You are on page 1of 15

Contents

Executive Summary....................................................................................................................................... 3 Human Resource Management Nestle Pakistan .......................................................................................... 3 Recruitment .................................................................................................................................................. 3 Knowledge ................................................................................................................................................ 4 Personality ................................................................................................................................................ 4 Review of CV ......................................................................................................................................... 5 The Interview Process ........................................................................................................................... 5 Retention ...................................................................................................................................................... 5 Corporate Culture ..................................................................................................................................... 6 Fair and Competitive Remuneration Structure......................................................................................... 7 Workplace safety and health .................................................................................................................... 7 Training & Development ............................................................................................................................... 8 Management Trainee Programm.............................................................................................................. 8 Rural Development ................................................................................................................................... 8 Nestl National Highway & Motorway Driver Training Institute ........................................................... 9 Performance Management and Reward ................................................................................................ 10 Principles of compensation for Members of Executive Board ............................................................... 10 Pay for performance ........................................................................................................................... 10 Base Salary .......................................................................................................................................... 11 Short-Term Bonus ............................................................................................................................... 11 Performance Evaluation.......................................................................................................................... 13 Task Performance ............................................................................................................................... 13 Citizenship ........................................................................................................................................... 13 Counter productivity ........................................................................................................................... 13 Purpose of Performance Evaluation ................................................................................................... 13 Methods used in Nestle for Performance Evaluation ............................................................................. 13 Written Essays..................................................................................................................................... 13

Critical Incidents.................................................................................................................................. 14 Graphic Ratings Scales ........................................................................................................................ 14 Behaviorally Anchored Rating Scales .................................................................................................. 14 Recommendations ...................................................................................................................................... 14

Executive Summary Human resource is devoted to their employees, and make certain that they have all the right people with the right skills, in the right places at the right time. Selection of employees with respect to their capabilities and innovative skills always remains a challenging job for human resource managers. Selected recruitment techniques, managing retention procedures and continued training and development programs are the key areas to provide a continuous availability of talented men and women for organization to achieve goals and objectives. For this assignment Nestle Pakistan has been selected as a case in order to understand HR planning and/or development models, critically evaluating the recruitment, retention, training and learning & development strategies within the Nestle Pakistan; the strategies implemented for positive employee relations, performance management and reward; and the H.R performance monitoring techniques used. Recommendations are also given for Nestle Pakistan to enhance the efficiency and effectiveness of these operations.

Human Resource Management Nestle Pakistan

Recruitment Nestle usually employ varied strategies for recruitment of employees. At initial stage Outside Sources of Candidates is used by college recruiting which involves sending employers representatives to college campuses to prescreen applicants and create an applicant pool of management trainees, promotable candidates, and professional and technical employees. Recruiting Goals are to determine whether a candidate is worthy of further consideration, and to attract good candidates. The schools reputation and the performance of previous hires from that source affect school selection. On Site Visits are usually extended to good candidates. Internships are a recruiting approach that can be a win-win situation for the employer and the student. For employers, interns can make useful contributions while being evaluated for possible full-time employment. Students are able to sharpen business skills, check out potential employers, and learn more about their likes and dislikes. Nestle looks for knowledge, personality and motivation in their prospective candidates.

Knowledge Candidates must be bearing excellent academic records demonstrating their intelligence, commitment and hard work, also the ability of analytical mind and to succeed in a competitive environment. Previous jobs, work experience special assignments and extracurricular activities are also valued. Students are also analysed with quality of problem identification, analytical capability of choosing from different options and coming to reasoned conclusions. Personality Nestl Pakistan looks for open minded persons willing to learn new skills and ideas, dynamic and communicative, can listen, understand and integrate the opinion of others, have ability to express ideas clearly, who likes to negotiate, solve problems in complex situations. Nestle likes candidates who have leadership qualities inspiring others and self-confident, having a positive attitude to work and could work hard under pressure.

Motivation
Loyal and motivated people are the prime requirement for Nestle. These people also must have potential to motivate others caritically and come up with positive suggestions for necessary improvements.

Recruiting process
For applying for a current job / graduate program / internship, vacancies can be looked through by filling out the online form. Once CV is completey uploaded confirmation message is sent to the candidate that CV has been received and is being processed.

Review of CV On receiving best CV is selected against best match job then short listed candidates are contacted. In any case, candidates receive an e-mail informing about the job applied for has been filled. Talent pool Registeration There is a facility in Naestle that in case there is no job currently then candidates are offered to register their details in database. Candidates are then considered as a potential candidate for new up coming positions. This ongoing process of talent hunt provides an opportunity for Nestle Pakistan have a regular supply of interested candidates.

The Interview Process Regular one-day sessions are conducted for most of the Graduate Programs round the year. In these interviews discussions are held regarding potential jobs and career developments both individually and in groups. For Professional applicants and Internships applicants, series of individual interviews with HR and line managers are conducted focusing on background and motivation likely to be adjusted in Nestls culture and values.

Retention Having 140 years of past experience Nestl can truly be declared as worlds largest and most respected food company. Precisely this success is based on their people rather more significant than systems & processes. Such thoughts of Nestle have considerably weighted as powerful source of attachment and retention for people. Further attractive and dynamic working environment coupled with constant opportunities for development, growth, learning and utilizing ones potentials also become a reason for not quitting Nestle.

Corporate Culture
The corporate culture in Nestl Pakistan is based on following principles that can be valued as retention tools i.e. high commitment to quality products and brands, respect of other cultures and traditions, commitment to strong work ethic, personal relations based on trust and mutual respect, proactive cooperation, being pragmatic rather than dogmatic, favoring decentralization and networking, being committed to work and quality, preferring the longterm perspective to short-term thinking, Nestle is proud of their traditions and heritage, and as times change, these core values keep developing.

Revitalizing Environment
At Nestl vibrant and revitalizing environment, surrounded by people who are passionate about their work makes everyone to contribute with best of ones knowledge and full capacity to achieve companys business objectives as well as ones personal and professional goals.

Diversity
Nestle although being a global entity enjoys significant attribute of adjusting diversified people and satisfying needs of diverse customers. This is because o diverse backgrounds and interests of people at all levels. Nestle is against Gender discrimination therefore female candidates work with utmost enthusiasm. Even day-care centre has been started to accommodate working ladies and single parents. Further, comprehensive Maternity Benefits Scheme for their female employees.

Fair and Competitive Remuneration Structure Nestle offers competitive and fair remuneration structures against other competing organizations with a regular increase pay systems on performance as well as personal knowledge growth basis. This link provides a well defined a growth-oriented culture, making Nestle most preferred employer.

Learning and Growth


At Nestle learning culture is used as a growth medium, which encourages employees to commit to a range of positive discretionary behaviors, including learning having following characteristics: empowerment not supervision, self-managed learning not instruction, longterm capacity building not short-term fixes. HR department suggests that to create a learning culture it is necessary to develop organizational practices that raise commitment amongst employees and give employees a sense of purpose in the workplace, grant employees opportunities to act upon their commitment, and offer practical support to learning. Employees are provided responsibility at early stage which helps high performers to develop fast. International multicultural working environment improves creativity, innovation and personal development in competitive working conditions.

Workplace safety and health


The Nestle Occupational Health and Safety Management System (NSMS) was revised in line with the 2007 edition of the international standard OHSAS 18001 and reissued to all Nestl operations helped to reinforce their obligation that Safety is non-negotiable. With the implementation of this system workplace injuries are reduced to minimum level. Employees at all levels are employed to assume ownership of workplace safety. Behavior based safety programs are being implemented in all operations.

Safety at Work Award


'Nestle Safety at Work Award' is operational since 2008 to reinforce a culture of safety in the

company. This award is presented annually to winners on the occasion of Nestle Market Conference.

Training & Development


Training and development is the field in HRM concerned with organizational activity intended at improving the employees short term as well as long term personal growth. Training refers to the idea of employees present growth requirements, this activity is both focused and evaluated against the job an individual currently holds. Whereas development means future skill and knowledge must be required by the employees. This activity focuses upon the activities that the organization employing the individual, or that the individual is part of, may partake in the future, and is almost impossible to evaluate.

Management Trainee Programm


For young, bright and hard working employees Nestle has introduced the Management Trainee Program. In this program fresh graduates as potential managers to develop new competencies and skills through on-the-job development. In duration of 12 months the trainees are sent to different departments where they are given full opportunity for working independently under constant surveillance of seasoned employees.

NQ (Nutritional Quotient) Employee Nutrition Training


In Nestle health and wellness are uncompromised elements and these elements heavily dependent on nutrition. This program is designed for all level of employees. Information and knowledge of nutritional values through NQ program helps employees to provide and communicate with consumes about balanced diet not only for themselves but also for their families.

Rural Development
Farmer Training & Development The Biggest Segment of our Rural Development support in Pakistan is through our Milk Collection and Dairy Development Department which is as follows:

Procured milk and provided Dairy Development Advisory support to 200,000 farmers spread over 146,000 sq Km. Have impacted small farmers for income growth by 25%. Increase in girls school education Milk yield increase by 20% to 50% Establishment of two dairy farmers training and demonstration farms (i.e Sarsabz & Sukheki) Trained over 5000 farmers directly

Nestl National Highway & Motorway Driver Training Institute


In order to reduce the risk of accidents during supply chain activities of Nestle products Nestl Pakistan in partnership with the National Highway and Motorway Police (NH & MP) established the first drivers training institute near Sheikhupura ( Punjab province) with the objective of safety and well-being of the communities it operates in. The Nestl-National Highways and Motorway Police (NH&MP) Driver Training Institute is a fully equipped training facility that has been providing training under the supervision of experts, not just to the drivers of Nestl Pakistan and NH & MP, but also catering for the drivers training need of the other public and corporate organizations of the country. The entire facility features a driving safety training track, 02 building blocks comprising of driver training classrooms and also a high-tech driving simulator. The training facility now allows participants to acquire specialized driving practices and would curb accident rates on motorway through requisite skills that will be gained during the training period. It is heartening to see the positive impact of the Nestls Drivers Training program at various levels. The multifaceted impact of the program extends beyond its envisaged scope and target audience, given that more organizations including the government agencies are engaging with the institute and benefitting from it. Till date, Drivers Safety Program has trained more than 13,000 drivers (Includes 2200 plus Nestl drivers). Aside from the professional and economic impacts, the drivers training program has also created a positive social impact not only on the drivers themselves but also on their families and the communities they live in.

Performance Management and Reward Nestle future success is dependent on its ability to attract, motivate and retain good people. Among the various programs competitive remuneration policy plays a vital role. Nestle considers in a performance culture as well as good corporate governance and corporate social responsibility. In Nestle following principles are followed for fixing remuneration: Pay for performance to support the short-term and long term objectives; Compensation aligned with long-term Group strategy and shareholders interests; Coherence in our remuneration plans and levels throughout the Company; Appropriate balance of fixed and variable remuneration depending on hierarchical level to ensure a direct participation in results achieved.

Following changes are made by The Compensation Committee in compensation system for 2013: In line with current trends in top management compensation, the use of stock options for the Long Term Incentive Plan will be discontinued as an instrument to deliver Long-Term Incentives to the members of the Executive Board. The Long-Term Incentive benefits will be delivered exclusively in the form of Performance Share Units; The Performance Criteria already used in the Performance Share Unit Plan 2012, i.e. the relative Total Shareholder Return and the Earnings per Share growth, will continue to be used with a weight of 50% for each of the two criteria. The grant levels remain unchanged; cash flow will be included as a new financial target for the Short-Term Bonus Plan.

Principles of compensation for Members of Executive Board


The principles of compensation for members of the Executive Board are the following:
Pay for performance

The Total Direct Compensation for the members of the Executive Board includes a fixed portion (Annual Base Salary) and a variable portion (Short-Term Bonus and Long-Term Incentives). The

fixed as well as the variable compensation is determined in line with collective and individual performance. Nestle targets its remuneration to be between the median and the 75th percentile of the benchmark (please refer to page 32). Whenever appropriate, the benchmark values are adjusted for the size of Nestle. Alignment with long-term company strategy and shareholder interests Compensation for members of the Executive Board is aligned with company strategy and shareholders interests.

The Short-Term Bonus payout is determined by the degree of achievement of a number of annual operating objectives. Long-Term Incentives are provided in the form of share based instruments, therefore ensuring alignment with shareholders interests. In 2012, Long-Term Incentive instruments included Performance Share Units (PSUs), Options on Nestle shares, which will be discontinued, and Restricted Stock Units (RSUs).
Base Salary

The Base Salary is the foundation of the total compensation. It also serves as the basis for determining the Short-Term Bonus target levels, and the allocation of Long-Term Incentives. The Base Salary is reviewed annually by the Compensation Committee. Criteria for adjustments are the individual contribution and the level of competitively against the benchmarks.
Short-Term Bonus

The Short-Term Bonus (Annual Bonus) is based on a bonus target expressed in % of Annual Base Salary. In 2012, the following target levels were applicable CEO: 150%; Executive Vice President: 100%; Deputy Executive Vice President: 80%. For the CEO, 100% of the target is linked to Nestle Group performance. For the other members of the Executive Board, 30% of the target is linked to the Nestle Group performance and 70% is linked to individual performance (quantitative and qualitative objectives) as well as other relevant business or functional performance. In case an executive reaches all objectives in full, the bonus payout will correspond to the targeted level. If one or more objectives are not reached, the bonus is reduced. The bonus payout is capped at a maximum of 130% of the

target. There is no guarantee for the payout of a minimum bonus. The objectives are set at the beginning of each year; they are set in line with the Companys strategy. The Nestle Group performance is determined by measurable operational objectives, most importantly organic growth, real internal growth, operating profit, as well as market share and working capital efficiency. Additional objectives used to evaluate Nestle Group performance are related to the Nestle strategic roadmap. Individual objectives are determined by the CEO for each member of the Executive Board. They are related to the individual area of responsibility and can be of financial or non-financial nature.

Performance Evaluation
In Nestle following performance evaluation techniques are used:
Task Performance

Employees performing the duties and responsibilities that contribute to the production of a good or service or to administrative tasks. This includes most of the tasks in a conventional job description.
Citizenship

Actions that contribute to the psychological environment of the organization, such as helping others when not required, supporting organizational objectives, treating co-workers with respect, making constructive suggestions, and saying positive things about the workplace.
Counter productivity

Actions that actively damage the organization. These behaviors include stealing, damaging company property, behaving aggressively toward co-workers, and taking avoidable absences. Most managers believe good performance means doing well on the first two dimensions and avoiding the third. A person who does core job tasks very well but is rude and aggressive toward co-workers is not going to be considered a good employee in most organizations, and even the most pleasant and upbeat worker who cant do the main job tasks well is not going to be a good employee.
Purpose of Performance Evaluation

In Nestle management uses evaluations for general human resource decisions, such as promotions, transfers, and terminations. Evaluations identify training and development needs. They pinpoint employee skills and competencies needing development. It helps to provide feedback to employees on how the organization views their performance. Management evaluates performance for the basis for reward allocations including merit pay increases.

Methods used in Nestle for Performance Evaluation


Written Essays

The simplest method of evaluation is to write a narrative describing an employees strengths, weaknesses, past performance, potential, and suggestions for improvement. No complex forms or extensive training is required, but the results often reflect the ability of the writer.

Critical Incidents

In Nestle management focuses on those behaviors that are key in making the difference between executing a job effectively and executing it ineffectively. The appraiser writes down anecdotes that describe what the employee did that was especially effective or ineffective. A list of critical incidents provides a rich set of examples to discuss with the employee.
Graphic Ratings Scales

A set of performance factors, such as quantity and quality of work, depth of knowledge, cooperation, loyalty, attendance, honesty, and initiative, is listed. The evaluator then goes down the list and rates each on incremental scales. The scales typically specify five points. Popular because they are less time-consuming to develop and administer and allow for quantitative analysis and comparison.
Behaviorally Anchored Rating Scales

BARS combine major elements from the critical incident and graphic rating scale approaches. The appraiser rates the employees based on items along a continuum, but the points are examples of actual behavior. To develop the BARS, participants first contribute specific illustrations of effective and ineffective behavior, which are translated into a set of performance dimensions with varying levels of quality.

Recommendations
Nestle HR policies covers all important parameters which are essential to constitute a sound basis for efficient and effective HR Management in the Nestl Group around the world. These policies are flexible and dynamic and may require adjustment to a variety of circumstances. For its implementation sound judgment is required for compliance at local levels suiting local market laws and common sense keeping in view specific context. Most important while adjusting to local market requirement the policy must not lose its true spirit.

While Nestls operations are scattered over world, it is vital that local legislation and practices must be adhered and respected. Advancement capacities of HR are also different and unique in different markets so this implication must also be adhered. Nestle policies should not enter into

any conflict with local environment. Nestle management and Leadership must develop strategies to guide its employees on one hand and fulfill local requirements.

Regarding concept of shared responsibility, HR managers propose adequate policies consistent with coherent implementation with fairness. In a multicultural working environment HR managers must act as business partners while advising and offering solutions and supporting and counseling its colleagues. This HR partnership will create an environment of co responsibility in all matters and also improve efficiency. Nestle must ensure direct and regular communication with its employees, both union members and non-members, as mentioned in the Nestl Management and Leadership Principles. Relations with unions must be established and austerely observed with respect to national laws and local practices. As per performance appraisal systems are concerned direct personal contact is more advisable as compare to written communications. Nestle must focus on developing environment for senior employees to work as mentors. This is hoe the tacit knowledge can be transformed into explicit knowledge thence using the benefits of knowledge management. The performance appraisal must be conducted on facts as compare to opinion based. Further employees both positive and negative skills and competencies must be kept in mind while providing feedback.