Nestle Australia Assignment Help

Human resource management is about managing human resource and it refers to taking decisions about HR policies and practice, with an objective of achieving organizational and strategic goals (Stone, 2010). However there are some issues related to HRM, which are discussed later in the essay in relation to the selected company i.e. Nestle. Furthermore it investigates the impact of 2013 global financial crisis on the chosen company.

BRIEF HISTORY

Nestle is the largest consumer foods company in the world (Nestle Global). Today, the company operates in 86 countries around the world, employs nearly 283,000 people and it has 480 factories all over the world. It was founded and is headquartered in Switzerland. Nestlé originated in 1905 by merger of the Anglo-Swiss Milk Company, which was established in 1866 by brothers George Page and Charles Page, and the Farine Lactée Henri Nestlé Company, which was founded in 1866 by Henri Nestlé. Nestlé is committed to the following Business Principles in all countries, taking into account local legislation, cultural and religious practices like nutrition, health and wellness, consumer communication, human rights in our business activities, leadership and personal responsibility, safety and health at work, supplier and customer relations and environmental sustainability. Hence in terms of Human resource management, organization is committed to safety and health of its employees. Nestlé uses the philosophy of “Good food for a good life” .This is the reason why Nestlé has win hearts of its consumers due to nutritious and tasty food. Nestlé is increasing its products line day by day.

NESTLÉ OPERATIONS IN AUSTRALIA

Nestle Australia has above six thousand employees, and twelve factories, it further has five distribution centers, twenty offices in the Oceania region, which includes Australia, New Zealand, and the Pacific Islands. Nestle Australia is a subsidiary of the parent company (Nestle Australia). The company many popular brands including Maggi, Allen’s, Nescafe, Milo, Carnation, Uncle Tobys, kit kat and Purina. The ultimate mission is to create value for everyone including employees, customers and shareholders.  

Employees at Nestle are supervised by cooperating and helping management and therefore every member can directly contact the top management for the problems faced and the decisions made. The company is not having a formal boss and employee structure; instead it is a group work structure which has a very helpful sketch. This structure clearly shows that the CEO is having a direct interaction with every manager and therefore every decision is made with mutual consignment. Similarly whenever the company assigns a certain managerial role like the decisional, interpersonal, informational or any other then the managers can easily ask the CEO about the preference of the role and thereby they can act upon the most efficient and the most useful plan. In other words the managers always ask the CEO about the preference and then they look for the role appropriate and suitable to the preference. They can perform any role but situation decides the appropriate role.

 

The employees of the company are very much motivated because of the motivation steps taken by the company (Nestle Global). The company is of the view that the employees are business partners for the company and therefore they are treated as partners. The management adopts positive reinforcement and avoids negative reinforcement and punishment. This is because positive reinforcement not only engages the labor in activities related to the goals of the business but also delights the employees. This is the main goal of Nestle and therefore they are very much concerned about it.

Punishment is just like a poison and results in the development of resistance by the employees in the company. This is why the managers are always instructed to avoid punishment as it can result in the development of resistance in not only the employees but also the labor unions and this can cause a lot of problems for the company. Extinction is a very important role and therefore it has to be played by every manager of the company. That is why this role has a very great importance for every manager. The company instructs the managers to be extinct, but not rude because this can degrade and demoralize the employees.

REASON FOR SELECTION

The most basic reason for selection of Nestle was that since it is world’s largest consumer goods company and if its performance is affected by financial crisis, there will be long run impacts on everyone. Moreover as Nestle Australia has more than 6000 employees and HR issues being faced need to be resolved, as performance of HR department translates into performance of overall company.

INTERNAL HRM PROBLEMS AND ISSUES

Some of the actual and potential HR related issues in Nestle are described below:

As mentioned above Nestle currently has 6000 employees, and it is expected that as a result of 2013 financial crisis company will be adopting the downsizing strategy, because of which motivation and moral of employees will be affected. However employee reaction will also depend upon the reason or motive behind the action i.e. there must be proper justification for any action (Grunberg, Anderson-Connolly & Greenberg, 2000). There must be proper policies, procedures, values and norms that can be used while following any strategy, as it will reduce the harmful impacts of such a strategy (Brockner, 1988). On the other hand employee perception will also depend upon the type of relationship with the company under such a strategy (Morrison & Robinson, 1997). Hence perceived justice is critically important and must be inculcated by the HR department in all the employees (Stone , 2010).

With the increased number of bankruptcies of large companies in response to global financial crisis, employees working in any company including Nestle feel threatened. They are threatened not only socially but also psychologically. Psychological distress impacts the trust relation between employee and employer and if they are not properly guided they will feel deceived and hence HR department needs to motivate the staff. (Pepur, M., Pepur, S. & Viducic, 2010).

Under the global financial crisis Nestle needs to respond to change fast and quickly. Successful companies are those who respond to changes fast and are ready to change according to the market needs. The annual report explicitly mentioned that Nestle is not resistant to change however the detailed analysis show that companies are resident to change particularly 2013 financial crisis, which should not be the case. This is an internal HR issue as leaders should have the skill of training and motivating employees. Under these crises, change management is the responsibility of HR managers at Nestle. I recommend that proper training programs must be designed to assist change management.

 

 

Another HR issue is that as I analyzed the website and the financial reports of the company, I realized that there is no proper system of evaluation of HR department, which is of course critically important under current situation. There must be proper systems to measure the performance of all the employees as previously mentioned people are less motivated because of financial crisis and the risk of downsizing is high, hence their performance needs to be evaluated regularly particularly in the period of financial crisis. The HR performance amplifies into overall organizations performance hence it is very important.

Talent management is also important here as described on the website; Nestle hires the best talent in the country and has a very competitive way of hiring employees, but that is just one aspect. Under the financial crisis employees may also be motivated to switch to any other company and here comes the role of talent management. Nestle needs to engage employees properly by providing them all the resources and also by reducing any risks that they are facing currently.

With the background of global financial turmoil, one of the recent study showed that only 35 percent of full time workers are motivated hence it is clear that HR role is vital in this scenario. Pictures of Nestle offices shown on the website demonstrate that the workplace is engaging and creatively designed but it further needs to improve it as energizing workplace motivates the employees. Furthermore the organization needs to implement and make polices that assist change, as they will be effective under the financial crunch. Moreover training programs will also be effective, and a system that motivates employees will be of prime importance.

Nestle although is providing internal training programs to employees but to remain competitive in the market in needs to give more attention to training. It has clear job descriptions and hiring requirements hence the company hires candidates from a selected pool of potential employees as a result it may not be able to choose the right person. There must not be a mismatch between training programs and the desired result.

HR THEORIES

Training programs train employees and teach them skills of working effectively and efficiently. Performance management is a way of achieving goals by training employees and assessing their performance and finally by rewarding employees properly.  Training, learning and motivation are important for Nestle to adopt in the 2013 financial crisis.

According to the theory there are many training methods like on the job training, apprenticeship training, informal training, job instruction training, simulated training etc and any of them can be used under current scenario.

Boselie (2009) examined the impact of market and institutional factors on HRM in relation to global financial crisis.  According to literature there is a strong relationship between human resource practices and performance of organization (Hesketh, 2006).  Hence Nestle is selected to understand the potential impacts in this company. There are popular theories in the field of HRM like resource based view, AMO theory and strategic contingency approaches. Deep house (1991) examined how strategic balance theory takes into account the impact of market factors on HRM policies. Additionally another model takes into consideration another factor i.e. organizations configuration (paauwe, 2004). External market factors include competition, other products, technological developments in an external environment, whereas institutional dimensions include social and cultural factors. On the other hand organizational configuration means internal culture and system of the organization.