Impact of Team-Based Approach on Productivity at Nestlé
Introduction
Companies in the contemporary business environment must rely more and more on intangible assets and develop competitive advantage beyond the hard and soft attributes of their products and services. Globalization and internationalization of supply chains demand more flexibility and resilience from the companies, placing pressure on their creative and innovative capabilities (Sims, 2007). That said Human Resource Management (HRM) has gone a long way in transforming from a simple administrative support function to a strategic element in most of the modern forward-looking organizations. Diversity is the key to building sustainable competitive advantage through strategic HRM and team-based approach is grounded on using this internal diversity to develop strong human capabilities and build an innovative and resilient organization. This document will examine the team-based approach at Nestlé and its impact on organizational productivity and the bottom line of the company (Swanson and Elwood, 2009).
Nestlé argues that employees are the key asset of the company and nothing can be achieved without employee engagement and motivation (Nestlé, 2012). Importantly, the company places internal diversity as the top priority of their Human Resource Management policies and outlines the critical role of “team player”, “emotional intelligence” and “sympathy” as the characteristics that the company looks for in their potential candidates (Nestlé, 2012). The company has adopted a functional organizational structure with working teams comprised of individuals with different professional and personal backgrounds. This approach also involves flexible work arrangements, such as part-time and reduced working hours, playschool and nursery for the employees and special compensation packages including monetary as well as non-monetary compensation methods (HSM, 2012). Nestlé outlines Training and Development as part of the corporate culture and emphasizes the critical role of the same for employee development and loyalty. Total Quality Management (TQM) and Performance Appraisal system in the organization are focused on building accurate knowledge about individuals and providing them with the opportunity to improve and grow professionally.
The above constitutes and summarizes the approach of the company to human development. The point that should be raised at this stage is how this approach emphasizes the team-based view on reaching organizational productivity. First, the company´s recruitment and selection processes are built in a way to attract the candidates that are not only the right fit for the position but also to the company´s culture. This approach ensures that the company operates as a unique and “tuned” mechanism, underpinning the team-based approach. Secondly, the functional organizational structure is concerned with building diverse and effective virtual teams, which enhance Nestlé´s innovative and creative capabilities, building on higher responsiveness and, thus, resilience at the time of crisis. Finally, Training and Development programs for Future leaders and functional training available to all the employees aim at improving individual performance and, thus, contributing towards higher collective productivity (Nestlé, 2012; Schneider, 1994). The above-outlined actions increase the collective productivity of the company and have positive impact on the bottom line for three reasons: (1) company reduces the overall production costs as individuals become more productive, allowing for headcount reduction and minimization of human errors, leading to incremental costs; (2) company increases its innovation capacity and can bring products to the market with higher “sellability”, building on incremental revenue, (3) company increases retention rate, reducing the need for training of new employees and recruitment and selection costs.
Training Challenges
The team-based approach, adopted by Nestlé has a visible positive impact on the organizational bottom line and productivity. The focus on diversity and building leadership capacity from within the core of the company implies, however, some training challenges. First, current leadership program demands very accurate and specific approach to recruitment and selection globally to ensure quality alignment across the regions and candidate fit. This process is highly complex, given the cultural and societal differences in various countries. Secondly, team-based approach demands strong emotional management and diversity management skills from employees on all the levels, building upon the training complexity and costs. The company must ensure that employees receive adequate and similar training across the borders and have strong skills in working in virtual teams, working across time zones. Finally, team-based approach always implies healthy competition, but many companies face with the issues, related to strong competition, which prevents teams from reaching good results. Building on the cooperative environment with healthy competition is one of the major challenges for the team-based approach (Wilson, 2006).
Approach to Overcome Training Challenges
Considering the above-outlined challenges, Nestlé should focus on the policies and approaches, which can address (1) cost of training, (2) virtual working environment competency, (3) diversity awareness, (4) building cooperative thinking across functional teams and (5) emotional intelligence. That said it is recommended that Nestlé pursues the following approaches to address the challenges. First, it is recommended that the company invests in the creation of Global Virtual Learning Space (GVLS), where employees can take different training programs, based on their perceived needs and interests. While representing high immediate development cost, it will reduce the long-term training expenses by providing a unified global solution with low maintenance cost. Secondly, it is recommended that the company enhances its cross-functional and international rotation program to develop stronger cultural diversity knowledge in future leaders. This will ensure that the company has an expertise and necessary capacity to deal with diversity and ensure that its growth ambitions are supported by strong HRM capabilities (Wilson, 2006). Finally, it is essential that the company develops Special Operations Procedures (SOPs) and Manuals, which employees can consult daily. This should come along with the creation of the role of “super user” for each of the specific system, process and operation. These super users will be able to conduct on-demand and monthly training for current and new employees and reduce the need for external training and consultant costs.
Conclusion
Nestlé is one of the most innovative and forward-thinking companies in the industry, whose general strategy strongly relies on the HRM capabilities and resources. Training and development are central to the company´s goal to reduce operational costs, improve the bottom line and increase its collective productivity. That said company adopts the team-based approach and functional organizational structure. This brings significant benefits, but also implies such challenges as increased demand for diversity training, virtual teams training and emotional intelligence. To address these challenges, the company should focus on the development of self-sustainable training and development systems, such as GVLS, SOPs and Manuals and “super user” approach to internal training and development. This will continue underpinning Nestlé´s team-based approach and further increase its resilience.
References
Sims, R.R. (2007). Human Resource Management. Contemporary Issues, Challenges, and Opportunities. Charlotte: Information Age Publishing.
HSM (2012). The Benefits of Flexible Working Arrangements. A Future of Work Report. Hot Spots Movement. Retrieved 5 January 2017, from https://www.bc.edu/content/dam/files/centers/cwf/individuals/pdf/benefitsCEOFlex.pdf
Swanson R.A. and Elwood F.H. (2009). Foundation of Human Resource Development. 2nd Edition. San Francisco: Barret-Koehler.
Schneider, C. E. (1994). The Training, and Development Sourcebook. Amherst, Mass: Human Resource Development Press, 1994.
Wilson, J P. (2006). Human Resource Development: Learning & Training for Individuals & Organizations. London: Kogan Page.
Nestlé (2012). The Nestlé Human Resource Policy. Nestlé Corporate Website. Retrieved 5 January 2017, from http://www.nestle.com/asset-library/documents/jobs/the_nestle_hr_policy_pdf_2012.pdf
