Nestle is the biggest nutrition company in the world having been in operation since 1866 when Henrie Nestle in Switzerland founded it. The company provides employment to more than half a million employees in around 130 countries around the world where they provide a variety of products from coffee to chocolate and many more. Their mission statement and vision, all focused on the needs and wellness of the consumers, has been the basis of their success to date. Their focused objectives coupled with their core values highlight their value for building their brand name and improving their performance globally in a consistent manner where the quality of their products is key. Lastly, their adherence to their appreciation for their people that is staff and their personal and professional growth and development have also played a role in their success and sustainability (Munir 2015).
Introduction
The focus of my assignment is to identify two human resource management practices adopted at Nestle and to define the strategies and illustrate how they are implemented within the organization. The company’s success has been due to their focus and investment in their growth and in their strategic positioning of the resources they have that is their team and product development so as to gain a competitive advantage over other similar companies within the industry. Their strategy for this success has been founded on six core prioritization methods constructed in collaboration with the staff and shareholders which have been the backbone and strength of the company. Nestlé’s six strategies include:-
1. Their ability to be decisive in decisions aimed at supporting their idea and product innovations so that the authenticity and quality are never compromised on and to ensure that their strategies for development are profitable and sustainable ensuring they remain global wellness leaders.
2. Nestle is always on the lookout for new trends and opportunities for better service provision and growth on the market and in the health and nutrition fields. This has given them an upper hand in producing products aimed at meeting the needs of the consumer and in capitalizing on opportunities to increase their productivity and their competitive lead in the market.
3. The Nestle culture has always been built on the values of the founder and of the management and business culture of consistency and integrity where the emphasis plut is not on sales and monetary value but on the value their products can add to the clients in health and nutrition.
4. Their value and integrity lead to their ability to communicate efficiently and thus they are trusted brands by both customers and investors.
5. Nestlé’s ability to invest in new technologies, for instance, the use of the internet to promote e-commerce structures has allowed more communication between the company and the client.Therefore, information exchange is vaster, and access is quicker enhancing relationship building with customers for a dialogue on needs and what the company is doing to satisfy them.
6. Lastly, the business’s success if built on their investment in their people skills and their teams where they ensure they are trained not only in production techniques but also in leadership where they collaborate on operations within the company and strive to empower all their staff in one way or another (Nestle 2016).
It is Nestles desire and investment in their employees that leads to some of their most successful human resource practices such as reward management strategies and performance management strategies which have played a vital role in reducing conflicts and misunderstandings within the organization and instead has increased teamwork and production hence the company’s success.
Reward Management Strategy
Reward management at Nestle deals with the process involved in the initiation and implementation of strategies and policies that help address the equitable, consistent and unprejudiced awarding of rewards to all achieving employees and staff in regards to the value they have within the organization. It may be a reward or recognition given in monetary or non-monetary terms (Armstrong 2012). For a majority of the modern companies today, rewards can be categorized into extrinsic rewards which can also be referred to survival oriented provisions such as security, health insurance, basic pay and good working conditions. Rewards can also be intrinsic where they are more emotionally and psychologically satisfying such as building esteem through recognition in internal awards, gifts or vouchers amongst others.
The core purpose of Nestles approach is due to their need to ensure their strategies are focused on supporting and sustaining the organization’s development and profitability to the clients and its shareholder. Labor has from the ancient times been the backbone of every business and. Therefore, there is a need for the companies today to pay attention to it so employees feel appreciated and a part of the company. Amongst the objectives associated with rewards management include:-
1. Recruitment and training procedures.
2. The motivation of the employees to do better.
3. Safeguarding internal and external equity.
4. Building the psychological well-being of the employees.
5. Ensuring employees have financial sustainability to cater to their needs.
6. As part of the compliance process to state legislation to promote proper working conditions for employees.
7. To ensure efficient administration of employees and the business in general (Human Resource Management 2010).
Nestle has taken measures to ensure that their rewards system is unbiased and fair as it can influence trust amongst the employees which enhances their efficiency and productivity due to their belief that they do indeed need to do better to support the common objectives of the company. The fair assessment also leads to contentment and focus as job evaluations with transparent basis increases just salary remunerations which are uniform across the board. It also guarantees that there are no conflicts and disputes with employees on exploitation by the company or management as compensation is realistic and measurable according to appraisal. It raises employee morale and teamwork which is good for the company reputation and thus good for the shareholders and investors.
The Nestle reward model has some characteristics that ensure it is unbiased and that it caters to the needs of the employees appropriately. Key amongst those features is:-
1. The holistic nature of the relations between the business and its employees where their value of their employees is not just dependent on their ability to be productive and profitable but also on ensuring the company is appealing to an employer and that it has the capability to empower and thus retain their staff.
2. The rewards system and policies align the rewards given to employees to their intrinsic and extrinsic needs ensuring there is an addition value concept to the individual’s personal or professional life.
3. All of Nestlé’s reward policies are in tandem with their strategic business concept as the decisions made are influenced by the business needs versus the employee’s activities and behaviors in supporting the strategic goals of the business.
4. Their rewarding system is focused on the needs of the people that is the staff as Nestle recognizes their role in providing success and a competitive advantage due to their skills and ambitions all based on the working environment and relation with colleagues and management (Thompson 2002).
Performance Mana
gement and Appraisal Strategy
Performance management has quickly taken a form of its own in modern companies as today it is a broad concept that needs the full attention of the management in planning, strategizing the measurement schemes of the feedbacks from the employees and the development of the appraisal plan to be used in the procedure. It is a process carried out at all levels of the company from individuals to teams and finally within the whole organization including the management team. However, a key concept of an effective performance review is the open and transparent communication between the management and the staff where they are informed of their specific duties against which their performance review will be conducted and the reward that thy stand to benefit should be they meet their targets (Greene 2013). The method has become essential to Nestle as it helps ensure the costs of maintaining their employees on their team is aligned with their output I the company and with the resources at the disposal of the management so as not to have drawbacks in their finances. Furthermore, the adoption of the modern economy is market driven rather than as a response to the concern of equity and equality within the organization a move that guarantees Nestle that they always have the best-skilled employees.
The process of performance management unlike the performance appraisal procedure which is periodic and a part of the performance review is a gradual, continuous process where once completed; the cycle begins again.
Figure 1: Performance Management Process
For Nestle, the procedures are significant as a move from the tense and usually counterproductive measures of the traditional systems. More so, they valued the performance measures as they helped the management and shareholders make crucial strategic decisions as they were more informed on input and outputs of their employees and their contributions and impact on the success of the company. The culture at Nestle that acknowledged the value of the people within their organization and their motivation and zeal to transfer leadership skills and qualities to their employees was amongst the most important contributions of the performance review systems within the company. Performance management was important because the company had branches globally and it was essential that the employees be flexible and empowered to adapt to any of the branches they were assigned to either locally and internationally.
Amongst the key factors that ensured the employees were armed and ready to be high performers in Nestles design and strategy include:-
1. Organizational Structure, which supports their freedoms, to perform and grow.
2. Information Systems which provides and stores information on the appraisal of employees.
3. The people and collaboration between them and the team encouraged by the company culture.
Alternatively, appraisals to have their benefits to the Nestle management and employees alike as it assist in the process of identifying the employees who have weaknesses that can be remedied through training. It also exposes to the management and shareholders any other issues they may have been unaware of for instance employee grievances on equality inconsistencies as has been the case in the past with Nestle. Through appraisals, the employees get a platform through which they can communicate their needs and grievances to the management as a source of their failure so it can be remedied or as a strength that needs to be developed and capitalized on. Furthermore, the results of the appraisal and performance management review can be used in future as a reference for cause for termination or other disciplinary measures as all outcomes and decisions are documented immediately after the review process ends. In other cases, the company has used the results to work out the pay rise or promotions systems for their employees concerning their performance.
Recommendations
The core strength of Nestle in delivering their company business targets and those of their clients is their ability to create and maintain a culture of differentiated but fair rewards and development through their performance management practices and the appraisal and rewarding structure within the organization. The employees are always involved in the operations of the company through effective communication on each person’s or each team’s responsibility towards the company common goals. Their performance evaluation process is the basis on which decisions of promotions and growth are made but for the company, the important thing is that the improvement process is orderly and transparent and that it is done in the right way (Nestle 2016). The vital improvement policies the company may focus on for better results include:-
1. Directing and management by senior members of the team so as to aid low competency employees to progress in skills and knowledge and for them to establish a culture and habit of commitment in all their staff concerning the wellness and health of the consumers.
2. There should also be a creation of coaching and mentorship programs all aimed at developing and fostering both competency and commitment.
3. The management should ensure that there is adequate and appropriate support from the management concerning the well-being and empowerment of the employees in a just and progressive way.
4. The performance management and appraisal procedure should not be in vain but should be utilized in delegation and promotions of deserving employees so as to motivate them and encourage more leadership accountability which is Nestlé’s mission.
Conclusion
Nestle has had its fair share of trials and tribulations, but their key strength has been their ability to utilize their strategic policies and practices within their organization and externally to push on with their ambitions to make the world healthier and nutrition conscious. Their employees have been a significant part of their success assets and the core reason for their focus and investment in human resource features that enhance their freedom and growth