Company Analysis Report 2018 - 20

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INTRODUCTION

1.1 Introduction of the Sector

1.2 Over View of the Sector
1.3 Contribution to GDP
1.4 Domestic Competition & Foreign
1.5 Govt. Policies / Regulation of the sector
1.6 Industry Trends
1.7 Products, Customers & Processes
1.8 Sectoral growth in last 5 years
1.9 Other relevant information
1.10 Introduction to the Company, SWOT Analysis, PESTEL Analysis & BCG Matrix
1.11 Objective of the Study

LITERATURE REVIEW

2.1 Introduction to the process of Talent Acquisition & Employee Performance

2.2 Talent Acquistion Practices and Employee Performance at HUL

RESEARCH METHODOLOGY

3.1 Data Source

3.2 Method of Data Collection
3.3 Data Analysis Techniques

REFERENCES
Introduction
1.1 Introduction to the sector

Fast-moving consumer goods (FMCG) are products that are sold quickly and at relatively
low cost. Examples include non-durable goods and soft drinks, toiletries, over-the-counter
drugs, processed foods and other consumables. FMCG product touches every aspects of
human life. These products are frequently consumed by all sections of the society and a
considerable portion of their income is spent on these goods. Apart from this, the sector is
one of the important contributors of the Indian economy. This sector has shown an
extraordinary growth over past few years, in fact it has registered growth during recession
period also.
The future for FMCG sector is very promising due to its inherent capacity and favorable
changes in the environment. From tooth paste, soaps, daily use items etc. FMCG companies
have dominated the Indian market and are set to grow further. The FMCG industry has seen
some big players but disruption by new players has also changed the Indian scenario. The top
Indian FMCG companies include names like HUL, ITC, Nestle and New Entrant Patanjali.
The Fast Moving Consumer Goods (FMCG) sector is the key contributor of the Indian
economy. This fourth largest sector of Indian economy provides employment to around 3
million people which accounts for just about 5% of the total factory employment in the
country. These goods are daily consumed by each and every strata of the public irrespective
of social class, income group, age group etc.
FMCG sector is more lucrative because of low penetration levels, well established
distribution network, low operating cost, lower per capita consumption, large consumer base
and simple manufacturing processes for most of products resulting in fairly low capital
investments. Besides that, growing awareness, easier access, and changing lifestyles are the
key growth drivers for the consumer market. The Government of India's policies and
regulatory frameworks such as relaxation of license rules and approval of 51 per cent Foreign
Direct Investment (FDI) in multi-brand and 100 per cent in single-brand retail are some of
the major growth drivers for the FMCG market.
The industry however, is highly competitive due to presence of multinational companies,
domestic companies and unorganized sector. A major portion of the market is captured by
unorganized players selling unbranded and unpackaged products. More than 50 per cent of
the total revenues of FMCG companies come from products worth Rs 10 or less1 .This has
made the proliferation of localized brands which are offered in loose form in small towns and
rural part where brand awareness is low.
In last 10 years domestic players are giving tough competition to multinationals; in fact they
have outstripped many MNCs in growth and market cap. Between 2005- 2014 the profit of
domestic companies increased by 24% against 14% increase of multinational companies.
Urban India accounts for 66% of total FMCG consumption, while rural India accounts for the
remaining 34%. However, rural India accounts for more than 40% of the consumption in
major FMCG categories such as personal care, fabric care and hot beverages. As per the
analysis by ASSOCHAM, companies like Hindustan Unilever Ltd and Dabur India generate
half of their sales from rural India while Colgate Palmolive India and Marico constitute nea
Fast Moving Consumer Goods are inexpensive products that require little shopping efforts2 .
These are non-durable products which are sold in packaged forms. These products are
purchased by the end-consumer in small quantities and frequently. The main FMCG
segments can be classified as Personal Care, Household care, Branded and Packaged food
and Tobacco .
• Personal Care: It consists of oral care; hair care; skin care; personal wash (soaps); cosmetics
and toiletries; deodorants; perfumes; paper products (tissues, diapers, sanitary); shoe care etc.
• Household Care: It comprises of fabric wash (laundry soaps and synthetic detergents);
household cleaners (dish/utensil cleaners, floor cleaners, toilet cleaners, air fresheners,
insecticides and mosquito repellants, metal polish and furniture polish).
• Branded and Packaged Food and Beverages: It consists of health beverages; soft drinks;
staples/cereals; bakery products (biscuits, bread, cakes); snack food; chocolates; ice cream;
tea; coffee; processed fruits, vegetables and meat; dairy products; bottled water; branded
flour; branded rice; branded sugar; juices etc.
• Spirits and Tobacco: An exact product-wise sales break up for each of the items is
difficult.rly 37% respectively.

1.2 Sector Overview

The Indian Fast Moving Consumer Goods (FMCG) industry began to shape during the last
fifty odd years. The growth of FMCG industry was not significant between 1950’s to the
80’s. The FMCG industry previously was not attractive from investor’s point of view due to
low purchasing power and the government’s favoring of the small-scale sector. FMCG’s
growth story further continued following the deregulation of Indian economy in early 1990s.
With relatively lesser capital and technological requirements, a number of new brands
emerged domestically as well, while the relaxed FDI conditions led to entry of many global
players in this segment. These factors made FMCG market in India highly competitive and
one of the important contributor in the Indian economy. In the mid - nineties, the growth of
the sector was very fast where as it declined rapidly at the end of the decade. The initial
growth was due to increase in product penetration and consumption levels. Riding on a
rapidly growing economy, increasing per-capita incomes, and rising trend of urbanization, the
FMCG market in India is expected to further expand to $100 billion by 2025.
The Retail market in India is estimated to reach US$ 1.1 trillion by 2020 from US$ 840
billion in 2017, with modern trade expected to grow at 20 per cent - 25 per cent per annum,
which is likely to boost revenues of FMCG companies. Revenues of FMCG sector reached
Rs 3.4 lakh crore (US$ 52.75 billion) in FY18 and are estimated to reach US$ 103.7 billion
in 2020. The sector witnessed growth of 16.5 per cent in value terms between July-September
2018; supported by moderate inflation, increase in private consumption and rural income.

1.3 Contribution to GDP

The FMCG sector has grown from US$ 31.6 billion in 2011 to US$ 52.75 billion in 2017-18.
The sector is further expected to grow at a Compound Annual Growth Rate (CAGR) of 27.86
per cent to reach US$ 103.7 billion by 2020. The sector witnessed growth of 11 per cent in
value terms between April – June 2018, supported by rate cuts due to Goods and Services Tax
along with better consumer off-take. It is forecasted to grow 12-13 per cent between July –
December 2018.^ FMCG’s urban segment is expected to have a steady revenue growth at 8
per cent in FY19 and the rural segment is forecasted to contribute 15-16 per cent of total
income in FY19.* Post GST and demonetisation, modern trade share grew to 10 per cent of
the overall FMCG revenue, as of August 2018.
Growing awareness, easier access, and changing lifestyles are the key growth drivers for the
consumer market. The focus on agriculture, MSMEs, education, healthcare, infrastructure
and employment under the Union Budget 2018-19 is expected to directly impact the FMCG
sector. These initiatives are expected to increase the disposable income in the hands of the
common people, especially in the rural area, which will be beneficial for the sector.
Cascading Multiple Taxes by the FMCG sector (Import duty, service tax, CST, income tax).
30% revenue of the sector goes into both direct and indirect taxes. Estimated size of $25
billion (Rs. 120,000 crores), that would constitute a contribution to the exchequer of
approximately US$ 6.5 billion (Rs. 31,000 crores).
In terms of employment, Direct employment is estimated at approximately 6% of turnover,
i.e. US$ 1.5 billion4 (Rs. 7,000 crores). Approximately 12-13 million retail stores in India,
out of which 9 million are FMCG kirana stores. Thus the sector is responsible for the
livelihood of almost 13 million people.

1.4 Domestic Competition & Foreign Competition

Following is the list of some Fast-Moving Consumer Goods nationally and internationally
1) Indian Companies:
 Amul
 Godrej Consumer Private Limited
 Patanjali Ayurved---
 Patanjali Industries
 Parle Agro
 Britannia Industries Limited
  ITC Limited
 Dabur India Limited
 Haldiram’s

2) International Companies:
 Nestle
 Philip Morris
 Pepsi
 Procter & Gamble
 Hindustan Unilever Limited
 Coca Cola
 Johnson & Johnson
 JBS
 Tyson Food Co.
 L’Oreal

1.5 Government Policies/ Government Regulators

 Union Budget 2018-19 The standard deduction of Rs 40,000 (US$ 618) for transport
allowance and reimbursement of miscellaneous medical expenses, will increase the
disposable income in the hands of the common people.
 The customs duty on import of products such as shaving and after-shave preparations,
fruit juices and vegetable juices, edible oils of vegetable origin are expected to boost
the domestic sector.

 Goods and Services Tax (GST) - The rate of GST on services lies between 0-18 per
cent and on goods lies between 0-28 per cent. Major consumer product manufacturing
companies like PepsiCo, Dabur, Hindustan Unilever etc. are aligning their supply
chains, IT infrastructure and warehousing systems ahead of unified GST regime, so as
to facilitate seamless interstate movement of goods.
Prices of commodities in the FMCG sector, like soaps, shampoo, detergents, biscuits,
savory snacks etc decreased after the implementation of GST, leading to a 3-8 per cent
decrease in prices of goods at modern retail stores. The GST is expected to transform
logistics in the FMCG sector into a modern and efficient model as all major
corporations are remodeling their operations into larger logistics and warehousing.
Warehousing cost for FMCG companies is estimated to fall by 25-30 per cent backed
by the implementation of the GST. The number of warehouses will decrease from 45-
50 to 25-30 and the size of warehouses will become larger.
The Goods and Services Tax (GST) is beneficial for the FMCG industry as many of
the FMCG products such as Soap, Toothpaste and Hair oil now come under 18 per
cent tax bracket against the previous 23-24 per cent rate.

 Excise Duty - Excise duty on instant tea, quick brewing black tea, and ice tea would
be decreased to reduce the retail price by 30 per cent.
Excise duty on other beverages and lemonade would be decreased to reduce retail sale
price by 35 per cent.
Excise duty on various tobacco products other than beedi would be increased,
resulting in retail price of tobacco products going up by 10-15 per cent.

 Foreign Direct Investment in Organized Retail - The government approved 51 per

cent FDI in multi-brand retail in 2006, which will boost the nascent organized retail
market in the country. It also allowed 100 per cent FDI in the cash and carry segment
and in single-brand retail.

 Food Security Bill (FSB) - The government approved 51 per cent FDI in multi-brand
retail in 2006, which will boost the nascent organised retail market in the country. It
also allowed 100 per cent FDI in the cash and carry segment and in single-brand
retail.

 SETU Scheme - Government has initiated Self Employment and Talent Utilisation
(SETU) scheme to boost young entrepreneurs. Government has invested US$ 163.73
million for this scheme.
  Relaxation of license rules - Industrial license is not required for almost all food and
agro-processing industries, barring certain items such as beer, potable alcohol and
wines, cane sugar and hydrogenated animal fats and oils as well as items reserved for
exclusive manufacture in the small-scale sector.

1.6 Industry Trends

Why has this FMCG model of value creation stopped generating growth? Because ten
technology-driven trends have disrupted the marketplace so much that the model is out of
touch. Most of these trends are in their infancy but will have significant impact on the
model within the next five years

The millennial effect

Consumers under 35 differ fundamentally from older generations in ways that make mass brands
and channels ill suited to them. They tend to prefer new brands, especially in food products.
According to recent McKinsey research, millennials are almost four times more likely than baby
boomers to avoid buying products from “the big food companies.”

And while millennials are obsessed with research, they resist brand-owned marketing and look
instead to learn about brands from each other. They also tend to believe that newer brands are
better or more innovative, and they prefer not to shop in mass channels. Further, they are much
more open to sharing personal information, allowing born-digital challenger brands to target them
with more tailored propositions and with greater marketing-spend efficiency.

Millennials are generally willing to pay for special things, including daily food. For everything
else, they seek value. Millennials in the United States are 9 percent poorer than Gen Xers were at
the same age, so they have much less to spend and choose carefully what to buy and where to buy
it.

Digital intimacy (data, mobile, and the Internet of Things [IoT])

Digital is revolutionizing how consumers learn about and engage with brandsand how companies
learn about and engage with consumers. Yesterday’s marketing standards and mass channels are
firmly on the path to obsolescence. Digital-device penetration, the IoT, and digital profiles are
increasing the volume of data collected year after year, boosting companies’ capabilities but also
consumer expectations. Most FMCGs have started to embrace digital but have far to go, especially
in adopting truly data-driven marketing and sales practices.

Some FMCG categories, particularly homecare, will be revolutionized by the IoT. We will see the
IoT convert some product needs, like laundry, into service needs. And in many categories, the IoT
will reshape the consumer decision journey, especially by facilitating more automatic
replenishment.

Explosion of small brands

Many small consumer-goods companies are capitalizing on millennial preferences and digital
marketing to grow very fast. These brands can be hard to spot because they are often sold online or
in channels not covered by the syndicated data that the industry has historically relied on heavily.

But venture capitalists have spotted these small companies. More than 4,000 of them have
received $9.8 billion of venture funding over the past ten years—$7.2 billion of it in the past four
years alone, a major uptick from previous years. This funding is fueling the growth of challenger
brands in niches across categories.

Five factors make a category ripe for disruption by small brands. High margins make the category
worth pursuing. Strong emotional engagement means consumers notice and appreciate new brands
and products. A value chain that is easy to outsource makes it much easier for born-digital players
to get started and to scale. Low shipment costs as a percent of product value make the economics
work. And low regulatory barriers mean that anyone can get involved. Most consumer-goods
categories fit this profile.

The beauty category in particular is an especially good fit, so the advanced explosion of small
brands in this category is no surprise. In color cosmetics, born-digital challenger brands already
represent 10 percent of the market and are growing four times faster than the rest of the segment.
The explosion of small brands in beauty enjoys the support of significant venture-capital
investment—$1.6 billion from 2008 to 2017, with 80 percent of this investment since 2014.

At the same time, digital marketing is fueling this challenger-brand growth while lifting the rest of
the category, as beauty lovers find new ways to indulge in their passion. An astounding 1.5 million
beauty-related videos are posted on YouTube every month, almost all of them user generated.

After a few challenging years, the incumbent beauty players are responding effectively and are
mobilizing to capitalize on the dynamism in their industry, particularly through greater digital
engagement. They are innovating in digital marketing and running successful incubators. The year
2016 alone saw 52 acquisitions of beauty-related companies.

Better for you

For years, consumers said that they wanted to eat healthier foods and live healthier lifestyles, but
their behavior did not change—until now. Consumers are eating differently, redefining what
healthy means, and demanding more products that are natural, green, organic and/or free from
sugar, gluten, pesticides, and other additives. Packaged-food players are racing to keep up, even as
consumers are increasing pressure on the packaged-goods subsector by eating more fresh food.
E-commerce giants

E-commerce giants Amazon, Alibaba Group, and JD.com grew gross merchandise value at an
amazing rate of 34 percent a year from 2012 to 2017. As their offer attracts consumers across
categories, they are having a profound impact on consumer decision journeys. This change
requires FMCGs to rewrite their channel strategies and their channel-management approaches,
including how they assort, price, promote, and merchandise their products, not just in these
marketplaces but elsewhere. This disruption is in early days in markets other than China and will
accelerate as the e-commerce giants increase their geographic reach and move in to brick-and-
mortar locations. Amazon’s push on private labels is a further game changer. To see the future, we
can look to how China FMCG retailing has been revolutionized by Alibaba Group and JD.com
and the profound impact Amazon has had on its early categories like electronics, books, and toys.

Discounters

ALDI and LIDL have grown at 5.5 percent from 2012 to 2017, and they are looking to the US
market for growth. Discounters typically grow to secure market share of 20 percent or more in
each grocery market they enter. This presence proves the consumer appeal of the format, which
enables discounters to price an offering of about 1,000 fast-moving SKUs 20 percent below mass
grocers while still generating healthy returns.

Mass-merchant squeeze

The rise of the e-commerce giants and the discounters is squeezing grocers and other omnichannel
mass merchants. Together, the seven largest mass players saw flat revenue from 2012 to 2017.
This pressure is forcing mass merchants to become tougher trading partners. They are pursuing
more aggressive procurement strategies, including participating in buying alliances, getting tighter
on SKU proliferation, and decreasing inventory levels. They are also seeking out small brands and
strengthening their private labels in their quest for differentiation and traffic.

Sustaining excellence in the developed-market base

Mass brands in developed markets represent the majority of sales for most FMCGs; as such, they
are “too big to fail.” FMCGs must keep the base healthy. The good news is that the industry keeps
advancing functional excellence, through better technology and, increasingly, use of advanced
analytics. The highest-impact advances we see are revamping media spend, particularly through
programmatic M&A and understanding of return on investment, fine-tuning revenue growth
management with big data and tools like choice models, strengthening demand forecasting, and
using robotics to improve shared services.
In addition to taking functional excellence to the next level, FMCGs will need to focus relentlessly
on innovation to meet the demands of their core mass and upper-mass markets.

FMCGs will need to increase their pace of testing and innovating and adopt a “now, new, next”
approach to ensure that they have a pipeline of sales-stimulating incremental innovation (now),
efforts trained on breakthrough innovation (new), and true game changers (next).

Further, FMCGs will need to gather their historically decentralized sales function, adopting a
channel-conflict-resistant approach to sales. They will need to treat e-commerce as part of their
core business, overcome channel conflict, and maximize their success in omni and e-marketplaces.
Players like Koninklijke Philips that have weathered the laborious process of harmonizing trade
terms across markets are finding that they can grow profitably on e-marketplaces.

Finally, FMCGs will need to keep driving costs down. We are following three big ideas on cost.

First, zero-based budgeting achieves sustained cost reduction by establishing deep transparency on
every cost driver, enabling comparability and fair benchmarking by separating price from quality,
and establishing strict cost governance through cost-category owners who are responsible for
managing cost categories across business-unit profits and losses.

Second, touchless supply-chain and sales-and-operations planning replace frequent sales-and-

operations meetings with a technology-enabled planning process that operates with a high degree
of automation and at greater speed than manual processes.

Third, advanced analytics and digital technologies improve manufacturing performance by pulling
levers like better predictive maintenance, use of augmented reality to enable remote
troubleshooting by experts, and use of advance analytics for real-time optimization of process
parameters to increase throughput yield of good-quality product.

Many of these changes will require strengthening technology—making it a core competency, not a
cost center.

Leapfrogging new category creation in developing markets

FMCG companies must bring their newest and best innovation, not lower-quality products, into
developing markets early to capture a share of the $11 trillion potential growth. Success will
require excellent digital execution, as many of these markets will grow up to be digital. Success
will also require empowering local leadership to compete with the local players looking to seize
the market’s growth potential. Local leaders will need decision rights on marketing as well as a
route to market that is joined up across traditional, omni, and e-marketplace channels.
Hothousing premium niches

FMCG companies must identify and cultivate premium niches that have attractive economics and
high growth potential to capitalize on the explosion of small brands. Success will require acquiring
or building small businesses and helping them reach their full potential through a fit-for-purpose
commercialization and distribution model. This means, for example, building a supply chain that
produces small batches and can adapt as companies learn from consumers. The beauty industry’s
incubators are a good model here.

The demands of this three-part portfolio strategy call for a new, agile operating model that allows a
company to adapt and drive relevance rather than prioritizing synergy and consistent execution
above other objectives.
1.7 Products, Customers & Processes
Products in the Sector:
Household Care:
The detergents segment is experiencing healthy annual growth rate of 10 to 11 per cent
during the past five years. The detergent market is equally dominated by the local and
unorganized players which shares decent percentage of the total volume. In urban areas,
people give preference to detergents in place of bars. Household care segment is featured by
intense competition and high level of penetration. With rapid urbanization and increasing
disposable income, introduction of the concept of small packets and sachets, the household
care products demand is growing fast. In washing powder segment, HUL is the leader with 38
per cent of market share. Other leading players are Proctor & Gamble, Nirma and Henkel.
Personal Care:
Personal care segment includes oral care products, skin care products and cosmetics, hair care
products, personal wash products etc. The Indian skin care and cosmetics market is very large
and valued at $274 million and is dominated by leading players like HUL, Colgate Palmolive,
Godrej Consumer and Gillette India. The coconut oil segment covers 72 per cent share in the
hair oil market. The hair care market can be divided into hair oils, hair colorants &
conditioners, shampoos, and hair gels. Marico (with Parachute) and Dabur are the leading
players in the branded coconut hair oil market. Rural people prefer to buy sachet which
makes up to 40 per cent of the total shampoo sale. Again HUL is the dominant player with
around ~47 per cent market share; P&G placed at second position with market share of
around ~23 per cent.
Personal wash can be further categorized into three segments i.e. Premium, Economy and
Popular. Here also, HUL is leading the 120 market with market share of 53 per cent; Godrej
stands at second position with market share of 10 per cent. Increasing disposable income of
the Indian consumers, wide channel network of MNCs, growth in rural demand for premium
products are the key drivers for pulling the future demand growth up in major FMCG
categories
The skin care market is at a primary stage in India. With modernization, the life style has
changed drastically, consumers have more disposable incomes which give greater product
choice and availability of the products give them freedom to purchase. Moreover, people are
becoming more alert and aware about personal grooming. The leading player in this segment
is Hindustan Unilever with a market share of 54 percent, Cavin Kare occupies second
position with market share of 12 per cent and Godrej at third with a market share of 3
percent.
The oral care market can be categorized into various sub-segments with toothpaste 60
percent; toothpowder 23 percent; toothbrushes 17 percent. Colgate-Palmolive is the leader of
this segment with market share of 49 percent, while HUL stands at second position with
market share of 30 percent. In toothpowders market, Colgate and Dabur are the leading
players.
Food and Beverages:
This segment comprises of the food processing industry- packaged foods-, health beverage
industry- bread and biscuits, chocolates & confectionery, Packed Mineral Water and ice
creams. The three largest consumed categories of packaged foods are packed tea, biscuits and
soft drinks. Tea market dominates the Indian hot beverage market. Unorganized players enjoy
the major share of tea market. Leading players of organized tea market are HUL and 121 Tata
Tea. Major players in food segment are HUL, Amul, Dabur, Nestle, ITC and Godrej.

Customers

We can classify customers into two broad categories- Rural and Urban which contribute
as follows-

 Accounting for a revenue share of around 55 per cent, urban segment is the largest
contributor to the overall revenue generated by the FMCG sector in India.
 Rural segment is growing at a rapid pace and accounted for a revenue share of 45
per cent in the overall revenues recorded by FMCG sector in India. FMCG
products account for 50 per cent of total rural spending.
  In the last few years, the FMCG market has grown at a faster pace in rural India
compared with urban India. In 2018-19, revenues from the rural segment are
expected to grow 15-16 per cent outpacing.
 Demand for quality goods and services has been going up in rural areas of India, on
the back of improved distribution channels of manufacturing and FMCG
companies.
 FMCG urban segment is expected to have a steady revenue growth at 8 per cent in
FY19.

Also, we can classify customers according to the segments:

 Premium Segment: Premium segment covers mostly to higher/ upper class which
is not price sensitive but brand conscious.
 Popular Segment: The popular or mass segment consists of consumers belonging
to the semi-urban or rural areas who are not brand conscious. Products sold in the
popular segment have lower prices than premium segment.

1.8 Growth In The Industry

 The FMCG sector in India generated revenues worth US$ 49 billion in 2016.
 Source: Booz and Company, Dabur, AC Nielsen

 Over 2007-16F, the sector is expected to post CAGR of 11.9 per cent in rev-
enues.
 In 2016-17, revenues for FMCG sector have reached US$ 49 billion and are
expected to grow at 9-9.5 per cent in FY18.
 In the long run, with the system becoming more transparent and easily compli-
able, demonetization is expected to benefit organized players in the FMCG in-
dustry.
1.10 Introduction to the company

Hindustan Unilever
Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods company
with a heritage of over 80 years in India. HUL works to create a better future every day and
helps people feel good, look good and get more out of life with brands and services that are
good for them and good for others.

With over 35 brands spanning 20 distinct categories such as soaps, detergents, shampoos,
skin care, toothpastes, deodorants, cosmetics, tea, coffee, packaged foods, ice cream, and wa-
ter purifiers, the Company is a part of the everyday life of millions of consumers across India.
Its portfolio includes leading household brands such as Lux, Lifebuoy, Surf Excel, Rin,
Wheel, Fair & Lovely, Pond’s, Vaseline, Lakmé, Dove, Clinic Plus, Sunsilk, Pepsodent,
Closeup, Axe, Brooke Bond, Bru, Knorr, Kissan, Kwality Wall’s and Pureit.

The Company has about 18,000 employees and has a sales of INR 34619 crores (financial
year 2017-18). HUL is a subsidiary of Unilever, one of the world’s leading suppliers of Food,
Home Care, Personal Care and Refreshment products with sales in over 190 countries and an
annual sales turnover of €53.7 billion in 2017. Unilever has over 67% shareholding in HUL.

The Vision

The vision is to grow the business, while decoupling their environmental footprint from their
growth and increasing their positive social impact.

Sense Of Purpose - Our business has always been driven by a sense of purpose, a thread that
connects us to our founding companies and their social missions to improve health, hygiene
and livelihoods in their communities.

We continue to believe that business must make a positive contribution to addressing the
challenges the world faces and that this is the only way a business will succeed. In 2009, we
launched The Compass – our strategy for sustainable growth, setting out our determination to
build a sustainable business for the long term.

Sustainability Targets - The Unilever Sustainable Living Plan, launched in 2010, laid the
blueprint for achieving this strategy. We continue to work towards the ambitious targets we
have set ourselves for halving our environmental impact, improving the health and wellbeing
of 1 billion people, and enhancing the livelihoods of millions.

We will grow our business by building on our strengths – combining our scale and expertise
with our understanding of consumers in diverse markets to continue providing brands and
services that people want and need. Our sustainable business model is making a difference to
millions of people’s lives and to our environmental impact, and we will keep working to
make these contributions greater. We’re also already seeing evidence that it is strengthening
our business by helping to drive growth and trust, and reduce risk and cost.

Products

HUL is the market leader in Indian consumer products with presence in over 20 consumer
categories such as soaps, tea, detergents and shampoos amongst others with over 700 million
Indian consumers using its products. Sixteen of HUL's brands featured in
the ACNielsen Brand Equity list of 100 Most Trusted Brands Annual Survey (2014), carried
out by Brand Equity, a supplement of The Economic Times.[
Food

 Annapurna salt and Atta(formerly known as Kissan Annapurna)

 Bru coffee
 Brooke Bond (3 Roses, Taj Mahal, Taaza, Red Label) tea
 Kissan squashes, ketchups, juices and jams
 Lipton tea
 Knorr soups & meal makers and soupy noodles
 Kwality Wall's frozen dessert
 Modern Bread, ready to eat chapattis and other bakery items(now sold to Everstone
Capital )
 Magnum (ice cream)
Homecare Brands

 Active Wheel detergent

 Cif Cream Cleaner
 Comfort fabric softeners
 Domex disinfectant/toilet cleaner
 Rin detergents and bleach
 Sunlight detergent and colour care
 Surf Excel detergent and gentle wash
 Vim dishwash
 Magic – Water Saver
Personal Care Brands:

 Aviance Beauty Solutions

 Axe deodorant and aftershaving lotion and soap
 LEVER Ayush Therapy ayurvedic health care and personal care products
 International breeze
 Brylcreem hair cream and hair gel
 Clear anti-dandruff hair products
 Clinic Plus shampoo and oil
 Close Up toothpaste
 Dove skin cleansing & hair care range: bar, lotions, creams and anti-perspirant de-
odorants
 Denim shaving products
 Fair and Lovely, skin lightening cream
 Hamam
 Indulekha ayurvedic hair oil
 Lakmé beauty products and salons
 Lifebuoy soaps and handwash range
 Liril 2000 soap
 Lux soap, body wash and deodorant
 Pears soap, body wash
 Pepsodent toothpaste
 Pond's talcs and creams
 Rexona
 Sunsilk shampoo
 Sure anti-perspirant
 Vaseline petroleum jelly, skin care lotions
 TRESemmé
 TIGI
 Vaseline
Water Purifier Brand

 The Pureit Water Purifier

SWOT Analysis of HUL

Strengths in the SWOT analysis of Hindustan Unilever ( HUL )

1) Brand visibility – From soap to mineral water, HUL is shaping the life of 1.3
billion people daily. Being in consumer goods market with its 20 consumer categories such as
soap, tea, detergents, shampoo etc. & each having large assortments, helped HUL in
occupying the large shelf space of Grocery /departmental stores which itself explains the
acceptance/demand of their products in the market.

2) Market leader in consumer goods: According to Nielsen data 2 out of three Indian
consumers use HUL products. HUL used selective targeting strategy to emerge as a market
leader in the Indian market.
3) Innovative FMCG Company: Hindustan Unilever Research center (HURC),Mumbai &
Unilever Research India, Bangalore ,both research facilities were bought together in a single
site in Bangalore in 2006.Employees in this facility continuously working & developing
innovations in products & manufacturing processes which is helping the HUL to set it as
front-runner in the consumer goods market.

4) Extensive & integrated distribution system: HUL’s brands are now household name which
is only possible due to its 4 tier distribution system namely

 a) Direct Coverage through common stockist within a town of population under

50000 people.
 b) Indirect coverage: Villages closer to larger urban markets have been targeted.
 c) Streamline: Leveraging the rural wholesale market to reach markets inaccessible by
road.
 d) Project SHATKI AMMA: It targeted the very small villages (2000 population) &
tapped into pre-existing women’s SHG (self-help groups). Markets have been seg-
mented based on their accessibility & business potential.

5) High Brand awareness: By signing popular celebrities for the advertisements of their
products HUL has created positive word of mouth over the ages which helped them in social
acceptance of their products intelligently targeted & meant for different income groups.

6) Product line: It offers product categories namely oral care, personal care, household
surface, fabric care and pet nutrition etc. having deep assortments across the product
categories.

7) Financial position: Having more than 80 years of experience in the consumer goods market
& backed by Unilever who owns 67% controlling share in HUL, It is financially strong.

8) Market share: Through high penetration in the market, HUL had managed to hold their
high market share in different product categories.

9) Share of Wallet: Whether one buys surf /wheel /Rin detergent it will go to HUL’s pockets.
HUL strategy to offer different products for different income groups (selective targeting) has
been successful in having share of wallet of a consumer.

Weaknesses in the SWOT analysis of Hindustan Unilever ( HUL )

1) Decreasing Market share: Competitors focusing on a particular product & eating up HUL’s
share, like Ghadi & Nirma detergent eating up HUL’s wheel detergent market share.
2) Large number of brands in different product categories: Sometimes having broad
brand portfolio can lead to confused positioning. Price positioning in some categories allows
for low price competition like AMUL captured Kwality’s market share.

Opportunities in the SWOT analysis of Hindustan Unilever ( HUL )

1) Expanding market: By penetrating more in the rural markets through its project Shakti
AMMA and transition of unorganized business to organized one will lead to further
expansion of the consumer goods market.

2) Awareness in usage rate of consumer goods: People getting more aware and conscious
about the usage may be through advertising /word of mouth /doctor prescription ,is resulting
in increase in usage rate of the these products.

3) Increasing Income levels: Due to stable political scenario, improved literacy rate &
controlled inflation, disposable income of the people is increasing thereby resulting into
upsurge in demand & changing their lifestyle.

Threats in the SWOT analysis of Hindustan Unilever ( HUL )

1) Competition in the market: With increasing number of local & national players it’s
becoming very hard for the companies to differentiate themselves from others. There is also
threat from counterfeit products destroying its brand image in the market.

2) Price of commodities: Increasing price of commodities will result in further increase in

the price. Further increase in price will result in decrease in sales, margins & brand switching.

3) Buyers power: With highly diversified consumer goods market where there are lots of
brands claiming different sorts of benefits, it’s very difficult for consumers to stick to a
particular brand & hence results into brand switching where consumer got power to select a
brand based on several factors like availability, reference group recommendation, preference
& price.

PESTEL Analysis

 Political aspects

Political factors are known to impact company’s ways of operation. Political factors can eas-
ily build opportunities and advantages for any company. Legislation, voluntary codes, market
regulations and trade agreements are factors that have influenced operations of HUL. Tax
levies and tax breaks have controlled the market in one way or another.

 Economic factors
Global interest rates and fiscal policy are all agreed around economic conditions. The climate
of the Indian economy controls how HUL consumers, suppliers and many stakeholders con-
duct themselves. A growing economy will have effects on HUL operations as it will increase
unemployment, lower stakeholders’ confidence and high spending power.

 Social factors

In the business world, it is wise for any entrepreneur or enterprise to pay attention to societies
and the media. Social factors impact consumers’ attitude, interests and opinions. Social fac-
tors shape consumers, the way they behave and what they are willing to purchase. Population
changes in India have influenced the way HUL operates especially supply and demand of
goods and services within an economy.

 Technological factors

Technological infrastructures like internet and other ways to share information have impacted
the operations of HUL and many other companies. It has also become easy for many compa-
nies to manage their operations and for consumers to expect instant results. Faster exchange
of information has become the in-thing for stakeholders and consumers.

 Legal factors

These factors come with both external and internal factors. Certain laws affect the business
environment while others have certain policies that any company can maintain. HUL has
been impacted by consumer laws, safety standards and labor laws among other rules.

 Environmental aspects

These are factors that are determined by surrounding environment and they have influence on
other areas that go hand on hand with business environment. Factors of a business environ-
mental analysis like that of HUL or any other company include climate, weather, global
changes in climate and geographical location.

There are many outlines for many companies to conduct PESTLE analysis. Looking at the
HUL PESTLE analysis is one of the great ways to succeed in the business sector. These fac-
tors have made the company to grow and meet the needs of many clients and in most of apt
means. Development sustainability has become the first priority for HUL over the years.

BCG Matrix
Stars
Star is a specialty unit that has a substantial piece of the overall industry in a quickly
developing industry. Stars produce a lot of money on account of their solid relative piece of
the overall industry, additionally expend a lot of money in view of their high development
rate; consequently the money in every bearing roughly nets out. On the off chance that a star
can keep up its substantial piece of the overall industry, it will end up being a cash cow when
the market development rate decays.
HUL stars are
1. AXE Deodorant
2. Fair & Lovely
3. Lakme Anti Ageing
4. Vim
5. Wheel
6. Surf Excel
7. Lifebuoy
8. Lux
9. Kwality Walls
10. Kissan Jam
11. Knor Soup
All these products are contributing maximum to the market share. Taking AXE Deodorant as
an example is contributing almost 25% in the market share. (Sandhu, 2013) Same is the case
with the other stars of HUL as well.
Cash Cows
Cash Cow – a specialty unit that has a vast piece of the pie in develop, moderate developing
industry. As pioneers in a develop showcase, cash cows display an arrival on resources that is
more prominent than the market development rate, and along these lines create more money
than they expend. Such specialty units ought to be “drained”, separating the benefits and
contributing as meager money as could reasonably be expected.
The cash cows of HUL are:
1. Clinic Plus
2. Sunsilk
3. Vaseline
4. Red Label
Sunsilk made the biggest group for Indian young ladies which are –
www.sunsilkgangofgirls.com. Sunsilk inventively thinks of a whole item scope of Soft and
Smooth, Thick and Long, Damaged Repair, Hair Fall Solution, Stunning Black Shine and
Hostile to Dandruff. Similar steps are taken for the other cash cows as well. (documents.mx,
2014)

Question Marks
Question Mark (or Problem Child) – a specialty unit that has a little piece of the pie in a high
development showcase. Question marks are becoming quickly and in this way devour huge
measures of money, but since they have low pieces of the pie they don’t produce much
money. The outcome is huge net money utilization. A question mark (otherwise called an
“issue kid”) can possibly pick up piece of the pie and turn into a star, and in the end a money
dairy animals when the market development moderates.
The HUL question marks are
1. Close Up
2. Pepsodent
3. Annapurna
4. Fair & Lovely Menz Active
5. Domex
6. Rin
7. Breeze
8. Taj Mahal Tea Bags
9. Kissan Ketchup
10. Knor Meal Maker
Since they are the new participants or strugglers in the market for real share where the market
is changing at a high pace, endeavors are being made to ensure that the pick up on their piece
of the pie. Pepsodent went into a noteworthy change of its Germ check and Whitening
toothpaste by thinking of the Sensitive and Gum care scope of toothpastes. (ArtiVaish, 2014)
Knor soups thinking of the whole scope of soups running from tomato blend vegetable,
Chinese to chicken soups.
Dogs
Dogs – a specialty unit that has a little piece of the overall industry in a develop industry. A
dog may not require significant money since they have low piece of the pie and a low
development rate and in this manner neither create nor expend a lot of money, and they are
money traps as a result of the cash tied up in a business that has minimal potential and the
capital that could better be conveyed somewhere else.
The dogs of HUL are
1.Taaza
2.Brooke Bond Sehatmand
3. Bru
Brooke Bond Sehatmad ought to be sold off in light of the fact that the client tastes and
wholesome necessities have changed from tasting vitamin B improved tea to hostile to
oxidants improved tea. With the advancement of green tea, the request by wellbeing
cognizant people is a greater amount of against oxidants rather vitamin b, as natural products
give an abundant wellspring of vitamins.

Objective

OBJECTIVES OF THE STUDY

 To analyse the process of Talent Acquisition and Performance Management at HUL
 To present conceptual framework relating to Talent Acquisition at HUL
 To observe the procedure to select the candidates from internal as well as external
sources at HUL.
  To find out various recruitment sources used by HUL
 To evaluate and analyse the effectiveness of Talent Acquisition Policies at HUL.

Literature Review

Human Resources are the resources that can be mobilized or immobilised". A resource has no
life - a distinct between a human and non-living. A resource can be tampered with, tempered
or developed. A resource can be managed. This would mean it is a “Source”, which creates
“resources”. This source should itself be-5 developed as a resource so that the resources
multiply. This process is an art. But management of human resource “per se” is more
complicated than management of other resources, “the term human resource refers to the
knowledge, skills, creative abilities, talents, aptitude, values and beliefs of the work force of
an organization”.
In recent times many new approaches to the study of human element in organizations have
emerged. People are viewed as the most valuable resources of an organisation. Several
inferences have been drawn based on research studies regarding the ways of treating people
and motivating them for better performance. Further for the organizational development the
researchers have emphasized the role of leadership, the investment in training and the inter-
personal relationships etc.
These inferences linked with dances in the behavioural sciences that have enlarged the
traditional concept of personal administration and management and have given birth to what
is now termed as “Human Resource Management”. (J.T.Hoey)
Human resource development (HRD) has gained increasing attention in the last decade. Its
importance is increasingly being felt. Coping with changes in the environment, rising
expectations of employees, new developments in technology and management systems have
necessitated increased emphasis on HRD93. It is mainly concerned with developing the skill,
knowledge and competencies of people and it is a „people-oriented concept‟. (J.T.Hoey)
The Human Resource plays a significant role for the success of an organisation”. No
organization can assume to achieve their business goals by neglecting the human resources.
The human resource is the sum of those factors that people bring into the organization, such
as experience, training competence cultural ethos and attitude. These collectively constitute
the human development in an organization. The human resource development is an essential
determinant of an organizational development. Human development responds to
organizational climate, training and motivation. The people working in an organization are
valuable resources and hence their talents must be developed and utilized for the achievement
of organizational goals.

HR, in the organizational context, may be defined as “a process in which the employees of an
organization are continuously helped in a planned way to”:
a) acquire or sharpen capabilities required to perform various tasks and functions associated
with their present or future roles.
 b) develop their enabling capabilities so that they can discover and exploit their own inner
potential for their own and/or organisational development purposes. ( J.T.Hoey)
c)develop an organisational culture where superior-subordinate relationships, team work and
collaborations among different sub-units are strong and contribute to the organisational
health, dynamism and pride of employees. (“The philosophical value concept developed by
Prof. Udai Pareek”)
The human resource management (HRM) function has increasingly been recognized as an
important element of a company’s strategy. Organizations attempting to succeed in today’s
global business environment must invest in the acquisition and development of employees.
Indeed, a recent study of managerial attitudes about HRM practices in different countries
found that training and development is perceived as the most important HRM practice
(Jennings, Cyr, & Moore, 1995).
Modern human resource management is radically different from personnel management of
decades ago. Since the turn of the century, the managerial philosophy that has defined the
personnel function, has undergone significant changes. In the last eighty years, both the
scientific management approach and human relations approach have appeared and declined
and currently what has popularly become known as the human resource approach has
emerged.
The HRM function emerged and is concerned with much more than simple filing,
housekeeping and record keeping. For many years HRM function had not been linked to the
corporate profit margin or what is referred to as the bottom line. The role of HRM in the
firm’s strategic plan and overall strategy was usually couched in fuzzy terms and abstractions.
HRM was merely a tagalong unit with people –oriented plans, not a major part of planning or
strategic thinking. Because of the recognition of the crucial importance of people, HRM in an
increasing number of organizations has become a major player in developing strategic plans.
It is currently much more integrated and strategically involved.
Human resource management can be defined to be that part of management concerned with:
all the decisions, strategies, factors, principles, operations, practices, functions, activities, and
methods related to the management of people as employees in any type of organization; all
the dimensions related to the people in their employment relationships and all the dynamics
that flow from it (including the realization of the potential of individual employees in terms
of their aspirations), all aimed at adding value to the delivery of goods and services, as well
as to the quality of work life for employees, and hence helping to ensure continuous
organizational success in transformative environments.

Talent acquisition is the process of finding and acquiring skilled human labor for
organizational needs and to meet any labor requirement. When used in the context of the
recruiting and HR profession, talent acquisition usually refers to the talent acquisition
department or team within the Human Resources department. The talent acquisition team
within a company is responsible for finding, acquiring, assessing, and hiring candidates to fill
roles that are required to meet company goals and fill project requirements.
Talent acquisition as a unique function and department is a relatively new development. In
many companies, recruiting itself is still an indistinct function of an HR generalist. Within
many corporations, however, recruiting as a designation did not encompass enough of the
duties that fell to the corporate recruiter. A separate designation of talent acquisition was
required to meet the advanced and unique functions. Modern talent acquisition is a strategic
function of an organization, encompassing talent procurement, but also workforce planning
functions such as organizational talent forecasting, talent pipelining, and strategic
talent assessment and development.

Talent acquisition is quickly becoming a unique profession, perhaps even distinct from the
practice of general recruitment. Talent acquisition professionals are usually skilled not only in
sourcing tactics, candidate assessment, and compliance and hiring standards, but also in
employment branding practices and corporate hiring initiatives. Talent acquisition as a
function has become closely aligned with marketing and PR as well as Human Resources. As
global organizations need to recruit globally with disparate needs and requirements, effective
recruiting requires a well thought out corporate messaging around hiring and talent
development. Talent acquisition professionals often craft the unique company message
around the approach the company takes to hiring and the ongoing development of employees.
The employment brand therefore encompasses not only the procurement of human capital,
but the approach to corporate employee development. The unique needs of large companies
especially to recruit and hire as well as attract top talent led to the development of a unique
talent acquisition practice and career.

Recruiting professionals often move between agency recruiting and corporate recruitment
positions. In most organizations, the recruitment roles are not dissimilar: the recruitment role
is responsible for sourcing talent and bringing qualified candidates to the company. However,
modern talent acquisition is becoming a unique skill-set. Because talent acquisition
professionals many times also handle post-hire talent issues, such as employee retention and
career progression, the talent acquisition role is quickly becoming a distinct craft. Some
recruitment industry advisors even advocate for a talent department unique from the HR
department, because talent acquisition and development is so intertwined with a company’s
ultimate success and effectiveness.

As a craft, talent acquisition is of course not new; it is the simple process of recruiting good
talent to meet company needs. As a profession, however, talent acquisition is quickly
evolving into a unique and important job function.

The Difference between Talent Acquisition & Recruitment

Talent Acquisition means a view of not only filling positions, but also utilization of the candi-
dates and their skills that come out of a rigorous recruiting process as a means to fill similar
positions in the future also.
These future positions can be identified today by looking at the succession management plan,
or by analyzing the history of attrition for certain positions. This makes it easy to predict that
specific openings will occur at a pre-determined period in time.

In few cases of Strategic Talent Acquisition, clients will recruit today for positions that do not
even exist today but are expected to become available in the future.

Taking the long term strategic approach to talent acquisition has a huge impact on how an ap-
proach is made to a candidate.

Recruitment – In this résumés are invited for a vacancy

Selection - Screening of only relevant or best matching candidates.

Hiring process - Time frame from the period of requisition of man power being made till
the person actually joining.

Talent Acquisition - Acquiring of “talent”

Here we focus on talent that the person possess and not just the educational background or
the experience / working years one has.
To be simple, it is about attracting, recruiting, inducting and making use of right talent.

Such as if one have a talent for content writing but do not possess any certification or degree
in this field. A person who is recruiting might not be interested in my profile. But a talent Ac-
quisition person who is looking for talent might want to try my skills. Recruitment invite the
eligible candidates for the existing vacancies available in the organization.

Talent acquisition is an ongoing cycle of process related to attracting, sourcing, recruiting and
hiring employees within an organization.

This includes elements of employment branding, outreach, networking and relationship build-
ing with potential candidate communities to continually build and enhance the talent pool for
an organization.

Talent Acquisition professionals understand that each talent has something of value to offer.
They also build relationships with the best of the talent that lead to more successful network-
ing, more referrals, more business and an amazing give and take of expertise, knowledge and
information.

Recruiting takes tremendous effort. Talent acquisition takes efficient and productive pro-
cesses that are easy to use and candidate centric.

The identification, relationship building and selection of people who possess special, cre-
ative/technical skills and who can influence, contribute to and/or drive revenue to our busi-
ness by exerting extraordinary effort, exercising strong relationship management in present or
in future could be considered as TA.

Recruitment is a linear process, where employers source candidates for the existing vacancies
currently available. This approach is reactive in its nature, thus leads to increased time-to-hire
and cost-to-hire. At times organizations compromise even on quality in order to manage cost
and time.

As specified above Talent Acquisition is ongoing cycle of process that start by building Em-
ployer Brand, communication of Employee Value Proposition and ongoing relationship with
targeted Talent segments. This approach leads to the development of talent pools and talent
pipelines eventually creating sustainable talent supply chain. This leads to more strategic na-
ture of the approach and significant improvements across all Recruitment KPIs.

The term Talent Acquisition (TA) is often used synonymously with Recruiting. However,
these are two very different things. Recruiting is a subset of TA, and includes the activities of
sourcing, screening, interviewing, assessing, selecting and hiring. In some organizations this
extends to the early stages of onboarding, which then becomes a shared responsibility be-
tween HR and the hiring manager, with support from the learning organization.

Talent acquisition includes recruiting, but it is inclusive of other strategic elements as fol-
lows.

Talent Acquisition Planning & Strategy – This ensures business alignment, examines
workforce plans, requires an understanding of the labor markets, and looks at global consid-
erations.

Workforce Segmentation – It requires an understanding of the different workforce segments

and positions within these segments, as well as the skills, competencies, and experiences nec-
essary for success.

Employment Branding – This includes activities that help to uncover, articulate and define a
company’s image, organizational culture, key differentiators, reputation, and products and
services. Employment branding can help advance the market position of organizations, attract
quality candidates and depict what it is truly like to work for that organization.
Candidate Relationship Management – This includes building a positive candidate experi-
ence, managing candidate communities, and maintaining relationships for those candidates
who are not selected at present against a particular skill set, but have few more skills.

Metrics & Analytics – It is the continuous tracking and use of key metrics to drive continu-
ous improvement and to make better recruitment decisions, to ultimately improve the quality
of hire.

Within each of these core elements of TA there are many other sub-activities and best prac-
tices. And, of course, the selection of tools, technology and outsourcing partners is a key ele-
ment of a company’s talent acquisition strategy.

In other words, a leadership program is to leadership development what recruiting is to talent

acquisition. Alone, neither will drive their highest value to the business.

Talent Acquisition at HUL

Razdan joined HUL as a management trainee and has worked with the company for over 13
years.
She has worked in a variety of HR, business partnering and expertise roles.
In her current position, she is responsible for talent acquisition, talent management, learning
and organisation development.
'Learn to Lead', she explains, is one of HUL’s most enriching offerings across campuses.
It’s a leadership talk that the company’s senior-most leaders deliver at top business schools.
The idea came up during a conversation with a management committee member, when he
was discussing his leadership journey and its highs and lows.

“We decided to let students hear stories of success and challenges from senior leaders
themselves. 'Learn to Lead' was born in order to let students experience this authenticity.”

Attracting the Best & Laying the Right Foundation Early With its robust talent systems and
processes, HUL identifies talent early and invests to build capability. The Company offers a
rigorous summer internship experience through the Unilever Leadership Internship
Programme (ULIP). Interns go through an enriching learning experience by managing live
projects that have a direct and huge impact on the business.
In 2015, 38% interns completed projects at international locations in Unilever. HUL is also
one of the first to announce Pre Placement Offers (PPO) for interns across campuses. Our
flagship Unilever Future Leaders Programme (UFLP) – a programme highly sought after by
fresh recruits and acknowledged within and outside Unilever as the best programme of its
kind – is another key programme with a legacy of grooming leaders for over 60 years. The
UFLP provides young managerial recruits an extensive cross functional experience through
live projects and learning assignments, including rural & international exposure, within 1215
months preparing them for bigger responsibilities very early in their careers. What makes the
programme unique is the strong support system of senior leaders who act as tutors, coaches
and mentors. This regular interaction along with a robust reverse feedback mechanism on
effectiveness of the support system ensures the best grooming and inputs for the trainees.

Building a High Performance Culture HUL's performance management and reward processes
are geared to building a high performance and execution focused culture. The objective is to
inspire employees to deliver to their best potential every day by setting ambitious goals and
ensuring top rewards for top performance. Periodic performance and development review and
feedback discussions ensure high clarity and transparency for employees.

Focus on Leadership Development Leadership development at HUL is about building leaders

through a combination of disciplined routines and processes: a collective expertise, honed
through practice, in recognizing and developing talent. This has established HUL as a source
of leadership talent, both for Unilever globally and industry in general. HUL is often referred
to as a ‘CEO Factory’ having contributed over 450 CEOs within the corporate world.
Recognizing the importance of leadership in the larger communities we operate, HUL has
also been extending its role in building and harnessing leadership amongst the student
community. Senior leaders of the Company interact with students on campus and share
leadership perspectives. The leadership development program and intervention for student
leaders are part of this larger initiative which has created tangible impact on students.

Employee Performance

There is no general, overarching theory about employee performance. The effectiveness with
which organisations manage, develop and stimulate their employees is an important
cornerstone for how organisations perform. Because of this, people management has a
significant impact on performance.1

Performance can be traced back to the behaviour of people on the shop floor. Employees
work in a certain way or behave in a way that contributes to (the goals of) the organisation.2

Employees' behaviour in relation to organisational performance can manifest itself in three

different ways.

per-form-ance (n.)
1 act, process or manner of performing or functioning
2 execution (of a duty etc.)
3 any accomplishment
Task performance

Behaviour focused on carrying out the task. Task performance is often regarded as the most
important aspect of work-related behaviour and is regularly used as a synonym for overall job
performance.

Organisational Citizenship Behaviour

This behaviour is also called 'soft performance'. In short, this is when employees also carry
out tasks that fall outside of their direct area or job description, thereby contributing to the
organisation's objectives.

Workplace Deviant Behaviour

This is behaviour whereby an employee violates the organisation's norms, as a result of which
he puts the organisation or his colleagues in danger. Spreading rumours, insulting colleagues,
theft and sabotage are a few examples. Actively disengaged employees display this
behaviour. It is important for employees to receive feedback on their behaviour and their
performance. If that is lacking, they will use the perception of their prior performance as a
frame of reference to determine:

 which tasks they are going to carry out4

 how much effort they will make5
 how much drive they have6
 to what extent they identify and correct mistakes

The importance of performance

If it does not add value, your organisation or organisational unit has no reason to exist. This
could be value for customers, society and shareholders or for colleagues within the
organisation.

Every employee makes an individual contribution to the performance of the organisational

unit and thus to your entire organisation. If the performance of an organisational unit or
individual employee falls behind for too long, as a rule this will lead to reorganisation or
redundancy. Particularly in an environment in which competition is fiercer than ever, the
importance of continuously performing is increasing.

Introduction to Performance Management

Employee Performance Management is about aligning the organizational objectives with the
employees' agreed measures, skills, competency requirements, development plans and the
delivery of results.

The emphasis is on improvement, learning and development in order to achieve the overall
business strategy and to create a high performance workforce.
The History of Employee Performance Management

Performance Management began around 60 years ago as a source of income

justification and was used to determine an employee's wage based on performance.
Organisations used this new method to drive behaviours from the employees to get specific
outcomes. In practice this worked well for certain employees who were solely driven by
financial rewards. However, where employees were driven by learning and development of
their skills, it failed miserably.

The gap between justification of pay and the development of skills and knowledge became a
huge problem in the use of Performance Management. This became evident in the late 1980s;
the realisation that a more comprehensive approach to manage and reward performance was
needed. This approach of managing performance was developed in the United Kingdom and
the United States much earlier than it was developed in Australia.

In recent decades, however, the process of managing people has become more formalised and
specialised. Many of the old performance appraisal methods have been absorbed into the
concept of Performance Management, which aims to be a more extensive and comprehensive
process of management. Some of the developments that have shaped Performance
Management in recent years are the differentiation of employees or talent management,
management by objectives and constant monitoring and review.

Its development was accelerated by the following factors:

 The introduction of human resource management as a strategic driver and integrated

approach to the management and development of employees; and
 The understanding that the process of Performance Management is something that's
completed by line managers throughout the year - it is not a once off annual event co-
ordinated by the personnel department.

How Annual Appraisals are Different But Part of Performance Management

Most organisations have some type of employee appraisal system, and many are experiencing
the shortcomings of manual staff evaluation systems. When
discussing workforce performance the most commonly asked question is "How does
Performance Management differ from performance appraisals or staff reviews"?

Performance Management is used to ensure that employees' activities and outcomes are
congruent with the organisation's objectives and entails specifying those activities and
outcomes that will result in the firm successfully implementing the strategy (Noe et al. 2000,
p.55).

An effective Performance Management process establishes the groundwork for excellence

by:

 Linking individual employee objectives with the organisation's mission and strategic
plans. The employee has a clear concept on how they contribute to the achievement
the overall business objective,
 Focusing on setting clear performance objectives and expectations through the use of
results, actions and behaviours,
 Defining clear development plans as part of the process, and
 Conducting regular discussions throughout the performance cycle which include such
things as coaching, mentoring, feedback and assessment.
Performance Appraisal properly describes a process of judging past performance and not
measuring that performance against clear and agreed objectives. Performance Management
shifts the focus away from just an annual event to an ongoing process. Figure 2.1 is a process
diagram that provides a graphical view of the major differences between the two processes.

Figure 2.1 - Graphical view of the difference between Performance Appraisal and
Management
Performance Management System at HUL

– A structured method of formally and objectively evaluating employees’ performance with

respect to their objectives.
– Addresses the issue of an employee’s development by providing them with structured and
in-depth analysis of strengths and areas of improvement
– Provides with input for annual increments, training and development.
– Employee Performance management at HUL includes planning work and setting
expectations, developing the capacity to perform, continuously monitoring performance and
evaluating it

Purpose of PMS

– Administration
– Determine promotion of employees
– Determine increment in pay of employees.
– Determine transfer & change in job assignments.
– Determine retention or termination
– Decide on layoffs
– Decide need for training
– Decide salary & related issues
– Development – Provide performance feedback to all concerned
– Identify individual skills, core competencies, strength & weaknesses
– Assist employees in setting goals
– Identify training needs
– Improve communication.

Methods of Performance Appraisal at HUL

 Management by Objectives (MBO):

 The MBO focuses attention on participative goals that are tangible, verifiable &
measurable
 The superior & subordinates jointly determine goals to be considered during appraisal
period & what level of performance is necessary for subordinates to satisfactorily achieve
specific goals
  During performance appraisal period the superior & subordinates update & alter goals as
necessary due to changes in business environment
 If not achieved identify reasons for deviation
Process of PMS in HUL Establish Performance Standard & communicate standard &
expectation to employees.
Measure actual performance with the target Compare actual performance with set standards
& find out deviations
Suggest changes in job analysis & standards if necessary
Follow Up Annual Goal Setting Mid-Year Review Annual Performance Review

PROBLEMS of PMS
– Rating biases
– Halo effect
– Error of central tendency
– Personal Prejudice

RESEARCH METHODOLOGY

Research design is defined as a framework of methods and techniques chosen by a

researcher to combine various components of research in a reasonably logical manner so that
the research problem is efficiently handled. It provides insights about “how” to conduct
research using a particular methodology. Every researcher has a list of research questions
which need to be assessed – this can be done with research design.

The design of a research topic is used to explain the type of research

(experimental, survey, correlational, semi-experimental, review) and also its sub-type
(experimental design, research problem, descriptive case-study). There are three main
sections of research design: Data collection, measurement, and analysis.

EXPLORATORY DESIGN

Exploratory means to explore the hidden things, which are not clearly visible.
Exploratory research is a type of research conducted for a problem that has not been clearly
defined. Exploratory research studies are also termed as formulate research studies.
Exploratory research provides insights into and comprehension of an issue or situation. It
draws definitive conclusions only with extreme caution. Exploratory research helps
determine the best research design, data collection method and selection of subjects.
 In our study we use exploratory research because we have to find the labour laws
which are practised by the company. We are doing it by the primary data analysis (i.e) by
circulating the Questionnaire among the labour and the HR managers in the company.

SAMPLING METHOD : CONVENIENT SAMPLING

Convenience sampling (also known as availability sampling) is a specific type of non-

probability sampling method that relies on data collection from population members who are
conveniently available to participate in study. Facebook polls or questions can be mentioned
as a popular example for convenience sampling.

Convenience sampling is a type of sampling where the first available primary data
source will be used for the research without additional requirements. In other words, this
sampling method involves getting participants wherever you can find them and typically
wherever is convenient. In convenience sampling no inclusion criteria identified prior to the
selection of subjects. All subjects are invited to participate.

In business studies this method can be applied in order to gain initial primary data
regarding specific issues such as perception of image of a particular brand or collecting
opinions of perspective customers in relation to a new design of a product.

GEOGRAPHICAL LOCATION OF THE SURVEY

The company I will be analyzing is HUL with the company’s head office being in Andheri,
Mumbai.

DATA COLLECTION

Data collection is basically the process of collecting data from different sources under
any specified environment to get answers to some predefined questions trying to gather
information about some certain issue.

The data is collected through Primary Data Collection. Here the data is collected by
the surveyor itself and is usually done for the first time. The set of questions are prepared and
passed through the employees of the company.

DATA ANALYSIS METHOD

The collected data is further analysed. There are several analysis method.
REGRESSION: Regression models the relationship between dependant and explanatory
variables, which are usually charted on a scatterplot. The regression line also designates
whether those relationships are strong or weak.
CORRELATION: Correlation is a technique for investigating the relationship between two
quantitative, continuous variables.
ANOVA: Anova is useful for determining if any significant differences exist regarding the
means of more than one group that are independent.

DATA SOURCES:
1. PRIMARY DATA SOURCES : The information regarding the Talent Acquisition
and Performance Management would be collected by approaching the employees at
all the levels through various mediums such as LinkedIn, Facebook and Quora.
2. SECONDARY DATA SOURCES: Secondary data collection would happen
through the website of HUL and Glassdoor wherein the process of recruitment and
selection is mentioned and reviewed.

DATA ANALYSIS TECHNIQUES :

QUALITATIVE METHOD :
This method comprises looks for things such as patterns and colors and not numbers. Here
in this study we would be using qualitative data analysis method to understand the quality
of recruitment and selection process at HUL along with the trends.
QUANTITATIVE METHOD :
This method mainly comprises of numbers. In this study we would be using Quantitative
Method of study to understand the number of internal and external talent acquisition at
HUL.
References

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