Assess the fit of Cadbury’s approach to managing its human resources and its business strategies with reference to relevant models of SHRM.
Cadbury’s approach to manage the human resource and business strategy in regards to the case study given can be categorized in two models: Resource based models and best fit models. According to the case study, it is assumed that resource based model was used prior to the acquisition of Adams and best fit approach were used after the acquisition done.
Most traditional HRM approaches use organizational external factors to determine HR policy, resource based, instead focus on company’s internal factors (e.g. strength) and develop further using the available resources. In Cadbury case, it can be seen that, using Managing for Value was launched in 1977 which focused on company’s internal ability (employee understanding) to decide how the company could be more profitable. Managing for Value itself has been categorized in three parts: Accountable (individual responsibility), Adaptable (get adjust with recent trends) and Aggressive (result oriented and goal driven). And then, Result Focused is also implemented for the sake of employee development let the employee understands the business goals and the environment where Cadbury operates the business during training session. The outcome was about 90% of employees returned with a better understanding and values of Cadbury and was proud to be in a team.
As such, resource based model was used based on company’s abilities and resources to determine the appropriate strategic actions. Cadbury’s approach to resource based approach can be summarized in the following 5 steps:
Cadbury’s is ranked 26th in FTSE and had a profit of 6% amounting £1115 million and had appointed a HR manager in main board. But then the major weakness was to identify the potential employees and promote and motivate them to perform better. This strength-weakness analysis is used in very first step of resource based model against the competitors.
Next, Cadbury identified that the employees skill must be analyzed to motivate each employee through some goals so that they can perform better (known as capability analysis). Employee motivation has been seen fruitful after the training session.
The Cadbury assess their unique set of resources to stay ahead of competitors. To be a competitive leader, Cadbury brought the employees closer to the company by offering them share in 1974. Employees had invested their own money and for that reason each employee has a good reason to be motivated towards a common goal – to perform better than yesterday.
By offering the part of the company business, 90% of employee said they liked the share investment which has proven big returns for the company itself. This strategy fitted with the Cadbury’s then competitive step as no such company had offered this opportunity before.
And then, to formulate the strategy into realty and to be a market leader, Cadbury took aggressive step toward acquisition of Trebor Bassett and Adams. This acquisition followed by a decentralized command of the company split into five regions which demands that Cadbury can no longer stick on old concept. As the business trends had changed, to be competitive and earn above-average returns after big acquisitions, HR has to play its roles.
There came the Best-Fit model which derived from the business strategy. Cadbury’s step forward to best fit was hugely changed trough the acquisitions. The following are the valuation how ‘best fit’ approaches fitted with Cadburys Human resource management.
Recruitment and selection process had been adapted with extreme care. Both businesses had been given equal priority as both had two different cultures. Some employees had been shifted over the businesses on demand. Communications has played its role and made things easier. The managements of two different businesses had been asked what culture the company should adopt to be a market leader. This communication let the employee had their flexibility on job rather than having job imposed on them. Direct discussions with employees had been made and few standards of behaviors had been set.
Cadbury identified that, rather than focusing on individual employee it could form a team for specific goals for a certain time and replace them for some other purpose at a later time. This strategy did make diversification among employees and known as Working Better Together in the case study. Cadbury introduced extensive training program with more than 50 online tools for employee to let employee work more collaboratively in a decentralized business structure. However, despite these steps, Cadbury wasn’t able to bring out the best of the workforce. A more growing approach – more likely a joint problem solving approach was necessary.
As a result, Growing Our People had been initiated so let employee be involved in decision making process with responsibility. Employees went through side by side with managers in assessment process of company’s various stages and gain their performance.
Performance appraisal was essential at this stage. Cadbury had to assess what were the outcomes of the training, communication etc to determine the next possible steps towards the HRM (e.g. pay increase, promotion). It has found that, poor performed employees were not given fair chances and opportunities.
Since Cadbury placed its first priority to stakeholders and only fifth priority to built reputation with staff, it took serious actions towards the poor performed employee; noted as Passion for People. Well performed employees had been give pay rise while low performed employees had been disqualified. AS a global business leader, it had no chance to retain poor performed employees.
Conclusively, optimal employee commitment has been established. To let the HR strategies more employee friendly, HR professionals was appointed in every regional decision making board. Cadbury initiated sense the employee considerations in different cultures.
Best fit model proved to bring success in Cadbury’s HR strategies up to date. While other elements have been considered over time as business grows, Cadbury is proven to be stable in human resource managements with more than 50,000 workforces globally and one of the top confectionary company around the world.
Cadbury went through many changes in the give case study. Taking consideration of strategic human resource management, Cadbury’s approach to assess the changes could be based on the following:
Change in Employee Roles and Responsibility
Cadbury went through many changes on employee roles and positioning during the case study; beginning with Andrew Gibson which didn’t follow traditional HR guidelines. But since Andrew’s appointment was based on his aggressiveness towards the shareholders and make the company profitable, led the leadership to promote him than his seniors.
Change in Strategies
5 different approaches throughout the case study had been flowed. Beginning with managing for value (increase employee understanding), result focused (employee must reach the goal), working better together (work as a team), growing our people (provide training and workshops) and passion for people (retain the talents). It should be noted that the 5 approaches had been implemented in different times. Except the working better together which failed to identify potential workforce in a cultural mix, all other approaches was seen viable and brought positive impact to Cadbury.
Talent Management
Talent management is a common and natural home for HR particularly where it may also need to become part of a broader culture change program. Talent management has been developed along with the approach of Passion for People where well-performed employees had been offered promotion and pay-out. In the mean time, it was found that poor performed employees had not been dealt with fairly.
Change in Culture
After acquisition of Trebor Bassett and Adams, it was necessary to change internal culture to let employee mix with other culture and know each culture better. Culture tells how each business goes through with its own resources. Often acquitted business needed to adapt with existing business but in Cadbury, both new and old business had been told to build a new working culture to be a winning business which is known as – working better together.
Change in Training and Development
Employee training plays the most innovative role in employee development. Business changes every day globally. New techniques and business policies are invented regularly. To let employees stay ahead with the latest business development, Cadbury had implemented various training facility over time. During the Result-focused it was seen 5 day training had been provided to understand the business goals. It has to be changed after acquisition of another business which had been implemented in Working Better Together to let the employee works together in a team despite of cultural differences.
Change in Structures
Before the acquisitions, Cadbury had a centralized business structure located in UK. Every decision was made in the head quarter and then made available to all sectors. After a large acquisitions and global business expansion, centralized business was not worthy. UK officers were not able to feel the cultural differentiation and its affect on Cadbury’s business in USA. To grow the business further Cadbury split the business to five different regions each having own standards and culture. And now, with more than 50,000 work forces from hundreds of different cultures put Cadbury ahead as one of the top confectionary around the globe.
HR function to adopt “the attraction, the development, grants or is the special value these individual retention and the deployment system’s process which enlightens is achieved to the organization” by the high potential. Before the integration new and existing high skill’s staff members, will absorb the management organization to enable each one and the organization goal understanding. Indeed, HR function integration and the alignment to other organization process is a crucial successful factor. The HR expert policy and the practice possible to create the value to the organization through the integration, the analysis, the survey and the appraisal human capital; Indeed the HR domain has develops richly.
In view of the fact of Cadbury, may attract without doubt it, fosters the talent, retained the staff to rise the majority organization precedence finally to be surprised. Outside it may be in a wasting assets huge process attempts to seek for the organization and the staff needs the new person only then the even more way to solve the problem now, and integrates it the work innovation creativity.
Despite the development of other were not aware of the benefits of a good bottom line has been embedded. Perceived in the development of a strong embedded inside the organizations, have a higher level of total shareholder return as seen in Cadbury case supports the philosophy of many top-performing corporations, both public and private, that effective HR functions is an inherent element of a high performance and successful business culture. The single most important factor in the successful development of other embedded active sponsor of senior management.
The HR functions, more and more business press reports as a more strategic approach, which aims to ensure the organization of a series of events, winning the people they need to meet the challenges of the future skills as noted at the end of Cadbury case study. Respondents planned development of the organization, ask them the organization is hoping to achieve it. The top three responses, including succession planning, to attract, retain and develop the sustainability and future growth
Managers should take the following key measures to ensure that HR can best support an organization going through change.
Get the right people: Proper care, but must be taken to employ the people themselves. This will be useful to the organization to recruit young people and nurture them, and not substitute for other organizations to employ. Even though the board has a member from HR department, to employ the right people in Cadbury, HR strategies should be diversified and more decentralized.
Promises must be kept: Any commitment to employee must be dealt with proper care and attention. Cadbury should bear in mind that, employee’s are asset to the organization; thus any promise given to then (e.g. promotion, pay, assessment, dividends) must be kept even if the expected profit outcome is not achieved.
Healthy working environment: Rules of the organization must be flexible enough to provide them with the freedom to fulfill their part of the mandate, they like, as long as the task of implementation. Opportunities should be provided to employees to achieve their personal goals.
Talent identification: Of course talents are the precious asset any organization be proud of. During the Cadbury case study it was seen that, after merge with Adams, Cadbury were unable to identify the potential talent even though their intention was good. Talents can be anyone in any field. One good way the HR policies in Cadbury can identify the talents is to reassign the employees in different position and let them be a part of every decision making process, if possible. It is no so easy to identify a talent unless they have given a chance.
Rewards and Appraisal: Employee should be provided with proper appraisal and pay assessment based on performance. Low performed employee should be given extra care and opportunity to perform better.
Continuous training: Employers must provide employees with continuous learning and closed areas of work opportunities, through the management development programs and distance learning programs.
Adequate relax: Rest and Recreation (R&R) is a common aspect ever big organization adhere in today business. Taking consideration of human psychology, rest and recreation can refresh employee mind and soul and let them think clearly with ideas. Even companies worldwide spent thousands to let their employee be fresh (e.g. annual trip, picnic, diner party etc) so that they can be more motivated and get the message that the company appreciates their service and wished better service in coming days. Cadbury could definitely adapt this process. In case study it was seen that only training was provided for employee motivation. Cadbury shouldn’t ignore that, if employees are not re-energized, they will not feel interest on any such training and workshop.
Overall, HRD policies in Cadbury should be adhering to an on-going evaluation process. Well-performed employees must be given awards to be more competitive and poor performed employees should be given more spaces to work on with. Diversification is also important to ensure that gap of cultures; race and religion do not make an issue and jeopardize the organization’s common goal.
Learning organizational culture is a growing trend in making more employee oriented organization. Many organizations, particularly large organizations are aware of the need to encourage learning and assume learning through work is a perfect fit (Billett, 2001). Small organization, however do not take much advantage of organizational learning due to limited organization scope and people diversity (Antonocopoulou, 2001). Recently small firms also started focus on learning in order to success over long term.
Learning in the organization is a descriptive topic to conclude (Brown and McCartney, 2004). Due to different culture, organizational culture would differ asymmetrically, some organizations provide formal learning, and some adopt informal learning, some offers blended learning, some even offer e-learning (Becker and Gerhart, 1996). Whatever the policy is, the main aim remains same: to ensure the employee would be able to adapt a change as soon as it is implemented, than competitor to stay in focus (Brown, Collins, and Duguid, 1989).
Culture is most famously defined as an integration of shared values and theories (Tharenou, 1997). Culture itself is a combination of internal organizational components like employee interactions, organizational functions and performance, employer attitude, organizational decision making process (Billett, 2001). These combinations defines the policies for a organization to solve normal problem as well the any unknown problems using new knowledge and scenarios are shared between multiple level employees; thus provides employee to address challenging and difficult situations (Antonocopoulou, 2001). This culture of learning organization is a continuous process of moving along with indefinite changes for a better learning environment (Maurer, Weiss, and Barbeite, 2003). Overall, the aim of a learning environment can be defined as the share of practical knowledge towards organization innovation, performance, growth (Booth, 1991). Continuing with the theme, this paper will address the value of learning organization culture, how organization can implement a learning environment and individual elements that’s plays the role (Becker and Gerhart, 1996).
Well trained employees play the first role in building of organizational learning culture (Parker, 2000). Many researchers identifies that putting employee in right place, giving time on right thing, utilize employee skills, introduce new learning method with fun is to implanted before expecting employee to do the right thing for the firm and the customer (Booth, 1991). Thus, in today’s business, much concentration should be given to company’s human capital strategy along with economic strategy and this has to as regularly as economic strategies are implemented to future performance (Antonocopoulou, 2001).
Model of learning process is another factors included in organizational learning process (Tharenou, 1997). In traditional human resource management process, companies usually takes extensive training based learning programs which focus only on related content (Becker and Gerhart, 1996). Since business trend has been changed, so did human learning behavior and intention. Traditional learning process doesn’t count how people learn and measures it success on how quickly the training is finished (Billett, 2001). Very often trainee employees don’t learn much as expected and measured this policy a failure in terms of cost, mistakes and outcomes. Today’s learning considers many aspects before design learning process (Booth, 1991). Employee can learn from home, learn as they work, learn in friendly consultation, learn through internet, share knowledge with worldwide employee unions etc (Brown, Collins, and Duguid, 1989). They not only tend to learn but also evaluate their learning with each other stay ahead. This creates a tendency to adopt as soon as there is any information out before anyone else (Brown and McCartney, 2004). Strategic Human Resource Development (SHRD) may put much focus on learning styles with four different approaches:
Experiment – Doing
This learning approach provides a details outline of a clear picture of the job to be done within the given time. Examination is taken to check the learning accuracy and always provides feedback with questions answered. This learning process is a go-on process to run until the learning objectives are fulfilled (Antonocopoulou, 2001). The trainee people are able to choose their resources to get the job done and are keen to finish the job given (Frese and Fay, 2001).
Observing – Participating
In this learning process, employee needs an overview of the process, and then follows a superior doing the job and then go with it ownself with a superior monitoring. Sometimes the trainee may learn for the mistakes that senior people does, take lesson from the mistakes, avoid repeated mistakes. Instant feedback is given during learning process (Becker and Gerhart, 1996).
Inquiring – Consulting
The trainees will learn through inquiring and consulting mode to have all the information of the new ideas (why, how, when, where etc) (Wall and Wood, 2005). After understand the context of the task, employee will apply the new knowledge into their work and expect details feedback (Booth, 1991).
Analyzing – Patterning
For an employee to learn in this way, a precise and details how-to-do guidelines must be presented in an organized and logical manner. These guidelines would be used in step by step process from start to end that is coherent to all (Eraut, 2004).
To work towards creating the learning culture through HRD strategies, following points might be considered:
Skill Gap Analysis
Skill gap analysis used organization human resource management which critically assess the current skill of an individual, team or even an organization. Skill gap can be as simple as communication skill and can be as complex as complex decision making. Identifying skill gaps will help organization to design learning program which have significant impact on skill level and performance. Another major impact of skill gap analysis is, when the skill gap is address and monitored properly and a on-going learning culture is on the way, employee might be more engaged and motivated towards the goal which might fulfill the achievement of skill gap, as a result makes the whole job easier and eventually benefits the company (Gherardi, 2000); (Malcolm, Hodkinson, and Colley, 2003).
Catalyst for Change
Introduction of new management skill, leadership style, monitoring and coaching the employees during any organizational change can channel the learning process inside HRD policies. It also might provide expert motivation, consulting skills as well as on-site learning. The aim should be incorporated to achieve said results, goals and objectives and establish sustainable innovative practices in the organization. In addition, the change will let employee committed to action and to be self dependant in terms of productivity (Fuller and Unwin, 2004); (Huselid, 1995).
Competitive Advantage
Of course, integrated learning process and continuous implementation will let managers keep making profits and sustain the company position over the competitors. It’s been long considered as one of the fundamental factor of competitive advantage in company’s strategic management. Learning culture through coordinated system change, with mechanisms available for individual and organizations to access and culture to develop long term organizational capacity is already a part of Strategic Human Resource Management. To stay competitive, creation, acquisition and integration of skill aimed for the development of human capital and capabilities might be included that influence organizational better performance (Crant, 2000); (Tight, 2000).
Creation of a Learning Environment
Learning environment can be viewed as the spaces where the learning will take place. Learning environment contains all necessary learning equipments, from class room to meeting board, from exam hall to discussion room. Learning environment usually plays its role to apply the knowledge instantly in different teams on different purpose and view the outcomes. Often whole organization can play a mock test to assess the validity of a resolution which can be defined in HRD policies. Learning environment arrangement can have impacts on employee learning, learning outcome and finally on Learning environment performance. The HRD policies in organization let employee learn as they go through everyday work by providing both informal and formal conversation, discussion etc (Eisenhardt and Martin, 2000); (Wall and Wood, 2005).
Performance management involves training, team cooperation, dialogue, management style, attitude, shared vision, employee involvement, multi-capacity, incentives and rewards. It is used to maximize the employee performance in an organization (Neely and Bourne, 2000); (Williams, 2003).
Performance Management System (PMS) provides performance reports on time and relevance to the organization helps to take swift decision. It also helps business to focus on achieving results to internal and external stakeholders (Blalock, 1999); (Bassioni, Price, and Hassan, 2004).
Disadvantage of PMS are often are not designed to be well-informed about the nature and link of the processes Performance management system may not be consistent always. Today PMS may not be useful tomorrow. It has to update and change regularly (Papalexandris et al, 2005; (Meyer and Rowen, 1991); (Lawler, 2003).
Several Performance Management System (PMS) are in use today like Balance Scorecard, Performance Prism etc (Kaplan and Norton, 2000); (Meyer and Rowen, 1991).
Performance Management System is designed to clarify the purpose of assisting individual employee performance management and program-related training and development programs (Kaplan and Norton, 2000). Consistent with the main objective, performance management should be seen as a fully integrated system of personnel management. Personnel management, including work and business design, job descriptions, selection process, performance requirements of the induction, proof, training, effective supervision, performance feedback and suggestions (Bontis et al, 1999); (Bassioni, Price, and Hassan, 2004); (Halachmi, 2002).
Traditional PMS mostly focused on theoretical and experience based approaches while modern PMS can be customized thoroughly based on organization needs. Modern business are not bound in one culture, they are fitted with hundreds of culture and environment which doesn’t really rely on theoretical approaches but rather focus on business driven trends which can be updated and upgraded regularly (Neely and Bourne, 2000); (Nilsson and Kalid, 2002); (Williams, 2003); (Lawler, 2003).
According to the case study given (of Cadbury), five framework analysis can explain how Cadbury integrated the PMS systems over time and what were the outcomes:
Managing For Value
Managing Value let employee work for company’s value. Three main A’s has been initiated for maintain the company profitable. Accountable – held individual responsible for the roles. Adaptable – adjust as the business world changes and upgrade own skills and knowledge whenever available and applicable. Aggressive – individual should be result and goal oriented and each goal must be achieved. However, this framework was based on older basis business style which doesn’t suit with today’s complex business needs (Kaplan and Norton, 2000); (Bassioni, Price, and Hassan, 2004); (Meyer and Rowen, 1991).
Result Focused
Result focused has brought the idea that the Cadbury holds a strong financial goals thus employee must be talented and strong too. Employees were sent to training that was linked with the goals achieved from managing for value. They were given a idea and context of business environment where Cadbury operates. This framework brought employee closer to invest inside the company. While own money is invested, every employee tends to work harder for the best of the company. Yet, this result focused approach was not enough when Cadbury went through acquisition of other companies (Bontis et al, 1999); (Nilsson and Kalid, 2002).
Working Better Together
This framework has been established bearing in mind that Cadbury’s global business. Cadbury found that employees should work collaboratively rather than individually. After the acquisition, different types of employee joined the company. There was a need to construct a framework where new comer will work with experienced as a team or group for certain purpose. This framework unfortunately didn’t bring the expected outcomes due to failure of identify potential workforce and lack of motivation. Employees had been assigned to the working environment where they weren’t familiar with (Blalock, 1999); (Meyer and Rowen, 1991).
Growing Our People
This strategy is a small training program for managers to teach them how to identify and manage potential talent and ensure equal participation of every resource. Managers were set to motivate the employee about the company succession and let them make decision in certain cases. What this policy missed is deal with poor performed employee. The framework did mention to motivate every employee but didn’t clearly identify how to influence poor performed employee, whether they will be left behind etc (Papalexandris et al, 2005); (Bassioni, Price, and Hassan, 2004).
Passion for People
Passion for people is said to be the best suited with Cadbury which looks at the mechanics of managing performance. Before this policy is established, stakeholder has been given first priority whereas deal with staff is given fifth priority. On certain point both conflicted. Thus Cadbury decided to demolish the poor working performance for the sake of stakeholders which has been a bottleneck for a long time. Cadbury decided to go for the people who work with Cadbury, but not for Cadbury. Employees has been given freedom and choice to do what is right for the job and thus each job in Cadbury now is a role of enthusiasm (Neely and Bourne, 2000); (Nilsson and Kalid, 2002); (Meyer and Rowen, 1991); (Norreklit, 2000).
Performance Management System (PMS) must implement 6 common features widely considered as the succession factors for such kind of system. They are:
Objective Setting – It appears that the main purpose of performance management systems, the focus of its strategic objectives, is not it have been a lot of people think that management and staff to assist in achieving other objectives of the system, namely, a comprehensive evaluation and the corresponding performance development and improvement of staff (Bassioni, Price and Hassan, 2004). In the performance management system aims at one of the reasons is the apparent conflict of strategic planning business development (Kaplan and Norton, 2000) (Neely and Bourne, 2000); (Bassioni, Price, and Hassan, 2004); (Lawler, 2003).
Ongoing Review of Objectives – Performance management system should be designed in a way that participants are well-informed about the objectives and link of the processes. PMS objectives should be closely related to the boundary of the working environment and it must ensure objectives are changed whenever company vision, mission and scope are changed (Papalexandris et al, 2005); (Meyer and Rowen, 1991); (Williams, 2003); (Halachmi, 2002).
Development of Personal Improvement – Personal improvement closely related with employee training about the PMS system is considered as the most important factors
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