Human resource practice at Nestle regarding personnel activities

1. History
It all began from a little venture by a Swiss pharmacist, Henri Nestlé, to
develop an alternative for infants who cannot be breastfed,with a
combination of milk, wheat flour, and sugar. Not only did this formula
help reduce infant mortality from malnutrition across Europe,but also
formed the basis for the world’s largest food and beverages company.To
this end, Nestlé soon added chocolate,milk, and Nescafe coffee to its line
of items through mergers and research. Nestlé kept increasing the length
and width of its productlines to cater to a wide range of consumerneeds.
As Nestlé was making its operations global, it found an eager market in
Pakistan. Nestle has been serving Pakistani consumers since 1988,when
its parent company, the Switzerland-based Nestlé SA, first acquired a
share in Milkman Ltd. Few of the milestones achieved by Nestlé Pakistan
and Milkman Ltd. are mentioned in
Global Structure
At the international level, the world is divided into four parts, each reporting
to the world headquarters in Switzerland. Nestlé employs bottom-up as well
as top-down reporting. For yearly budgeting, each territory reports next
year’s forecastedsales toots Area Manager who after gathering all these
reports sends a summary for his area to the Regional Manager. Regional
and Zonal Manager do the same process until National Sales Manager
has the forecasted sales for the entire country. Target sales are then
reported down to each zone, from where it is sent to each region, and
the process continues until each territory has its target sales
Organization Structure
Ne s tlé P akis tan f o llo ws a f lat, m atrix o rg anizatio nal . t h
e departments are divided function-wise and product-wise. All the
products use different functional departments, and all
the functional departments have specific product departments
within them. The span of control is wide, as each department head has
many direct and indirect reporting relations with his subordinates.
Also, as in a pure matrix form, nearly all employees have two
or more departments to reportto, directly or indirectly.to.Mana
g ing D ire c to r o f Ne s tlé P akis tan re p o rts d ire c tly to

2. the He ad O f f ic e in Switzerland, and gets guidance
and objectives from them. Directly under the Managing Directorare
differentfunctional departments:
 Business Executive Managers
 Head of Human Resource Department
 Head of Sales Department
 Head of Supply Chain
 Head of Food Services Department
 Head of Technical Department
 Head of Finance Department
 Head of Corporate and Legal Department
Human Resource Department
The Human Resource Departmentis subdivided into three branches:
 Shared Services
 Centre of Expertise
 Business Partners
Shared Services
Shared Services are responsible for data and record c ollections of
all the employees of Ne s tlé P akis tan. T he y hand le the
p ayro lls , d ivis io n o f p ro vid e nt f und s , m e d ic al allowances,
travel allowances, and all other administration of the employee funds.
Centre of Expertise
The Centre of Expertise is the department responsible for
recruitments, remunerations and organization development
through Nestlé’s training programs, both local and
international.

3. Business Partners
The Business Partners form the link between different human
resource activities of
theo rg anizatio n, and the f unc tio nal d e p artm e nts the y ar
e wo rking with. T he Hum anResource Manager–Commercialis a
Business Partner for Sales and reports to the Head of
S ale s D e p artm e nt. He is s up p o s ed to f o rm a link b e twe
e n the Hum an R e s o urc eDepartment and the Sales
Department, making sure all decisions made by the Sales
Department are in line with the Company’s goals and policies.
Human Resource Function
Shared Services (SS)
As explained in the organization structure, this department is responsible
for maintaining the data and records of the employees to decide
about their pays, allowances etc. The department is also supposed to
carry out the performance appraisals (PA) with the help of the line
managers. The SS sets guidelines and provides the line managers
with tools, systems and processes to evaluate their subordinates.
Based on these evaluations, pays and remunerations are decided.
(Remunerations are done by the Centre of Expertise).The pay
and compensation strategy is tied to the achievement of
the business objectives and helps them build a growth-oriented culture.
Apart from payrolls, SS is in-charge of administration of employee funds.It
is supposed to decide that which employee gets which fringe benefit,and
to what extent, for example, medical allowances, travel allowances
etc. The provident funds for employees are also calculated by Scathe
SS is a vital departmentfor maintaining employee motivation and loyalty to
Nestlé. It needs to be ensured that all data collectionand PAs are done
correctly, and in line with the proceduresand guidelines set by the
organization. It also needs to give enough allowances and leverages to the
employees to allow them to balance their personaland professional
life. Nestlé believes that employee’s private and professional life should
have a good balance. In the same spirit, Nestlé encourages flexible

4. working conditions whenever possible and encourages its employeesto
have interests and motivations outside work. This not only maintains
satisfaction with the job, it also increases loyalty, productivity and
provides motivation for better performance in the future
Centre of Expertise
The Centre of Expertise is
the department in Human Resource Function which isre s p o n
s ib le f o r re c ruitm e nts , o rg anizatio n d e ve lo p m ent (traini
ng p ro g ram s ) and remuneration
Hiring & Recruitment
Hiring and requirement is the most important task performedby Centre of
Expertise.It is the process on which the entire company’s
future and performance relies upon.
TheBusiness Partners are supposed to communicate the staf
f requirements of differentdepartments,and set the job description
and requirements. Contacts with universities
andre c ruitm e nt e ve nts are m aintaine d to have g o o d vis i
b ility o f the C o m p any and recruitment sources. The recruitment
office looks for three key characteristics: knowledge, personality
and motivation. For managerial positions,specificleadership qualities and
business acumen is required. Even when promoting employeesfrom within
the organization, it is their role to keep an eye on valuable
candidates.Those who meet the essential requirements are the
n evaluated through a series of screening tests, interviews and
group discussionsessions to gauge their suitability for the job. It is
extremely important to hire the right person,not just for Company’s
objectives, but to help integrate newcomers in the organization
so that their skills and behavior can merge smoothly with the company
culture. At Nestlé the recruitment is done keeping the objective of
diversificationin mind. The organization has a global mindset which
involves diversity to encourage and foster creativity and new ideas, which
forms the unique selling propositionof a business.

5. Training Programs
Training is seen as an ongoing process. It doesn’t only involve
training sessions and lectures,but day-to-day interactions with the
superiors and fellow employees, absorbing their knowledge and ideas:
guidance and coaching by managers is a given. Knowledge also
comes through the tasks assigned:simple learning-by-doing and on-the-job
training. Apart from that, Nestlé is committed to enhancing
employee skills and
competenciesthro ug h f o rm al training p ro g ram s . T he s e are
s e le c te d ac c o rd ing to ind ivid ual requirements and the job they
are working for. The candidates are selected based on their performance,
potential and personal developmentgoals and recommendations come
fromthe Head of Human Resource Department and the Busine
ss Partners of respectivedepartments. The Centre of Expertise
is responsible for designing and providing the requisite training once
the candidate and his needs are identified.
Remuneration
Compensation and benefits
Nestlé’s remuneration is benchmarked against other organizations
and surveyed on regular basis to ensure that it remains competitive and
fair. The policy needs to be framed keeping local market, individual
performance, skills and potential for development in mind. This is what they
call the ‘Total Competitive Remuneration’. The manager’s task is to ensure
that the remuneration structure facilitates the implementation of flat
organizational structure and be flexible so as to be able to adapt tithe
evolution. It is also the manager’s task to evaluate remuneration of each
staff member taking into account her/his professionalperformance
and her/his specific responsibilities.These specialists need to know about
stock options,and how to compare and compensate the employee payroll
system. They need to make regular changes in their strategies and find
new ways of operating to increase the efficiencyof the whole organization.
This helps ensure not just the company’s growth, but motivation for
individual growth as well

6. Training & Development of Employees
Mr Janjua placed special emphasis on the need for training in
an organization so that the employees can handle their
delegated responsibilities well. Training can be seen as a tool to support
them in their tasks and responsibilities and to motivate them to perform
outstandingly. The Organization DevelopmentDepartment is responsible
directly for the training needs of the employees.They hire trainees and
then Mr Janjua communicates the objectives of the training plan to
the trainees. For example, should the training be provided in interpersonal
skills or should it be provided in specific functional skills. Hethen helps in
identifying and nominating a poolof people who can benefit and implement
the training practically in the near future so that the benefits are maximized
for the organization as a whole
Ensuring Motivation & Communication with the Employees
After the line manger he is responsible forensuring that the staff is
motivated and committed to their work. He believes in keeping an
interactive relation with the employees and to intervene anytime there is a
conflictbetween two parties. He has also beeninvolved in conducting road
shows and meetings to encourage a spirit of participation and
belongingness inthe employees
Family & Female-Friendly Organization
Diversity is central to the nature of their business.As a global organization,
Nestlé caters to the needs of diverse consumers.
This is only possibledue to the diverse backgrounds and interests of their
people and their firm commitmentto embracing diversity at all levels.
When they employ staff, they make a commitmentto provide them with
good working conditions. Female employees and their employees' families
know that Nestlé Pakistan has a friendly and caring attitude.

7. They recently set up a day-care centre, and have established a
comprehensive Maternity Benefits Scheme fortheir female employees.
Total Competitive Remuneration
At Nestlé you can be sure you'll get competitive and fair remuneration
structures. Their remuneration is benchmarked against other organizations
and surveyed on a regular basis to ensure that they remain competitive.
Their pay and compensationstrategy is tied to the achievement of their
business objectives.This linkage helps us define a growth-oriented culture,
making us the most preferred employerin the market.
The benefits of working at Nestlé go beyond the financial. Here, you'll find a
structure to help you fulfill their ambitions and supporttheir lives.
Growth
New employeesare given responsibilityat an early stage, and high
performerscan develop fast. Their international and multicultural working
climate is conducive to creativity, innovation and personal development.
And you'll get competitive working conditions,a compensationpackage
and social benefits in line with their company's high standards.
Here, you'll get the room to add value and make a real difference.If you're
qualified and ready to confrontnew horizons, you'll have the chance for a
truly international career.
Learning
If you want to keep learning and improving every day of their working life,
you might fit in very detail at Nestlé Pakistan. From their very first day, you
will start to acquire new skills that may take you to the very top, and to the
furthest corners of the world. Here, you'll thrive in an environment of
lifelong knowledge enrichment, where learning is a continuous process

8. rather than an occasional programmed or event. That's why you'll find their
self working with people who want to know more, do more and achieve
more – for themselves.,and for the organization.
SAFETY AT WORK
Nestlé is committed to being a leader in workplace safety and health.
The Nestlé Occupational Health and Safety Management System (NSMS)
was revised in line with the 2007 edition of the international standard
OHSAS 18001 and reissued to all Nestlé operations,reinforcing our
commitmentthat “Safety is non-negotiable”. They are also working
towards external certification of our factories against OHSAS 18001.This
will provide a commonlanguage around our health and safety management
systems,and make it easier to demonstrate implementation of these
standards to our stakeholders. The number of workplace injuries has been
reduced.For example, in 2007 the number of injuries leading to one or
more days away from work in Nestlé decreased to almost one quarter of
that seen in 2001.
Listening and responding to employee views
Businesses throughout Nestlé listen and respond to employees.Nestle
globally conducted an independentsurvey, which provided constructive
feedbackfrom employeeson a range of topics.A clear finding was that
Nestle employees wanted the business to take a fresh look at internal
communication. Nestle responded firstlyby running structured workshops
to help translate opinions into action. Various initiatives they are
implemented as a result. These range from new opportunities to meetand
share ("mystery lunches" and monthly departmental meetings) to improved
information sources (intranet and publications library). Nestlé is conducting
a global employee survey. This is currently underway, and they will be able
to report on it in future publications.