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Assessment of Coca Cola HR-process in regard of current trends (2017) Research · October 2017 DOI: 10.13140/RG.2.2.15495.70564

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2017

Assessement of the Coca-Cola Company’s HRprocesses in regard of current trends

PHILIPP SCHEUFELE

Ta Tab ble o off C Cont ont onte ent

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Intr Introduc oduc oductio tio tion n

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II.

The Coc Cocaa Col Colaa Co Com mpany

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III.

Recrui ecruitting and SSelec elec electin tin tingg our new emp employ loy loye ees

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The Coca Cola Company-process

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Outlook

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Ac Ach hievi ievin ng hig high hp perfo erfo erforrmance ffro ro rom m the new emp employ loy loye ees

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Incentives

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Well-Being

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Outlook

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Ach Achievi ievi ievin ng affec affecti ti tive ve co com mmit mitment ment fr from om th the en new ew em empl pl plo oyees

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Employer Branding

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Employee Development

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Outlook

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Is Issue sue suess on cr cro oss cu cultu ltu ltural ral mana anage ge geme me ment nt

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Global perspective

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Outlook

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Co Concl ncl nclu usion

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Ap Append pend pendix ix : C Coca oca Co Cola la A At-a t-a t-a-Gl -Gl -Glanc anc ance e

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IX. Ref Refer er erenc enc ences es

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I.

Int Introduc roduc roducti ti tion on

The HR-process still belongs to one of the essentials among the company’s success factors. As described in the assessment ‘war for talent’ published in the McKinsey Quarterly Journal 20 years ago, companies were already suffering a shortage of executive talent and that this competition for new talents will intensify. However, just finding and hiring the right people is not the only obstacle which was identified. The attraction and to retain the workforce is the key. Therefore, the company needs to give the employee the opportunity to refine and create his value proposition. Then, to attract and retain the people you need, you must create and perpetually refine an employee value proposition. That done, you must turn your attention to how you are going to recruit great talent, and finally develop, develop, develop!” (Chambers et al. 1998) These principles haven’t become obsolete until today. This assignment will take a look at the HR -activities of The Coca Cola Company and will evaluate it in comparison to recent trends and benchmarks.

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Th The e Coc Cocaa Co Cola la Compa Company ny

Coca-Cola is an American company with a 131 year-long tradition of producing non-alcoholic beverages. It is in business since 1886 originating from Atlanta, Georgia serving 1.9 billion servings a day to more than 200 countries in 2016. This makes Coca Cola the global No. 1 provider of sparkling beverages, juices, juice drinks and ready-to-drink coffee. TCCC manufactures, distributes, and markets non-alcoholic beverages along with fountain syrups and concentrates, such as flavoring ingredients and sweeteners. The portfolio includes 500 brands and 3,500 beverage products featuring 21 billion-dollar brands. (Appendix 1) Coca Cola’s mi mission ssion stat stateme eme ement nt involves three key statements: to refresh the world, to inspire moments of optimism and happiness, and to create value and make a difference. (The Coca Cola Company 2016A)

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III.

R Rec ec ecruiting ruiting aand nd SSelec elec electing ting our ne new w eemploye mploye mployees es

The Coca Col Colaa Co Company mpany mpany--pr process ocess With a network of over 700 thousand associates worldwide HR-management is fundamental activity for Coca-Cola. The process is composed by internal and external recruitments in which, the Coca-Cola Company (TCCC) established a common procedure and framework to maintain quality standards to a certain level. In the external search, Coca-Cola is always on the lookout for new talent, be it in experienced hires, the Coca-Cola graduate programme, or the University Talent Programme.(JobTestPrep 2017) As it costs in average up to $4000 to recruit an employee for an open position the recruitment process need to make sure the person and its abilities are fitting perfectly to the vacant position. (The Stewart Group 2016) As previously mentioned, the recruitment starts with being attractive to talents and applicants. TCCC achieves this with several initiatives and a clear statement towards employees of being part of a community with shared values and stating it is a local business on a global scale with a unique culture and a strategy to grow from within. This means that a new employee is fully integrated and has a variety of development programs to choose from as well as having ‘one of a kind’ experiences like being a brand-ambassador at the Olympics or FIFA World Cup. TCCC puts also a lot effort into the acquisition of new talents, as they are supporting students in the ‘University Talent Program’ or are creating new platforms like the ‘All women hackathon’, to name two of them. Coca Cola Company’s recruitment process of external applicants also follows a specific multi steps practice as seen below, where they want to find the ideal candidate, who combines the attributes of ‘Creative and fresh thinking ’- spirit of collaboration-pragmatic and commercial mind set. (The Coca Cola Company 2017B)

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Sour Sourcce: Writer bas based ed on JJobT obT obTestPr estPr estPrep ep (2017 (2017))

Out Outlook look The current recruitment process of TCCC combines all the features of a global player assuring to find the right person for the position and can be seen as highly effective. TCCC can also create the so important attractiveness for new applicants , through the popularity of its brands, the creation of a corporate culture which values every position, as well as putting up several initiatives. However, these things are more or less taken for granted from a global company and lacks a certain degree of uniqueness. The changing environment where the trend is going towards a more candidate-driven market, where applicants are using interviews to determine if the company fits to them and their lifestyle is one of the central topics pressuring companies to adapt. (Glassdoor 2016) In order to respond to this development, companies need to include new digital and cognitive technologies like VR and channels to target the new generation of talents. Platforms like LinkedIn and Glassdoor are gaining even higher importance in the next years and are central for the search to employees. Here it is key for TCCC to build a digital employment brand on a defined strategy which is recognizable and transparent to benefit from the socialized online environment where people are sharing experiences and evaluate their employers. (Deloitte 2017)

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Achie Achieving ving high pe perform rform rformaance ffrom rom the new eem mploy ployees ees

Inc Incenti enti entives ves TCCC’s approach towards a high-performance environment builds up on a rewarding scheme with a clear definition of payment, benefits and development programmes. The strategy is to differentiate from the market with a compelling package, which is constantly updated to provide new motivation and stimulation fitting to the employees’ needs. It also includes short term assignments avoiding a repetitive work experiences and challenging the employee on a constant basis. The incentives are relying on the Peak Performance System, where associates and their managers regularly discuss development, movement and succession in an interactive atmosphere.(Wilson 2015) The main incentives are categorized into: •

Base salary

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An Annual nual inc incentive entive entivess

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Lon Long-t g-t g-term erm inc incentive entive entivess

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Ben Bene efifits ts

Exemplary for benefits within TCCC the recently introduced Paid Parental Leave can be named, which was developed by the internal group ‘Millennial Voices’, taking care of the employees’ interest and bringing up innovative proposals to extend the company’s spectrum of services. Paid Parental leave is provided by only 30-35% of large U.S.-companies, which gives TCCC a certain advantage in the industry. (WorldatWork 2017) We Well-Be ll-Be ll-Bein in ingg In 2015 a survey among U.S employees found out that 79% of the participants would prefer additional or new benefits or perks over a pay increase.(Glassdoor 2016) Therefore, TCCC took an introspective look at its health and well-being offerings, which span the physical, emotional, social, and financial support. Work platform, workplace health and vitality has recently become a core for companies to create the best possible setting for employees to 6

be happy and to encourage their performance. (Food and Drink Federation 2012) In TCCC’s case it starts with unique Co-Working offices, which are providing open spaces to enhance group meetings and discussions in an unformal atmosphere. Nutritious & fresh food choices in the cantina combined with initiatives and free in-house gyms are giving the employees all opportunities to have a healthy lifestyle. In order to solve any of the employees’ concerns, TCCC even introduced a credit union, giving financial advice and easy access to credits.

(T (The he Coc Cocaa Cola C Compa ompa ompany ny 2016B) Sourc Source: e: Write base based d on on(T

Out Outlook look All these measures are proving to have an impact on the employees’ happiness, as TCCC achieves a rating of 3.9/5 on Indeed based on 6,076 reviews in the last 6 years with 28% giving a 5-star rating. (Indeed 2017) However constantly changing trends and mindsets of new employees are challenging companies to adapt and break up old structures. In the recently released Forbes-list of the happiest companies to work for in 2017, Coca-Cola didn’t make it into the Top 50, whereas it was listed among the Top10 in 2012. There are several challenges the company needs to solve to catch up with the industry leaders again. (Kauflin 2016) One opportunity, will be the shift of generations where three quarters of the workforce will be occupied by Generation Y and Millennials until 2025, which means TCCC needs to align its HRmanagement more specifically towards their needs. In particular the current inflexible compensation/incentives models are not well received by the new generations, as for example the sabbatical year belongs to one of the major preferences today. The optimization of processes and structures towards these professional generations can improve the overall performance of the company significantly in the next years.(Amiot and Gatto 2016)

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V.

Achi chieving eving aff affectiv ectiv ective e com commitme mitme mitment nt ffrom rom the ne new w eemploy mploy mployees ees

Emp Empll oy oyer er B Brandi randi randing ng Whereas incentives and benefits are definitely necessary features, the overall performance of a company correlates heavily with the engagement of the employees, due to positive attitude and commitment it is in the best interest for the company to enhance these two factors in particular. As commitment is described as the degree of identification and involvement that individuals have with their organization’s mission, values and goals, it is the first step build such a strong connection. (Mowday, Steers and Porter 1979) The entire process of creating a unique and meaningful working experience with a sense for the bigger purpose for the employee refers to Employer Branding. The triangle starts with the underlying mis misss ion state statemen men mentt of TCCC: • • •

To r ef efre re resh sh the worl world... d... To i nsp nspire ire mom moments ents of op optimi timi timiss m an and d happ happii ne ness... ss... To ccreate reate vvalu alu alue e an and d mak make ead dii ffe fference rence rence..

‘W ‘We e aare re tthe he b brand’ rand’ rand’-- On One e ccompany ompany ompany,, On One e Team, O One ne pa passion ssion ssion. This is the slogan of TCCC describing the company’s culture, where every employee can make the difference with ideas and their creativity to make the company better every day. Combined with Corporate Social Responsibility activities to support local endeavours and protecting the environment, TCCC creates a community feeling among its employees. In addition, the values are representing another layer to find a common ground for the employees’ actions and behaviour. (The Coca Cola Company 2017B)

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Emp Empll oy oyee ee Deve Develop lop lopmen men mentt An elevated working experience also includes the opportunities to improve the individual position in the company as well as being respected and appreciated in the current one. Companies with dynamic career models outperform their peers by providing continuous learning opportunities and a deeply embedded culture of development. (Deloitte 2017) TCCC follows the strategy and slogans of ‘Ability to Grow’ and to ‘Grow from Within’, as it puts a lot of effort in to the development of its current employees. This includes inter alia the internal Coca Col olaa Univ Univer er erss ity (CC (CCU) U) offering a variety of virtual and physical trainings and workshops to improve specific skills or to develop the knowledge about other business fields within the company. Another field is the implementation of a rewarding culture, where goals are transparent and have an increased focus on team achievements with regularly feedback. The performance indicators are based on skills and abilities rather on job titles, which is giving the employee a feeling of appreciation and freedom. Out Outlook look

Sourc Source: e: (Gratt (Gratton on aand nd Sco Scott tt 2016)

A development evolving in the next years is assessed by Gratton and Scott, describing the changes in the perspective of a 100 year-life. It shows that the turnover of employees averages at 4.5 years and companies need to offer learning & development paths as well as alternative careers to bind the workforce to the company for a longer time. Additionally the younger generations rather see themselves in their own business in the future, creating and developing own ideas, than pursuing a long term career in an enterprise. (Amiot and Gatto 2016)

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Here a possibility for TCCC is to promote platforms like the ‘TCCC-Start Up Weekends’ where employees and entrepreneurs are able to bring in their personal creativity and ideas more actively, encouraging this knowledge to stay in the company.

VI.

Iss ssues ues on ccross ross ccultura ultura ulturall mana manage ge gement ment

Glob Global al pe perspect rspect rspective ive TCCC with its operations in other 200 countries relies on a truly global community, which can be seen as a challenge and opportunity at the same time.(Sainte-Rose and Schult 2012) Bringing in such a diversity of cultures gives the company an enormous potential of innovation and local knowledge, which is of course paired with big efforts to the align these various influences into the company’s culture. As the company promotes on its website, it belongs to one of the central aspects of TCCC, being part of a truly diverse team and environment. In a global HR-perspective, Andr Laurent argues that the nationality had three times more influence on the shaping of managerial assumptions than components such as age, education, job position, etc.(Laurent 1983) This leads inevitable to the term of ‘being global thinking local’, which is a fundamental phrase in TCCC’s philosophy. Transferred to the HRmanagement this means that local HR-manager are applying strategies adapted to the country’s specifications. One of Coca Cola’s HR -managers claims, ‘We certainly need a common platform and set of tools, but we also need to allow segmentation and adaptation to different cultures – perhaps do a bit of “social engineering”.’(Sainte-Rose and Schult 2012) The statement summarizes the balancing act international companies are going through to build effective teams around the globe. An example for improvement are the expatriate-packages within TCCC, which are still suited for mainly older male managers, in which the expenses and service are covered for children and mothers, whereas flexibility and comparable services for young single female managers are not taken into account.

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Out Outlook look In a survey conducted by Deloitte in 2017 among managers, 88 percent of the participants believe that building the organization of the future is the most important issue facing companies in the next few years.(Deloitte 2017) This can be seen as general challenge but specifically for the HR-processes it is a pioneering development. The successive creation of a high performing organization with flat hierarchies, agile teams, horizontal career paths and an efficient information system paired with a strong company culture will determine the global success of the company as a whole.

VII.

Concl onclusi usi usion on

TCCC understands the challenges in the global HR-management and can create a wide range of measures and initiatives to respond. The rewarding incentive system and environment paired with the strong ‘ONE’-company culture ensures a healthy relation to the employees , their motivation and commitment. However upcoming topics need to be assessed and implemented throughout the entire organization on a constant basis. This involves the change in demographics among the workforce, the related new expectations towards the company but also new technologies. As the ‘war for talent’ won’t be less intense among the industry leaders in the future, it is vital for TCCC to retain the image of an attractive employer by encouraging innovative structures and unique career opportunities.

Sourc Source: e: (The C Coca oca Col Colaa Co Com m pan panyy 2017B)

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Appen ppendix dix : Coca C Cola ola At-a At-a-Gla -Gla -Glance nce

Sour Sourcce: (The Co Cocca Col Colaa Com Company pany 2017A)

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Refe Referenc renc rences es

Amiot, E. and Gatto, D. 2016. What role for HR in 2020-2025?. Oliver Wyman. Available from: http://www.oliverwyman.com/content/dam/oliverwyman/global/en/2016/june/What%20role%20for%20HR%20in%2020202025.pdf [Accessed October 27, 2017]. Chambers, E.G., Foulon, M., Handfield-Jones, H., Hankin, S.M. and Michaels, E.G. 1998. The war for talent. McKinsey Quarterly, pp.44–57. Deloitte 2017. Deloitte Global Human Capital Trends-Rewriting the rules of the digital age. Food and Drink Federation 2012. Worplace Wellbeing. Glassdoor 2016. Ultimate Recruitment Planning Guide. Gratton, L. and Scott, A. 2016. 100-Year Life: Living and Working in an Age of Longevity. Bloomsbury. Indeed 2017. Working at Coca-Cola Refreshments. Indeed.com. Available from: https:/...