Cadbury's Business Strategy and Human Resources (HR)

1.1 Access the fit of Cadbury's approach to managing its human resources and its business strategies with reference to relevant models of SHRM.

The approach in which Cadbury manage its human resources and its business strategies lies in the ability to identify the core competence of their people and use these resources with each individual's capability to create a competitive advantage for the Company to stay ahead among its competitors in the industry.

Cadbury Schweppes employs more than 50,000 people and has manufacturing operations in more than 35 countries. It is the world's third largest soft drinks company and holds either the top or second position in the market share of 24 of the world's top 50 confectionery markets. This illustrates that this large Quaker company has its value in the market where it is important for HR to manage their employee's performances, working culture and management in an efficient and positive way.

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Resource based model, the SHRM role becomes one of the creating systems and procedures that focus not on external relationships but on how staff and their abilities are used. The resource based model recognizes that many aspects of capability can be formally defined in skill terms and allows the integration of the intangible aspects of work alongside other more visible areas such as patents, trademarks and other intellectual. The core competencies include many things such as aspects change of the management, capability of staff, strategic development capability and speed of response.

The RBV of the firm argues that a firm's growth (Penrose, 1959) and competitive advantage (Wernerfelt, 1984) are function of the unique bundle of resources that it possess and deploys (Barney, 1991, 1997). Firms acquire critical human resources and then establish HR system to enhance the potential of these human resources that are most difficult to imitate (Paauwe and Boselie, 2002; Jackson et al., 2004)

As the business has grown and acquired a wide range of non Cadbury originated businesses the strategy has been adapted to fit the worldwide competitive situation it finds itself in. Cadbury's goal is to deliver its superior shareholder performance, just as simple as that - Cadbury focused on its shareholders which ranked 26th in the FTSE and they achieved its goal in the year of 2004 by showing the turnover business from £6,738 million to £1,115 million for its underlying profit.

The success of a 'best fit' model depends on its ability to integrate into the strategic plans of the organization, provide horizontal or vertical integration or the key policy areas. How far organizational objectives will be met is also dependent on the level of fit between the business strategy and the environment at one level, HR strategy and business strategy at a second level and the internal coherence of the policy. Best fit allows organizations to determine whether a 'hard' or a 'soft' approach needs to be taken given the prevailing circumstance and the success of a 'best fit' model depends on its ability to integrate into the strategic plans of the organisation and provide horizontal or vertical integration of the key policy areas.

There is no one single perfect SHRM model to be applied in Cadbury's and the Company needs to take into consideration the nature of business of the Company, the external environment of the industry and in this case the resource based view and best fit model is more suitable.

1.2 Using your knowledge from Unit 8 and the related information about managing effective change evaluate the organisations approach to change assessing its impact and the role played by SHRM techniques and processes?

It is important for Cadbury to use its SHRM techniques and processes to manage effective change and evaluate the impact by helping the company in establishing or executing various strategies, provide alternative insights. HR requires people management skills but also in depth understanding of the current situation of the Company and provide value creating proposition accordingly. The HR department's strategies, policies and activities must support and align with the company's corporate and competitive strategies.

The strategies of Cadbury for managing their people's value is to aim to increase employee understanding on how company be profitable and make sure employees in the company is result oriented focused. Cadbury can carry out employees' surveys and use the feedback obtained to make necessary future strategy planning. Any sort of feedback -negative or positive feedback makes huge impact in the company as HR can use this to address people management issues. Any discovery of dissatisfaction can be used to minimize existing conflict and personality or culture clash happened in the company. Furthermore, the top management formulates its strategy by supplying competitive intelligence that may be useful in the strategic planning process, supplying information regarding the company's internal human strengths and weakness by conducting employee survey, feedback regionally. By doing such, HR builds a persuasive case that show how the HR can implement several strategies that can be evaluated in a measurable terms and contribute in creating value for the company.

After the merger, there is another group of employees joining the Company with different age (gap) and technology skills which plays a huge part of their working responsibility daily no matter in operations or communications area thus, there will be an internal restructuring and consolidation of workforce to be carried out.

With the given transition period after the merger, and the increasingly competitive market and the continuous evolution of technology together with the different generation who may have joined the Company (Gen Y and Gen Z or NetGen), therefore HR can be able to implement workplace training to address to skill gap between employees. These trainings must also be evaluated accordingly by doing a pre training evaluation of performance and post training evaluation. It is important to ensure that the focus of the evaluation is to analyse the performance of employees as well as providing information on how to manage the different categories of people and improve on their performance .A systematic training literature indicates which techniques might be the best for which behaviour in which situation. Changes in job as new technologies develop can have similar effects and more effective training programs can also affect other systems in the work organization. For example, when a employee in Cadbury change his or her current position into new position as a result of a career change or promotion, they need to enter into training program. It is important for them to understand the effects of training experiences as part of the organisation.

"Merger and Acquisition" in Cadbury Schweppes shows difference its difference before and after the merging with Schweppes (a.k.a Cadbury Schweppes) is that they managed to show the people how strong both the company and they are worth 4.2 billion after the merging with their new HR director, Andrew Gibson whom was promoted for Cadbury Schweppes for GB and Ireland to drive the company further as HR isn't usual.

"Managing for Value" was invented in year 1977, which this is a programme that employees have to go through on a five-day training course that linked their work to those goals. Cadbury's HR director Andrew Gibson practice the use of the 3As which include Accountable, Adaptable and Aggressive which in this context is about being results-focused and tenacious. Results-focused is certainly something every Cadbury Schweppes employee has to be according to Gibson. However, HR have to ask several question such as how has the programme able to show measurable result and overall impact for the Company and whether the programmes reflect on current issues or interest that applies to their work? The impact can be measured through designing a performance management system with quantifiable elements as the staff's key performance index (KPI). Different reward system - (monetary and non monetary) can be designed to motivate the staffs further and retain the overachievers in the Company.

Managing the people for their value added is extremely important for HR to consider in every level in the business such as their employees have the freedom to do what is right, bottom up their initiatives where staffs can recommend to management their ideas either locally or globally. With this merging, Cadbury had gained their competitive advantages and also in the same time improved and maximize the company's resources as the company went through a major reorganization, moving to a more decentralized way of operating business units within a new structure. In order to reinforce that message of value added for the people, Cadbury Schweppes has two share schemes, ShareSave that has been operating since 1974 and the company's share worth having for Cadbury's employee. The impact can be accessed through analyzing the overall staff turnover of the Company and also conduct a staff satisfaction survey relating it to their performance results.

"Working Better Together" is a framework designed by their HR director himself, Andrew Gibson is to encourage employees to undertake in order to work more collaboratively than they were used to a more decentralised business structure both company have different working culture after merged. Cadbury Schweppes have some tough managers who would usually only talk about hard nose financial results where they focus on behaviour and unlocking the potential of people at different levels of the business had really paid dividends. The impact can be measured by the overall team performance and the reduction in conflict or people issues.

"Passion for People" was introduced for directors to look closely of their people's managing performance and also their skills of enhancement. Adding to the impression that the people who work there with full satisfaction, Gibson reveals that the climate survey (staff attitude survey) where the employees said they understood the business's purpose and values and its local priorities, were proud to work for the company and felt part of team. Cadbury is successful because their HR are able to unlock employee's potential and they focused on their strength and implement the growth of people within the organisation.

Both companies has different cultures and it is important for HR to develop a similar benefits in the company for the people's consideration to get used to the culture of the business and the nature of the way may undertake change. The result of those implemented programme by HR of Cadbury, showed that training and communication among employees and management is important in order to get the ball rolling within the company and also the business regionally.

1.3 From your knowledge of the course how does the HR Function seem to be supporting the Business Strategy at Cadbury's? In general how can HR best support an organisations going through change?

HR function important in organisation to help them formally evaluate the effectiveness of the performances within the Company. HR seems to be supporting the Business Strategy in Cadbury by bringing in Bob Stack as the company's HR director whom has being so geared towards company's dividends such as bringing more shareholders and create a positive working environment among their employees. After the merging, Cadbury's business indeed been through a huge amount of change as the acquisitions of confectioners Trebor Bassett and Adams which at $4.2 billion, the purchase of Adams in 2003 was the biggest acquisition Cadbury Schweppes has made. HR function is often linked between HR department and business such as developing people, bringing out talent, supporting the organisational strategy and being guideline to the people in the Company. System value like communication, training and development should be carry out in HR function too.

The changing business environment could bring employees some uncertainty towards the organisations such work is becoming unsecure, the notion of organisational boundaries is sometimes less clear, employees long term relationships with organisations could stopped due to redeveloping access in between. The change process in organisational need to make sense for the management and employees which involve communication between people of more understanding the objective and how change can be achieved. The main areas under HR function are Recruitment and Selection, Training and Development, Industrial Relation / Employee Relation, Compensation and Benefit, Health and Safety.

Under Recruitment and Selection stage, it show how effective will HR be in planning decision such as what are the recruitment planning, career planning, succession and workforce planning of staff where they will be given chance to expand their skills or ability within the Company freely. Staff selection should be integrated as the main key task for the organisation as a whole while HR department do the selection. Training and Development is also required whether it is foundation or introduction planning for new entry level staffs, professional development for executives, leadership and management training for managers and HOD in order for the people to improve and grow together with the Company. Industrial Relation / Employee Relation reflect on areas for employee's assessment such as teamwork, mentoring, communication between people within an organisation. Compensation and Benefit stage is where the staffs need to know what are the equitable of themselves such as promotion, rewards, insurance, employee's deduction of funds and etc. Lastly but not least, Health and Safety is being considered because the employees need to have sort of security during working hours in case if any accident might happen and the Company will have the responsibility to take care of it.

In general, HR department is like a "consultant" of the Company where they assist people to solve their problems or difficulty working among colleagues, provide guidance, explaining or create ruling (SOP) in line with the labour laws and human rights to support organisation which is also called as HR Chain Management.

Section B

Question 2

What is the value to organisations in creating a learning organisational culture? How can organisations work towards creating this culture through its HRM/HRD Strategies?

The value and the importance of an organization in creating a learning organisational culture is to encourage the interaction and friendship between the families in the company. Skills training programme and also advanced system that can simplify work yet promoting a happy workplace is the criteria that HRM/HRD (Human Resource Management / Human Resource Development) should consider in order to help staffs maintain a healthy balance between work and their personal life as we know we spent most of our time in workplace from 9am-6pm (average 8 hours per day). A company should be enriched by the staffs creativity, brilliant ideas and initiative in order to grow or move forward thus, taking care of their needs and potential has to discover and what matters is the quality of staff's work, results together with their passion that is always noted and rewarded by the company. Organisational culture can be reflected in person related objectives and bring in the cultural change or culture reinforcement.

For example, the HR department in an organisations will need to work closely with Corporate Culture department on how to bring their staffs together as one family such as setting up activities that are designed to build their characteristic and leadership skills by understanding their job more in various area.

Culture is a set of shared meanings that influence or determine behaviour on how decision are taken care of, how rules are made, what and what information is being shared. All these elements can also prescribed by organisations in term of say their mission statements or in the informal ways, individuals and groups develop ways of thinking about working behaviour and these is an attitude that grows over time in response to organisational events.

By creating a healthy culture, an HR must consider few things such as the structural control within the Company, co-ordination and job design can be influenced thoroughly thus standardisation of jobs or flexibility of job (free thinking), formalisation of communication channels and flows, division of labour between departments or teams, term and conditions and the degree of rules and also the ability to work beyond contract. The dimension of HRM in managing cultural behaviour according to strategic aspects will be discuss as follows:-

What are the key to organisational relations (customer service)?, create initiatives for integrated strategic change, fast speed of making decisions, transformational leadership working to bring positive change, facilitation or prized management skills involving employee support and encouragement to employees. Teamwork and communication is always important in working culture especially it need to be handled through managing culture and being harmonised with overall business strategy objectives.

Question 4

To what extent can performance management systems stand alone from an organisations overall approach to developing and managing people? How can organisations integrate the performance and developmental aspects of managing people? Use case examples to illustrate your answer.

Performance Management Systems (PMS)., Bevan & Thompson (1992) is a set of techniques and procedure on how to improve an organisation performance such as how to communicate the vision of an organisation's objectives to the employees, providing departmental or business unit and individual performance targets that are drawn from the wider organisational objectives or a formal review process of how the objectives have been met. A fully integrated PMS (objective setting, review process and linked development and review system) provides the basis for evaluating the effectiveness of the whole performances process in providing enhanced organisational performance.

As case examples, AirAsia Bhd is a low cost carrier or budget airline in Southeast Asia and they still a growing airline for 8 years now but yet they've started to implement the 360 degrees of performance appraisal among its employee so that the company can know well as well as provide its employees with unparalleled opportunities for career development and to achieve a multi-skilled workforce which a lot more other established company has not practise this 360 degrees appraisal program.

The role of HR under PMS is to consult and formulate its schemes in consultation with line of managers and staff, monitor and evaluate PMS based on stakeholder use on what are the outcomes and process effectiveness, review organisational capability as a result of PMS and design policy action in HRD and recruitment.

PMS distinguishing in an organisation is seen as a series of steps linked to an overall business strategy such setting objectives, on going review on the objectives, development of personal improvement plans, formal appraisal with feedback, a competence based organisational capability review and pay review for result oriented.

In this world of business today, managing people could be tough and challenging especially in a huge organisations where there are employees from different countries, different culture and also the language barriers. The features that can make up PMS as a series of steps linked to an overall business strategy as follows:

Figure 1: Features of a Performance Management System

As illustrated in Figure 1:Features of a Performance Management System, a performance management system has six (6) distinguished features, namely:

• i) Objective setting - this would be the area where long term objectives would be set for the employee and are normally stated in a formal Key Performance Indicator/Index (KPI) and is normally set by the immediate manager or by the management team.
• ii) Ongoing review of objectives - this would be the area where KPI's are reviewed periodically either every 3 months or quarterly to ensure that the employee would be able to meet the said long term objectives.
• iii) The development of personal improvement plans linked to training and development - this area is to ascertain the targeted development that the employees wish to go through and to allow personal development to takes place to help improve productivity of the employee.
• iv) Formal appraisal with feedback - this area is to review the progress of the employee against personal skills development and personal experimentation in trying out new tutoring systems or skills. Also to ascertain the level of self improvement the employee had managed to gain throughout the period of the objective setting.
• v) Pay review - this area would allow the management to see how best fit the employee would be rewarded for the effort that they had shown over the period of the appraisal.
• vi) A competence-based organisational capability review - this area would be more to organisational strategies where the organisation would be able to place resources where they are more suitable to able productivity to be increased.

Learning and Development objectives should also be measured in order to contributes to better productivity, improved job performance and eventually a high performance culture. L&D objectives is bring employees in an organisation to link directly with the skills and core competence requirements of the business and help to achieve organisational development goals. All these include how the employee's behaviour in term of the job is being carryout, positive teamwork attitude or communication among colleagues or customers. Thus, HR department is responsible to emphasize on quality behavioural factors of the people, differentiation of individual performance (resource based view), increase bottom line (profit/cost) prioritisation to be fed down to each employee and get to understand the importance of communicating with employees themselves that can align their behaviour and attitudes. The concern to improve individual's potential in their workplace is necessary for HR because the future of the organisations will become more dependent on the people and their ability will effectively help the company grow stronger. Despite of providing external training, staffs within the organisation can often have 'swapping lesson' where opportunities is opened for self directed learning experiences from different colleague, different field.

As for conclusion, the organisational culture will be influenced by the decisions taken by PMS on matter such as the relationship the relationship of dependence or interdependence formed by managers and employees and how this influences change through the design and delivery of the scheme.

References

1. Irwing L.Goldstein & K.Kevin Ford., 'Training in Organisations' (Fourth Edition), 2002.
2. Derek Torrington, Laura Hall & Stephen Taylor., 'Human Resource Management'.
3. Strategic Management of Human Resources,. University of Sunderland BA (Honours) Business Management, Version 3.0, Unit 1 - Definition and Purpose of SHRM., pp.13-22.
4. Strategic Management of Human Resources,. University of Sunderland BA (Honours) Business Management, Version 3.0, Unit 8 - Managing Change: Culture and Performance., pp.
5. 'Managing Human Resource Capabilities for Sustainable Competitive Advantage' www.emeraldinsight.com/reseachregister
6. 'The Strategic Managing of Human Resources'., John Leopold, Lynette Harris & Tony Watson, 2004.