HINDUSTAN UNILEVER LTD.

Case Solution: Meeting Employee Expectations

Team Members:

Anjan Ganguly – M2014HRM019

Avinash Singh – M2014HRM010

Mehul Bhati – M2014HRM019

Srivastav Iyer – M2014HRM052

Tushar Gupta – M2014HRM057

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Brief About Case:

HUL is a market leader in Indian FMCG sector. It is a subsidiary of Unilever Ltd. The case

brings about the genuine concern that the company might be losing its position as the "dream

employer" for graduates from the top Indian business schools from which it recruits its

management personnel. The shifting demographic profile of employees and their changing

expectations have already resulted in changes in the company's employment model. These

include on-the-job training and classroom and e-learning program facilities at all levels of the

organization and at all stages of one's career; mentoring by senior management;

communication of vision and goals throughout the company, especially through regular

meetings with the CEO; a focus on corporate social responsibility; and an emphasis on work-

life balance, such as offering sabbaticals and providing health and recreation facilities at the

new headquarters. While the company has changed its traditional employment value

proposition, in a highly competitive and talent-scarce job market, can it continue to be

relevant in order to attract and retain the best talent in the country?

1. What are the typical expectations that an employee has from any corporate

organization?

• Policies and Processes (Tangible on the Paper facts)

• Compensation

• Flexible Working Hours

• Work-Life Balance

• Career Growth

• Organization Culture

• Challenging work Assignments

• Learning Opportunities

• Job Security

• Better Location

• Psychological Contract (Intangible Touch Points)

• Interaction with Leaders

• Feedback and expectation management

• Job (EVP – Enriching, fulfilling and challenging)

**Psychological Contract refers to often unacknowledged and unspoken

expectations. These are part of the psychological contract. The psychological contract is

an unwritten agreement that sets out what employers expect from employees and what

employees expect from employers. In practice most psychological contracts are majorly

between managers and their direct reports and at times organization as whole.

The list of major factors established in the report by linked in 2015 report on Talent trend

are as mentioned below:

Key Highlights:

Compensation tops the list

Though compensation is highest look for aspect but in specific countries work-life

balance, Professional development and opportunity for advancement lead.

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The above point suggest better branding in these aspects can give opportunity to

play around compensation than it being considered non-negotiable in past.

Source: Linked in Report on Talent Trends 2015

2. In the context of the HR practices followed at Unilever, “are leaders born or made?”

In the context of HUL, as per the case there are references to the scenarios which point to the

fact that HUL had the philosophy of making leaders. As the case states, HUL has been known

as Leadership churning machinery. With around 440 CEO’s in different companies of India

who have at the some point of time worked for HUL, it sure was a Leadership making

factory.

Later in the case, there are references to its Leadership development program. As the case

states, Leadership development was part of HUL culture and 90% of their top leadership was

groomed internally. It had a Business leadership training program that was 15 to 18-months

long and exposed graduates from top colleges to various aspects of marketing and sales

including a rural stint. Not only this, the trainee in the BLT program was assigned a coach, a

mentor and a tutor, all at three different levels of hierarchy. This mentoring, coaching and

tutoring was taken seriously and reflected on the appraisal processes of all the stakeholders

involved. HUL has a performance versus potential tool to differentiate between its talent

pools. Known as Leadership Differentiation Tool it helped HUL to identify High Performers

and sustained High Performers and helped them to groom such talent for future roles.

Not only this, the HUL leadership invested 30-40% of their time in grooming and mentoring

leaders for future with the philosophy that one needs to groom few people who can take their

job today and few people who would be ready to take on the role in next 2-3 years and few in

next 5-7 years.

In the light of these facts one can say that in context of HUL, Leaders are made.

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3. How did HUL successfully manage to become a company in tune with the changing

needs of potential recruits?

The period between 2001 and 2004 showed a marked decrease in the growth of HUL and

with it the attrition of some of its key leaders. In 2007 HUL dropped to the position of 14

from being a leader for over two decades in the ranking of the most preferred employer,

thereby leading to an investigation as to the changing needs of the newer generation of

management graduates. HUL now faced competition from the service sector which became a

top employer of choice for the management graduates. Employer value proposition

completely changed in the period. Therefore the traditional model of HUL now failed

because the employees now looked for an urban lifestyle, where the children were exposed to

better education, medical care very early in their career.

Nair, the executive director, HR of HUL, identified some of the core needs of the newer

generation employees. They were:

1. A job that was both exciting and could be viewed as making a difference to the

stakeholder, society and the environment directly.

2. A career that would help them both personally and professionally and also the future

of the company where they were investing their time and effort.

3. A responsible and caring work culture that would be sensitive to their needs and

welfare.

4. Opportunities to get their performances distinguished by rewards and recognitions and

recognize their special performances.

5. Work-life balance.

Once the needs of the new generation were identified HUL focussed on implementing them

throughout the organization. This led to the revamp of employer value proposition in the

company in the following areas:

1. Career Path: The organization structure was flattened requiring only 14 years to

achieve a senior management position which previously took 16-18 years. Adding to

this was the opportunities of a global experience early on in their career. (13% served

Globally in 2001)

2. Compensation: Changes in compensation were made by increasing the variable

component of their salaries (by over 100%), thereby opening the door to performance

and rewards, decided by the performance of the company, team and individual

performances.

3. Increasing responsibility: This became the USP of HUL and therefore attracted

young talent into the company. Management trainees with an experience of 15 months

were given the responsibility of the market of a few million rupees.

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4. Training and Development: This was another USP of HUL where the differentiation

of them being leaders created a culture of competitiveness and the idea of building

leadership from within. Huge stress was given to cascading the system of leadership

development right down to the front line managers.

A 15-18 month BLT (Building Leadership Training) program was developed that had

phases of training in particular domains (sales, marketing, HR, technical commercial

and IT) and also a rural stint of 4 weeks to know their 250 million rural customers

very closely.

5. Mentoring: This was a huge development in the HUL family. Tutors, Mentors and

Coaches were appointed as their immediate manager, Management Committee

Manager and a senior manager and were given the responsibility to contribute to their

learning and development. Even their individual appraisals were linked to the

performances of the trainee. This led to the leaders contributing almost 30-40% of

their time in grooming young managers. This led to the development of an intense

succession plan while at the same time giving the managers the personal and

professional development they had hoped for. Moreover the management graduates

were also given the opportunities to interact with the CEO himself and share their

ideas and views on the policies in HUL.

6. Performance Measurement: This was a tool to reflect what the company values. HUL

had a two pronged approach towards PMS. One way is regarding the targets achieved,

while the other caters to the 6 standards of leadership called GREATB towards the

consumers, society and related issues. This in a way proved to be a marker to valuing

the needs of the employee aspirations in contributing towards the society environment

and also towards the performance of HUL itself.

7. Work Life Balance: HUL focussed heavily on maintain the work life balance by

providing them career breaks, sabbaticals and providing them a leave of almost 5

years for personal reasons. Moreover policies were developed regarding work-from-

home at least once in a week and no working hours after 8:30 pm so that they could

spend time with their families. Moreover various facilities of physical fitness and

recreational activities were provided by including them as a part of the ergonomics in

the office.

8. CSR activities: This also became a part of the employee value proposition where the

employees were provided the opportunity to contribute to the society and also

bringing them closer to their customers.

These policies were very carefully developed so that they reflected exactly what potential

employees needed in the present context. Moreover proper implementation of the policies

by the top management ensured that HUL retained its efforts to maintain its brand among

present and potential employees. These major revamp of measures proved very effective

and helped HUL in more ways than one to sustain its brand among the fierce competition

it faces from the VUCA world of today’s business.

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4. What approach is required for managers to become successful in the changing

scenario in emerging economies?

There are following approaches which Managers can do to become successful in changing

scenario in emerging economies:

1. Personal resilience

In cost-reduction initiatives, managers lose valued colleagues and team members and

have to learn quickly how to work with fewer people and resources. Providing support

Resilience

Coaching

Sensible

plan

Follow through

Forcing Clarity

Trust

Building Networking

Managing Uncertainty

Seeing Big

picture

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to colleagues, peers and senior managers, and routes for line managers to get things

off their chest is an important part of keeping them effective through major change.

2. Trust-building

The speed of change is normally directly proportional to the level of trust people have

in their line managers. People look to their manager for information on how a change

is going to affect them. They are less likely to trust a big leadership presentation about

the need for change unless this is reflected consistently in line manager priorities.

3. Networking

Building networks of trust with other line managers is essential to enable line

managers to support themselves and to implement the details of change effectively.

These networks can help bring problems to the surface earlier.

4. Coaching

Managers need coaching skills to deal with the individuals who are struggling with

change and they need to understand that people react to change in different ways.

Line managers also need to recognise their own reactions to change and to be coached

to ensure they maintain personal resilience.

5. Forcing clarity

When the details of the change are worked out, leaders need line managers who will

help to shape the change and work out the implications of different ideas. While the

ability to deal with uncertainty is an important capability, it is better to force clarity as

early as possible.

6. Managing others’ uncertainty

Most resistance to change is resistance to uncertainty, and managers that force clarity

help staff cope with change. However, some uncertainties will inevitably remain. The

best line managers act as strong leaders, explaining why the uncertainty is necessary,

what action is being taken and when it will be resolved. They also coach people

sensitively to help them handle the uncertainty well and know how to spot when an

individual may be entering a crisis.

7. Organisation

Creating a sensible plan, thinking through the details of how things will work and

then delivering in line with the plan is a great driver of confidence.

8. Follow-through

The best line managers only start initiatives they can see through to the end, and they

track change progress in the same robust way they track operational business

performance. Poor line managers never say no to initiatives and just wait for leaders

to run out of steam in following through.

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9. Think outside the box.

Managers read widely, and don’t confine one to own area of ‘expertise.’ They try to

see links between apparently separate and diverse elements in your life and

experience.

10. Accept uncertainty and be optimistic.

Life is inherently uncertain, so don’t waste your energy trying to predict the future. Of

all the possible outcomes, focus on the most positive one. This is not to be a

‘Pollyanna,’ but to accept that if you respond well and work to the best of your ability,

a good outcome is as likely as any other. Don’t waste your energy being negative.

11. See the big picture.

Change is inevitable, but if you take a bird’s-eye-view of the landscape, the change

won’t be so disorientating and you will keep perspective at all times.

5. How can HUL continue to be a dream employer?

Figure 1 Drivers of Attraction in Work

Figure 2 Drivers of Attraction in Rewards

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Figure 3 Drivers of Attraction in Work Environment

Figure 4 Drivers of Attraction in Opportunities

With a changing demographic the demands of the generation Y are also changing. HUL must work on

restructuring its EVP. It is important to understand what does the new generation of employees’

desire. Based on research published by the Corporate Leadership Council in 2014 the following

highlights may be drawn.

Work-life balance, Innovation and Business Travel are some of the key focus areas of the employees.

Surprisingly compensation is not such a high priority. So is a collegial work environment. However

manager quality is very essential along with ample development opportunities. Of highest

importance is the Organization Growth Rate, presumably the rate at which one grows within the

organization.

Clearly from the data given in the case HUL has some of the best practices in employee management

as far as India and the FMCG sector are concerned. Exhibit 1 is a testament to this fact. However

there are a few programmes that HUL may initiate to continue to remain a dream employer despite

chaining aspirations. These are

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1. Redesign the Employee Value Proposition (EVP)

Figure 5 the EVP Mismatch

To successfully deliver an EVP, HUL must first base the EVP on attributes the prospective employees

prioritizes. In general, however, misalignment exists between what the market preferences and

organizations’ EVPs. One cause of this misalignment is a general disconnect between what the

market prefers and what HR believes the market prefers. Organizations can construct the EVP from a

wide array of attributes, requiring it to prioritize some over others. Unfortunately, during this

construction, HR tends to overestimate the importance of people while underestimating the

importance of rewards, opportunities, and the nature of employees’ work. Based on the insights

from changing employee needs HUL must evaluate its current EVP and update it.

2. Hire widely But restricting itself to premier tier 1 B-schools HUL is denying it self the talent available in 2nd tier

reputed B-Schools like IITs. As HUL already has a good training plan HUL can benefit from hiring

widely.

3. Include short-term international stints Clearly opportunities abroad are a prized perk. HUL may leverage its wide base, and grant a short-

term abroad stint even in the training phase. Moreover HUL India has been a fertile ground for

talent for Unilever worldwide.

4. Digital Brand Building

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Social media is increasingly becoming an avenue for communicating with prospective employees.

HUL must focus on building an engaging relationship online.