspiring supervision or some personal problem may also result in poor performance. Transfer, job redesign, improving quality of supervision, or discharge will solve the problem.

Learning Principles

Training and development programmes are more likely to be effective when they incorporate the following principles of learning:

  • Employee motivation
  • Recognition of individual differences
  • Practice opportunities
  • Reinforcement
  • Knowledge of results
  • Goals
  • Schedules of learning
  • Meaning of material and
  • Transfer of learning

Difference between Training and Learning

Training implies putting skills into people, when actually we should be developing people from the inside out beyond skills, i.e. facilitating learning

So focus on facilitating learning not imposing training Emotional maturity, integrity and compassion are more important than skills and processes. If you are in any doubt, analyse the root causes of your organization's successes and your failures they will never be skills and processes.

Enable and encourage the development of the person - in any way that can.

Give people choice - we all in different ways, and we all have our own strengths and potential, waiting to be fulfilled.


Globalization is the process of international economic integration in worldwide markets. It involves the development of single international markets for good or services accompanied by an accelerated growth in world trade.

To match the global requirement of business working pattern Lvmh has to deploy local people rather than experts from the French, because they do not have know the local culture or local market how they react in new or old segment for their products or what is the trend among them for Lvmh's products. If they select local manager with relevant expertise for their desire project or aim to achieve. In this condition they can get manager with skill which they want and also get improvement from his knowledge about their product matching the local public views and if possible implement them for getting better results.

Environmental differences:

Environmental differences between countries have to be taken into account in managing globally. As described by Gerhart and Fang (2005), these include 'differences in the centrality of markets, institutions, regulations, and collective bargaining and labour-force characteristics.' For example: in Western Europe, collective bargaining coverage is much higher than in countries like the United States, Canada and Japan. Works councils are mandated by law in Western European countries like Germany, but not in Japan or the Unites State. In China, Eastern Europe and Mexico, labour costs are significantly lower than in Western Europe, Japan and the United State.

For Lvmh operates in all over world so, they have to think globally and act locally for their operations. For example they have decided same rules and regulations for the all employee world wide like their wages and benefits. In France they have decided to give 6500 € per month salary to the global manager for giving his or her services to the company as per same pay may not be pay in other continent like Asian countries China or India.

Cultural differences:

Lvmh has to take care for the different culture base for their strategy in HRM for example in Japan they cannot deploy younger manager on the employee who is senior in terms of age then him or her, because Japanese have cultural custom that they respect elder person and do not cross their words ever so, in that way Lvmh has to be specific about cultural differences. Like in South East Asia India is a populated country and have more knowledge base potential candidates are available to match their criteria but they have to keep in mind that Indian culture is a versatile and full of festivals. If they want to launch the new product there they have to look forward for the appropriate festive season for their products and the manager who familiar with the custom of this festival and achieve company's goal. Before sending the global manger on his or her assignment they has to be given training about language which is locally spoken over there and have good command over at least 3 languages other then French.

Convergence and divergence:

The dilemma facing all multinational corporations is that of achieving a balance between international consistency and local autonomy. They have to decide on the extent to which their HR policies should either 'coverage' worldwide to be basically the same in each location, or 'diverge' to be differentiated in response to local requirements.

Looking forward the HRM policies of Lvmh is to adopt divergence in terms of local environment like in UK people like to drink Beer while in USA and France prefer to drink Wine. Such things keep in mind and develop their plan for act in a global market through their global managers who actually implement their policies to their business.

Task 3

Recruitment and selection

Once an organization identifies its human resource needs through employment planning, it can begin the process of recruiting potential candidates for actual or anticipated organizational vacancies.

Recruiting is the process of discovering potential candidates for actual or anticipated organizational vacancies.

Recruitment is a process which aim to attract appropriately qualified candidate for a particular position from which it is possible and practical to select and appoint a competent person or persons.

In other word, Recruitment is the process of searching potential candidates for a job or project undertake by recruiters.

Successful human resource planing designed to identify an organizations human resource needs. Once these needs are known an organization will do something to meet them, staffing function assume that demand for certain skills, knowledge and abilities is greater than the current supply then recruiting is necessary.

There are many way available to for recruitment process like job advertisement through publication.

In this advertisement we have to derive about job description, what are the skills required for a job, another factor that necessary are qualifications, age experience in requiring the relevant skills or references. These all criteria are necessary for recruitment process. Some time company may take some short of test or group discussion. These are the techniques to identify the best candidate among all. Many case candidate request to provide resume or application form to provide this evidence.

Recruiting Goals

To provide information that will attract a significant pool of qualified candidates and discourage unqualified ones from applying.

Selection is a process which involves the application of appropriate techniques and methods with the aim of selecting, appointing and inducting a competent person or persons. In other view selection is the process used to identify and hire individuals or group of individual to fill vacancies within an organisation several screening methods may be used in personal selection. For example resume, oral interviews and work trials, references, telephonic interview through some time candidate can be selected.

The main focus of recruitment process in this company is given to the job that particular knowledge or expert needs while in selection process company should study that it is relevant for that position.

In some area strategic fit job is not required because that type of job there is no need to particular technical knowledge and skills. It may be some type of restriction required so we have to identify the most crucial requirements. Most of selection process strategic fit may get limited requirement so scope of selection can be decrease. With the strategic fit scope of business strategy could be lead it can go higher. In selection process, there is higher risk of mistakes happens.


  • Be clear about what you want otherwise you can not get good result.
  • Use a through recruitment process because this way you can quality employee.
  • Advertise carefully
  • Interview thoroughly
  • Assess appropriately
  • Always recruit the right person for the job
  • Pre screening may be outsourcing

The first step in the recruitment process is to assess the need for additional human resources and decide whether or not you have a vacancy you wish to fill. The vacancy may be a new post that has been identified through the development of the corporate strategic plan, or it may have arisen because an employee has resigned, retired or been dismissed. The latter are sometimes referred to as replacement posts to distinguish them from new posts. You may also decide to recruit a job-share partner for an established employee who no longer wishes to work full time.

Filling the vacancies which arise because an employee has decided to leave or creating new posts should be part of a careful planning process, scrutinised in terms of how the action contributes to the organisation's strategic goals.

When a jobholder leaves, HR and line managers should take the opportunity to examine the work done and consider whether it can be covered in another fashion. Here are some of the factors that could be considered: Are all the tasks necessary? , Can some tasks be incorporated into another post? , should the job redesigned to include more interesting and challenging work? , Can some task be completed in other ways, e.g. by machine, by computer?

Job descriptions and person specifications/competency profiles:

In organisations that engage fully in human resource planning there will be ongoing work dedicated to producing and maintaining job descriptions and person specifications/competency profiles, since these documents contain much of the information required for the planning process.

Job analysis is the name of the process do not engage fully in human resource planning, it is essential to produce job descriptions and person specifications/competency profiles for all existing posts as a basic framework for recruitment and, later, selection activities.


Collecting information:

Gathering and evaluating information in order to make the selection decision can be done in a number of stages. According to the CIPD (2007a and c), the most well established methods used include: Short listing from information on application forms and CVs, interview of various kinds, tests, assessment centre, references.

Policy and procedures:

It is amazing how many managers still claim to be good judges of character and ability based on very short acquaintance. These managers will tell you that within a few minutes they can tell whether they are going to get on with someone, and whether that person will do well in the job. This kind of overconfidence is a major contributing factor to the low validity of interviews as a selection method. The concept of validity will be discussed in more detail later in the chapter, but it can be stated here that the strategic HRM approach would suggest that employees are too valuable a resource to the selected or rejected in such a subjective and uninformed manner.


  • date visited 10/12/2009 at 1:24 pm
  • Armstrong Michael - A Handbook of Human Resource Practice, 10th Addition 2006 ( date 20/12/2009 6:30 pm)
  • date visited 12/12/2009 at 9:30 pm

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