Sonoco HR Analysis - Essay Example

? Case Study: SONOCO HR Diagnosis Sonoco, an industrial and commercial packaging products provider, has been operating globally with success for morethan one hundred years. In the nineteen nineties, the steady clients of Sonoco succumb to the pressure of the financial crisis and responded by reducing its demand for Sonoco’s services. This impacted Sonoco’s sales. However, despite the reduced demand, Sonoco managed to remain afloat by reducing its operating expenses. Overtime, this strategy enabled Sonoco to increase its net income modestly. Conversely, the continuous slide in sales and the trending in every sales forecast have eroded share holder confidence. The packaging industry as a whole have began to alter the landscape of the industry, a change towards “packaging end-to-end solutions” instead of individual packaging services have become the norm (Sand, 2009). Sonoco’s leadership for its part have at the onset implemented strategies to control cost that is in-line with its target of generating growth by stimulating sales and its capacity (Gase, 2007). The plan involved modernizing its commercial packaging division to enable it to respond to the demands of clients with dynamic requirements due to these clients’ need to respond to consumer tastes. However, the changes only granted autonomy to the General Manager of each division in managing his own personnel contrary to the required cross functional cooperation to meet the changing customer needs (Heinecke, 2011). Sonoco has been known to encourage a family-oriented, paternalistic, collaborative, and team oriented corporate culture amongst its employees. Underperformance and indolence are often times overlooked if it does not affect the bottom line too much. Cindy Hartley was hired to align Sonoco with the ever changing requirements of the packaging industry. Hartley was able to identify three priorities that need to be resolved as soon as possible; these are the compensation and performance management process (Henderson, 1993); employee development plan to re-tool if not upgrade the skills of every employees in production (Mayo, 2004); and last but not the least is the succession planning (Rothwell, 2010). Analysis Cindy Hartley’s first focus is to resolve the distortion in the compensation schedule of the employees and make it hand in hand with the performance evaluation process. There is a need to ensure that the performance is reflective of the actual contribution of the employee to the company (Neal, 2009). Sonoco’s employee training should not be limited to hard skills training but also on soft skills training to ensure that employees are developed overtime that will satisfy the third focus area of Cindy which is succession planning (Brinkerhoff & Mulder, 1995). Succession planning is ensuring that any position in the company can be replaced by individuals easily to prevent down time (Sims & Gay, 2007). Sonoco’s existence has been marked with several acquisitions of small companies mainly for its customer base if not additional capacity it will bring to the organization. The strategy is not only sound but it makes more sense, since instead of acquiring new equipment and getting fresh employees to be trained at considerable cost while spending on marketing to acquire new clients, buying companies will accomplish all in a much shorter time frame (Clemente & Greenspan, 1998). The strategy while sound similarly created specialization amongst and between the employees of the acquired company (Prof Jarillo & Straub, 2012). It should be noted that the acquisition of the different companies equally resulted to the acquisition of employees with unique skill set that is applicable to the acquired company’s operation (Stahl & Mendenhall, 2005). However, the best scenario is to have employees that are multi skilled if not ambidextrous (Kortmann, 2012). The expanding employee base and the expanding customer base did not bode well for leaders within Sonoco and the companies it integrated due to its acquisition. Leaders were not trained to accept more responsibilities much less handle people effectively. There is no training given to leaders to enable them to develop into mature leaders that can manage resources and people at the same time (Blarr, 2012). This could lead to quality control issues if not delivery issues which would translate to customer erosion and consequently shareholder erosion (Clutterbuck, 2012). Evaluation It would seem that what ensured the survival and profitability of Sonoco could very well be the reason for its systematic demise that is originating from within (Klein, 2000). However, the solution should be implemented as soon as possible to ensure that Sonoco can retain the best of the best of its people. Acculturation should therefore be controlled to involve only the positive aspect of diverging organizational cultures (Soderdberg, et al., 1998). Focus should be made on how behavior impacts the output or productivity of the organization and how it affects the other employees (Donaldson, 1980). Cindy Hartley’s plan while directly impacting the very heart of Sonoco’s challenges should be revised to take the following observed flaws into consideration. The flaw finds its root from the lack of baseline that will enable her to effectively monitor the success of her plan (Cavanagh, 2001). It is therefore essential to determine the current situation and then monitor the changes as the plan progresses and its impact to the company. Strategy development and target setting should start at the top level management and then consolidating and cascading it down to the employee level by translating targets into action items is a good example on how to monitor the success of Cindy Hartley’s plan (Cianfrani & West, 2010). A comprehensive plan should also include a compliance monitoring and continuous improvement strategy (Myhrverg, 2009). It should be accepted that Cindy Hartley’s plan in order to be perfect should evolve and respond to the actual changes it brings while it is being implemented (Karger, 1991). Design Cindy Hartley’s plan focusing on Sonoco’s reward system should be revised in such a way that it will coincide with the performance of the organization. It will make no sense for Sonoco to grant incentives if it does not have any to give (Prof Merchant & Prof Van Der Stede, 2007). The incentive should not only be in a form of cash but there should similarly be non-cash component in the equation (Rose, 2011). As predicated in the analysis of the issues, performance evaluation should include an evaluation of the behaviors that would result to an exemplary production number or output. In this way not only would the proper culture be enhanced but institutionally supported. While the evaluation process is standard across the organization, its implementation is still managed by the local manager including its frequency. Production modernization includes skills re-tooling for production personnel. These are training that are best implemented locally since training needs analysis are best implemented locally. Local managers are in the best position to determine the needs including the schedule of its personnel to enable each to attend the required training that will make them multi skilled. One of the key elements in succession planning is the acquisition of corporate knowledge and the ability to lead and manage resources even as ordinary employee or the next in line for leadership roles (Berger & Berger, 2011). Ambidexterity in every employee should therefore be encouraged and harnessed. This will bode well for the goal of DeLoach of making the employees be more flexible in accepting multiple roles or in a project that require cross functional cooperation. The HRs role while distributed across all of Sonoco’s facilities will have a singular operating focus and implementation strategy. Implementation Cindy Hartley’s three point program while supporting DeLoach’s goals should also focus on other corporate and organizational improvement strategies. Talent development and management while going hand in hand with the succession planning goal should also take into consideration what Sonoco have learned as an organization. The knowledge learned in packaging from manufacturing process to design over a period of one hundred years should be stored and accessible to all employees, both current and future. Being a knowledge based organization (Davenport & Prusak, 1998) would enable Sonoco to learn from experience as an organization and for its employees to have a singular and common knowledge of Sonoco’s craft, product and processes individually. Not only would the history and acquired knowledge be instinctive in every Sonoco employee it could be available to all future employees. The entry of new employees will not change the corporate culture but it will enhance it in a positive way, once the new employee’s learning and acquired knowledge become part of Sonoco’s corporate knowledge (Hawryszkiewycz, 2007). Cindy Hartley’s employee evaluation and the incentive program can be used as a tool that could be enhanced to mould an organization that will have a culture of goal oriented and success oriented behaviors. Rewarding the attitude and behavior along with the exemplary performance of the employee should inculcate these behavior and attitude amongst the employee. By rewarding ambidextrous behavior both in each employee’s ability to handle multiple projects but also multiple roles would encourage employees to perform better than what is expected of them (Blarr, 2012). The onus of DeLoach plan is to put autonomy in each of the revenue generating facility or offices to maximize its capacity and potential. His plans include making the Human Resource Management Processes constant and consistent for all the facility. However the flaw of this plan is in the strength or weakness of the General Manager and the talent the facility has in its ranks. Human Resource Management may be able to consistently set the phase or even define the corporate culture of Sonoco through the evaluation process and performance review however base on the autonomy strategy of DeLoach the local HR maybe constrained to follow the lead of the local management. To rationalize Cindy Hartley’s plans with the goals of DeLoach the following should be considered: The goals and targets for each General Manager should not be limited to revenue targets alone. It should include human resource targets that will enhance the talents of each employee within the General Manager’s facility. The Corporate Goal and targets should emanate from corporate head office. The implementation plans for each General Managers should be formulated and devised by the General Managers themselves. However, the monitoring and compliance including the regular review of the key performance indicator should be done if not administered by the Corporate Head Quarters. It is essential for corporate and the different general managers to agree on the measure and metrics from where the general manager will be evaluated from to ensure that there is no miscommunication and no misunderstanding including different interpretation of what needs to be done and measured. The coverage of the regular review should include the key performance indicators and a plan of action if in case the general manager failed to satisfy his key performance indicator. To support Cindy’s plan it is prudent to transform the organization into a knowledge centered and learning company, this will ensure that the succession plan will develop leaders or employees that has the capacity to learn if not have the same knowledge as everybody. Developing an ambidextrous culture will also ensure that the developed leaders will equally have a guide and perspective including the training of managing multiple projects. Developing a baseline and a process that will ensure continuous improvement as the plan is being implemented will ensure that necessary changes can be implemented at once as soon as the challenges are exposed. Answers to Task Questions 1. The packaging industry is shifting from the traditional packaging service provisioning to becoming an end to end packaging solutions provider. Traditional packaging service providers just provide the packaging services and then disengaged from the clients. End to end packaging solutions provider engages the client from packaging concepts to packaging designs to actual packaging to impact review of packaging to packaging solution improvements (Selke, 1994). 2. Cindy Hartley’s is to professionalize the HR group. Make the HR Group one of the essential components in ensuring Sonoco’s success. However, her focus is to develop leaders, drive down costs, improve productivity and enhance working capital management and cash flow. 3. Cindy Hartley’s plans were largely successful the way it was implemented as indicated from the case study. However, as indicated above, the plan I propose is an alternative implementation plan that could also work. 4. The hybrid could be the best option for the reason indicated by the case study. Centralization could provide a homogenous implementation of all the policies across the company, alternatively however there could be policies that may not be applicable to some local offices for cultural if not legal reasons. The hybrid on the other hand could very well answer this particular concern, its negative effect however, is the review process to ensure that the local HR is doing what it is supposed to do. 5. Changes should be monitored and reviewed. The compliance of each business unit to policies and processes HR is implementing should be reviewed and rate regularly. Reflection Cindy Hartley’s plan in retrospect is doable and can be implemented with minimal cost. Adopting the hybrid structure to continue the implementation of Cindy’s plan would provide more success and institutionalization of the changes. Institutionalizing the changes would ensure that the focus of the company is geared towards meeting the challenges of the packaging industry. The HR organization may not be part of production but its invaluable assistance in meeting the company’s target is founded on its ability to provide the correct manpower with the correct skills and correct motivation. The additional recommendation of this paper will not only support Cindy’s plan but also transform the organization to meet the new industry landscape. Transforming Sonoco to a knowledge organization driven by HR will ensure that each employee of Sonoco is not only aware of its identity but also of its capability, skills and collective experience that can be used for the benefit of its customers. 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