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Developing a winning Human Resources Strategy for Unibail-Rodamco

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Unibail Rodamco was formed when the two property management giants from France and the Netherlands came together in 2007 in a historic merger. Here we analyze the successful HR strategy of the company …

Unibail Rodamco was formed when the two property management giants from France and the Netherlands came together in 2007 in a historic merger. Here we analyze the successful HR strategy of the company and what could be changed to make this strategy even more impactful

Published in: Education, Business, Real Estate

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  • 1. Human Resources strategyHuman Resources Management Unibail-Rodemco Designing a Winning IE Business School Unibail Rodamco was formed when the two property management giants from France and the Netherlands came together in 2007 in a IMBA Nov 2010 N8 historic merger. Here we analyze the successful HR strategy of the Group B company and what could be changed to make this strategy even more impactful Bertrand Rousseau Daniel Balsemao Pires Holly Ann Wright Kundan Bhaduri Mariana Penzini Shaheen Samavati
  • 2. Human Resources Management: Unibail-Rodamco 1|PageTable of ContentsINTRODUCTORY ANALYSIS .......................................................................................................................................................... 2COMPANY DESCRIPTION ............................................................................................................................................................... 2COMPANY CULTURE PRE-MERGER ........................................................................................................................................... 2NEW CORPORATE CULTURE POST-MERGER ........................................................................................................................ 3CURRENT HR POLICIES AND PROPOSED IMPROVEMENTS ............................................................................................ 4FIVE FACTOR ANALYSIS ................................................................................................................................................................. 5CONCLUSION....................................................................................................................................................................................... 6APPENDIX ........................................................................................................................................................................................... 7 IE Business School IMBA Nov 2010 Section N8 Group B
  • 3. Human Resources Management: Unibail-Rodamco 2|PageINTRODUCTORY ANALYSISThe following project analyses Unibail-Rodamco’s (UR) history, company culture and current HRsystems in an effort to detect the need for improvements between external alignment andinternal consistency to ensure the long-term growth of the company. Upon review, our team hasconcluded that the changes made after the M&A and the current systems provide a good match for avibrant culture and organization. Organizational approach adopted during the merger was wellmatched with the overall strategy. However we recommend the company review its financial andteam incentive policies as well as its adherence to standards concerning the environment.COMPANY DESCRIPTIONUnibail-Rodamco is the largest commercial real estate company in Europe. Formed in April 2007 bythe merger of Unibail (Leading French construction business) and Rodamco (Dutch consortium ofindependent companies with presence in 14 European countries), Unibail-Rodamco (UR) has adopteda vertical integration strategy within the real estate business with interests in development,investment and management of commercial properties. The company is known for its strength in theshopping mall leasing space and has several agreements with prominent retailers in the market.COMPANY CULTURE PRE-MERGERRodamco EuropeSharing: Rodamco sought to bring transparency and openness to all their projects thereby drivingasset, financial and risk management of the best retail property portfolio. There was emphasis onprofessional communication, clarity of thought and constructive feedback. Rodamco strongly repelledsecretiveness and cover-ups.Predictability: Predictability and reliability were the foundations of Rodamco’s values thatencouraged people to give their best at their job. Associated values of honesty, consistency, IE Business School IMBA Nov 2010 Section N8 Group B
  • 4. Human Resources Management: Unibail-Rodamco 3|Pageresponsible behavior and accountability were also linked to the success of the organization.Team play: At the very heart of a successful organization is a strong team culture. Rodamco was nodifferent – Team player skills and cooperation were the basis for their multidisciplinary expertise. Thecompany seemed to form long-term relationships; both internally and externally, founded in mutualrespect, motivation and inspired engagement.Constant Improvement: In addition to the focus on customers, results and quality, employeeswere encouraged to value and promote proactively entrepreneurship to raise the bar in retailproperty management, something that brought the company its success.Unibail EuropeTechnical Excellence: Unibail thrived on the technical competence of its people. The company’sfocus on using cutting edge technology to develop the latest structural designs was a statement ofthe brilliance that Unibail expected from its people.Financial eagle: Before the merger Unibail Europe had very healthy financial figures that madethem the strongest commercial property developers. The employee culture at Unibail valued financialexcellence that led the company to being the strongest player in the French commercial developmentmarket.Teamwork: Unibail’s strength as a company laid in their ability to harness their collective learningfor the benefit of the entire organization – whether in marketing, property development, leasing ormanagement.NEW CORPORATE CULTURE POST-MERGERThe merger allowed the creation of a new company that combined Unibail’s development skills andRodamco’s retail footprint, investment strength and experience to ensure long-term value creation.The resulting post-merger culture gathers elements from both companies and unlocks great value for IE Business School IMBA Nov 2010 Section N8 Group B
  • 5. Human Resources Management: Unibail-Rodamco 4|Pageall stakeholders. The resulting values are:Customer Satisfaction: UR places the end customer at the heart of its strategy. It offers a biggervalue proposition that encourages them to select UR shopping centers. They build a completeexperience for the consumer by providing a memorable and enjoyable shopping experience throughthe design of the shopping centers, scents, sounds, light effect, quality of stores, among others.Performance & Results: The Company is focused on results and seeks the best people that wouldbe able to provide them out of the box thinking and help improve their competitive advantage.Diversity: UR seeks a balance in terms of gender (currently at 49% women and 51% men 3), ageand background diversity that encourages creativity and different way of thinking.Financial Soundness: UR is recognized by its low financial and business risk given it’s conservativerisk philosophy, being the only company in this sector with an A debt credit rating.Entrepreneurial, autonomous, leadership centric, proactive focus: Skills development,international rotation of roles and empowerment are tools UR uses to develop the leadership andentrepreneurial skills for its employees.CURRENT HR POLICIES AND PROPOSED IMPROVEMENTS CURRENT STAGE CRITICAL ANALYSIS AND RECCOMENDATIONSRecruitment and Selection: Overall Human Resource Policies: - European Graduate Program (EGP) - Focus placed on EGP could cause rotational program – 1 year, multi- oversight in other areas – ie ‘blue- country, multi-function collar’ staff. Consider increased - UR has been recognized as the #1 attention to improving HR policies and company in France for the ‘high level of allowing for best practices in terms of responsibility offered to recently-hired health, safety and standards young graduates’4 /guidelines for this class of workforce.Career Management & Performance Management by Competencies3 http://www.unibail-rodamco.com/W/cms_sites/SITE_16406/ressources16406/pdf1/2007_Full_Year_Results.pdf;4 http://www.universumglobal.com/IDEAL-Employer-Rankings IE Business School IMBA Nov 2010 Section N8 Group B
  • 6. Human Resources Management: Unibail-Rodamco 5|PageAppraisal It is important to have previously - Standard job-grading framework for defined competencies and skills career management and progression – required for each role in order to have creates transparency and increased job a clear understanding on what it takes mobility to continue growing in the company - Pay grade system to ensure employees and to meet the requirements of each doing a similar job receive equity in pay role. – scope > seniority > core skills Incentives + Teamwork: - 360-degree feedback to encourage - Performance based rewards are critical coaching for development and in maintaining company culture (best assessment on employee performance. performing employees should receive As a result, an action plan is defined a higher bonus). based opportunities including training. - In an effort to foster collaboration, sharing of best practices and commonCompensation: goals, UR could implement team or - The total compensation plan includes business unit based financial other benefits besides salary such as a incentives. company Saving Plan, Stock Options and Performance Reviews: a standard Pension Fund Increase frequency: quarterly goal andEmployee Development: performance discussions; semiannual review; - EGP Rotational annual 360-degree feedback analysis - Training to develop a ‘common language’ Environmental Focus: among the staff to ensure processes are - Increase company focus on carried out the same way through the sustainability and environmentally organization regardless of location friendly methods to ensure long-term Designed to empower employees to success beyond the code of ethics make sound decisions in complex through incentives. situations involving huge investments.Code of Ethics: 3rd Party, Subcontractors + Supplier Set of values and principles that every Standards: employee, manager and director in the - Protect reputational risk by increasing company must respect and should public transparency and creating comply with. Values are based on the policies to ensure the highest respect of law, individuals and Group’s standards for 3rd party vendors, internal rules and regulation. subcontracted employees and supplies used by URFIVE FACTOR ANALYSISI. Environment: Given that UR is active in a wide range of business functions (construction, projectfinance, sales and maintenance), it is critical for the company to attract a human capital base with awide range of skill sets. For this reason, it is imperative that it has access to the Pan-Euro talent pool IE Business School IMBA Nov 2010 Section N8 Group B
  • 7. Human Resources Management: Unibail-Rodamco 6|Pagefor recruiting purposes, and hence the diversified generalist hiring methodology works for thecompany at the moment.II. Strategy: UR differentiates itself with high-level, unique and architecturally advanced assets.Given this focus, the skills and experience of UR’s employees serve as the company’s unique asset.III. Workforce: The company seeks to build its human capital with individuals possessing a diverserange of profiles: experience in finance, economics, engineering or other related fields. Thishighlights the company’s commitment to bringing diverse perspectives to issues. The company isfocused on hiring bright, ambitious, results driven, detail oriented individuals educated at the topschools in the countries that UR operates in. The company wants flexible learners and believes thatits approach to workforce selection helps get people who are adaptable and can take educated risks.IV. Work Organization: As per the UR’s code of ethics, accountability within the work organizationcomes from teamwork, one of the Groups core strengths. Clear communication and mutual respectfoster a high-ownership environment that empowers every individual to act and achieve. Theorganization encourages its teams to be ambitious and therefore seeks a close fit on this aspect ofthe work organization. The Groups work organization is built around excellence based oncommitment, responsiveness, initiative, creativity and innovation.V. Culture: Results and performance oriented.CONCLUSIONThe team believes Unibail-Rodamco has incorporated many of the right HR tools and changes to thecompany culture after the M&A to ensure long-term success in the market. The organization todayvalues diversity, skills, training and international mobility allowing the company to develop a ready-to-go workforce that can perform under global challenges, new areas, demanding fast decisionmaking, handling risks and delivering results. IE Business School IMBA Nov 2010 Section N8 Group B
  • 8. Human Resources Management: Unibail-Rodamco 7|PageAPPENDIXUnibail-Rodamco Portfolio of Investments:576% in Shopping Centers8% in Conventions & Exhibitions16% in OfficesUnibail-Rodamco International Presence Figures:663% in France7% in Netherlands9% in Nordic8% in Spain7% in Central Europe6% in AustriaVisuals from Unibail-Rodamco Properties in FranceCarrousel du Louvre (Paris, France)CNIT La Defense (Paris, France)5http://www.marketwatch.com/story/unibail-to-buy-rodamco-in-148-billion-property-merger6 http://www.marketwatch.com/story/unibail-to-buy-rodamco-in-148-billion-property-merger IE Business School IMBA Nov 2010 Section N8 Group B