Strategic Human Resource Management At Cadburys Management Essay

1.1 Assess the fit of Cadbury’s approach to managing its human resources and its business strategies with reference to relevant models of SHRM. (625 Words Max – Actual 609)

Cadbury Schweppes has a history of being a traditional, family company, caring for its employees by providing benefits, excellent working conditions and welfare rights.  As it has grown this culture has been maintained through the involvement of HR strategically throughout all levels of the company, from the HR Director on the main board down

Although its number one  goal during the period 2004-7 was “to deliver superior shareholder performance.” instead of having a more people/employee objective.  It is clear that within the culture of the company they require a certain degree of aggression in their leaders. 

 

In assessing the company’s approach to managing its human resources, it is important to firstly analyze Cadbury Schweppes to establish if it has a high or low commitment to HR strategies.  According to Leopold el Al (2005) p 31,   there is a set of components that indicate the degree of commitment a company has towards HR strategies.  When a company has a high commitment to HR strategy it is argued that human resources can create high levels of uncertainty for its managers.

 

This analysis shows that Cadbury Schweppes has a high commitment to Human Resources throughout the company. The organizational cultures indicate that the company has shared values and an emphasis on problem solving.  Employees are encouraged to be profit driven and must be results- focused.  This is supported by two share schemes open to everyone with a permanent contract.  This strategy motivates the employees to see that the company does well.  The share schemes can potentially be very lucrative for the employees.  It was clear from the staff attitude survey conducted in 2005 where over 90 percent of the employees had said they understood the business’s purpose and values and its local priorities, that they were proud to work for it.  Involving the employees and ensuring that they have a good understanding of the company’s objectives has been key to the success of the business.

Another example of the company’s commitment to HR is after their purchase of Adams in 2003, the company went through a major reorganization in the business and formed a new decentralized structure based on five global regions. HR had an important role in bringing the two businesses together .

According to Guest’s (1992) model there are four main goals of a strategic approach. Strategic integration, commitment of the employees to the organisation, flexibility in structure and functions and high quality of goods and services. The three main dimensions, commitment, flexibility and quality enhancements are important factors for low staff turnover, adapting to change and productive job performance. This model was implemented in Cadbury Schweppes in 1977 with the programme called “Managing for change” where the three As where talked about. Accountability – which was taking ownership; Adaptability-which was about coping and adapting to change and Aggressiveness – which was being results-focused.

There are many SHRM models. The best practice and best fit views are two traditional models but the new trend is the resource-based approach. This model is different because it first addresses the organisation internally and its potential for developing ways of exploitation. Although there are similarities between the three models, Cadbury Schweppes follows a combination of approaches. The strong HR presence indicates clearly the best practice approach but they are also resource-based. This approach focuses on internal personnel and their abilities and capabilities.

 

 

In conclusion Cadbury Schweppes has a high commitment to HR Strategy throughout the company.  This is demonstrated in the company structure with HR being on the main board of directors and its focus on the people aspect of its employees and their collective involvement and interest in the success of the business.

1.2 Using your knowledge from Unit 8 and the related information about managing effective change evaluate the organization’s approach to change assessing its impact and the role played by SHRM techniques and processes. (1250 words Max – Actual 969)

 

According to Sir Adrian Cadbury the extent of the Quaker involvement and influences business in the 18th and 19th century in the UK. These businesses included as well as Cadbury, the other three main chocolate companies, Fry, Rowntrees, and Terry.

However it was the fundamental religious belief for the worth of every individual, whether male or female that impacted the way the business was managed. The company benefited greatly from the belief that everyone working there had something of value to offer.

Cadbury Schweppes has had to cope with change throughout its history. Recently with the acquisition of Trebor Bassett and Adams in 2003. The organization has been continually changing and adapting. This ability to adapt to change has to be a quality of all of their employees. The company has run programmes to help their employees embrace, instead of fear change.

Cultures bind a organisation. They give unity of purpose and also motivate and stimulate employees. It is vital that organisations take time and give consideration to the culture they wish to develop. A resources orientated culture within a company is more productive than a traditional culture without clear employee goals.

According to Paul Bate (1992) there is an important relationship between organizational culture and effective organisation problem solving. Bate’s model of culture is used to measure an individual’s attitude to organisational life. In Cadbury Schweppes they clearly show the attitude of conservatism, which is the receptiveness to learn and experiment. Within the organisational culture, it is essential to welcome all aspects of positive change.

Cadbury Schweppes has had a culture of commitment to its staff in return for loyalty and has been results orientated for many years. With the new acquisitions in 2003. they had to involve all relevant managers and develop a new unique culture that would allow for a more harmonious, collaborative relationship between the existing and new staff. The benefits of creating a new culture would facilitate the integration of different groups.

The company has managed this change very effectively with HR playing a very important role in the success of managing change within the organisation.

There are new trends in the management of HR Functions. Auditing Performance, Devolution and Decentralization are clearly evident within Cadbury Schweppes.

Auditing Performance has the objective of ensuring that the investment in personnel can be justified. This is used for setting up agreements and targets for the HR role within the company. Cadbury Schweppes uses this strategy of auditing performance to invest in its people and to set budgets to measure added value to the company.

Devolution of HR activities is important for a more business led response to employee related issues. Devolution is when some of activities normally carried out by HR department are given to line managers or locations away from the head office. Cadbury Schweppes has indeed followed this trend reaping the benefits since the days of ‘Managing for Value’ was launched in 1977. According to Hall & Torrington (1998) devolution includes certain activities such as work organisation, training, recruitment and selection, appraisal and employee relations. One important benefit with devolution is enhanced ownership, something very important to Cadbury Schweppes in their culture. It enables empowerment by management and a higher degree of flexibility in the decision making process. This flexibility has brought about improvement in the relationship between HR and line managers. A possible disadvantage of devolution, however, could be that it is seen as having less commitment by top management to HR issues and integration of HR policies.

Perhaps the most impacting change to Cadbury Schweppes has been the decentralizing of the human resource functions amongst other business activities. In their period of greatest change, in 2004, they went through a major reorganization, when they moved to a decentralized organizational structure based on five global regions. A principal advantage of having decentralized activities is greater flexibility in terms of the speed at which decisions can be made.

After using the Human resource Role-Assessment Survey by Dave Ulrich and Jill Corner to analyze: HR is used to improve employee needs, operating efficiently and aid with the process of change. HR is involved in many programmes: for example the ‘working better together’ framework to help working collaboratively within the new decentralized structure. The company scores highly in the area of adapting to change where is has tried to create a unique culture between the businesses. By producing this culture and involving everyone in the process has given everyone a sense of ownership.

In evaluating the success of Cadbury Schweppes and their HR strategies and more recently Cadbury Schweppes Adams: a general overview of companywide strategic HR planning provides evidence that supports a balanced approach in the strategic planning of HR resources and functions. Several examples can be highlighted such as business focus, results orientation and performance enhancement which has been addressed by the policy of auditing performance. The number one goal of 2004-7 was “to deliver superior shareholder performance”. The auditing of performance and the adoption of coaching approach to unlock existing employee potential. gave rise to the ‘Growing our People programme’, which was deemed to be one element in the success of the company in the last three years. The focus on behaviours and unlocking the potential of employees at different levels of the business has paid dividends and obviously resulted in enhanced performance.

One particular area targeted for improvement is the perceived lack of attention directed at poor performance as recorded by the employee survey is to be tackled by yet another programme ‘Passion for People’ which specifically tackles the mechanics of managing performance. These programmes underline the company’s commitment to creating and developing its own approach to people management issues as stated by Andrew Gibson the company’s HR director (GB & Ireland).

The company demonstrates a balanced approach in the area of human resource management with a strong focus upon achieving business objectives and delivering superior shareholder performance while at the same time involving and committing employees at all levels within the business to a programme of performance optimization and adaption to change. The inclusion of both strong business strategies along with commitment, partnership and involvement strategies has strongly contributed to the development of the Cadbury’s Schweppes culture rather than simply adopting an ‘off the shelf’ or more generic solution to fit their requirements.

Maybe i should emphasize more “BEST PRACTICE” APRROACH?

I NEED 250? WORDS MORE IN THE PART OF THE QUESTION

1.3 From your knowledge of the course how does the HR Function seem to be supporting the Business Strategy at  Cadbury’s? In general how can HR best support an organisation going through change? (625 words Max – Actual 552)

The HR Function is supporting the Business Strategy at Cadbury’s in many ways. From top to bottom and bottom to top. The HR function is represented in all aspects of the business including the HR director being on the main board. The HR Link is extremely important to the business. For the company it is essential to take into account people’s considerations.

The company clearly focuses on its employees. It has done this by creating a unique culture within the organisation where people enjoy their work and feel proud to be a part of the company. The company programme ‘Managing for Value’ was aimed at increasing how the company could be more profitable. This programme helped employees to understand the importance of being results focused. This brought about a sense of ownership by everyone. The company culture also promoted working collaboratively through the programme ‘Working better together’. One of HR’s biggest goals is to unlock the potential in its people, by using a joint problem-solving approach.

University of Sunderland Version 3 (2004) p447 – 448 summarizes the role of culture with 27 points. In terms of the Cadbury’s approach, it is geared more towards the SHRM perspective.

Cadburys Schweppes takes a more strategic focus to its HR management. The nature of the relationship between employer and employee is very much of promoting a united culture within the organisation. The employees have a lot of flexibility in what they do and this promotes job satisfaction and produces an atmosphere of ‘going the extra mile’. Due to the management decentralization this has allowed the company to make decisions quickly. As far as strategic aspects of HR the initiatives are integrated and change orientated. The line management is also working towards change and promoting a results orientated culture. The employees show commitment to the organisation and its brands..

According to Hofstead’s (1980) model of culture. To analyze the existing culture within an organisation it is important to the find out the employee attitudes to the following: Power distance; Uncertainty avoidance; individualism and masculinity. Power distance is the distribution of power. Within Cadbury’s its culture is based more on equality and empowerment. Uncertainty avoidance is when employees feel threatened by change. The opposite is the case for Cadbury’s where they have demonstrated flexible, risk taking behaviour. It is very difficult for an organisation to change a culture. This is an ongoing process. Individualism is when an individual is more interested in the wellbeing of the organisation’s family above their own personal interests. Finally masculinity is the interest in acquiring possessions, money etc over caring values and social well being. In Cadbury’s they show the slightly aggressive attitude to organisational based reward.

How can HR best support an organisation going through change?

The key to successful HR support to an organisation is developing a flexible culture and encouraging employees to be adaptable to change. With an open-minded outlook, improved performance becomes achievable. Communication between management and employees is of great importance and the need for involvement in the decision making process. Also the importance of listening to the employees it should be stressed too. HR needs to support the change with training, workshops and constant communication. HR support should focus on the company culture and having caring values and developing a sense of belonging and team work.

Section B

Question 2

What is the value to organizations in creating a learning organizational culture? How can organizations work towards creating this culture through its HRM/HRD Strategies? (Word Limit 1750 max current word count 1660)

Introduction

For Strategic Human Resource Management achieve a competitive edge and to release employee capability, creating a learning organisation culture is essential. Creating a learning organizational culture is much more than simply acquiring skills for the workforce. There are many benefits for developing this culture, but it is not easy and there are also problems to overcome in the process.

What is a learning organizational culture?

According to Navran Associates:-

“A learning organization is one that seeks to create its own future; that assumes learning is an ongoing and creative process for its members; and one that develops, adapts, and transforms itself in response to the needs and aspirations of people, both inside and outside itself” ( Navran Associates Newsletter 1993).

Firstly, it is important to note that in recent times we have changed the word “Training” which was previously used to “Learning”.. Learning is an important part of staff development. Employees need formal learning and self-development programmes to help improve both the individual, as well as the organisation as a whole and its overall capabilities. It is important also to note that Human Resource Development becomes part of the organisational cultural as opposed to it being ‘forced’ upon the organisation.

The strategic purpose for learning within an organisation includes the following: Addressing skills gaps for individuals and the organisation. This is when there is a particular skill missing that needs to be learned to benefit both the individual and the organisation collectively. By using Human Resource Development as a means of initiating change within a company, HRD can also be used to gain competitive advantage by integrating strategic planning with human capabilities. The final purpose is for the creation of an environment for learning for self development and personal growth.

Learning is central to achieving a SHRM approach because of the inter-relationship between learning, performance and change. Learning will bring change as a result.

The learning organisation concept is a indispensable model. Pedler et al (1988) defines a learning organisation as:

“An organization which facilitates the learning of all its members and continuously transforms itself.”

What is the value to an organisation?

HELP EXPANDING THIS SECTION WOULD BE GOOD!

Karash (1995) suggests that organizations are healthier with a learning environment because it increases the ability for employees to manage change and to improve the quality of products and the job employed.

What really adds value to the employees and in turn to the company is that a learning culture develops a more committed workforce. The workers become not only more loyal and committed to the organisation but also they become proactive and work much more efficiently.

A highly motivated workforce that is constantly learning and improving will obviously contribute in the longer term, to achieving competitive advantage over competitors.

According to Rehem (1995 page 10), Learning organizations create environments where people can learn together for the betterment of the whole by creating the results that they really want.

What problems and implications are there?

There are of course problems and implications of having a learning environment culture in an organisation. The cost implications of learning and development can be very high and this can have a negative effect on the cash budgeted for this cause. There are arguments that staff should take an interest and be responsible for their own learning and not rely on the business to train them.

On the other hand, sometimes staff development is not welcomed and in fact some managers create barriers. Some lack motivating and enthusing their teams and in not so doing, limit the results and possible benefits.

Sometimes training is seen as a reward by the company to its successful employees. It is, however, central to the effectiveness of learning and development and the competitiveness and growth of companies.

Another challenge for an organisation is the amount of time training and reflection take. Perhaps management may think this valuable time could be used for something else, arguably more productive, in the short term.

Sometimes organizations disagree with what needs to be learned or changed within the business. This may generate friction between management and workers.

A final problem may not have anything to do with the willingness to learn but with how people learn and their ability to learn. For example, modern ways of learning are through the use of ‘ICT’ and e-learning. This for a less technically proficient person would obviously be distressing and a reason for low enthusiasm and effort.

How can organizations create this culture?

According to Senge (1990) there are five disciplines which an organisation must master if they are to have this culture in their organizations.

Systems Thinking – This is seeing the whole picture and the other four disciplines are needed. This is about looking at things in an interconnected way and not as isolated events. It is important to look at internal, personal actions that can create problems.

Personal Mastery – This is about being committed to lifelong learning. This is when employees look for excitement in their careers.

Mental Models – This suggests that we need to look and reflect about our own lives before we think about real change.

Building shared Visions – An individual vision will not succeed if it is not shared commonly by others. Real commitment is needed from the group. This provides commitment over the long term.

Team Learning – It is essential nowadays in almost any organization that there is team work; this is both for learning and for working together.

There are three clear areas needed to create a learning culture within an organization:-

The first area is in designing the learning activities. The designing of learning activities needs to be carefully thought through. The different learning styles and preferences for learning must be taken into account during the designing stage.

Honey and Mumford (1982) developed a model which links the styles of learning to the four stages of the learning cycle:-

The ‘activist’ is a person who is a risk taker, prepared to try things out. They try things out and discuss things with others. This type of person enjoys brainstorming.

The ‘reflector’ is a person who analyses situations and ideas. This person listens more and takes their time in making decisions and conclusion.

The ‘theorist’ is someone who needs to read something before actually doing it. These people are logical and need to understand the theory; they are also sometimes perfectionists, logical and analytical.

The ‘pragmatist’ is more interested in the applicability to real life and the real world.

The goals for learning need to be very clear, relevant and have a clear business goal, including the acquisition of new skills.

The Role of the management can play a big part in the success or failure of creating a learning organisational culture. The manager should have now changed to a more coaching and counseling type role. They should look for opportunities to reflect on experiences and unplanned activities. They need to ensure that the learning is fitting to the needs of the employees.

An company striving to have a learning organizational culture needs to ensure that it hires efficient management who will not put up barriers to change. An efficient manager is someone who is able develop strengths and help motivate their staff by rewarding risk. There should always be opportunities for learning and staff should be encouraged to address their own learning needs, ask questions and participate in problem solving.

Employee behaviour in relation to culture requires the employee to be flexible and have the desire to learn and develop. It is necessary that they are participative and share ideas, being both proactive and responsive.

Strategic HRD Policy

There are many challenges facing a company with regard to Human Resource Development. The first stage is getting the company to invest in both internal and external courses. A possible objection could be the cost of the training. An organisation seeks to form an integrated approach to training and development.

HRM/HRD Strategies to support a learning environment

For a learning environment to really happen it is vital to have management support at all levels of the organisation. The management must be seen as leading by example and as acting as positive role models to the other members of the organisation.

There are many strategies that can be used to support a learning environment. Staff induction is one way of creating an environment of learning and developing. This is especially important for someone joining the company to appreciate the culture in which they are going to work. Another important strategy is appraisal and assessment. It is very important that employees have feedback on the way that they are working. This should must be on a regular basis. They should be encouraged to develop and set clear career goals and targets. Career development is also a good way of supporting the learning environment. Some companies send their managers to other countries to complete MBAs or they are sent on secondment to learn about other areas of the business or to share their knowledge with charities or other ‘not for profit’ organisatons.

E-learning is a new trend in organizational learning. Employees are required to study online courses which have many advantages. The employee is able to learn in a more flexible manner and at a speed suitable to their own time, pace and speed of learning. However, for e-learning initiatives to be successful, needs a motivated workforce.

Conclusion

In conclusion it can be difficult to create learning organizational culture in a business but the benefits and value to a business are crucial. This type of culture can truly unlock the full potential of employees within a business in terms of both knowledge and skill.

This learning culture needs to be modeled by management and learning should happen at all levels of the business both top down and bottom up. The role of the manager is key to the true success of the development of a learning culture.

Question 3

Why is human resource planning such an important aspect of SHRM? (Word Limit 1750 max – current 1533 words)

Introduction

According to Leopard et el (2005) page 27 “Strategies are outcomes of human interpretation, conflicts, confusions, guesses and rationalizations rather than the clear picture unambiguously traced out on a corporate engineer’s drawing board”

What is human resource planning?

Human resource planning (HRP) entails determining in advance what the staffing needs of the organization will be assessing the recruitment of appropriate employees and labour market, and finding ways to fulfill its staffing needs.

Formulating a strategy can only happen after firstly obtaining an in depth knowledge of the strengths and weaknesses (SWOT analysis) of the current workforce.

An organisation needs to have the correct human resource with correct skills, knowledge and abilities for strategic plans to be successful.

Successful planning for future employment needs of a company can indeed deliver a competitive advantage, primary based on the skills and abilities of the individuals. Forecasting these skills can be challenging for organisations especially those reliant on technology which is an ever changing industry.

The evolution of HRP has been affected by many developments, including computerized information systems; closer links between line management and the activities of HR managers and skill shortages. HRP is seen as an increasingly essential process to ensure the future recruitment issues are kept to the forefront of an organisations thinking and that the output from the HRP process is fed into all HR decisions.

HRP is all about diagnosing and planning for the short, medium and longer term future. This of course is a difficult task as prediction is always challenging.

HRP has contributed to the evolution and development of a number of issues. In order to predict and plan there has been great advancement in the use of computerized HR information systems. The relationship between the business environment and the activities of the HR managers. Skills databases have also been created and reviewed on an ongoing basis.

Why focus on human resource planning?

Human resource planning is important because it is used to address the business at a strategic level. This means dealing with all areas of the business such as marketing, financial, operation and technology departments to name just a few.

HRP and HR functions must remain focused towards the business objectives. It is vital that this link is kept strong to remain strategic.

Generally HRP planning looks at internal factors but it is also relevant to look at external factors such as trends in technology skills etc.

Workforce Planning

Supply and demand of skills

Value using Scenario planning

The Social Science approach to HRP, introduced by Bennison & Casson (1998) is based on a manpower system and map. It forms the basis for making management decisions with regards to social factors and implications. With regards to workforce wastage, retirement, skill changes, behavioural and cultural requirements of the employees.

The importance of human resource planning for Strategic Human Resource Management

HRP is key in maintaining the link between business strategy and operational strategy.

Forecasting the needs of the business technically and as far personnel and skills is vital for a competitive edge. Failure to recognise and act on these changes could be costly to an organisation they could cause them to lose their competitive edge.

HRP provides managers with strategic information which they need to make human resource decisions. This enables them to anticipate future changes to stay one step ahead.

According to Reilly (1996) there are some specific uses for HRP, which will be discussed:

HRP is used to establish the correct number of employees for new locations. If an organisation does not estimate correctly the size of its workforce and has too many staff then there can be a surplus of employees and hence underutilized workforce. This is both expensive and counterproductive. Of course the opposite is also problematic because to have predicted too few staff can lead to existing staff becoming overstretched and that itself may lead to the failure of reaching output and targets directly affecting profitability.

Reilly (1996) asks the following pertinent questions:

“What techniques can be used to establish workforce requirements?

Have more flexible work arrangements been considered?

How are the staff needed to be acquired?”

These principles are very useful and can be applied to ascertain workforce requirements, whether in a new business or the relocation or the opening of a new factory, in the case of the manufacturing industry.

Retention of highly skilled staff

In the recent tough times of recession, retaining staff has not been a huge worry to organisations that have been desperately looking for ways to cut costs. A huge problem though is losing key staff, who have specific skills essential to productivity of the business.

For an organisation it is essential that the continually monitor the resignations, inquiring as to the reasons and also calculating what will be the loss to the company.

An example of highly skilled staff is Nokia, who in their research and development division. These highly skilled workers are essential for maintaining a competitive edge. Also highly skilled workers in the information technology industry who possess specific skills.

Management must be aware of the numbers of highly skilled workers lost so as they can do something about it. This many mean offering incentives not to leave or recruiting or training existing staff with the value skill. The cost to the organisation could be both through the bill for separation, requirement and induction, but also perhaps more importantly through the loss of long-term capability and even competitive edge.

Examples of Successful Human resource planning

An example of human resource planning in the form of learning and development is Audi. It has a training and development programme designed for technicians at the company. The line managers identify their personal training and development needs. Using professional consultants they are facilitating in their learning, by onsite courses or external ones. They have cleverly incorporated the use of IT and multimedia to analyze their training needs and to produce a personal plan.

The objective of this programme is to have a workforce proficient with the latest training and development needs to ensure competitive advantage.

Although HRP is very beneficial, computerized HR systems have come a long way in the last decade, however the old saying ‘Rubbish in – Rubbish out’ remains equally true today, in the past a great deal of time and effort has been wasted by satisfying “wish lists” from all interested parties.

Bacal (2009) suggests a number of ways in which HRP could be made more effective?

HRP to be effective needs to have a strong link between the business planning of the organisation and with its strategic planning. Within the HR function of a company is to give support and facilitate the company to reach its goals. Bacal (2009) calls this link between HR and strategic planning “vertical integration.”

Secondly the most effective way for HR planning efficiency is to have it lead by the HR department of an organisation and it should involve the stakeholders and the customers. HRP must take into account all aspects of the business including its mission and vision. Both management and employees need to be involved.

Finally, as with any planning project the outcomes of the implementation of HRP should be measurable and assessable. Remember that many personnel functions already have available data such as employee turnover, frequency of grievances and disputes but it is also appropriate to try and assess the effects of the implementation of HRP on the achievement of the organisations strategic business goals.

Conclusion

For many years, especially in large manufacturing companies a young new employee may spend the rest of their working life with that one company. In many cases working along side friends, neighbor or even family members. This resulted in supervisors and line managers not only acquiring a detailed knowledge of the work processes but also of the ability of every member of their workforce to do the job. Those new employees who failed to perform satisfactorily would soon be dismissed and replaced from the then seemingly permanent pool of people looking for work. Working practices in general tended to evolve slowly over the medium term.

The need for even very basic personnel records other than for payroll purposes, was minimal and the strategic objective of the business owners was simply to maximize profits.

Compare that to today again especially in large manufacturing companies where new young employees are more likely to have several employers in different industries and / or countries over their working lives.

Organisations are flatter, with more flexible working practices and the need for “can do” and “will do” employee characteristics. For example Cadbury Schweppes with more than 50,000 people and manufacturing operations in more than thirty-five countries. In this environment of mass production and attendant high capital expenditure and rapid change and new developments that requires company aligned strategic HR objectives. However we must not forget the primary business objective of making a profit for the business owner / shareholders.

HRP brings practical benefits to an organisation by optimizing resources and allowing more flexibility. Organisations that give great importance to specific and new skills need to plan carefully for the future as this gives or takes away competitive edge and fulfill strategic objectives.