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Procter & Gamble Company Overview

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Procter-&-Gamble-Company-Overview
13.02.2020
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Procter & Gamble

The Procter & Gamble Company is an American multinational company and one of the world’s market leaders in producing consumer goods. The firm, founded in 1837 by the candle maker William Procter and soap-boiler James Gamble, has evolved from a local manufacturer of two household items into one of the world’s largest companies producing such different items as chips, diapers, batteries, traditional soap, and much more in the factories located in all parts of the world.

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Regarding the spheres of production, P&G does not have the core business branches since the company manufactures a very wide variety of consumer products. However, the corporation has three main areas of activity: Beauty & Grooming, Household Care, and Health & Well-Being. Currently, the firm owns 43 brands that are the engines of growth for the company and provide an annual sales growth of 10%. The main trademarks involved are Pampers, Always, Fairy, Tide, Head & Shoulders, Pantene, Old Spice, Hugo Boss, Dolce & Gabbana, Blend-a-Med, MaxFactor, Gillette, Venus, Duracell, Braun, etc. Talking about its competitiveness, P&G holds the 22nd place in the Fortune 500 list and is one of the leading companies in the US by volume of profits and market capitalization. The firm is public, which implies that its shares are traded on the New York Stock Exchange and are used to calculate the Dow Jones industrial index.

The total number of employees in the company is more than 130 thousand people in 80 countries around the world. The board of directors consists of 13 people, including top executives from companies such as American Express and Boeing. Procter & Gamble is a recognized pacesetter among the companies that are “the academies of leaders”, and one of the best companies in HR practices by numerous organizations, including Workforce 100. Furthermore, P & G possesses an award for the World’s Most Attractive Employers by Universum and also is among the Top Companies for Recruitment and Retention by Diversity, Inc.

Best Practices

Undoubtedly, the company has obtained its high position in the world’s market due to the well-implemented practices regarding human resources. These include some of the following examples.

Labor Planning

Procter and Gamble’s use hold employment constant policy. The company is searching for new employees who could bring something new to the firm policy all the time. As evidence, one can always find some vacancies on its website. Besides, the company representatives frequently visit universities in order to find young talented future employees among the current students. High employment levels constantly maintain a trained workforce and enable managers to keep hiring, layoff, and unemployment costs to a minimum for a company.

To proceed, the work schedule in the company is very flexible and variable. Thus, there is a standard 8-hour working day for office workers and a 10-hour working day for factory workers. Besides, employees are free to determine their schedules. Consequently, it makes the working requirements very convenient for potential laborers and attracts multitudes of new people to the company. Furthermore, work in P&G is strictly classified. The managers govern virtually all the steps, decisions, and behavior of employees; all rules are described in the internal corporate documents in detail and are reflected in the adaptation training. This peculiarity is the hallmark of the company’s corporate culture, its prominent feature, which attracts some people and repels others.

Job Design

Taking into account that all the actions and rules are clearly defined, there is a strong labor specialization in the company. P&G uses an individual approach to the planning of wages on the basis of the results and abilities. The corporation uses the practices of the job enlargement by adding tasks requiring similar working skills, and the job rotation by moving their employees from one specialization to another, paying an especially big amount of attention to the managerial branch. To be more specific, the most common are rotations among areas and geographic locations – they are a prerequisite for any serious vertical growth. Besides, over 90% of P&G employees start working in the company from the lowest levels of the career ladder and continue to develop within the organization. Furthermore, the company also uses the job enrichment strategy implemented by adding controlling and planning tasks to the job. However, there are very severe rules applied to the laborers. A distinctive feature of the control system is strict regulations of all procedures, which check virtually all the activities and decisions of the company. Often it can be heard that P&G employees are called “robotic”. Saying this, people usually mean that employees are only empowered when talking about leadership practices. Generally speaking, workers are responsible for their actions by which they will be estimated on the path to managerial positions.

To continue, the basic principle underlying the talent management system in P&G is a meritocracy. The company does not pay a great amount of attention to the university the candidate has graduated, the quality of received degree, or country the potential employee was born in. The only things they consider are the psychological component, and the person’s character and integrity, which have to enable him or her to achieve exceptional results and build a strong discipline. Additionally, the jobs one can receive in P&G are determined by several factors including skills variety (candidates should pass many tests in order to check their abilities), job identity (allowing the worker perceive a job as a whole and recognize a start and finish), job significance (assuring that any job matters), autonomy, and feedback (managers receive it by placing mentors for each job).

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To continue, there is distinct motivation and incentive system in P & G that consists of base pay and bonuses. To determine the number of perks, the company conducts regular benchmarking studies of compensation levels among the competitors. Four factors influence the amount of each employee salary: position level, work experience at this level, wage growth in the market, and direct achievements of an employee. In addition to the base salary, all the staff starting from the third level receives an annual bonus from the STAR program, which is the essential short-term premium for achievements. At the same time, the higher the position is, the higher the maximum possible level of payments becomes (8% of the basis for level 3 and 170% for the CEO position (10th level)). Moreover, the higher the position becomes, the greater the percentage of the bonus part compensation is (from 0% for the first level to 90% for the highest). This is called “payment for the risk” and reflects the principle of the company that the interests of the employee and the corporation cannot be separated from each other. As a non-monetary motivation, the company uses active involvement of managers in career development and personal growth of each employee, various forms of flexible working, a wide range of benefits, development programs in various countries, etc.

Ergonomics and the Work Environment

Procter & Gamble strictly maintains the ergonomics of its working environment. The company not only adheres to the legislation of the native and host countries on the working environment but has also established own Rules of Business Conduct for employees. Thus, according to it, P&G traditionally seeks to build a clean working environment.

Similarly is placed the question in the rules section dedicated to bribery in commercial relations. Besides, if an employee believes that any other employee violates the law or the P&G principles of activity, he/she has to bring that information to the management. Thus, the company’s working environment presents a high level of corporate discipline, which is believed to be a key to long term success. It is important to note that in matters of rules and order compromises are not allowed. In the company, there are clear expectations in terms of discipline, which only people who have an appropriate level of maturity and responsibility can follow.

Work Measurement

P&G provides the annual evaluation of staff at all levels, which includes the self-esteem (the employee evaluates own results for the year, comparing them with the own work and development plan), evaluation of “360 degrees” (the employee receives feedback from all those with whom he worked during the year, including subordinates and clients), and assessment by the manager according to particular characteristics. Based on the evaluation, for each employee supervisors form the individual work and development plan for the next year which includes: indication of the expected results; the short-term and long-term career interests as well as an interest in the rotation, tasks, projects, which the employee would/would not want to deal with; personal development plan, where managers indicate one or two areas in which the development is expected to be made; measures to take by the employee and his immediate supervisor to implement the plan. Heads of departments and teams are responsible for ensuring that each employee receives own operation and development plan and executes it.

Employee Empowerment

The employee empowerment is the practice of enriching jobs in order to enable employees to accept responsibility for a variety of decisions normally associated with staff specialists. Empowering employees helps them take “ownership” of their jobs so they have a personal interest in improving their performance. It refers to the feeling of effectiveness, control, and influence. The empowerment of an employee is a mix of four feelings. The first is the feeling of autonomy that means the freedom of choice of behavior and actions resulting in the responsibility for them. The second is confidence that indicates the feeling of performing satisfactorily. The third is meaningfulness which is the value of the job done. Finally, the last one is an impact that represents the actions that lead to the planned results.

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To proceed, the practices of P&G relative to employee empowerment are successful when talking about confidence, meaningfulness, and impact. As previously stated, the company makes employees confident by providing constant feedback, meaningful – by providing the ability to grow, and impacted by individual annual planning and checking the results. These practices improve the employees’ morale and lead to higher job satisfaction; the reason is, the workers see that their decisions matter. Consequently, improved morale leads to improved productivity. The confident employees do not fear to make a mistake and take necessary actions to increase profitability; the meaningful employees want to prove that the value provided is justified; the employees feeling the impact observe the followed order of the working process, which brings them desire to act further. Since the empowered employees are more innovative; their fresh ideas on the company’s operations can increase productivity. They also work more willingly, therefore their productivity grows as well as the productivity of the whole company.

However, P&G is not successful in fully ensuring the autonomy of its employees. As it was mentioned above, the company strictly prescribes all the actions of each employee. So, it is hard to be more or less independent in such an environment. Thus, it negatively influences the overall picture of employee empowerment as well as morale.

Morale

Morale is a condition of mind involving feelings and emotions. Significantly, it is usually unachievable in each employee of the company. Morale consists of attitudes and perceptions of the job, working environment, working team, management, and the company in general. The positive employee’s morale can be seen in the confident and disciplined laborer who wants to work.

Thus, P&G uses many successful practices that improve morale leading to bettered productivity. First of all, the company’s flexible schedule allows every worker to adjust to the corporation’s conditions. Additionally, strict labor specialization ensures that the employees’ skills are estimated accordingly. Besides, widespread job rotation ensures the feeling of ability to be promoted. Despite the strict rules, the employees can also control and plan their activities, which adds them confidence.

One of the most important and successful practices is the principle of meritocracy when hiring employees. It increases their morale by ensuring the feeling that the only things that matters are individual characteristics and skills. Moreover, another important and successful practice is the compensation policies of the company. The practice of the company to reward employees on the basis of work experience and individual achievements also increase the morale of the stuff. They understand that their efforts and knowledge will be estimated accordingly and they will receive a fair payment for them.

Additionally, the ergonomic and clean working environment indicate that the company and management care for employees and want them to feel comfortable and safe. Finally, the last important successful practice is developed work measurement. The fact that the actions of each employee are measured annually from three sides allows estimating the efforts of each worker accurately. Thus, it provides the confidence of the employees and, therefore, increases their morale. All these actions lead to the fact that the P&G’s staff wishes to improve their quality of work and develop their skills, therefore increasing the total productivity of the company and increasing its profits.

Recommendations

Despite the numerous advantages of the working process in the company, there are several downsides that require betterment. First of all, Procter and Gamble should improve employee empowerment in the company. For example, it should switch its focus from regiments and procedures that strictly determine the actions of each employee to the client orientation. The rules should be minimized to indicate only the goal of actions and the codes of conduct. This would be especially favorable for the higher-level employees, for example starting from the third level.

Additionally, there is nothing mentioned about the rest in the company that brings positive emotions. P&G human relations practices are based only on hard work, promotion, and compensation. Thus, the second recommendation is to improve employee morale by occasional unwinding. For example, the company can establish one day in a month when the working teams relax together, or participate in some competition to better teambuilding process. Besides, the employees can receive special “run” rewards for reaching particular goals in the company; for instance, that could be ticketed for a sports game, cinema, or museum, etc. Additionally, the company could create football or basketball teams to improve staff interaction and communication.

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In the first case, canceling the strict procedures enables the employees to become free to determine themselves what action to take to reach the goal. This involves the fact that they will be able to implement their innovative ideas into life. Besides, starting from the third level, employees have already gained the necessary knowledge and skills to conduct the working ideas that will possibly increase the productivity of the company operations. Additionally, the transferring of focus on clients ensures the development of the company.

In the second case, the entertainment in the company boosts employees’ moods, since they can work more willingly. So, their productivity will increase, and as well as the productivity of the whole company. Besides, the “fun” rewards can be even more encouraging than money perks. Finally, sports teams unite people, so they will cooperate better and more possibly share and discuss their ideas at work contributing to the improved productivity in the operations of the company.

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