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Procter & Gamble HR System Overview
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Agenda Procter & Gamble Company HR Systems Overview HR Systems
Issues we’re facing Q&A
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Procter & Gamble Company Overview
Established in Cincinnati, Ohio, US in 1837 A global leader in consumer goods 100,000 employees worldwide Operations in 80+ countries Products sold in 160+ countries
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Procter & Gamble Korea Overview
1989, Entered Korea via Joint venture (P&G-STC) 1992, Established P&G Korea 1992, 100% ownership 1994, Chonan plant start-up 1998, Acquired Ssangyong Paper Co. 2004, Integrated Wella Korea 2005, Acquired Gillette
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Procter & Gamble Korea Overview
500 employees General Office in Seoul Plant in Chonan Acquired Gillette Brands -- Pantene, Vidal Sassoon, Head & Shoulder, Whisper, Cutie, Febreze, Pringles, SKII, Ivory, Joy, Crest, Wella, IAMS
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Procter & Gamble HR System Overview
A holistic system approach A strong linkage to P&G business model A strong Corporate culture Corporate Purpose, Values, Principles Business Conduct Policy 169 years of trial and error
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Procter & Gamble HR System Overview
Home-grown management Early responsibility Manager manages employee. Line organization responsible for organization development HR develops and owns the systems. Line organization executes the systems. .
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Business Need Analysis
Key factors in design and implementation Business success (short term and long term) Balance between business and organization Productivity Company's needs and wants from employees Employee's needs and wants from Company Determine the type of people, skills, and experience we need for the business to be successful Determine the type of organization and its culture we want to build
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Recruit the Finest People
Work Plan for the year ahead Business Direction Reward & Recognition 1:1 Relationship Coaching Feedback Personal Development Plan Review of Results Career Planning Development Program Business Results Career Interests Performance Management Retain the Finest People
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HR Model
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Administrative Expert
Dimensions of HR’s Role: The Four Quadrant Model Multiple Roles of HR: Change Agent The roles are not separate and unrelated All 4 roles can come into play while doing HR work One or more of the roles may dominate depending on the nature of the work Every HR practitioner can & often does play all 4 roles Strategic Partner Employee Champion Administrative Expert
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PVP-Culture
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P&G Core Value Purpose, Values and Principles
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Visionary, Successful Companies that Stand the Test of Time*
Preserve Core Values Core Purpose Change Cultural & Operating Practices Specific Goals & Strategies * from Built To Last, by James C. Collins and Jerry I. Porras
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Visionary, Successful Companies that Stand the Test of Time*
1812 Citicorp 1837 Procter & Gamble 1847 Philip Morris 1850 American Express 1886 Johnson & Johnson 1891 Merck 1892 General Electric 1901 Nordstrom 1902 3M 1903 Ford 1911 IBM 1915 Boeing 1923 Walt Disney 1927 Marriott 1928 Motorola 1938 Hewlett-Packard 1945 Sony 1945 Wal-Mart * from Built To Last, by James C. Collins and Jerry I. Porras
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Our PVP William Procter and James Gamble’s most significant contribution was not hog fat soap, lamp oils or candles, for these would eventually become obsolete; their primary contribution was something that can never become obsolete: a highly adaptable organization with a ‘spiritual inheritance’ of deeply ingrained core values transferred to generation after generation of P&G people." "윌리엄 프락터와 제임스 갬블의 가장 위대한 공헌은 비누, 램프오일, 양초가 아니었다. 왜냐하면 이것들은 결국에는 역사 속으로 사라져 버린 것들이기 때문이다. 그들의 가장 중요한 공헌은 결코 사라 질 수 없는 그 무언가 이다. 그것은 수 세대 동안 P&G 사람들에게 전해진 것으로 깊게 각인된 핵심가치라는 정신적 유산을 가진 매우 적응성이 뛰어난 조직이었다.” James C. Collins and Jerry I. Porras, authors of Built to Last – Successful Habits of Visionary Companies, 1995 Here’s a quote from the book – “Built to Last” – which captures the key message of our company’s founders. The PVP is what will ensure that we transmit our core values and culture from generation to generation.
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Corporate Purpose, Value and Principles
Purpose, Values and Principles represent the Corporate Culture. PURPOSE states the most fundamental reason why the organization exists. VALUES are the core concepts that define the character of the Company and its people PRINCIPLES are the guidance by which choices, decisions, and behaviors are determined.
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Purpose, Values and Principles
We will provide branded products and services of superior quality and value that improve the lives of the world’s consumers Values: P&G People We attract and recruit the finest people in the world. We build our organization from within, promoting and rewarding people without regard to any difference unrelated to performance. We act on conviction our people will always be the most important asset.
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Purpose, Values and Principles
We show respect for all individuals The interests of the Company and the individual are inseparable We are strategically focused on the work Innovation is the cornerstone of our success We are externally focused We value personal mastery We seek to be the best Mutual interdependency is a way of life
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Purpose, Values and Principles
We show respect for all individuals We believe that all individuals can and want to contribute to their fullest potential. We value differences. We inspire and enable people to achieve high expectations, standards, and challenging goals. We are honest with people about their performance.
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How PVP works in P&G Business Conduct Policy
Regular Training and Compliance report Actual Case Studies Performance measure for leaders Hot Line And many more
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Promotion from Within
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Promotion from within Unique HR practice of P&G
Fundamental to retain our corporate core values Reason we need to focus on selection process and employee development Hire future leaders Hire at entry levels only Maintain healthy turnovers for continuous supply of new talents
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A Culture to Support Development
Long history of developing people Leaders take ownership in developing people and coaching others Willingness to release people for developmental opportunities Organization and people development are key measures in performance assessment Business decisions frequently combined with talent/staffing discussions Build from within requires continual learning and development
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We Build Our Organization from Within
How? Hire only at entry level (exceptions = doctors, lawyers, etc.) Field The Best Team in Acquisitions Search for talent locally, regionally then worldwide Combine and leverage On-the Job Posting and Assignment Planning Develop for greater responsibility Why? Value deep knowledge Rooted in learning the business from the ground up Organizational focus is on growing talent vs. searching for talent Internally developed talent produces better business results 90% success rate at executive level vs. 50% industrial average industry
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Developing Talent : P&G’s Promise
The Right People in the Right Jobs at the Right Time At P&G, we: Hire the best of the best everywhere Identify high potentials early in their career Fill strategic jobs with high potential, high performers Develop our leaders through planned experiences Develop a diverse mix of future leaders Help match individuals’ passion to business opportunities Empower our people to succeed Protect and grow the business through sound succession planning
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The difference is based on the expectation on the job.
Job family Group of Jobs categorized by different career objectives and competencies. Each Job Family has different system of Career Progression, Salary, Assignment etc. A&T : Admin and Operational Job oriented with expertise and experience C5 : Expert C4 : Senior C3 : Entry (Univ.) C2 : Entry (College) C1 : Entry (High School) Technician :Technical Resources -Plant Operation -R&D Manager : Manage the Business and people The difference is based on the expectation on the job.
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Recruiting Process
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Talent Supply Process Owned by hiring function : Career system
Focusing on a candidate’s behavior, result, experience : past behavior is the best predictor of future behavior Major selection criteria is a potential to be a group manager (2 levels up)
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Talent Supply Process Enrollment Planning Recruiting Needs
Campus or Market ? Pre-screening Experience Education Diversity needs Stability Etc. Screening Interview English Test (as needed) Problem Solving Test Management Application Form Success Drivers For reference use only Cutoff score applied Strong or above Physical Exam. Job Offer Hiring & Onboarding Comprehensive Interview Success Drivers At least 3 times
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Success Drivers Set of competencies of P&G
people, our most unmatchable competitive strength Nine specific behaviors organized under three basic ideas that describe the competitive advantage created by P&G People. Fundamental of all HR systems in P&G.
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SD and people systems
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Performance Evaluation
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ED&PS (Employee Development and Planning System)
Goal Rating W&DP Salary Planning Develop & Review Develop People & Business Explain how the W&DP fits into the ED&PS. The W&DP is part of the overall ED&PS. Key components in the system are W&DP, Rating, Salary Planning and Assignment Planning/Promotion in addition to actual training development and review. Based on the individual’s past year’s performance, we assess his/her contributions to the business in W&DP, which will be a base for Rating and Salary planning. SDDS combined with the individual’s past year’s performance, will also be a base for the individual&s next year’s work and development plan, which will determine his/her Assignment Plan. Assignment Planning
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W&DP Process Goal Overall Rating Performance Session Assessment
Assignment Planning - Work Plan For Year Ahead - Career Interests 1:1 Relationships On-going Coaching & Feedback Review of Results Personal Development Plan Strength Improvement Areas Explain trainees for process for several cases - Newly hired in P&G - Transfer to the other organization Complete Review of Results before Transfer - Immediate manager change Key Customer Inputs Quarterly Review
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Spirit of W&DP WIN-WIN!! WANT MUST CAN Preference Responsibility
Capability CAN
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Key Customer Input Feedback Request Form
Broad-based Customer Feedback: Purpose Supplement managers understanding of your performance and contributions by getting additional, specific and actionable feedback Overall Assessment Strength/Talents Opportunities Weaknesses / Performance Issues Note: The previous format of Start/Stop/Continue is an optional. Managers may want to use that format. There is a handout as a reference.
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Broad Base Feedback Process
- Employee will propose the key customer - Manager will ask & collect inputs Proposed Key Customer should meet followings; - Who works with the employee closely - 3~4 will be sufficient - Consider diversity, multi-functional Note: 1. When you decide the customer name list, you had better make it in diversity, e.g., colleagues of different levels, from different departments, other managers you work with etc. Tell the participants that the detailed Tips For Giving and Receiving Feedback and the W&DP Quality Checklist are in the Toolkits, they can read them after the class.
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Compensation & Benefit
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P&G Compensation Principle
Pay competitively With Selective Group of Companies Pay for performance
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P&G Compensation System
Compensation Management : 2 processes Compensation Benchmarking Process: Establish competitive job value Product: Salary Ranges Salary Planning Process: Differentiate pay according to performance and contribution Product: Individual Salary Plan
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Salary Planning-Range Design
Growth is faster in the early years at level – Higher rate of learning and contribution; Slower rate (closer to market growth) as skill and experience stabilize. Salary growth is based on performance, job level and time at level Higher Pay for Higher Performance and Contribution Years at Level 100% 50% 0 % 1-Rated 2-Rated 3-Rated . .
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Compensation System
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Benefit Principle We attract, retain and motivate employees by offering a reasonable policies and plans packages.
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Objectives for Benefit Programs
Tie to company’s business strategy Take into account employee needs Be competitive Cost effective Valued by the employee The benefit programs cannot be decided in a vacuum. They must be consistent with the environment in which they exist taking into account: the company the employees our competitors Five key objectives for the benefit programs provide guides to assess the company benefits programs in relation to the environment. Explain the 5 objectives in next few slides
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Tie to Company’s Business Strategy
Be able to attract and retain good people Share in company’s performance Be able to adapt to changing environment Demographics Government programs and legislation Competitive practice Provide affordable benefits The company wants to attract and retain good people. The benefit programs must contribute to the overall image of the company as a good employer. Furthermore, we should seek to reward employees for their contributions by sharing in the company’s good performance. Nonetheless, we live in a business environment that evolves very rapidly. It is therefore important that we retain sufficient freedom to be able to adapt our programs to remain a competitive company and employer. Example - US medical - other co’s reduced to 80%. By staying at 100% we were at a disadvantage. Costs increaing too fast and would have to be reflected in price of products.
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Meet Employee Needs Protect against potential loss of income
Disability Death Maintain appropriate standard of living after retirement Offer opportunities for capital accumulation Protect against burdensome health care costs Recognize different employee needs (offer choice if possible) We believe the benefit programs should provide sufficient security to employees so they can focus on their job and not worry about those risks. At the same time, we have a workforce that is becoming more diverse. We must recognize that some employee groups will have benefits needs that others will not feel important. If we provide a level of benefit to meet everyone’s needs, it would represent a terrible waste of the company’s resources for the people who do not feel such needs. To avoid such a situation, we need to offer employees some choice once we have guaranteed them a core minimum. -- example - optional life
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Meet Employee Needs Three pillars of provision Social security
Company provided Employee provided Employee may receive benefits from multiple sources. To effectively manage our benefit programs, we must take into account the three pillars. We will discuss two of these pillars in detail in this presentation. Social security Company provided An example of “employee provided” would be employee savings for retirement or employee paid life cover.
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Offer Competitive Programs
Our target is median in peer group Choice of peer group consistent with compensation surveys Total compensation package to be competitive Consider social security provision. We do not want total provision to be overly generous, nor overly expensive. For example, you do not design a pension plan without looking at social security or termination indemnities. Otherwise, total income after retirement could be higher than the employee’s active salary. Consider benefits in context of total remuneration. You need to make sure your total package is at average which means that some pieces of the package are below average and others are above. If all of the pieces are at average, we may be too generous overall. - more of this later. We want to be considered as average employer in the area of employee benefits among our peer group. I’ll define the peer group later.
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Cost Effective Takes advantage of Economies of scale
Favorable tax treatment Employee participation in cost The company benefit programs are also a chance to provide employees with compensation in a cost effective way. For example if the employees were to purchase their life coverage on their own, they would be likely to pay higher administrative charges. We can therefore help employees improve their security in a way that is more effective for them. An example of the effectiveness may be the purchase of medical coverage. If the employee buys it on his own, he will buy it with after tax money. Very often, when the company buys it, it can get a tax deduction for its contributions and the benefits are tax free to the employee. An example of economies of scale might be the way you use insurance - of which more later. We want employees to pay part of cost of the programs.
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Valued by the Employee Regularly communicated to employees
Employee must understand added value of benefit programs Part of total compensation package Emphasize communication to employees. Benefit costs are a significant percent of total labor costs. Best benefit plan in the community will gain the company nothing if the employees do not perceive the plan as good.
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Employee Sensing Stay in touch with employee’s emerging needs
External environment (change of regulations) CHARLES/KITTY TO ELABORATE
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Career & Assignment System
Assignment Plan Open Job Posting W&DP W&DP is going to be covered after Hide’s part, thus cover just briefly OJP & Assignment Planning come next.
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Career Development Principles
Function based career management Management and employee co-ownership Individual initiatives to drive career Fair and equitable treatment System to provide “choice” to employees Meet the needs of the company and the individual Transparent 360 degree feedback W&DP is going to be covered after Hide’s part, thus cover just briefly OJP & Assignment Planning come next. Individual Ownership
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Assignment Planning Intent: Key Drivers of Assignment Planning:
Place the right people on the right job Utilize resources effectively Develop a strategic flow of top talent Proactive plan of assignments and succession planning Key Drivers of Assignment Planning: Skill Matrix Promotion Criteria Development of Top Talent Business Needs Individual needs via career discussion Intent & Purpose Have the right people on the right job Effective utilization of resources Develop a constant flow of top talent Proactively plan assignments for all managers and succession planning for key positions -> This should in turn help increase job satisfaction. Key Drivers of Assignment Planning: This is primarily a tool for manager that allows managers to plan career development opportunities for their people in advance. However, the system takes in account individual development needs, which are reviewed by the immediate manager during the W&DP.
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Open Job Posting Intent: Attention:
To place the best people in the job by leveraging the talent of our people Provide “choice” to employees Build organization capability Attention: 2 years in current job is required to apply Pay & benefit may be affected when job changes involve function or level change Exception for maternity leaves, long-term LOA, and dual career couple moves Flow of OJP to be distributed.
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Training System
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P&G’s Training and Development Philosophy
Promote from within Train and develop future leaders Employee owns their learning Teaching is an essential part of leadership Employees teach to learn 90% of learning happens through on the job training/coaching The focus is bring the capability in-house vs. relying on external Formal part of job progression
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Training Programs e-Learning Onboarding Corporate College
Functional College On the Job Training
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Training Corporate Training
New Hire College, Success Drivers Training, Time management, Memo writing, People Supporting People, Maximizing Creative and Logical Thinking, Improving your personal leadership, Positive Power and Influence, Basic Finance, Business Process, Effective Presentation, People and Communication Skills, Total Assessment Interview, Training of Trainers, Management Training, etc. Rapid Learn (on-line computer based training)
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Training
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Functional Training Owned by each function Function on boarding
1-1 orientation Qualification project Function College Classroom/on-line training Self study On-the-job training
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Learning Curve Performance Time on the Job 5 Years 8 Years Group 2
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Learning Curve
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Talent Development System
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Talent Review Selecting top 1% of our total employees to develop them further by assigning them to a core, strategic and challenging position Talent Review Meeting Twice a year Add new talents and drop poor talents Function BU Country Region Global Performance driven selection process : Rating, W&DP, 360 degree feedback, etc. Check Diversity : Gender, Nationality, Race
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Top Talent Development Program
Objective : Identify top local talents early in their career and accelerate their development by proactive assignment/career planning, focused training, mentoring, and personal action planning. Full support from top management : developing people is one of key performance measures to management level Performance Based Competition Strategic, Challenging assignment assess the procedure how to survive through the assignment Coaching, Mentoring
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NEA LTDP System NEA (North East Asia) Local Talent Development Program
To develop weak area of NEA employees as a global leader focusing on 4 critical skill area Leadership Strategic Thinking Global Communication Skill Coaching Skill Group Manager Level Playing a Key role as a bridge between executives and juniors (90% of our total population)
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NEA LTDP System Accelerate Top Talents’ development and prepare them as a future global leader 1 year program Methodology Personal Action Plan Development based on feedback Classroom training and case studies taught by GMs and Directors Assignment and career planning reviewed by NEA Leadership Team Skill assessment & feedback (LAT, EPA) Leadership mentoring
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Personal Action Plan Development
Before the session starts, participants should submit self-assessment and broad-based feedback Leadership Assessment Tool (LAT) English Proficiency Assessment (EPA) Develop personal improvement plan
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Top Talent Training 1 year program : 9 sessions with Graduation case study Classroom training in Japan with all participants Case Studies facilitated by General Managers and Directors At the end of each session, the facilitators give feedback on individual performance during the case study Opportunity to Network with other top talents and top management another leaning enhancement
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Assignment and Career Planning
Review next 2 assignment plan including promotion plan Review future potential (up to which level) to set career plan Assess Top talents’ skill : Leadership, Strategic Thinking, Global Communication Skill, Coaching Skill Assessment Center : Web based tool Individual and Line manager fill out the data Accessible anywhere in P&G
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Assessment Center : Employee
General : General personnel information of the person (Downloaded from SAP HR) Career History Assignment History, Education, Expat Assignment Certifications (work Related Certifications input page) Training
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Assessment Center : Employee
Experience Organization/Geographic/Business’ Experiences
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Assessment Center : Employee
Interests Career Interest Mobility : Identify locations preferred or not preferred Skills Language Skill Technical Skill by function Results Attach most recent W&DP and other documents, which shows business result.
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Assessment Center : Manager
Career Plan Estimated future potential Estimated year ready Next promotion plan Assignment Plan : next 2 assignment plan Assignment name Promotion Status Starting Date Location
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Assessment Center : Manager
Development area Identify Top 3 development area and set improvement plan Succession Plan General information of successor Priority of Candidate (1 to 4) Candidate Type : Planned, Emergency, Diversity, Local Estimated succession timing Rating for past 3 years
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Leadership Mentoring Mentor : a relationship between a junior and senior colleague that is viewed by the junior as positively contributing to his/her development. 2 level up manager from any function Any kind of topic Share personal experiences Sponsor : Technical support support quality job delivery Function Head in most cases Secret for success? Promotion from within!
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Employee Communication Process
To selected employees : communicate through one to one discussion. The intent of the program Why he/she is selected The contents of NEA Leadership Development Program Implications for his/her selection Your expectations Establish clear expectation that this is not a guarantee for promotion
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Employee Communication Process
To other employees : no proactive communication to other employees but provide perspectives when asked. This is a going program and they may have opportunity to enroll next year. This is not the program for everyone. It takes management recommendation to enroll. Strong performance and future potential are two key criteria for nomination. Other programs are available via Corporate Training Program. Everyone can take advantage of similar program. When asked why a certain manager was not selected, be transparent about what it takes for the manager to be nominated (candid feedback)
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Top Talent Reward System
No special incentive or allowance for Top Talents Pay for performance better reward to top talents Salary growth is based on performance, job level and time at level 50% of salary gap between top performer and poor performer
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Issues We’re Facing
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Issues we’re facing Gillette Integration Promotion from within
Successful business integration through successful cultural integration Promotion from within Take time to develop leaders from bottom Should plan fastest track in career for leaders and maintain continuously Hard to find a right replace in case of sudden leave of talent : Succession plan implements this issue but difficult to back up 100% capability in a short period
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Closing Managements’ full commitment and support is critical (culture promoting people who grow capability of others) P&G’s talent development system is based on P&G’s Promote from Within principle May not be applicable to other companies Key to success is finding the objective and essence of a company and what would be the best fit to the company
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