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An introduction to the LVMH brand

LVMH is a luxury brand located in Paris. The business employees are about 56, 000 people from across the world where just 33 percent33 % are from France. The company was proven in 1987 with 50 esteemed luxury brands. LVMH is a decentralized company, growing, growing and constantly acquiring new businesses.

The core principles of the company are "being creative and innovative", "aiming for product excellence", "promoting our brands with passion", and "acting as entrepreneurship and striving to be the best in every we do"

As LVMH is French company with all its main office buildings and headquarter in France but yet the management of company is multi-culture. The group is structured into five groupings whilst every group is a collection of several strong brands.

Structure and Operations of LVMH

LVMH comprises of 50 companies controlling 450 subsidiaries, each company has its president and executive committee, and each company has its subsidiaries which directly or indirectly report to the president. LVMH perform its HR activities in five main world zones (i. e. France, Europe, America, Pacific Asia and Japan). The company believe in development of their workers and management staff, for the they use different techniques in which the mostly modified for the progress of professionals is International Flexibility; instead of presenting training to employees they believe in mobility such as vertical, horizontal and physical moves within organisation.

As LVMH is a multi culture organisation so they develop their workers / managers skills to perform the company operations efficiently in a multi culture environment, they don't follow the task of intercultural training because the majority of LVMH expatriates have some international experience, or have their studies in this field. But they are accelerating the cross culture modification process however now they are spending much more on cross culture training of expatriates and their family (both pre departure and post entrance training).

Introduction to Activity 1

Indentify three key HRM activities in LVMH and discuss how they can fit into overall corporate objectives of the company. Argue which style of HRM LVMH deploys and just why?

Identification of HRM Activities

The three key HRM activities which I have identified from the LVMH research study are following

Recruitment and Selection

Career development and International Range of motion (T & D)

Employees Appraisal System

Recruitment and Selection (R & S)

As LVMH is a global giant with global procedure, it is necessary for LVMH to obtain talented staff to preserve their global position as "giant" and offer their customers good services to be able to truly have a good name for the organisation.

At start LVMH human resource division was sometime lacking in international experience, fighting in a global environment, so LVMH decide to appeal to, develop and preserve professionals with global experience (by 2001 it had 260 expatriates and 650 other employees working in a country not their own)

To achieve the organization goals LVMH is carrying out a very comprehensive and realistic methodology i. e. the LVMH subsidiaries HR directors organize with the business groups through every month meetings, to be able to identify the vacant positions throughout the world and also review the set of potential candidates within organisation who may have potential to progress through new task within the year. After that vacant positions are released on the business website, so anyone can make an application for that position worldwide, so LVMH attract professionals from worldwide not just for economical benefits but through fascinating profession development opportunities, which help LVMH is getting professionals from around the globe and achieve their corporate goals.

Career Development and International Ability to move (T & D)

From its creation LVMH can be an international organisation, also to meet up with the needs of a global organisation, they were without their human resources and their international management skills. E. g. in 1987 too many mangers were not fluent in English so the management sought to create a team of managers with working understanding of international market.

To have a professionally trained international class team it is important to have plans for job development of employees. At LVMH they don't really target too much on formal trainings but rather than that they choose "Mobility", ability to move like vertical, horizontal and physical moves in company, To be able to polish their skills and get experienced in an international environment, like once a French insurance specialist in the style business unit was delivered to Romania to brain a shoe factory.

To have a global business specialist management team LVMH targets international mobility instead of expatriation, because a person directed from UK to France is more likely to come back and work in UK with good experience got their in France. The international flexibility policy is a part of job development which requires the training of global mangers on limited time basis. The HR department convince a director to be "internationally mobile" by offering them more challenging job with an increase of freedom to execute his task than home.

One positive facet of LVMH international ability to move is to take risk to be able to develop high potentials. LVMH has two kind of high potentials HP1 and HP2, an HP1 is an individual going to own top management position (like plank of director) while HP2 can be an worker go a step or more in management hierarchy.

Employees Appraisal System

Appraisals done properly are an honest try to appraise someone's current performance (i. e. behavior) and help them identify how to improve. (Honey, Peter Make your people skills, second edition, 09)

Appraisal is required to realize one's work and get the employees motivated and stick to the organisational goals. A lot of the organisations have a systematic way of appraisal like once in 12 months, after fulfillment of an activity.

At LVMH performance appraisal system isn't just predicated on results but also to propose and use new ideas. A good method of appraise someone is to appraise ones ideas, because it is not essential that the most notable level management can just produce guidelines, newly used young and energetic people can produce ideas which might be not predicated on experience, but through the latest and modified knowledge and resources they have got (like technology). So LVMH try to achieve their corporate goals and aims through appraisal system.

Which HRM Model LVMH deploys

LVMH has deployed the Western european model of individual reference management i. e. "Best Fit" model. Because in best fit model company identify HR strategies that fit their business e. g. market, labour, size and structure of the organisation.

Justification of using Best Fit model

At LVMH they have got different HR activities which plainly state that which model they may have deployed in their company. If we take the example of International Mobilization the idea behind this is "Best Fit" as Boxall and Purcell identified "decisions over selection / recruitment, development and training are tactical in nature and have to be harmonised with commercial strategy".

LVMH is working in several countries working with different social people, as HR activities vary from cultured people, as HR activities change from cultural to ethnical, so using the best fit approach they package each country / subsidiary in the way which best fit them. At LVMH the HR strategies and business strategies are inter reliant, which is according to explanation of (Armstrong, 2003) declares that best fit strategy is "Inter-dependence between HR strategies and business strategies".

Introduction to Job 2

The requirement out of this job is to provide information on the main element approaches that how LVMH handles its employees training and development. What are the advantages and weaknesses with their system and offer suggestions to LVMH table of Directors on how to improve its strategy towards T&D of its personnel management.

Training and Development

Training is the procedure of "altering worker behaviour and attitudes in a way that increase the probability of goal attainment" [1] or we can identify training as "the formal and systematic modification of behavior through learning which occurs because of this of education, training, development and prepared experience" [2].

Development is "any learning activity which is aimed toward future needs alternatively than present needs, and which can be involved more with progress than immediate performance" [2].

How LVMH ensure their workers T & D

To ensure their employees skill development and prepared them with latest skills and understanding of management LVMH has a variety of training and development programs. The primary focus of all these activities is on to prepare their employees to meet the high market issues and to ensure the accomplishment of the organisational goals and targets through proper usage of human resources.

Following are the key strategies which LVMH use for their employees training and development.

International Mobility

Career Management (Organisational Management Review OMR)

Inter Cultural training

International Mobility

At LVMH international ability to move is an activity for attaining high career mile rocks, and develop manager to use the global management positions and permit them to just work at a multi social and out of their home countries. International range of motion will probably entail a radical efficient move. Through international flexibility the managers are placed into new situations to help them develop new skills and show their courage.

Through international flexibility LVMH make an effort to identify the actual individuals who are ready to go for an international assignment and have capabilities to carry out the responsibilities of expatriates. The business provide so many opportunities to its international mobile personnel, it attract mangers to international assignments through exciting profession development prospects and not through economic bonuses, even though its incentive program is competitive. That is a part of career development, they don't dispatch expatriates due to a insufficient local talent nevertheless they international mobile employees have to fulfil two information, one is to those delivered by the headquarter to control its subsidiaries and protect its passions and the other is to ensure information, organisational business also to harmonize the steps.

Career Management (Organisational Management Review OMR)

To provide their workers an insight to their career development LVMH has a career management process which is recognized as Organisational and Management Review (OMR). That is an gross annual process where the HR targets of the company are reviewed and place the organisational dependence on the next 3 years, whatever employees need what sort of trainings and list the actual employees ready for international tasks and to make them and train them for the top management position. They use the OMR for keeping the list of the candidates prepared to move and examine their current development.

Inter Cultural training

To become an internationally mobile or expatriate the employees of LVMH needs intercultural training to adjust quickly, because international position usually needs to be filled very quickly, which leaves short amount of time for intercultural training. LVMH normally decided to go with those employees to become internationally mobile / expatriates that has some past experience of international environment. They can be increasing training to both the employees and his / her family, as well as for time being both pre departure and post entrance training limited to just language training, which LVMH needs to increase to properly prepare their employees for the position of expatriate.

Recommendation for LVMH Board of Directors

Keeping in view the above discussion about the training and development in LVMH, I will recommend the board of Directors of LVMH as

As LVMH believes in international flexibility, and select those employees who may have some past international experience, but that is not enough to hold a global management position. So that it is recommended to start out a structured long term training program to develop a pool of employees for international ability to move.

When a worker is going to take position as expatriate they should be provided plenty of time to get trained about that country culture, people life-style, management styles preferred for the reason that country and the environment of business.

LVMH has the possibility to have proper training and development lessons for his or her support staff and non managerial employees to enhance the standard with their daily organisational and business activities.

Introduction to Task 3

The requirement out of this task is to use Balance Scorecard to LVMH, and critically review the performance of HR and provide suggestion that how to boost their HR performance.

What is Balance Scorecard

The healthy scorecard is a proper planning and management system that is utilized extensively running a business and industry, administration, and nonprofit organizations worldwide to align business activities to the vision and strategy of the business, improve inner and external marketing communications, and monitor group performance against proper goals. [3]

Balance Scorecard for LVMH

To apply Balance Scorecard to LVMH the following factors of HR perspectives will be dealt with and critically review how HR performance is suggested and monitor

Learning and Growth Perspective

Internal Perspective

Financial Perspective

Learning and Expansion Perspective

To achieve LVMH organizational goals, what is need to learn and innovate

Objectives: Enhance HR Staff knowledge & skills in tactical areas, and make managerial staff to be equipped for international mobility

Corporate Objectives

Performance Measures

Identify potential individuals for international assignments, evolve their skills, measure gaps, develop learning tools and plans

Maintained employee improvement reports

HR Skills Learning Plan Complete

Courses Delivered

Validate HR Competency

Description:Coach HR staff and the potential candidates to get ready for international assignment


Corporate Objectives

Performance Measures

Identify potential individuals for international assignments, develop their skills, measure gaps, develop learning tools and plans

Maintained employee improvement reports

HR Skills Learning Plan Complete

Courses Delivered

Validate HR Competency

Objectives: Enhance HR personnel staff skills and dedication to LVMH goals

Corporate Objectives

Performance Measures

Assess the performance of HR staff &determine what personnel areas to focus and what areas need to be focused.

Maintenance of employee's personal and professional improvement file, and proper review of that.

Corporate Objectives

Performance Measures

Enhance individual prospects to align with the strategic plan &the incentive plan

Enhance &implement existing communication ideas with HR personnel and other employees.

Create an execution plan to model best practices

Conduct an employee opinion study and score that to provide information on what things to do

Description:Identify the power and weaknesses at HR office, and enhance the employees' skills.


Corporate Objectives

Performance Measures

Assess the performance of HR staff &decide what personnel areas to target and what areas need to be focused.

Maintenance of employee's personal and professional improvement file, and proper overview of that.

Objectives:Create, model performance management &communication best practices in HR

Description:Continue to develop, improve &show with the best practices in communication and

performance management


Corporate Objectives

Performance Measures

Enhance individual targets to align with the proper plan &the motivation plan

Enhance &put into action existing communication strategies with HR staff and other employees.

Create an execution intend to model best practices

Conduct an employee opinion study and rating that to provide information on what to do

Internal Perspective

Objectives: Improve staff satisfaction with LVMH as an employer

Description: Improve the LVMH employee's satisfaction from other organization.


Corporate Objectives

Performance Measures

Continue effort to LVMH as a great place to work

Pilot effective ways of improve staff satisfaction

Select Staff Judgment Survey items

Select turnover data

Objectives: Improve worker commitment

Description: Improve employee willingness to stay and actively donate to the organization


Corporate Objectives

Performance Measures

Identify key commitment drivers

Develop ideas to affect positive change

Select Staff View Survey item(s)

Objectives: Strengthen Rewards & Acknowledgement Program

Description: Develop and improve rewards and identification programs to effectively stimulate workforce


Corporate Objectives

Performance Measures

Identify high rating departments

Access and connect best practices

Enhance "how-to" information for rewards &reputation implementation

Staff Opinion Survey results

Objectives: Strengthen recruiting and employing right person, in the right job at the right time

Description: Continue steadily to develop and enhance effective recruiting methods to optimize the selection and success of new hires


Corporate Objectives

Performance Measures

Identify key qualities of working successfully at LVMH

Utilize technology more effectively for recruiting and verification applications

Integrate "good workplace" storyline and branding work into recruiting


Customer Satisfaction Survey

Objectives: HR Process Improvement

Description: Improve HR services


Corporate Objectives

Performance Measures

Identify consulting opportunities that occur through key occurrences (e. g. , start recruiting consultation upon knowledge of old age )

Continue producing process documentation

Streamline HR procedures and add automation where appropriate

Annually review and enhance existing process documentation

Implement Remedy for all of HR

Customer Satisfaction Survey items

% of the procedure recorded and updated

Select Staff View Survey items from HR staff

Completed Actions

How can LVMH improve their HR performance?

As LVMH is a global giant doing procedure in several countries with several 50 companies and 450 subsidiaries, they have got very good approach to manage their employees all over the world, and ensure the non-public and professional growth chuck different activities organized by the HR office of LVMH. After learning the case study there are a few HR activities and functions which can be make a lot more influential in achieving the organizational goals and goals.

The HR department may begin management courses for his or her middle level and principal level management team, to ensure their progress to take over the future top level management positions

Employees ready for international ability to move should get proper training before each goes on project, though LVMH provide some pre departure and post arrival training but it is needed to employ a structured training program which provide complete knowledge and information about how to work as expatriate.

The procedure for inter-cultural training has a lot more potential, therefore the training should be prolonged to subsidiaries level to make a pool of employees aware of the different ethnic values and available for any cross cultural assignments.

LVMH needs increase their recruitment and selection process not merely to the people countries where the company is functioning, to global recruitment and selection in order to get a major pool of potential applicants from around the globe and then select the appropriate individuals based on merit which best suit the organizational goals and strategy.

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