General Mills Total Rewards

Total Reward Program General Mills is a major food producer with a stable business selling packaged foods to supermarkets. The company earned $17.9 billion in revenue in 2014, and on that took home $1.8 billion in net income (MSN Moneycentral, 2015). According to its 2014 Annual Report, the company sees its strategy as "putting the consumer first." The company competes by connecting with consumers and developing "deep insight into what they like to eat, where they shop for food and how they approach cooking" (p.1).

The company notes that the industry in the developed world is mature, with just 1.5% growth in the U.S., slower than overall industrial sales growth. Input costs, however, were up 4%, creating a challenging operating market (2014 Annual Report). The report's explanation of the company's business indicates that General Mills is primarily a marketing-driven company, developing products and utilizing channels suited to getting goods to the customer. This paper will examine the key human resources needs for General Mills. The company has around 43,000 employees, spread across a large number of divisions.

In addition to marketing, the company needs to have substantial production expertise in order to handle the misalignment between rising costs on the input side and the sluggish sales growth. By identifying the human resources needs of General Mills, it will be possible to design a total rewards program that will complement other human resources strategies in order to meet the overall needs of the company.

The total rewards program is the central element to this paper, and will reflect the rewards strategies best aligned with the overall performance objectives of General Mills. Summary of the Organization General Mills is one of the leading food producers in the United States. Its domestic market share in major categories ranges from 9.1% in frozen pizza (Totino's) to 70% in refrigerated baked goods (Pillsbury). General Mills' organizational chart is cluttered. There are senior executives for product categories (e.g. "meals," "frozen foods"), for geographic regions (e.g.

Canada, Australia/New Zealand) and for functions (e.g. supply chain, compliance, investment). Jacqueline Williams-Roll is the Senior Vice-President for Human Resources Operations. She has performed HR duties with several divisions -- supply chain, finance, marketing and organizational effectiveness (General Mills, 2015). This again indicates that there is only a minimal amount of centralization of the human resources function at General Mills.

One of the core values of General Mills is "innovation in all aspects of business," and another is "investing in, respecting and developing employees," which makes these two core values the most relevant in the development of a total rewards program. Investing in and developing employees reflects a strategy where the company finds good people, provides them with training and upward mobility, and seeks to retain the people in whom they have invested.

Innovation is interesting, because many times in mature industries innovation is not that important, but in this case General Mills actually launches dozens if not hundreds of new products every year. Many will ultimately not succeed, but having an innovation pipeline of new products is one of the key ways for this company to succeed, and keep its product lines fresh. General Mills also relies on having employees who can learn fast, be creative, communicate effectively and work as part of a team.

Part of this comes from hiring well, but part will come from being able to take employees who have the right attributes with respect to hard work and willingness to learn, and training them to do the rest.

The major challenge for General Mills will be to ensure that this is done consistently throughout the organization, despite the fact that there are many different companies, each doing their own hiring, and there may be a mash-up of different organizational cultures, and further there may be chain of command issues given the cluttered nature of the organizational chart. Total Rewards at General Mills Total rewards is a human resources concept that reflects the reality that people work for a company for a variety of different reasons.

Each reason is a 'reward', and the mix of these rewards will be a key driver of what type of employee the company attracts, on its retention rate, and on other human resource metrics. Ultimately, a total rewards program should allow for the organization to meet its strategic objectives. Employees look for the following categories of rewards from their employers: compensation, benefits, work-life, performance recognition and development. General Mills' own core values hint at the latter two being important, and the first two are standard at any company.

There is not as much mention about work-life in the company's literature. The head of HR is a good example of how career opportunity and development works. Ms. Williams-Roll had progressive positions, taking advantage of the large number of divisions and departments within the company to build her internal resume to the point where she reached the executive ranks. By allowing employees to move around within the company, General Mills provides ample development opportunity, but also encourages innovation.

This works because employees who have exposure to a large number of operating groups will be able to transfer ideas between these groups effectively, to look at problems in different ways and to utilize solutions developed at one division to creatively solve problems in another.

By allowing people to forge diverse development pathways, the company creates a situation whereby knowledge transfer is facilitated, a common organizational culture can be developed, and where talented employees will never lack for opportunity, all positive aspects that contribute to the company meeting its overall performance objectives. Another area within the total rewards program at General Mills that is worth discussing is the benefits package. The company's benefits package involves annual enrollment.

This strategy helps the company keep its costs down, and allows the employees to choose from a buffet menu. This is something that is done on a centralized basis at the company, so that each unit works the same with respect to the benefits program (Kofski, 2012). The benefits offered are not unusual -- the normal medical, dental and insurance packages are available. A third area is performance and rewards.

The company seeks to tie its performance management to rewards in an explicit way, so that employees can see a direct link between their performance and the rewards that they receive. Again, this element of the company's total rewards program is developed centrally, but is implemented at the division level (Kofski, 2012). The performance and rewards process is annual, but there is an imperative at the company to have the rewards as close as possible to the event that precipitates the reward (Kofski, 2012).

The rewards include signing bonuses, which average $3,360, and 100% of new hires receive a performance bonus in their first year, at an average of $2,070 (Business Week, 2007). The signing bonuses and education reimbursement programs are designed to help the company have a highly-educated workforce, and to attract new college graduates, in order to keep the workforce fresh and innovative. General Mills notes in their 2014 Annual Report that they need to be in tune with the food tastes of millennials, who number 80 million.

Attracting millennials is the only real way to effectively develop new food products for that generation. Segmentation of the Workforce There are a number of ways to segment the workforce. With 43,000 employees, General Mills has a lot of employees who are involved in basic tasks such as food production, but the company is largely a marketing company and needs to have a high level of system-wide innovation in order continually launch new, successful products. The workforce therefore has a diverse range of drivers.

For many production workers in particular, wages, benefits and stability are the key drivers. But for people on the marketing and product development side, the key drivers are development opportunity and performance recognition. For such workers, pay is less important because they are the architects of their careers -- if they want more pay they will work harder and earn promotions. So there are two distinct groups of employees.

The second group, the strivers, may ultimately be split between those at higher levels who are seeking a pathway to the executive suite, and those at lower levels who simply wish to see opportunity. The company promotes what it calls a "glass door" policy, meaning that it provides opportunity to those who want it, knowing that it will serve as a motivator.

The split between the two groups of employees roughly reflects those in transactional roles -- repetitive jobs that need to be executed to perfection -- and roles that are more transformative in nature. Marketing and innovation staff in particular need to have a lot of creativity in order to understand the markets they serve, and to find ways to serve those markets. Current Needs Arguably, while much of the workforce is transactional, driven by stability and high pay for performance, their needs are also relatively simple.

Less simple are the needs of the employees whose motivations like with building a career progression, and taking advantage of the opportunities that are available. The organization needs employees willing to cultivate a high level of market knowledge, and creativity is a key attribute, given the need that the company has for an innovation pipeline. The company has spent a fair bit of money on its innovation pipeline, even opening an innovation center in China (PR Newswire, 2014) so staffing this pipeline is an essential component of success for the company.

The Shanghai facility highlights a key emerging issue going forward for the company. One-third of General Mills' sales are now outside of the U.S. Europe is a shrinking market, and Canada has somewhat limited upside, but Latin America and Asia (both smaller than those other two) are areas with major growth potential. Latin American sales skyrocketed 38% last year (2014 Annual Report). Thus, there is a significant need for General Mills to foster international innovation.

This is imperative for growing into those markets, which may not understand many of the traditional General Mills products. Further, product innovations in those regions can likely be translated back to America, given that the 2014 Annual Report noted that millennials have a taste for ethnic cuisine. So greater internationalization of the workforce is necessary, and there is a constant need to innovate, particularly where products for millennials are concerned.

Both of these areas for improvement fit in with a key observation -- that in order to understand the market, the company needs to hire people who are in that demographic. Such understanding will come much more naturally, and General Mills knows this, which is why they are a great place for new college graduates and why they have opened up their innovation facility in Shanghai. Recommended Changes & Justification For the most part, the needs of the "transactional" employees are met by the total rewards program.

The biggest challenge for the company is to contain health care costs. Hiring young people for many positions is one way to achieve that end. General Mills will need to work hard to contain these costs, however, the same as any company, since health care costs are growing rapidly and becoming a dominant part of the total rewards cost per employee. The biggest changes are with respect to the ongoing need for innovation.

There is far more value locked up in developing new products that appeal to growing markets than there is in executing routine tasks effectively. This ongoing need highlights the value of recruitment, and that recruitment is going to be driven by meeting the needs of the 'transformative' set. This set wants performance recognition and it wants career opportunity. It is recommended that graduate hiring and internships be increased in order to bring in more fresh blood into the organization.

Performance incentives should foster greater competition within the company, so those should also be increased. Performance bonuses tied to product ideas launched, and sales achieved for new product, will spur high rates of innovation throughout the company. One's career path should be tied to innovation and sales metrics so that people who are not performing in these respects can be removed and replaced with younger workers and managers who are driven and motivated to help the company to succeed.

Competition need not be cutthroat, as that seldom works in the long run, but General Mills should in particular focus on the "carrot" side of the classic carrot and stick concept of performance management. The more incentive is created, the more opportunities are available, the increased likelihood for General Mills to attract the best talent. The Shanghai innovation center raises an interesting issue. Decentralizing innovation might allow for "opportunity" to take different forms within this company.

If that opportunity included the ability to, as a reward, work overseas or in different locations, that might be very attractive to precisely the kind of millennial talent that General Mills wants to attract. The chance to work in Shanghai or Mexico City, or in Europe, could be the sort of reward that attracts young talent.

These are workers who are less motivated by job security and high salaries as they are by opportunity and actualization, and young workers cost less in their health insurance, so there is opportunity for a trade-off at the cost level for General Mills. Risks of not Implementing the Recommendations General Mills is in a competitive marketplace for talent, and failing to implement this strategy will reduce the company's ability to attract talent. Strategically, this would be a critical failure.

In developing world markets in particular, many countries have growing middle classes, and more importantly growing Western-style retail and distribution systems for food. If General Mills can saturate these new distribution channels with foods that will sell in those countries, the company will gain a critical foothold in these growth markets. Without that foothold, General Mills will be faced with persistent slow growth in the major industrialized nations, a future that while profitable will lack growth.

A company that is not growing faces two problems -- unhappy shareholders, and it will lose the ability to attract people with a total rewards program heavy on performance incentives and opportunity. Strategically, it is critical that General Mills makes some adjustments to its total rewards program in order to continue to innovate, and attract top talent. Metrics for Evaluation There are a number of metrics that can be used.

Demographic metrics will help to determine if the company is adding the kinds of ethnic and national groups to help it develop new products for the world's growth markets. Further, the company will want to track its age metrics as well, as there is significant benefit to staying young, especially in product development and marketing. It is also recommended that output-based metrics are used: total benefits cost per employee; new products launched, and new product success rate.

Traditional HR metrics are also valuable here: retention rate, new hire performance measures, and total cost per employee are all important. Retention among top performers is important because that is where the institutional knowledge is locked up, and while losing mediocre performers is no big deal, losing top performers may.