Value of Strategic Human Resource Management in Unilever

The report clearly points out the essence of strategic human resource management in ensuring high performance of multinational companies against the backdrop of Unilever. The report shows that training and empowerment of employees encourage them to deliver higher standards of performances.

Running head: HUMAN RESOURCE MANAGEMENT
HUMAN RESOURCE MANAGEMENT
Name of the Student:
Name of the University:
Author Note:

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Executive Summary:
The report clearly points out the essence of strategic human resource management in ensuring
high performance of multinational companies against the backdrop of Unilever. The report
shows that training and empowerment of employees encourage them to deliver higher standards
of performances. The report also points out that application of SHRM at the apex level also
motivates employees further. The Unilever Group based in the United Kingdom and Netherlands
employs strategic human resource management to such depth throughout the organisational
hierarchy that the employees of the company are motivated to perform highly. The report shows
succinctly the role of uniform organisational practices and policies in implementation of strategic
human resource management. It is evident that the application of SHRM and following of
uniform codes of practices are instrumental in driving Unilever towards achievement of the fifth
position in the consumer goods market globally. Finally, it can be recommended that the
company should make the employee training sessions more frequent like monthly instead of
holding them annually and train employees employed in less strategically important markets like
Africa.

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Table of Contents
Introduction:....................................................................................................................................3
About the Unilever Group:..............................................................................................................4
Business type and organisational structure:.................................................................................4
Financial performance:................................................................................................................5
Products, markets and competitors:.............................................................................................7
Value of strategic human resource management using balance score card in Unilever:.................9
HR policies, practices and Unilever outcomes are linked:............................................................15
Conclusion:....................................................................................................................................16
Recommendation:..........................................................................................................................16
References:....................................................................................................................................17

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Introduction:
Human resource practices and policies have direct impacts on the business outcomes of
multinational companies. Morschett, Schramm-Klein and Zentes (2015) lays the perfect stage
from the discussion. The authors mention in their book titled, ‘Strategic international
management’ shed light on the challenge which every multinational company is facing-the need
to form strategies which would meet the needs of its global market. Multinational companies in
order to gain and retain their competitive advantage have to ensure that their strategies are
aligned to the macroeconomic contexts of the concerned host markets besides meeting the global
standards set by the apex management. The multinational companies have to integrate their
market specific strategies with their global strategies to ensure positive business outcomes
namely, generation of high profits, high levels of competitive advantages and holding high
positions in the global market in comparison to their competitors. Hollenbeck and Jamieson
(2015) mention that human resource is the most important resource which drives the
multinational companies towards achievement of these business outcomes. This is because the
human resource of multinational organisations consisting of the managers and their subordinate
employees are responsible for making and executing these strategies respectively. Haddock-
Millar, Sanyal and Müller-Camen (2016) point out that unlike other resources like financial
capital and raw materials, human resources of multinational companies are stakeholders having
immense impact on the sustainability of the concerned firms in the macroeconomic environment.
Thus, it is clear that business organisations in order to acquire and retain employees strategically
have to form practices and policies. The strategic human resources management (SHRM)
practices and policies have direct impact on the operations of the employees and consequently on
the business outcomes. The aim of the paper would be exploring the value of SHRM to shed

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light on the ways HR practices and policies impact business outcomes. The paper would explore
five roles of strategic human resource management namely, motivation and leadership, talent
acquisition and retention, employee engagement and training, decision making and
implementation and ensuring competitive advantage. This section would be accompanied by a
balance score card. The researcher would shed light on the HR practices and policies in link with
the business outcomes. The paper discussion would close by drawing on the findings of the
discussion and making appropriate recommendations to the management bodies pertaining to
SHRM measures. The research would be carried against the backdrop of the Unilever Group.
About the Unilever Group:
Business type and organisational structure:
The Unilever Group consisting of two main companies Unilever PLc and Unilever NV
consumer goods manufacturing and marketing company having their headquarters in London,
the United Kingdom and Rotterdam, Netherland respectively (Unilever.com, 2019). The Forbes
in a report published in 2019 mentions that the Unilever at present holds in the fifth position in
the global consumer goods industry (Cardello, 2019). The organisational structure of Unilever
operates under the leadership of Alan Jope, the CEO who was appointed in 2019 for the position.
The multinational company operates in its global market using several business models like
subsidiary and export. The company in order to maintain its command over the global consumer
goods markets especially in the strategically important markets experiencing presence of its
leading international competitors like P&G, follows wholly owned subsidiary format. The
wholly subsidiaries of Unilever overseeing business operations in extremely competitive markets
like China and India function under the leadership of their respective apex management bodies.
The management bodies stationed in particular markets function under the directions of the apex

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management body of the Unilever Group headquartered in London and Rotterdam. An analysis
of the very organisational structure of the Unilever Group shows application of strategic human
resource management. For example, the present Chief Human Resource Officer, Leena Nair is
from India, Laura Cha, the Non-Executive Director is from China while Graeme Pitkethly, the
present CFO is from Scotland (Unilever.com, 2019). This shows that diversity management
forms a part of the very organisational culture of the company and finds importance right that the
apex management level. This inclusion of employees from several host countries upholds the
employee centric SHRM policies and practices of the Unilever Group.
Financial performance:
The financial performance of Unilever Group (including its subsidiaries) is dependent on
two main sources of financial resources namely, capital generated from the securities market and
revenue generated by marketing of products. The Unilever is a public limited company and
hence is heavily dependent on capital raised from the securities market to fuel its operations
including SHRM operations. The Unilever Group is a listed company with primary listing on
two stock exchanges. Unilever Plc. with its headquarters in London is listed on the London Stock
Exchange and Unilever NV based in Rotterdam is listed on Euronext Rotterdam (Figure 1). The
company is listed on several other leading stock exchanges in the world like the NYSE. The
comparison between the performance of the company in the stock market and its main
international competitors namely, P&G, Reckitt Benckiser, Nestle and Colgate-Palmolive
Company shows that the company boasts a strong performance. The stock price of the Unilever
Group stands second to Nestle while the world’s largest consumer goods company, Procter &
Gamble bearly touches the indices achieved by Unilever. The historical performances of Reckitt

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Benckiser and Colgate-Palmolive Company on the NYSE are far below than that of Unilever
which one again proves the financial strength of the company.
Figure 1. Graph showing share price of Unilever on LSE for 5 years
(Source: Londonstockexchange.com, 2019)

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Figure 2. 5 years share indices graph of Unilever on NYSE in comparison to its main
international competitors
(Source: Bloomberg.com. 2019)
The excerpt below shows that profit generated by the Unilever Group for two consecutive
financial years. The table shows that the net profit earned by Unilever in 2018 was €m 9,808
while the net profit earned for 2017 was €m 6,486. The strength of the company in maximising
its profit can be outlined from the fact that the sales turnover in 2018 was €m 50,982 compared
to €m 53,715 in 2017. However, the company succeeded in reducing its costs of operations
which ultimately led to increase in net profits (figure 3). It can be established that this immense
financial strength of Unilever enables the company bear the immense costs incurred in order to
implement SHRM.
Figure 3. Excerpt of the annual results of Unilever for 2018 showing net profit earned
(Source: Unilever.com, 2019)

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Products, markets and competitors:
The entire product umbrella of the Unilever Group is divided into four main divisions
namely, beauty and personal care, food and refreshments, home care and water purifier. The
company boasts some of the top consumer brands like Lux, Dove and Magnum. These brands
constitute the intangible assets held by the company. The balance sheet of Unilever for the period
December 2018 shown below shows that the company held goodwill and intangible assets
amounting to €m 29,493. The company held goodwill and intangible assets €m 28401 in 2017
which means that company has experienced appreciation in the values of intangible assets which
constitute the brands.
Figure 4. Balance sheet of Unilever for the period ended December 31, 2018
(Source: Unilever.com, 2019)

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The main markets of the Unilever consist of Europe, North America, South America,
Middle East, Asia Pacific and Africa. As far as the main competitors of the Unilever Group are
concerned, the company competes with different companies owing to the four divisions in its
product umbrella. As far as the food and beverage segment is concerned, the main international
competitors of Unilever are Nestle and Mondelez International. As far as beauty and personal
care segment is concerned, the company competes with L’Oreal and P&G. The company
competes with Reckitt Benckiser and P&G in terms of home care products’ segment. The main
competitors of the Unilever Group in terms of water purifier segment are the global domestic
appliances companies like Samsung Electronics Limited.
Value of strategic human resource management using balance score card in Unilever:
The Unilever Group (including all its business units) places immense importance on
strategic human resource management. Sánchez, Marín and Morales (2015) opine that
multinational companies operate in dynamically changing market environment which requires
continuous adaption. They further point out that the traditional resources of competitive
advantage like material and technology are no more sufficient in ensuring sustenance of MNCs.
The authors then go on to point out that intangible resources like knowledge and skills today play
vital role in mobilisation of the traditional resources towards attainment of global competitive
advantage. This importance of the intangible resources like knowledge and skills actually point
out the importance of strategic human resource management. Nankervis et al. (2016) strengthen
the argument by pointing out that SHRM consist of establishment and implementation of
organisational policies and practices to ensure that the former leads to organisational
effectiveness. As far as the Unilever Group is concerned, the above analysis clearly points out
that the global business conglomerate adopts and implements SHRM as well as practices and

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policies. This is evident from the Code of Business Principles and 24 other codes of conduct
which every employee of the conglomerate is to comply with. The codes illustratively discussed
on page 16 in the annual report 2018 of the company clearly mention the four areas in which it
uses SHRM. They are creating a future-fit workforce, recruitment and retention, diversity
and inclusion and business integrity (Unilever.com, 2019). The following section would
demonstrate how the Unilever Group values and implements SHRM in its global business
operations. The balance score card would present the SHRM functions pictorially.
Motivation and leadership:
The first area of operation in which the Unilever Group implements strategic human
resource management is motivation and leadership. Kuvaas, Buch and Dysvik (2018) point out
that employee motivation plays a very important factor in encouraging employees achieve higher
levels of performance which ultimately translates into organisational performance. This is
because in order to retain and increase its global position, the company has to ensure that its
employees deliver superior performances. Lu and Gursoy (2016) argues in this respect that
intense pressure which the company is bound to put on its employees would result in employee
burnout which would ultimately result in low job satisfaction and high employee turnover.
Coetzee and Stoltz (2015) point out that on the other hand, the employee job satisfaction and
employee retention are empirical for the organisations concerned to achieve high level of market
performances. Motivated employees show more readiness to accept the high targets assigned to
them by the managers. It can interpreted that motivated employees exhibit more alignment to the
high performance of the organisations employing them. Alfayad and Arif (2017) explain the
impact of motivation on employee performance by shedding light onto the two factor motivation
theory proposed by Herzberg. They pointed out that the Herzberg’s motivation theory takes

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into two factors namely, motivators and hygiene factors. They point out that motivators consist
of aspects like challenges which encourages employees to use their skills, involvement in the
decision making process and sense of achievement which employees derive from their high level
performances. The hygiene factors are largely financial benefits like salary hikes and incentives
which motivate the employees to perform highly. As far as Unilever is concerned, it can be
pointed out that the multinational company adopts several strategic human resource management
strategies to motivate the employees achieve high targets. For example, the Codes of Business
Principles and Code Policies clearly mention that employees should respect the dignity of their
co-workers and treat everybody on the fairgrounds without any discrimination on the grounds of
gender or cultural identities (Unilever.com, 2019). These SHRM policies of Unilever encourage
the employees to achieve high levels of performances which ultimately contribute to the high
performance of the company all-round the globe. The management of the company issues the
organisational policies and practices in written formats which every employee has to follow. This
establishment of uniform organisational policies and practices create perception of belongingness
to the company and clear idea of the organisational policies among the employees which
strengthens the organisational culture of the company as a whole. This strong feeling of
relatedness to the company and clear understanding in the organisational policies among the
employees which ultimately leads to formation of a tight organisational culture (Dekoulou &
Trivellas, 2017). This tight organisational culture encourages higher level of collaboration
among the employees of Unilever which ultimately enables them to overachieve targets. This
overachievement of target by individual employee and department ultimately catapults the
company to achieve higher levels of performance. It can be pointed out that motivation as an
important SHRM strategies do not find expression in the operational levels but also at the apex

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management level. This was evident from the leadership and organisational changes which took
place in Unilever in 2019. Sanjiv Mehta, EVP, South Asia was promoted to the position of
President, South Asia and joined the executive team of the company (Unilever.com, 2019). Thus,
it is evident that the very top management of Unilever follows organisational practices and
policies laid down to motivate the employees achieve higher levels of performance in order to
obtain professional development opportunities like promotion to higher posts. Thus, it is evident
that the Unilever Group adopts the SHRM strategies to motivate and lead employees to
achieve high levels of business outcomes like superior performance in the global market
and generation of high profits.
Talent acquisition and retention:
The second SHRM strategy which multinational companies adopt to ensure high levels of
business outcomes is talent acquisition and retention. Meyer and Xin (2018) mention that in
order to maintain their global positions and generate high business performances, multinational
companies require to acquire and retain talent. This is because in order to take advantage of the
business opportunities in a dynamic market environment, business organisations have to form
long term strategies. Beamond, Farndale and Härtel (2016) strengthens the argument that the
global business organisations require an immense body of human resources to implement these
strategies efficiently. Thus, it is clear that they require to acquire and retain employees in order to
align them to their long term business strategies. As far as Unilever is concerned, in order to
acquire and retain employees adopt the strategy of aligning SHRM strategies to the business
strategies (Mukherjee, 2019). This ensures that the employees acquired are aligned to the
business requirements of the company. The Unilever Group in a press release in 2015 mentions
three main strategies which the global company adopts to win and retain talents (Unilever.com,

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2015). The first strategy which Unilever adopts to acquire and retain talent is empowering
employees to take decisions by providing them with training and mentoring sessions. These
research and mentoring sessions enhance the skills of the employees which enable them to
perform. This achievement of high performance results in job satisfaction among employees
which motivate the latter to continue serving the company. The second talent acquisition and
retention strategy which the company uses is recruitment of new employees aligned to the
requirements of particular job roles. Thus, it is evident that the multinational company rather
than merely recruiting employees, endeavours to establish strategic fit with the latter to ensure
that the competencies of the latter is aligned to the business requirements. This ensures that the
employees are able to perform highly which result in the job satisfaction and retention of the
employees (Abraham et al., 2015). The third SHRM strategy which the Unilever adopts is
allowing employees to represent the company in the market. This empowerment of employees to
act as ‘brand ambassadors’ make them feel more responsible to perform highly. Thus, it can be
inferred that acquisition and retention of employees enable Unilever to ensure high market
performance (positive business outcome). Thus, it can be established that organisational policies
and practices pertaining acquisition and retention of talents pave ways for high business
outcomes.
Employee engagement and training:
The Unilever Group employs employee engagement and training is one of the most
important SHRM strategies to ensure positive business outcomes. Albrecht et al. (2015) mention
that employee engagement is one of most important SHRM strategies which multinational
companies use to achieve high business outcomes. Engagement of employees in decision making
and implementation of the decision enable employees to develop clear ideas about their

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strategies. Thus, they are able to implement the decisions of the management better which leads
to achievement of higher organisational performances. Ahmed et al.(2015) strengthen the
argument by mentioning that training and mentoring of employees enables the latter to take more
proactive participation in the strategy making sessions. Thus, it can be established in this context
that training empowers employees to get more engaged in the operations of the company. As far
as the Unilever Group is concerned, the company provides training to its employees to enhance
their knowledge and skills which in turn enhance their performances. The company also provides
in-house training to its employees to improve their skills on newly evolving technology. The
well trained employees are as a result able to perform better in the dynamic business
environment which ultimately promotes high performance of the company. Thus, it can be
established that Unilever employees training and employee engagement as an SHRM strategy to
ensure high business outcomes.
Decision making and implementation:
Unilever engages its employees in the decision making and implementation. As already
pointed out that engagement of employees in the decision making and implementation of the
decisions encourage the employees to get more involved in the operations of the MNCs
(Abraham et al., 2015). As far as Unilever is concerned, the multinational company engages in
training of employees and then engaging them in the decision making sessions. The employees
as a result have better knowledge about the strategies of the company and perform more highly
in the market.
Ensuring competitive advantage:

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Vision and strategies of the
Unilever Group (including the
SHRM strategies)
Global consumer
bases
Internal process (carried
on the Mother Company
and subsidiaries)
Financials (capital+Revenue of the Unilever
Group)
Organisational capacity
The strategic human resource management strategies enable multinational companies to
align their employees with their business requirements which ultimately lead to high
performance in the market which ultimately earns competitive advantage for these companies
(Dekoulou & Trivellas, 2017). As far as Unilever is concerned, it has already been pointed out
that the company markets products of four different segments namely, food and refreshments,
skincare and beauty products, home care products and water purifier. This means that the
company has to compete with companies manufacturing these four different types of products.
For example, Unilever has to compete P&G in the beauty and personal care segment. As far as
the food and beverage segment is concerned, the company has to compete with Nestle. Thus, it is
evident that it is the employees of the Unilever who take and implement the strategies which
enable Unilever compete with its global competitors. Thus, it is evident that the SHRM attributes
competitive advantage to the British Dutch multinational company.
Figure 5. Balance Score card of the Unilever Group
(Source:Author)

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HR policies, practices and Unilever outcomes are linked:
The HR policies, practices and business outcomes of Unilever are linked to each other. It
has already been pointed out that the multinational company lays down codes of conduct which
every employee has to comply with in order to operate. Moreover, the company strictly debars
its employees from showing prejudice or disrespect to co-workers on any ground. This
establishment of common codes of policies ensures that the employees have clear idea about the
practices and policies of the company. This enables Unilever to develop a common sense of
belonging and security among all employees which encourages the latter to perform highly.
Thus, it transpires from the discussion that HR policies and practices are linked with the positive
business outcomes.
Conclusion:
It can be concluded from the discussion that SHRM has strong impact on the HR policies,
practices and the business outcomes of Unilever. First of all, the company motivates and leads its
employees to deliver high levels of performances by engaging employees by forming a common
body of codes of conduct which has to be followed by all employees. Secondly, the company
trains its employees to upgrade their skills and competencies. This enables the employees to
participate in the decision making sessions of the company. The employees are able to develop
stronger knowledge about the strategies which motivate them to deliver better. Thus, the
company is able to ensure high level market performance by adopting SHRM.

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Recommendation:
It can be recommended by the virtue of the above discussion that Unilever should provide
more training to its employees. It has already been mentioned that the company provides training
on annual basis. However, it can be recommended that monthly or half yearly held training
sessions would enable the employees boost their competencies more. This would enable them to
deliver higher levels of performances. It can also be recommended that the company should
provide training to the employees employed at the less important subsidiaries like the
subsidiaries in less important markets like Africa. This would in turn enable the employees to
deliver higher levels of performances which would boost the global performances of Unilever
altogether.

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