Strategic Human Resource Management is a tool for an organisation to achieve an inimitable and valuable competitive advantage that its competitors find it hard to duplicate. Best HR practices and modelling structures lead to better organisational effectiveness which in turn leads to higher manufacturing performance. In this report, an argument as to how Grolsch could realise success in its developing markets venture by valuing and empowering its employees.
A committed, trained and healthy workforce is the key to this competitive advantage. This workforce could be developed by attracting, developing and retaining talented individuals with the skills, motivation and unique characteristics that could drive Grolsch in accomplishing its strategic objectives for the present and future. These individuals need to be treated fairly and with respect and are to be provisioned with a positive, safe, and healthy working environment. Since there is a direct causal relationship between an organisation's global performance to its human resource competencies and management perspectives, global HRM best practices that could exploit the organisation's synergies are to be developed and established.(Huselid et al., 1997)
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The report is to develop HR initiatives to manage the marketing and sales teams that are to be deployed in new markets that the company is to venture into. The author has likened the members of this team to storytellers who could relate the story of Grolsch and its premium products to the consumers of the markets who have limited or no knowledge about it.
The market economies of the three countries in question - Brazil, China and Russia - are highly varied in terms of size, abundance of human resources, power distance, uncertainty avoidance, masculinity and individualism. Therefore the success of Grolsch in these countries would be dependent on its effectiveness in restructuring and reorganising itself to the local business environments prevalent in the respective countries. But such an adoption of realignment should happen with a foundation of the firm's primary strategic goals and objectives as the basis.
Strategic HR Plan
Grolsch has decided to appoint a new core marketing and sales team in each of the three countries where it wishes to expand its operations. A strategic HR plan on the proper selection and functioning of these groups would be crucial to Grolsch's plans of global expansion as these emerging markets have the potential to grow exponentially in the near future. With the view of Grolsch's strategic objectives of re-establishing beer as the consumer's first preference of drink and restoring its premium status in mind the following components of HR strategy have been formulated.
The processes involving the formation of teams, the recruitment and selection of individual employees, the planning and flexibility of their career progression are all part of the strategic resourcing in terms of strategic human resource management (SHRM)(Pilbeam and Corbridge, 2006) To achieve the sizeable goal of gaining market favourability for its product launches, Grolsch would require storyteller type marketers plucked from the local regions to communicate the rich heritage of the company's products and their distinctive virtues. They are to be able to communicate the inspiration behind each product's concoction and the craftsmanship involved in its production. The recruitment and selection of the specifically suited profiles is to be carried out by associating with a HR consulting and recruitment firm of good reputation in the market.
For Grolsch to ensure that they have the best people in their organisation, they should actively work together to build the people pipeline. To accomplish this particular goal, Grolsch, through various programs, should recruit suitable candidates who would help in integrating the ownership culture to build and develop the functional leadership capabilities and also help in taking a step further for their individual careers. Not just recruiting the most talented people, but also making a significant investment in retaining and cultivating the talented people who are the main essentials for Grolsch moving forward. Grolsch should be committed to recruit the best graduates with high potentials acquired through related qualifications and experience to provide them with broad range of education, training and development programs to further develop their functional and leadership skills which would also help the individual and overall performance of the organisation.
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When it comes to diversity, increased female workforce participation has been one of the most significant social trends over recent decades. Firstly, Grolsch should seek to hire more women which would mean that the recruiters of Grolsch should be encouraged to look forward for more talented female candidates. Secondly, Grolsch should provide a supportive environment for the personal development of the individual to promote greater flexibility by introducing new ideas. And thirdly, the company should help women share their experiences with others, which would help them personally, by participating in group mentoring and later get promoted to next level and make lateral moves to develop deeper skills.
In the ever-changing economic conditions in the developing countries the employees look for a stability that a multi-national company (MNC) like Grolsch could provide. Therefore the focus is to be on the long-term and emphasis of contract renewal and employee retention through appropriate incentives program would help Grolsch retain its knowledge base at lower costs.
Grolsch's compensation structure should be determined on the basis of prolonged but attainable targets. The use of clearly distinct targets creates a clear way for the achievement of each person within the organisations, as well as the company overall. By providing bonus to the employees is a reward for great performance, not an entitlement, and this system tends to attract people who relish a challenging, merit based environment and help them to perform even better.
Scottish and Newcastle (S&N) makes use of schemes that reward employees with shares of the company. This scheme provides a way for its staff in UK to each invest up to 125 pounds per month. This scheme is also used by the company give employees performance based share allocations to recognise and reward their performance. (Merrick, 2005) Appropriate rewards according to the needs of the employees explicit to the country of establishment similar to SABMiller providing free healthcare benefits, access to voluntary HIV testing in countries where the disease is prominent and other suitable medical counselling benefits to its employees.
Other facilities such as car allowance for the senior executives, family benefits, pension schemes, life insurance policies, and holiday trips are to be allocated based on their seniority and contribution to the company. This promotes the idea of the company recognising their employees' worth and importance and keeps a realistic measure on their individual and organisational performance levels.
Grolsch's success in these countries is hugely dependent on the high performance of the team and its members. Therefore it is recommended that this performance is measured, recognised and rewarded. This could be achieved through an objective questionnaire and rating feedback from the supervisor, subordinates, and the clients that the employee is in conjunction with. Each individual team member lays down a set of targets upon the onset of each quarter. These objectives are to be in line with the strategic objectives of the company and the responsibility and the accountability of the employee is to be made clear. The objectives that the employee sets out with and the related outcomes that were achieved in a particular time period are compared against each other and the feedback system is used to assess the employee's performance in a comprehensive manner.
Bonuses and pay rises are therefore proportional to these performance measures and the said individual's singular and organisational contributions. Incentives in the form of the company shares can be also be utilised by Grolsch to commit its employees for a longer term and gains their trust towards the organisation. It makes them sensitive to the performance of the organisation and allows them to understand its cost-related issues in the perspective of an active stakeholder. (Takeuchi et al., 2009)
The employees and staff are also motivated by receiving free company products on a regular basis and Grolsch's own initiative in Netherland to provide all its staff and employees with case of its beer every month could give them the boost required to stay committed to the cause. Additionally the company could provide discounts of other company products to the marketing and sales team to stay in touch with the company's rival products.
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Grolsch should provide training and development programs to further develop their functional and leadership skills which would also help the individual and overall performance of the organisation. Grolsch should offer courses on subjects varying from specific functional programmes to management development and leadership programmes. Learning is considered to be only way of obtaining and keeping competitive edge. The nature of learning that Grolsch need to adapt is social learning that is by participating, experimenting and learning from experience. Every employee needs to attend the learning and development programmes to stand out and have a challenging performance and be competitive. This would improve the overall performance of the individual as well as the organisation.
The marketing and sales team need to be updated regularly on the context of the global market and the relevance of Grolsch and its products in the market. This can be achieved through extensive network of internal communication through a global intranet facility that keeps them informed of the operations of the company globally. Newsletters and other forms of electronic communication could also achieve the goal of raising more awareness in the employees on a regional and national level. This could ensure their gradual and continuous development in terms of market knowledge and organisational understanding.
Grolsch being a global company, it is to be expected of it to be a fair, flexible and equitable employer. Expatriates from its home country are therefore necessary to facilitate for the oversight of the cultivation and preservation of Grolsch's culture and transfer of essential knowledge about the company to the relatively new members of the team. The company needs to recognise the diverse cultural backgrounds that its employees hail from and allow its employees to form unions. Grolsch would need to form productive partnerships with such unions and manage the collective bargaining efforts.
The expatriates are to be allowed for a settlement programme that would help them adapt to the new environments and facilitate an exchange of knowledge with their team members via smooth communication channels. The safety, health and wellbeing of each of the expatriates is of paramount importance to the company in its efforts to create synergies between its individual branches located in the several countries because the expat's approval of their importance to the organisation would foster a trust among the other prospective expatriates regarding the new branch's safe and healthy work atmosphere.
The application of a strategic HRM model
The above HR policies have been formulated through a resource-based view of human resources (Boxall, 1996). This allows for the development of the employees and the simultaneous growth of the organisation along with its human resources. This synergy is thus capable of being a competitive advantage that is hard to replicate. Observing the best practices of the industry, Grolsch is recommended to adopt the most highly skilled individuals into the sales and marketing team from the local regions and using the team members' experience and expertise in the local market, Grolsch could add their own kind of expertise and hone their skills to extract a high level of performance that could in turn drive the performance of the company. This knowledge based view of the human resource management is crucial to understand the contribution of each member and the focus should be on the individual's development in order to get the development of the company.
Managing a global HR structure and system
There are several factors that differentiate people of different countries but a company like Grolsch needs to find the common denominator in managing its global HR. This common measuring scale has been provided and explained by Hofstede (1994) in his cultural dimensions theory. The data acquired on the cultures of the three countries where Grolsch is to set up its new teams shows that they score similarly high on the power distance index (the acceptance of inequality),similarly low on individualism index, but show varying scores on the uncertainty avoidance and masculinity indices. Also they are in stark contrast to the cultural dimension scores of Netherlands (the home country of Grolsch) which all means that the company would need to extrapolate this data carefully to find the best suited approach to working with the country nationals and communicate effectively with them.
Though these new markets of developing countries are unchartered territories for Grolsch and the efforts to make this venture a success are to be made warily, Grolsch has taken the next step in realising its objective of being one of the world's top ten beer brands. These emerging markets represent huge growth potentials but they are not without challenges. The most significant of those challenges is to understand the prevalent culture, receive the local knowledge of the market and work with the employees who come from a divergent culture. The company would then need to imbibe the culture of the organisation into the local employees for it to realise a resemblance in its HR model that mirrors globally. This steady and measured process would help Grolsch in achieving competitive human resources that could have the potential to develop into a matchless workforce.