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Human resource Management Individual Assignment Theme: Building a world class HR Organization


Case study: Sonoco Products Company

Question One
What are Sonocos current strengths in terms of its culture and people? What are the companys major weaknesses? Current Strengths in terms of culture The working atmosphere at Sonoco is more conducive for work. Sonocos collaborative, friendly and team oriented work environment policy is responsible for its history of productivity. Sonoco has succeeded to grow and maintain competition in its core activity and that of its subsidiaries. The fact that some of employees have worked at Sonoco throughout their career is an indicator of its career management strategy. Sonoco has been able to retain their employee which is a good strategy for competition. Sonoco is characterized by an ethically aligned culture which can be seen in the value that attributed to the employees. The ethic of its corporate culture is testified by an employee who clearly says Sonoco is a group of ordinary people doing extraordinary things.

Sonocos major weaknesses The Lack of a performance management strategy: Sonoco had a n absent or failed performance management strategy. . Evaluations did not often reflect an employees performance .Personnel were laid off the company without justifiable reasons. Worst even, talented employees lost their jobs because of the lack of a performance management strategy. This was bad for the sustainability of the company. Over dependence on the general managers managing talent Rather than viewing talent as an overall corporate resource, the current structure was too dependent on the objectives and strategies of the current managers. The major problem with such a system is that defined objectives are usually a reflection of individual interest and fail to profit the organization. Uneven distribution of Human resource talent Most of the HR talent was concentrated at the top of the organization while smaller divisions were left to figure out organizational problems on their own. Most often organisms with low consideration for HR fail to tap out the potential from their employees and hence fail to take advantage of an important competitive advantage.

Absence of a reward management policy: The highly structured and mechanistic system obscured the true performance of employees and also contributed to the difficulty in assigning appointing new managers.

Question Two
How successful were the HR changes at Sonoco? Was the sequence of changes the right one?

Hartleys HR changes at Sonoco were very efficient. She identified the loopholes in the system and elaborated a sequential HR strategy that effectively tackled the different problems. The sequence of changes was as follows: 1. Change of performance and compensation Management Systems Hartley linked the companys HR by eliminating bureaucracy and installing a system which better reflected employee contribution to company performance. 2. Creation of an employee development process Hartley understood the performance of developing the potential in employees and she definitely understood the impact its a long term competitive strategy for Sonoco. This program not only developed skill but paved the way for the identification of future leaders which leads us to the third point 3. Succession Planning The lack of personnel training for top managerial positions at Sonoco led to the poor performance of designated leaders (even those that had considerable years of experience within the company). The previous HR system failed to analyze the data on career aspirations and thus failed to anticipate the managerial future of the company. 4. Diversity issues Once Hartley had finished installing the hard HR laws of the company, she proceeded with issues pertaining to diversity such as gender, race, age, education, ethnicity and a lot more. Lastly Hartley adopted the rightful character of a human resource manager. She was open to disagreement and most of all approachable thus she could easily have information about the company and models an exemplary human resource system.

Question Three

What is the right HR structure for Sonoco- centralization or hybrid? Why? Evaluate different options (pros and cons). 10 points

The organizational structure of a company is one of the elements that determine the sustainability of the company. Accountability is an important element in organizational planning. When a manager is in charge of a defined framework of duties, he will do his best to ensure the success of his duties. In a situation where several managers are collectively responsible for a wide range of responsibilities, the outcomes are likely less efficient than the previous managerial situation. That being said, companies have realized that the hybrid organizational system is the best. Perfectly horizontal models lack accountability and hence efficiency. In the case of Sonoco, the Centralized Human Resource is a good example for a perfectly hierarchical organization where all or most of the decision making rights are centered at the top of the pyramid [organization]. The diagrams below express my point of view on the functioning of both the Central and Hybrid system respectively.

Centralized Human Resource System at Sonoco Products Co. HR Field Representatives

Administrative staff of 5 people
HR managing 10-15 plants

Administrative staff operates across business units

As illustrated in the diagram above, The Human resource Group representatives are responsible for much of the evaluation of the entire human resource system. In addition to their Evaluating role, they are entitled to the decision making powers. This system is not quite different from what it was in the 1990s at Sonoco; Mechanical and arbitrary. The only difference is a small increase of flexibility and the minimization of cost. An ambitious organization aiming at long term growth must understand that Labor cost is different from labor rate and minimize the importance of cost in the elaboration of human resource strategy.

Cons of the centralized Human resource system Having defined the functional system of Centralized organizations, it is clear that one of the cons of this system is the difficulty of coordination. The responsibilities of the Human Resource Field representatives are too wide and it is clear that they will be less efficient than a smaller group of managers responsible of specific task. Secondly, As a result of the inflexibility of the centralized human resource, it fails to understand the problems of the consumer and industrial class of customers. As a result, decisions made at the top of the hierarchy will fail to address the specific problems of both customer classes. This system is Unaligned with individual business needs. Centralized organizations fail to stimulate individual efficiency due to lost importance of accountability. Since a group of individuals are collectively responsible for the same task, they will invest themselves less efficiently since they are less accountable for results.

Pros of the centralized Human resource system Hartley succeeded to surpass the cost cutting limit recommended by the CEO. She defined a model that will cut cost by 22% instead of 20% as recommended by the companys newly appointed CEO.

The Hybrid Human resource Structure at Sonoco products co

Hr consumer Business unit

Director of employee relations

Director of compensation Hybrid Hr of Industrial Business unit Director of employee relations

Director of compensation

Pros of the Hybrid Human resource system As can be seen on the illustration above, managers in this system are more accountable for their task and outcomes. The presence of the Consumer and industrial human resource representatives makes the decision making process more dynamic and efficient. Divisions have direct involvements with decision making on key issues and as a result the problems of the stake holders are have a direct impact on the elaboration of decisions. Under such a system, Centers of excellence will define efficient programs since they have much more date on the specific problems of divisions.

Cons of the Hybrid human resource system The main disadvantage of the hybrid system as defined by Hartley was the fact that it missed the 2.8 million target set by the CEO of Sonoco product Co. More importance should be given on organizational human resource efficiency rather than cost reduction. If a company focuses much more on cutting labor cost, it might fail in its performance management strategy and lay off talented personnel. That being said, I would have recommended Hartley to implement Hybrid Human resource model.