Unilever's strategic approaches to recruitment, selection, and performance management

¶ … Unilever's Strategic Approaches to Recruitment and Selection and Performance Management

Established in the 1890s, mega-corporation Unilever currently competes on a global level with more than 400 brands in more than 40 countries, many of which have longstanding and widespread recognition. To its credit, the company has acquired and merged with dozens of other enterprises over the years and has managed to harmonize its human resource operations across both national borders as well as dissimilar corporate cultures with good results. Although it is reasonable to suggest that Unilever's human resource practices differ across its dozens of business units and far-flung geographic locations, it is also reasonable to suggest that it is possible to discern, at least in a general fashion, the company's recruitment and selection as well as its performance management strategies based on its promotional material and industry analyses. To this end, this paper provides an examination of the peer-reviewed and scholarly literature, as well as organizational material from Unilever, to determine how this company achieved this harmonization and a competitive advantage by applying strategic approaches to its recruitment and selection as well as its performance management functions. A summary of the research for both tasks and important findings are presented in the paper's conclusion.

Review and Discussion

Task 1: Recruitment and Selection Practices at Unilever

The specific strategic goals of an enormous multinational corporation such as Unilever vary from industry to industry as well as by region and country. For instance, Van Clieaf (2004) notes that, Unilever is "a global entity operating in three or more industry sectors, with over 30 business unit presidents accountable for investing in new products and new business models in more than 40 countries" (p. 2). At present, Unilever also has more than 170,000 full-time employees working in these far-flung geographic locations throughout Asia, Africa, Europe, and the Americas. (Company profile 2012). In addition, Unilever (hereinafter alternatively "the company") has established some general strategic goals for sustainable development and enlightened human resources practices in all of the markets in which it competes (Van Clieaf 2004). These types of lofty -- and laudable -- corporate goals demand a careful assessment of how to best use an organization's resources to achieve a maximum return on their investment. Given the enormous diversity that exists within the company's human resources and the differing needs of its business units, the specific recruitment and selection strategy used at a given point in time and place may reflect the immediate needs of the company, but increasingly, multinational corporations such as Unilever are seeking to align the recruitment and selection process with larger corporate goals such as those described above.

The strategic alignment of the human resource recruitment and selection function with these types of ambitious organizational goals has become an important part of achieving a competitive advantage in the increasingly globalized marketplace in which the company currently competes. In this regard, Millmore (2005) emphasizes that, "Recruitment and selection has long been recognized as a key activity within human resources. Prior to the more recent emphasis on strategic alignment, organizational recruitment and selection practice remained relatively unchanged, having evolved into a relatively standardized approach frequently libeled as 'traditional'" (p. 87). In sharp contrast to the traditional approach to recruitment and selection, the strategic application of this HR function involves placing a premium on "selecting employees against organizational rather than job-specific criteria" (Millmore 2005, p. 88). Some indication of the vast variety of jobs available throughout the company is provided in Table 1 below.

Table 1

Summary of Unilever's Business Units

Business Unit

Description

Personal care products

These include skin care and hair care products, deodorants, and oral care products under the brand names of Axe, Brylcreem, Dove, Fissan, Lifebuoy, Lux, Pond's, Radox, Rexona, Signal & Close Up, Simple, St. Ives, Sunsilk, TRESemme, Vaseline, and VO5.

Task 2: Performance Management Practices at Unilever

Corporate giants such as Unilever must employ a flexible approach to performance management based on the unique conditions that exist in the geographic regions in which it competes (Gorelick, Milton & April 2004). For instance, according to the company's most recent annual report (2011), "Unilever operates a wide range of processes and activities across all its operations covering strategy, planning, execution and performance management" (p. 33). Beyond this generalization, though, there is some indication that performance management processes throughout the company are ultimately approved at the appropriate corporate level based on its specific needs at the local and regional levels, while maintaining a focus on improving its supply chain operations across the board and eliminating waste at every opportunity. Identifying appropriate and effective ways to measure the performance of its far-flung enterprises, though, apparently remains a relatively localized affair. At present, the company is controlled by a board of directors that has ultimate responsibility for the performance of all of the company's business units, but these are divided into two major groups that have fundamentally different missions and goals (Annual report 2012). In sum, performance management practices throughout the company are based on the preferences and specific requirements of the type of industry and culture in which the company competes, making this aspect of corporate governance an especially challenging endeavor for this company's top leadership team.

While specific performance management practices vary, a general corporate performance management program is in place at Unilever that provides a framework in which employee expectations can be measured against performance to identify strengths and weaknesses and improve job fit to promote individual growth within the company. This overall approach includes a standardized development evaluation form that is used throughout the company's global enterprises (Kiger, 2005). The company's entire description of its performance management approach is concise and worthy of quoting here:

Your progress is important. That's why we invest a lot of time & effort in supporting you to perform well and in building your capabilities. Performance and Development Planning (PDP) helps you make the most of your working life at Unilever. The process supports you in identifying and delivering against challenging goals that impact the organization. It helps you plan how you'll develop skills and leadership behaviours for your current position and for the years ahead. It also gives you the opportunity to clarify expectations and discuss future opportunities. PDP provides a continual process that allows for a thorough evaluation of your performance. it's an approach designed to encourage clarity and transparency throughout the year. The key thing to remember is that this is an ongoing dialogue between you and your manager. it's about listening, sharing and accepting feedback, and taking responsibility for the next step in your career. (Performance management 2012, p. 3)

This overarching performance management process is responsible in large part for the company's successful integration of its broad-based enterprises within its corporate umbrella. For instance, Kiger (2005) reports that, "Unilever, whose products include food, home and personal care products, made a successful union with Ben & Jerry's, a rare story in the highly charged world of mergers and acquisitions. Only about 15% of corporate mergers achieve their financial objectives, and about half result in culture clashes" (p. 33). Like Roman conquering its neighbors and allowing them to retain their chieftains and religion, Unilever has harmonized its human resources practices by allowing its subsidiaries to apply its performance management practices in ways that are best suited to their individual needs. In this regard, Kiger (2005) emphasizes that, "Unilever allowed Ben & Jerry's to pick which parts of the parent company's human resources policies it wanted to adopt. When Ben & Jerry's did implement a Unilever program, it was free to modify it. In the case of Unilever's standard global development evaluation for employees, for example, Ben & Jerry's shortened the document and added the company's social mission as one of the performance goals" (p. 33). An executive at Ben & Jerry's said of the company's global development evaluation performance management approach: "Unilever had a good process, but we needed to make it ours" (quoted in Kiger 2005, p. 33).

Moreover, the company's globalized but flexible performance management approach has paid dividends in other ways as well. For instance, Kiger reports that, "While Ben & Jerry's did go through downsizing, its integration with its corporate parent also has created opportunities" (p. 33). These opportunities included applying the company's organizational culture to its new acquisition in ways that were consistent with both organizations' core values -- a daunting prospect by any measure. Nevertheless, Unilever's performance management approach was up to even this major challenge. For example, Kiger (2005) notes that following the acquisition by Unilever, most of the employees at Ben & Jerry's were more interested in whether the parent company would continue their social activist approach and emphasis on quality, while virtually none of the employees were interested in how the acquisition would actually make money. According to Kiger, although Unilever assured Ben & Jerry's employees that their interests would be protected, they needed to help the parent company achieve the fundamental goal of generating revenues in the process. In this regard, Kiger (2005) reports that the new CEO for Ben & Jerry's made it clear that in order for both companies to succeed in promoting their social activism goals, they would have to focus on performance and making money from the outset. In this regard, Kiger (2005) emphasizes that, "Unilever used persuasion rather than coercion. The new CEO argued that the best way to spread Ben & Jerry's enlightened ethic throughout the business world was to make the company successful" (p. 33). This approach to implementing new performance management processes in another enterprise with a proven track record of success requires a delicate balancing act, but Unilever's leadership team appears to know what is needed in a given situation. For example, Kiger also notes that:

Changing mind-sets [at Ben & Jerry's] wasn't easy. The workforce, though skilled at making quality ice cream and ereative at marketing it, wasn't up to speed on boring stuff such as corporate finance. Unlike other bottom-line-conscious companies, Unilever didn't require Ben & Jerry's to quantify the dollars-and-cents impact of its human resources policies. Instead, once management decides a program is needed, the only charge is to deliver it within budget. We measure return by whether or not the company achieves its overall goals. (emphasis added) (quoted in Kiger 2005, p. 34)

Although the process has not been without its problems, the transition to Unilever's performance management approach by Ben & Jerry's has produced some unexpected benefits. In fact, despite eliminating more than 50 jobs (primarily at Ben & Jerry's headquarters) and 69 elsewhere in the system and the closure of several facilities as part of its consolidation of its North American ice cream operations, Unilever allowed Ben & Jerry's to use the approach it deemed best suited to its employees and their situations to facilitate the transition. For example, Kiger (2005) notes that, "Jobs at Ben & Jerry's are now posted throughout the Unilever corporate empire. That gives the Vermont company access to a larger global pool of talent than it ever had as an independent. Ben & Jerry's staffers can find out about career opportunities at other Unilever companies-though few seem to want to move" (p. 34).

In fact, Ben & Jerry's social activism is highly congruent with Unilever's larger corporate goal of promoting sustainable business practices throughout the organization and along its entire supply chain.

In this regard, Van Clieaf (2004) reports that the company is committed to contributing cash-value-added to worldwide society at present as well as 2 to 3 decades in the future (Van Clieaf 2004, p. 2). According to this industry analyst, "Cash-value-added for society was defined by Unilever in their 2002 Corporate and Social responsibility Report. Cash-Value-Added = cash paid to employees + governments + capital providers + suppliers + cash contributions to local communities + investments in the business for future growth)" (Van Clieaf 2004, p. 2).

This larger organizational goal is supported by a number of other initiatives, including promoting sustainable business practices along its entire supply chain. As one of the world's larger food producers and distributors, Unilever is well situated to achieving the above-stated goals given its top-down emphasis on corporate social responsibility. In this regard, the company emphasizes that, "Since Unilever was established in the 1890s, brands with a social mission have been at the core of our business, and now corporate responsibility underpins our strategy" (Introduction to Unilever 2012, p. 2). In an effort to fulfill this commitment, the company has actually put its money where its corporate mouth is and invested a significant amount of resources in developing performance management processes that are consistent with its larger goals by compelling its supply chain partners to conform to its larger corporate goals. For instance, the company reports that, "In 2010 we launched the Unilever Sustainable Living Plan -- a set of targets designed to help us deliver our objective of growing our business while minimizing our impact on the environment. To embed sustainability into every stage of the life cycle of our products, we're working with our suppliers to support responsible approaches to agriculture" (Introduction to Unilever 2012, p. 2). Moreover, the company admits that it does not necessarily know how to best proceed in all of the environments in which it competes, but emphasizes that it seeks out expert guidance when the situation calls for it. For example, the company's promotional literature states the Unilever is "also learning from NGOs and other organisations, recognizing that building a truly sustainable business is not something we can do without expert advice" (Introduction to Unilever 2012, p. 3).

Conclusion

The research showed that even corporate giants can have a heart, and the top leadership team at Unilever has consistently demonstrated that by establishing lofty goals and communicating these throughout the organization, it is possible to achieve a competitive advantage while promoting enlightened human resources approaches in a wide range of cultural and economic settings. The research also showed that the translation of the company's larger corporate goals through these enlightened corporate philosophies, particularly with respect to its performance management approaches, clearly indicates that Unilever is modeling the way for others that would grow their businesses in new locations by remaining sensitive to cultural and economic factors that will likely differ in substantive ways from the parent company's organizational culture and home country. Despite these challenges, it is also clear that Unilever has consistently sought to transform its overarching corporate goals into reality through informed and flexible human resources practices that include its recruitment and selection function as well as its performance management processes.