Human Resource Management (HRM) is a new area of study that is seeking to gain credibility in comparison with more established academic disciplines. It is often contrasted with industrial relations and personnel management, with industrial relations laying claim to represent the theoretical bases of the subject while personnel management is viewed as the practical and prescriptive homeland for issues concerning the management of people. More so, there are many variants of HRM it is easy to misuse it, especially when critics are comparing the apparent rhetoric of 'high commitment' HRM with the so-called reality of life in organisations that manage by fear and cost-cutting. (Keenoy 1990; Chaldwell 2003)
HRM is now seen as the major factor differentiating between successful and unsuccessful organisations even more important than technology or finance in achieving competitive advantage. This is especially noticeable in the service sector where workers are the primary source of contact with customers, either one-on-one in a service encounter or over the telephone or the internet. Even in manufacturing firms the way in which the human resources are managed is seen as an increasingly critical component in the production process mainly in terms of quality and reliability. Much of this revolves around the extent to which workers are pre pared to use their discretion to improve products and services. Wikipedia explained HRM as 'the strategic and coherent approach to the management of an organisations most valued assets-the people working there who individually and collectively contribute to the achievement of the objectives of the business.' It goes on to summarise HRM as 'employing people, developing their capacities, utilising, maintaining and compensating their services in tune with the job and organisational requirement'
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However many frameworks and models tend to assume there is a specific model of HRM- the universalist, high commitment and best practice model. On the other hand if we assume that HRM is a field of study instead of a distinct style, it is then possible to examine how the management of employment may vary between organisations and work places, as well as over time as it can be shaped by a range of influences and changing factors. This approach also calls us to examine the extent to which factors external to the work place- such as legislative, political and economic changes can impact differentially depending upon management choice, management employee relations and worker attitudes and behaviour. Working with this idea of the subject area means that HRM can exist just as easily in a small owner-managed shop as it can in a large and sophisticated high-tech organisation like Coca-Cola as we will soon see. HRM can therefore be defined as the management of employment, so incorporating individual and collective relations, the whole range of HR practices and processes, line management activities and those of HR specialists, managerial and non-managerial actors. As it is HRM may include a role for unions, the development of so-called leading-edge HR practices. Again HRM may be individualised, HR polices can rely on cost reduction and rationalisation, then there is no provision for an internal HR function. Whatever the approach adopted employers will probably be interested to enhance the contribution of HR practices to performance.
Therefore subsequently we will high light the objectives of Coca-Cola and then determine what role HRM has played in achieving same.
Coca-Cola Company background
Like many people who change history, John Pemberton, an Atlanta pharmacist, was inspired by simple curiosity. One afternoon he stirred up a fragrant, caramel-coloured liquid and when it was done he carried it a few doors down to Jacob's pharmacy. Here the mixture was combined with carbonated water and sampled by customers who all agreed this new drink was something special. So Jacob's pharmacy put it on sale for 5 cents (about 3p) a glass. Pemberton's bookkeeper, Frank Robinson named the mixture Coca-Cola, and wrote it out in the descriptive script. To this day Coca-Cola is written the same way. In the first year Pemberton sold just nine glasses of Coca-Cola a day. A Century later the Coca-Cola Company has produced more than ten billion gallons of syrup.
Established in 1886, Coca-Cola owns or licences as well as markets more than 500 non alcoholic beverage brands primarily sparkling beverages but also a variety of still beverages such as waters, enhanced waters, juices, ready to drink teas and coffees and energy and sports drinks. Along with Coca-Cola which is recognised as the world's most valuable brand, the company owns and markets four of the world's top five non alcoholic sparkling beverage brands, including diet Coke, Fanta and Sprite.
Always on Time
Marked to Standard
The Coca-Cola Company is actually the world's leading owner and marketer of non alcoholic beverage brands and the world's largest manufacturer, distributor and marketer of concentrates and syrups used to produce non alcoholic beverages. The company's branded products are made available to consumers throughout the world through a network of bottling partners, distributors, wholesalers and retailers- the world's largest distribution system. The company was finally incorporated in September 1919 under the laws of the state of Delaware and succeeded to the business of a Georgia Corporation with same name that has been organised in 1892 and today the Coca-Cola Company operates in more than 200 countries of the world . To this day, of the 54 billion beverage servings of all types consumed worldwide every day, beverage bearing trademarks owned or licensed by Coca-Cola account for 1.6 billion.
The Coca-Cola Company's Objectives
In order to achieve its mission the company has developed a set of objectives which it hopes to deliver together with bottlers and associates. These objectives can be said to be the very goals which the company works to achieve on day to day basis. These are set out below:
PEOPLE: Be a great place to work, where people are inspired to be the best they can be.
PORTFOLIO: Bring to the world a portfolio of beverage brands that anticipate and satisfy people's desires and needs
PARTNERS: Nurture a winning network of partners and building mutual loyalty.
PLANET: Be a responsible global citizen that makes a difference.
PRODUCTIVITY: Be a highly effective lean and fast moving organisation.
PROFIT: Maximising long-term return to shareowners while being mindful of our overall responsibilities.
Given the above objectives we will look into them one after the other to explore what the Company is doing, or has done to achieve them, to what extent the Company has achieved them and if not, what needs to be done.
According to the Coca-Cola Company's corporate website "Our people are built around two core assets, its brands and its people. That's what makes working here so special. We believe that work is more than a place you go every day. It should be a place of exploration, creativity, professional growth and inter-personal relationships. It's all about being inspired and motivated to achieve extra-ordinary things. We want our people to take pride in their work and in building brands others love. After all it's the combined talents, Skills, knowledge, experience and passion of our people that make us who we are." The people here are the employees which the company equally refers to as the associates. From the above we can see that the company, through its HR Department, makes it a priority to treat these associate well, help them to develop and give them a rewarding working life knowing that these associates are an integral and invaluable resource towards the achievement of strategic resource. This means creating an environment where employees can excel in their performance, develop skills for improvement and move towards their career goals. For instance the Coca-Cola in Great Britain does these things:
As a great place to work
On-site Company gym for staff relaxation and fitness.
Free Coca-Cola drinks and fruits.
GDA information in the staff area.
Summer hours and flexible working.
A leaving allowance and a cycle to work scheme.
All these are geared towards making the company a really great place to work but there may be other ways and means of achieving these or at least enhanced for instance Coca-Cola could come up with a scholarship scheme for its staff children or better still, build a staff children's school in order to subsidise the fees for staff members. Most companies also give their staff members branded clothing such as bags, watches, dresses and caps and this serves as a source of pride for employees. Shell Company gives free medical treatment for it staff members and their wards while Transport for London has discount transport scheme for its staff.
The Company believes that its success depend on motivated and committed employees. Therefore it makes effort to make its employees understand that they are important part of the company towards realising its goals and understand what they are. Coca-Cola measures employees' engagement with their working live by constructive dialogue with the employee's representative groups and also through employee surveys.
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This is a good step in the right direction as employer-employee relationship is essential to the smooth operation of a business. The company might as well encourage unions. However this could boomerang as strong trade unions can negatively impact on firms especially when they make certain demands. For instance the British Airways staff strike has caused the company millions of pounds already.
Training and Development
To attract and retain the best people Coca-cola recognises the need to invest in their development. This is taken so seriously that leadership development is done for managers, internal talent management, employee performance management and all emphases are on employee development. For instance in 2008 a rundown of The Company's training activities is shown below:
Average spending cost per head was £1,413.
A total of 2,504 hours of training were completed during 2008.
Functional expertise- This aims to build the skills required to "be best in class" in marketing, commercial and franchise leadership (known as the three pillars)
The Company is already doing so much in terms of employee development therefore they can only improve as there is always better way of doing things as time goes on.
Pay and Reward
Offering competitive pay and motivating benefits is crucial to both attracting and retaining the most talented people to drive any business. Coca-Cola considers a lot of different elements such as pension, healthcare and additional holiday which form a total compensation and benefit package for employees. The company's reward programs are regularly benchmarked against a select peer group of major competitors and key players in the local market. This means that the company considers what its competitors are doing in this regard so as to do more for its people.
Again Coca-Cola is doing well in when it comes to rewards but rewards must not only be in terms of money. Coca-Cola can motivate its employees through awards, recognitions and promotions as well. It is natural to feel recognised as it gives the recipient a sought of inner energy and zeal to keep working. "Employee of the year", "Best senior manager of the year", and "Best factory worker are all awards that can be introduced to further motivate employees. ISS UK normally gives an award to their employee of the year and even publishes it with their photograph in the Company's annual Reports.
Since the first soda fountain sales in 1886, the Company has been a market driver bringing in innovations and investing in local economies. Today Coca-Cola leads the beverage industry with more than 500 beverage brands- including four of the world's top five sparkling brands. With a portfolio of more than 3,300 beverages, from diet and regular sparkling beverages such as 100percent fruit juices and fruit drinks, waters, sports and energy drinks, teas and coffees and milk-and soy-based beverages, Coca-Cola's variety spans the globe. However while Coca-Cola has one or more of the world's top brands care should be taken in order not to flood the market with undesirable products which may not drive the market and will only end up wasteful. What may be good for this one geographical area may not be good for another.
Most Coca-Cola products that are manufactured are being sold by its bottling partners. Basically Coca-Cola sells syrups and concentrates to bottlers who then convert them to finished products, package and sell to distributors and other customers. Separate contracts (''Bottler's Agreements'') exist between the Company and each of the bottling partners regarding the manufacture and sale of Company products. Subject to specified terms and conditions and certain variations, the Bottler's Agreements generally authorize the bottlers to prepare specified Company Trademark beverages, to package the same in authorized containers, and to distribute and sell the same in (but, subject to applicable local law, generally only in) an identified territory. The bottler is obligated to purchase its entire requirement of concentrates or syrups for the designated Company Trademark Beverages from the Company or Company-authorized suppliers. Coca-Cola typically agree to refrain from selling or distributing, or from authorizing third parties to sell or distribute the designated Company Trademark Beverages throughout the identified territory in the particular authorized containers; however, Coca-Cola typically reserve the right (1) to prepare and package such beverages in such containers in the territory for sale outside the territory, and (2) to prepare, package, distribute and sell such beverages in the territory in any other manner or form. Territorial restrictions on bottlers vary depending on the case.
Coca-Cola's work with the carbon Trust has revealed that packaging accounts for between 30% and 70% of the carbon foot prints of its products throughout their life cycle. Coca-Cola started a scheme which has helped so many people to recycle thereby helping the environment. Under this innovative loyalty scheme, recycling at home can earn a consumer Recycle Bank Points, which can then be exchanged for discounts on different products and services in shops and supermarkets. Liz Lowe, Citizenship manager at Coca-Cola said. "Empty packaging isn't just waste, it's a valuable resource which can be used again and again through recycling. One of the most important ways in which we can get more recycled material to put back into our packaging is to encourage everyone to recycle. And our partnership with Recycle Bank is just one of the ways we're working on this." Says Sue Igoe, UK Managing Director at Recycle Bank: "Recycle Bank is leading the charge towards environmental change on a daily basis. The trials in the UK have proven that by incentivising households, we can increase participation and frequency of recycling. It is fantastic to have such a huge household name as Coca-Cola on board as a national partner and top tier sponsor. This is a great reward for residents and will help to engage a wider audience which we hope will kick start mass recycling across the country. With the Recycle Bank programme, everybody wins, the council, reward partners, residents and most importantly, the environment." This shows how committed the company is to the environment and it is a welcome development. Today, many world governments are working towards reducing gas emissions into the environment in order to make the environment a safer and better place to leave (The G20 Copenhagen Summit) and Coca-Cola joining this campaign is truly commendable as it can make a very big impact due to its huge size and consumers.
RISKS TOWARDS ACHIEVING THE OBJECTIVES
Coca-Cola considers urbanization to be a major driver to its continued growth through 2020. The company hopes significant population and wealth growth across key cities will help increase its consumer base and unit case volume. These major cities for growth cut across developed, developing and emerging economies, and all are cities where Coca-Cola already has a large market presence today. Coca-Cola plan to grow in these cities by strengthening our distribution networks, growing our portfolio, and increasing the sales and per capita consumption of its beverages. However, Coca-Cola faces a number of risks as discussed below.
Overweight and Social life. Increasing concern among consumers, public health professionals and government agencies of the inherent health problems associated with obesity and inactive lifestyles represents a significant challenge to the industry. Coca-Cola recognizes that obesity is a complex public health problem and its commitment to consumers begins with its broad product line, which includes a wide selection of diet and light beverages, juices and juice drinks, sports drinks and water products. Coca-Cola's commitment should also include adhering to responsible policies in schools and in the marketplace; supporting programs to encourage physical activity and promote nutrition education; and continuously meeting changing consumer needs through beverage innovation, choice and variety. Coca-Cola will equally be committed to playing an appropriate role in helping address this issue in cooperation with governments, educators and consumers through science-based solutions and programs.
Water Quality and Quantity. Coca-Cola Company will have to pay serious attention to water quality and quantity as regards non-alcoholic beverages segment of the commercial beverages industry, governments, nongovernmental organizations and communities where we operate. Water is the main ingredient in substantially all of Coca-Cola products. It is also a limited natural resource facing unprecedented challenges from overexploitation, increasing pollution and poor management. The onus therefore rests on Coca-Cola to share the water-related knowledge it has developed in the communities they serve - water resource management, water treatment, wastewater treatment systems, and models for working with communities and partners in addressing water and sanitation needs. The Company are actively engaged in assessing the specific water-related risks that they and many of its bottling partners face and have implemented a formal water risk management program. We are working with our global partners to develop water sustainability projects.
Consumer Preferences. Consumers' needs and wants are always changing. Coca-Cola is impacted by shifting consumer demographics and needs, on-the-go lifestyles, aging populations in developed markets and consumers who are empowered with more information than ever. It needs to be committed to generating new avenues for growth through its core brands with a focus on diet and light products. They might as well expand the variety of choices they provide to consumers to meet their needs, desires and lifestyle choices.
Increased Competition and Capabilities in the Marketplace. Coca-Cola Company is facing strong competition from some well-established global companies and many local participants. It therefore must continue to selectively expand into other 31 profitable segments of the non-alcoholic beverages segment of the commercial beverages industry and strengthen its capabilities in marketing and innovation in order to maintain its brand loyalty and market share. All four of these challenges and risks - overweight and social life, water quality and quantity, consumer preferences, and increased competition and capabilities in the marketplace - have the potential to have a material adverse effect on the non-alcoholic beverages segment of the commercial beverages industry and on the Coca-Cola Company; however the Company is well positioned to appropriately address these challenges and risks.