Comparison Of Employee Motivation Systems In Nestle And Unilever

Background of Nestle and Unilever

Question:

Discuss about the Working Capital Trends and Liquidity Analysis.

Motivation is one of the major factors that govern the grounds for engagement in a distinct by an individual or group of individuals (Barrick et al. 2015). In order to successfully conduct its business, it is very important for an organization to keep its employees motivated, as for only the motivated employees will bring in better productivity. Motivation affects each and every aspect of a business. This paper shall elaborate on the different motivation systems on Nestle and Unilever. It shall compare and contrast on the motivation system of the two companies and their performance based on different motivational theories. It shall further shed light on a brief evaluation and analysis of their incentive systems as a whole. Apparently, the paper also includes an analysis of the SWOT of both of the companies which is based on the overall motivation performance of the companies. Finally, as a recommendation for both the companies to improve their employee motivation system as well as their performance, an action plan is constructed. 

Nestle is the leading Health, Nutrition and Wellness company in the world (Porter and Kramer 2018). It is a food processing company and was founded in the year 1867 by Sir Henri Nestle, a pharmacist in Switzerland. As the most profitable corporation in the world, the company was listed as number 64^th in the fortune global 500, 2017 and 33^rd on the Forbes Global 2000 in the year 2016.  Gradually the company, with its wide range of products, offering millions of people in the world has succeeded in being the world’s leading food company (Scrinis 2016). It owns several famous brands in their range of products, starting from Milo, Nescafe to Maggie and Nestum. Since the brand is trusted, people always chose to buy its products above all. The company has more than eight thousand brands along with wide range of products across various markets. Its product includes medical food, baby food, coffee and tea, bottled water, dairy products, confectionary, snacks, frozen foods, pet foods and ice cream. The company is also one of the major shareholders of the world famous cosmetic brand L’Oreal (Williams 2014). Since its emergence, the company has been serving worldwide, with more than 447 factories, operating in about 194 countries and employing more than four lakh people.

Unilever on the other hand, is a consumer goods company and is a merger of two well known companies- Dutch Margarine of Holland and Lever Brothers of UK (Lindblad, 2013). It was founded in the year 1930 by William Lever. It is headquartered in Rotterdam, Netherlands. As of 2012, the company is listed as number one in the list of largest consumer goods company in the world. It is also one of the few largest producers of food spreads. The company is serving the entire world since its emergence and now has earned its position as one of the best FMCG (Fast Moving Consumer Goods Industry) in the world (Thain and Bradley 2014). P&G is the sole competitor of Unilever (Mehrotra 2013). The company is invariably increasing its range of products in order to provide more intense and extraordinary development. It has a total of five laboratories around the world that scrutinize new and latest techniques for making more improvement. The main purpose of the company is setting highest standard of its organizational behavior along with everyone it works with. It focuses is on innovation, which is helping the company in bringing out more new products for the consumers each and every year.

Motivation and its Theories

Motivation is usually conceptualized as a desire or an urge that arises from within an individual. As stated by Pezzulo et al. (2014), motivation is an internal processes which guides, activates and maintains the behavior, particularly the goal directed behavior. Martell, Dimidjian and Herman-Dunn (2013), further defines motivation as an essential element to quality and adaptive functioning of life. According to Aunger and Curtis (2013), motivation is based on a variety of human needs. He believed that there are a total of five basic needs of the hierarchy of needs theory. The Maslow’s hierarchy of needs is among the most popular theories, which has been always the centre of interest by most of the management researchers.

This five step model is further divided into growth needs and deficiency needs. The top most level is called as the being needs or as the growth needs, while the next four levels is referred to as the deficiency needs. According to Maslow, the deficiency needs arises because of deprivation and he said that this need can motivate an individual when he is unmet, while the growth needs stem from a desire to grow as an individual. Once the growth needs are met, he might be able to reach to the top-most level of the hierarchy, i.e., the self-actualization. Apparently, According to the Hygiene theories, which proposed the famous Two-Factor theory of Human Motivation, also known as the Motivation-Hygiene Theory, the things that people come across fulfilling in their workplace are not always the reciprocal of the things that they identify as dissatisfying. DiPaola and Tschannen-Moran (2014) further highlighted that the employee motivation theory suggests long-term commitment, organizational citizenship behaviors of loyalty as well as high levels of extra role practices that leads  to maximized level of organizational commitment. This theory is in line with the Expectancy Theory that suggests that high expectancy is perceived in case when the employee believes that his extra performance has the potential to lead to increased pay raises, promotions, and recognition. According to Trevino and Nelson (2016), the success in becoming household names established strongly in the person’s minds for a company largely relies on its organizational culture as well as the behavior of its employees because they are solely responsible for the creation of products that the company offers.

The HR policies and practices in Nestle are dedicated to all its employees and it ensured that the company has the right people along with right skills and knowledge in the right places (position). As discussed above, the company is the largest and the one of the most respected food companies in the world, and its success is surely built on its people it has. Its years of experiences have taught that employees acquire more importance than its systems and processes. Nestle works a lot on the development of its employees in order to make them productive. It follows the theory of Maslow’s Hierarchy of Needs within its organization. In order to meet the physiological needs of all of its employees, the company provides them with sufficient food and water supply, pure air to breathe and it also provide residence for its employees. It has its own NSMS (Nestle Occupational Health and Safety Management System) for its employees (Sroufe and Joseph 2017). It also conducts behavior based safety programs and safety at work award for its employees in order to promote safety culture within the workplace. It focuses a lot on preventing accidents. It also has Operational safety, health and risk management system in its organization. Furthermore, the company has launched Nescare program for its employees. This program helps in joining the employees emotionally to the organization. It provides several benefits to its workers such as financial security assistance to its employees for their retirement, competitive pay, opportunities for their learning and development, high quality benefit programs and health care, work and life benefits, financial assistance to its employees for illness, death or disability. Apparently, in order to meet their esteem needs, Nestle supports the two guiding principles of the United Nations Global Compact, based on the human rights. Hence, this shows that Nestle respects as well as supports protection of global human rights in its globule of influence. It is also against child labor. The company also sticks to the ICC or International Chamber of Commerce Business Charter for the sustainable development (Chantraine 2017). The Business Charter requires establishment of the policies, practices and programs for managing operations in the environmentally sound way.  Lastly, it must be noted that Nestle takes five approaches to motivate its employees and they are-

• It says its employees thank you by giving them meaningful gifts
• It supports a healthy lifestyle
• It uses foodservice rewards as an incentive for the workers
• It give all its employees career development opportunities
• It respects all its employees

Comparison of Employee Motivation Systems in Nestle and Unilever

Like Nestle, Unilever too aims for establishing a long term and strong organizational commitment from its employees. Unilever believes that there is a very strong connection in between motivation and reward. Therefore, in order to ensure continuous growth within its organization and among its employees, Unilever offers financial motivations and reward to all of its employees. It offers them a wide range of non-financial incentives (Gassenheimer, Siguaw and Hunter 2013). With the same, it also offers a high competitive salary packages to the employees in addition to its pension scheme, dental benefits, free health, stiffen spending accounts, life insurance, as well as tuition reimbursements. The company motivates all of its workers for taking minor everyday engagements, which helps in adding up to a great transformation for the whole world. Apart from these, the unique benefits that the company is providing to its large array of employees include rewarding them with rewards and perks like gym facilities, onsite wellness, pet friendly environment, laundry rooms, massage, first-class dining, carwashes etc.

According to (), SWOT analysis is a very useful technique in order to understand the possessed Strengths and the weaknesses as well as to identify the Opportunities present and threats that an organization might face in the near future. SWOT is an acronym, which stands for Strengths, Weaknesses, Opportunities and Threats. The Strengths and Weaknesses belong to the internal of an organization, whereas Opportunities and Threats are external to the same. This is a framework that helps in analyzing these internal and external factors which are both constructive and adverse in order to achieve the organization’s objective and in regards of motivation the SWOT analysis present below can be identified to Nestle and Unilever.

Table 1: SWOT analysis of Nestle

In the SWOT analysis of Nestle’s motivational system, it has been identified that the biggest strength of the company is its efficient and loyal workers that have played a major role in making the company rank number one in the world’s best food processing company (Chowdhury 2015). The key strength of the company is that it follows a unique motivation system in order to keep all its employees motivated. It offers an efficient and competitive financial motivation system along with a wide range of non-financial motivation system as well. Its other strengths include its brand name, which attracts more people to seek for employment under it and the powerful financial position it has in the market. However, the weakness of the company is the same like that of any other company- its high turnover rates and facing issues in finding and retaining the desired workforce. As for opportunities, the company can adapt new technologies and effective research and development department with latest equipments for conducting researches. It can also provide incentives to the retailers in order to increase its sales volume. As far as the threats present for the company is concerned, it is to be noted that there is an increase in competition in the market as the competitors of Nestle are also continuously thriving and developing and this in turn is welcoming a risk that they too might implement the motivation system adapted by Nestle in order to attract the employees present here.

SWOT Analysis

Table 2: SWOT analysis of Unilever

From the above SWOT table of Unilever, it can be seen that the company has a wide array of strengths based on its motivational system, which is attracting numerous employees towards its workforce. Right from its leadership style to the benefits it is providing to each of its workers are highly competitive and effective (Epstein and Buhovac 2014). However, just like Nestle, Unilever too faces problems in finding and retaining a top-notch workforce manytimes. Moreover, the opportunities present for unilever are many in the present days. It has a great opportunity in making its position in the health and wellness space and to bolster its product ranges. Lastly, there are few threats present for the company in today’s market and that include risk of increasing employee turnover rates if its competitor companies starts to adapt similar motivation strategy in order to motivate their employee, along with extra benefits. This shall attract the employees present in the Unilever towards those companies, resulting in rise in the employee turnover rates. With the same, there is also a strong competition in the consumer goods industry.

For every company, retention and motivation of the key talents (employees) is very important. The only way to keep the employees engaged and involved within their work is by motivating them to do so. In order to achieve this, below is a set of action plans are proposed for both Nestle and Unilever:

• Motivate the employees from inside out; enthusiasm needs to come from within each of the employees. However, it is also true that what can inspire one person, may or may not work for the other. Hence, the companies must create an all-inclusive winning work environment for the employees and they must make sure to encourage the employees to believe in it.
• Give them what they want. If an employee asks for more feedback on his work and more responsibility, give that to him. A person who is actively participating and is trying to become more engaged and involved in the organizational success must be encouraged to do the same. When they feel that their skills and talents are been valued, the contributions are recognized, they are likely to remain motivated.
• Invest in employee recognition and rewarding programs. Additional incentives for the employees make them strive for success. These give the employees opportunities to shine in their respective area. Acknowledging the contributions of the employees publicly will inherit a sense of importance within them. However, it is to be kept in mind that the parameters that are set and decided for a contest should be equally valid for the people who work in such an area where their results or outcomes could not easily quantified, for example- in a non-sales positions where there is no target to calculate the ultimate production of the employee. Most of the times these people do have a significant contribution on the overall business but they go long time without being recognized and getting any special rewards for their work.
• The lines of communication must be kept open. Regular meetings and forums should be conducted where the employees can get ample of space to provide their ideas and input. Through offering them the opportunities to the employees to voice their comment and concerns on the issues related to the organization they work under, an organization keeps the line of communications open for them, providing them an insight of the big picture. With the same, through this, the employees also feel that their inputs and ideas really matters to both the present and future of the company.
• Put a positive spin on the performance reviews. While conducting a performance review, make sure to measure the growth of each employee and discuss about their positive contributions which they have made all through the year.
• Ask open-minded questions. Ask the employees to write self-assessing that details their impression about their work that they have done in the last year. Ask open minded questions. This will provide the employees with opportunities to discuss their parts of the job which are most and least rewarding.

Conclusion

From the above discussion, it can be concluded that both Nestle and Unilever are among the leading food companies in the world and they are intended to remain the same in the coming future as well. It is to be noted that both the companies offer highly effective and competitive motivation system within its organization from both the financial as well as the non-financial systems. Along with that, both the companies follow motivational strategies that are similar in many ways. This individual assignment has provided a critical analysis and comparison on the motivation systems and performance of Nestle and Unilever, two of the best known and leading companies in the global market. From the overall analysis it is to be concluded that in both the companies, there is a strong link and mutual interdependence in between the motivation environment and organizational performance, as this is only because of their employee motivational strategies that these companies has become two of the world’s leading companies in the current era.

References:

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