The Performance Of The Nestle Company Business Essay

3218 words (13 pages) Essay in Business

5/12/16 Business Reference this

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Nestlé is a multinational packaged food company founded and headquartered in Vevey, Switzerland. It came into being from a merger in 1905 between the Anglo-Swiss Milk Company for milk products established by the Page Brothers in Cham, Switzerland, in 1866 and the Farine Lactée Henri Nestlé Company set up in 1867 by Henri Nestlé to provide an infant food product. Trademark of Nestlé is birds in a nest, derived from Henri Nestlé’s personal coat of arms, suggests the values upon which he originated his Company. Several of Nestlé’s brands are globally renowned, which has made the company a global market leader in many product lines, including milk, chocolate, confectionery, bottled water & pet food. (Strategic HRM, n.d.).

Nestle’s Brands are:

1. Milk & Nutrition

2. Beverages

3. Prepared dishes & cooking aids

4. Chocolates & confectioneries

Objectives of Nestle

To manufacture and market the Company’s products in such a way as to create value that can be unremitting over the long term for shareholders, employees, consumers, and business partners.

It does not favor short-term profit at the expense of successful long-term business development.

It recognizes that its clients have a genuine and reasonable interest in the behavior, beliefs and actions of the Company behind brands in which they place their trust and that without its patrons the company would not exist.

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Nestlé thinks that, as a common rule, legislation is the most useful protection of responsible demeanor, though in certain areas, extra supervision to staff in the form of deliberate business principles is advantageous consecutively to guarantee that the highest standards are met all the way through the organization.

Nestlé is aware of the fact that the success of a company is the expression of professionalism, conduct and the conscientious attitude of its management and employees. Consequently recruitment of the right people and constant training and development are essential.

Nestlé persists to preserve its dedication to follow and value all applicable local laws in each of its markets. (Strategic HRM, n.d.).

Core values of Nestle

A requirement for dealing with people is reverence and reliance.

Integrity and transparency in dealing with people are very important for good communication. This is balanced by open dialogue with the purpose of sharing competencies and boosting creativity.

To communicate is not only to notify; it is also to pay attention and to take on a discussion.

The eagerness to collaborate, to facilitate others and to be trained is a requirement for progression and promotion in Nestle. (Strategic HRM, n.d.).

Nestle is a human company

Nestlé is a human Company providing a rejoinder to individual human needs all over the world with explicit concern for the comfort of both its patrons and its employees. This can be seen in its approach and its sense of conscientiousness towards people. (Strategic HRM, n.d.).

After analyzing Nestle it has been seen that it has to follow all three models

High Performance,

High Involvement &

High Commitment.

Since Nestlé simultaneously aspires to boost sales and profits and, to raise the standard of living everywhere, it is active and the quality of life for everyone. Nestlé is also swayed that it is the people who form the vigor of the business and that nothing can be attained without their loyalty and their vigor, which makes people its most significant asset. Participation of people at all levels starts with suitable information on the Company’s activities and on the explicit aspects of their work. Everyone is invited to contribute towards improvements enhancing Company results and personal progress through open communication and dynamic collaboration. (Strategic HRM, n.d.).

Nestlé’s Culture

There’s a very strong organizational culture in Nestlé. It believes on team work. The head office provides the guide lines to the zonal managers and informs them about their budget limitation. The zonal managers are totally independent in constructing their plans and the usage of budget. Likewise, the regional managers are independent in their areas. They are given a specific target and a certain amount of budget. The discretion is theirs to make plan and attain the targeted result in the certain given budget. The internal control system of the organization is very strong and effective as well. Due to the strong check and balance, they can make eradications and amendments in their plans. If the plan does not work properly, the manager can take corrective measures. No one from the company can challenge his power. The betterment towards the achievement of goals can only be done through the collective commitment. (Nestle Report, n.d.)


Human resource planning and requirements in Nestlé

Planning consists of those guidelines which encompasses a sound basis for efficient and effective HR Management in the Nestlé Group around the world. They are flexible and dynamic and may require adjustment to various circumstances. Hence its application will be influenced by good judgment, compliance of the local market laws, keeping in mind the specific context. Its spirit should be respected under all circumstances. As Nestlé is operating all over the world, it is necessary that labor laws and practices be respected everywhere. Degree of development of each market and its capacity to advance in the management of their human resources should also be taken into consideration. (Nestle HRM, n. d.)

HR policies are addressed to all those who have a liability in managing people as well as to HR professionals. The Nestlé Management and Leadership Principles include the guidelines influencing all the Nestlé employees in their action and in their dealings with others. The Corporate Business Principles comprises of the basic principles which Nestlé endorses and subscribes to on a worldwide basis. Both these documents are the pillars on which Nestlé’s present policy has been built. (Nestle HRM, n. d.)

HR managers and their staff are there to provide professional support in handling employee matters but should not substitute themselves to the responsible manager. Their major liability is to contribute effectively to the quality of HR management throughout the organization by proposing adequate policies, ensuring their consistent application and coherent implementation with fairness. (Nestle HRM, n. d.)


The recruitment process at Nestle is evidently distinct. People with qualities like dynamism, realism, pragmatism, hard work, honesty and trustworthiness are welcomed there. Nestlé follows a set process for hiring more employees. The major document in this connection is the “Recruitment Requisition Form”. A recruitment opportunity could arise either after discussing or planning a position on the termination of some employee or on an urgent need basis. After receiving the document the human resource department puts up an advertisement in the newspaper or it directly contacts placement officers at various institutes. Approximately eight to ten best resumes are selected and presented to the divisional heads. On their recommendation the candidates are called for interviews and the most suitable are finally selected. (Nestle HRM, n. d.)


From the factory floor to the top management, training at Nestlé is incessant. Since it is mainly given by Nestlé people, it is always significant for the professional life. Throughout the world, each country runs its own training programs (e-Learning, classroom courses, external courses), and it has five training centers in France, UK, Spain, Mexico and Brazil.

Nestle provides the following-

Literacy training to promote vital literacy skills, particularly for workers who operate new equipment (‘Mission-directed Work Team Approach’). Employees are also sent abroad to study markets, consumer tastes and others.

Nestle Apprenticeship Programs.

Local Training Programs-on issues ranging from technical, leadership, and communication and business economics.

Rive-Reine, their International Training and Conference Centre in Switzerland is where Nestlé people from all over the world meet to exchange information and ideas in seminars and training courses (Strategic HRM, n.d.).

Performance management

Formal assessment is done by Line Managers and HR once a year with feedback. Nestle gives subordinates the freedom to ask question for an unfair evaluation. Explicit key Performance Indicators have been listed by the HR department. One of the important key performance indicators is achievement following the Nestle management and leadership principles. Remuneration structure and promotion criterion depends on the individual’s performance. (Strategic HRM, n.d.).


Nestle endeavors to offer fair compensation. Remuneration level is above the average in industry. The inconsistent component of the salary is relatively immense to reward individual performance. In case of higher management level, the inconsistent part is associated with individual & team target achievements. (Strategic HRM, n.d.).

Rewards & incentives

‘Passion to Win’ awards- These quarterly awards have been institutionalized to reward those who over-achieve their targets. Long-service Awards are given to recognize employees who have been with the company for more than 30 years.

‘Nestle Idea Award’- the company institutes Nestle Idea Award every quarter to distinguish and honor employees who come up with significant and pioneering ideas which have the prospective of being implemented at Nestle. (Strategic HRM, n.d.).


The following benefits are provided to all employees at Nestle

Leave-Personal & Medical (fixed no. per year).

Children Education Assistance Scheme.

Provident fund.

Retirement Gratuity Scheme.

Group Insurance & Accidental Insurance Scheme.

Conveyance Reimbursements.

Residential Accommodation.

Monthly health check-ups & free consultation for self & family etc. (Strategic HRM, n.d.).

Employee relations

Nestle provides a very healthy working environment which is one of the reasons why Nestlé’s employees organizational commitment is very high. Employee turnover is less than 5%, which is considered to be very low for a multinational corporation. Nestle has an open culture & upward communication particularly in case of grievance, redressal is encouraged. Work and Life stability is given substance, as illustrated in the Nestle Human Resource Policy document. ‘Nestle Family’ annual events are organized by their HR department and employees along with their families are invited. Strong emphasis is laid on safety of employees (Nestle Policy on Health and Safety at Work. (Strategic HRM, n.d.).

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Change management

Nestle has attuned to the dynamic external environment for the last 140 years since its commencement in 1866 without trailing its elementary beliefs and core values. It manages change and coerces sustainable advantageous growth by following the policy of making plodding changes as a substitute of making radical and precarious changes. (Strategic HRM, n.d.).

Safety & health

Nestlé considers its people as its most valuable asset and ranks the highest priority on protecting them. In every country where Nestle operate, it emphasizes the need for safe working environments, which must meet the strict global corporate standards.

They are determined to provide a safe working environment for all employees, contractors and visitors and are vigilant in continuing to implement Health and Safety practices and programs at all the sites.

• Valuing people by providing a safe place to work.

• Identifying, assessing and reducing risk and preventing injury or illness to employees, contractors and visitors.

• Operating business to meet health, safety, legislative and other requirements applicable to Nestlé.

• Continually monitoring, reviewing and establishing new objectives aimed at eliminating or minimizing work related injury or illness.

• Developing and implementing effective and efficient injury management systems which enable a safe and sustainable return to work for affected employees.

• Providing information, training and supervision to employees and contractors to ensure they understand their roles and responsibilities in eliminating or minimizing the risk of workplace injury or illness.

• Encouraging a similar Health and Safety commitment from our suppliers and contractors.

• Consulting with employees and other stakeholders on Health and Safety matters. (Nestle HRM, n. d.)

Contribution of human resource planning towards organizational objectives

Nestle is the world leader in FMCG industry. People rely on the products offered by the company. Nestle in this present era is heading towards implementing and adopting new strategies to retain its customer and to get more clientele as well. Nestle tries to evaluate its strengths and weaknesses along with opportunities and threats to assess the need of implementing strategic policy. HR as discussed above plays a significant role to capturing and sustaining Nestle status and consumers in the market. This is possibly done through the constant effort on the part of strategic human resource management and their planning as discussed in this paper to keep up the pace with modern revolutions, technological advances and changing perceptions of the people and consumers world over.

List of References

Nestle HRM. (n.d.). Scribd Inc. Retrieved March 13, 2011 from

Nestle Report. (n.d.). Scribd Inc. Retrieved March 13, 2011 from

Strategic HRM. (n.d.). Scribd Inc. Retrieved March 13, 2011 from

Upson, M. (2011). What is strategic human resource management? Retrieved March 14, 2011 from

Task 3

Briefing paper for the client

Every organization has people; that implies they have human resources. Not considering the size of an organization or the extent of its resources, the organization endures and flourishes because of the competence and performance of its employees. The actions to take full advantage of those capabilities and that performance are essential regardless of whether the organization refers to them as Human Resource Management, Human Resource Development or Human Resources or has no official name for those actions at all. These activities are the liability of all people in the organization. (McNamara, n.d.).

Implementation of straight-forward, unambiguous and brief HR policies and job descriptions are important for a number of reasons in an organization. Failing to implement policies and job descriptions leaves the company open to legal challenges, grievances and law charges, particularly if you contradictorily apply your human resources policies and your pay structure/system. (Absolute HR Solutions, n.d.).

Grievances and lawsuits lead to:

Increased costs that affect company’s profits

Increased turnover

Negative morale

The company can keep away itself from these troubles if you implement HR policies, procedures according to the labor laws. (Absolute HR Solutions, n.d.).

The company requires human resources policies and procedures and current job descriptions so that the staff is treated uniformly athwart a variety of employment issues. Moreover, human resource polices facilitate if legal situations arise. (Absolute HR Solutions, n.d.).

Impact of organizational structure and culture on the management of HR

Organizational culture generates a number of diverse concepts, strategies, and situations which influence every level of scheduling when it comes to any type of hierarchical organization. The implications of organizational structure and culture apply to companies, corporations, charitable organizations, governments, and even sports teams/organizations. (Implications of Organization Structure Culture, 2007).

Many leadership theorists and coaches have found that ineffective leadership often tends to be one of the major causes of an organization’s retreating and deterioration. A governmental example from history can be ancient Rome. During a series of terrible emperors, the structure and culture was strong enough to often overcome it, even for decades at a time-but without strong top end leadership eventually the mid level governing and organizational culture collapsed, resulting in the ultimate failure of the culture. To be healthy for the long term, a corporation must have strong human resource management, leadership and a strong organizational culture. Though some of the strongest companies or organizations may be able to tread water for a long period of time, or even do well, if the culture starts to erode, it’s only a matter of time until the larger structure collapses. (Implications of Organization Structure Culture, 2007).

Enormous human resource management and good leadership is needed for an organization to have strong culture, even great organizational culture will eventually become dull, and then erode completely without strong HR to help keep everything running smoothly. (Implications of Organization Structure Culture, 2007).

Leaders must have a deep understanding of the identity and impact of the organizational culture in order to understand what kind of human resource management and adjustment is needed within the company, as well as perceiving how to communicate their vision to the rest of the company. (Implications of Organization Structure Culture, 2007).

From corporations to government to sports teams, the study of how structure and culture impacts the management can reflect a better way to make an entity work. Use a sports team as an example: most teams who have the only head coach as the GM doesn’t do well as compared to the teams who split the duties between two individuals who can work together towards the same common goal. (Implications of Organization Structure Culture, 2007).

Recommendations to improve the effectiveness of HRM

“Organizational efficacy depends on having the right people in the right jobs at the right time to meet quickly changing organizational needs. Right people can be selected by performing the role of Human Resource function. “A strategic approach to managing employment relations which emphasizes that leveraging people’s capabilities is critical to achieving sustainable competitive advantage, this being achieved through a distinctive set of integrated employment policies, programs and practices.” According to this human resource management should not only handle recruitment, pay, and discharging, but also must make the most of an organization’s human resources in a more strategic manner. An important aspect of an organization’s business focus and direction towards achieving high levels of competency and competitiveness would depend very much upon their human resource management practices to contribute effectively towards profitability, quality, and other goals in line with the mission and vision of the company. Staffing, training, compensation and performance management are fundamentally central tools in the human resources practices that shape the organization’s role in satisfying the needs of its stakeholders. Common rules and procedures of human resource management must be adhered to by the organization which forms basic guidelines on its practices. Teamwork amongst lower levels of staff and the management should be formed and continue to assist in various aspects that would reckoned necessary in eliminating communication breakdowns and encourage better relationship among workers. The management should emphasize on first-rate corporate culture in order to develop employees and generate an optimistic and favorable work environment.

An HR strategy should aim to capture “the people element” of what an organisation is tending to achieve in the long run, guarantying that

It has the right people in place

It has the right mix of skills

Employees display the right attitudes and behaviors,

Employees are developed in the right way. (Groenewald, 2011).

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