Term Paper on "Performance Management Human Resource Performance Management System"

Term Paper 6 pages (1543 words) Sources: 5 Style: APA

[EXCERPT] . . . .

Performance Management

Human Resource Performance Management System at British American Tobacco

BAT's performance management strategy and philosophy

British American Tobacco is committed to personal growth and development and the international corporation implements a human resource performance management system. The first points on the HR performance management agenda refer to creating a safe and pleasant environment where BAT employees can activate. The personnel's performance is measured with the aid of the Lost Workday Case Incident Rate, or the LWCIR, which has been decreasing during the past years, falling from 4.9 to 4.2. BAT aspires to a rate between 0.1-0.2, the rate withheld by the strongest and most competitive companies (BAT 2006 Annual Report).

The policies implemented eliminate discriminations based on any criteria and promote a friendly environment where employees are appreciated, encouraged to develop and become involved, promoted, motivated and remunerated accordingly. The wage strategy implies analyses of other large firms and the offering of competitive wages. All human resource strategies, policies and philosophies are the same in all 52 cigarette factories spread across a total of 44 countries (BAT Website, 2007).

2. HR policies and overall objectives and management

British American Tobacco aims to increase their competitive advantages on the national and international market with the final objective of increasing the company's profits. Throughout the processes implemented in order to reach the overall organizational objective, BAT considers their personnel as the vital force in the completion of their mission.

The basic system of beliefs is that the human resource is the primary force that supports BAT's activity and in order to increase their efficiency, the manufacturer intends to keep his employees satisfied at all times. Employees with increased satisfaction related to the employer and the working conditions feel safe and appreciated and as a result they converge towards increased performances and productivity. These then all lead to increased quantity of the manufactured goods and their adherent superior quality; increase the number of customers, sales, market share, sales revenues and consequently profits.

In all, the human resource policies are fully integrated within the organization's overall goals and management philosophy. The personnel is offered safe and friendly working environment and motivating remunerations and it is being valued and respected, tending to be integrated in the BAT family. Employees' integration and the final objective of the HR policies will be reached once the organization manages to unify employees' individual goals with the company's overall goals.

3. HR Performance management, strategy and competitive advantage

British America Tobacco aims to become the international leader on the tobacco industry and in achieving this goal, they implement four major strategies. "Our vision is to achieve leadership on the global tobacco industry, through strategies for creating shareholder value based on Growth, Productivity, Responsibility and a Winning Organization" (BAT 2006 Annual Report).

Source: BAT 2006 Annual Report

The human resource is present in all these strategies and at all organizational levels and they remain the force that makes the objectives reachable. "The extent to which our employees, at every level of the business, feel engaged and committed to delivering superior results is key to delivering our leadership vision" (BAT 2006 Annual Report). BAT's human resource system is a triangular one, in which employees make up the core and they influence all organizational layers and policies, including the working system, the personnel flow and the remuneration and rewards system.

Aside from a committed human resource, British American Tobacco possesses competitive advantages that derive from an international expansion and recognition and a large number of factories strategically placed through numerous countries - 52 factories in 44 countries.

4. Effectiveness of BAT's performance management system

The effectiveness of BAT's human resource performance management system is highlighted by the increased productivity over the past years and a considerable reduction of the Lost Workday Case Incident Rate. In addition, the manufacturer implements surveys within the organization in order to identify employees' view points in regard to the company's policies and practices and to identify the personnel's level of satisfaction. The responses are then analyzed and new strategies are being developed and implemented based on the findings.

To make sure that the responses are objective and real, British American Tobacco compares them with the results retrieved by other corporations. In 2006, BAT received superior qualifications than other major competitors, registered improvements at numerous organizational levels and registered an increased response rate than in precedent years (BAT 2006 Annual Report).

5. Success of the system

As with any other major corporation, the British American Tobacco has not been speared from criticisms, more over when their products have such negative impacts upon the consumers' health. Ethical issues have been raised, but the conclusion drawn was that consumers are free to choose smokes and not forced by the manufacturer, who simply activates in an industry. Employees have as well complained about this and some of them feel less thrilled about working for a company which 'promotes' lung cancer and other numerous diseases. Directly linked to this, employees also fear for their own healthy as they complained about the unsafe conditions they work in. The company strives to improve these conditions and increase employees' safety. In addition, they compensate the personnel with numerous other incentives. However dissatisfactions are impossible to avoid, the BAT overall activity and results point out a highly efficient system which implements suitable human resource strategies and policies and which generally retrieves the desired overall outcome.

Cost-effectiveness

BAT employees are generally satisfied with their positions within the company, which generates a reduced employee turnover and therefore reduced capital expenditures with recruiting, selecting and hiring. Costs basically derive from training, wages, benefits and taxes to the state budget.

Competence

The human resource policies implemented by British American Tobacco are aimed to hire and prepare key people for key positions, which are vital for the current and future position of the manufacturer.

Commitment

The employees are generally satisfied with working at BAT, more over due to the pleasant and safe working conditions and the stimulating remunerations. Some employees are faced with moral issues in regard to working for a company that promotes an unhealthy habit.

Congruence

BAT's stakeholders are divided based on their approach and personal beliefs regarding smoking. However the company is an internationally successful conglomerate, some stakeholders object to their activity, whereas others praise their strong financial results.

6. Need for improvements

British American Tobacco implements a human resource performance management system focused around satisfying the employees, with the stated belief that this would eventually lead to an increased chance of reaching the overall objectives.

Improvements could be brought to the system in the following meanings:

Increase the safety of the working conditions

Better integrate the employees within the organization

Care more about employees and show interest in their personal lives in order to better understand and motivate them Develop and offer packages of personalized incentives (such as more personal days for some or more flexible schedules for others)

Enlarge the benefits and especially the medical coverage to comprise the employee's near family (spouse and children)

Develop better pension and retirement plans

Improve the means of measuring employee performance and develop programs based on the registered performance (such as bonuses, premiums or promotion).

A particular manner by which BAT could better motivate and satisfy its employees resides in offering them the possibility to purchase BAT stocks or shares. This would be done based on the registered performance and other internal regulations that promote fairness. For instance, such a regulation could stipulate that employees are allowed to purchase BAT stocks for a value of maximum 40% of their monthly wages.

7. A more proactive system

In order to implement a more proactive and strategy driven performance management system, BAT needs to better approach the human resource. In this order of ideas, strategies need to be developed among… READ MORE

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