Executive Summary
This comprehensive plan is designed for the Coca-Cola company, an international organization operating in the non-alcoholic beverage production industry. The rationale for selecting Coca-Cola as a company for analysis is justified by the global presence of the brand, its large size in terms of the workforce, and its successful pursuit of competitive advantage in its industry. The firm has facilities in more than 16 countries, where about 28,000 people are employed (“Form 10-K,” 2021). The organization’s business model entails partnerships with bottlers who produce drinks from concentrated beverages and sell them. The company successfully competes with other large non-alcoholic drinks manufacturers on a global scale.
Currently, Coca-Cola has a well-developed, highly effective system of human resource management (HRM) practices. In particular, the company’s efforts to manage employees are based on prioritizing innovation, performance excellence, and continuous improvement and development. The company values talent as the most significant asset, which is why it attracts, develops and retains the best professionals in the industry (“Hiring process,” 2022). The company implements HRM practices based on human rights, prioritizing employee interests and needs (Coca-Cola BIG re-defines HR strategy,” 2021). In terms of reward and recognition HRM practices, the firm uses a performance-based reward system that effectively motivates high-performance levels (Kothari, 2022). Moreover, Coca-Cola implements effective methods of enhancing job satisfaction, morale, and engagement through a laissez-faire leadership style and development-based programs (“Why work at the Coca-Cola company,” n. d.). Thus, the currently used HRM methods help the company remain competitive.
However, several issues necessitate updating and improving HRM to ensure long-term sustainable competitive advantage and growth of employees and the company. In particular, research and analysis indicate that Coca-Cola’s HRM lacks digitalization and local-based approaches, has an insufficiently customized reward and recognition system, and insufficient team-building, training, and decision-making delegation for better job satisfaction. Therefore, it is recommended that innovative digitalized HRM solutions with a focus on cultural sensitivity for each local division be implemented. Moreover, it is suggested that the company initiate customized employee-centered reward systems and enhance team-building, training, and personalized decision-making independence.
The recommended solutions are validated by the evidence obtained through research. The suggested efforts will allow for engaging and retaining talented employees who will ultimately be able to develop their skills and competencies within the organization through its developmental programs. Better morale and job satisfaction yielded using enhanced training, team-building, and individual concern-addressing will result in higher performance and commitment. Ultimately, the organization’s workforce will perform excellently, improving the firm’s outcomes and achieving its sustainable competitive advantage goals.
Summary
An overview of an organization’s background is an essential part of the comprehensive HRM improvement plan since it allows for setting the recommended changes into the relevant context. Coca-Cola is one of the most successful companies on a global scale that has a highly competitive advantage in the non-alcoholic beverage production industry. Drinks with its brand name and trademark have been sold since 1886, which is the year when the company started functioning (“Form 10-K,” 2021). It is an American company with facilities located in 16 countries, where 28,000 people are employed. The firm’s products are sold in more than 200 countries and territories, which demonstrates its high level of global market presence and a significant competitive advantage over its rivals (“Form 10-K,” 2021). The primary customers of the Coca-Cola Company are teenagers and young adults who consume non-alcoholic beverages (“Form 10-K,” 2021). The company’s business model is based on partnerships with bottlers who produce and distribute drinks among retailers for further sales. Overall, Coca-Cola is a highly efficient and well-performing organization with high employee management standards, allowing for its endured development and competitive advantage.
Challenges and Opportunities
Like any organization operating in a changing and challenging business environment, Coca-Cola faces several challenges and opportunities regarding its HRM practices and strategies. Indeed, the challenges the company is currently facing include the ineffectiveness of hiring and employment strategies due to the lack of relevant digitalized solutions and practices sufficiently recognizing local particularities. According to the company’s HR management, the formerly used centralized approaches to hiring, employment, and workforce management are deemed ineffective due to inevitable differences related to cultural, legal, and economic features (“Coca-Cola BIG re-defines HR strategy,” 2021). In particular, such a challenge has arisen within the context of COVID-19 and its implications on company operations and employment regulations in different countries.
Another challenge faced by Coca-Cola is the insufficiency of employee job satisfaction due to the imperfections in the reward and recognition systems. Research shows that the motivation system at Coca-Cola is currently not customized enough (Ramyasri & Aruna, 2019). Although the company uses a performance-based motivation strategy, many employees do not consider such efforts personalized enough (“Form 10-K,” 2021; Ramyasri & Aruna, 2019). Finally, another challenge the firm encounters is morale, job satisfaction, and support for positive change in HRM. In particular, the company’s workforce job satisfaction is not high enough, necessitating proper morale enhancement through corporate culture facilitation (Shrestha & Singh, 2020). Moreover, Coca-Cola lacks relevant strategies for delegating decision-making responsibilities to employees to engage them and facilitate their independence, which is essential for talent retention and contribution to the company’s competitive advantage (Maisoni et al., 2019; Shrestha & Singh, 2020). Thus, these challenges within the framework of HRM hinder Coca-Cola’s advancement in obtaining a long-term competitive advantage.
The firm has several developmental opportunities given its current approaches to human resource issues handling. According to the official information provided by the company, Coca-Cola values human rights policies, competency, and talent, which demonstrates the prioritization of employees in the overall corporate culture of the firm (“Form 10-K,” 2021; “Hiring process,” 2022). Therefore, one of the opportunities for Coca-Cola that derives from this particularity is the ability to enhance professionals’ and experts’ engagement to form strong competitive teams of innovative and resilient employees to lead the industry of non-alcoholic beverage production (Chu, 2020). Another significant opportunity is related to the company’s ability to retain the employees and develop their talent and skills via well-adjusted development, training, and education programs available to the workforce (“Why work at the Coca-Cola company,” n. d.). Moreover, globalization trends and workforce diversity, as strengths of the company, open more opportunities to employ the best talent globally to ensure that Coca-Cola is a leader in its field. All these opportunities might be possible for the organization given the implementation of an improvement plan that would enhance its HRM based on the drawbacks of the strategies currently used.
Current Practices
Coca-Cola uses many effective HRM practices to attract, hire, and retain talent. Firstly, the company uses the principles of diversity prioritization in its hiring procedures, which allows for expanding the pool of potential employees with a significant contribution level (“Hiring process,” 2022). Secondly, Coca-Cola has implemented a well-develped system of hiring practices and adaptation and adjustment programs for newly hired employees to cultivate coherent integration of the workforce into the organization’s corporate culture.
Thirdly, the company utilizes a performance-based reward and recognition system that motivates employees to perform at an excellent level with commitment and quality assurance. In particular, as stated by Kothari (2022), “Coca-Cola’s compensation system is noteworthy since employees are awarded based on their performance” (para. 8). The firm’s official statement holds that the “compensation programs are designed to reinforce our growth agenda and our talent strategy as well as to drive a strong connection between the contributions of our employees and their pay” (“Form 10-K,” 2021, p. 10). Furthermore, currently used engagement and morale enhancement practices include collective bargaining agreements and developmental and educational programs, such as Coca-Cola University, Peak Performance initiatives, and Assessment and Development Forums (“Why work at the Coca-Cola company,” n. d.). The company uses questionnaires and surveys to monitor employee job satisfaction and morale for possible improvements.
Key Results
When assessing the company’s HRM outcomes, one should identify particular indicators of its performance and establish anticipated levels as compared to currently reached results. For that matter, Table 1 (Appendix 1) demonstrates key result areas for Coca-Cola in 2021 with the performance indicators, their current levels, desired levels, and the difference. Some essential elements in HR metrics are turnover rate and turnover cost. For Coca-Cola, the turnover rate is 22%, which is 12% higher than the target; the turnover cost reaches $3,700, while the target is $2000. The reduction of turnover rate and costs will allow the organization to retain talented employees and save monetary assets to enhance its competitive advantage in the market.
Another important HR indicator is employee satisfaction, which depicts the overall emotional appeal of the organizational atmosphere and culture to its employees. At Coca-Cola, this indicator is currently 37% lower than the target, which necessitates significant improvements. Within the framework of job satisfaction, employees’ satisfaction with decision-making delegation, availability of equipment, and training effectiveness varies from 42%, 70%, to 76%, respectively, while the target indicators are 99%, 95%, and 99% respectively (Ramyasri & Aruna, 2019; Shrestha & Singh, 2020). The need to increase employee satisfaction is validated by the attractiveness of the workplace to the talent that might be recruited for the company’s competitive advantage. While these indicators need substantial improvements, the demographic representation of women in Coca-Cola’s workforce meets its target of 50%.
In addition, the level of employee morale and engagement is rather high and reaches 85% of the 99% targeted. It is imperative to increase this indicator to ensure that the employees are relevantly motivated to contribute their efforts, skills, and talent to the company to complete its goals. At the same time, the company is interested in lowering the number of grievances from 5 per 100 employees to 0.5 per 100 employees and increasing the number of employee suggestions from 2 per 100 employees to 10 per 100 employees. These HR metrics changes are important since they allow for eliminating employee concerns about their work and improving their internal experiences, which will strengthen their loyalty, commitment, and retention. Overall, achieving the target indicators will help Coca-Cola solidify its competitive advantage by retaining talented employees.
Effectiveness of Current Practices
When assessing the effectiveness of current HRM practices, one should refer to Table 1 and the key results’ implications for the overall organizational outcomes based on such HRM practices. Indeed, the indicators demonstrate that the practices aimed at job satisfaction are unsatisfactory since employees report a need to improve their decision-making capacity and compensation system (Ramyasri & Aruna, 2019; Shrestha & Singh, 2020). The company’s versatile strategy of performance-based compensation and motivation does not particularly meet the expectations of each employee. Moreover, the retention-aimed practices are effective since they allow for employees’ satisfaction with training, education, and development programs and the company’s overall corporate culture.
The reliance on effective leadership that encourages independent, innovative solutions, decision-making, and personal and professional growth within the company yields positive results regarding employee satisfaction, engagement, and retention. Nonetheless, the company’s collective bargaining agreements do not comply with the workforce’s expectations of a more individualized approach to addressing concerns, and decision-making delegation deem insufficient (Shrestha & Singh, 2020). However, the hiring practices are a strength of the company since they are aligned with diversity and inclusion values and are implemented using digital solutions. These conclusions are justified by the HR metrics that signify the need for improvements in job satisfaction, turnover management, and feedback handling.
Recommendations and their Impact
Several recommendations might be suggested to Coca-Cola’s management to enhance its competitive advantage based on the results of the analyzed HR practices. Firstly, it is recommended that the company expand its hiring capabilities by utilizing external hiring sources, namely social media, due to its relevance to the current workforce and talent. Moreover, Coca-Cola should facilitate existing recruitment practices by using cloud-based, locally-customized HR solutions to maximize performance excellence, attract talent, and increase competitive advantage (“Coca-Cola BIG re-defines HR strategy,” 2021). Secondly, to address the issues of employee engagement and retention, it is recommended to implement a more customized KPI-based contribution-oriented reward and recognition system, as well as a diversified mentorship program (Kothari, 2022). Such an approach will motivate employees and maximize their commitment.
Thirdly, the company should revise and update its practices aimed at employee morale and job satisfaction facilitation. In particular, team-building interventions and training should be initiated to sustain a high level of job satisfaction, contributing to employee retention (Shrestha & Singh, 2020; “Why work at the Coca-Cola company,” n. d.). Finally, to support positive change for long-term benefits, Coca-Cola should address grievances individually and initiate more accurate feedback collection methods to address workforce concerns instantly. Thus, the organization’s business success will be enhanced by retaining committed, satisfied, and talented employees.
Measuring and Reporting
When measuring the success of the proposed plan of HRM improvement at Coca-Cola, one should implement accurate interventions for data collection and analysis. In particular, the HR metrics will be collected regularly over the plan implementation period to identify possible improvements and drawbacks. The performance and retention-based indicators will be measured via documented organizational results, while the job satisfaction and engagement indicators will be measured using surveys and interviews with employees. The reporting procedures will be held electronically, using HR metrics tables forwarded to responsible stakeholders regularly.
References
Chu, B. (2020). Analysis of the success of Coca-Cola marketing strategy. Advances in Economics, Business and Management Research, 155, 96-100.
Coca-Cola BIG re-defines HR strategy to meet the needs of a changing workforce. (2021). Forbes. Web.
Form 10-K: The Coca-Cola Company. (2021). Web.
Hiring process. (2022). Web.
Kothari, N. (2022). Reward analysis in Coca-Cola company. Web.
Ramyasri, C., & Aruna, G. (2019). A study on employee job satisfaction with reference to Coca-Cola. A Journal of Composition Theory, 12(9), 674-684.
Maisoni, H., Yasri, Y., & Abror, A. (2019). Effect of organizational culture, leadership, and compensation on employee engagement in Coca-Cola Amatil Indonesia Central Sumatra. In 2nd Padang International Conference on Education, Economics, Business, and Accounting (pp. 553-561). Atlantis Press.
Shrestha, N., & Singh, D. (2020). Impact of employee empowerment on job satisfaction: A case study of Coca Cola, Nepal. Research Journal of Science, Technology and Management, 2(3), 60-72.
Why work at the Coca-Cola company? (n. d.). Web.