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Derive a performance management report on Nestle to find out the implementation failure and inspiration challenges?
The core objective of performance management is to set higher aims and objectives for an individual or a team and to devise an effective plan for achieving the planned objectives. The performance itself is defined as the management of two important elements of an individual career in an organisation, namely behaviour and results. Organisations today are a lot more complex than they used to be as the environments they operate today are much more competitive than ever before. Assurance of effective and efficient performance of employees is thus very critical for organisations today. A one-time performance appraisal method is thus no more an effective way of ensuring expected performance from an employee. A performance appraisal is done once or twice in a year whereas the performance management process is a continuous process across the whole year. The performance management process ensures that the manager sets effective goals for their teams at the beginning of the year. The goals are set as per abilities and potential of the team members and thus the manager knows what kind of training and guidance will be necessary for the team to achieve their goals. In performance management, the team also knows what is expected out of them as the goals are set after a discussion with the concerned employee. The employees’ performances are monitored throughout the year and proper feedback mechanism is maintained.
1. NESTLE AND IT’S PERFORMANCE MANAGEMENT
Nestle is a multi-product multinational company in the domain of food industry and is headquartered in Vevey, Switzerland. This food company is also the largest multinational organisation in terms of revenue and is also ranked 33 in the year 2015 as “The World’s Most Admired Companies” by Fortune (Syncforce, 2015). It has also been ranked as 43 by Forbes in the year 2015 as “The World’s Most Valuable Brands” (Syncforce, 2015). It has a wide list of products which includes dairy products, frozen foods, baby products, cereals, bottled water, coffee, tea, etc. Nestle has its presence in around 194 countries globally and it also operates around 450 factories across the globe. Nestlé’s global presence makes it one of the most trusted brands across the globe. This is a huge achievement given the nature of the industry Nestle operates in. It is very hard to build a reputation in the food industry. However, it takes only a few mistakes to spoil that reputation. Nestle has kept its reputation strong and untarnished for decades now. Nestle operates in a number of countries, each with their difference in political and social culture (Nestle, 2004). Across the globe, Nestle directly employs more than 3, 33,000 people (Syncforce, 2015).
1. ISSUES OF IMPLEMENTATION OF PMS in NESTLE
The two issues in performance management system are implementation failure and inspiration challenges. We will be discussing each issue in detail below.
3.1 Implementation Failure
Performance management system is a change in Nestlé’s performance evaluation process. Many of its employees are still habituated with the age old performance appraisal process. Now it is the duty of the leadership to ensure the success of this change.
- The change management process must be flawless and the employees must be made aware of the process as well as its necessity. There is always an inherent resistance to the change in the existing system (Dean, 2004). This resistance is also prominent in Nestle.
- Employees are also confused because of the lack of proper communication with the management and leadership.
3.2 Inspiration Challenges
Staff motivation or inspiration is another major issue in the implementation of performance management system. The major reasons for the lack of inspiration among employees towards performance management system are discussed below.
- The Inability of management to understand the factors that motivate the employee. Employees are motivated by different kinds of rewards which might not be the same for all. It is the duty of management to understand what motivates the employees in the first place. Management of Nestle has also failed to understand this fact and thus have a homogenous reward system for all its employees (Nestle, 2004).
- Often layers of hierarchy, bureaucracy, accountabilities and channels of communication act as a hindrance in establishing a smooth flow of information in Nestle. This results in demotivation of employees and thus the failure of performance management system.
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