HINDUSTAN UNILEVER LTD.
Case Solution: Meeting Employee Expectations
Team Members: Anjan Ganguly – Ganguly – M2014HRM019 M2014HRM019 Avinash Singh – Singh – M2014HRM010 M2014HRM010 Mehul Bhati – Bhati – M2014HRM019 M2014HRM019 Srivastav Iyer – Iyer – M2014HRM052 M2014HRM052 Tushar Gupta – Gupta – M2014HRM057 M2014HRM057
Brief About Case:
HUL is a market leader in Indian FMCG sector. It is a subsidiary of Unilever Ltd. The case brings about the genuine concern that the company might be losing its position as the "dream employer" for graduates from the top Indian business schools from which it recruits its management personnel. The shifting demographic profile of employees and their changing expectations have already resulted in changes in the company's employment model. These include on-the-job training and classroom and e-learning program facilities at all levels of the organization and at all stages of one's career; mentoring by senior management; communication of vision and goals throughout the company, especially through regular meetings with the CEO; a focus on corporate social responsibility; and an emphasis on worklife balance, such as offering sabbaticals and providing health and recreation facilities at the new headquarters. While the company has changed its traditional employment value proposition, in a highly competitive and talent-scarce job market, can it continue to be relevant in order to attract and retain the best talent in the country? 1. What are the typical expectations that an employee has from any corporate organization?
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Policies and Processes (Tangible on the Paper facts) • Compensation • Flexible Working Hours • Work-Life Balance • Career Growth • Organization Culture • Challenging work Assignments • Learning Opportunities • Job Security • Better Location
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Psychological Contract (Intangible Touch Points) • Interaction with Leaders • Feedback and expectation management • Job (EVP – Enriching, fulfilling and challenging)
**Psychological Contract refers to often unacknowledged and unspoken expectations. These are part of the psychological contract. The psychological contract is an unwritten agreement that sets out what employers expect from employees and what employees expect from employers. In practice most psychological contracts are majorly between managers and their direct reports and at times organization as whole. The list of major factors established in the report by linked in 2015 report on Talent trend are as mentioned below: Key Highlights: Compensation tops the list Though compensation is highest look for aspect but in specific countries work-life balance, Professional development and opportunity for advancement lead.
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The above point suggest better branding in these aspects can give opportunity to play around compensation than it being considered non-negotiable in past.
Source: L in ked in Report on Talent Tr ends 2015
2. In the context of the HR practices followed at Unilever, “are leaders born or made?”
In the context of HUL, as per the case there are references to the scenarios which point to the fact that HUL had the philosophy of making leaders. As the case states, HUL has been known as Leadership churning machinery. With around 440 CEO’s in different companies of India who have at the some point of time worked for HUL, it sure was a Leadership making factory. Later in the case, there are references to its Leadership development program. As the case states, Leadership development was part of HUL culture and 90% of their top leadership was groomed internally. It had a Business leadership training program that was 15 to 18-months long and exposed graduates from top colleges to various aspects of marketing and sales including a rural stint. Not only this, the trainee in the BLT program was assigned a coach, a mentor and a tutor, all at three different levels of hierarchy. This mentoring, coaching and tutoring was taken seriously and reflected on the appraisal processes of all the stakeholders involved. HUL has a performance versus potential tool to differentiate between its talent pools. Known as Leadership Differentiation Tool it helped HUL to identify High Performers and sustained High Performers and helped them to groom such talent for future roles. Not only this, the HUL leadership invested 30-40% of their time in grooming and mentoring leaders for future with the philosophy that one needs to groom few people who can take their job today and few people who would be ready to take on the role in next 2-3 years and few in next 5-7 years. In the light of these facts one can say that in context of HUL, Leaders are made. 2|Page
3. How did HUL successfully manage to become a company in tune with the changing needs of potential recruits?
The period between 2001 and 2004 showed a marked decrease in the growth of HUL and with it the attrition of some of its key leaders. In 2007 HUL dropped to the position of 14 from being a leader for over two decades in the ranking of the most preferred employer, thereby leading to an investigation as to the changing needs of the newer generation of management graduates. HUL now faced competition from the service sector which became a top employer of choice for the management graduates. Employer value proposition completely changed in the period. Therefore the traditional model of HUL now failed because the employees now looked for an urban lifest yle, where the children were exposed to better education, medical care very early in their career. Nair, the executive director, HR of HUL, identified some of the core needs of the newer generation employees. They were: 1. A job that was both exciting and could be viewed as making a difference to the stakeholder, society and the environment directly. 2. A career that would help them both personally and professionally and also the future of the company where they were investing their time and effort. 3. A responsible and caring work culture that would be sensitive to their needs and welfare. 4. Opportunities to get their performances distinguished by rewards and recognitions and recognize their special performances. 5. Work-life balance. Once the needs of the new generation were identified HUL focussed on implementing them throughout the organization. This led to the revamp of employer value proposition in the company in the following areas: 1. Career Path: The organization structure was flattened requiring only 14 years to achieve a senior management position which previously took 16-18 years. Adding to this was the opportunities of a global experience early on in their career. (13% served Globally in 2001) 2. Compensation: Changes in compensation were made by increasing the variable component of their salaries (by over 100%), thereby opening the door to performance and rewards, decided by the performance of the company, team and individual performances. 3.
Increasing responsibility: This became the USP of HUL and therefore attracted young talent into the company. Management trainees with an experience of 15 months were given the responsibility of the market of a few million rupees.
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4. Training and Development: This was another USP of HUL where the differentiation of them being leaders created a culture of competitiveness and the idea of building leadership from within. Huge stress was given to cascading the system of leadership development right down to the front line managers. A 15-18 month BLT (Building Leadership Training) program was developed that had phases of training in particular domains (sales, marketing, HR, technical commercial and IT) and also a rural stint of 4 weeks to know their 250 million rural customers very closely. 5. Mentoring: This was a huge development in the HUL family. Tutors, Mentors and Coaches were appointed as their immediate manager, Management Committee Manager and a senior manager and were given the responsibility to contribute to their learning and development. Even their individual appraisals were linked to the performances of the trainee. This led to the leaders contributing almost 30-40% of their time in grooming young managers. This led to the development of an intense succession plan while at the same time giving the managers the personal and professional development they had hoped for. Moreover the management graduates were also given the opportunities to interact with the CEO himself and share their ideas and views on the policies in HUL. 6. Performance Measurement: This was a tool to reflect what the company values. HUL had a two pronged approach towards PMS. One way is regarding the targets achieved, while the other caters to the 6 standards of leadership called GREATB towards the consumers, society and related issues. This in a way proved to be a marker to valuing the needs of the employee aspirations in contributing towards the society environment and also towards the performance of HUL itself. 7. Work Life Balance: HUL focussed heavily on maintain the work life balance by providing them career breaks, sabbaticals and providing them a leave of almost 5 years for personal reasons. Moreover policies were developed regarding work-fromhome at least once in a week and no working hours after 8:30 pm so that they could spend time with their families. Moreover various facilities of physical fitness and recreational activities were provided by including them as a part of the ergonomics in the office. 8. CSR activities: This also became a part of the employee value proposition where the employees were provided the opportunity to contribute to the society and also bringing them closer to their customers. These policies were very carefully developed so that they reflected exactly what potential employees needed in the present context. Moreover proper implementation of the policies by the top management ensured that HUL retained its efforts to maintain its brand among present and potential employees. These major revamp of measures proved very effective and helped HUL in more ways than one to sustain its brand among the fierce competition it faces from the VUCA world of today’s business. 4|Page
4. What approach is required for managers to become successful in the changing scenario in emerging economies?
There are following approaches which Managers can do to become successful in changing scenario in emerging economies:
Trust Resilience
Coaching
Sensible plan
Building
Forcing Clarity
Follow through
Networking
Managing Uncertainty
Seeing Big picture
1. Personal resilience In cost-reduction initiatives, managers lose valued colleagues and team members and have to learn quickly how to work with fewer people and resources. Providing support 5|Page
to colleagues, peers and senior managers, and routes for line managers to get things off their chest is an important part of keeping them effective through major change. 2. Trust-building The speed of change is normally directly proportional to the level of trust people have in their line managers. People look to their manager for information on how a change is going to affect them. They are less likely to trust a big leadership presentation about the need for change unless this is reflected consistently in line manager priorities. 3. Networking Building networks of trust with other line managers is essential to enable line managers to support themselves and to implement the details of change effectively. These networks can help bring problems to the surface earlier. 4. Coaching Managers need coaching skills to deal with the individuals who are struggling with change and they need to understand that people react to change in different ways. Line managers also need to recognise their own reactions to change and to be coached to ensure they maintain personal resilience. 5. Forcing clarity When the details of the change are worked out, leaders need line managers who will help to shape the change and work out the implications of different ideas. While the ability to deal with uncertainty is an important capability, it is better to force clarity as early as possible. 6. Managing others’ uncertainty Most resistance to change is resistance to uncertainty, and managers that force clarity help staff cope with change. However, some uncertainties will inevitably remain. The best line managers act as strong leaders, explaining why the uncertainty is necessary, what action is being taken and when it will be resolved. They also coach people sensitively to help them handle the uncertainty well and know how to spot when an individual may be entering a crisis. 7. Organisation Creating a sensible plan, thinking through the details of how things will work and then delivering in line with the plan is a great driver of confidence. 8. Follow-through The best line managers only start initiatives they can see through to the end, and they track change progress in the same robust way they track operational business performance. Poor line managers never say no to initiatives and just wait for leaders to run out of steam in following through.
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9. Think outside the box . Managers read widely, and don’t confine one to own area of ‘expertise.’ They try to see links between apparently separate and diverse elements in your life and experience. 10. Accept uncertainty and be optimistic . Life is inherently uncertain, so don’t waste your energy trying to predict the future. Of all the possible outcomes, focus on the most positive one. This is not to be a ‘Pollyanna,’ but to accept that if you respond well and wor k to the best of your ability, a good outcome is as likely as any other. Don’t waste your energy being negative. 11. See the big picture . Change is inevitable, but if you take a bird’s -eye-view of the landscape, the change won’t be so disorientating and you will keep perspective at all times.
5. How can HUL continue to be a dream employer?
Figure 1 Drivers of Attraction in Work
Figure 2 Drivers of Attraction in Rewards
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Figure 3 Drivers of Attraction in Work Environment
Figure 4 Drivers of Attraction in Opportunities
With a changing demographic the demands of the generation Y are also changing. HUL must work on restructuring its EVP. It is important to understand what does the new generation of employees’ desire. Based on research published by the Corporate Leadership Council in 2014 the following highlights may be drawn. Work-life balance, Innovation and Business Travel are some of the key focus areas of the employees. Surprisingly compensation is not such a high priority. So is a collegial work environment. However manager quality is very essential along with ample development opportunities. Of highest importance is the Organization Growth Rate, presumably the rate at which one grows within the organization. Clearly from the data given in the case HUL has some of the best practices in employee management as far as India and the FMCG sector are concerned. Exhibit 1 is a testament to this fact. However there are a few programmes that HUL may initiate to continue to remain a dream employer despite chaining aspirations. These are
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1. Redesign the Employee Value Proposition (EVP)
Figure 5 the EVP Mismatch
To successfully deliver an EVP, HUL must first base the EVP on attributes the prospective employees prioritizes. In general, however, misalignment exists between what the market preferences and organizations’ EVPs. One cause of this misalignment is a general disconnect between what the market prefers and what HR believes the market prefers. Organizations can construct the EVP from a wide array of attributes, requiring it to prioritize some over others. Unfortunately, during this construction, HR tends to overestimate the importance of people while underestimating the importance of rewards, opportunities, and the nature of employees’ work. Based on the insights from changing employee needs HUL must evaluate its current EVP and update it.
2. Hire widely But restricting itself to premier tier 1 B-schools HUL is denying it self the talent available in 2nd tier reputed B-Schools like IITs. As HUL already has a good training plan HUL can benefit from hiring widely.
3. Include short-term international stints Clearly opportunities abroad are a prized perk. HUL may leverage its wide base, and grant a shortterm abroad stint even in the training phase. Moreover HUL India has been a fertile ground for talent for Unilever worldwide.
4. Digital Brand Building
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Social media is increasingly becoming an avenue for communicating with prospective employees. HUL must focus on building an engaging relationship online.
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