Strategic Human Resource Management Practices at Coca-Cola Company

This report provides a comprehensive analysis of Coca-Cola's strategic human resource management (SHRM) practices. It defines SHRM and human resource management (HRM), highlighting their distinctions. The report examines Coca-Cola's company background, strategic business goals, ...Read More

Strategic Human
Resource Management

Strategic Human Resource
Management
Definiti
on:The practice of developing, attracting, rewarding and retaining employees so
that it benefits both the employees and the organizations at the same time.
Human Resource Management
Definiti
on:Main focus is on the recruiting and hiring the best candidates and providing
them with resources like compensation, training, benefits and professional
development in the workplace.

SHRM vs. HRM
Point of distinction HRM SHRM
Focus Employee Relations Partnerships with internal
and external groups
Role of HR
Reactive and Transactional Proactive and
transformational, change
leader
Initiative for Change Slow and not integrated
with larger issues
Fast, systematic & flexible
Time Horizon Short-term Consider both short and
long time frames
Control Bureaucratic control Organic Control
Job Design
Focused on the design of
job
Focus on not just
employees, but broader
aspects
Important Investment
Capital, technology,
products and finance
People and their
knowledgeable skills and
abilities

Company Background:
• Headquarters: Atlanta, Georgia US
• Started in 1886
• Company Status: Publicly Traded Company
• Market Position: World’s largest beverage company
• # of Employees: 146,000 worldwide
• Revenue generated by per employee (TTM): $325,595
• Market cap: $163.39B

Strategic Business Goals and Objectives:
Cost Leadership:
• Focus on price strategy and cost of packaging to make it available to more
people
• Changing to the producer that offers the lowest price
Differentiation:
• Eliminate diversification of the market
• Goal is to be exclusive and unique in the whole beverage industry
Focus:
• Company selects only a narrow competitive scope which is available in the
industry.

Strategic HR Goals and Objectives:
Refresh the Company’s Culture
• Formulate a clear direction and common purpose for the business and the
employees
• Employee engagement survey showed low morale
• Encourage face-to-face meetings across the global organization’s
executives
• Ensure that employees are able to work as a unified team
• Business model needs to be focused on getting short term results.

HR Strategies
• Regional franchises employ their own recruitment
processes once they have been approved to hire more
employees
• Job advertisements are published in newspapers, company
website, recruitment websites, etc.
To fulfil the requirement for talent bank, company
representatives visit universities and colleges.
Recruitmen
t

• Company is in charge of both internal and external recruitment
Internal: Promotion, transfer, retirement, employee
recommendation
External: Employment agencies, campus recruitment, walk-in
interviews
• Major recruitment avenue is for their e-commerce sector
HR Strategies
Recruitmen
t

HR Strategies
• Fresh employees go through a three months training
process, after which they start getting paid as they
become a confirmed employee.
• Training and development of the employee to make them
understand the procedures of the company, along with the
rules and regulations that should be followed.
Induction

HR Strategies
• New employees go through a training process of three months
• Training is also given to existing employees depending on their
professional condition
 For example, when new technology is introduced, HR formulates
full training process in order for them to get accustomed to the
new process.
• Promote mentorship programs so the higher level executives are able
to establish a relationship with each other
Staff Training and
Development

HR Strategies
• A strong importance given to company executives having an open-
door policy for all the employees
• Availability of compensation and benefits packages for employees that
are the high-performers in the organization
• Using the Peak Performance System
 Managers and their associates regularly discuss the possible
development or succession plans which are available around the
world.
Employee Engagement

HR Strategies
• Understand the employee’s aspirations and needs for their
well-being
• Performance appraisal of all employees is performed every
year
• Innovate and create synergies between the employees,
managers and the organization as a whole
Employee Retention

HR Strategies
• Communication of a grievance must be done formally
 Written document or an e-mail.
• Employees are required to talk to their immediate senior
manager to convey their grievances, who will then offer
them a solution or escalate the matter further, if required.
• Suggestion boxes and surveys are also rolled out
frequently
Grievance Handling

Effectiveness of HR Strategies
Impacts on Employees
• Sense of equality among the employees because they all
have the same uniform
• Employees can avail financial security if they need to
reduce their burden
• Training activities encourage employees to develop
interpersonal skills within the employees
• Open-door policy makes way for better management of
organization

Impacts on Organization
• Motivated employees help better the brand image of the
company
• Internal capabilities of the organization is improved
• Better equipped to handle future change
• Increase loyalty of employees towards the organization
• Reduce employee turnover rate
Effectiveness of HR Strategies

Challenges faced by Coca Cola
Legal Factors to Manage Employees Internationally
Goal: centralize employee relation functions of the HR to
produce consistency and reduced costs.
• Employees and managers were used to developing interpersonal
relationships only on a face-to-face basis
• Adapting to virtual communication will take some time
• There was some push back from leaders

Challenges faced by Coca Cola
Contemporary Issues
1. Leadership Development
• Usage of both instructor-led and virtual approaches to develop
leaders
• Personalized leadership development program
2. Adapting to Innovation
• Need to be open to adapting new technologies
• Encourage creative ideas in the workplace

Challenges faced by Coca Cola
Ethical Issues
• Racial Discrimination Allegations
 Faced a lawsuit in 1999
 1500 African Americans complained of company
racially discriminating
 Company put African Americans at the bottom of the
pay scale, even with the similar job role to a Caucasian
 Lawsuit states that top management knew of the
discrimination, and did not stop it

• Burger King False Market Test
 First trial of their frozen coke in Burger King was not well
received by consumers
 Company paid an individual $10,000 to take hundreds of
children to Burger King so they can purchase Value Meals
which include the new beverage.
 Attracted a lot of negative publicity.
 Ruined relationship with Burger King
Challenges faced by Coca Cola
Ethical Issues

Challenges faced by Coca Cola
Safety Issues
• Distribution warehouses of the company have repeatedly violated
safety regulations for the layout of the factory
 Unmarked exits
 Obstructed exit routes
 Gas cylinders improperly stored
 Unguarded floor holes
 Lack of training on operating forklifts

Challenges faced by Coca Cola
Health and Wellbeing Issues
• Prevention of health and safety risks at warehouses to
prevent serious injuries
• Ensuring that all international branches are following
international standards
• Focus must not shift from employees being the most
integral part of the organization

Global Brand, Local Culture
• Culture highly influences the image of the brand
• Anyone who joins the company anywhere in the
world will be able to enjoy the same working
environment as is provided in other locations
• Encourage free flowing of ideas
• Support is easily available

• Future leaders are required to be able to work in a
cross-cultural scenario
• Global company culture sets local cultures of the
company apart from any other company in the
same location.
Global Brand, Local Culture

Impact of SHRM on Coca Cola’s Company Policies
1. Dynamics of Organizational Culture
• HR executives directly affect the culture of the
company
• Organizational culture can be measured and used as a
reference to consider the level of engagement and
effectiveness of the workforce
2. Changing Demographics
• There has been an increasing number of millennials
entering the workforce which requires the company to
be accepting of the modern mentality and in turn,

3. Industry Trend
• Political factors and a tight job market will push the HR
to adopt new strategies
• These trends have a direct relationship with changing
company culture
4. Employee Engagement
• Level of employee engagement can be altered by the
strategies used by HR
• This has a direct effect on the company’s culture.
Impact of SHRM on Coca Cola’s Company Policies

Company Policy linking to International Law
1. Global Workplace Rights Policy
• International human rights standards have been set
• Open and inclusive workplaces
• Prohibits forced labor, child labor, discrimination and long work
hours
• Promote safe and healthy workplace
2. Environmental Policy
• Minimize waste according to the World Without Waste framework
constructed by the company
• Promote sustainable packaging – light weight and recyclable
• Conserve water sheds by saving water - treating wastewater
3. Climate Change Policy
• Reduce energy in all the operations
• Implement renewable energy technologies
• Reduce supply chain carbon emissions

Corporate Social Responsibility
1. Educating and Empowering Worker
• Ranked to be a great place to work
2. Labour and Human Rights
• 44% of the workforce in the US is multicultural
• 1010 military veterans

3. Health and Safety
• 100/400 of the products are low or no-calorie
drinks
• 94% of the companies comply with the
workplace rights policies
4. Environment
• Energy efficiency increased by 20%
• Efficiency of water usage increased by 8%
Corporate Social Responsibility

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