Managing People at Coca-Cola - Case Study Example

MANAGING PEOPLE at Coca Cola Today we are living in a fiercely competitive world. In order to sustain the business operations in such a competitive environment, a company requires to have sound strategies for marketing, communication, research and development, sales, social responsibility and of course in managing the workforce. In fact effective HR policies are being a used as a tool to take on today's competitive environment by many international organisations. The workforce is one of the key stakeholders in the business, requiring fullest attention. Managing other operations and activities become far more convenient if a company is able to have a pool of talented and motivated workforce. Terry & Franklin (1994) defines management as 'a distinct process consisting of activities of planning, organising, actuating and controlling performed to determine and accomplish stated objectives with the use of human beings and other resources'. In this paper we will analyse Coca-Cola for the manner in which it manages its workforce. Coca Cola is a kind of product which is known and available in almost all parts of the world. It is said that1 'if all the Coca-Cola ever produced were in 8-ounce contour bottles laid end-to-end, they would reach to the moon and back 1,677 times'. With increasing consumer base, opening economies, globally accepted rules and regulation, emphasis on quality standards etc. the consumer base of the company is bound to see many more milestones in the near future. Therefore managing such a company becomes far more challenging as the company requires to have policies in place to manage the diversity in workforce, depending upon the regional considerations etc. Selection of Personnel With a global workforce of around 90, 500, the company has been able to attain 1.5 billion servings a day, Muhtar Kent, President and Chief Operating Officer of the company says2, "Coca-Cola isn't only a drink. It's an idea, a vision, a feeling. It's connection and refreshment." a. What information and documentation is used in identifying personnel requirement in the organisations' Coca-Cola being an international brand and having operations in more than 200 countries around the world, the company is almost perpetually in need of new people with newer ideas to move ahead towards achieving the competitive targets for the company. Therefore, to assess the need of new workforce, the company is in need of the following information and documentation; i. The marketing strategies and sales targets planned for the year/ region. Coca Cola prefers to have ambitious targets and with the levels of competition increasing and margins shrinking, efficiency and effectiveness are the key consideration in planning the requirement of personnel. ii. The employees' turnover ratio also plays a crucial role in such requirement. Suppose nobody leaves the job this year from the company, then the company will of course be looking to have fewer recruitments, while focusing on granting promotions and bonuses to the loyal workforce. iii. The budgetary provisions under the HR department, of course are a key consideration as it will help in deciding about the salary and perquisites structure for the workforce. iv. Regional considerations like the size of the market, topography of the area etc. For example, if the market/country is a big size, it requires a separate focus and a dedicated team, but if the market size is small, it can be clubbed with some other countries/ regions. For example China being a huge market with many more opportunities for the company, it certainly helps to have a dedicated team from top to bottom, but the markets like Thailand, Philippines etc. can be clubbed together from the point of view of top management. The sales force and lower level employees can of course be from the respective markets. Similarly, the topography and availability of facilities like transport, communication etc. also determines the kind of the workforce the company might be recruiting. v. Strategies of competing companies also play a crucial role in the selection and recruitment policies. Sometimes, head-hunting from amongst the rival companies makes the situation quite interesting. Companies require adopting aggressive marketing communication and sales promotion strategies if the rival company is seen to adopt an aggressive stance. vi. The level of involvement in marketing and promotion activities also provides the need for recruiting the workforce. Coca-Cola is a major partner in the organising of Beijing Olympics 2008, which calls for recruiting many more young people, till the games are over, to be able to hold company's flag in different types of activities and events. This helps in propagating the intended message and creating adequate marketing space. b. How does the organisation identify the individual needs of its personnel and how does it address these needs. Coca-Cola considers its people as its greatest assets3 as it prefers to be an employer of choice. Regional considerations and prevailing standards of compensations are of course the key factors in deciding about the needs of the workforce. Being a well known brand over the years certainly helps in attracting people to the company. In order to fulfil the needs of the individual the company prefers to think about all the aspects of the individual like career goals, personal goals, life outside of the company and expresses its commitment to provide 'support and benefits to accommodate life's essentials'. c. What specific location method does the organisation use when deciding whom to employ Coca-Cola has presence in almost all corners around the world with offices in almost 200 countries around the world. The world is indeed a very diverse place. The business case for managing diversity therefore offers a way to operate equal opportunities as a strategic issue, a core value linked to organisational competitiveness (Dickens 1994). Cultural and values are of course key consideration while devising strategies for diversity management, but in addition the company takes due consideration of non-visible diversity factors like sex, race, age, background, culture, disability, personality and work-style. Coca-Cola has been able to harness these differences over the years in different locations like a predominantly traditional society on religious considerations to the liberal societies in the western world. Therefore employees a person who is well versed with the local traditions, values, beliefs and sentiments helps in company to reach out to a larger market base. When everybody feels valued it helps the company in gaining tangible and intangible benefits, besides being socially and morally right. d. What legislation should the organisation be aware of when selecting personnel. The key legislations that Coca-Cola must be aware of while selecting the workforce are; i. The UN convention on human rights. ii. Labour standards as per ILO conventions and recommendations iii. Laws governing industrial relations in the country. For example, Germany has a dual system of industrial relations involving two pillars in the form of 'free collective bargaining' and the 'Works Constitution Act'. Developing Personnel a. How does the organisation identify and then apply learning styles in developing its personnel' Effectively managing the Human Resources and developing this resource into a competitive advantage forms the core component of globalisation. Irrespective of the nature and specialisation of company, it can be said for sure that, 'people' form the core of its activities and therefore, the behaviour and character of these very 'people' will affect the overall character of the organisation. The performance level of this workforce depends upon the types of motivations provided by the organisation. Organisations identify the needs and subsequently apply learning styles towards developing it human resource by way of; i. Assessing the need of the job ii. Assessing the calibre of the individual iii. Level of motivation and urge in the individual to excel iv. Levels of competitions in the sector/ industry v. Technology upgrades having taken place in all these years b. Explain how the organisation plans, monitors and evaluates its development programmes for staff' Staff development too is an incremental and ongoing process in an industrial set-up. In order to remain competitive, the staff needs to be future ready i.e. it must be able to come to the expectations of the customers in term of the product (or services) features and quality. A company plans staff development plans to attract and retain high quality staff. Coca cola too works out such developmental programmes; i. By assessing the need being felt by the individual ii. By assessing the need of the moment e.g. if the company is planning a foray into a new market then it needs to have staff competent enough to cater to those markets iii. Such programmes are monitored by the HR department for their effectiveness by noting the levels of interest the staff shows for the training programmes, the reaction of industry, and how the senior management views it. iv. The best method to evaluate such programmes is of course to find out the changes and dynamism brought about in the functioning of the company and the effect on production/ marketing levels. c. Show how the organisation develops group cultures, state how these cultures can lead to increase in output but also to conflict. Group culture in fact comes out as an amalgamation of people from different cultures and traditions within the company. Cross-cultural management becomes all the more important when the company has a global presence and is faced to intense competition. Coca cola states4, "We continue strengthening our workplace environment, ensuring a safe environment where a diverse workforce is engaged, fulfilled, and fairly compensated and rewarded for their performance." The company has been consistent in developing group culture because it has to deal will diversity in all spheres of business, be it the R&D facilities located at different places, the marketing division, the supplies, the production or the distribution chain. An effective management of this diversity and group culture help the company in planning and scheduling of its resources in such a manner that the company is able to make optimum use of its resources. But at times, cultural differences, give rise to conflict like situations. This happens the workforce finds disparity on the basis of colour, race, gender etc. Coca Cola being a responsible and world class organisation has been able to manage such conflicts quite effectively so far. In fact the company achieved5 No. 4 position on 'The 2007 DiversityInc Top 50 Companies for Diversity'. In addition the company was counted amongst the top 10 companies for retention and recruitment. The company proudly proclaims that it is, 'One Company, One Team, One Passion' at Coca Cola. Its policies seem to encourage this very culture in all forms of business as it says6, "We are a local business in communities around the world". Allocate Work a. How is work organised and job designed in the organisation. Show the procedures used and their effectiveness. Job analysis and design takes into account the company's requirement and the dynamic behaviour of job holders. One of the major purposes of carrying out job analysis exercise is to develop an appropriate design of job for improved efficiency and productivity. The job profiles have undergone drastic change since the times of 'standard work week'. Internet proliferation, competition and longer working hours have resulted in adding many more dimensions to a job profile. The jobs are therefore designed as per the evolving requirements. In Coca-Cola, work is organised in such a manner that it fulfils the evolving needs of the business together with coming up to the expectations of the individual towards fulfilling his/her career goals. Procedure in general for this process comprises of the following steps; Step-1: Reviewing the existing information about jobs. Step-2: Determining the process of job analysis. Step-3: Data collection Step-4: Data Compilation Step-5: Verifying job description and job satisfaction Step-6: Providing specifications with the approval of middle level supervisors and senior management. Step-7: Maintaining the Job specifications for future reference b. Demonstrate in what ways the organisation applies motivational theories and empowerment techniques to its personnel. Motivational factors arouse a need, propelling a person to channelize his efforts and energies in the direction of fulfilling those needs. These needs are aroused in the employee of an organization to increase the output, provide quality, increase efficiency, maintain industrial peace etc. The fact that the company considers its people as its greatest asset helps in devising appropriate motivational and empowerment policies for these people. Coca Cola calls tells its people that, "From your career goals, to your personal goals, to even your life outside of The Coca-Cola Company, you'll have the resources, support and benefits to accommodate life's essentials". Such support at all levels definitely helps in motivating the workforce to excel in life. The company compares itself to a university, where the individuals come to learn. In addition company takes care of a range of other requirements like health and well-being of its people, providing a 'total benefit package' in line with the changing needs of the individual and the family. The company keeps revising the benefits package depending upon the market driven factors as well while promoting a healthy lifestyle. c. What procedures are there for delegation in the organisation' Delegation not only helps at the hour of crisis, but it also helps in preparing a reliable second line of management. Coca Cola considers the workforce as a team working with passion and commitment towards one common goal. The company says, "Our job is to refresh the world, and it requires the vision, innovation, and passion of every single one of them". The company encourages its team leaders to delegate the powers and responsibilities amongst his/ her team mates, in order to instil inspiration and encourage learning in the team members. Such delegation also provides enough motivation for the team members and creates a positive ambience in team spirit. The company also monitors the outcomes of delegation, because inappropriate delegation might lead to reduction in team spirit, egoistic attitudes and lack of effective interpersonal communication. d. Identify various leadership and management styles at work in the organisation. Leadership styles play a key role in inculcating the values and hunger for being achievers amongst the workers. It can be said for sure that, Coca Cola doesn't encourage authoritarian type leadership style, instead it courage more like a participative style with management focusing on the people as an important resource towards the stated mission and objective of the company. Examples of some of the leadership styles at work are; Encouragement to team spirit instead of strict top down approach Placing more emphasis on acting as a local business at different facilities around the world Encouraging individuals, who can7 'make a difference, develop and inspire others, drive innovative ideas and deliver results, and who live the values of the company'. The company is able to sustain such leadership styles because it is based on trust and respect for each other's contribution e. How does the organisation measure the performance of its staff, which techniques does it use to facilitate these performance gains' Performance appraisal techniques prove quite crucial towards retaining, training and developing of the workforce. In fact measuring the performance of the staff, not only helps the management in knowing about the strengths and weaknesses of the staff, but it also provides an opportunity to the staff member to improve upon his or her weaker points, so that his/her overall efficiency is increased. Coca Cola believes in treating everyone at par as far as performance evaluation methods are concerned. Even the board members' performances are evaluated by the Corporate Governance Committee in order to make sure that the top decision making body is composed of performance oriented people. Such a performance appraisal is a necessity before the expiry of the present term of the incumbent director, before making a recommendation for the next term. In addition the board of directors will also resort to self assessment to find out the shortcomings in the functioning. Similarly, the Chief Executive Committees performance is evaluated by the Board of directors, to see whether the CEO is providing inspiring leadership to the company or not. In addition the evaluation committee also keeps track of the 'executive management succession planning scheme', to make sure that a second line of defence is readily available to take control of the company, just in case the need arises. For measuring the performance of the staff, Coca Cola uses different techniques, at various facilities. The 'five-point rating system' and a 'four point grading system' are two of the widely used methods for such an evaluation. Discipline and Grievance Procedures a. When disciplinary issues arise, what procedures does the organisation employ for their settlement' The commitments of Coca Cola towards fair working conditions are enunciated in the documents named8, 'Workplace Rights Policy' and 'Human Rights Statement'. These two policies take care of a host of issues like, working hours, wages, discrimination, workplace security, human rights concerns etc. In addition the company has a 'Code of Business Conduct9' to take care of the routine matters. But disciplinary issues might arise in the company owing a range of issues like; Differences of opinion on some marketing ideas Touching upon some emotional sentiments related to religious, nationalistic, linguistic, race etc. Sense of deprivation and being slighted, owing to some apparently partisan decision. Demotivating factors playing their role in aggravating the situation Some health related issues, which doesn't allow the staff member to go beyond a certain limit, which is not well understood by the floor manager or the immediate boss. In such cases, first of all the organisation tries to figure out the exact nature of the issue being involved. Thereafter, the extent and severity of the issue is measured by discussing it with the concerned people. Subsequently, if required, written submissions are invited from the concerned parties. These submissions are then analysed to ascertain the reason for the disciplinary issue. Subsequently the issues are decided on a case by case basis. b. The knowledge of which pieces of legislation are required in order to carry out disciplinary procedures correctly' Some of the key legislation required for settling such sensitive matters are; i. United Nations human rights policy and guidelines ii. ILO conventions iii. Industrial relations and the governing rules and regulations iv. Collective bargaining agreements with the unions v. Prevailing code of conduct and related rule books c. Show how closely these procedures compare to the ACAS code of practice The procedure adopted by Coca Cola is perfectly in line with the ACAS code of practice. In fact for an organisation of international repute, what is more important is, to be seen as a responsible and responsive organisation. References: 1. Coca-Cola (2008). The Coca-Cola Company. Available online at http://www.thecoca-colacompany.com/ourcompany/index.html (June 9, 2008) 2. Dickens, L. (1994) 'The business case for women's equality: is the carrot better than the stick'' Employee Relations 16(8). 3. Terry, George R and Franklin, Stephen G. (1994). Principles of Management. Richard D Irwin Inc. USA Read More