Human Resource Management At Mars Confectionery

This assignment will investigate how human resource management (HRM) contributes to the achievement of organisational goals and objectives, particularly looking at HRM activities such as staffing, performance management and change management.

A discussion of several HR planning and development models will be presented including the model of traditional manpower planning, the integrated human resources planning framework and the systematic model of learning and training. Finally, an analysis of how appraisal systems are used to monitor performance in organisations will be undertaken, making suggestions on the shortfalls of this method and potential improvements.

Discussions in this assignment will be retaliated to current information about Mars incorporated Ltd (Mars). Mars is a privately-owned, global fast moving consumer goods organisation specialising in confectionery, drinks and pet care. HRM Information of Mars was largely obtained from in interview conducted with a line manager in HRM at Mars. Information in this assignment obtained from the interview has not been referenced. Other information presented about Mars which has been obtained from other sources such as their website and books has been reverenced at the end of the assignment.

Task 1: Human Resources Management

Human resource management activities at Mars Confectionery

This section will firstly discuss the HRM activity of staffing which is conducted at Mars. Staffing is the process of acquiring, deploying, and retaining a workforce of sufficient quantity and quality to create positive impacts on the organisation’s effectiveness (Burkholder, Edwards and Sartain, 2004). Secondly, the HRM activity of performance management will be discussed. Performance management can be understood as the process of creating a work environment or setting in which people are enabled to perform to the best of their abilities (Bacal, 1999). Change management is the third main HRM activity conducted at Mars. Change management is a structured approach to transitioning individuals, teams, and organizations from a current state to a desired future state (Cameron and Green, 2004).

Staffing

Human resource management at Mars is primarily concerned with ensuring that the organisation is appropriately staffed with the right people, with the right skills, at the right time. At the employee level, staffing has the objective of finding an employee who ‘fits’ into the culture and value system and who is motivated and empowered to work for the organisation. Secondly, at the organisational level, staffing aims to maximise critical knowledge, skills and abilities within the organisation which contribute to its overall effectiveness and competitive advantage (Judge and Ferris, 1992).

At Mars, these objectives are achieved through several means. Initially, a clear forecast on future staffing needs are established. These are determined at Mars by the organisational strategy and the predicted turnover rates based upon averages from previous years. Contracts for different groups of employees are then devised and employment packages are designed to attract the required employee skill levels. Relevant line managers who are familiar with the skills required for the certain role will be required to draw up role specifications addressing the certain skills and abilities needed.

In addition to this, employees seen as no longer fitting into the organisation’s culture and value system are dismissed by HRM. Before dismissals occur at Mars, HRM places underperforming employees on a Performance Improvement Plan (PIP) to help monitor their performance and provide them with mentoring.

Performance Management

A second activity of human resource management at Mars is to ensure that employees are highly motivated and perform well within their roles. The main objective of enhancing motivation and performance is to maximise the effort employees put into their roles and to focus attention on performance targets. In addition to this, enhancing performance within the workforce also helps to raise levels of commitment and engage employees in developing new ideas (Torrington, Hall and Taylor, 2005 p7).

Enhanced employee performance is achieved by human resource management at Mars through employee training and development programmes which aim to increase employee’s capacity to adopt new technologies and methods. Training and development programmes allow employees to increase their career development through the organisation and reduce employee turnover through increased motivation and commitment. In addition to this, reward systems, such as promotion and bonuses, are also used at Mars to enhance performance through providing incentives and positive reinforcement.

Change Management

Another activity of human resource management at Mars is to make sure that organisational change interventions are successful and run as smoothly as possible. For example, Mars has recently implemented change programmes such as TQM and six sigma. These have required substantial changes to the organisations culture and work systems. It was HR’s role to help with the planning of this implementation and to make sure that the necessary training and support was available to the workforce when implementation began.

These objectives are achieved by HR at Mars through recruiting and developing people with the necessary leadership skills to help drive the change process. In addition to this, agents are also recruited by HR to encourage the acceptance of change by the workforce and construct reward systems to reinforce new behaviours.

HR also takes a leading role in assessing the likely impact of change on employees as well as supporting them during the change programme. This is achieved through preparing information to help them cope with the process and developing a timeline for change.

HR at Mars also has a critical role in assessing whether the change programme had been successful and monitoring whether it has produced the required return on investment. They achieve this objective through conducting employee survey to obtain feedback on employee perceptions regarding the change and how it was conducted.

In summary, the three HRM activities of staffing, performance management and change management at Mars are essential for the smooth running and development of the Mars organisation.

Theoretical models of human resource management

This section will describe two influential models within HRM. Firstly, the Harvard model by Beer et al. (1984) is an analytical model which views employees as significant stakeholders within the organisation with their own needs and concerns (Torrington, Hall and Taylor, 2005 p34). Secondly, the Michigan or Matching model will be addressed. The Michigan model states that the control of HRM is the responsibility of senior management and sees employees as resources in the same way as any other business resource (Price, 2007 p39).

The Harvard Model

The model acknowledges that management has the greatest power within an organisation but suggests that for effective HRM, the needs of employees must be always be considered. For example, the model shows HRM policies to be influenced by two significant considerations: situational factors (workforce characteristics, management philosophy and labour market) and stakeholder interests (employee groups, community and unions). This shows that effective HRM should not be a reactive function but continually help monitor and adjust the organisations policies to meet the forever changing needs of the workforce and environment in which it operates.

In addition to this, the model also acknowledges the need for HRM mechanisms to reconcile the inevitable tension between employee expectations and management objectives. For example, the implementation of rewards and structured work systems allow for the organisation to nurture the values of commitment, competence, congruence and cost effectiveness within the workforce.

To achieve long term HRM objectives of individual wellbeing, organisational effectiveness and social well being, the Harvard model suggests that it is essential that all must be responsible for human resource and consider issues such as delegation, leadership, participation and team building.

The Michigan Model

Unlike the Harvard model, the Michigan model (Fombrun et al, 1984 p41) takes a top-down approach suggesting that the control of HRM is the responsibility of senior management and sees employees as resources in the same way as any other business resource (Price, 2007 p39). For example, the model highlights areas such as ‘selection’, ‘appraisal’, ‘rewards’ and ‘development’ but ignores the influence of employee needs and situational factors upon the organisation. Instead, the model views that employees have to be managed like equipment; obtained as cheaply as possible, used sparingly, and developed and exploited as much as possible (Price, 2007 p39).

The Michigan model also shows that employees must be selected and trained to ‘fit’ the strategic requirements of the organisation and show behavioural consistency with their ways of thinking and operating (Price, 2007 p41). For example, if there is an organisational strategy of innovation, employees will be expected to show long term creativity and skill. This is displayed by the great emphasis upon selection, performance and appraisal within the model.

In contrast to the Harvard Model, the Michigan model shows HRM to be a reactive organisational function which under-emphasises the importance of social and external factors. For example, the model places emphasis on the importance of selection, performance, appraisal, rewards and training, but make no reference to employee needs and interests, and environmental factors such as employee groups, community and unions. This means that the model would be unable to factor in current concerns such as employee work-life balance.

In summary, the Harvard and Michigan models both show two contrasting perspectives of effective HRM. Although they are both highly applicable models in their own right, it could be suggested that Harvard model is the most applicable to the HRM of today, taking into consideration current concerns of work-life balanced.

Task 2: HR Planning and Development

Three HR planning and development models

This section will describe the two HR planning models of ‘Traditional Manpower Planning’ and ‘Integrated Human Resources Planning Model’; and the HR development model of ‘Systematic Learning and Training’.

Human Resource Planning

Human resource planning is the process of managing when people enter, move through and leave business organisations in accordance with the overall objectives of the business. HRM needs to assess the future demand for staff and the availability of suitable staff to meet their requirements (RDI, 2008 p2.3 ff).

1. Model of Traditional Manpower Planning

The model of traditional manpower planning is a more traditional human resources planning model emphasising the importance of obtaining the right number of the right employees in the right place at the right time (Torrington, Hall and Taylor, 2005 p51). The model suggests that demand for employees is strongly influenced by organisational strategies and objectives, the environment, and the way in which staff are managed and utilised (Torrington, Hall and Taylor, 2005 p51).

Environment

Organisational objectives and strategies

Analysis of internal manpower supply

Analyses of external manpower supply

Project manpower demand

Project manpower supply

Manpower plans

Reconcile

Figure 3: Model of traditional manpower planning. Adapted from (Torrington, Hall and Taylor, 2005 p51).

When applying the model of traditional manpower planning to Mars, it could be recommended that Mars begins by analysing the changing environment in which it operates. For example, the recent takeover of Cadbury’s by Kraft has meant that Mars’ strategy has become more defensive making sure that maintains its competitive advantage within the industry. Mars must begin to project manpower demand and supply to make sure it is able to recruit the right people with the right skills to facilitate its new defensive strategy. For example, one option for Mars is to target and recruit former Cadbury’s and Kraft managers to obtain important competitor information. Before it can fulfil this recruitment strategy, the model suggests that Mars must assess the availability of such knowledge within job the market.

2. Integrated Human Resources Planning Model

Unlike the model of traditional manpower planning, the integrated human resources planning model brings together all aspects of HR planning and considers the effects of culture, systems and environment on employee demand (Torrington, Hall and Taylor, 2005 p52). The model identifies ‘where we want to be’ based upon the organisation’s strategy; ‘where we are now’; and ‘what we need to do to get there’.

Environmental Influences

Where are we now?

Translate vision –

Where do we want to be?

Design and use plans to achieve transition

Strategic

Vision

Figure 4: Integrated Human Resources Planning Framework. Adapted from (Torrington, Hall and Taylor, 2005 p52).

When applying the integrated human resources planning model to Mars, Mars would firstly need to address ‘where we are now’; analysing the environment to determine what customers want and what competitors are doing. For example, from analysing the current confectionery market, Mars will determine that there is increasing competition from Cadbury’s due to its recent takeover by Kraft. Also, they would be able to determine from the analysis of customer requirements that there is a need for better customer service and lower prices.

Based upon the model, Mars would then have to address ‘where we want to be’; translating environmental influences into strategic objectives which can be used to determine human resource goals. For example, for Mars to compete against Cadbury’s they must establish human resources goals to make sure that their hire talented managers who can bring new skills and capabilities to Mars. In addition to this, Mars should address ‘what do we need to get there’; addressing the resources and time-scales needed to fulfil the strategic objectives. Mars would need to decide on what type of skills and personalities they need to recruit, how many new employees they need to recruit and how they are going to advertise the positions.

Human Resources Development

HR development is a strategic approach used to invest in human capital. It draws on other HR processes including resourcing and performance assessment to identify actual and potential talent (RDI, 2008 p2.22). The systematic model of learning and training was developed to help organisations move away non-evaluated training, replacing it with a more orderly sequence of development.

1. Systematic Model of Learning and Training

Environment

Business Strategy

People Development

Strategy

Identify development

need

Design development

activity

Carry out development

Evaluate development

Figure 5. A systematic model of learning and training. Adapted from demand (Torrington, Hall and Taylor, 2005 p391).

According to the model, the changing environment and business strategy help to shape the type of skills and abilities required in the workforce. These developmental needs can be identified by both the individual and organisation through a problem centred approach (where a new strategy may highlight a shortage of a particular skill within the workforce) and developing an individual’s competency profile to meet the job requirements. For example, the changing business strategy at Mars to improve internal computer systems has revealed a potential gap IT technical skills.

When a gap in skill has been identified, the model suggests that the development required needs to be planned and developed. The planning and design of the learning will be influenced by HR development strategy, which may determine who is involved in the training and type of methods used. For example, HR at Mars has planned and developed a learning programme with trained IT trainers to visit the business and develop employee IT skills whilst at work, but not divert too much of their time away from other more important tasks.

In summary, when an organisation such as Mars adapts to changing environments through with new strategic objectives, it often requires new skills to be brought in or developed within the company. These changes in workforce requirements can either be planned and remedied through recruitment, or development can take place to enhance and build upon existing employee skills and abilities. Planning and development models that are most effective in helping an organisation to meet is objectives are these which take a more holistic approach and are able to adapt to changing organisational requirements.

Effectiveness in achieving organisational objectives

An organisational objective at Mars is to gain and maintain competitive advantage through a highly skilled and motivated workforce. Although the model of traditional manpower planning is effective in allowing Mars to plan for and fulfil future workforce needs, the model does not take into consideration the need for Mars to plan for issues such as employee behaviour, personality and ‘fit’ within the organisation’s culture.

In contrast to this, the integrated human resources planning model is very effective in allowing Mars to achieve this strategy. Unlike the model of traditional manpower planning, the integrated human resource planning model is able to integrate the need of the organisation to obtain highly skilled employees with the need for them to have the right ‘fit’ within the organisational culture. In addition to this, the model is able to adapt to the continuous changes to Mars’ strategy which is central to the manpower planning framework.

The systematic model of learning and training is also effective in allowing Mars to achieve its organisational objective to gain and maintain competitive advantage through a highly skilled and motivated workforce. The model provides an integrated framework to allow Mars to plan learning programmes and to develop workforce skill around organisational strategies and environmental changes. Despite this, the model has the limitation of being too systematic and potentially unable to relate to the fast pace of continuous change evident at Mars (Sloman, 2001).

In summary, it could be recommended that Mars adopts a combination of the integrated human resources planning model and the systematic model of learning and training. Through using a combination of these two models, Mars would be able to adequately plan for and hire appropriate staff and then develop skills to meet their strategy needs.

Task 3: Performance

How HR performance is monitored at Mars

This section will discuss how appraisal systems are used at Mars to monitor performance. Performance appraisal systems are a formalised process to review performance at work over a given period of time (Grote, 1996).

Mars uses a method whereby role objectives or targets are established by the employee and line manager throughout the year and are later reviewed at the next appraisal. Assessments are made to measure the extent to which these objectives have been met throughout the year. Mars believes that performance expectations need to be understood and involve contribution from employees to allow for a greater degree of input and commitment.

The objectives set by employees at Mars are closely monitored by the line manager to make sure that they appropriately stretch the individual and offer personal development as well as meeting the needs of the role. The objectives set by the employee and line manager are prioritised according to importance and how urgently they need to be addressed. Prioritising objectives in this manor allows the employees to manage their time more effectively through addressing the most important objectives first.

In addition to this, Mars also uses the SMART system for describing individual targets and objectives. Before a target can be set by the employee, the line manager must make sure that the target is Specific, Measurable, Appropriate, Relevant and Timed. Ensuring that the target meets these criteria means that the objectives are meaningful and reliably assessed.

Regular brief meetings are set between employee and manager, as objectives are met, to discuss progress and decide on whether new objectives need to be added or whether some objectives need to be removed. Problem areas are highlighted and discussed, and ongoing coaching is given by managers to help guide employees by giving constructive feedback.

360 degree appraisals are used at Mars to allow for a more fair and stringent method of performance assessment. Performance is monitored and assessed by a variety of people in contact with the individual, including, line managers, peers, clients, suppliers. Obtaining appraisals from a variety of sources allows for a fuller picture to be built up of the performance and capabilities of the individual in many different areas of their work.

The outcome of appraisal systems at Mars is directly linked to the salary and promotions. For example, if employees are rated during their appraisal as ‘exceeds expectations’, they will receive a 4% pay raise the following year. Employees rated as ‘below expectations’ can be placed on a ‘Performance Improvement Programme’ which means that their performance is closely monitored throughout the year and they are provided with mentoring to improve problem areas.

Although it appears that Mars has a very stringent approach to performance appraisals, it is important to understand how Mars uses this information after it has been obtained and whether line managers have received the correct training to make sure they are collecting information fairly.

Effectiveness of the appraisal system at Mars and potential improvements.

The appraisal system at Mars is very effective in obtaining reliable and useful information regarding employee performance. One way in which Mars maintains the effectiveness of its appraisal system is through making sure that line managers are properly trained to conduct appraisals. Managers are required to attend a yearly training session supported by human resources where they informed about the most effective ways of monitoring process and supporting their employees through development. Training is also provided on how to record appraisal information efficiently and how to conduct 360 degree appraisals.

Despite the stringent approach to performance appraisals at Mars, appraisal have been criticised for being too subjective (Torrington, Hall and Taylor, 2005). Sometimes appraisals can be unreliable through prejudice when the appraiser’s judgement is distorted because they don’t like the appraisee. Also appraisals can be unreliable when the appraisers have insufficient knowledge of the appraisee. This is particularly the case when appraisers carry out appraisals due to their position in the company hierarchy rather than their knowledge of the appraisee.

In addition to this, appraisals can cause a lot of anxiety and stress for all involved. Research about appraising performance has found that the appraisal itself was often accompanied by long periods of sickness absence due to stress (Grint, 1993). This is a potential problem at Mars because appraisals are directly linked to employee pay and promotion which may create a lot of stress for individual employee.

Effectiveness of appraisals at Mars can be improved further making sure that all involved in the 360 degree appraisal understand what the system is for and the importance of accuracy. Research suggests that questions will be answered more accurately when participants understand the true purpose of the appraisal (Grint, 1993). In addition to this, plenty of feedback should be given to those involved in appraisals as research also suggests that feedback allows for the system to be better accepted and reduces anxiety (Grint, 1993).

In summary, Mars has a very stringent approach to performance appraisals. They believe that it is important to obtain a full picture of the individual, from many different sources and allow the individual to play an active role in shaping their own objective and target setting. Despite this, improvements can be made to make sure that stress is kept to a minimum and proper training is provided to make sure that appraisals are not biased in anyway.

Assignment Conclusion

To be successful in a fast changing global economy, organisations must invest more time and resources into the acquisition and development of high calibre employees. HRM has a vital role to play in this strategy through performance management, recruitment and change management. In the example of Mars, HRM is continually facilitating an environment where employees can improve their skills and competencies through professional development programmes and performance appraisal. Although Mars has well developed HRM policies, to remain competitive, they must continue to invest time and resources into HRM to continue to obtain the right employees, with the right skills at the right time.