Section A
Question 1:
The first question pertains to the approach that Cadbury takes in managing human resources and its business strategy. Before I discuss this issue I will first present a brief discussion about Strategic Human Resource Management (SHRM). Strategic human resource management aims at the improvement of the way human resources are managed strategically within organizations, with the definitive goal of improving organizational performance, as judged by its impact on the organization’s declared corporate strategy, the customer or shareholders (Brewster et al 2000, p.6). Strategic human resource management (SHRM) is a philosophy of people management based on the belief that human resources are uniquely important to sustain the success of a business. SHRM can be defined as the process of linking the human resource functions with the strategic objectives of the organization in order to improve performance (Ahmed et al 2006). Strategic human resource management involves the linking of HRM with the strategic goals and objectives of the organization in order to achieve a progressive business performance and achieve an organizational structure that promotes innovation and flexibility (Buyens and de Vos 1991). Strategic HRM according to Burke and Cooper (2004) has emerged as a major approach to improving the competitive advantage of the firm. The goals and objectives of HRM are aligned with the strategic objectives and plans of the organization. Strategic human resources management means accepting the HRM function as a strategic partner in both the formulation of the organization’s strategies and the implementation of those strategies through activities such as recruiting, selecting, training, and rewarding personnel (Sims 2002, p. 27).
The case presents a picture of an organization that has a clear business objective – to deliver shareholder performance. The company aims at dividends. The company has a clear goal and at the same time acknowledges that its people are important in achieving its goals. Cadbury’s approach to SHRM is something that can be considered as “contingency approach”. The company manages its human resources in a contingent manner. Let us discuss the underlying theory of this approach.
The underlying theory of Cadbury’s approach to managing its human resources is Contingency Theory of SHRM. Advocates of the contingency perspective of SHRM argue that a firm can be effective if its practices and strategy are aligned with other aspects and strategies of the firm. According to Baird and Mechoulam (1998) HR must be closely integrated into the planning process of the firm. They also believed that a firm can achieve success if it is able to develop HR policies and practices that complement and support other HR policies and practices and other elements of the organization’s strategic plan.
It is evident from the case that Cadbury views its people as a source of competitive advantage and the main contributors to the company’s success. The company seeks changes; it has clear objectives and goals. It realizes that in order for it to achieve its goals and objectives, it must align the efforts of its people. This can only be done through SHRM. Through SHRM the company aligns the HRM activities to its business objectives, SHRM is used in order to integrate the policies, practices and activities of the HR department to the goals of the organization. Perhaps, communication plays an important role in the company’s approach. In order to successfully align the efforts of its human resources, the company communicates its plans, strategies and current situation to its people. The mere fact that Cadbury Schweppes has an HR director on the main board and that HR is represented at every regional business unit make it obvious that the company recognizes the strategic importance of human resources and takes HR issues and concerns seriously.
Question 2:
The second question pertains to the role of the HR department to the delivery of people strategy. The company believes that in order to maintain its market position and competitive advantage it must constantly evolve and remain at pace with the changes internally and externally. The organization makes it a point that its people can adapt, learn and become change-responsive. The organization invests on its people in order to make them more flexible, learning and adapting quickly to the fast changing conditions.
The purpose of SHRM is to make the integration of organizational objectives and HR policies and practices. The organization views its human resources as the most important contributor to the company’s success. Because of this the HR department was appointed to develop strategies and policies that is geared towards the achievement of the company’s goals by making use of the human resources. In order for us to have a clear picture of how the HR department deliver people strategy let us have a look at the SHRM process.
1. Identifying the impact of the company’s gaols on specific departments.
The plans of the HR department are based on the strategic objectives of the organization. The objectives of the HR department are derived from the overall strategy of the company.
2. Identifying the knowledge, skills, expertise and total number of employees required to achieve the organizational and functional and departmental objectives.
The top management encourages every department to come up with their own objectives and goals. Based on these goals, the knowledge, skills and expertise required are determined. The HR department makes sure that the company have access to adequate pool of knowledge, skills and abilities.
3. Determining the additional human resources requirements in light of the organization’s current human resources.
The HR department is responsible in keeping track with the current condition of the company’s human resources. The HR department is responsible for making sure that the human resources requirements are satisfied in order to keep the operation flowing.
4. Developing specific action plans to meet anticipated human resources.
The HR department makes a plan in order to accommodate the people in the organization. The HR department provides training for the new employees and makes sure that the knowledge and skills of the current employees are always updated.
Let us now discuss the case of Cadbury. Because of the changes that happened in the company brought about by its growth and acquisition strategy, the company needs to adapt to its new environment. The company started to give importance to delivering shareholder performance. This new business spotlight is communicated to every department and to every one in the company. The company made sure that its entire people understand and contribute to the company’s new business spotlight. The different HR programs and policies that are in effect in Cadbury Schweppes are geared toward achieving the organizational objectives. First, the program called “Managing for Value” is aimed at the enhancement of employee knowledge of how the company could be more profitable. This program is coupled with the “Three A’s” policy (Accountable, Adaptable, and Aggressive). We can say that the HR department is able to deliver people strategy by helping the employees adapt to the new organizational culture. The HR department helps the employees to become results-focused, be commercially focused on growth and be aggressive. In order to ensure that the employee’s individual goals are linked to the organizational goals, the employees went on a five-day programme. In addition, to make employees feel a sense of ownership, the company has introduced two share schemes. The HR is able to deliver people strategy by motivating employees through the company’s share schemes. The company also strives to create an environment where every employee can build relationships with co-workers. This is evident in the result of the company’s first global climate survey. Over 90% of the employees felt they are part of a team. In addition, the global climate survey also revealed that the employees understood the business’s purpose and values and its local priorities, they also added that they felt proud to work for Cadbury Schweppes. Collaboration has become important since the acquisitions of different companies. “Working Together” provided more than 50 online tools for people to undertake in order to work more collaboratively than they were used to. In order to deliver people strategy, the HR department focused on motivating and coaching employees to unlock their full potential. With this thinking, the company introduced “Growing our People”, a program focusing on behaviors and unlocking the potential of people at different levels of the business.
Question 3:
The third question pertains to the role of culture within SHRM.
In the case of Cadbury, alongside with the integration of the company’s HR policies and practices with the overall business goals was the major restructuring of the company. This restructuring entailed a restructuring of the organizational culture. In order to achieve its goal, Cadbury Schweppes integrate every HR objectives to that of the company’s. The company has undergone major restructuring and a lot of new HR programmes has been introduced. Let us look at the different strategies that the company employs to achieve its goal while giving importance to its HR.
Lets look at how the company has reshaped its culture in order to accommodate the changes that are required to achieve success. The company is openly looking for leaders that are aggressive. Someone who is results focused. The company actively seeks for potential leaders who will promote the organization’s goal. According to the article, Aggression is among Cadbury Schweppes’ core leadership value. In 1977, John Sunderland, former chief executive (now chairman) introduced “Managing for Value”, a leadership program that aimed to increase employees’ understanding of how the company could be more profitable.
Three As
- Accountable – owning rather than saying “it’s not mine, it’s someone else’s”
- Adaptable – coping with the changing world and changing your skills as required
- Aggressive – being results focused and firm
The company promotes a culture built on the above mentioned behaviours. The management believes that in order to lead, the organization as a whole must drive results, be commercially focused on growth and be aggressive. Cadbury Schweppes is a listed company with a set of financial goals. The “Managing for Value” program is geared toward educating employees about the goals of the company and its business context. Employees attended a five-day seminar that linked their work to organizational goals. According to Gibson, the HR department makes sure that people understand the context the business is operating in. To reinforce that message, the company has two shares. One of them is “ShareSave”, which has been in operation since 1974.
Along with the company’s goal of delivering superior shareholder performance, came its acquisition strategies. One of its biggest acquisition moves was the acquisition of confectioner Adams in 2003. The company has also undergone a major reorganization, moving to a more decentralised way of operating business units within a new structure based on five global regions. In all these, the HR played an important role. Adams and Cadbury Schweppes have different cultures. The HR needed to bring the two businesses together. In order to create a winning organizational culture, the two management teams collaborated. It was a move that made people feel that they own the company. It made the employees more engaged with the organization’s goals. Out of this strategy came “Working Better Together”, a program that provided more than 50 online tools for people to undertake in order to work together. The program made the company realized that in order to sustain its business, people, and brand advantage, the employees must be motivated. Another program – “Growing our People” came from the realization that the company could get more from its staff. The program is a three-day workshop that mangers are taking focuses on behaviours and unlocking the potential of people at different levels of the business.
References
Brewster, C, W. Mayrhofer, & M. Morley (eds.) 2000, New Challenges for European Human Resource Management, Macmillan, Basingstoke, England.
Burke, R & Cooper, C (eds.) 2004, Reinventing Human Resources Management: Challenges and New Directions, Routledge, New York.
Buyens, D & De Vos, A 1999, ‘The added value of the HR department’, in C Brewster & H Harris (eds.), International HRM: Contemporary Issues in Europe (pp.31-47), Routledge, New York
Clardy, A 1996, Managing Human Resources: Exercises, Experiments, and Applications Workbook, Lawrence Erlbaum Associates, Mahwah, NJ.
Gilley, J and Maycunich, A 2000, Organizational Learning, Performance, and
Change: An Introduction to Strategic Human Resource Development, Perseus Publishing, Cambridge MA.
Gratton, L., Hailey V H, Stiles, P., and Truss, C 1999, Strategic Human
Resource Management: Corporate Rhetoric and Human Reality, Oxford University Press, Oxford.
Lengnick-Hall, M and Lengnick-Hall, C 2004, The HR Function in the New
Economy. In R. Burke and C. Cooper, (Eds.), Reinventing Human Resources Management: Challenges and New Directions (pp. 35-53). New York: Routledge.
Sims, R 2002, Organizational Success through Effective Human Resources
Management, Quorum Books, Westport CT.
Section B
Topic 3: Human Resource Planning and SHRM
Cascio (1995, p. 142) defines human resource planning as an effort to anticipate future business and environmental demands on an organization and to provide qualified people to fulfill business needs and satisfy demands. Human resource planning is viewed as a process. As a process, human resource planning focuses on identifying an organization’s human resource needs under changing conditions and developing the interventions and initiatives necessary to satisfy those needs (cited in Gilley and Maycunich 2000).
In HRM planning, planners analyze an organization’s HRM needs in a dynamic environment and develop activities that enable an organization to adapt to change. The HRM planning process involves forecasting HRM needs and developing programs to ensure that right numbers and types of individuals are available at the right time and place (Sims 2000).
SHRM: Contingency Perspective
Proponents of the contingency perspective in SHRM argue that a firm can be effective if its HR practices and strategy are aligned with other aspects and strategies of the firm. Contingency perspective is also called ‘fit-alignment’ perspective. There are two forms of fit alignment – vertical and horizontal. The vertical alignment (external alignment) is the level of alignment between the components of the organization’s human resource strategy and core features of its business strategy. Horizontal fit (internal alignment) measures the level of alignment among components of the organization’s HR strategies such as recruitment, selection, training and compensation.
Perhaps, the most notable argument in favor of the fit perspective was presented by Baird and Meshoulam (1988). They argued that HR must be closely integrated into the planning process of the firm. In addition they also advocated the idea that a firm can achieve success if it is able to develop HR policies and practices that complement and support both other HR policies and practices and the other elements of the organization’s strategic plan. Two types of fit were identified by these theorists. These are internal and external. Internal fit refers to the level of that human resource practices complement and support each other. External fit on the other hand, refers to the level of complement and support between HR practices and other elements of the strategic plan. The contingency perspective according to Radcliffe (2005) assumes that business performance will be improved when there is consistency or fit between the business strategy and HR policies. It has been argued that HRM practices that are not aligned and consistent with organizational strategy and which conflict with other HRM practices can restrain both individual and organizational performance.
There are several benefits that are attributed to the fit perspective on SHRM. Jackson et al (1989) suggested that firms that seek to pursue innovation as a strategy used HRM practices that will complement the strategy.
Definition of SHRM based on Fit Perspective
Based on contingency or fit perspective, SHRM can be defined as the integration of HR practices and policies to the overall organizational objectives with the aim of improving performance. Ahmed et al (2006) defines SHRM as the process of linking the human resource functions with the strategic objectives of the organization in order to produce better performance. Buyens and de Vos (1991) on the other hand defines SHRM as the linking of HRM with the strategic goals and objectives of the organization in order to achieve a progressive business performance and achieve an organizational structure that promotes innovation and flexibility. The goals and objectives of HRM are aligned with the strategic objectives and plans of the organization. The role of HRM is to determine the human resources needed to support strategic objectives and to ensure that employees are selected, trained, evaluated, and rewarded in ways that further the achievement of business objectives. Strategic HRM is frequently described as a linear, balanced process that begins with the identification of goals that will guide human resource practices. The integration of the HR programs with the goals of the organization will result to the organization’s increased value. The recruitment, compensation, performance appraisal, promotion, training and other functions are designed and managed so that they work towards the strategic objectives of the firm (p.92). Strategic HRM has the purpose of improving the way that human resources are managed within firms. The main objective of strategic HRM is to improve organizational performance as judged by its impact on the organization’s declared corporate strategy (Brewster et al 2004, p. 29). Strategic human resources management means accepting the HRM function as a strategic partner in both the formulation of the organization’s strategies and the implementation of those strategies through activities such as recruiting, selecting, training, and rewarding personnel (Sims 2002, p. 27).
The contingency perspective of SHRM gives particular importance to HR planning. According to the contingency model, in order to achieve success, the HR policies and practices must be planned in such a way that they coincide with the company’s business objectives and strategies. The contingency model highlights the importance of the HRM department as a strategic partner of the firm. In this regard, HR planning is placed at the center of the formulation and implementation of the organization’s strategies.
Topic 4: HR Department in Organization
Contributions of the HR Department in Organization
1. It provides the right kinds of talent to the organization at the right time. HRM is expected to assure that a supply of qualified labor in a timely fashion (Clardy 1996, p.20).
2. It ensures that the organization is properly staffed. When done effectively, the staffing, recruitment, and selection process provides a flow of qualified individuals for filling open positions within the organization on a timely and efficient basis (Clardy 1996, p. 41).
3. Using appraisals, the employees are assesses and evaluated. Employee appraisals have very profound implications for both the employees and for the future success of the organization (Clardy 1996, p.58).
4. Using effective pay systems, the management can focus employees’ efforts toward desired organizational goals (Clardy 1996, p.79).
5. Ensures that the employees are properly skilled to perform their tasks and supports the organization’s growth through career development. The goal of training as part of the human resources management processes is to create cost-effective programs that build the skills to perform effectively (Clardy 1996, p.103).
The Roles and Activities of HR Department
1. HR Planning
In HRM planning, planners analyze an organization’s HRM needs in a dynamic environment and develop activities that enable an organization to adapt to change. The HRM planning process involves forecasting HRM needs and developing programs to ensure that the right numbers and types of individuals are available at the right time and place (Sims 2002).
2. Recruitment and Selection
Employee recruitment involves interview, screening, and selection of most qualified candidates, filling of positions through transfer or promotion and coordinating temporary employment. The aim of recruitment is to identify a suitable pool of applicants quickly, cost efficiently, and legally. Selection or staffing involves assessing and choosing job candidates (Sims 2002).
3. Training and Development
Training and development such as orientation, performance management skills training, and productivity enhancement are planned learning experiences that teach employees how to perform their current and future jobs. Training focuses on present jobs, whereas development prepares employees for possible future jobs.
4. Performance Appraisal
Through the performance appraisal process, organizations measure the adequacy of their employees’ job performance and communicate these evaluations to them. Performance appraisals are a critical link in the HRM process, as they assess how well employees are performing and determine appropriate rewards or remedial actions to motivate employees to continue appropriate behaviors and correct inappropriate ones. The HRM role in performance appraisal is one of working with other managers in the organization to establish the appraisal process, the performance dimensions to be measured, the procedures to ensure accuracy, and requirements for discussion of appraisal results with employees (Sims 2002).
5. Career Development
Organizations are becoming more active in developing career development programs. Many organizations are designing career programs in an attempt to increase overall organizational performance and employee productivity, and to attract, develop, and retain the most qualified employees in this increasingly competitive and global environment (Sims 2002).
6. Compensation
The aim of compensation practices is to help organizations establish and maintain a competent and loyal workforce at an affordable cost (Sims 2002).
7. Health and Safety
The human resources department ensures that the employees are working is an environment that is safe and healthful. Organizations try to create a safer and more healthful working environment by instituting accident prevention programs and programs designed to ensure the health and mental well-being of their employees. Organizations are taking more responsibility for helping employees deal with problems caused by stress or substance abuse through wellness and employee assistance programs (Sims 2002).
New Functions of HRM
Different changes and challenges have caused a dramatic shift in the functions of HRM. Aside from its traditional functions such as human resource planning, recruitment and selection, job analysis, wage, salary and reward management, performance management, training and development, legislative compliance and labor relations, HRM has been called to serve other functions that create competitive advantage and ensure organizational success. Among these new roles are the following:
1. HRM as Human Capital Steward
As a Human Capital Steward, HR contributes to strategic capabilities by developing, leveraging, renewing, and nurturing a firm’s stock of knowledge, skills, abilities, interests, and talents. HR is there to help ensure that every individual is able to make value added contributions by identifying and cultivating individual competencies and capabilities. HR delivers people strategy by ensuring that renewal and rejuvenation are on-going activities. HR contributes to organizational success by initiating training and development activities and by creating a culture of continuous learning. HR shapes the values and provides the contextual backdrop that enables people to take initiative and use their judgment in a flexible and fluid business setting. The role of HR is not to create a dependency between the employee and the HR unit, but to forge a partnership that leads to increased intellectual capital, enhanced commitment, greater awareness of opportunities to make a difference, and adaptability (Lengnick-Hall and Lengnick-Hall 2004).
2. HRM as Relationship Builder
The role of Relationship Builder focuses on creating programs and practices that enable employees to encourage, facilitate, nourish, and sustain relationships among fellow employees, customers, suppliers, firms in complementary arenas, and at times, even rivals. HR can deliver people strategy by contributing to a firm’s ability to leverage its resources and develop strategic capabilities and core competencies by helping individuals build a strong web of relationships. Developing relationships between employees helps workers find jobs and creates a richer pool of recruits. It facilitates inter-unit resource exchange and product innovation. Social capital facilitates the creation of intellectual capital since people are more likely to share tacit information and take intellectual risks in a supportive social environment. It facilitates cross-functional team effectiveness since social capital enables people to see situations from perspectives that are different from their own. It reduces turnover rates, since individuals are less likely to leave a firm if they have strong, positive social connections with their co-workers. It strengthens supplier relations, regional production networks, and inter-firm learning since social capital can be the foundation for multifaceted, multidirectional, mutually beneficial relationships that extend beyond transactional exchanges (Lengnick-Hall and Lengnick-Hall 2004).
3. HRM as Knowledge Management Facilitator
It is not enough simply to hire employees and put them to work. Strategic capability requires a firm to be able to create and disseminate knowledge among its employees. HR can play a vital role in facilitating organization learning and knowledge sharing between employees, among departments, throughout the organization, and with external co-producers. An important aspect of human capital stewardship is identifying people who want to learn. Employees need to be able to learn and unlearn continuously, to teach and be taught. The organization must tap into all employees’ knowledge as sources of innovation. HR can make an important contribution by identifying sources of employee knowledge and eliciting that knowledge from employees. New knowledge must lead to new behaviors if it is to create strategic capability. Knowledge is of little use unless a firm is bale to adjust its actions, decisions, and relationships to capitalize on the insight. Knowledge management facilitation includes developing organizational capabilities that enable individuals to apply knowledge more skillfully, quickly and creatively. Equally important, HR must help organizations strike a balance between productivity focusing efforts on critical tasks while constantly incorporating new ideas (Lengnick-Hall and Lengnick-Hall 2004).
4. HR as Rapid Deployment Specialist
The rapid pace and constantly changing environment that many organizations and industries confront creates another new challenge and new function for HRM: rapid Deployment Specialist. Strategic capability requires competence in rapidly assembling, concentrating, and deploying specific configurations of human capital in order to achieve mission-specific strategic goals. Rapid deployment of human talent requires adaptable employees. Workers need to be adaptable, versatile, and tolerant of uncertainty to operate effectively in the constantly changing global market (Lengnick-Hall and Lengnick-Hall 2004).
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