Developing Strategies for Performance Management at Unilever: A Report

This report provides a comprehensive analysis of workplace relationships and employee development strategies within Unilever, a multinational corporation. The study begins with an executive summary highlighting the importance of employee-management relationships, particularly in complex organizations. The report delves into Unilever's financial performance, HR metrics, and employee training programs, revealing insights into the company's approach to performance management and employee development. The report examines the potential benefits of employee development, including alignment with macroeconomic changes, political factors, and retaining a competitive position in the global market. It evaluates Unilever's development vehicles and proposes strategies for managing individual expectations, including training and diversity management. Furthermore, it offers recommendations for improving employee development, focusing on training lower-level employees and empowering weaker subsidiaries to foster a more inclusive and effective work environment. The report utilizes Unilever's 'Developing & engaging our people' initiative as a case study to demonstrate the importance of strategies for performance management and employee development in workplaces. The report concludes with a call to action, urging Unilever to prioritize employee development to enhance its competitive advantage and overall organizational success.

Running head: WORKPLACE RELATIONSHIPS IN UNILEVER
Workplace Relationship in Unilever
Name of the Student
Name of the University
Author note

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Executive Summary:
Workplace relationship between the employees and management play important role in the
performance of the organisations. This relationship is even more complex ion multinational
companies like Unilever. The apex management of these companies stress on development of
upper level staff but the lower level employees do not receive these benefits. The paper points
out the importance of uniformity in employee development across hierarchies and its benefits.

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Table of Contents
Introduction:....................................................................................................................................4
About Unilever:...............................................................................................................................4
Financial performance of Unilever:.............................................................................................4
HR metrics of Unilever:...............................................................................................................5
Section 1: Potential benefits to Unilever and individual of personally developing individuals:.....9
Alignment to macroeconomic changes in the market:................................................................9
Political factors:.......................................................................................................................9
Economic factors:..................................................................................................................12
Social:....................................................................................................................................14
Technology:...........................................................................................................................16
Role of employees in the macroeconomic factors in Unilever:.................................................16
Retaining competitive position in the global market:................................................................17
Investment and marketing decision making:.............................................................................17
Section 3: Management of individual expectations in respect of personal development:.............18
Training:....................................................................................................................................18
Diversity management and promotion:.....................................................................................19
Section 2: Evaluation of development vehicles in Unilever and appropriateness to development
needs of employees:.......................................................................................................................19

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Section 3: Development of plan to meet identified developmental needs and individual
expectations:..................................................................................................................................20
Recommendations:........................................................................................................................21
Training of lower level employees:...........................................................................................21
Empowering of weak subsidiaries:............................................................................................21
Conclusion:....................................................................................................................................22
References:....................................................................................................................................23

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Introduction:
Development of strategies to manage performances as well as personal and career
development of employees have proved to be important standing pillars of multinational
corporate organisations. The employees of multinational business corporations are no more mere
workers executing orders. They have emerged into drivers of the business generation in the
organisations employing them and consequently have emerged to be recognised as significant
internal stakeholder. Albrecht et al. (2015) in their work link two important variables namely,
human resource management and competitive advantage of companies. They clearly mention
that human resources in business organisations are the very crux of their business decisions,
execution and consequently their business performances. It is this business performance of
business organisations which forms the basis of the competitive advantage which organisations
boast and thrive on in the global market. Brewster, Chung and Sparrow (2016) mention a term
‘Globalizing Human Resource Management’ which means that global organisations empower
and train the employees to operate in ways so as to bring about career as well as personal
development of the employees. Hollenbeck and Jamieson (2015) point out the very basis of
competitive advantage and human resource management of companies rests of their capability to
retain talents and manage their performance. Considering the stiff competition which commences
between multinational companies to acquire and retain talents, the multinational employers make
strategies to bring about professional as well as personal development of employees to boost job
satisfaction among the latter, thus ensuring prolonged retention. The paper would revolve around
development of strategies for performance management and employee development in
workplaces. The paper would open against the employee development project which Unilever
has undertaken to promote professional skill and personal skill development among employees

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called ‘Developing & engaging our people’ (Unilever.com. 2018). This publication by Unilever
would be the case study on which the entire study would be based.
About Unilever:
Unilever is a multinational company based in London and Rotterdam under the names of
Unilever Plc and Unilever NV respectively. Unilever PLC is primarily listed on the London
Stock Exchange while its Dutch counterpart is listed on the Euronext Amsterdam. The product
umbrella of Unilever consists of beauty and personal care, food and refreshments, home care and
water purifier. The company owns brands like Lux, Axe, Dove and Surf giving it leading
positions in the global consumer goods market.
Financial performance of Unilever:
Unilever Group earned a net profit of EU 6486 million in 2017 compared to EU 5547
million which means actually shows the revenue generation power of the company.
Figure 1. Excerpt from the financial statements of Unilever showing financial performance
(Source: Unilever.com. 2018)

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Figure 2. 5 years share price graph of Unilever on LSE
(Source: Londonstockexchange.com. 2018)
The trend of high profit generation of Unilever in the global market continues into its
share market trend as well. It can be pointed out from the graph that the company enjoys a high
position in the stock market. These two findings namely, revenue generation and capital
generation show that Unilever enjoys a high competitive advantage in the global market.
However, it can be pointed out that two facts pointed out above namely, capital generation and
revenue directly point out to performance management of Unilever expect the fact that the
financial statements mention the expenditure spent on employee salaries. This makes it pertinent
to delve into HR metrics of 2017 Unilever Group released on the official website.

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HR metrics of Unilever:
The HR metrics reveals a very poor performance of Unilever in performance
management and employee development areas. The two main branches of Unilever along with
the subsidiaries companies, some of which are also public limited companies and function as the
Unilever Group are among the largest employers in the industry. Unilever is a global employer
employing a total 149666 permanent employees and 10900 temporary employees. The metrics
further shows that on average employees of Unilever have received 14 hours of training towards
which the company has incurred an expenditure of EU 519 per employee on average. The
metrics below shows that number of employees of both categories have fallen in 2017 compared
to 2016 and 2015. The rate of employee satisfaction in the 2017 was 74 percent compared to 76
percent and 77 percent in 2016 and 2015. This waning employee satisfaction clearly points out to
the degrading employee developmental strategies of Unilever to ensure professional and personal
development of employees. The number of employees resigning voluntarily has increased to 7.4
percent compared to 7.6 percent and 5.9 percent respectively. The only positive aspect of HR
management of Unilever as per the HR metrics is the increased amount of training hours to 14
form 8 in the previous two years. These figures of the GR metrics of Unilever shows that the
company has not performed well as a global employer.

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Figure 3. HR metrices of Unilever for 2017
(Source: Unilever.com. 2018)

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Net profit(Eum) Number of
parmanent
employees as
per HR metrics
Number of
temporary
employees as
per HR metrics
Total
employees Net
profit/
employee
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
Chart Title
2017 2016
Figure 4. Net profit per employee in Unilever
(Source: Author)
The above graph shows that the net profit of Unilever has increased but the number of
employees both permanent as well as temporary has decreased. Thus, it can be inferred taking
the business expansion of Unilever, that the company puts pressure on its existing employees.
The outcome of this stress can be pointed out in the falling rate of employee satisfaction rate.
The same can be also be inferred from the number of voluntarily retiring employees which rose
to 7.4 percent in 2017 from 7 percent in 2016. The HR metrics further shows that the British-
Dutch company has increased the number of training hours but decreased the amount it spent in
2017 compared to 2016. Thus, it can be inferred that Unilever’s employees benefit standards are
not up to its global employer status and need further development. This makes Unilever an
appropriate organisation to study the topic mentioned above.

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Section 1: Potential benefits to Unilever and individual of personally developing
individuals:
Unilever reaps several potential benefits by development of individual employees in the
workplaces:
Alignment to macroeconomic changes in the market:
The development and retention of employees enable the Unilever to align as well as adapt
its business operations to macroeconomic changes in the global market. The eighth page of the
Annual Reports of Unilever for the period ended 2017 provides strong evidence that the
company comes the influence of macroeconomic influences (Unilever.com. 2018). Grant (2016)
mentions that multinational companies need to form to adapt to the external environmental
factors. This would make it pertinent to delve into the macroeconomic influences under whose
Unilever comes and the way the company uses its human resources to adapt these influences.
Political factors:
The political factors are one of the most important influencing factors acting on Unilever
and necessitate it to develop its individual employees to decisions regarding different political
changes in its global market. The political factors plays a very important role because the policy
of the home country government of multinational have significant on impacts on all aspects of
their businesses including their international expansion (Jabbour and de Sousa Jabbour 2016).
The first political factor influence as far as Unilever is concerned is foreign expansion.
Unilever is has headquarters in both the United Kingdom as well as Netherlands. This location is
of tremendous importance to the business operations of the multinational company. It can be

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pointed out that Netherlands has foreign numbers of countries which concludes most of
European and North American countries but few countries from South America and Asia.
Further it can be pointed out that Netherlands does not share relationships with countries like
India and Myanmar (Government.nl. 2018). Thus, in other words, the foreign relationship of
Government of Netherlands would prevent Unilever from exploiting the emerging giants like
India which is one of its biggest markets. This is where the foreign relationships of the United
Kingdom, the headquarters of Unilever Plc comes into play. London has strong bilateral
relationships with as many as 225 countries which includes both developed and emerging
markets (Gov.uk. 2018). Thus, it is evident that foreign relationship of domicile countries of
Unilever allows it to enter several countries and acquire talents from them besides marketing its
products in these host countries.
The second importance of political factors as far as business of Unilever is
concerned is formation of laws. Huq, Chowdhury and Klassen (2016) mentions that
government bodies forms laws which the multinational companies have to comply with in order
to operate. The laws cover several areas include taxation and human resource exploitation. The
Government of the United Kingdom and Netherlands form laws which Unilever has to comply
with. For example, the company while employing employees in the United Kingdom has to
comply with the National Minimum Wage rates which is decided by the government (Gov.uk.
2018). Similarly, while operating in countries members to the European Union, the company has
to comply with the minimum wage rates prevailing in the respective countries
(Eurofound.europa.eu. 2018). It can be pointed out that China, one of the fastest growing
economic giants has strict wage regime for exploitation its human resources. The Labour Law
Article 50 mandates the commercial organisations to pay wages to employees on monthly while

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Article 44 of law mentions that the overtime wages should be minimum 150 times the normal
wages of employees (Clb.org.hk. 2018). Similarly, the taxation laws which multinational
corporations like Unilever pay varies from country to the next. For example, in the United
Kingdom, the limited companies of both UK origin as well of foreign origin having an office in
the UK have to pay corporation tax (Gov.uk. 2018). As far as Australia is concerned, it can be
pointed out that Australian Taxation Office, Government of Australia imposes 30 percent tax in
large limited companies which also includes Unilever functioning in its economy (Ato.gov.au.
2018).
The third important influence which political factors have on multinational
companies including Unilever is changing relationship between their home country
government(s) and international organisations. Holmes, McGrattan and Prescott (2015) point
out that multinational companies are able to exploit the human resources in different countries.
Employees from different countries enable the companies to bring about innovation in their
operations. This need to exploit talents from different countries to bring about innovation in
operations and ensure continuous supply of talents from all over the world make companies
subject to changing political equations in the global market. It can be pointed out one of the most
significant political events which has affected multinational companies like Unilever
significantly is Brexit, the exit of the United Kingdom from the European Union. Unilever
decided to leave the United Kingdom and move its headquarters to Netherlands to take
advantage of the European Union. This would mean that the company has to cede its listing on
London Stock Exchange and lose majority of its shareholders (Fortune.com. 2018). This would
impact the capital generation and the entire operations of the multinational company. Thus, it is

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clear political decisions between countries and international organisations have significant
impacts on the decisions of multinational companies like Unilever.
Economic factors:
Multinational companies like Unilever operate in more than a hundred countries and
come under the influences of several macroeconomic factors. The first economic factor which
impact crucial areas of business of these multinational companies is changing exchange
rates of international currencies (Hair et al. 2015).
Figure 5. GBP exchange rates to USD, JPY, INR, CAD, AUD, SGD, NZD and EUR
(Source: Bloomberg.com. 2018)

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The above graph shows that changing exchange rates of GBP with respect to five
important currencies. The North American market is presented by the United States of America
and Canada represented by their currencies USD and CAD respectively. The Asian market is
represented by Japan, India and Singapore by their respective currencies JPY, INR and SGD.
The Australian and New Zealand markets are represented by AUD and NZD respectively while
the European Union is represented by EUR. The graph above shows that GBP is weakening
comparison to all the chosen currencies which means that Unilever would have to spend
immense amount of expenditure to import raw materials in these countries. Further it can also be
pointed out that GBP is showing signs of resurgence in case of CAD, EUR NZD and AUD. As
far as INR is concerned, GBP is predicted to fall further. In case of the other currencies, GBP
also shows signs of weakening. It can be pointed out as far as Unilever is concerned, it can use
its Dutch operations to source raw materials from Europe which to some extent would nullify the
GBP and EUR exchange rate difference. Karolyi and Liao (2017) mention that fluctuating
currency rates have strong influences on companies right from their acquisition of financial
resources, material resources, human resources, knowledge capital and sale of goods.
Considering the above graph it can be inferred that the exchange rates of the currencies in the
international currency markets would have strong impact on the operations of Unilever.
The second economic factor which comes into play is supply chain management.
Heckmann, Comes and Nickel (2015) mention that multinational companies require to source
raw materials from all around the globe to fuel their immense manufacturing processes which in
turn form the base of their product umbrellas. This means that multinational companies are
dependent to a great extent on the supply chains available in their host countries. For example,
while operating in markets rich in resources like India, the USA and China, the multinational

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companies can depend on the supply chains available within these markets. Contrarily while
operating in countries with poor resident supply chains, the multinational corporations have to
depend on foreign supply chains to a greater extent. While the first set of countries companies
like Unilever can achieve higher degree of economies of scale, the second types of host markets
the companies have to incur immense expenses to source raw materials in these markets. The
same is applicable for sourcing financial resources which would be discussed latter.
Social:
The social factors come to play at all stages of operations of multinational companies like
Unilever. The first social factor which influences the multinational companies is resident
population of their host markets.
Figure 6. World map showing population density
(Source: Data.worldbank.org. 2018)

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The above world map published by the World Bank shows that global world population.
The map shows that countries like the US and China are highly populated. This is an important
factor because population available in a country provides companies with their customer bases
which forms the base of their revenue generation. As far as Unilever is concerned, it can be
pointed out that most of the market of the company is present in these countries compared to the
less populated countries.
The second factor which influences the multinational companies is cultural differences
between countries. De Mooij (2018) points out that cultures have great influences on
consumption habits of consumers and consequently on the revenue generation of multinational
companies like Unilever. The figure below shows four important markets of the company
namely the UK, the US, China and India. It can be pointed China and India, being eastern
markets exhibit great cultural differences from their western counterparts namely, the US and the
UK. Thus it can be pointed out that Unilever has to adapt to the social conditions of all its host
markets in order to function profitably in the global market.

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Technology:
Technology is one of the most significant factor affecting the operations of multinational
companies like Unilever. Görg and Strobl (2016) point out that technology plays a very
significant role towards driving their mass production of goods and services to cater to the needs
of the consumers. Kolk (2015) supports this argument by mentioning that business organisations
like technology to bring about innovation in their products. Andersson et al. (2016) contradict
these opinions and point out that the application of technology is not linked to manufacturing
alone and in fact pervades all aspects of businesses of MNCs like Unilever. For example,
advanced technology like cloud enable the managers of located in one market hold meetings with
managers located in other markets to take important business decisions. Thus, it can be pointed
out that technology has emerged as one of important macroeconomic factors.
Role of employees in the macroeconomic factors in Unilever:
It can be pointed out from the above analysis of the external business environment of
Unilever that it requires to ensure development of the individual employees in order to retain
them and adapt to the market changes. Włodarkiewicz-Klimek (2015) in this respect points out
that adapting to macroeconomic changes require business organisations to form strategies to
adapt to the changes. The strategies aim to maximise the driving forces in the market like
increase and remove or at least minimise the negative impacts like economic downturns. Thus,
the business organisations require to retain their employees to form strategies to capitalise on the
market opportunities and manage the risks. As far as Unilever is concerned, it can be pointed out
that the multinational company functions in more than a hundred countries each with a diverse
external market environments. Eriksson et al. (2015) point out in this respect the multinational

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companies require to make appropriate decisions to adapt to the market. Faulty market decisions
can lead to losses worth billions to the company, thus impairing its global position. This means
that the Unilever has to ensure development of employees, especially the experienced employees
in order to take appropriate decisions to adapt to the macroeconomic changes discussed above.
Retaining competitive position in the global market:
Unilever requires to ensure development of its human resources in order to maintain its
competitive advantage and global position. Deresky (2017) points out that competitive advantage
of multinational companies depends to a large extent on the decision making power of
companies. This statement is extremely applicable to Unilever because it can pointed out that the
company shares its international market with competitors like P&G. This means retention of
competitive position against P&G would depend largely on the decision making power of the
senior management. De Mooij (2018) strengthens this view by mentioning that the retention of
market position of companies are not only dependent on the decision making of their senior
managers but also in the execution power of the lower level employees. Thus, in this light it can
be pointed out that Unilever in order to sustain in stiff competition is dependent on both senior
managers as well lower level executives to ensure effective decision making and execution
respectively. This means that the company needs to ensure development of both its senior level
employees as well as junior level employees in order to retain its global position.
Investment and marketing decision making:
Unilever requires to promote development of its employees to ensure appropriate
decision making in investment and marketing. Lehmann (2015) points out in this respect that
business organisation require to invest their acquired capital from the market to generate higher
returns. Erel, Jang and Weisbach (2015) point out in this respect that asset positions of the

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multinational organisation as well as revenue generation depends a great on their abilities to
make appropriate decisions on acquisitions and mergers. This is evident from the product
portfolio of Unilever which consists of brands acquired by the company. It can also be pointed
out that some of these brands like Brut and Axe are some of the biggest brands generating a high
revenue for the company in the global market. Giuliani et al.(2014) contradicts this statement and
points out that acquisition of subsidiaries alone cannot ensure profit. The companies have to
form strategies so as to market the acquired brands and generate immense profits. This is again
very true for Unilever considering its immense marketing power. It can pointed out that making
marketing and investments decisions require the company to retain employees with tremendous
decision making power. Thus, it can be concluded that making investment and marketing
decisions requires Unilever to develop its employees to retain them (Deresky 2017).
Section 3: Management of individual expectations in respect of personal development:
Unilever being a global employer manages the expectations of the individual employees
in several ways to ensure their personal development. The following are the ways in which
Unilever manages the expectations of the employees:
Training:
Unilever offers training to its employees to improve their skills and develop their
decision making power. Hanaysha (2016) point that training enhances the efficiency of the
employees. Considering the macroeconomic environment of Unilever, it can be pointed out that
the business environment of the multinational undergoes drastic changes ranging from political,
economic, social, technological or an combination of these factors. Gutierrez-Gutierrez et al.
(2018) strengthens the discussion by adding the extreme competition in the market requires
business companies to develop new products in order to leave its competitors behind. As far as

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Unilever is concerned, the company faces competition from both international and local firms.
The firm trains its employees to embrace the newly evolving market trends. This enables the
employees of Unilever operate in several hundred economies and cater to market needs. This
employment development of Unilever can be proved by the performances of its subsidiaries.
Hindustan Unilever, the Indian subsidiary of Unilever featured in the 8th position for its
innovativeness (Forbes.com. 2018). This article proves that Unilever does not only train the
employees deployed in the headquarters but also the employees of its subsidiaries. Thus, it can
be proven that Unilever develops its global human resources by empowering them with training.
Diversity management and promotion:
Unilever brings about development of employees by awarding them promotion and
ensuring diversity management. Fernandez et al.(2015) point out that promotion and diversity
management motivates employees and bring about their development. Companies which
empower and promote employees are able to retain the employees for longer tenure. Unilever
can be described as global trend setter as far as diversity management and promotion are
concerned. The apex management promoted Leena Nair, an Asian as its chief HR officer
(Thestraitstimes.com 2018). This promotion and diversity management in Unilever can again be
observed from the apex managers. The apex management is led by people across Europe, Asia,
North America and Africa, thus upholding diversity in action (Unilever .com 2018).
Section 2: Evaluation of development vehicles in Unilever and appropriateness to
development needs of employees:
An analysis of the human resources metrics of Unilever shows that in spite of being a
multinational company, the company fails to manage individual expectations of employees. The
official website of the Unilever claims that it maintains high level of fairness while employing

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human resources. The company on its official website claims that it ensures promotion of human
rights and provides its employees self-development opportunities. The official website on
Unilever in its case study tirtled ‘Developing & Engaging our people’ further claims that
company provides training to its employees to empower them to take more appropriate decisions.
The company further claims that it ensures employee development using robotics and artificial
intelligence (unilever.com 2018). This claim of Unilever is rendered effortless by a report
published by the Resource Centre Human, Human Rights Organisation. The report mentions
employees in Kenya serving Unilever face sexual harassments. The report points out that
supervisors of tea plantations under Unilever’s possession harass female by paying them low
wages and allocating them difficult tasks (Business-humanrights.org. 2018). The Guardian
reports that Unilever sources palm oil grown in plantations employing child labour (Davies
2018). Thus, it can be evaluated that far from ensuring development of its employees, the
company resorts to exploitation to get more productivity at lower wages. It can also be
evaluated that the current development vehicle of Unilever is appropriate to ensure
development of its employees.
Section 3: Development of plan to meet identified developmental needs and individual
expectations:
The development plan to develop employees at Unilever would follow the global
employer status of the company The development session would be started by the departmental
managers measuring the performances of the employees and recognising the shortcomings. The
departmental should submit a report regarding the development needs with the apex management
of the respective subsidiary. The national heads should submit a report with the apex
management. The apex management would form a development plan. The employee

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development plan would be broken down according to the markets starting with Asia. Asia
would be followed by Europe, North America, South America, Africa and Australia. The starting
date of the plan would be December 3, 2018. The activity series is as follows:
Recommendations:
The following are the recommendations which can be made to Unilever in terms of
employee development:
Training of lower level employees:
Unilever should train its lower level and outsourced employees. The above discussion
emphasises on employee development and diversity management up the organisational pyramid
which is undoubtedly worth praising. However, the exploitation of the plantation workers show
the employee development initiatives do not travel downward the pyramid. The company should
apply employee development initiatives at the lower level as well.
Empowering of weak subsidiaries:
The apex management should empower and develop the employees posted in the weak
subsidiaries as well. The leadership of the company is dominated by employees from mianly
Europe, North America, Australia and Asia, all; of which are important markets and homes to
strong subsidiaries. However, it can be pointed that the apex management should also train the
employees of the weaker subsidiaries like Africa.

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Conclusion:
It can finally be concluded that Unilever has come a strong employee development
infrastructure. However, the employee development methods applied in different markets and at
different organisational levels lack uniformity. While the employees holding high positions in
the important subsidiaries enjoy development and promotions, the employees posted in poor
markets and at lower levels hardly receive any benefit. The apex management should introduce
the training and employee development initiatives at the lower levels as well. It must also be
noted that the scope of the task does not cover aspects like marketing and innovative.
Incorporating these two concepts would have rendered the task a greater depth.

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