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Human Resource Practices in Coca-Cola Company

Human Resource Practices in Coca-Cola Company

Executive Summary

This report has analyzed the mission and value of the Coca-Cola Company. It has also discussed how Coca-Cola utilizes its human resource to gain leverage over its competitors. The report has also discussed the importance of strategic human resource management and how Coca-Cola have used such as design of work, training and development to name a few. Furthermore, the report has highlighted performance management systems, its importance and how Coca-Cola has used it to ensure that their employer-employee relationship is at its best. This report has also stated how Coca-Cola utilizes performance management strategies such as encouraging open communication and rewarding and developing employees.

Table of Contents

1.0 Introduction 4

2.0 Concept of Strategic Human Resource Management 4

3.0 Importance of Strategic Human Resource Management 5

4.0 Analysis of SHRM Practices in Coca-Cola 6

64.1 Job Analysis and Designing

74.2 Planning and Forecasting

74.3 Recruitment Process

74.4 Selection Process

5.0 Performance Management 7

5.1 Performance Management Practices in Coca-Cola 8

85.1.1 Encouraging Open Communication

85.1.2 Rewarding and Developing Employees

5.2 Challenges Facing Performance Management Systems 9

6.0 Recommendations 9

7.0 Conclusion 9

8.0 References 11

1.0 Introduction

Coca-Cola Company is an American multinational corporation that manufactures beverages as well as retailers of nonalcoholic drinks and concentrates of syrup. It has its headquarters in Atlanta, Georgia (Coca-Cola Journey, 2014). The company is renowned for its exquisite product, Coca-Cola, which is sold as concentrates to various bottlers all over the world. The company also runs as a franchised distribution system from the year 1889 till date. Coca-Cola’s mission declares the aim of the company which is to refresh the world, inspire moments of optimism as well as happiness and finally to develop value and make a change. On the other hand, its vision functions as a framework for guiding all faces of their business by means of describing what they require to achieve so as to continually accomplish sustainability, and quality growth (Harney, 2008).

In addition to their values, encourages leadership, collaboration, integrity, accountability, passion, diversity and quality to name a few. Furthermore, the external environment of Coca-Cola includes Political, Economic, Socio-cultural, Technological, Environmental and Legal factors (Coca-Cola Journey, 2014). Coca-Cola being the world’s dominating soft drink producer and seller, they ought to abide in by the rules and regulations set by the country within which they operate which is affected by the political factors. Additionally, there has been an increased awareness regarding human health which has pushed the social movement towards a lifestyle that embraces healthy living all over the world (Noe et al., 2007). This has significantly pushed the society into looking for healthier alternatives due to socio-cultural issues (Coca-Cola Journey, 2014). This report will highlight the importance of strategic human resource management while critically evaluating human resource practices in Coca-Cola Company. Furthermore, it will discuss performance management practices in Coca-Cola. Finally, it will provide recommendations for improvement of Coca-Cola’s business strategies offering a concise workable action plan.

2.0 Concept of Strategic Human Resource Management

Organizations are striving to enhance competitive advantage by acquiring a larger market, more customers and more revenue among others. Many companies have set some performance goals such as employee motivation, cost reduction, improving productivity and revenue level and attracting more customers in order to attain a competitive edge (Johnson et al., 2014). The realization of performance goals is achieved through the implementation of effective human resource management in the workplace. Human resource management when used as the key success factor will bring about effective organizational performance and also is a source of competitive advantage since these people utilize assets in the organizations, realize objectives and enhance productivity (Noe et al., 2007). Then again, Strategic human resource management is a revolution of the human resource management field. Strategic Human Resource Management is termed as the alignment of initiatives that involves how employees are managed with a company’s mission and objectives. Strategic human resource management is aimed at solving the challenges that face the management of human resources and improve organizational performance through people management (Johnson et al., 2014).

3.0 Importance of Strategic Human Resource Management

Over the years, organizations have come to recognize and appreciate the potential of the human resources to bring about competitive advantage. Related to this, many organizations are using measurement techniques like workforce scorecards so as to establish how human resources in the business entity add value (Harris, 2001). The increase in the use of these measurement techniques has also been stirred by the research studies that show the correlation between strategic human resource management and employee and organizational performance. The existing positive relationship between strategic human resource management and organizational performance has undergone a tremendous debate in the last two decades (Jing and Huang, 2005). Studies are endeavoring to prove the ability of SHRM to bring about higher organizational performance and productivity.

The assumption underpinning human resource management practices is that the success of strategic human resource management to bring about higher performance and productivity depends on organizations (Noe et al., 2007). When appropriate and effective human resource policies and practices are implemented properly, then human resource will have a positive impact on organizational performance. Human resource management practices that can potentially influence behavior and attitudes of employees can positively impact performance of an organization (Fenton, Gooderham and Nordhaug, 2008). Strategic human resource management is focuses on important practices including human resource planning, training and development, management-employee relationship, compensation policies and selection and recruitment to name a few. Managers use these practices in order to boost organizational performance (Harney, 2008).

Strategic human resource management allow the management to focus their attention on employees in order to gain competitive advantage (Gooderham, Parry and Ringdal, 2008). Strategic human resource policies increase performance in areas including quality, productivity and financial performance. Managers are the ones responsible for bringing about organizational performance. Thus, managers are expected to have the confidence to execute authority and responsibility within the organization for this to be possible (Harney, 2008). Needless to say, managers should collaborate with all the employees in order to achieve required performance. Today, managers work jointly with their employees and agree together on what is to be done and how it should be done (Gooderham, Parry and Ringdal, 2008). Both managers and the employees take part in performance management processes.

4.0 Analysis of SHRM Practices in Coca-Cola

It is very essential for all business units to have a human resource management unit especially a corporate company such as Coca-Cola. In Coca-Cola, they have their own HRM department which has their own policies as well as strategies which they use to control the operations within their departments (Coca-Cola Journey, 2014). Therefore, Coca-Cola HR department takes control of every practice of HRM for instance, job analysis as well as design of work, training and development, performance appraisal employee relationship, medical policies, recruitment and selection and staff welfare to name a few. All these practices are carried on by their own policies and strategies.

4.1 Job Analysis and Designing

Coca-Cola’s HR department utilize strategic human resource management in allocating duties and skills needed for a certain position within the company. They match these requirements with the type of person fit for the job. In addition, under job analysis, Coca-Cola uses SHRM to recruit using two different aspects of job analysis, which includes job description and job specification (Coca-Cola Journey, 2014). Coca-Cola company HR section assures its own job description as well as its job analysis practices where they derive information related to their staff members regarding their human behavior, job context, and work activities as well as information connected to this conduct. They therefore utilize these information to conduct their recruitment, selection, training, compensation, performance appraisal as well as their staff member’s relationships (Coca-Cola Journey, 2014).

4.2 Planning and Forecasting

This is the process of concluding which position a company will have to occupy using various procedures that will govern the process how they will be adequately filled. Coca-Cola’s HR department uses SHRM by taking part in the company’s tactical planning by creating adequate planning for hiring new staff members in the near future (Coca-Cola Journey, 2014). The company predict for the estimated number of employees required by the corporation. They also predict the forthcoming employees with regard to the variation on technology as well as the growth of productivity. Therefore, after planning, Coca-Cola’s HR department directs this planned report to its head of department for further approval (Press Center, 2013). Thereafter, if the approval passes, they commence conducting the recruitment exercise.

4.3 Recruitment Process

Coca-Cola has a substantially recognized recruitment process. The HR department in Coca-Cola gives newspaper ads and company websites to name a few. This operation occur at the beginning of the recruitment process (Press Center, 2013). Once the applicants have received an application form, they undergo both an internal and an external recruitment process.

4.4 Selection Process

The human resource department at Coca-Cola, conduct selection of the applicants depending on the position which one is applying for. This selection process is done through a series of different operations such as interviews, group exercises, psychometric tests and situational exercises (Press Center, 2013). Coca-Cola performs interviews to their applicants with an insight of knowing more about them and determining whether they can be fit for a certain position through one on one conversations. In addition, Coca-Cola’s HR department conducts group exercises to determine how well an applicant can function when in a group. Psychometric tests are clocked tests which are used to evaluate the abilities and potentials of an applicant. This helps Coca-Cola know the particular characteristics about the applicant. Last but not least, Coca-Cola allows their applicants to perform situational exercises which are designed to assess how someone reacts towards certain circumstances (Coca-Cola Journey, 2014).

5.0 Performance Management

Performance management is the process involving the measurement, feedback and open dialogue between the employees and the management (Thompson and Heron, 2005). It is concerned with the measurement of the performance achieved against performance expected. Performance management strategy does not only involve the managers but also the entire organization (Harney, 2008). Performance management entails a development process that involves the managers and employees which determines how the two parties can work together in achieving organizational performance. Strategic human resource management offers a platform whereby regular dialogue between the management and the employees occurs for further development of the organization. SHRM brings about many benefits including its contribution to goal accomplishment, increases the feasible strategic options to an organization, and creates competitive advantage and implements business strategies of an organization (Wright, Snell and Jacoben, 2005).

5.1 Performance Management Practices in Coca-Cola

Coca-Cola Company has more than 700,000 associates and each associate contributes his or her talents as well as ideas so as to help the company achieve the goals and objectives clearly outlined in their vision 2020. Therefore, various performance management practices are carried out by the corporation in order to assure that their associates are satisfied and happy. These performance management practices are as follows:

5.1.1 Encouraging Open Communication

Coca-Cola encourages and promotes a working environment that embraces open communication which effectively solicits innovative ideas. The company also involves themselves with their associates by maintaining constant dialogue with them worldwide (Press Center, 2013). Such dialogues offer direct information about the welfare of the associates which assist the company in increasing awareness, opportunities, and shares successes and most importantly promotes business strategies.

5.1.2 Rewarding and Developing Employees

Coca-Cola has devised one of the most satisfying benefit packages for their employees. They provide various developmental opportunities, particularly for their employees which includes Coca-Cola University which is a program that is given to high performers (Coca-Cola Journey, 2014). In addition, they utilize Peak Performance Systems, which is their performance management systems which has liaised with more than 100 worldwide forums as well as managers and associates in order to discuss development and succession plans all over the world (Press Center, 2013).

5.2 Challenges Facing Performance Management Systems

There are various challenges that face performance management systems. They include: having the wrong design, lack of leadership commitment, absence of integration and incompetence (Kennerley and Neely, 2002). Having a wrong design may vary with the particular requirements of the organization. Furthermore, absence of integration is crucial to the implementation of a performance management system, therefore, it should be integrated with both tactical planning and HRM so as to flow smoothly. Incompetence when it comes to a performance management system brings about a discontinuous process which might affect the overall structure of the organization (Kennerley and Neely, 2002). Lastly, lack of leadership commitment is another weakness of a performance management system. Without appropriate leadership, the whole process might lack strategic direction as well as performance measures which may eventually lead to lack of appropriate identification and rewarding of performance (Harris, 2001).

6.0 Recommendations

This report has clearly indicated that strategic human resource management is very important to the sustainability of a company. Therefore, for companies such as Coca-Cola, which belong in the manufacturing sector ought to create an effective administration tool as well as operations which encourage performance management systems (Jing and Huang, 2005). They should also design the systems in a manner that brings visible, value added benefits, especially in the performance planning and development thus issuing proper feedback and attaining results.

7.0 Conclusion

To sum up, strategic human resource management is very important to large and even small companies since it brings about the aspect of competitive advantage to a company. It also leads to high performances as well as productivity to an organization. Furthermore, SHRM influences the behavior and attitude of employee thus impacting positively to an organization. Strategic human resource management allows the management to focus their attention on employees in order to gain competitive advantage through performance in areas such as quality, productivity and finance. Furthermore, Coca-Cola has demonstrated great SHRM practices through, job analysis as well as design of work, training and development, performance appraisal employee relationship, medical policies, recruitment and selection and staff welfare. In addition, Coca-Cola has shown great performance management by encouraging open communication and rewarding and developing employees. Furthermore, the challenges that affect performance management includes having the wrong design, lack of leadership commitment, absence of integration and incompetence.

8.0 References

Coca-Cola Journey 2014, «Our Company: Mission, Vision & Values.» Global. Retrieved 21st May 2016 from

Fenton-O’creevy, M., Gooderham, P And Nordhaug, O 2008, Human resource management in US subsidiaries in Europe and Australia: centralisation or autonomy? Journal of International Business Studies, vol. 39, no. 1, pp. 151-166.

Gooderham, P., Parry, E and Ringdal, K 2008, “The impact of bundles of strategic human resource management practices on the performance of European firms,” The International Journal of Human Resource Management, vol. 19, no. 11, pp. 2041-2056

Harney, B 2008, «Unlocking the black box: line managers and HRM performance in a call center context», International Journal of Productivity and Performance Management, Vol. 57, No. 4, pp. 275-296.

Harris, L 2001, “Strategic Human Resource Management, Market orientation, and Organizational Performance,” Journal of business research, vol. 51, pp. 157-166.

Jing, W and Huang, T 2005, “Relationship between Strategic Human Resources Management and Firm Performance,” International Journal of Manpower, pp. 434-449.

Johnson, S., Whittington, A & Regner 2014, Exploring Corporate Strategy, Edn. 10, Prentice Hall.

Kennerley, M & Neely, A 2002, “A framework of the factors affecting the evolution of performance measurement systems,” International Journal of Operations and Production Management, vol. 22, no. 11, pp. 1222-1245.

Noe, R., Hollenbeck, Gerhart, B and Wright, P 2007, Human Resources Management: Gaining A Competitive Advantage, 5th.Ed.,Mc- Graw-Hill Co. New York.

Press Center 2013, The Coca-Cola Company, Web. 16 Mar. 2014.