HRM09004: Strategic Human Resource Management at Nestle - Report

This report provides an in-depth analysis of strategic human resource management (SHRM) at Nestle, a multinational food and beverage company. It begins with an introduction to Nestle, highlighting its focus on employee performance and its strong position in the FMCG market, particularly in Ireland. The report then delves into the concept of SHRM, emphasizing its role in achieving competitive advantage through effective human resource practices. A VRIO analysis is conducted to assess the value, rarity, imitability, and organization of Nestle's resources, including financial resources, local food products, employees, and patents. The report examines Nestle's HR strategy, emphasizing its commitment to employee well-being, inclusive working environments, and corporate social responsibility. It further explores specific HR practices, such as recruitment, people management policies, innovation, and training programs. The report concludes by summarizing key findings and highlighting the significance of SHRM in Nestle's overall success. This report is designed to provide a comprehensive understanding of how Nestle leverages its human resources to achieve its strategic goals.

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Management

Contents
Introduction: About the Company.............................................................................................4
Concept of SHRM......................................................................................................................4
VRIO of Nestle..........................................................................................................................5
Valuable..................................................................................................................................5
Rare.........................................................................................................................................5
Imitable...................................................................................................................................6
Organisation...........................................................................................................................6
HR strategy at nestle..................................................................................................................7
HR practices at Nestle................................................................................................................8
Conclusion................................................................................................................................10
References................................................................................................................................11

Introduction: About the Company
Nestle is multinational company headquartered in Switzerland (Vevey). Anglo Swiss
Dairy Company founded it. Nestle is one of the most successful FMCG Company. Nestle has
stated that the performance of its employees plays the most important role in the success of
organisation. Nestle gives emphasis on recruiting the experienced and determining people
who value its price. In Ireland, it has around 70 brands categories including cereals,
confectionary, food, dairy, pet care, and infant nutrition. It employs around 750 employees in
Ireland. Until now, company has done several acquisitions and mergers to expand its
customer visibility and base in the market. This is the reason Nestle is known as one of the
strongest FMCG Company across the world. Nestle always recruit those people who respect
their beliefs and values. In the paper, discussion has been carried on the strategic HRM. At
the same time, it has also included the strategic HRM of Nestle by explaining HR activities
and HR practices.
Concept of SHRM
Human resource are the significant part of management process that enhances, makes,
develops as well as manages the human element of the organisation. Human resource
management can be accepted as the strategic partner at the time of formulating organisational
strategies. The aim of Nestle is to expand the business, income, and list of customers. Nestle
has stated that its human resources is the major strength behind its success, involvement of
every person and their interest at all level has led to the growth and success (Paauwe & Boon,
2018).
Strategic human resource management tends to bring the competitive advantage for
the organisation over its competitors by ensuring the effective and unique human resource
competency. Training, selection, recruitment, and performance management of the
organisation put greater influence on the competency of employees. Workforce will also
become capable when organisation will be able to effectively attract, identify and select the
competent applicants (Hassan, 2016).

VRIO of Nestle
Valuable
 Nestle financial resources highlights that they are highly valuable as it helps Nestle in
investing into the external opportunities that is arising. At the same time, it also assist it in
combating with the external threats (Brewster, 2017).
 The local food products of Nestle are highly valuable as they keep the differentiation
with others. This tends to make the perceived value for such products high. Customers highly
value their products due to significant differentiation in its products.
 Nestle employees also found to be highly valuable to the firm. Most of the workforce
is found to be highly valuable. Due to the effective training programs, employees are able to
perform better and providing high productive work for the organisation. Customers also value
them high due to innovation and differentiation in their products.
 The patent of Nestle is high valuable resource that helps it in selling its product
without any competitive interference. This helps Nestle in getting the higher revenue and
growth.
Rare
 It is found that the organisation structure of Nestle is a competitive disadvantage that
needs to be worked on. Due to its valuable resource, its Health and wellness strategy can
directly make use of the resource.
 The Nestle VRIO Analysis shows that the research and development at Nestle is not a
valuable resource. This is because research and development are costing more than the
benefits it provides in the form of innovation. There have been very few innovative features
and breakthrough products in the past few years. Therefore, research and development are a
competitive disadvantage for Nestle. It is recommended that the research and development
teams are improved, and costs are cut for these.
 In Nestle, financial resources are seen to be rare as per the VRIO Analysis. It is true
that string financial resources lies with only few companies.
 Nestlé’s local food products are rare as it is not easily sold by other competitors. It
means that competitors can also use in the same way as Nestle is doing.

 The productive employees of Nestle are rare as per the identification of VRIO. Their
employees are higher skilled and rare which might not found in other organisation. the better
working environment and compensation ensures that employees retain in the organisation for
long time.
 Nestle distribution network is also found to be rare as other competitors will require
higher investment for doing the same (Miles & Van Clieaf, 2017).
Imitable
 The financial resources might be imitable by other competitors by earning prolong
profit. However, new competitors and entrants will require the same profit over period of
time.
 Nestle local food product not seen to be too much costly as per the VRIO analysis of
Nestle. By doing the significant investment in the proper research, this can be imitated by the
competitors. At the same time, it also not requires much experience. This is one such
competitive threat for Nestle that can affect the firm’s profit.
 It is found that the employees or workforce of Nestle do not require too much
investment to hire. It is because other organisations also provide training to their employees
for gaining necessary skills and knowledge. Due to this, other companies can also hire the
employees of Nestle by offering them good working environment, better working conditions,
benefits and growth opportunities. This helps the employees of Nestle valuable resource by
providing the competitive advantage.
 It is not easy to imitate the Nestle patent as per VRIO framework. It is because it is
illegal to imitate the patent of any firm. At the same time, it prove to be costly process for
getting the patent of any firm (Boon, Eckardt, Lepak & Boselie, 2018).
 The distribution system of Nestle is found to be costly as it is developed by Nestle
after spending huge time. Competitors are also required to invest significant amount in order
to imitate the same distribution system of Nestle.
Organisation
 The financial resources of Nestle is quite organised for capturing the value. These
resources are used in the right place and in right time. At the same time, they are also used
strategically in order to make effective use of the strategies lying in the market. This also

enables Nestle to combat form the threats that are coming on the way. In this way, it is one
such significant competitive advantage for Nestle.
 It is seen that Nestle patent is not organised properly that means it is not able to fully
utilise its patent. Therefore, it can gain competitive advantage by effectively utilising its
patent.
HR strategy at nestle
HR strategy is found to be the most significant aspect for any organisation. This
strategy tends to determine how any HR process will run by assisting different departments to
achieve goal effectively. The success of any organisation depends on the capacity to retain,
attract and develop the employees. Nestle also follow the policy to hire the employees with
professional skills and personal attitude. At the same time, it also put the personal attention to
ensure that there is alignment between the values of candidate and organisational culture.
It is true that human resource strategy of business should support as well as reflect the
corporate strategy. An effective and better human resource strategy includes the way through
which organisation develops its workers and better working environment. It means selecting
the competent personnel and ensuring the fit between job and employees. It is true that Nestle
is human oriented company that gives major emphasis on the well being of its employees and
customers.
Nestle Ireland has also created employment opportunities for the young people
including development programmes and work experience placement. (Nestle, 2015).
Nestle always keep on tract for meeting the commitment of creating employment
opportunities. For supporting this commitment, it has also increased the opportunities for
young people by launching graduate roles and new apprenticeship programme in
Confectionary and Food manufacture. For this initiative, Nestle Ireland has also partnered
with the experts of young employability for offering the training, skills as well as experience
for young people in the local communities (Malik, 2018).
An inclusive working environment is developed by Nestle by increasing the
awareness about issues that LGBTI faces across the world. In addition to this, Nestle also
effectively work for the corporate social responsibility. Nestle Ireland is the first supplier of
food to not only provide the surplus food to “FoodCloud” but also some financial

contribution for helping the social enterprises across Ireland. Nestle has also pledged to make
100 per cent of the its packaging reusable and recyclable by the year 2025. For this, Nestle
has also create the “Nestle Institute of Packaging Sciences” that is dedicated to develop the
safe, functional and environment friendly solution related to packaging. Since the year 2015,
Nestle is first company in Ireland to use 100 per cent of the certified and sustainable cocoa
for its confectionary. Not only this, Nestle has also committed itself toward playing the part
in addressing health challenges. By effectively including the efforts of its human resource,
Nestle has removed 60 billion calories from its Irish as well as UK products by maintaining
the quality of its products (Storey, Ulrich & Wright, 2019).
HR practices at Nestle
Recruitment: it is said to be the process of maintaining and developing the proper work force
resources. Nestle always see the people with qualities such as realism, dynamism, loyalty,
hard work, reliable and honesty. Recruitment for management level takes place at the head
office. The current employees are being promoted to the higher post by seeing the
requirement. The other source of recruitment in Nestle includes the human resource
consultancies and campus placement.
People management policies and principles
The performance management of Nestle includes the entire standard procedure that is being
used to appraise the potential members in the organisation (Marler & Parry, 2016). Human
The most significant key indicator of Nestle is the leadership principles led down by the
management.
Innovation in HR: In order to support the innovation and knowledge in employees, Nestle has
opened the innovation centre in Ireland. It has employed around 40 employees in this
innovation centre who work to bring innovation in the company (DeCenzo, Robbins &
Verhulst, 2016). With the new centre, it will be able to increase the pace of innovation
capacity in its employees. As a result of this, it will explore more innovative solution. In
addition to this, it also encourages its employees to embrace the digital opportunities. By
providing opportunities to its employees on the new technologies, it helps them in increasing
their knowledge and foster growth (Caldwell, 2018).

Healthy working environment: Nestle Ireland comes hundreds of company who took part in
events for ensuring the National Workplace Wellbeing day. Many employees supported the
event that tends to improve the health of employee through promotion of exercise and
nutrition at the workplace. It is rightly stated that a healthy working environment is required
for the positive wellbeing of employees. Without positive environment, it is not possible for
employees to work effectively (Armstrong & Taylor, 2020). It is found that the people who
are having the line management responsibilities required to take the personal responsibilities
related to health and safety. It is essential to maintain as well as build the relationship based
on respect on trust.
Training: Nestle provides the literacy training to its employees for upgrading the literacy
skills especially for those people who are operating new equipment (Ahmad & Schroeder,
2013). Local training programme is also provided ranging from leadership, technical and
communication. Employees are also sending in other countries to learn the taste of
consumers. In Ireland, Nestle has undertaken the Training Named Tasty careers. This
initiative supports the industry for highlighting the diversified opportunities available. This
scheme works effectively as it tends to allow the schoolchildren to hear about life in drink
and food industry from peers. Employees who have been in this program received positive
experience from the training. They also learned to build their confidence in learning and
presenting the other attendees. As per the changing requirement of customers, it also bring
changes in its working system by providing relevant training to the employees.
Fair evaluation system: Nestle working depends on the higher level of working and
performance across its business. It continuously gives emphasis on the workplace relations
and human rights. It tends to provide the continuous talent management and learning to assist
its employees in adapting and developing their capabilities in the rapidly changing business
environment. For keeping the fair evaluation system, Nestle tends to keep the basis of its
corporate culture. At the same time, it regularly ensures that its activities are sustainable and
creating fair value for the society. The Supplier code of Nestle also establishes the standards
that it asks from employees, suppliers, as well as agents. The reward system of Nestle
however focuses on the variable pay, fixed pay, benefits, and work life environment.
Performance management: In Nestle, a highly performance culture is being supported
through the differentiation of reward and development. This is ensured by the alignment of
challenging and clear responsibilities. Employees as well as line manager work together in

order to ensure that challenging goals are set and properly evaluated throughout the year.
Employees also tend to receive regular feedback regarding their career aspiration and
performance. Promotions in Nestle are based on the sustainable performance from the results
and behaviour. Nestle also undertakes the rigorous and active succession planning process at
each level of the organisation.
Conclusion
In the limelight of above discussion, it can be concluded that Nestle is products are
able to reach wide number of people due to its strong brand image. It is found that the
financial resource and distribution of network is rare. However, employees of Nestle are not
hard to imitate which might prove to be the disadvantage to it in near future. Research and
development of the Company is found to be disadvantaging for it that can be improve
through further improvement. The implementation of human resource strategy works in the
best interest of the employees as well as organisation because it tends to keep the working in
right direction. At the same time, Nestle can bring several improvements in its HR practices
in order to grow more.

References
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Paauwe, J., & Boon, C. (2018). Strategic HRM: A critical review. In Human resource
management (pp. 49-73). Routledge.
Storey, J., Ulrich, D., & Wright, P. M. (2019). Strategic Human Resource Management: A
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