PMS at

Hindustan

Unilever Ltd

Shubhangi Kesarwani

Smrity Mishra

Sreyashi Mukherjee

Sector Information

– The Indian FMCG sector is the fourth

largest sector in the economy

– The FMCG sector has grown at an annual

average of about 11 percent over the last

decade

– The sector is expected to grow at a

compounded annual growth rate (CAGR)

of 20.6 percent in FY2020

– The present market size of FMCG sector is

$49 billion

34.8 36.8

44.9 47.3 49

103.7

0

20

40

60

80

100

120

2011 2012 2013 2015 2016 2020

Revenues (Billion $)

Revenues (Billion $)Source: ibef.com

FMCG

FOOD & BEVERAGE

18%

HEALTH CAREHOUSEHOLD & PERSONAL-

CARE

32% 50%

OTC products & ethical Oral care, skin care, deodorants etc

Health beverages, staple/cereals, etc

MARKET BREAK-UP BY REVENUE(FY16*)

Hair Care, 23%

FOODS, 19%

HEALTH, 16%

ORAL CARE, 15%

OTC & ETHICALS , 9%

HOME CARE, 6%

DIGESTIVE, 7%SKIN CARE, 5%

Growth Prospective

India has a population more than 1.150 billions which is

just behind china

According to the estimates, by 2030 India's population

will be around 1.450 billion

FMCG Industry which is directly related to the

population is expected to maintain a robust growth rate

– Hindustan Unilever (HUL) is the largest fast moving consumer goods (FMCG)

company

– HUL's brands are spread across 20 distinct consumer categories

– Has employee strength over 15000 & 1200 managers

– There 75 manufacturing locations in India and caters its wide range of products

to 6.3million outlets

– Offers different category and products which caters to the need of every

income segment in the country

Performance Management

System at HUL

– A structured method of formally and objectively evaluating employees’

performance with respect to their objectives.

– Addresses the issue of an employee’s development by providing them with

structured and in-depth analysis of strengths and areas of improvement

– Provides with input for annual increments, training and development.

– Employee Performance management at HUL includes planning work and setting

expectations, developing the capacity to perform, continuously monitoring

performance and evaluating it.

Purpose of PMS

– Administration

– Determine promotion of employees

– Determine increment in pay of

employees.

– Determine transfer & change in job

assignments.

– Determine retention or termination

– Decide on layoffs

– Decide need for training

– Decide salary & related issues

– Development

– Provide performance feedback to all

concerned

– Identify individual skills, core

competencies, strength &

weaknesses

– Assist employees in setting goals

– Identify training needs

– Improve communication

Methods of Performance

Appraisal at HUL

360 Degree Performance Appraisal:

provide feedback from superiors, peer groups and subordinates

to provide holistic and objective evaluation of the employees.

assessment is communicated transparently to all employees

individually

career paths are shared with them

Continued…

Management by Objectives (MBO):

The MBO focuses attention on participative goals that are tangible, verifiable

& measurable

The superior & subordinates jointly determine goals to be considered during

appraisal period & what level of performance is necessary for subordinates

to satisfactorily achieve specific goals

During performance appraisal period the superior & subordinates update &

alter goals as necessary due to changes in business environment

If not achieved identify reasons for deviation

Process of PMS in HUL

Establish Performance Standard & communicate standard & expectation to employees

Measure actual performance with the target

Compare actual performance with set standards & find out deviations

Suggest changes in job analysis & standards if necessary

Follow Up

Annual Goal Setting

Mid-Year Review

Annual Performance

Review

PROBLEMS of PMS

– Rating biases

– Halo effect

– Error of central tendency

– Personal Prejudice