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Learning Knowledge and Effective Performance

A comparison of employee training at Unilevers and Nestlé Companies

HIMESHA DHARMATHILAKE

Staffordshire University

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Acknowledgement

It would be impossible to thank everyone connected with this report. So many people deserve

more than my warmest recognition. I wish to offer my special appreciations to our valued

instructor Mrs. Shumara Fernando for her untiring support given in completing this Assignment

a success. Without her support this report wouldn’t be a success. It has been a great pleasure

working with a lecturer that takes the extra mile in order for her students to achieve their highest

potential and these efforts are greatly appreciated and have not gone unnoticed.

I would also like to thank the librarians of Asia Pacific Institute of Information Technology

(APIIT) for providing me with necessary resources to complete this project

Finally, I would like to thank my family and friends for their immense support and guidance

given to complete this project successfully.

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Executive Summary

This is a report of comparison on Unilever and Nestlé companies’ HRD processes and practices.

And identifies that the two companies have very effective and systematic training and

development which includes different training aspects such as On-the-job training, Off-the-job

training, Induction training to improve competencies of its workforce in enhancing their levels

of performance while maintain a contended work force who retain in the long run. And also they

make sure to evaluate as the end of the training program.

In chapter 1 the author has analyzed on the topic training and has incorporated the concept of

STC and how the chosen companies have adopted the process. Learning and Development being

the second chapter brings facts about the learning and development processes of the companies.

Finally the author has touched on the topic performance where the performance appraisal

concept has been incorporated to give a meaningful idea as to how the two companies use this.

The report mainly focuses on the idea that “Skill Development is the primary initiative” and the

author has elaborated throughout the report on how the two companies use this idea in their HRD

process.

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Table of Contents

Acknowledgement .......................................................................................................................... 1

Executive Summary ........................................................................................................................ 3

Table of Contents ............................................................................................................................ 4

List of Figures ................................................................................................................................. 5

List of Tables .................................................................................................................................. 5

List of Abbreviations ...................................................................................................................... 6

Introduction ..................................................................................................................................... 7

Chapter 1: Training ......................................................................................................................... 9

1.0. Systematic Training Cycle ............................................................................................... 9

1.1.0. Training Need Analysis .......................................................................................... 10

1.1.1. Determining and Design ......................................................................................... 12

1.1.2. Deliver and Support ................................................................................................ 13

1.1.3. Evaluation and Valuation ........................................................................................ 14

Chapter 2: Learning and Development ......................................................................................... 15

2.0. Kolb’s Experimental Learning Cycle ............................................................................. 15

2.1. The Downward Spiral of Difference .............................................................................. 16

2.2. The Competency Model for Employee development. ................................................... 17

2.3. Succession planning for development and Management of managerial and Non

Managerial Staff........................................................................................................................ 18

Chapter 3: Performance ................................................................................................................ 20

3.0. Performance Appraisal ................................................................................................... 20

Recommendations and Conclusion ............................................................................................... 23

Reference List ............................................................................................................................... 24

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List of Figures

Figure 1.0 – Systematic Training Cycle ………………………………………………………….8

Figure 1.1 – Unilever Training Philosophies …………………………………………………....12

Figure 1.2 – Nestlé Training Cycle ………………………………………………..…………….13

Figure 2.0 – Kolb’s Experimental Learning Cycle ………………………………………….......14

Figure 2.1 – Downward Spiral of Difference …………………………………………………...15

Figure 2.2 – The Effective Unilever Manager: Unilever Competency Model ………………….16

Figure 2.3 – The seven pointed star model for systematic SP &M ……………………………..17

Figure 3.0 – The continuous Cycle of performance …………………………………………….19

Figure 3.1 – Comparison of Unilever and Nestlé company employee performance appraisal ....21

List of Tables

Table 1.0 – Skill development at Unilever and Nestlé ………………………………………...…9

Table 1.1 – Difference between Training and Development ……………………………………10

Table 2.0 – Seven steps of the seven pointed star model for systematic SP&M ………………..18

Table 3.0 – Performance of Nestlé and Unilever ………………………………………………..20

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List of Abbreviations

HR – Human Resource

HRD – Human Resource Development

KPI – Key Performance Indicators

KSA – Knowledge Skills and Attitudes

SP&M – Succession Planning and Management

STC – Systematic Training Cycle

TNA – Training Need Analysis

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Introduction

In this report, the author wishes to compare the practices of human resource development,

Unilever and Nestlé to bring out the statement “Skill Development is recommended as the

primary Initiative”. Leitch Review (2006)

According to Cosh et al (1998) an educated and well-trained work force is considered to be

essential to the maintenance of a business firm’s competitive advantage in a global economy. It

is also believed that HRD can and should be a powerful agent to facilitate a firm’s expansion and

the development of capabilities, thus enhancing profitability.

HRD as an organizational process comprises the skillful planning and facilitation of a variety of

formal and informal learning and knowledge processes and experiences, primarily but not

exclusively in the workplace, in order that 4 Human Resource Development in a Knowledge

Economy organizational progress and individual potential can be enhanced through the

competence, adaptability, collaboration and knowledge-creating activity of all who work for the

organization. (Harrison and Kessels, 2004)

Skill development can be identified as to improvement of productivity in the workplace and the

competitiveness of businesses and improving the quality of life of workers, their prospects of

work and their mobility. Moore (2012)

Training is futile if the trainer lacks the ability or motivation to benefit from it. In terms of ability

the trainer needs the required reading, writing and mathematics skills and the required

educational level, intelligence and knowledge base. (Dessler and Varkkey, 2009)

The four-stage model of learning outlined by David Kolb (1983) has been an extreamly

influencial tool for employee development. The four satges of learning cycle, experiencing,

reflecting, conceptualizing and experimenting, have been used to demonstrate that effective

learning involeves multiple, interactions with experience and passing through all four stages.

(Edward and Rees, 2011)

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The individual manager needs development just as much as company and society do. He should

first keep himself alert and mentally alive. He needs to keep himself challenged. He must acquire

today the skills which will make him effective tomorrow. (Drucker, 1998)

Performance management is a process that involves many aspects, of people management. But

simply initiating a new performance management scheme or introducing new HR practices or

policies as part of the process will not itself bring about the desired motivation of workers. ( Foot

and Hook, 2011)

Multinational Consumer Goods Company Unilever believes that a skilled, motivated and

engaged workforce is essential to achieve the growth ambition of their organization. Skill

development of managerial and non-managerial staff depends upon the improvement of a team

that is fit for growth and sustainability and is able to understand the gaps in talents of employees

and there by implement strong programs to retain and improve these talents of employees.

(Unilever global company website, 2015) Similarly at Nestlé the employee’s private and

professional life have a good balance. This helps attract and retain people and reconciles

economical imperatives with wellbeing. Nestlé embarked upon training, retraining and upgrading

the skills of its local workers. (Nestlé people development review, 2003)

As stated in Mayfield and Mayfield (2011), Performance goals may need revision, employee

development programs implemented, and assessment measures modified and, much training and

information sharing must be ardently practiced organization-wide as an ongoing process that

educates all employees to be organizational learners.

To further discuss the basic ideas of HRD and Skill Development the author has incorporated

concepts like the systematic training cycle (Training), Downward spiral of difference

(Learning), (Development), the continuous cycle of performance review (Performance).

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Training Need Analysis

Determining and Design

Delivery and Support

Evaluation and validation

Chapter 1: Training

1.0. Systematic Training Cycle

In order to have competitive advantage organizations must compete through their people.

Employees are the most valued asset of any organization (Aguinis & Kraiger, 2009).

The Systematic Training Cycle (STC) is one of the most commonly acknowledged training

models that have influenced training since the 1960’s (Sloman, 2010). It is comprised of 4 main

stages, namely Training Needs Analysis (TNA), Planning/ Design of training, Delivery of

training and the evaluation of training outcomes. (Armstrong, 2001)

Figure 1.0: Systematic Training Cycle

Source: Authors work based on (Köster, 2002)

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1.1.0. Training Need Analysis

The first stage out of four emphasizes on the Training Needs which should be analyzed in an

organization.

Skill Development

Companies aim to develop their people on 3 different sets of skills during their Training process.

Table 1.0: Skill Development at Unilever and Nestlé

General Skills Professional Skills Leadership Skills

A catalogue exists of all general

skills trainings we offer, and

which are delivered in the most

appropriate way (e-learning,

virtual classroom learning,

classroom learning, etc.)

Each function has an Academy -

e.g. Unilever Marketing Academy

develops programs specifically

for marketers, at each level of

their career

High Potential Leadership

programs exist for High

Potentials at each work level

within Unilever

Source: Author’s work based on Leena Nair (2014).

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Table 1.1 - Difference between training and development

Basis of

difference

Training Development

Focus Learn specific behaviors and actions;

demonstrate techniques and process to

complete a specific job.

Understand information concepts

and context; develop judgment;

expand capacities for assignments in

a variety of fields.

Time frame Short term process. Long term educational process.

Skill development Provides technical skills for operational

activities.

Provide conceptual skills.

Suitability Targeted mostly on non-managerial

employees.

Targeted on managerial personals.

Objective

To make employees more efficient in their

present work.

To make employees efficient in the

present job as well as to make them

capable of handling future

problems efficiently.

Scope Scope of training is restricted and it is a part

of development.

Scope of development is wide and

training is a part of it.

Method Its chief methods are vestibule training,

apprenticeship training and internship

training.

Its chief methods are transfer,

special courses, conferences and

seminars.

Effectiveness

measure

Effectiveness measures through

performance appraisals, cost- benefit

analysis, passing tests and certification.

Effectiveness measures through

qualify people available when

needed; promotions from within

possible; HR- based competitive

advantage.

Source: Mathis & Jackson (2003: 316); Singla (2009:36)

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At Unilever the need of individual training are objectively identified and necessary involvements

are planned for identified groups, which get rolled out in a phased manner through a training

calendar. Training and development programs are also important to cope up with the changes in

technology and with diversity within the organization. (Unilever global company website, 2015)

At Nestlé the Organization Development Department is responsible directly for the training

needs of the employees. They hire trainees and then communicate the objectives of the training

plan to the trainees. Then identifies and nominate a pool of 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. (Nestlé people Development Review, 2003)

1.1.1. Determining and Design

The second step of the STC is designing the training program. According to the results

identified at the need analysis the appropriate training methods are selected.

At Nestlé both managers and non-managers receive help from training and developmental

program but mostly non-managers are concerned with training while the managers are concerned

with developmental programs. External training programs are the best means of maintaining a

balance; they enable participants to keep up with the latest developments in management theory

and examine working methods and situations that are outside Nestlé’s normal experience.

(Nestlé people Development Review, 2003)

On the other hand Unilever designs training programs to their employees that covers professional

skills, general skills and leadership skills to improve their working effectiveness and efficiency.

Unilever believes that through the investment in training would make their employees develop

rapidly and would contribute to the growth of the company. (Unilever global company website,

2015)

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1.1.2. Deliver and Support

The next stage of the training cycle is to deliver the actual training to the employees which

consist of the implementation of the training where various training courses are delivered to the

participants. Köster (2002)

The global training programs at Unilever takes place annually, where employees are sent to

different countries to be trained and developed. Duration of these training programs is 6 months

or more and approximately 35 to 40 managers are being sent. These programs are done for

people who have the most potential in the company. (Maumita and Zaman, 2013)

Over the past three years the total number of registered direct training hours at Nestlé is in excess

of 2800 man–days for around 310 employees. To encourage the sharing of global best practices

all potential factory managers follow an 18-month training program. (Nestlé people

Development Review, 2003)

Figure 1.1 Unilever Training Philosophies

Source: Authors work Based on (Unilever Sri Lanka Sustainable Development Overview, 2011)

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Nestlé

Training Need

Ananlysis

Nomination

Training Calender

Logistics

Feedback

Figure 1.2 Nestlé Training Cycle

Source: Author’s work based on Nazim et al (2011:11)

1.1.3. Evaluation and Valuation

Evaluation and Validation is the last stage of the Training Cycle. To evaluate the training, the

trainers assess if the training objectives are achieved.

Unilever uses the Kirkpatrick model of learning evaluation. This evaluates the effect of the

training under four criteria, namely, the student's reaction to the training, what the student is

actually taking away from the instruction, changes in the student's behaviour due to the training

and benefits to the organisation from the training. (Nazim et al 2011) Nestlé takes feedback on

training in the form of a quiz. The quiz is double sided; both the trainees' and trainers' opinions

regarding the training and facilities provided are polled. (Nestlé people Development Review,

2003)

The STC has be able to give a clear understanding for the Author thus is able to notify that

training of employees is essential for any company’s employees for them to perform well and in

turn for them to help in achieving organizational goals and objectives. Ultimately it can be stated

that Training is needed for the Skill Development of the employees and “Skill development” has

be an organization’s Primary initiate.

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Concrete Experiences

(Doing/Having an experience

Reflective Observation

(Reviewing/ Reflecting on the

experience)

Abstract Conceptualisation

(Concluding/ Learning from the

experience)

Active Experimentation

(Planning/ Trying out what you have

learnt)

Chapter 2: Learning and Development

2.0. Kolb’s Experimental Learning Cycle

“Learning is the process whereby knowledge is created through the transformation of

experiences”. Kolb (1984:38)

Kolb’s Experimental Learning theory is an effective four stage cycle of learning. David A. Kolbs

stated that learning comprises the achievement of abstract concepts that can be applied flexibly

in a range of conditions. Thus as the Kolbs experimental learning cycle Figure 2.0 suggests, at

Unilever and Nestlé by implementing various development techniques the employees could learn

effectively and develop through experience.

Figure 2.0 Kolb’s Experimental Learning Cycle

Source: Kolb D. A (1984:38)

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2.1. The Downward Spiral of Difference

HRD professionals need to be able to recognize workplace learning process activity that

intensely old patterns of difference between people, or create new ones. Such patterns can lead to

alienation of individuals or minority groups from the very communities of practice within which

valuable organizational knowledge can be created. Figure 2.1demonstrates the downward spiral

of differences.

Figure 2.1: Downward Spiral of difference

Source: Authors work based on Harrison and Kessels (2004:211)

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Learning is part of the Company culture. Employees at all levels are systematically encouraged

to consider how they upgrade their knowledge and skills. The Company determines training and

development priorities. Experience and on-the-job training are the primary source of learning.

Managers are responsible for guiding and coaching employees to succeed in their current

positions. (The Nestlé Human Resource Policy, 2012)

2.2. The Competency Model for Employee development.

The global Unilever competency Model was introduced in 1994. The company identified these

competencies by studying successful Unilever managers around the world to determine which

characteristics and behaviors distinguished from other managers in Unilever. The Figure 2.2 is a

diagram of the Unilever competency Model. It includes five clusters with their supporting

competencies. Millitelo and Schwalberg (2002:176)

Figure 2.2: The Effective Unilever Manager: Unilever Competency Model

Source: Author’s work based on Millitelo and Schwalberg (2002:176)

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2.3. Succession planning for development and Management of managerial and

Non Managerial Staff.

Figure 2.3: The Seven Pointed star model for Systematic Succession Planning and Management.

Source: Author’s Work based on Rothwell (2010:83)

Step 7: Evaluate the

Succession Planning

Program

Step 6: Close the

Development Gap

Step 5: Access future

Individual Potential

Step 4: Access future

work/people

requirements

Step 3: appraise

Individual

Performance

Step 2: Access present

work/people

requirements

Step 1: Make the

commitment

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Table 2.0: Seven Steps of the Seven Pointed star model for Systematic Succession Planning and

Management

Steps Method

Step 1 The organization’s decision makers should commit systematic SP&M and establish

a program.

Step 2 Decision makers should then asses the present work requirements in Key position.

Only in that way can individuals be prepared for advancement in a way that is

solidly grounded on work requirements,

Step 3 The organization should also begin establishing on inventory on talents so that its

clear what human assets are already available.

Step 4 The decision makers should make an effort to asses future work requirements and

competencies to align with organization’s strategic direction. In that way future

leaders may be prepared to cope up with changing requirements and organizational

strategic objectives.

Step 5 The organization should establish an organizational process or a series of processes

to asses future individual potential that future- oriented process should not be

confused with past or present- oriented employer performance appraisal.

Step 6 The organization should establish a continuing program for leadership development

to cultivate future leaders informally. Decision makers should also explore

alternatives to traditional promotion from within methods of meeting succession

need.

Step 7 The results of evaluation should in turn be used to make continuous program

improvements and to maintain a commitment to systematic SP&M

Source: Rothwell (2010:83:85)

The Author has recognized that from the above learning methods implemented by Unilever and

Nestlé the two companies chosen for comparison has been able to develop the capabilities and

competencies of their employees. Through these learning processes the employees has been able

to develop their own talents and will perform well in their work.

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• Preparing an effective plan

• The effective Coach

• Coaching approaches and techniques

• The Appraisal Process

• Preparing for the appraisal interview

• Conducting the appraisal interview

• Significant job segments

• Standard of perfprmance

The Basis for

Appraisal

The Appraisal

The performanc

e Impreovem

ent plan

On- the- job

coaching

Chapter 3: Performance

3.0. Performance Appraisal

According to Angelo et al (2006) “Performance appraisal” is a discrete, formal,

organizationally sanctioned event, usually not occurring more frequently than once or twice a

year, which has clearly stated performance dimensions and/or criteria that are used in the

evaluation process. Figure 3.0 gives a better understanding how the performance appraisal is

carried out in an organization.

Figure 3.0: The continuous cycle of performance review

Source: Author’s work based on Kirkpatrick (2006)

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Table 3.0 Performance of Nestlé and Unilever

Nestlé Unilever

Line managers and HR assess formally

once in a year and get feedback.

Subordinate managers can interrogate for

an unfair evaluation.

The HR department has enlisted specific

key performance indicators.

Remuneration structure and promotion

criteria consider individual performance.

HR staff must help the management in

elaborating training programs. Sufficient

training programs are developed at the

level of every working company that

capitalizes on the availability of local

regional or global resources of the group.

Some training programs improve the

language skills of the employees. These

programs also try to consolidate corporate

cohesion as well as to promote networking

throughout the group. They develop and

share best practices of the different

management disciplines practiced in the

group.

E-learning programs are alternative to

formal training programs.

To help better current performances

To help in development of the employee.

To determine training and development

needs.

To give employee feedback and counsel

them

To review performance for salary

purposes.

Everyone in Unilever have 3 business

goals and 1 development goal

This is about aligning everyone’s actions

and getting things done

Clear direction on key priorities

KPIs and targets to focus employees’

actions and assess results

Yearend performance rated on a 1 to 5

scale

Source: Author’s work based on Annual Reports of Unilever and Nestlé, (2013,2014)

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Figure 3.1: Comparison of Unilever and Nestlé company employee performance appraisals

Source: Author’s work based on Annual reports of Unilever and Nestlé, (2013, 2014)

The Author has identified from the information of company comparisons that better

performances will lead to successful achievements in organizational goals and objectives and

also improve sales and bring more profit to the company. This is because the Employees at this

point have developed their skills. It is therefore clear that Skill development is the primary

initiative that any company should adopt in order for their employees to help in their goal

achievement.

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Recommendations and Conclusion

This Report provides an insight into the HRD practices in Unilever and Nestlé. The Author was

able to examine the impact of HRD practices on company performance. It is assumed the

following relationship between a interacting HRD system consisting of performance-oriented,

skill-developing and strategically aligned HRD practices and organizational performance.

Based on the outcome of the study, it is essential on the part of management to take a second

look at the drawback revealed so that the maximum impact of employee appraisal can be

achieved. Unilever should also adopt other employee appraisal methods in addition to the

management by objective method. This will ensure that the shortcomings of management by

objective can be controlled through the use of other methods as well. For instance it can

occasionally use 360 degrees of appraisal which has been proven to be quite effective as well.

The Author suggests that in Nestlé they should be establishing and maintaining effective

communication with each employee, sharing of ideas and employee involvement in decision

making process. The employer should show a greater trust to employees and employees should

feel good about their employer. There should be no artificial barriers between employees and

management.

Thus from the above information provided in the report it is clear that Developing the skills of

employees should be the primary initiative in any company in order to gain and retain their

employee training, developing, learning and performing skills at a higher level.

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