This document provides a summary of a project on HR practices in the FMCG sector in India. It includes comparisons of recruitment sources, selection processes, compensation and benefits, performance appraisal, and training and development across several major FMCG companies in India. The key HR challenges in the FMCG sector are also outlined, such as managing knowledge workers, technological changes, developing leadership, and managing change. Overall, the document finds that while practices vary between companies, the FMCG industry in India follows modern approaches to HR.

1. A PROJECT ON HR PRACTICES
OF
FMCG SECTOR IN INDIA
AT
SUBMITED BY:
SUBMITED TO:
Desai Madhav Ashutosh(45)
Dr. Bhavna Jaiswal
Vishesh Mehta(13)
Faculty Human Resource
Varun Banga(47)
IBS, Hyderabad.
Nitesh Raj(27)
Rishav Milind(29)
Saurav Rai(60)

2. INTRODUCTION OF FMCG SECTOR INDIA
The Indian FMCG sector is the fourth largest in the Indian economy and has a market size of
$13.1 billion. This industry primarily includes the production, distribution and marketing of
consumer packaged goods, that is those categories of products which are consumed at regular
intervals. The sector is growing at rapid pace with well-established distribution networks and
intense competition between the organized and unorganized segments. It has a strong and
competitive MNC presence across the entire value chain. The FMCG’s promising market
includes middle class and the rural segments of the Indian population, and give brand makers
the opportunity to convert them to branded products. It includes food and beverage, personal
care, pharmaceuticals, plastic goods, paper and stationery and household products etc.
India, Asia’s third largest economy, saw urban consumers spend less in calendar year 2012 due
to high inflation, muted salary hikes, and slowing economic growth that affected both real
wages and sentiment. During 2012, the overall slowdown in the economy has begun to affect
the FMCG sector with companies posting deceleration in volume growth in the recent quarterly
results. Discretionary spending has been hit severely due to the ongoing slowdown. The
prevailing high inflation level is also a cause of concern for the sector. The trends seen in 2012
are likely to accelerate in 2013. Growth will come from rural dwellers that are expected to see a
rise in disposable incomes due to the direct cash transfer scheme, while urban consumers will
continue to be affected by the macroeconomic environment.

3. HR CHALLENGES IN FMCG SECTOR INDIA
Over the past three to four years, the global economy has gone through a tumultuous change
and the looming threat of a “double dip” and “triple dip” recession. The environment that
organizations are operating in today is one characterized by volatility, uncertainty, complexity
and ambiguity. The Indian economy has also not remained insulated from the economic turmoil
that the world is going through – many industries have seen slowdown and organizational
decision-making is today marked by cautiousness. In this context, the HR profession in the
Indian context has several daunting challenges to face in the year 2013.
FMCG registered gains of just 33% on the BSE FMCG Index last year. At the macro level, Indian
economy is poised to remained buoyant and grow at more than 7%. The economic growth
would impact large proportions of the population thus leading to more money in the hands of
the consumer. Changes in demographic composition of the population and thus the market
would also continue to impact the FMCG industry.
Major HR challenges in FMCG sector India are as follow:
1. Managing Knowledge Workers
Essentially, here we are looking at different kind of people who does not obey the
principles of management for the traditional group. This boils down to higher
educational qualifications, taking up responsibilities at a lesser age and experience, high
bargaining power due to the knowledge and skills in hand, high demand for the
knowledge workers, and techno suaveness. The clear shift is seen in terms of
organization career commitment to individualized career management. Managing this
set of people is essential for the growth of any industry but especially the IT, BPOs and
other knowledge based sectors.
2. Managing Technological Challenges
In every arena organizations are getting more and more technologically oriented.
Though it is not in the main run after the initial debates, preparing the work force to
accept technological changes is a major challenge. We have seen sectors like banking
undergoing revolutionary changes enabled by technology. It is a huge challenge to bring
in IT and other technology acceptance all levels in organizations.
3. Competence of HR Managers
As it is more and more accepted that lot of success of organizations depend on the
human capital, this boils to recruiting the best, managing the best and retaining the

4. best. Clearly HR managers have a role in this process. Often it is discussed about lack of
competence of HR managers in understanding the business imperative. There is now a
need to develop competent HR professionals who are sound in HR management
practices with strong business knowledge.
4. Developing Leadership
It is quite interesting to note that there is less importance given to developing
leadership at the organizational level. Though leadership is discussed on basis of traits
and certain qualities, at an organizational level it is more based on knowledge. The
challenge is to develop individuals who have performance potential on basis of past
record and knowledge based expertise in to business leaders by imparting them with
the necessary "soft skills".
5. Managing Change
Business environment in India is volatile. There is boom in terms of opportunities
brought forward by globalization. However this is also leading to many interventions in
terms of restructuring, turnaround, mergers, downsizing, etc. Research has clearly
shown that the success of these interventions is heavily dependent on managing the
people issues in the process. HR has a pivotal role to play here.

5. COMPARISON OF RECRUITMENT AND SELECTION
In a highly competitive environment of FMCG market companies are very much investing in
selection and recruitment process to gain the comparative advantage and to get best resource
in the organization. The studied companies have been using traditional as well as modern
techniques. As the firms want to reach to maximum level of masses with lower cost companies
are more shifting towards modern techniques like use of internet etc.
COMPARISON OF RECRUITMENT SOURCES:
Recruitment
Sources
Advertisement
in Newspaper
Online
Advertisements
Company
Website
Job Portals
Employment
Exchange
Placement
Agencies
Campus
Recruitment
Casual
Application
Walk-ins
Head Hunting
Mergers &
Acquisitions
Internships
Internal Data
Banks
Employee
referrals
Private
Consultants
Trade Unions
Internal
Promotion
HUL
Nestle
ITC Ltd
Coca-Cola
Pepsi Co.
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
P&G
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES

6. COMPARISON OF SELECTION PROCESS:
Selection Tools
HUL
Nestle
ITC Ltd
CocaCola
Pepsico
P&G
Preliminary
YES
YES
YES
YES
YES
YES
YES
YES
Selection
Initial screening
YES
YES
Application forms
Tests/Role
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
Play/Case study
Selection
YES
Interview
Final Interview
YES
YES
Medical Evaluation YES
Job offer
YES
YES
YES
Group exercises
Presentations
YES
YES
Specialized Testing
Performance
YES
YES
YES
YES
YES
YES
YES
YES
Exams
Panel Interview
YES
YES
YES

7. COMPARISON OF COMPENSATION AND BENEFIT PLANS
To gain a competitive advantage, attract potentially skilled and qualified employee and retain
their employees in this highly competitive world FMCG sector companies come up with large
number of compensation and benefit plans.
COMPENSATION:
HUL, Nestle, ITC, Coca cola provide a basic salary and some variable salary depending on
performance of the employee.
PepsiCo gives a basic salary and bonus as compensation.
BENEFITS:
Medical benefits are provided by Nestle, HUL, Coca-Cola. E.g. Nestle provides medical plan
called NesCare.
Insurance benefits are provided by Pepsico, P&G and Nestle.
Retirement benefits like Gratuity are given by Coca cola, Pension Plan by Nestle like Nestlé
401(k) Savings Plan and the Nestlé Pension Plan, Provident Fund by HUL, Nestle, ITC, Coca cola,
Peps Co, P&G.
Benefits for Personal growth & Development are provided by Nestle, P&G and HUL. Nestle has
a world-class corporate university Nestle University, providing transformational learning and
development solutions to our customers. Tuition assistance programs are provided by HUL
which included financial assistance to meet tuition expenses for all employees.
Company stock option plan is given by HUL offers to the employees to enable them to share
the benefits of the company’s performance.
Facilities like Leave Allowance is provided by Pepsi Co, pick and drop is provided by Coca cola.

8. COMPARISON OF PERFORMANCE APPRAISAL
FMCG Sector in India is highly competitive between few giants and several medium small and
medium scale companies. Transparent, fair and attractive performance appraisal plays the
curtail part in retaining, developing and attracting the human resources.
Most organizations focus on an annual evaluation process for employees and call that
Performance Management. However, annual evaluations are often subjective and can lack
specific measurements and supportive data to help the employee truly improve their
behaviour.
Companies that are being studied in this report are focusing mainly upon the transparency in
performance appraisal and genuine feedback of employees. Taking it into consideration almost
all companies are using modern techniques of performance appraisal. In the study conducted
and the results below supports the argument that FMCG industry follows the modern
techniques for performance appraisal and certain similarities has been noticed in the studies
between the competitors and differences also to take the competitive advantages.
The below table shows the techniques used by studied companies in this report.
COMPANY
HUL
Nestle
ITC Ltd.
Coco-cola
Pepsi co.
P&G
MBO




BARS

360 Degree





Assessment
Center
General
appraisal



9. COMPAIRISON OF TRAINING AND DEVELOPMENT
The needs of individual are objectively identified & necessary interventions are planned for
identified groups, which get rolled out in a phased manner through training calendar.
The training and development program is charted out to cover the number of trainees, existing
staff. The programs also cover the identification of resource personnel for conducting
development program, frequency of training and development programs and budget allocation.
Training and development programs can also be designed depending upon job requirement and
analysis. Selection of trainees is also facilitated by job analysis.
The company has a strong focus on manpower training according to their requirements. The
internal training department aims at improving the skill sets relevant to the work profile of
employees. This includes improving communication, Different skills, E-mail programming,
Operation systems.
The design of the training program can be undertaken only when a clear training objective has
been produced. The training objective clears what goal has to be achieved by the end of
training program i.e. what the trainees are expected to be able to do at the end of their
training. Training objectives assist trainers to design the training program.
HUL, ITC Ltd, Nestle, CocaCola, PepsiCo and P&G being all multinational firms has operations in
many different countries of the world but they all are well interconnected with their all the
offices and ground workforce. For instance if a plant at Cairo does something new or applies a
new strategy which is successful, people are sent from here so as to learn them and apply it
into their operations. So on job training takes place continuously.
They also comprise of technology based training programs. Like they have a mentor program on
their website where employees can interact with each other, discuss issues and find ways to
help each other in times of need (Experiential exercises). Here people in similar departments or
on similar projects interact, share information, guide and find solutions.
Annual functions are held regularly where employees of all levels interact and discuss advance
strategies and do planning for future. Team building exercises are also conducted along with
motivational workshops so that specific issues concerning employees could be addressed and
rectified. Management trainees in this company are also trained through job rotation.
Similar practices are carried on by all the companies.

10. Conclusion
The entire are Learning Organizations to some extent as it focuses on enhancing its systems
(including people) to continually increase the organization's capacity for performance. They all
have built a strong foundation for consistent sustainable growth, with clear strategies and room
to grow in each strategic focus area, core strengths in the competencies that matter most in the
industry, and a unique organizational structure that leverages strengths.
Their HR department has evolved since the organization’s inception and it now empowers
employees to choose their mentor on their own from any part of the organization worldwide
through their intranet. This helps to even resolve any issue regarding similar problems faced by
employees in different parts of the world.
An organization’s ability to meet the recruitment & selection challenges provides an
opportunity to make significant contribution to the company. With better quality people
executing the company’s operations the HR department can create a competitive advantage for
the company.
In light of the research conducted by our team members we have concluded that these
organizations are extremely formal, organized, dedicated and quality conscious organization. It
has very formalized structure for the recruitment and selection of employees.
All these organization have a unique human resource management system where it focuses on
bringing out the best of its employees through continuous hard work and devotion.