Coca-Cola Company Human Resource Management System Analyze Essay Example

short, almost all of the business about people in the company, we can call it HRM.

The Importance of HRM in a Company Human resource management is an important part of every business for a variety of reasons, but all of the reasons focus on the employee. Employees are an important aspect to any business, without employees, the business could not be as successful as managers want. The reason for this is that without some type of employees the business would not be run properly, no matter what size of business you have. Why Coca-Cola Company is so successful in the world? The answer is HRM. They offer a professional human resource management system to the employees in the company.

The wonderful HRM system can ensure the company in a right way. So next part our group will analyze the HRM system in depth of Coca-Cola Company. Coca-Cola’s HRM System Analyze The Value Theory The Coca-Cola Company focus on cooperation, it required employees to unite together in order to solve problem because the company believed that unity is strength. In the meantime, company emphasized that everyone is the leader, and aimed at inspiring employees to do their best when they are working, further, the company encouraged employees regard the jobs as their careers.

Only the employees treat their jobs as their careers that they will pay 100% attention on their jobs. This is the value theory of Coca-Cola Company which is very important for a company to earn more profit. And the theory for each employee is the reason why Coca-Cola Company’s human resource management is so successful. Now, our group analyzes

Coca-Cola Company’s human resource management in these three parts in detail: recruiting and staffing, training and compensation. 1. Recruiting and Staffing In this part, we will include two parts which are external and internal staffing.

Coca-Cola Company had not only used some special methods but also use some useful methods both in external and internal recruiting and selecting. So it is in order to organize and managed the company’s human resource in a perfect way. But at the same time, we also find out some disadvantages during their recruiting and selecting. External Staffing First of all, for the first line employees, the Coca-Cola Company will hire local people for local operations, such as Coca-Cola (China) will mainly staff employee from Mainland China, Coca-Cola (Macau) will mainly staff employee from Macau.

Because Coca-Cola believes that people are better equipped to do a business in their home town and employees will feel more comfortable to work in the local company. Moreover, this method will increase the belongingness of the employees, in this situation, it will increase the efficiency of the whole company. On the other hand, it is obvious to find out this method’s disadvantage. Coca-Cola Company just staffing first line employees locally, it will limit the human resource from the market.

The company cannot recruit talents and good employees from other places, meanwhile, the company may not develop very well in the following period of time. Secondly, Coca-Cola had built the special management talent system in order to hire some talent management people even they are not badly in need of being used by the company. As the Coca-Cola Company had foresight, all

these talent people will be entrusted with an important post if the company wants to expand their business in the new cities in the future. On the contrary, our group thinks that the company used this method the same as to take a risk.

If the company will not expand the new market in the short period of time, the company should pay a large amount of salary to those talent people, so the opportunity cost is too high for the company to bear. And most importantly, the talent people will sit around all this period of time, they think they are nothing to do, they are not important for the company and they will try to leave the company to find another job. Thirdly, the Coca-Cola Company gave new employees, who apply for the position that is account for the large proportion in the company (sales man), some “practices day”.

On the one hand, the “practices day” lasts for one day to fifteen days, so as to give them a chance for new employees to know whether they are qualified for the position or not. On the other hand, the Coca-Cola company gave the employee an opportunity to find out if they are suit for the position or not. Under the circumstances, the Coca-Cola Company can avoid new employees quit office in a short time. And the company will save the human resource and capital in recruitment and staffing. Internal staffing The Coca-Cola Company’s internal staffing is different form common company.

A great quantity of international company will promote the employees only in their department, which limited the chances for talent

employees from other department. But in the Coca-Cola Company, it is quite different from other company. The company will open the vacant position for all the employees so that more employees will get the chance to be promoted and change their position. Before the promoting, the human resources department will organize the examination for the applier, who get the higher marks will get the position.

This method of internal staffing is called “take up a job through competition”, it is fair for anyone in the company. Moreover, it is not only for the company to find out more talent employees, but also for the employees will have a great experience and learn more skills during the promoting examination. Besides, providing lateral opportunities for all employees positively boosts morale and makes them feel their talents, capabilities and accomplishments are appreciated. 2. Training Coca-Cola training system is divided to four levels: New Staff Training

In this step, new employee will be taught some basic information, include company’s development history, corporate culture and regulatory framework, meanwhile, there is a system to incorporate new employee into company: provide two seasoned employees to each new employee to help them to solve some problem in their daily work and seasoned employees will keep record, human resource department will follow up this record. After two months, HR department will communicated with new employee base on record and will help employee resolve some other questions. On-the-job Training

Employees should be trained with some professional courses about job related responsibility and skills, if they need to change to a new position, either new employees or not. The department supervisors will teach

the courses for employees. In this case, Coca-Cola Company can ensure their employees quality, in the other way, the company can ensure their products’good quality because of their excellent on-the-job training. Ability Development Training The Coca-Cola Company would help employees to upgrade themselves so as to expect them will have a better performance.

So the company will design a series of standard program, which including management courses and professional skills courses. Training of Career Development Career development are more personalized, different people has different development directions and capability gaps. Therefore, according to the result of performance appraisal and the communication with the employee and manager, aim to the employees’ situation of knowledge and skills, and their training expectation.

Thus, human resources department will design the courses for the employees; the employees can though these courses which serve as a stepping stone for their career development. Face up to the problem “how to solve the tedious work? ” the Coca-Cola Company do not emphasize the shift work, because it may cause some departments’ performance declined. They advocated Specialization and Multi-level, implement Cross-Management. Everybody has the primary responsibilities and auxiliary responsibilities. After the employees finish the primary responsibilities, the company encouraged them to try their best to do more.

3. Compensation Business development of Coca-Cola Company in China dates back to the 1920s, at the end of 1940s, Coca-Cola Company pulled out of China. And at the beginning of reforming, Coca-Cola entered the Chinese market again. So, our report will talk about the three periods which are after the Coca-Cola Company come back to China—the return period, the rapid growth period, and the stable development

period. The return period—the policy of high salary In the early 1980s, China still in the planned economy era, standard of living is low, few of people drank beverage at that time, and the beverage industry was in the backward state.

The enterprise in China the thought of “communal pot” is ingrained, there is no connection between enterprise benefit and compensation. In order to achieve the Coca-Cola Company’s business strategy and objective in the condition of low employee income level in China, the Company adopted the policy of higher salary to attract, retain, and motivate employees. Compensation structure contains basic salary, bonus, subsidy, and welfare. And the basic salary is the principle part of the compensation. The basic salary of the Coca-Cola Company is the two or three times more than that of domestic beverage companies.

The average basic salary of staff at a state-owned company was about ? 60 per month, while the average basic salary of staff at Coca-Cola Company reached up to ? 150 per month, and the salary grade divided into 17 grades, it focused on internal equilibrium, so the gap between the managers and junior employees are small. Because of the high salary which can satisfy the physiological needs of the people, plenty of people join the Coca-Cola Company. And the high salary also brought the low turnover rate, at the end of the 1980s, the turnover rate was around 1. 4% to 1. 8%.

The rapid growth period—the compensation policy of internal and external competition From 1993 to 1998, it was in the high-speed growth stage of the Coca-Cola Company. In this stage, there were a

large number of multinational companies entered the Chinese market. Just like the Coca-Cola Company, they also had the strong demand of native human resources. On the other side, China had a lot of low quality of labor force, while the high education, technology people were limited. So, it caused the intense competition between the multinational companies and domestic companies for scrambling for human resources.

In order to scrambling for the human resources in the Chinese market, the Coca-Cola Company changed their compensation policy in 1995. They reduced the grades of the salary, and improved the total wages, set up flexible salary system reflect value of employee. So, they reduced the 17 salary grades to 13grades; increased the basic salary by a quarter per year; and according to the ratio upper limit of law or government regulations, they set up the retirement fund, accident insurance, and housing loan scheme.

Moreover, the Coca-Cola Company also concentrated on non-monetary rewards, such as the training opportunities. The training opportunities are not only included process of production, technology and management, but also contained the corporate culture and operation principle. The stable development period—Comprehensive remuneration policy Since 1999, the Coca-Cola Company’s pace of expansion became slow down, and it has entered a stable stage.

Meanwhile, there are many competitors came along and developed, such as Pepsi-Cola, China Huiyuan Juice, Wahaha, and so on, competition in the beverage industry grows increasingly fierce. After 20 years of economic and technology development, as elevation of living standard, people were not satisfied with the physiological needs, great changes have taken place in the structure of the labor market and concept of employment. Ideologically,

the older employees are concentrated on the salary and promotion, but, nowadays, the employees have more demands and anticipations about their jobs.

They do not like the traditional way of the authority management, they hope for more participation of their companies, to get the self-actualization. Due to the fierce market competition and the changes of the labor market structure and concept of employment, there were some impacts on the Coca-Cola Company compensation policy. In the Chinese market, there were many multinational companies grew their employees’ salary, so Coca-Cola Company should do something else to attract and retain talents.

Otherwise, it can only cause the high turnover rate, and decline the employees’ enthusiasm. In 2002, the compensation policy has changed by Coca-Cola Company, and started the comprehensive remuneration policy. The new policy integrated the economic salary and non-economic salary, expanded compensation category, it included basic salary, bonus, welfare, stock rights, training program, career development, employee communication and participation, improvement of employees satisfaction, and so on.

Compensation is not only a cost, but also an investment which can bring more return value. Comprehensive remuneration policy encouraged innovation spirit and continuous improvement of performance, for example, the people who have proficient skill will get the rewards. Comprehensive remuneration policy of Coca-Cola Company integrated material reward and psychic reward, satisfy the employees’ multi-level demands in the economic and non-economic salary. Encourage employees activate their potential, in order to raise the competition and attraction of the company.