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Submitted By: Saumya Aggarwal 026/Cse/2k5 (B.Tech-MBA Dual Degree)
I express heartfelt thanks to Ms. Sona Vikas, our respected faculty member, who has been my constant guide throughout the work on this project. Our work could not have gained its present shape but for her constant guidance. Also, I would like to thank Ms. Bhawna Sikka, Food Services and Vending Executive of Nestle Connaught Place Branch Office and Mr. P.K.Sinha, Deputy General Manager of Human Resource Department of NTPC office at SCOPE building, CGO complex, Lodhi Road, New Delhi for their wholehearted efforts. The project would not have taken its present shape without their valuable insight. I express my gratitude to them for providing me their valuable time and helping me in interacting with the employees. I also express our gratitude to all those people who allowed me to work with them. Lastly, we would like to extend our sincere thanks to all those who have directly or indirectly helped us in the completion of this project.
Serial no. Chapter no. Description Page no.
SHRM at Nestle
SHRM at NTPC
Analysis & Conclusion
1.2 A VISUAL DEPICTION OF THE SHRM PROCESS- 5 .CHAPTER 1 INTRODUCTION 1. In the case of Strategic human resource management. flexibility and sustainable competitive advantage is called STRATEGIC HUMAN RESOURCE MANAGEMENT. the HR function is a strategic partner in the formulation and implementation of the company’s strategies through HR activities.1 WHAT IS STRATEGIC HRM?The linking of human resources with strategic goals and objectives in order to improve business performance and develop an organizational culture that fosters innovation.
1. . 6 .The business strategy .Manage the young. overambitious recruits.Manage continuous competitiveness in a changing business environment and technology and product delivery systems.Manage a cross cultural work-force. .The external environment – which is very dynamic in the current global business scenario. .Create employee loyalty programmes.Keep HR cost to minimum possible.The internal environment – the organisational context and the general culture which is prevalent in the organization.Support Company's Brand (employees as customers approach).1. Look Beyond Traditional Goals. Vision. .Build a Strategic Framework: Mission Statement. .4 PRACTICAL ROLE OF SHRM.The outcomes of the SHRM process – which should be evaluated both quantitatively as well as qualitatively. .it affects and is affected by the SHRM process and which gives the organization a well thought of direction. . .3 KEY FACTORS OF SHRM PROCESS.Help in goal setting.Design and utilize assessment metrics for evaluation of SHRM process. . .Create Leadership Vision and culture of innovation. Values. . .
Right from the time of selection. organizations can directly link the selection of a candidate to the net profit he/she expected to generate. it can be found out whether the revenue generated by the employee outweighs the costs incurred on him or not. Thus. 7 .1. Now. there are certain activities which are carried out vis-à-vis the employee which incur some costs.5 AN EXAMPLE OF A QUANTITATIVE TECHNIQUE FOR ASSESSMENT OF THE EFFECTIVENESS OF THE SHRM PROCESS: THE SELECT TO PROFIT LOOP- SELECT ENROLL TRAIN EVALUATE PROFITS REWARD SALES COSTS PRODUCTI V-ITY MOTIVATE THE SELECT TO PROFIT LOOP is a quantitative technique which organizations employ to ascertain whether an employee is a profit centre or a cost centre. by evaluating all these activities. and certain activities undertaken by the employee generate revenues for the company.
Succession Plans.Establish Career. weaknesses. 1.Develop Core Competencies – assimilate the best practices from the organization’s earlier strategy into the new strategy. . . . opportunities and threats of the current human capital of the organization. .People’s Champion – champions the cause of employees in the organization.Test and Evaluate – evaluate the new strategy and the proposed HR integration with it for fissures.Recruit. retention etc.7 COMPETENCIES OF AN HR EXECUTIVE. Helps align the personal goals of employees with strategic goals of the organization.New Business Strategy.Strategist – Knows the business inside out. Orient.Administrator – Deliver the Basics like recruitment. . training. . .Change Agent – helps bring about change in the organization by convincing employees the change is good for their as well as for the organization’s growth.1. .Assess HR Capacity – whether the current capacity is sufficient or whether more human capital is required. Set Total Reward System – this would help in motivation and fostering loyalty in the employees.Evaluate Performance – check whether the new strategy’s implementation is on course or not and whether the HR is an intrinsic part of the implementation process. . .Initiate HR Practices – this should be done in line with the new strategy. Train and Develop. 8 .SWOT Analysis – done to ascertain the strengths. .6 STEPS IN STRATEGIC HRM PROCESSThe analysis of the Strategic HRM process has been done from the point of view of a new business strategy being adopted by an organization: .
1. .Business can meet ever increasing customer demands.8 NEED FOR SHRM. . .Maintaining a competitive advantage by becoming a low cost leader or a differentiator is possible through good HR practices. Good HRM = Good financial results HRM Financial results 9 .9 ADVANTAGES OF SHRM. align their personal goals with the goals of the organization.Employees become pro-active. as best practices in terms of the working of human capital within an organization are hard to replicate. .Each employee becomes a profit centre. AND THE BOTTOM-LINE IS….1.Accountability at all levels in the organizational hierarchy increases.Increase competition in both local and global markets requires organizations to involve their people in developing the strategy for a sustainable competitive advantage.
results-oriented plan for making the transition. human resources professionals have sounded the drumbeat of change: HR must transform itself from an administrative function into a strategic business partner. external vendors. the book outlines a 10step.1 BOOK 1“Roadmap To Strategic HR. that the message often sounds like a wouldn't-it-be-nice scenario. The work of HR is changing. reward systems. and line managers. real-life information on how to actually achieve this new mission. Drawn from the author's more than 25 years of experience and insights as an HR practitioner at Hallmark and other companies.CHAPTER 2 BOOK REVIEWS 2. But it isn't. For decades now. Roadmap to Strategic HR is a sorely needed prescription for achieving strategic focus in complex organizations. training systems. 10 . and more and more professionals realize that to succeed in the future they must be part of the team that makes important business decisions. for so long. or work processes—that will meet the strategic business demands of your organization. and with so little concrete. More and more traditional HR activities are being farmed out to service centers. But it has been said so often. It helps one integrate top-quality tactical work with innovative internal systems—talent systems.Turning a Great Idea into a Business Reality” By Ralph Christensen The book illustrates a practical approach for turning Human Resource into a crucial component of success.
As the author so aptly puts it: "Talent is the engine behind the creation of all value. 11 . learning and development.This book helps one: - Understand the business realities that are driving change. The connection between people issues and business success is irrefutable. Build a real partnership between the frontline managers and HR staff. performance management. - Compress the multitude of HR activities into five fundamental processes: workforce planning and staffing. Identify the competencies required of HR professionals who assume the crucial role of "organizational architect. Resolve the tensions between HR specialists and HR generalists. and demanding and scarce customers." Roadmap to Strategic HR is a practical book which strengthens the link between people and value— for building a department that drives excellence throughout the organization—and for honing one’s department's focus so that it stays locked on the marketplace and the business strategy." - Recognize the roadblocks and political landmines that might lurk along the way. organization development. and employee relations. including employees afraid for their jobs. - Examine each of the five processes through a powerful strategic lens.
organizations have to continuously adapt by changing and expanding and must look after the following processesCareful and extensive systems for recruitment selection and training (RST). Performance appraisals (self-appraisal system should be followed for all executive positions in my view). Strategic HRM discusses that every employee has a right and looks forward to both horizontal and vertical growth with room for experimenting with ideas and testing entrepreneurial spirit within and organization have to continuously adapt to this requirement by changing and expanding. Clear job design. participations and financial rewards. Formal system for sharing information with employees. Properly functioning grievance procedures (with both procedural and technical justice visible). 12 . Promotion and compensation schemes that provide for the recognition and reward of high.2.2 BOOK 2“Human Capital Management-Achieving Added Value Through People” By Angela Barron & Michael Armstrong The book provides a planned & proactive process of partnership with top management to achieve desired long term organizational growth and direction while satisfying the individual objectives and growth of best employees.performing employees. High level participation processes. monitoring of attitudes. Thus. No one likes to work with stagnant organization or organization without sharing growth with employees-Promotions.
quick growth and sense of identity with projects of company. Such organizations have little chances of growth or survival for long in new environment. curbing enterprise and failing to communicate organizational goals. Here role of HR leadership is most crucial to transform the organizations into innovative. It is also seen that Top management/owners in Indian companies still have commodity approach underpaying.The changing profile of New Age young workers has to be built in HR policies like flexibility of work time. learning and flexible organization where employees find it exciting to work with lot of room with all round positive environment within the organization. freedom for experimenting. disallowing delegation. 13 .
3. The third stage developed in this paper has not been explicitly taken up in existing literature till now The two-stage model does not explicitly clarify how the fit will be assessed and achieved. It will also help in maintaining a better fit between the intended and actual strategy.1. In order to assess both vertical and horizontal fit. the evaluation and feedback stage is vital for any process of SHRM.2 SIGNIFICANCE OF THE ARTICLEThe literature in the field of SHRM prior to this research had been developed up to the two-stage process till concepts like the Two Way Vertical Fit and the Horizontal Fit.1 INTRODUCTIONA three-stage model for the process of strategic human resource management has been developed in this paper. 14 .CHAPTER 3 ARTCLE REVIEWS 3.1. implementation and evaluation.1“Strategic Human Resource Management-Three Stage Process & Influencing Organizational Factors” By Sandeep Krishnan (IIM-A) and Manjari Singh (IIM-A) 3. It will also help in demonstrating HR successes and increase the credibility of the HR department. The three stages cover strategy formulation.1 ARTICLE NO.
(1981) put forth a number of reasons why strategic orientation may lack in the HR function. This includes activities like creating a culture change.4 BASIC CONCEPTS ON WHICH THE MODEL IS DEVELOPEDOne-way Vertical FitIt talks about aligning HRM systems to the business strategy and the partnering role of HR where HR is highly integrated with business processes. tracking the market and proactively making changes.1. identifying mergers and acquisition possibilities. • HR departments must develop competencies in dealing with strategic issues.3 LITERATURE REVIEW IN THE ARTICLE• Devanna et al. 1999: 362). 15 .3. b) Lack of comfort among HR professionals to take risks and c) HR professionals who do not demonstrate courage of conviction about their principles” (Huselid and Becker.1. but also contribute in the strategy formulation the HR department’s role as a strategic partner emerges in the two-way vertical fit. business awareness and the ability to quantify its own the contributions/ significance. A major one is that the top management does not perceive it important to include the HR department in the decision making process. 3. • Tony Rucci states that the three significant barriers to HR playing a more proactive role in the next ten years are “a) Lack of basic economic literacy among HR professionals. Horizontal FitIt refers to the alignment of various HRM systems to each other and the alignment of key HR systems and processes with for bringing out desired behaviors and culture in the organization. Two-way Vertical FitIn this particular scenario the HRM systems not only align to the business strategy.
are looked into and their likely impact on strategy implementation are examined.Various HRM systems like recruitment and selection. . . low employee satisfaction. 16 . need to be aligned with the HR strategy. HRM systems also need to be aligned to each other. training and development. etc.Elements of HR like acquiring. compensation. Issues like high turnover of employees. career management. performance management. managing and developing the competencies are important for the success of strategy implementation. Based on the concept of horizontal linkage. undesirable work-place politics etc. Policies and practices of various HRM systems are set or modified according to the strategy implementation needs. lack of morale and motivation.This model follows the concept of interactive business and HR strategy so that each contributes to the formulation of other.
In the evaluation metric of this model. This two-way link strengthens the role of HR department as a strategic partner. perceived and real fairness of the process. Valid interpretation may not be obtained because of faulty measures or lack of appropriate measures. The behavioral factors include the purported use of the evaluation results. Evaluating the impact of HRM systems is a challenge for measurement techniques because the effects of environmental and personal factors are inter-mixed with it (Gordon. extent of implementation of the suggestions/feedback. level of Formalization of the evaluation and feedback process. Not only are HRM systems aligned with the HR strategy. The operational factors are the availability of required data. HR professionals may not have required analytical skill for the evaluation process so they either need to be given special training or provided help of experts (Gordon. proper selection of assessors. The factors that influence this stage may be categorized into structural. The structural factors include the scope of the evaluation and feedback process. 1972). 17 . and technological support for data collection and analysis. and incentives for various stakeholders. transparency in the evaluation process. Also there are factors that act as enablers/ deterrents for the effectiveness of the evaluation and feedback stage. and behavioral factors. and Periodicity of evaluation and feedback. 1972). required analytical skill. operational.. but HRM systems and their outcomes also provide information pertaining to organizational context for the formulation of business strategy. defining and measuring goal achievements or outcomes of various HRM practices and activities is the first step. man-hours spent on evaluation and feedback. importance given to the process. proper measurement techniques.The second stage has a two-way link with the first stage.
Efficient and inter-linked HRM systems linked to business strategy and 2. Monitoring mechanisms to identify and correct any sort of misalignment. The enablers/deterrents for each stage is another important contribution of this paper.3. Organisations can no longer ignore the necessity of an integrated three-stage process for SHRM that should at least include: 1. 18 .1.5 CONCLUSIONAnything less than the complete process described in the model increases the possibility of failure.
2.2 ARTICLE NO. 3.2 HCM DRIVERSThe authors with the help of various Employee and management surveys have identified a core set of HCM drivers that predicts performance across a broad array of organizations and operations. 2. 19 . These drivers are as follows: 1.3. Leadership practices Employee engagement Knowledge accessibility Workforce optimization Learning capacity In each of these categories HCM practices are further sub divided into groups such as under leadership practices: communication. job design etc.1 INTRODUCTIONThis article explains the various innovative tools to show which investments in employees are driving company performance and which one should emphasize upon to advance strategic goals. According to the authors investment in Human capital management can be directly linked to organizational performance. They have explained methods for measuring bottom line contributions of investment in human capital management (HCM)-like leadership development. 3.2. 4. 5. 2“Maximizing Your Return On People” By Laurie Bassi and Daniel Mc Currer (Harvard Business Review – March 2007) 3. supervisory skills etc. for every company its people are the only source of long term competitive advantage and companies that fail to invest in employees jeopardize their own success and even survival.
4 CONCLUSIONThus with these HCM tools HR can start gauging how well people are managed and developed throughout the organization. In this role HR department can take a strategic responsibility.3.3 MATURITY SCORESThese surveys are effective in gauging and improving organizations’ capability across 23 HCM practices based on maturity scores ranging from 1 to 5 with 1 indicating low performance and 5 high performances. identifying HCM strengths and weakness and linking improvements or backsliding in specific HRM practices with improvements or shortcomings in organizational performance.2. 3.2. Also multiple surveys over time can reveal progress or regression in each of the HCM practices and help a company decide where to focus improvement efforts that will have a direct impact on performance. It helps in benchmarking organizational HCM capabilities. acting as coaching. mentoring and monitoring agencies to ensure that superior management of human capital becomes a central part of the organization’s culture. 20 .
All Business unit heads crafted their own people policies to cope up with increasing competition. Understanding the needs of the business units and their unique challenges. The HR an obstacle to change and hinged onto bureaucratic practices that effected business and people practices. Building key HR pillars to deliver core HR services.3. Ltd. became a private and commercial business after takeover by Temasek Holdings Pte Ltd in June 2005. Building the employer brand positioning of CISCO to attract talents.3.3. Identifying the key factors causing the high attrition. All 4200 employees were transferred to the new company. HR practices were irrelevant to the business resulting in very high staff turnover and uncompetitive salaries. 3. Building a strong human capital development program to strengthen key competencies needed for the business. Identifying the key factors causing the loss of key talents. The objective of the new HR team was to shape the CISCO manpower and talent to support the new philosophy and the mission of its business to deliver high quality services to its clients.1 CISCOCISCO is an armed security business.3 THE CHANGE PROCESSHowever when the company was in the process of transition.3. 21 . 3.Major considerations for the new HR transformation were: • • • • • • • Understanding the business strategy and aligning HR strategy with it.2 THE EARLIER SCENARIO AT CISCOIt was merely administrative in nature.It came to be known as CISCO Security Pvt. 3“Transforming HR Function from Reactive to Proactive” By Jaclyn Lee 3.3 ARTICLE NO. HR function was completely overhauled and transformed to a strategic function to facilitate the transition of the company to a private company. HR aligned itself with the critical needs of business.
5 THE KEY CHALLENGESHR transformation to a commercial enterprise was a challenging task. The Toughest job was to convince existing staff to transform from a back end function to a front line area. However Effective communication played an important role in overcoming these challenges. 22 . 18.104.22.168.3.6 CONCLUSIONTo conclude the new role of HR was to shape the CISCO manpower and talent to support the new philosophy and the mission of its business to deliver high quality services to its clients thereby reflecting the strategic role of HR function.4 THE HR PILLARSTo achieve the above objective the following key HR pillars were formed• Manpower Planning and Recruitment • Aligning human capital development • Strategic compensation and benefits • Employee engagement • HR systems and service delivery 3.
firms should filter the applications and spend more time with few candidates. rather than a detection approach to work. doing things right the first time. and striving for continuous improvement.4. 23 . Moreover. system factors can enhance or constrain the influence of person factors on work performance. generation of more number of CV’s is generally not good. Instead.4 PERFORMANCE APPRAISAL & JOB PERFORMANCEThese practices can cause managers to ignore system factors and cause employees to compete instead of cooperate as: In sharp contrast to the TQM performance assumption. 3. Operations and SCM.4 ARTICLE NO. Traditionally.1 TQMTQM refers to a set of principles and practices whose core ideas include understanding customer needs. It also bridges the gap between what senior leaders feel is necessary to improve employee satisfaction & their ‘real’ need. TQM was on the agenda of Manufacturing. 4“Thinking ‘Integrated Space’-TQM and HRM” By P. (Detection approach). Both person and system factors can directly influence work performance.4.4. TQM approach emphasizes a prevention.3. 3. Vijayan 3.3 EMPLOYEE SATISFACTIONIt is as important as Customer Satisfaction because satisfied employees can add value towards enhancing customer satisfaction. the field of human resource management (HRM) assumes that performance is largely due to the worker and not the system/process.4.2 TQM SELECTION PROCESSAs opposed to what was believed traditionally by the HR Department. 3.
1 INTRODUCTIONThis article shows how HR can emerge as a strategic partner with the business and be recognized as a source of competitive advantage with a focus on the TCS model.5. It uses extensively BALANCED SCORECARD (BSC) for aligning all HR and Other Departments’ activities across geographies. HR alignment with the mission. According to the article. 24 . Leading change. Excellence. TCS has incorporated 5 VALUES -Integrity.By enhancing employee delight through effective management of their operating efficiency. 3.3. The delivery routes to enhancement of shareholders value are.5. industry practices. in this whole process. Learning and sharing.2 ROUTES TO ENHANCE SHAREHOLDERS’ VALUETCS considers its workforce capabilities as its principal offering to its customers. All these add up to the company’s human resource efficiency and human capital effectiveness. that supports its mission and vision . 5“Redefine The HR Agenda…The TCS Model” By Dilip K.Through enhancement of customer delight through delivery excellence of world class services and successful management of customer relationship and . Mohapatra 3. IT solutions and services and delivering value and joy to all stakeholders.5 ARTICLE NO. service practices and its delivery centres. TCS VISION is of Being global top 10 by 2010 in the IT industry is supported by its MISSION to ensure Customer delight by providing best in class consulting.TCS has a robust HR alignment framework starting from the vision and mission which drives the strategic objectives and business plans. Respect for individual. vision and values is very important.
EVA has two components: revenue and cost. employees & shareholders.4 BALANCED SCORECARDIt gives managers the opportunity to look at the Co. mission and strategies.5. On the cost side. At TCS alignment is done through a cascading balanced score card. It should be used to: • Link HRM activities to the Co’s business strategy. 25 . • Evaluate the extent to which the HR function is helping the Co meet it’s strategic objectives. Thus human resource efficiency and human capital effectiveness affects the EVA and hence plays a strategic role. Revenue is driven by realization rates and the number of people engaged in client delivery. retain and recognize talent within the organization.3 HR DELIVERY ALIGNMENT AT TCSAccording to the author another important aspect is HR delivery alignment with the business objective. the performance management group ensures optimum utilization of the budget to structure compensation packages to attract. TCS considers its EVA as the main driver of its business objective.5. It is a performance measurement tool for strategic planning and management including feedback. 3.3. from the perspective of internal & external customers. It is an effective instrument for linking the HR strategies and the HR delivery with the organization’s vision.
Bhawna Sikka ( Food Services and Vending Executive. 26 . including milk. Primary Data collected by way of Interview schedule with Ms. 2. Nestlé’s trademark of birds in a nest. evokes the values upon which he founded his Company. Beverages 3. 4. Chocolates & confectioneries 4. Several of Nestlé's brands are globally renowned. but its basic foundation is unchanged from the time of the origins of the Company. Nestle believes in adaptation to a changing world. Prepared dishes & cooking aids 4. Switzerland. Cannaught Place. New Delhi) and Questionnaire answered by 9 employees of different departments.CHAPTER 4 SHRM AT NESTLE 4. It resulted from a merger in 1905 between the Anglo-Swiss Milk Company for milk products established by the Page Brothers in Cham. 4. and a general concern for people. honesty.3 WHY NESTLE?We have chosen Nestle because it is an appropriate company to study both open culture and values of a company.1 AN OVERVIEW OF NESTLENestlé is a multinational packaged food company founded and headquartered in Vevey.4 METHODOLOGY ADOPTED-A1. in 1866 and the Farine Lactée Henri Nestlé Company set up in 1867 by Henri Nestlé to provide an infant food product.2 BRANDS UNDER NESTLE1. derived from Henri Nestlé’s personal coat of arms. bottled water & pet food. and reflects the basic ideas of fairness. chocolate. Milk & Nutrition 2. which has made the company a global market leader in many product lines. confectionery. Secondary data collected by way of company’s website and other sources. Switzerland.
The willingness to cooperate. and business partners. To communicate is not only to inform. • Nestlé does not favor short-term profit at the expense of successful long-term business development. 4. consumers. although in certain areas.6 CORE VALUESA prerequisite for dealing with people is respect and trust.4. • Nestlé is conscious of the fact that the success of a corporation is a reflection of the professionalism. to help others and to learn is a required basis for advancement and promotion within our company.5 BUSINESS OBJECTIVES OF NESTLE• Nestlé's business objective is to manufacture and market the Company's products in such a way as to create value that can be sustained over the long term for shareholders. 27 . as a general rule. Transparency and honesty in dealing with people are a sine qua non for efficient communication. Therefore recruitment of the right people and ongoing training and development are crucial. it is also to listen and to engage in dialogue. • Nestlé believes that. additional guidance to staff in the form of voluntary business principles is beneficial in order to ensure that the highest standards are met throughout the organization. Nestlé continues to maintain its commitment to follow and respect all applicable local laws in each of its markets. • Nestlé recognizes that its consumers have a sincere and legitimate interest in the behavior. beliefs and actions of the Company behind brands in which they place their trust. legislation is the most effective safeguard of responsible conduct. and that without its consumers the Company would not exist. employees. conduct and the responsible attitude of its management and employees.This is complemented by open dialogue with the purpose of sharing competencies and boosting creativity.
Involvement of people at all levels starts with appropriate information on the Company’s activities and on the specific aspects of their work. pragmatism.1 RECRUITMENTThe recruitment process at Nestle is clearly defined. which makes people its most important asset.4. Recruitment for management levels takes place in the head office and all others at the branch level. realism. 28 . Decision to hire only by HR staff. We have analyzed Nestle to follow all three models High Performance. There are no lateral recruitments.8. Another source of recruitment is campus placements and human resource consultancies. 4. People with qualities like dynamism. High Involvement & High Commitment. honesty and trustworthiness. no external consultant. Nestlé is also convinced that it is the people who form the strength of the Company and that nothing can be achieved without their commitment and their energy.7 A HUMAN COMPANYNestlé is a human Company providing a response to individual human needs throughout the world with specific concern for the wellbeing of both its consumers and its employees. to raise the standard of living everywhere it is active and the quality of life for everyone. hard work. Match between candidate’s values & company’s culture. This is because Nestlé aims to increase sales and profits but. at the same time. Through open communication and active co-operation. everyone is invited to contribute to improvements enhancing Company results and personal development. The existing employees are promoted to higher posts as per the requirements.8 HR PRACTICES4. This is reflected in its attitude and its sense of responsibility towards people.
Nestle provides the followingLiteracy training-to upgrade essential literacy skills. their International Training and Conference Centre in Switzerland is where Nestlé people from all over the world meet to exchange information and ideas in seminars and training courses. basic values & principles elaborated inNestle management & leadership principles.People management policies.The Nestlé Management and Leadership Principles describe the management style and the corporate values of the Nestlé Group. Employees are also sent abroad to study markets. Nestle Apprenticeship Programmes. training at Nestlé is continuous. Local Training Programmes-on issues ranging from technical. And because it is mainly given by Nestlé people. Throughout the world. different training programs and life of employees after work. UK. and communication and business economics.8.This policy encompasses those guidelines which constitute a sound basis for efficient and effective HR Management in the Nestlé Group around the world. leadership. and it has five training centers in France. Rive-Reine. specifically in the area of interpersonal relations. 29 . consumer tastes etc. it is always relevant to the professional life. Nestle people development review-this policy throws light on Nestle’s culture and core values. external courses). classroom courses.2 TRAININGFrom the factory floor to the top management. consumer tastes etc. 4. Nestle human resources policy. Mexico and Brazil. especially for workers who operate new equipment (‘Mission-directed Work Team Approach’). Spain. Employees are also sent abroad to study markets. each country runs its own training programmes (e-Learning.
3 PERFORMANCE MANAGEMENTFormal assessment by Line Managers and HR once a year with feedback. Subordinate can question an unfair evaluation. to motivate employees and to break the monotony of their job tasks. the variable part is linked to individual & team target achievements. In case of higher management level. which is an example of job enlargement. 4. One of the important key performance indicators is achievement following the Nestle management and leadership principles. The variable component of the salary is comparatively big to reward individual performance.5 PAY STRUCTURENestle strives to offer fair remuneration.These quarterly awards have been institutionalized to reward those who over-achieve their targets. - Long-service Awards. 22.214.171.124. Specific Key Performance Indicators have been enlisted by the HR department. The correspondent herself works in both sales and brand management departments. Remuneration structure and promotion criteria take into account individual performance.8. 4.To recognize employees who have been with the company for more than 30 years. The company incorporates practices like Job Enrichment and Job Enlargement. GD & interview (Interviews for top management posts).6 REWARDS & INCENTIVES‘Passion To Win’ awards. 30 .8. Remuneration level is above the average in industry.4 JOB DESIGNSelection-Combination of written test.
8 EMPLOYEE RELATIONSNestle provides a very healthy working environment which is one of the reasons why Nestle’s employees state their commitment level to be very high. as illustrated in the Nestle Human Resource Policy document.7 BENEFITSThe following benefits are provided to all employees. Work/Life balance is given importance. Emphasis is laid on safety of employees (Nestle Policy on Health and Safety at Work).- ‘Nestle Idea Award’. per year) Children Education Assistance Scheme Provident fund Retirement Gratuity Scheme Group Insurance & Accidental Insurance Scheme Conveyance Reimbursements Residential Accommodation Monthly health check-ups & free consultation for self & family etc.It was found from the correspondent that the company institutes Nestle Idea Award every quarter to recognize and award employees who come up with relevant and innovative ideas which have the potential of being implemented at Nestle.8. 31 . 4. Nestle has a open culture & upward communication especially in case of grievance redressal is encouraged. 4. which is considered to be very low for a multinational corporation. ‘Nestle Family’ annual events are organized by their HR department whereby employees alongwith their families are invited.. Employee turnover is less than 5%.8. with no discriminationLeave-Personal & Medical (fixed no.
8. 32 . While the ERP system was likely to have long-term benefits. This was initially opposed by employees but with subsequent measures taken by the HR like training etc. 4. Health and Risk-Management Strategy document illustrates that: Nestle is dedicated to safe & healthy work environment. this has been successfully implemented. Regular safety assessments & audits take place by internal & external bodies. and it tried to centralize it. ERP implementation.9 CHANGE MANAGEMENTNestle has adjusted to the ever-changing external environment for the last 140 years since its inception 1866 without losing its fundamental beliefs and core values. The structure was decentralized. the project touched the corporate structure and culture.4..In June 2000.8.10 SAFETY & HEALTHThe Nestle Operational Safety. It manages Change and drives sustainable profitable growth by following the policy of making gradual changes instead of making drastic and risky changes. Nestle SA signed a much publicized $200 million contract with SAP and additional $80 to install an ERP system for its global enterprise to help centralize a conglomerate that owns 200 operating companies and subsidiaries in 80 countries.
At present.1 AN OVERVIEW OF NTPCNTPC Limited is the largest thermal power generating company of India. A public sector company. Public and others.5% is held by FIIs. Government of India holds 89.2 NTPC’s CORE BUSINESSESEngineering Construction Operation of power generating plants Consultancy in the area of power plant constructions and power generation to companies in India and abroad. 5.5% of the total equity shares of the company and the balance 10. Domestic Banks. with power generating facilities in all the major regions of the country.CHAPTER 5 SHRM AT NTPC 5. Within a span of 31 years. it was incorporated in the year 1975 to accelerate power development in the country as a wholly owned company of the Government of India. 33 . NTPC has emerged as a truly national power company.
It is providing power at the cheapest average tariff in the country. 5.4 METHODOLOGY ADOPTED1. CGO complex. with increasing global presence”.NTPC has set new benchmarks for the power industry both in the area of power plant construction and operations. 5.Lodhi Road . NTPC has been able to satisfy its employees by adapting its internal environment to the everchanging external environment. K. P. 34 . ( DGM – HR ) • Data collected by way of Interview 2. NTPC is well on its way to realise it’s vision of being “A world class integrated power major. Secondary data was collected from company’s website.a potential global giant. With its experience and expertise in the power sector. powering India’s growth. Government of the India has identified NTPC as one of the jewels of Public Sector ‘Navratnas’. Inspired by its glorious past and vibrant present. Recognizing its excellent performance and vast potential. which reflect the organization’s business goals as well. Primary data was collected as follows• Visited NTPC office at SCOPE building. Sinha. New Delhi and met Mr. NTPC is extending consultancy services to various organisations in the power business.3 WHY NTPC?NTPC was chosen to study strategic HRM as it is a public sector enterprise but has been able to achieve excellence in its field by incorporating appropriate HR practices in employees’ daily life.
35 . All HR initiatives are undertaken within this broad framework to actualize the HR Vision of "enabling the employees to be a family of committed world class professionals making NTPC a learning organization. It also goes to the various IIT’s and NIT’s for the campus recruitment. NTPC’c HR department was known as the personnel department and basically all their work was restricted to the administration and all. HR and Finance disciplines also.500 employees to fulfill its business plans. Human Resources Function has formulated an integrated HR strategy which rests on four building blocks of HR viz.6 HR PRACTICES5.) Competence building 2. Electrical.1 RECRUITMENTFor the recruitment process the company conduct the all India written test. Culture building and Systems building.6.) Culture building 4.5.5 HUMAN RESOURCESNTPC believes in achieving organizational excellence through Human Resources and follows "People First" approach to leverage the potential of its 23. To induct talent and groom them into a dedicated cadre of power professionals "Executive Trainee" Scheme was introduced in the year 1977 for recruitment in the disciplines of Mechanical.) Commitment building 3. Prior To 1997 . 5. Competence building. NTPC’S human resource department work on the following model1. Commitment building.) Systems building Where the systems building include identifying the manpower and looking for these talent who are apt for the particular project work. Civil. Chemistry. Control & Instrumentation and now encompasses Computer Science.
2 TRAINING & DEVELOPMENTA comprehensive one-year training comprising theoretical inputs as well as onthe-job training. BITS. As part of post employment training and development opportunities. Gurgaon (Executive MBA programme).3 JOB EVALUATIONIn NTPC all the roles are uniquely defined and they have role directories. NTPC has set up 15 project training centres. The new recruits are also attached with senior executives under a systematic and formal 'Mentoring System' of the company to integrate them into the Culture of the company. MDI. Every individual in the company is evaluated every year on the following parameters1) KPA 2) FUNCTIONAL COMPETENCIES 3) MANAGERIAL COMPETENCIES 4) CORE VALUES KPA includes the key performance areas of every employee.Tech in Power Generation Technology). (M. a systematic Training plan has been formulated for ensuring minimum seven man days training per employee per year and includes level-wise planned intervention designed to groom people for assuming positions of higher responsibility.6. Delhi.Tech) etc. 36 .6. Pilani (B. 5. Besides opportunities for long term education are also provided through tie ups with reputed Institutions like IIT. as well as specific need-based interventions based on scientific Training Needs Analysis. While the project training centres (Employee Development Centres) have specialized in imparting technical skills and knowledge. 2 simulator training centres and an apex institute namely 'Power Management Institute' (PMI). PMI places emphasis on management development.5.
5 REWARDS. And rest 30% is distributed equally amongst the various parameters. 5. Retention strategies – they include giving Mediclaim to all employees. This also works as the one of the most important factor for the retention of the employee in the company. in 2002 each and every employee was sensitized about this system. And then finally the final 37 . 5.This process is done every year and every individual are judged on the mark of 100 wherein 70% of weight age is given to the KPA.6. INCENTIVES & BENEFITSIncentives scheme – It is group performance based (no individual incentives) which illustrates that the company encourages effective and efficient teamwork. Target study 2. (this percentage may vary year wise). All the employees are encouraged to come up with the creative and the innovative ideas. The overall-working environment of the NTPC is employee friendly which works as the driver to the motivation of the employees. Prior to the implementation of this system. Final review A target is set in the beginning of the project or the year and after that in the middle of it the project is reviewed for the appraisal and being checked whether if there is any flaw or lagging in the project so that it can be upgraded accordingly. various monetary incentives and a favorable work environment.4 JOB ANALYSISNTPC has the provision for the job rotation policy also.6.6.6 PERFORMANCE MANAGEMENT SYSTEM (PMS)PMS started in 2004 for the alignment of company’s and employees’ goals. It is a 3-stage process1. Mid term appraisal 3. Every 10% of the employee are rotated in various areas of a department to avoid the monotony of the work. 5.
Open system .Individual evaluation (marks out of 100 given to each employee) is done at the end of the year. The attrition rate in this company is less than 1%. Quality Circles have been set up in various units/offices in NTPC. In order to tap the latent talent among non-executives and make use of their potential for creativity and innovation. "Professional Circles" have been formed department-wise where Executives of the department meet every fortnight to share their knowledge and experiences and discuss topical issues.7 EMPLOYEE RELATIONSDemonstrating its high concern for people.8 TOTAL QUALITY MANAGEMENT (TQM)All the total quality management tools are used In NTPC except six sigma.review is done. 5.Employee satisfaction survey.6. . The motivation to perform and excel is further enhanced through a comprehensive NTPC Rewards and Recognition system. . Besides a management journal called "Horizon" is published quarterly to enable employees to share their ideas and experiences across the organization. health & well-being and social security systems leading to high level of commitment.6. The shorter the span of the project the higher the frequency of the review being done.done by Shriram centre every 2-3 years along with e-darpan online survey. 5. 38 . medical and recreational opportunities for employees and their family members. NTPC has developed strong employee welfare.NTPC offers best quality-of-life through beautiful townships with all amenities such as educational.
Like. over its long historical development from a small village operation to the world’s leading food Company. open and flexible culture is ensured by way of providing training programs to employees at all the levels. Nestle’s emphasis on individual achievement is evident from the kind of pay structure HR has designed for its employees. Nestle is unique in the sense that it has been able to successfully inculcate its business objective as well as its core values. Transparent performance appraisal systems and the freedom given to them to question their seniors benefits not only the employees but even the organization as a whole. Nestlé.CHAPTER 6 ANALYSIS AND CONCLUSION The Model employed by Nestle is one of High Performance. Over the years to come. has demonstrated an enviable capability to adjust to an ever changing external environment. 39 . Its motivation based on willingness to learn and to question what it is doing and why it is doing it. combined with its long standing respect for Nestlé values. this capability of using HR as a strategic partner in implementation of company’s activities will continue to be challenged even more as Nestlé is growing in size and complexity up to a dimension which demands a continuous evolution of its organization and of the way in which it is run. will assure its success. consistently in its employees day-to-day activities starting from recruitment till continuous performance appraisals. High involvement and high commitment due to reasons illustrated in chapter 4. without losing its fundamental beliefs and core values. This kind of culture is also supported by decentralized structure of Nestle. so important for long-term success.
The above SHRM practices help both companies to harmonize it's HR policies with the business strategy leading to Competitive Advantage. giving same benefits to all employees. Distinctive Capabilities and Strategic Fit . NTPC’s HR vision of enabling employees to become a family of committed world-class professionals is depicted by the company’s People First approach. Such strategic HRM activities at SHRM ensure high productivity as well as low attrition rates at NTPC. TQM practices of Quality and Professional Circles and development of superior Townships provide a healthy work environment for the employees. 40 .The Model employed by NTPC is one of High involvement and high commitment due to reasons illustrated in chapter 5.As a result enabling them to become India's one of the biggest organizations in their own fields and to grow further. Unique features illustrated by its Human Resource Department like the 10% Job Rotation Policy.
What is the degree to which Nestle creates clear objectives and performance expectations? 11. 4. What kind of training programmes are conducted for the employees and what are the role requirements for the employees? 7. New Delhi. Is the span of control narrow or broad? 9. assistance. What structure does your organization have? 5. Is there centralization in the organization? 8. What is the hierarchy at Nestle? Kindly illustrate it with an organizational chart. 1. What is the degree to which managers provide clear communication. Is there flexibility in the organization? 10. What is the degree to which employees identify themselves with the organization as a whole rather than their particular workgroup or field of professional expertise? 41 .ANNEXURE Below is the Questionnaire given to five employees of Nestle India working at the Branch Office located in Connaught Place. What are the achievements of Nestle? 2. What is the degree to which units within the organization are encouraged to operate in a coordinated method? 12. What degree of formalization exists in the organization? 6. and support to their subordinates? 13. It has been organized chapter wise to facilitate easy reading. What are the various Corporate Social Responsibility initiatives being carried out by Nestle? 3.
How does Nestle reward achievement and good work? 21. and independence that employees have? 20.Innovative and risk seeking? 19. freedom. What is the degree of responsibility. What are the possible consequences of various changes for the organization? 24.14. What is the degree to which reward allocations are based on employee performance. What are the initiatives carried out by Nestle to facilitate interaction and cohesiveness within its employees? 22. How many rules and regulations and how much direct supervision is used to oversee and control employee behavior? 17. How does Nestle deal with change given that it produces 10000 products which are marketed in 130 countries? 42 . What is the mechanism of Performance Appraisal? 18. What is the degree to which employees are encouraged to be aggressive. What is the degree to which communication patterns are restricted to the formal hierarchy of authority? 16. What are the factors that can cause change? 23. What is the degree to which employees are encouraged to air conflicts and criticisms openly? 15.