Hrm Project On Strategic Human Resource Management

HRM PROJECT On STRATEGIC HUMAN RESOURCE MANAGEMENT

Submitted By: Saumya Aggarwal 026/Cse/2k5 (B.Tech-MBA Dual Degree)

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ACKNOWLEDGEMENT I express heartfelt thanks to Ms. Sona Vikas, our respected faculty member, who has been my constant guide throughout the work on this project. Our work could not have gained its present shape but for her constant guidance. Also, I would like to thank Ms. Bhawna Sikka, Food Services and Vending Executive of Nestle Connaught Place Branch Office and Mr. P.K.Sinha, Deputy General Manager of Human Resource Department of NTPC office at SCOPE building, CGO complex, Lodhi Road, New Delhi for their wholehearted efforts. The project would not have taken its present shape without their valuable insight. I express my gratitude to them for providing me their valuable time and helping me in interacting with the employees. I also express our gratitude to all those people who allowed me to work with them. Lastly, we would like to extend our sincere thanks to all those who have directly or indirectly helped us in the completion of this project.

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INDEX Serial no.

1.

2.

3.

4.

5.

6.

10.

Chapter no.

Description

Page no.

Chapter 1

Introduction

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Chapter 2

Book Reviews

10

Chapter 3

Article Reviews

14

Chapter 4

SHRM at Nestle

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Chapter 5

SHRM at NTPC

33

Chapter 6

Analysis & Conclusion

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Annexure

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CHAPTER 1 INTRODUCTION 1.1 WHAT IS STRATEGIC HRM?The linking of human resources with strategic goals and objectives in order to improve business performance and develop an organizational culture that fosters innovation, flexibility and sustainable competitive advantage is called STRATEGIC HUMAN RESOURCE MANAGEMENT. In the case of Strategic human resource management, the HR function is a strategic partner in the formulation and implementation of the company’s strategies through HR activities.

1.2 A VISUAL DEPICTION OF THE SHRM PROCESS-

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1.3 KEY FACTORS OF SHRM PROCESS- The external environment – which is very dynamic in the current global business scenario. - The business strategy - it affects and is affected by the SHRM process and which gives the organization a well thought of direction. - The internal environment – the organisational context and the general culture which is prevalent in the organization. - The outcomes of the SHRM process – which should be evaluated both quantitatively as well as qualitatively. 1.4 PRACTICAL ROLE OF SHRM- Build a Strategic Framework: Mission Statement, Vision, Values. - Help in goal setting. Look Beyond Traditional Goals. - Create Leadership Vision and culture of innovation. - Support Company's Brand (employees as customers approach). - Manage a cross cultural work-force. - Manage the young, overambitious recruits. - Manage continuous competitiveness in a changing business environment and technology and product delivery systems. - Keep HR cost to minimum possible. - Create employee loyalty programmes. - Design and utilize assessment metrics for evaluation of SHRM process.

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1.5 AN EXAMPLE OF A QUANTITATIVE TECHNIQUE FOR ASSESSMENT OF THE EFFECTIVENESS OF THE SHRM PROCESS:

THE SELECT TO PROFIT LOOP-

SELECT

ENROLL

TRAIN

PROFITS

SALES

EVALUATE

REWARD

COSTS

PRODUCTI V-ITY

MOTIVATE

THE SELECT TO PROFIT LOOP is a quantitative technique which organizations employ to ascertain whether an employee is a profit centre or a cost centre. Right from the time of selection, there are certain activities which are carried out vis-à-vis the employee which incur some costs; and certain activities undertaken by the employee generate revenues for the company. Now, by evaluating all these activities, it can be found out whether the revenue generated by the employee outweighs the costs incurred on him or not. Thus, organizations can directly link the selection of a candidate to the net profit he/she expected to generate.

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1.6 STEPS IN STRATEGIC HRM PROCESSThe analysis of the Strategic HRM process has been done from the point of view of a new business strategy being adopted by an organization: - New Business Strategy. - SWOT Analysis – done to ascertain the strengths, weaknesses, opportunities and threats of the current human capital of the organization. - Assess HR Capacity – whether the current capacity is sufficient or whether more human capital is required. - Develop Core Competencies – assimilate the best practices from the organization’s earlier strategy into the new strategy. - Test and Evaluate – evaluate the new strategy and the proposed HR integration with it for fissures. - Initiate HR Practices – this should be done in line with the new strategy. - Recruit, Orient, Train and Develop. - Evaluate Performance – check whether the new strategy’s implementation is on course or not and whether the HR is an intrinsic part of the implementation process. - Establish Career, Succession Plans; Set Total Reward System – this would help in motivation and fostering loyalty in the employees.

1.7 COMPETENCIES OF AN HR EXECUTIVE- Strategist – Knows the business inside out. Helps align the personal goals of employees with strategic goals of the organization. - Administrator – Deliver the Basics like recruitment, training, retention etc. - People’s Champion – champions the cause of employees in the organization. - Change Agent – helps bring about change in the organization by convincing employees the change is good for their as well as for the organization’s growth.

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1.8 NEED FOR SHRM- Increase competition in both local and global markets requires organizations to involve their people in developing the strategy for a sustainable competitive advantage. - Maintaining a competitive advantage by becoming a low cost leader or a differentiator is possible through good HR practices, as best practices in terms of the working of human capital within an organization are hard to replicate.

1.9 ADVANTAGES OF SHRM- Each employee becomes a profit centre. - Accountability at all levels in the organizational hierarchy increases. - Business can meet ever increasing customer demands. - Employees become pro-active; align their personal goals with the goals of the organization. AND THE BOTTOM-LINE IS….

Good HRM = Good financial results

HRM

Financial results

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CHAPTER 2 BOOK REVIEWS

2.1 BOOK 1“Roadmap To Strategic HR- Turning a Great Idea into a Business Reality” By Ralph Christensen The book illustrates a practical approach for turning Human Resource into a crucial component of success. For decades now, human resources professionals have sounded the drumbeat of change: HR must transform itself from an administrative function into a strategic business partner. But it has been said so often, for so long, and with so little concrete, real-life information on how to actually achieve this new mission, that the message often sounds like a wouldn't-it-be-nice scenario.

But it isn't. More and more traditional HR activities are being farmed out to service centers, external vendors, and line managers. The work of HR is changing, and more and more professionals realize that to succeed in the future they must be part of the team that makes important business decisions.

Roadmap to Strategic HR is a sorely needed prescription for achieving strategic focus in complex organizations. Drawn from the author's more than 25 years of experience and insights as an HR practitioner at Hallmark and other companies, the book outlines a 10step, results-oriented plan for making the transition. It helps one integrate top-quality tactical work with innovative internal systems—talent systems, training systems, reward systems, or work processes—that will meet the strategic business demands of your organization.

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This book helps one:

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Understand the business realities that are driving change, including employees afraid for their jobs, and demanding and scarce customers.

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Compress the multitude of HR activities into five fundamental processes: workforce planning and staffing, learning and development, organization development, performance management, and employee relations.

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Examine each of the five processes through a powerful strategic lens.

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Resolve the tensions between HR specialists and HR generalists.

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Build a real partnership between the frontline managers and HR staff.

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Identify the competencies required of HR professionals who assume the crucial role of "organizational architect."

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Recognize the roadblocks and political landmines that might lurk along the way.

The connection between people issues and business success is irrefutable. As the author so aptly puts it: "Talent is the engine behind the creation of all value." Roadmap to Strategic HR is a practical book which strengthens the link between people and value— for building a department that drives excellence throughout the organization—and for honing one’s department's focus so that it stays locked on the marketplace and the business strategy.

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2.2 BOOK 2“Human Capital Management-Achieving Added Value Through People” By Angela Barron & Michael Armstrong

The book provides a planned & proactive process of partnership with top management to achieve desired long term organizational growth and direction while satisfying the individual objectives and growth of best employees. Strategic HRM discusses that every employee has a right and looks forward to both horizontal and vertical growth with room for experimenting with ideas and testing entrepreneurial spirit within and organization have to continuously adapt to this requirement by changing and expanding. No one likes to work with stagnant organization or organization without sharing growth with employees-Promotions, participations and financial rewards. Thus, organizations have to continuously adapt by changing and expanding and must look after the following processes-

Careful and extensive systems for recruitment selection and training (RST).

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Formal system for sharing information with employees.

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Clear job design; High level participation processes; monitoring of attitudes.

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Performance appraisals (self-appraisal system should be followed for all executive positions in my view).

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Properly functioning grievance procedures (with both procedural and technical justice visible).

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Promotion and compensation schemes that provide for the recognition and reward of high- performing employees.

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The changing profile of New Age young workers has to be built in HR policies like flexibility of work time, freedom for experimenting, quick growth and sense of identity with projects of company. It is also seen that Top management/owners in Indian companies still have commodity approach underpaying, disallowing delegation, curbing enterprise and failing to communicate organizational goals. Such organizations have little chances of growth or survival for long in new environment. Here role of HR leadership is most crucial to transform the organizations into innovative, learning and flexible organization where employees find it exciting to work with lot of room with all round positive environment within the organization.

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CHAPTER 3 ARTCLE REVIEWS

3.1 ARTICLE NO.1“Strategic Human Resource Management-Three Stage Process & Influencing Organizational Factors” By Sandeep Krishnan (IIM-A) and Manjari Singh (IIM-A)

3.1.1 INTRODUCTIONA three-stage model for the process of strategic human resource management has been developed in this paper. The three stages cover strategy formulation, implementation and evaluation.

3.1.2 SIGNIFICANCE OF THE ARTICLEThe literature in the field of SHRM prior to this research had been developed up to the two-stage process till concepts like the Two Way Vertical Fit and the Horizontal Fit. The third stage developed in this paper has not been explicitly taken up in existing literature till now

The two-stage model does not explicitly clarify how the fit will be assessed and achieved. In order to assess both vertical and horizontal fit, the evaluation and feedback stage is vital for any process of SHRM. It will also help in maintaining a better fit between the intended and actual strategy. It will also help in demonstrating HR successes and increase the credibility of the HR department.

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3.1.3 LITERATURE REVIEW IN THE ARTICLE•

Devanna et al. (1981) put forth a number of reasons why strategic orientation may lack in the HR function. A major one is that the top management does not perceive it important to include the HR department in the decision making process.

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HR departments must develop competencies in dealing with strategic issues, business awareness and the ability to quantify its own the contributions/ significance.

• Tony Rucci states that the three significant barriers to HR playing a more proactive role in the next ten years are “a) Lack of basic economic literacy among HR professionals, b) Lack of comfort among HR professionals to take risks and c) HR professionals who do not demonstrate courage of conviction about their principles” (Huselid and Becker, 1999: 362). 3.1.4 BASIC CONCEPTS ON WHICH THE MODEL IS DEVELOPEDOne-way Vertical FitIt talks about aligning HRM systems to the business strategy and the partnering role of HR where HR is highly integrated with business processes.

Two-way Vertical FitIn this particular scenario the HRM systems not only align to the business strategy, but also contribute in the strategy formulation the HR department’s role as a strategic partner emerges in the two-way vertical fit. This includes activities like creating a culture change, identifying mergers and acquisition possibilities, tracking the market and proactively making changes.

Horizontal FitIt refers to the alignment of various HRM systems to each other and the alignment of key HR systems and processes with for bringing out desired behaviors and culture in the organization.

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This model follows the concept of interactive business and HR strategy so that each contributes to the formulation of other. - Elements of HR like acquiring, managing and developing the competencies are important for the success of strategy implementation. -

Issues like high turnover of employees, lack of morale and motivation, low employee satisfaction, undesirable work-place politics etc. are looked into and their likely impact on strategy implementation are examined.

- Various HRM systems like recruitment and selection, performance management, compensation, training and development, career management, etc. need to be aligned with the HR strategy. Policies and practices of various HRM systems are set or modified according to the strategy implementation needs. Based on the concept of horizontal linkage, HRM systems also need to be aligned to each other.

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- The second stage has a two-way link with the first stage. Not only are HRM systems aligned with the HR strategy, but HRM systems and their outcomes also provide information pertaining to organizational context for the formulation of business strategy. This two-way link strengthens the role of HR department as a strategic partner. In the evaluation metric of this model, defining and measuring goal achievements or outcomes of various HRM practices and activities is the first step.

Also there are factors that act as enablers/ deterrents for the effectiveness of the evaluation and feedback stage. The factors that influence this stage may be categorized into structural, operational, and behavioral factors.

The structural factors include the scope of the evaluation and feedback process, level of Formalization of the evaluation and feedback process, proper selection of assessors, and Periodicity of evaluation and feedback.

The operational factors are the availability of required data, proper measurement techniques, required analytical skill, and technological support for data collection and analysis. Evaluating the impact of HRM systems is a challenge for measurement techniques because the effects of environmental and personal factors are inter-mixed with it (Gordon, 1972). Valid interpretation may not be obtained because of faulty measures or lack of appropriate measures. HR professionals may not have required analytical skill for the evaluation process so they either need to be given special training or provided help of experts (Gordon, 1972).

The behavioral factors include the purported use of the evaluation results, transparency in the evaluation process, perceived and real fairness of the process, extent of implementation of the suggestions/feedback, man-hours spent on evaluation and feedback, importance given to the process, and incentives for various stakeholders.

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3.1.5 CONCLUSIONAnything less than the complete process described in the model increases the possibility of failure. Organisations can no longer ignore the necessity of an integrated three-stage process for SHRM that should at least include: 1. Efficient and inter-linked HRM systems linked to business strategy and 2. Monitoring mechanisms to identify and correct any sort of misalignment. The enablers/deterrents for each stage is another important contribution of this paper.

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3.2 ARTICLE NO. 2“Maximizing Your Return On People” By Laurie Bassi and Daniel Mc Currer (Harvard Business Review – March 2007) 3.2.1 INTRODUCTIONThis article explains the various innovative tools to show which investments in employees are driving company performance and which one should emphasize upon to advance strategic goals. for every company its people are the only source of long term competitive advantage and companies that fail to invest in employees jeopardize their own success and even survival.

According to the authors investment in Human capital management can be directly linked to organizational performance. They have explained methods for measuring bottom line contributions of investment in human capital management (HCM)-like leadership development, job design etc. 3.2.2 HCM DRIVERSThe authors with the help of various Employee and management surveys have identified a core set of HCM drivers that predicts performance across a broad array of organizations and operations. These drivers are as follows: 1.

Leadership practices

2.

Employee engagement

3.

Knowledge accessibility

4.

Workforce optimization

5.

Learning capacity

In each of these categories HCM practices are further sub divided into groups such as under leadership practices: communication, supervisory skills etc.

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3.2.3 MATURITY SCORESThese surveys are effective in gauging and improving organizations’ capability across 23 HCM practices based on maturity scores ranging from 1 to 5 with 1 indicating low performance and 5 high performances. It helps in benchmarking organizational HCM capabilities, identifying HCM strengths and weakness and linking improvements or backsliding in specific HRM practices with improvements or shortcomings in organizational performance. Also multiple surveys over time can reveal progress or regression in each of the HCM practices and help a company decide where to focus improvement efforts that will have a direct impact on performance.

3.2.4 CONCLUSIONThus with these HCM tools HR can start gauging how well people are managed and developed throughout the organization. In this role HR department can take a strategic responsibility, acting as coaching, mentoring and monitoring agencies to ensure that superior management of human capital becomes a central part of the organization’s culture.

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3.3 ARTICLE NO. 3“Transforming HR Function from Reactive to Proactive” By Jaclyn Lee

3.3.1 CISCOCISCO is an armed security business, became a private and commercial business after takeover by Temasek Holdings Pte Ltd in June 2005.It came to be known as CISCO Security Pvt. Ltd. All 4200 employees were transferred to the new company.

3.3.2 THE EARLIER SCENARIO AT CISCOIt was merely administrative in nature, HR practices were irrelevant to the business resulting in very high staff turnover and uncompetitive salaries. All Business unit heads crafted their own people policies to cope up with increasing competition. The HR an obstacle to change and hinged onto bureaucratic practices that effected business and people practices.

3.3.3 THE CHANGE PROCESSHowever when the company was in the process of transition, HR function was completely overhauled and transformed to a strategic function to facilitate the transition of the company to a private company. HR aligned itself with the critical needs of business. The objective of the new HR team was to shape the CISCO manpower and talent to support the new philosophy and the mission of its business to deliver high quality services to its clients.Major considerations for the new HR transformation were: •

Understanding the business strategy and aligning HR strategy with it.

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Understanding the needs of the business units and their unique challenges.

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Identifying the key factors causing the high attrition.

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Identifying the key factors causing the loss of key talents.

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Building key HR pillars to deliver core HR services.

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Building the employer brand positioning of CISCO to attract talents.

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Building a strong human capital development program to strengthen key competencies needed for the business.

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3.3.4 THE HR PILLARSTo achieve the above objective the following key HR pillars were formed• Manpower Planning and Recruitment • Aligning human capital development • Strategic compensation and benefits • Employee engagement • HR systems and service delivery 3.3.5 THE KEY CHALLENGESHR transformation to a commercial enterprise was a challenging task. The Toughest job was to convince existing staff to transform from a back end function to a front line area. However Effective communication played an important role in overcoming these challenges.

3.3.6 CONCLUSIONTo conclude the new role of HR was to shape the CISCO manpower and talent to support the new philosophy and the mission of its business to deliver high quality services to its clients thereby reflecting the strategic role of HR function.

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3.4 ARTICLE NO. 4“Thinking ‘Integrated Space’-TQM and HRM” By P. Vijayan 3.4.1 TQMTQM refers to a set of principles and practices whose core ideas include understanding customer needs, doing things right the first time, and striving for continuous improvement. TQM approach emphasizes a prevention, rather than a detection approach to work. Traditionally, TQM was on the agenda of Manufacturing, Operations and SCM. (Detection approach).

3.4.2 TQM SELECTION PROCESSAs opposed to what was believed traditionally by the HR Department, generation of more number of CV’s is generally not good. Instead, firms should filter the applications and spend more time with few candidates.

3.4.3 EMPLOYEE SATISFACTIONIt is as important as Customer Satisfaction because satisfied employees can add value towards enhancing customer satisfaction. It also bridges the gap between what senior leaders feel is necessary to improve employee satisfaction & their ‘real’ need.

3.4.4 PERFORMANCE APPRAISAL & JOB PERFORMANCEThese practices can cause managers to ignore system factors and cause employees to compete instead of cooperate as: In sharp contrast to the TQM performance assumption, the field of human resource management (HRM) assumes that performance is largely due to the worker and not the system/process.

Both person and system factors can directly influence work performance. Moreover, system factors can enhance or constrain the influence of person factors on work performance.

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3.5 ARTICLE NO. 5“Redefine The HR Agenda…The TCS Model” By Dilip K. Mohapatra 3.5.1 INTRODUCTIONThis article shows how HR can emerge as a strategic partner with the business and be recognized as a source of competitive advantage with a focus on the TCS model.

According to the article, in this whole process, HR alignment with the mission, vision and values is very important. TCS VISION is of Being global top 10 by 2010 in the IT industry is supported by its MISSION to ensure Customer delight by providing best in class consulting, IT solutions and services and delivering value and joy to all stakeholders. TCS has incorporated 5 VALUES -Integrity, Leading change, Excellence, Respect for individual, Learning and sharing, that supports its mission and vision .TCS has a robust HR alignment framework starting from the vision and mission which drives the strategic objectives and business plans. It uses extensively BALANCED SCORECARD (BSC) for aligning all HR and Other Departments’ activities across geographies, industry practices, service practices and its delivery centres.

3.5.2 ROUTES TO ENHANCE SHAREHOLDERS’ VALUETCS considers its workforce capabilities as its principal offering to its customers. The delivery routes to enhancement of shareholders value are- Through enhancement of customer delight through delivery excellence of world class services and successful management of customer relationship and - By enhancing employee delight through effective management of their operating efficiency. All these add up to the company’s human resource efficiency and human capital effectiveness.

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3.5.3 HR DELIVERY ALIGNMENT AT TCSAccording to the author another important aspect is HR delivery alignment with the business objective. TCS considers its EVA as the main driver of its business objective. EVA has two components: revenue and cost. Revenue is driven by realization rates and the number of people engaged in client delivery. On the cost side, the performance management group ensures optimum utilization of the budget to structure compensation packages to attract, retain and recognize talent within the organization. Thus human resource efficiency and human capital effectiveness affects the EVA and hence plays a strategic role. At TCS alignment is done through a cascading balanced score card. It is an effective instrument for linking the HR strategies and the HR delivery with the organization’s vision, mission and strategies.

3.5.4 BALANCED SCORECARDIt gives managers the opportunity to look at the Co. from the perspective of internal & external customers, employees & shareholders. It is a performance measurement tool for strategic planning and management including feedback. It should be used to: • Link HRM activities to the Co’s business strategy. • Evaluate the extent to which the HR function is helping the Co meet it’s strategic objectives.

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CHAPTER 4 SHRM AT NESTLE 4.1 AN OVERVIEW OF NESTLENestlé is a multinational packaged food company founded and headquartered in Vevey, Switzerland. It resulted from a merger in 1905 between the Anglo-Swiss Milk Company for milk products established by the Page Brothers in Cham, Switzerland, in 1866 and the Farine Lactée Henri Nestlé Company set up in 1867 by Henri Nestlé to provide an infant food product. Nestlé’s trademark of birds in a nest, derived from Henri Nestlé’s personal coat of arms, evokes the values upon which he founded his Company. Several of Nestlé'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.

4.2 BRANDS UNDER NESTLE1. Milk & Nutrition 2. Beverages 3. Prepared dishes & cooking aids 4. Chocolates & confectioneries

4.3 WHY NESTLE?We have chosen Nestle because it is an appropriate company to study both open culture and values of a company. Nestle believes in adaptation to a changing world, but its basic foundation is unchanged from the time of the origins of the Company, and reflects the basic ideas of fairness, honesty, and a general concern for people.

4.4 METHODOLOGY ADOPTED-A1. Primary Data collected by way of Interview schedule with Ms. Bhawna Sikka ( Food Services and Vending Executive, Cannaught Place, New Delhi) and Questionnaire answered by 9 employees of different departments. 2. Secondary data collected by way of company’s website and other sources.

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4.5 BUSINESS OBJECTIVES OF NESTLE•

Nestlé's business objective is to manufacture and market the Company's products in such a way as to create value that can be sustained over the long term for shareholders, employees, consumers, and business partners.

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Nestlé does not favor short-term profit at the expense of successful long-term business development.

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Nestlé recognizes that its consumers have a sincere and legitimate interest in the behavior, beliefs and actions of the Company behind brands in which they place their trust, and that without its consumers the Company would not exist.

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Nestlé believes that, as a general rule, legislation is the most effective safeguard of responsible conduct, although in certain areas, additional guidance to staff in the form of voluntary business principles is beneficial in order to ensure that the highest standards are met throughout the organization.

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Nestlé is conscious of the fact that the success of a corporation is a reflection of the professionalism, conduct and the responsible attitude of its management and employees. Therefore recruitment of the right people and ongoing training and development are crucial.

Nestlé continues to maintain its commitment to follow and respect all applicable local laws in each of its markets.

4.6 CORE VALUES-

A prerequisite for dealing with people is respect and trust.

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Transparency and honesty in dealing with people are a sine qua non for efficient communication.This is complemented by open dialogue with the purpose of sharing competencies and boosting creativity.

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To communicate is not only to inform; it is also to listen and to engage in dialogue.

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The willingness to cooperate, to help others and to learn is a required basis for advancement and promotion within our company.

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4.7 A HUMAN COMPANYNestlé is a human 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.

We have analyzed Nestle to follow all three models -

High Performance,

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High Involvement &

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High Commitment.

This is because Nestlé aims to increase sales and profits but, at the same time, to raise the standard of living everywhere it is active and the quality of life for everyone. Nestlé is also convinced that it is the people who form the strength of the Company and that nothing can be achieved without their commitment and their energy, which makes people its most important asset. Involvement of people at all levels starts with appropriate information on the Company’s activities and on the specific aspects of their work. Through open communication and active co-operation, everyone is invited to contribute to improvements enhancing Company results and personal development.

4.8 HR PRACTICES4.8.1 RECRUITMENT-

The recruitment process at Nestle is clearly defined. People with qualities like dynamism, realism, pragmatism, hard work, honesty and trustworthiness.

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Match between candidate’s values & company’s culture.

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Recruitment for management levels takes place in the head office and all others at the branch level. The existing employees are promoted to higher posts as per the requirements. There are no lateral recruitments. Another source of recruitment is campus placements and human resource consultancies.

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Decision to hire only by HR staff, no external consultant.

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People management policies, basic values & principles elaborated in-

Nestle management & leadership principles- The Nestlé Management and Leadership Principles describe the management style and the corporate values of the Nestlé Group, specifically in the area of interpersonal relations.

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Nestle human resources policy- This policy encompasses those guidelines which constitute a sound basis for efficient and effective HR Management in the Nestlé Group around the world.

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Nestle people development review-this policy throws light on Nestle’s culture and core values, different training programs and life of employees after work.

4.8.2 TRAININGFrom the factory floor to the top management, training at Nestlé is continuous. And because it is mainly given by Nestlé people, it is always relevant to the professional life.

Throughout the world, each country runs its own training programmes (e-Learning, classroom courses, external courses), and it has five training centers in France, UK, Spain, Mexico and Brazil.

Nestle provides the following-

Literacy training-to upgrade essential literacy skills, especially for workers who operate new equipment (‘Mission-directed Work Team Approach’). Employees are also sent abroad to study markets, consumer tastes etc.

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Nestle Apprenticeship Programmes.

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Local Training Programmes-on issues ranging from technical, leadership, and communication and business economics. Employees are also sent abroad to study markets, consumer tastes etc.

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Rive-Reine, their International Training and Conference Centre in Switzerland is where Nestlé people from all over the world meet to exchange information and ideas in seminars and training courses.

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4.8.3 PERFORMANCE MANAGEMENT-

Formal assessment by Line Managers and HR once a year with feedback.

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Subordinate can question an unfair evaluation.

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Specific Key Performance Indicators have been enlisted by the HR department.

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One of the important key performance indicators is achievement following the Nestle management and leadership principles.

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Remuneration structure and promotion criteria take into account individual performance.

4.8.4 JOB DESIGN-

Selection-Combination of written test, GD & interview (Interviews for top management posts).

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The company incorporates practices like Job Enrichment and Job Enlargement, to motivate employees and to break the monotony of their job tasks. The correspondent herself works in both sales and brand management departments, which is an example of job enlargement.

4.8.5 PAY STRUCTURE-

Nestle strives to offer fair remuneration. Remuneration level is above the average in industry.

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The variable component of the salary is comparatively big to reward individual performance.

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In case of higher management level, the variable part is linked to individual & team target achievements.

4.8.6 REWARDS & INCENTIVES-

‘Passion To Win’ awards- These quarterly awards have been institutionalized to reward those who over-achieve their targets.

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Long-service Awards- To recognize employees who have been with the company for more than 30 years.

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‘Nestle Idea Award’- It was found from the correspondent that the company institutes Nestle Idea Award every quarter to recognize and award employees who come up with relevant and innovative ideas which have the potential of being implemented at Nestle.

4.8.7 BENEFITSThe following benefits are provided to all employees, with no discrimination-

Leave-Personal & Medical (fixed no. per year)

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Children Education Assistance Scheme

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Provident fund

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Retirement Gratuity Scheme

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Group Insurance & Accidental Insurance Scheme

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Conveyance Reimbursements

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Residential Accommodation

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Monthly health check-ups & free consultation for self & family etc.

4.8.8 EMPLOYEE RELATIONSNestle provides a very healthy working environment which is one of the reasons why Nestle’s employees state their commitment level to be very high. -

Employee turnover is less than 5%., which is considered to be very low for a multinational corporation.

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Nestle has a open culture & upward communication especially in case of grievance redressal is encouraged.

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Work/Life balance is given importance, as illustrated in the Nestle Human Resource Policy document.

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‘Nestle Family’ annual events are organized by their HR department whereby employees alongwith their families are invited.

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Emphasis is laid on safety of employees (Nestle Policy on Health and Safety at Work).

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4.8.9 CHANGE MANAGEMENT-

Nestle has adjusted to the ever-changing external environment for the last 140 years since its inception 1866 without losing its fundamental beliefs and core values. It manages Change and drives sustainable profitable growth by following the policy of making gradual changes instead of making drastic and risky changes.

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ERP implementation- In June 2000, Nestle SA signed a much publicized $200 million contract with SAP and additional $80 to install an ERP system for its global enterprise to help centralize a conglomerate that owns 200 operating companies and subsidiaries in 80 countries. While the ERP system was likely to have long-term benefits, the project touched the corporate structure and culture. The structure was decentralized, and it tried to centralize it. This was initially opposed by employees but with subsequent measures taken by the HR like training etc., this has been successfully implemented.

4.8.10 SAFETY & HEALTHThe Nestle Operational Safety, Health and Risk-Management Strategy document illustrates that: -

Nestle is dedicated to safe & healthy work environment.

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Regular safety assessments & audits take place by internal & external bodies.

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CHAPTER 5 SHRM AT NTPC 5.1 AN OVERVIEW OF NTPCNTPC Limited is the largest thermal power generating company of India. A public sector company, it was incorporated in the year 1975 to accelerate power development in the country as a wholly owned company of the Government of India.

At present, Government of India holds 89.5% of the total equity shares of the company and the balance 10.5% is held by FIIs, Domestic Banks, Public and others.

Within a span of 31 years, NTPC has emerged as a truly national power company, with power generating facilities in all the major regions of the country.

5.2 NTPC’s CORE BUSINESSES-

Engineering

-

Construction

-

Operation of power generating plants

-

Consultancy in the area of power plant constructions and power generation to companies in India and abroad.

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NTPC has set new benchmarks for the power industry both in the area of power plant construction and operations. It is providing power at the cheapest average tariff in the country. With its experience and expertise in the power sector, NTPC is extending consultancy services to various organisations in the power business.

Recognizing its excellent performance and vast potential, Government of the India has identified NTPC as one of the jewels of Public Sector ‘Navratnas’- a potential global giant. Inspired by its glorious past and vibrant present, NTPC is well on its way to realise it’s vision of being “A world class integrated power major, powering India’s growth, with increasing global presence”.

5.3 WHY NTPC?NTPC was chosen to study strategic HRM as it is a public sector enterprise but has been able to achieve excellence in its field by incorporating appropriate HR practices in employees’ daily life, which reflect the organization’s business goals as well. NTPC has been able to satisfy its employees by adapting its internal environment to the everchanging external environment.

5.4 METHODOLOGY ADOPTED1. Primary data was collected as follows•

Visited NTPC office at SCOPE building, CGO complex,Lodhi Road , New

Delhi and met Mr. P. K. Sinha. ( DGM – HR ) •

Data collected by way of Interview

2. Secondary data was collected from company’s website.

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5.5 HUMAN RESOURCESNTPC believes in achieving organizational excellence through Human Resources and follows "People First" approach to leverage the potential of its 23,500 employees to fulfill its business plans. Human Resources Function has formulated an integrated HR strategy which rests on four building blocks of HR viz. Competence building, Commitment building, Culture building and Systems building. All HR initiatives are undertaken within this broad framework to actualize the HR Vision of "enabling the employees to be a family of committed world class professionals making NTPC a learning organization. Prior To 1997 , NTPC’c HR department was known as the personnel department and basically all their work was restricted to the administration and all.

NTPC’S human resource department work on the following model1.) Competence building 2.) Commitment building 3.) Culture building 4.) Systems building

Where the systems building include identifying the manpower and looking for these talent who are apt for the particular project work.

5.6 HR PRACTICES5.6.1 RECRUITMENT-

For the recruitment process the company conduct the all India written test,

-

It also goes to the various IIT’s and NIT’s for the campus recruitment.

To induct talent and groom them into a dedicated cadre of power professionals "Executive Trainee" Scheme was introduced in the year 1977 for recruitment in the disciplines of Mechanical, Electrical, Civil, Control & Instrumentation and now encompasses Computer Science, Chemistry, HR and Finance disciplines also.

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5.6.2 TRAINING & DEVELOPMENT-

A comprehensive one-year training comprising theoretical inputs as well as onthe-job training.

-

The new recruits are also attached with senior executives under a systematic and formal 'Mentoring System' of the company to integrate them into the Culture of the company.

-

As part of post employment training and development opportunities, a systematic Training plan has been formulated for ensuring minimum seven man days training per employee per year and includes level-wise planned intervention designed to groom people for assuming positions of higher responsibility, as well as specific need-based interventions based on scientific Training Needs Analysis.

-

NTPC has set up 15 project training centres, 2 simulator training centres and an apex institute namely 'Power Management Institute' (PMI). While the project training centres (Employee Development Centres) have specialized in imparting technical skills and knowledge, PMI places emphasis on management development. Besides opportunities for long term education are also provided through tie ups with reputed Institutions like IIT, Delhi, (M.Tech in Power Generation Technology), MDI, Gurgaon (Executive MBA programme), BITS, Pilani (B.Tech) etc.

5.6.3 JOB EVALUATIONIn NTPC all the roles are uniquely defined and they have role directories. Every individual in the company is evaluated every year on the following parameters1) KPA 2) FUNCTIONAL COMPETENCIES 3) MANAGERIAL COMPETENCIES 4) CORE VALUES

KPA includes the key performance areas of every employee.

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This process is done every year and every individual are judged on the mark of 100 wherein 70% of weight age is given to the KPA. And rest 30% is distributed equally amongst the various parameters. (this percentage may vary year wise).

5.6.4 JOB ANALYSIS-

NTPC has the provision for the job rotation policy also. Every 10% of the employee are rotated in various areas of a department to avoid the monotony of the work. This also works as the one of the most important factor for the retention of the employee in the company.

-

All the employees are encouraged to come up with the creative and the innovative ideas.

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The overall-working environment of the NTPC is employee friendly which works as the driver to the motivation of the employees.

5.6.5 REWARDS, INCENTIVES & BENEFITS-

Incentives scheme – It is group performance based (no individual incentives) which illustrates that the company encourages effective and efficient teamwork.

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Retention strategies – they include giving Mediclaim to all employees, various monetary incentives and a favorable work environment.

5.6.6 PERFORMANCE MANAGEMENT SYSTEM (PMS)-

PMS started in 2004 for the alignment of company’s and employees’ goals. Prior to the implementation of this system, in 2002 each and every employee was sensitized about this system. It is a 3-stage process1. Target study 2. Mid term appraisal 3. Final review

A target is set in the beginning of the project or the year and after that in the middle of it the project is reviewed for the appraisal and being checked whether if there is any flaw or lagging in the project so that it can be upgraded accordingly. And then finally the final

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review is done. The shorter the span of the project the higher the frequency of the review being done. -

Open system - Individual evaluation (marks out of 100 given to each employee) is done at the end of the year.

5.6.7 EMPLOYEE RELATIONSDemonstrating its high concern for people, NTPC has developed strong employee welfare, health & well-being and social security systems leading to high level of commitment. -

The attrition rate in this company is less than 1%.

- NTPC offers best quality-of-life through beautiful townships with all amenities such as educational, medical and recreational opportunities for employees and their family members. The motivation to perform and excel is further enhanced through a comprehensive NTPC Rewards and Recognition system.

- Employee satisfaction survey- done by Shriram centre every 2-3 years along with e-darpan online survey.

5.6.8 TOTAL QUALITY MANAGEMENT (TQM)-

All the total quality management tools are used In NTPC except six sigma.

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"Professional Circles" have been formed department-wise where Executives of the department meet every fortnight to share their knowledge and experiences and discuss topical issues.

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In order to tap the latent talent among non-executives and make use of their potential for creativity and innovation, Quality Circles have been set up in various units/offices in NTPC.

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Besides a management journal called "Horizon" is published quarterly to enable employees to share their ideas and experiences across the organization.

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CHAPTER 6 ANALYSIS AND CONCLUSION The Model employed by Nestle is one of High Performance, High involvement and high commitment due to reasons illustrated in chapter 4. Nestle is unique in the sense that it has been able to successfully inculcate its business objective as well as its core values, consistently in its employees day-to-day activities starting from recruitment till continuous performance appraisals. Like, open and flexible culture is ensured by way of providing training programs to employees at all the levels. This kind of culture is also supported by decentralized structure of Nestle. Transparent performance appraisal systems and the freedom given to them to question their seniors benefits not only the employees but even the organization as a whole. Nestle’s emphasis on individual achievement is evident from the kind of pay structure HR has designed for its employees. Nestlé, over its long historical development from a small village operation to the world’s leading food Company, has demonstrated an enviable capability to adjust to an ever changing external environment, without losing its fundamental beliefs and core values, so important for long-term success. Over the years to come, this capability of using HR as a strategic partner in implementation of company’s activities will continue to be challenged even more as Nestlé is growing in size and complexity up to a dimension which demands a continuous evolution of its organization and of the way in which it is run. Its motivation based on willingness to learn and to question what it is doing and why it is doing it, combined with its long standing respect for Nestlé values, will assure its success.

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The Model employed by NTPC is one of High involvement and high commitment due to reasons illustrated in chapter 5. NTPC’s HR vision of enabling employees to become a family of committed world-class professionals is depicted by the company’s People First approach. Unique features illustrated by its Human Resource Department like the 10% Job Rotation Policy, giving same benefits to all employees, TQM practices of Quality and Professional Circles and development of superior Townships provide a healthy work environment for the employees. Such strategic HRM activities at SHRM ensure high productivity as well as low attrition rates at NTPC.

The above SHRM practices help both companies to harmonize it's HR policies with the business strategy leading to Competitive Advantage, Distinctive Capabilities and Strategic Fit .As a result enabling them to become India's one of the biggest organizations in their own fields and to grow further.

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ANNEXURE Below is the Questionnaire given to five employees of Nestle India working at the Branch Office located in Connaught Place, New Delhi. It has been organized chapter wise to facilitate easy reading. 1. What are the achievements of Nestle? 2. What are the various Corporate Social Responsibility initiatives being carried out by Nestle? 3. What is the hierarchy at Nestle? Kindly illustrate it with an organizational chart. 4. What structure does your organization have? 5. What degree of formalization exists in the organization? 6. What kind of training programmes are conducted for the employees and what are the role requirements for the employees? 7. Is there centralization in the organization? 8. Is the span of control narrow or broad? 9.

Is there flexibility in the organization?

10. What is the degree to which Nestle creates clear objectives and performance expectations? 11. What is the degree to which units within the organization are encouraged to operate in a coordinated method? 12. What is the degree to which managers provide clear communication, assistance, and support to their subordinates? 13. What is the degree to which employees identify themselves with the organization as a whole rather than their particular workgroup or field of professional expertise?

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14. What is the degree to which employees are encouraged to air conflicts and criticisms openly? 15. What is the degree to which communication patterns are restricted to the formal hierarchy of authority? 16.

How many rules and regulations and how much direct supervision is used to oversee and control employee behavior?

17. What is the degree to which reward allocations are based on employee performance. What is the mechanism of Performance Appraisal? 18. What

is

the

degree

to

which

employees

are

encouraged

to

be

aggressive,Innovative and risk seeking? 19. What is the degree of responsibility, freedom, and independence that employees have? 20. How does Nestle reward achievement and good work? 21. What are the initiatives carried out by Nestle to facilitate interaction and cohesiveness within its employees? 22. What are the factors that can cause change? 23. What are the possible consequences of various changes for the organization? 24.

How does Nestle deal with change given that it produces 10000 products which are marketed in 130 countries?

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