Sonoco Products Company Case Study Solutions
What are Sonoco’s current strengths in terms of its culture and people? What are the company’s major weaknesses?
Sonoco’s culture was described as collaborative, family, friendly, paternalistic, ethical, and
The employees were so comfortable working there that there were many employees with more than twenty years of experience working there. Employees understands the mission and vision of the company and they even have shared ethical work practices.
mpany did well in the decades of 80’s and 90’s, the management has thought
of not changing the culture. Sonco has evolved its strategy from product driven to the solution oriented company.
The major weakness of the HR function was that it was highly decentralized, siloed, inconsistent in its process and unequal in the services that existed among the various businesses.
HR managers reporting to the solid lines to the General managers but dotted lines to the corporate HR. Some of the divisions specifically paper, industrial and consumers had its own HR function with separate HR systems, budget, performance management processes and leadership training programme. There were different pay revision cycles among different divisions.
The staff’s complex reporting
and communication structure has made no room for a healthy communication regarding overall intent or direction regarding how the implementation needed to be coordinated at the division or plant level.
According to several managers the divisional managers often manipulate the performance ratings to get larger salary increases for their staff. Evaluations did not
reflect employee’s performance accurately. This often resulted in difficulty in weeding
out the non performing employees.
What were Cind
y Hartley’s objectives for changes at Sonoco?
Cindy Hartley was senior vice president of Human Resources at Sonoco Products company. Her objectives for changes at Sonoco were to come up with at least two HR structures
that would reduce the function’s cost
by 20% or by $2.8 Millions.
She has a newer objective is to develop newer HR fundamental with fewer resources and a changing company strategy.
She needs to create corporate wide consistency on how HR systems and processes were implemented and used, how to increase the level of accountability placed in general managers in the business for developing, retaining and replacing talent, and how to provide customized, strategic support to the businesses.
She has provided the priorities to her objectives which includes change in the
CredibilityAn organization may reach the creditability when its HR practices is able to createtrust between low level staffs and top management, as well as to encourage
employees‟ belief in HRM strategies.
In the case of Sonoco, the trust was created andstaffs of a division may understand HR practices being applied in their particulardivision, but not in others, and obviously not in the entire company. As aconsequence, the link between business strategies, including HRM ones, andindividual development was lost. Price (1997) advised top managers to be sincere,honest and consistent. Above all, managers should convey open messages toemployees and revise their HR policies to gain understanding.2.3.
CommunicationFor effective communication, objectives of organization and that of HRM must beunderstood and accepted by all employees; open culture with no barriers (Price,1997). But the communication at Sonoco contained a number of problems. Forexample, the implementation of the compensation system was only a dialoguebetween GM and HR staffs, not widely publicized. Even in such discussions, therewas mostly one-way communication from GM to HR managers, since
“there was notmuch HR could do but meet GM‟s wishes”
(Case study). Beardwell et al (2004)recommended that the development of social cultural, communication and empatheticknowledge will be a priority. Sonoco must break the silo situation; create amechanism for smooth flows of non-barrier communication and encourage openness.2.4.
Cost effectivenessTo be cost effective, the reward and promotion system must be fair. To Sonoco
management, however, “compensation and benefits were viewed as entitlements
rather than costs in need of control or tools to drive behavior (Case study). In HRaspect, this scheme failed to serve the purpose of reward management whichcontributes to appropriate organizational cultures, underpinning core values andincreasing the commitment and motivation of employees (Armstrong and Murlis,2007). From accounting angle, it decreased the cost control and caused a disorder infinancial management. F
rom owners‟ perspective, expenses to human capital shouldgenerate revenues in business, rather than serving managers‟ casual purposes.