The situation in Sonoco, a consumer packaging company reflected inept human resource management activities - Essay Example

?Business Contents Contents 2 of the Situation 3 Diagnosis of the Problems 4 Analysis of the Case 5 Evaluation of the Issues 7 Design of Changes 9 Implementation of the Changes 9 References 11 Description of the Situation The situation in Sonoco, a consumer packaging company reflected inept human resource management activities. The ineptness of the human resource management activities owes to its mismatching with the operational activities of the company. Sonoco as a consumer packaging company was found to gain a high amount of growth rate both in terms of market and financial value. The situation of the company turned grave after the period of 1990s when national crisis like decline in export volume or financial crisis in the Asian market made its sales to decline by around 6 percent during the period 1995 to 1999. This decline in sales volume from $2.7 to $2.5 billion resulted in the company revising its operational structure to reduce the amount of expenditure. Thus the operational strategy devised by the company management was required to focus upon generation of increased sales volume while effectively managing the cost structure of the concern to evade undue rise of expenditure. Sonoco in the previous periods acquired huge amount of growth by acting on strategies like acquisitions where it is recorded that in the period pertaining to 1990s around 60 companies were acquired on a global basis. Large consumer product companies like Nestle, Gillette, Kraft and Procter and Gamble belonged to the consumer profile of Sonoco. The company also worked in the development and rendering of growth opportunities of the employees of the company. This helped in the development of tem work in the company. However the period of 1990s rendered a huge shock to the company that happened to tumble its stock price in the share markets. Moreover along with tumbling stock prices the company also happened to face increased competition from the external group of competitors that in turn started reducing both its market shares and potential revenues. These two situations of faltering stock price and reduction in market share and potential revenues reflected that the company, Sonoco was required to go for a total restructuring. It was inferred that the structure and culture on which the company worked reflected such a tight and knit environment that happened to conceal the underperformers. This concealment of the underperformers in the company is considered to be one of the important factors that triggered the decline of business for the company after the 1990 period. Diagnosis of the Problems The problem being identified in the above segment this part calls for a steady diagnosis of the same. The diagnosis or analysis of the problems can be made based on the analysis based by Cindy Hartley, the newly appointed Vice President of Human Resources operations. It was noted by Cindy that the existing human resources management practices of the company were set on a very decentralised and traditional note. This decentralisation of human resources functioning in the company failed to effectively address the needs of the concern pertaining to the different departments. Further the role played by the human resources managers pertaining to different departments were found to operate based on a tactical note and thus failed to render any type of strategic decisions. These human resources managers cooperated largely with the general managers pertaining to the different divisions by means of direct reporting activities. However in that responding to the calls of the corporate manager pertaining to the human resources department the same is reflected to be conducted in an indirect fashion. Human resources functioning in the company were considered as back end process with no such relation to the operational activities. Thereby no such planning was made to enhance the potential of the human resources working in the concern. Again in regards to the corporate manager of human resources in the concern it was found that the manager was highly involved in settlement of corporate disputes in the concern. The corporate human resources manager was thereby not required to bring out and monitor policies regarding the framing of compensation and benefit schemes for the people. Such activities were rendered to another manager where no such noted actions were taken to be found. Further commenting on the self appraisal and salary increment process conducted in the concern it was found that such system was carried out in a manipulative manner. The human resources manager reporting to the division general managers created a problem for the employees where the general manager carried out several manipulations to hinder the growth and salary increment of employees which were not preferred. This fact in turn created a problem for the employees that desired a growth both in terms of career and financial benefits. The career planning activities of the human resources in the company were found to be in doldrums because of the existence of the inept human resource management. Career planning though taken was evident only in paper and pen and was rarely implemented. Analysis of the Case The case reveals a very siloed and decentralized HR function which was highly inconsistent its processes and services between businesses. There were disparity between the divisional HR managers and the corporate HR mangers. The HR structure was considered to be more tactical rather than being strategic in nature. While the divisional managers were more concerned about the day to day employee relations issues, the business managers were of the opinion that HR issues were solely a back room operation. Moreover the various divisions had their own HR functions which varied greatly between them, led to unhealthy competition and lack of collaboration between the divisions. Compensation plans were highly decentralized and were least strategic in nature. There were other shortages in all of the HR functions of Sonoco. Compensations of employees were not directed towards enhancing employee performance at all. Rather they were perceived as being entitlement for workers. Performance reviews were highly irregular in nature and were least reflective of the productivity and performances of employees. The employees remain dissatisfied, discontented and de-motivated. They lacked direction and guidance regarding their subsequent steps in their careers. In other words the organization lacked HR functions which were business oriented. Absence of proper leadership development programs was one of the main reasons why employees’ efforts could not be driven or directed in the proper direction. Also, there were questions regarding the suitability of candidates regarding job positions. Analysis of the present situation in the company revealed that compensation and performance management systems were needed to be linked directly with the performance of employees, emerging need for an employee development process to refine and nurture the skill and abilities of employees and finally creation of a proper succession plan for preparing the future leaders in the organization. Prompt and dramatic changes were required; however, Hartley discovered that the process would not be easy as there were employees who were opposed to the idea of bringing about any change. Bringing about and initiating the change management program was one of the issues before Hartley. The divisional HR managers were of the opinion that changing the HR functions would be hardly effective in bringing about changes or improving the performance of the firm. However, constant participation and involvement from the part of Hartley in every small move and decision making attracted and encouraged the participation of the HR managers. They subsequently led to believe in the positive effects that the changes were supposed to bring in and consequently became more comfortable with the changes too. However, changing the HR tasks was extensive and diverse. There were some options which required evaluating. The first one was to divide the HR strategies among the four centres for the sake of reducing administrative costs and bringing about other process improvements. However, there were apprehensions that in such a case the HR would be reduced to another corporate call centre. The second alternative was to have a hybrid structure in which the various divisions would retain such responsibilities as staffing, compensation and benefits planning, succession planning and personnel programs. Even though this was meant to retain significance of the divisions, the question as to the extent of sharing of responsibilities still remained. Evaluation of the Issues It is found that problems exist in Sonoco in regards to inept management of human resources. The human resources in the organisation are found to be dissatisfied in regards to in effective compensation and benefit schemes. Further the policies pertaining to the performance evaluation of the employees were also found to be quite weak and subjected to high amount of manipulation. These issues along with absence of an effective training and development mechanism are found to make the concern weak in the face of recession and competition. The compensation policies in the organisation are required to be formulated keeping in mind the needs and aspirations of the different employees existing in the different levels in the concern. The compensation and benefit structure must be as such that needs to meet the basic needs of the people and also must be compatible enough when compared to the compensation structures of other companies belonging to the same or different sectors. The level of compensation rendered to the employees needs to be constituted of not only wages and salary amounts but also must be enhanced through the rendering of incentives based on the performance level of the people. Benefits on the other hand are generally classified as non-financial in nature and are rendered to the employees in order to enhance the sense of employee loyalty. These benefits can be rendered in the form of leaves, financial benefit structures in the form of insurance policies and other benefits like rendering flexible working policies (Pride, Hughes and Kapoor, 2011, p.260-263). Moreover the performance of the individuals needs to be appraised in an effective manner so as to render potential feedbacks. These feedbacks generated to the employees help in developing their performance and productivity. The performances of the employees in this regard needs to evaluate through identification of the key result areas and thereby effective standards to compare the performances of the individuals. Further the manner the performances of the employees would be evaluated must be effectively communicated to them. The employees who have rendered adequate performance based on set standards must be rewarded while those that failed to perform adequately in spite of the right resource base needs to be removed (Deb, 2009, p.7-8). Further the productive potential of the employees need to be enhanced through designing of adequate training policies. This training polices help in developing the knowledge base of the employees working in the concern and thereby helps them to enhance their productivity. The training imparted is directed in educating the employees about the changes in the external environment that enhances their flexibility (Taylor, 2010). Further in periods of economic recession the employees are required to be trained effectively in order to counter business contingencies. Training needs to be imparted to the individuals in order to reduce costs and serve the customers in a better manner in times of recession and thereby to focus on enhancing consumer loyalty (IMC Learning, 2008). In regards to the literature reviewed above the endeavours taken by Hartley in Sonoco can be analysed. Hartley tended to link the appraisal activities of the employees to the performances performed by them. Similarly, Hartley also worked in developing the potential of the employees through formulation of development programs. Further, Hartley also worked in the development of potential leaders in the concern. Thus though the development of future business leaders is seen as an addition in case of Hartley’s endeavours when compared to the literatures studied yet the programs can be further enhanced through the designing of essential benefits in addition to the compensation rendered. Design of Changes The compensation and the benefits plan reviewed above must be effectively designed to help in the enhancement of productivity in the concern. In this regard the compensation and the benefits plan in an interwoven manner must be designed in view of the business objectives of the company. Further the plan made for the compensation and benefits to be rendered must be discussed with the different stakeholders so as to avoid conflicts. Again an internal team containing of financial, legal, administrative and business experts must be made to effectively implement such policies (Davis and Edge, 2004, p.199-200). The designing of effective performance appraisal systems within the company can be made through identification of the key result or performance areas. After identification of the key performance areas the same needs to be linked potentially to the operational effectiveness of the concern. Standards need to be set based on such performance areas and an evaluation chart needs to be created to help in evaluation of the performances (Kitaeff, 2011, p.170). Designing of an effective training program must be made through focusing on the aspects and business objectives for which it needs to be developed. The training program must be designed based on different learning modules that would be imparted to the participants based on different periods. Drafting of the same must be made and approval of the same must be gained from experts regarding that to generate effectiveness (Chu, 1998, p.30-31). Implementation of the Changes The implementation of the compensation and benefit program by the company can be conducted through viewing the legislations passed in regards to the wage and salary parameters in the industry. This practice would help the company in setting the wage and salary standard at par with the industry. Similarly the benefit program can be enhanced through the incorporation of insurance schemes like group medical claim policies made in relation to an insurance company. The leave and flexibility policies in the company also need to be revised from time to time depending on the needs of the employees matched with business objectives (Bernardin, 2008, p.316). Implementation of the performance appraisal system needs to be conducted through effectively communicating its benefits and advantages to the different stakeholder groups like employees. They need to be trained and communicated in respect of the key performance areas based on which they would be evaluated. Further motivation parameters must be enhanced through the generation of the rewards to employees that have exceeded their performances above the standards set (Grote, 1996, p.270-271). The implementation of the training program can be conducted through focusing on some specifications that can be underlined as follows. Firstly the objectives behind designing of the training programs must be evaluated in order to design the training modules in an effective manner. Secondly the group of participants needs to be chosen effectively in order to effectively disseminate the information rendered during the training process. Thirdly the mode of communication along with the training resources and apparatus must be decided upon to help in enhancing the training paradigm. Use of projectors, printed modules and board presentations must be decided and chosen upon. Finally in the fourth case the implementation of the training process must be conducted through the designing of the charts that tend to reflect the training modules imparted on the different days or hours or weeks. This chart helps in the effective division of the training period so as to help in enhancing the mode of imparting the modules created. Further an effective feedback mechanism must be developed to help in gaining knowledge from the participants involved in re-enhancing the potential of the training modules (McArdle, 2010, Taylor, 2010). References Pride. W., Hughes, R., and Kapoor, J. (2011). Business. Cengage Learning. Deb, T. (2009). Performance & Reward Management. Ane Books Pvt Ltd. Davis, M, and Edge, J. (2004). Executive Compensation: The Professional's Guide to Current Issues & Practices. Windsor Professional Information. Kitaeff, J. (2011). Handbook of police psychology. Taylor & Francis. Chu, D. (1998). Jumping into plyometrics. Human Kinetics. Benardin, H. (2008). Human Resource Management 4E. Tata McGraw-Hill Education. Grote, R. (1996). The complete guide to performance appraisal. AMACOM Div American Mgmt Assn. McArdle, G. (2010). Instructional Design for Action Learning. AMACOM Div American Mgmt Assn. Taylor, J. (2010). Learning and talent development: an overview. [Online]. Available At: http://www.cipd.co.uk/hr-resources/factsheets/learning-talent-development-overview.aspx. [Accessed on January 7, 2012]. Taylor, J. (2010). Learning and talent development strategy. [Online]. Available At: http://www.cipd.co.uk/hr-resources/factsheets/learning-talent-development-strategy.aspx. [Accessed on January 7, 2012]. IMC Learning. (2008). Fight recession by training staff. [Online]. Available At: http://www.trainingpressreleases.com/news/imc-learning/2008/fight-recession-by-training-staff. [Accessed on January 7, 2012]. Read More