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Human resource management: The key pillars of nestles strategy include being recognised as preferred corporate citizen, preferred employer, and preferred supplier of preferred product. Based on this strategy of being organisation of choice,analyse how Nestle is able to integrate and align their hrm practices with overall business strategy. Introduction: According to Webster’s new world dictionary, the strategy is “The science of planning and directing large-scale military operations, of maneuvering forces into the most advantageous position prior to actual engagement with the enemy”.
The origination of word “strategy” is from military background however it is very much relevant in today’s business world. Any organisation needs to have well structured planning and implantation process to survive and keep well ahead of competitors. It is a known fact that the HRM practices has major influential role in managing a business successfully. Alignment of Human resources management practices implies integrating decisions concerning employees with decisions regarding the outcomes a business is attempting to reach the objective of the company in relations to its business targets. Nestle S. A. s the largest nutrition and foods company in the world,[2] founded and headquartered in Vevey, Switzerland. Nestle originated in a 1905 merger of the Anglo-Swiss Milk Company, which was established in 1866 by brothers George Page and Charles Page, and the Farine Lactee Henri Nestle Company, which was founded in 1866 by Henri Nestle. Several of Nestle’s brands are globally renowned, which has made the company a global market leader in many product lines, including milk, chocolate, confectionery, bottled water & pet food. (from Nestle website) Key pillars of Nestle’s business strategy, to recognized as preferred orporate citizen, preferred employer and preferred supplier of preferred product is an amalgam of Nestle’s business objective and its core values. Nestle’s business objective is to be the world’s largest and best branded food manufacturer, whilst ensuring that the Nestle name is synonymous with products of the highest quality, at the same time being recognized as preferred corporate citizen by maintaining high standard of business ethics, working as part of community, protecting environment and by engaging in fair trade & business practice and fair workplace relation.
Nestle believes to be a human centric company providing a response to individual human needs throughout the world with specific concern for the wellbeing of both its consumers and its employees. This is reflected in its attitude and its sense of responsibility towards people and community as whole. Though Nestle aims to increase sales and profits but, at the same time, it concentrates on raising the standard of living and improving quality of life for everyone. Nestle strongly believes that people are the most important asset of the company who provide strength and nothing can be achieved without their commitment and their energy.
This is where HRM plays an important role through aligning and integrating it practices to implement successfully the strategy and achieving organisational strategic goals. An organisation has verity of structural forms and organizational processes to choose from when implementing a given strategy, an these choices make an economical difference. (Neo etc page 78 – 24). The variables that determine the success in Strategy implementation are : – Organisational Structure – Task Design – Selection, training and development of people – Reward system – Type of Information and information system.
Three (task, people and reward) of the above five implementation variables are primary responsibility of HRM and HRM can directly affect the remaining two variables. Hence integration and alignment of Business Strategy with HRM Functions are outmost important for achieving organizational goal. HRM Functions can be thought of as having six menus of HRM practices, from which companies can choose the one most appropriate for implementing their strategy. Each of these menus refers to a particular functional area of HRM : – Job Analysis and Design – Recruitment and selection Training and development – Performance Management – Pay Structure, Incentives and Benefits – Labor and Employee Relations (Neo etl 80-28) In this assignment question we will analyse how Nestle has chosen the perfect mix of HRM Practices which are perfectly aligned and integrated with its business strategy of becoming organisation of choice. – JOB ANALYSIS and DESIGN : Definations : As sited by Nel etl Job Analysis is a systematic process of compiling a description of the skills, duties, knowledge and experience required to perform various tasks or jobs.
Job Analysis is the starting point for all the HRM related activities in an organisation: – Workforce planning: The current and future human resource requirement forecast for an organisation can be done by using job analysis. To achieve Organisation objective, targets and goals, job analysis help to determine human resource requirement. Even in the ever changing technological environment, job analysis can be used to re-design the work process. It can be summarized that work force planning cannot be done without job analysis. Job evaluation and compensation : Different type of jobs can be compared and raked based on their total value to the organisation by the help of job analysis. Different level skill requirements, level of responsibility of any particular job etc can be determined through job analysis and based on which compensation level can be determined. – Recruitment & Selection : Job descriptions and job specifications can be put together with help of job analysis which will provide valuable information on qualifications, experience, competencies and personal attribute required of prospective candidate. Training, development and career planning : Based on information provided by job descriptions and specification through job analysis, training needs (skill gap) can be identified. It can assist managers and employees in career planning by identifying developmental needs. – Performance management: Performance level of any particular job can be standardize by use of job analysis which in turn can assist managers to determine rewards, promotions or discipline. – Ergonomics: Job analysis can be use to design a job or work environment which lead to efficient performance. Health and Safety procedure : Job Analysis is used to determine safety hazards and dangerous operating procedures associated with the job. – Organisational restructuring due to downsizing, rightsizing, mergers requires re-arranging and re-organising the jobs which can be done efficiently by the use of job analysis. – Labour relations: job analysis is an useful tool for employers facing implications of labour legislation and employment equity. – HR Research: Job Analysis is the starting point for researcher when investigating organizational variables such as absenteeism, turnover and job satisfaction.
Job Analysis Process : Job analysis is done in two step process : – The systematic process. Figure 7. 3 on page 195 of Nel etl – The strategic process : Figure 7. 4 on page 197 of Nel etl Job analysis methods : Job oriented method of data collection : – Questionnaires – Interviews – Direct observation – Systematic activity logs – Job performance Worker oriented method of data collection : – Critical Incident Technique – Position Analysis Questionnaire – Functional Job Analysis – Management Position Description Questionnaire.
Job analysis provides a platform from which management can control and direct the organisation through its jobs to achieve effectiveness and success. The case study does not provide detailed information on methods or process that Nestle adopted to analysis the job however HR department has successfully managed to acquire the knowledgeable, skilled and experienced employees. Nestle have also provided the best working condition with well equipped machinery, tools and technologies which extract the best productivity and highest quality products within acceptable time frame.
Which implies that Nestle has well structured job analysis process and method which in turn assist them to become an organisation of choice. RECRUITMENT and SELECTION : As cited by Noe etl Recruitment is the process through which the organisation seeks applicants for potential employment, Selection refers to the process by which is attempts to identify applicants with necessary knowledge, skills, abilities and other characteristics that will help the company achieve its goals. A meticulous workforce planning is required before an organisation decide to recruit new additional staff.
Recruitment : As pointed out in Nel etl by Kleyhans, Markham, Meyer, Van aswegen and Pilbeam (2006), any organisation should have basic guidelines in their policies and procedures before they start recruiting. They also refer to recruiting as the process of attracting potential job applicants from available work force. It is essential that recruitment policy should be in line with business strategy of organisation as Hertel et al (2007) suggested recruitment policy must take into account the corporate philosophy, rganizational mission, strength and weakness in an effort to generate pool of qualified candidate for particular job. As the business strategy of Nestle suggested to be preferred corporate citizen and preferred employer, its recruitment method is a fusion of both internal and external. HRM uses both the method of recruitment process to its benefit and to achieve its organizational goal. Internal Recruitment Process : Nestle’s priority is to look internally first for most of its recruitment needs. Internal promotions / transfer and internal staff referrals are used to recruit.
It motivates staff to perform better, improves their moral and loyalty towards organisation and makes the company most desirable to work for. External Recruitment : Nestle uses the external source of recruitment like Advertising, Employment Agencies and Company website to seek job applicants for positions that required special skills and talent. Simultaneously Nestle operates Graduate Development Programme (GDP) to recruit fresh talent directly from university. Through this programme Nestle create employment in community which further establishes its image of good corporate citizen.
By recruiting through external process Nestle not only benefits by getting staff with new ideas and insights but also provides greater diversity without compromising on existing organizational hierarchy. Selection Process : Based on Nestle’s Human Resource policy (provided on Nestle website) Nestle generally follows a three step selection process, after the candidate is sort listed through recruitment process, the applicant is called for telephonic interview to get the first impression and then applicant is called in for qualification assessment along with structured interview with HR Personnel and line manager.
In the third round, an unstructured interview with Head of Department to determine the final outcome. Selection process varies from position to position based on job criteria and level. Nestle does not give any consideration what so ever, to select or not to select based on candidates’ origin, nationality, religion, race, gender or age. Selection process is transparent fares and end result or outcome is well communicated to applicant. Most important criteria for section decision are candidate’s value and company culture should be in a harmony.
The Nestle policy is to hire staff with personal attitudes and professional skills enabling them to develop a long-term relationship with the Company. Employee Training and Development : Difference between training and development : Holland and De Cieri (2006) suggested that training is a planned and systematic effort made by employer to facilitate employee’s learning of the knowledge, skills and behaviour required to perform their jobs where as development is program designed for employee to educate, gain job experience and asses personality and abilities that facilitate employee for his /her future role within organisation.
Nestle is a learning organisation, training and development programs are a continuous process within the organisation and at all level of hierarchy. Training and development process and their objectives are well defined and structured to promote achieving organizational goals; improves job productivity and quality of work; provide information for future needs in all areas of organisation; facilitate in development for promotion from within; help to keep operational cost down; and stimulate preventative management.
At the same time the training and development program facilitate employee to achieve personal goals; act as motivational tools; bring a sense of responsibility and ownership of the job; increase commitment and loyalty and help in relieving stress and fear to endeavor new job roles. Nestle allows employee to draft their own career path and development within organisation, the process assist line manager and HR manager to identify and design the training and development requirement for employees.
Nestle also has a structured development program for newly graduated trainees that are hired from institutions of higher studies. The two year program is intended to mould the fresh talents to high performing professionals who are aligned with Nestle Culture. This program is also intended to create more jobs for graduate youth in a society where graduate unemployment is major concern, by doing so trying to fulfill the responsibility of a good corporate citizen.
Apart from own internal training programme like e-learning, class room courses, external courses, Nestle has mad available additional five training centers in France, United Kingdom, Spain, Mexico and Brazil which provides extensive training and development programs and provides international experience to its high performing employees. Additionally, Nestle also has International Training and Conference Center in Switzerland (Rive-Reine) where Nestle people all around the world meet to exchange information and ideas in seminars and training courses.
The courses and training provided by Nestle are mainly conducted by Nestle employees themselves and hence professional and hence it is always relevant to the job and professional life. General Managers actively participates as speakers and are available for Q&A sessions and discussion with participants. Nestle training and development programmes are not just in tune with but well ahead of the times and the competitions. (Information provided on Nestle website). PERFORMANCE MANAGEMENT :
As defined by Noe et al on page 343 Performance Management is a process through which managers ensure that employee’s activities and outputs are congruent with the organisation’s goals. An effective and meaningful performance management system requires a well defined objective or goal of organization which is conveyed and well understood by its employees; the performance of the individual employee or of the team / department is analogous to that of organizational goals.
Performance Management system includes monitoring and quantify the performance level and develop corrective measures should there is digression from achieving organizational and individual growth objectives. Periodical and formal reviews of performance assist to identify training and developmental needs of individuals; provides input for other HR system like review of job analysis and determining remunerations, promotions, retentions and termination. by Nel Werner et al on page 493) Performance Management System should measure performances which support achieving overall organizational goals, including non-financial performance areas such as customer loyalty, employee satisfaction that affect profitability. It should measures performances which are job related and not lack any work related parameter and also must not be contaminated with non work-related parameters.
The system should be reliable in terms of internal consistency of raters as well as consistency in external factors like time and environment. Performance Management system should be fair, standardized for all employees with similar job, minimize rating error, agreeably communicated, done within preset time frame and specific (sited by Noe et al: page 351-355) There are number of approaches to performance management systems (Noe et al : page 355-375) – The comparative approach The attribute approach – The behavioural approach – The result approach – The quality approach The case study does not provide specific approach that Nestle implement for performance management however considering the overall business strategy to become organization of choice and current performance level and it can be assumed that Nestle implement a quality approach which adopts a system oriented approach to measure the performance of its employees.
As Noe et al:page 370 suggests, the performance management system based on quality approach should accentuate assessment of both person and system factors. It emphasize managers and employee work together to solve performance problem; involving customers in setting standards and measuring performance and use multiple sources of evaluate person and system factors.
Nestle’s Human Resource has identified Key Performance Indicators to evaluate its employee, this key factors assess the employees’ performance based on individual contribution as well as the external factors affecting the over all performance, Nestle encourages active participation from both manager as well as employee, thus making the system acceptable and assist to identify training and development need to improve productivity without compromising in quality.
A multi-rater approach / 360 degree approach to seek performance information also assists Nestle to compose reliable quality information which is more thorough, less biased and free from rater error.