Nestl

Nature and Elements of HRM

HRM is based on ideas and techniques developed to enhance worker s motivation, productivity
and performance. According to Peng (2007), it clearly indicates that people are key resources of
the firm to be actively managed and developed. In the last two decades (since the late eighties),
HRM has become even more important and often sports the word strategic to make it strategic
HRM. From a lowly administrative support function, HRM

has now increasingly been

recognized as a strategic function that together with other crucial functions such as finance and
marketing, helps accomplish organizational effectiveness and finance performance.
The importance of HRM, from a strategic perspective, to the management of HR is seen to be a
source of competitive advantage (e.g. Huselid, Jackson & Schuler, 1997; Poole & Jenkins, 1996;
chuler, 1992). A strategic approach to HRM is generally characterised by linking the external and
in ternal environment of the business to the management of HR (Baird & Meshoulam, 1988;
Beer et al., 1984; Hendry & Pettigrew, 1986). These features emphasise the need to achieve
consistency and complementarities among HR practices (Baird & Meshoulam, 1988; B aron &
Kreps, 1999) including the uniformity of practices and treatment among individuals, continuity
in HR philosophy and practice and technical complementarities among policies and practices
(Baron & Kreps, 1999). Zupan and Kase (2005 ) lucidly express that frequently, conceptual
HRM models assume linear relationships between the constructs of the model (Boselie et al.,
2001). As an example, the SHRM model proposed by Becker et al. (1997) suggests that business
and strategic initiatives are the basis for designing HRM systems, thus affecting employees skills
and motivation as well as job design and work structures. These systems result in creativity,
productivity and discretionary effort that lead to improved organizational performance. Schuler
(1992) proposes that strategic HRM is about integrating people issues with the strategic needs of
the business. Therefore, business strategies provide the foundation for HRM strategies, policies
and processes to be linked. The elements of the HRM mix are the 3 philosophy, policies,
programs, practices and processes. First, philosophy refers to the organization attitude towards its
human resources and the extent to which they contribute towards the success of the
organizations. It is used as a guideline for formulating the necessary actions required to manage

its HR strategically. Second, policies are used to provide the link between the organizations
business needs and specific people related business issues. These issues are critical for the
organizations as they impact on the short and long term aspects of people management relevant
to the business. Third, programs are shaped by HR policies in an attempt to introduce
organizational changes that are essential for meeting business needs. Fourth, HR practices are
used to provide the motivation to match the specific role behavior required to reinforce the
desired performance. Finally, processes ensure that the HRM practices support the strategic
business needs.

HRM Policies:
Policy is a course or principle of action adopted or proposed by an organization or individual
(Concise Oxford Dictionary). Studies examining the extent to which all employees are valued by
the organization are exemplified by the research into equal employment opportunity and
affirmative action (EEO/AA) policies. In accordance with the Constitution of India, the State
shall not deny to any person equality before the law or the equal protection of the laws within the
territory of India and the State shall not discriminate against any citizen on grounds only of
religion, race, caste, sex, place of birth or any of them. And there shall be equality of opportunity
for all citizens in matters relating to employment or appointment to any office under the State.
However, there are exceptions to these laws in favour of certain castes/classes of people which
are not adequately represented in the services under the State.

HRM Practices:
Practice is the actual application or use of a plan or method. As demonstrated in Baron and Kreps
(1999) and Poole and Jenkins (1996) effective strategic HRM relies on choosing the right
practices to achieve alignment with business strategies. Therefore, we have operationalised
strategic HRM by focusing on the HR practices used to meet business needs in terms of staffing,
appraising, compensating, developing and organising. Best practices often include extensive
training, high pay for high performance, and self managed teams (emphasis on team work)
(Peng, 2007). According to Geringer, et al. (2002) while the list of best practices may vary, the
underlying spirit seems to be the same around the world.

Staffing:
Ployhart (2006) refers to staffing as HRM activities associated with hiring employees and filling
positions. Organizational effectiveness depends on finding the right people in the right job at the
right time (Bechet and Walker, 1993). The competitive aspects of selection decisions become
especially critical when organizations are confronted with tight labor markets or when
competitors tap the same labor market. If one company systematically skims off the best
applicants, the remaining companies must make do with what is left (Noeet al., 2003, p. 218).

Appraising:
Basically relates to the assessment of the performance of an employee. It is not sufficient just to
get the right persons for the right job at the right time. It is also necessary to motivate them to
ensure their performance is consistent with the long term needs of the business. According to
Noe et al. (2003, p. 330) a performance management system should link employee activities with
the organization's goals. One of the primary ways strategies are implemented is through defining
the results, behaviours, and, to some extent, employee characterieistics that are necessary for
carrying out that strategy, and then developing measurement and feedback systems that will
maximize the extent to which employees exhibit the characteristics, engage in the behaviour
, and produce the results. To achieve this strategic purpose, the system must be flexible, because
when goals and strategies change, the results, behaviours, and employee characteristics ususally
need to change corresponsingly.

Compensating:
Chang et al. (2006) emphasize that as an HRM area, compensation refers to the determination of
salary and benefit.The compensation practices of the firm are important in creating and
maintaining specific behaviour and performance outcomes from employees. Compensation
practices are often essential in attracting and retaining those employees who are core to the
business (Cheng & Brown, 1998; Nankervis, 1995). Noe et al. state ( 2003, p. 498) that
organizations that link pay to individual performance may be more likely to attract indiviualistic
employees, whereas organizations relying more heavily on team rewards are more likely to
attract team-oriented employees. The implication is that the design of compensation programs
needs to be carefully coordinated with the business and human resource strategy.

Developing:
HR development practices include those that focus on training (i.e. immediate concerns) and
development (longer term). Recent studies into HRM practices have demonstrated that HR
development practices can be used to achieve organizational objectives (Nankervis, 1995) and
can be a means to minimize staff turnover(Cheng & Brown, 1998). The HR development
practices can also be used to narrow skill gaps and to conduct career planning. Pfeffer and Veiga
(1999) have emphasized that the training is an essential component of high performance work
systems because these systems rely on frontline employee skill and initiative to identify and
resolve problems, to initiate changes in work methods, and to take responsibility for quality.
Fritchie (1988) is of the view that all too often technical training is given priority over personal
effectiveness. This can result in people having technical expertise but no real ability to deal with
people in a clear and fair way. By balancing technical training with assertiveness training it is
possible to develop people who not only know what to do but also how to do it by working with
people.

Organizing:
Organizing is planning, actuating and controlling organization: dynamic relationships
(Rozman,2006). Teamwork has also been emphasized as a key feature of the flexible
organization of the 1990s (Scully, Kirkpatrick & Locke, 1995). According to Pfeffer and Vega
(1999) perhaps one of the greatest payoffs from team-based organizations is that teams substitute
peer-based control for hierarchical control of work. Barney and Wright (1998) opined that,
although managers cite human resources as a firm's most important asset, many organizational
decisions do not reflect this belief. The authors use the value, rareness, imitability, and
organization (VRIO) framework to examine the role that the human resource (HR) function plays
in developing a sustainable competitive advantage. As Nestl [http://www.nestle.com] is
operating on a worldwide basis, it is essential that local legislation and practices be respected
everywhere. Also to be considered is the degree of development of each market and its capacity
to advance in the management of their human resources. Should any HR policy conflict with
local legislation, local legislation will prevail. These policies are addressed to all those who have
a responsibility in managing people as well as to HR professionals. The Nestl mnagement and
Leadership Principle [http://www.nestle.com] include the guidelines inspiring all the Nestl

employees in their action and in their dealings with others. The Corporate Business Principles
refer to all the basic principles which Nestl endorses and subscribes to on a worldwide basis.
Both these documents are the pillars on which the present policy has been built.

A shared Responsibility
Each employee has a distinct responsibility in dealing with people be it as a leader of a team or
as a peer. HR managers and their staff are there to provide professional support in handling
people matters but should not substitute themselves to the responsible manager. Their prime
responsibility is to contribute actively to the quality of HR management throughout the
organization by proposing adequate policies, ensuring their consistent application and coherent
implementation with fairness. Acting as business partners, the HR manager advises and offers
solutions which results in positive impact on the organizations effectiveness. Furthermore,
she/he proposes best practices and provides state-of-the-art support and counseling to her/his
colleagues. Together they act as co-responsible partners for all HR matters. This partnership is
the key for efficiency in people management. The communication skills of the HR staff must be
appropriate to deal with all delicate matters as they occur frequently in human relations issues.
They gain their credibility not only from their professional contribution but also through the care
and the excellence of their communication skills.

Dealing with People

The Nestl Management and Leadership Principles[http://www.nestle.com] describe the
management style and the corporate values of the Nestl Group, specifically in the area of
interpersonal relations. Their respect calls for specific attitudes which deserve to be outlined in
the present policy: A prerequisite for dealing with people is respect and trust. There can be no
room for intolerance, harassment or discrimination of any kind as they are the expression of an
elementary lack of respect. This principle suffers no exception and is to be applied at all levels
and under all circumstances.

Transparency and honesty in dealing with people are a sine qua non for efficient communication.
Based on facts and on a sincere dialogue, such transparency is the only solid basis for boosting
continuous improvement.
This is to be complemented by open communication with the purpose of sharing competencies
and boosting creativity. It is particularly relevant in a flat organization to convey systematically
all information to those who need it to do their work properly. Otherwise no effective delegation
or knowledge improvement are possible. To communicate is not only to inform. It is also to
listen and to engage in dialogue. Every employee has the right to an open conversation with
superiors or colleagues. The willingness to cooperate and to help others is a required basis for
assessing potential candidates in view of a promotion. In case of discord between an employee
and her/his superior or another employee, the possibility must be offered for a fair hearing. The
HR staff will provide assistance to ensure that the disharmony is dealt with impartially and that
each party has the opportunity to explain her/his viewpoint regardless of hierarchical position.

Joining Nestl
The long-term success of the Company depends on its capacity to attract, retain and develop
employees able to ensure its growth on a continuing basis. This is a primary responsibility for all
managers. The Nestl[http://www.nestle.com] policy is to hire staff with personal attitudes and
professional skills enabling them to develop a long-term relationship with the Company.
Therefore the potential for professional development is an essential standard for recruitment.
Each new member joining Nestl is to become a participant in developing a sustainable quality
culture which implies a commitment to the organization, a sense for continuous improvement
and leaves no place for complacency. Therefore, and in view of the importance of these Nestl
values, special attention will be paid to the matching between a candidates values and the
Company culture. Hence, a clear communication of these principles and values from the very
beginning of the recruitment process is required. Those who are not willing to adhere to the
Corporate Business Principles and/or to the Nestl Management and Leadership Principles
cannot be part of the Company, as both these documents express the basic values and principles
of the Organization. Moreover, for managerial positions specific leadership qualities and
business acumen will be required. Nestl wishes to maintain and develop its reputation as an

employer of high repute. Contacts with universities, attendance at recruitment events and other
contacts are to be undertaken so as to ensure good visibility of the Company vis--vis relevant
recruitment sources. Particular care will be given to the treatment of each candidacy regardless
of the outcome of the selection process.
Even when promoting employees intensively from within the organization, it is the role of
management and HR to keep an eye on valuable candidates from outside and to benchmark
internal skills with external offers. Whilst adequate recruitment tools may improve the hiring
process, it is understood that the decision to hire a candidate remains in the hands of the
responsible manager supported by the HR staff. Under no circumstances should the decision to
hire or not to hire be left in the hands of an outside consultant or expert. As mentioned in the
Nestl Management and Leadership Principles, [http://www.nestle.com] only relevant skills
and experience and the adherence to the above principles will be considered in employing a
person. No consideration will be given to a candidates origin, nationality, religion, race, gender
or age. It is as important to hire the right person as it is to integrate newcomers in the
organization so that their skills and behaviour can merge smoothly with the company culture.
Whereas from new employees it is expected to respect our companys culture, it is accordingly
required from all employees to show an open mind towards new ideas and proposals coming
from outside.

Employment at Nestl
The Corporate Business Principles outline the Companys commitment to fully endorse and to
respect a series of principles and international conventions concerning employees rights, the
protection of children against child labour and other important issues. These principles are to be
respected everywhere and under all circumstances. The management will implement the
necessary processes to ensure that these principles are enforced at all levels. Employees who are
not abiding with the Corporate Business Principles and the Nestl Management and Leadership
Principles cannot be maintained in employment and will be requested to leave the organization.
Also our main suppliers and providers of outsourced services should be informed of the
Corporate Business Principles and should comply with those. Nestl provides a working
environment which protects the health and welfare of the employees according to the highest

affordable standards of safety, hygiene and security. Each employee should not only care for
her/his own safety but also that of her/his colleagues. Therefore, suggestions for improvement
are welcome and will be given prime consideration. In the same way that no discrimination for
reason of origin, nationality, religion, race, gender or age will be tolerated when joining Nestl,
no such discrimination will be tolerated towards Nestls employees. Furthermore, any form of
harassment, moral or sexual, will not only be prohibited but actively tracked and eliminated.
Internal rules and regulations will explicitly deal with discrimination and harassment issues so as
to obtain the best possible prevention. Nestl considers that it is not enough to avoid
discrimination or harassment. It is essential to build a relationship based on trust and respect of
employees at all levels. Therefore, it is indispensable for each manager to know how her/his
employees feel in their work. In larger units it may be necessary to organise such feedback on a
regular basis, using internal surveys or other valuable approaches. Nestl favours a policy of
long-term employment. Whenever, an operation/ activity cannot be maintained within the Nestl
sphere, reasonable steps will be undertaken to avoid overall loss of employment by identifying
an external business willing to take over activity from Nestl, whenever this is possible. If this is
not possible, a closing down may be unavoidable. It will be handled in full respect of local
legislation and of the Corporate Business Principles. A social plan will be elaborated taking into
account the legitimate interests of the concerned staff. Reasonable efforts will be deployed to
reduce, as much as possible, the negative social impact of such a situation. Work/Life Balance At
Nestl we believe that the employees private and professional life should have a good balance.
Not only because it reinforces employees satisfaction, loyalty and enhances productivity but
also because it positively reflects on the Companys reputation. It helps attracting and retaining
people and reconciles economical imperatives with well being. Nestl is willing to support
employees who wish to take an active part in the life of the community or by assuming
responsibilities in professional, civic, cultural, religious or voluntary organizations it being
understood that any activity during working hours be first approved by the Company. In the same
spirit, Nestl encourages flexible working conditions whenever possible and encourages its
employees to have interests and motivations outside work.

Remuneration
Nestl favours competitive, stimulating and fair remuneration structures offering an overall
competitive and attractive compensation package. Remuneration includes salary, any variable
part of remuneration as well as social, pension and other benefits. Each operating company will
establish a compensation practice taking into account relevant external compensation levels as
well as the requirement of internal fairness. It is recommended to undertake regular surveys so as
to gather relevant information on the remuneration levels practised at a local or national level.
Nestls policy is to strive to position itself as an employer offering remuneration levels above
the average of the relevant benchmark. Nestl reviews regularly its competitive position with
other companies so as to keep in line with the market trends. However, the evolution of
remuneration is in the first instance determined by the capacity of the Company to improve its
productivity. Wage and salary structures should be kept simple and avoid unnecessary
complexity so as to provide effective compensation and reward. Remuneration structures should
specifically facilitate the implementation of flat organizational structures and be flexible so as to
be able to adapt to the evolution of the market conditions. This means broad spans allowing
sufficient flexibility to effectively reward high professional insight and performances as well as
individual potential. It is the responsibility of each manager to propose, within the framework of
the company policy, the remuneration of her/his employees, taking into account the local market,
individual performance, skills and potential for development.
It is also the responsibility of each manager, if needed with the support of HR management, to
communicate properly, clearly and with sufficient transparency, the individual remuneration of
each staff member taking into account her/his professional performance and her/his specific
responsibilities. The quality of communication in these matters is an essential part of the
dialogue that each manager will have with her/his employees on remuneration matters.
Specifically at management level, the variable part of the remuneration may be substantial. This
part will be linked to a combination of group, business and individual or team target
achievements. The higher the remuneration level, the more important will become the variable
part. It should be realised that, however important remuneration is for each employee, it is not
remuneration alone that will stimulate the motivation of the staff. The HR management sees to it

that the implementation of the remuneration policy is fair throughout the organization and that its
spirit is duly reflected.

Professional Development
Learning is part of the Company culture. Each employee, at all levels, is conscious of the need to
upgrade continuously her/his knowledge and skills. The willingness to learn is therefore a nonnegotiable condition to be employed by Nestl[http://www.nestle.com]. First and foremost,
training is done on-the-job. Guiding and coaching is part of the responsibility of each manager
and it is crucial to make each one progress in her/his position. When formal training programs
are organised they should be purpose oriented and designed to improve relevant skills and
competencies. Therefore they are proposed in the framework of individual development
programs. As a consequence, attending a program should never be considered as a reward.
Adequate training programs are developed at the level of each operating company capitalizing on
the availability of local, regional or global resources of the Group. It is the responsibility of HR
staff to assist the management in the elaboration of training programs. Great importance will be
attached to programs enhancing the language skills of the employees. Training programs
organised at the International Training Centre Rive-Reine aim at developing and sharing best
practices of the various management disciplines practised in the Group. They also strive to
strengthen corporate cohesion as well as to promote networking throughout the Group. Training
programs should, as much as possible, be based on action learning and reduce ex-cathedra
teaching to the strict minimum. It is necessary to make optimal use of e-learning programs as a
complement to or a substitute for formal training programs. According to needs they should be
made available at shop floor level and enlarge the access to training. It is the role of each
manager to assess progress achieved as a result of training programs.

Assessing and Developing

Each employee is in charge of her/his own professional development. However, the Company
endeavours to offer the opportunity to progress for those having the determination and the
potential to develop their capabilities. Such opportunities should take into account the potential
of each employee and be discussed with transparency. They will be based on defined

possibilities, concentrate on the next career step and not on vague promises or remote
hypotheses. The Company encourages its employees to express their objectives and expectations
in an open dialogue. The objective is to retain and motivate employees by offering attractive but
realistic career moves allowing them to develop their skills over a long-term period within the
framework of economic reality and a changing environment. Whereas succession plans forecast
the Company needs, they will be reconciled, inasmuch as possible, with individual development
plans. HR management provides the support for implementing the necessary planning tools,
having in mind the necessary flexibility to cope with unforeseen situations. However, it is
understood that each manager is co-responsible for preparing the resources necessary to the
development of the Company as this is also part of his accountability. Regular counselling and
guidance are the best tools for improving performance and for helping people develop their
skills. It also allows to correct errors swiftly and to transform them into a positive learning
experience. In an organization with flat structures this supports better delegation. Direct personal
contact should always been given preference over written communication whenever possible.
Each manager has the duty to act as a mentor for his employees. Formal assessment should take
place on a regular basis, preferably once a year. Its purpose is to provide feedback on past
performance and future potential as well as on other relevant aspects concerning a staff
members work including the development of his skills and competencies. Both the positive and
negative aspects of individual performance should be frankly addressed.
Assessment of performance should be based on facts rather than opinions. For managerial
positions, assessment will be based essentially on agreed objectives and their level of a
achievement. Efficient performance management emphasising the achievement of agreed
objectives is a prime responsibility for each manager. The necessary time should be dedicated to
the monitoring and the follow-up of the progressive achievement of objectives during the year.
This feedback is meant to stimulate performance and should take place through an open dialogue
based on mutual trust and willingness to progress. It is requested to provide written evidence of
such meetings. Focus should be essentially on continuous improvement, appropriate training
measures but also on shaping a stimulating working environment. In case of serious
underperformance, a termination of employment should be envisaged. Such termination should
be handled with due respect of the person and should include, where appropriate, separation
terms that take into account the employees personal situation. When assessing potential it should

be kept in mind that the best indicator of talent is achievement. Therefore responsibility should
be given as early as reasonable to allow people to prove themselves. Candidates for managerial
positions should clearly have demonstrated their willingness and ability to apply the Nestl
Management and Leadership Principles. The Nestl Human Resources Policy Promotions will
exclusively be based on competence, insight, performance and potential with the exclusion of
any consideration for origin, race, nationality, gender, religion or age. Flexibility is a requirement
for ensuring a positive professional evolution. Staff may be requested to move to other positions.
Managers, especially international staff, may be asked to move to other locations. International
experience and participation in group development initiatives such as GLOBE, SMPT and others
can be acquired in all countries of the Group and are a requirement for holding high-level
positions. The development of expertise in specific areas of competence is determinant for the
Companys success. Therefore job rotation should be practised with caution.

Part-B
Industrial Relations
Nestl upholds the freedom of association of its employees and the effective recognition of the
right to collective bargaining. Nestl wishes, also through its relationship with unions and other
representative associations, to sustain the long-term development of the Company, both to the
benefit of the employees and of the Company, by maintaining a level of competitiveness adapted
to its economic environment. Industrial relations are a clear responsibility of local management
and will be handled at the appropriate level: first at site level (factories, warehouse) subsequently
at regional or national level, according to local law and practices. Nestl will ensure that direct
and frequent communication is established with its employees, both union members and nonmembers,

as

mentioned

in

the

Nestl

Management

and

Leadership

Principles[http://www.nestle.com]. Relations with unions will be established under strict

observation of national law, local practices as well as those international recommendations to
which Nestl has adhered to on a voluntary basis as stated in the Corporate Business Principles.
Contacts with union delegates should create a further opportunity to provide information
allowing their members and other representative associations to acquire a full understanding of
the business activities and the goals of Nestl. In accordance with local legislation, Nestl will
refrain from any action restricting the employees right to be or not to be affiliated to a union.
Nestl will not engage with any union or other representative association in activities or
discussions other than those relating to employment and working conditions as well as issues
relating to the workplace. Whenever negotiations take place, they will be duly prepared with the
full involvement of line management and take into account both the Companys and the
employees legitimate interest. In dealings with unions, it will be ensured that management
prerogatives be properly maintained.
HR Organization
The fact that Nestl is more people and product than systems oriented is reflected in the way HR
is functioning and is organised. Processes and systems as well as professional HR tools are there
to support HR management but never to the detriment of the human dimension. The human
perspective should be present at all times and under all circumstances.

The HR function should report to the manager responsible for a defined operation (Region,
Market, Country, Factory) with a functional relation to the market HR according to the size of
that operation. The HR manager should not only have the skills and competencies from a purely
professional standpoint but also have the charisma and the credibility to be a trustworthy partner
to her/his colleagues. Whereas the HR function should indeed provide flawless administrative
support, its main role is to add value to the business and to play a proactive role in every
situation where HR action is required. Specific HR KPIs are useful in assessing the performance
of an HR unit. However, it should be kept in mind that the HR contribution aims in the first place
at optimising the overall company performance through improving people performance. With the
evidence that the human capital is of increasing importance, HR plays indeed a pivotal role in the
conception and implementation of the people strategies that impact financial results and the
organizations overall reputation and effectiveness.
Industrial relation of Nestle with India
NESTL's[http://www.nestle.com] relationship with India dates back to 1912, when it began
trading as The NESTL Anglo-Swiss Condensed Milk Company (Export) Limited, importing
and selling finished products in the Indian market.
After India's independence in 1947, the economic policies of the Indian Government emphasised
the need for local production. NESTL[http://www.nestle.com] responded to India's aspirations
by forming a company in India and set up its first factory in 1961 at Moga, Punjab, where the
Government wanted NESTL to develop the milk economy. Progress in Moga required the
introduction of NESTL's[http://www.nestle.com] Agricultural Services to educate, advise and
help the farmer in a variety of aspects. From increasing the milk yield of their cows through
improved dairy farming methods, to irrigation, scientific crop management practices and helping
with the procurement of bank loans.
NESTL[http://www.nestle.com] set up milk collection centres that would not only ensure
prompt collection and pay fair prices, but also instil amongst the community, a confidence in the
dairy business. Progress involved the creation of prosperity on an on-going and sustainable basis
that has resulted in not just the transformation of Moga into a prosperous and vibrant milk
district today, but a thriving hub of industrial activity, as well.

NESTL[http://www.nestle.com] has been a partner in India's growth for over a century now and
has built a very special relationship of trust and commitment with the people of India. The
Company's activities in India have facilitated direct and indirect employment and provides
livelihood to about one million people including farmers, suppliers of packaging materials,
services and other goods.
The Company continuously focuses its efforts to better understand the changing lifestyles of
India and anticipate consumer needs in order to provide Taste, Nutrition, Health and Wellness
through its product offerings. The culture of innovation and renovation within the Company and
access to the NESTL[http://www.nestle.com] Group's proprietary technology/Brands expertise
and the extensive centralized Research and Development facilities gives it a distinct advantage in
these efforts. It helps the Company to create value that can be sustained over the long term by
offering consumers a wide variety of high quality, safe food products at affordable prices.
NESTL[http://www.nestle.com] India manufactures products of truly international quality
under internationally famous brand names such as NESCAF, MAGGI, MILKYBAR, KIT KAT,
BAR-ONE, MILKMAID and NESTEA and in recent years the Company has also introduced
products of daily consumption and use such as NESTL Milk, NESTL SLIM Milk, NESTL
Dahi and NESTL Jeera Raita.
NESTL[http://www.nestle.com] India is a responsible organization and facilitates initiatives
that help to improve the quality of life in the communities where it operates.

Why is there lead in MAGGI Noodles?

Lead occurs in the earths crust and is present in air, soil and dust. The CODEX Alimentarius
standards are a key reference for Nestl. We test lead levels in our raw materials and source
ingredients from regions with the lowest levels of lead.[https://www.nestle.in/aboutus/asknestle/answers/maggi-noodles-india-lead]
The authorities have also set firm limits to ensure that any lead present in a finished product are
within recommended food safety levels and safe to consume.
We regularly monitor all our raw materials for lead, including testing by accredited laboratories.
These tests have consistently shown lead in MAGGI Noodles to be within safe limits. In addition

to testing both raw materials and finished products for lead, we carry out extensive research on
lead and contribute to global efforts to assure safety in this area.
Food safety is Nestls number one priority.[https://www.nestle.in/aboutus/asknestle/answers/maggi-noodles-india-lead]. We do more food testing than any other entity in the
world and have many stringent controls to guarantee safety: starting from the raw materials we
use, throughout processing to packaging. We adhere to the same quality standards wherever in
the world we operate.

What is the recall process?

This is one of the largest recalls[https://www.nestle.in/aboutus/ask-nestle/answers/magginoodles-india-recall-process] in the history of Nestl, and in the rest of the food industry.
We have a long route to market

We have 8 factories in India, 5 of which produce MAGGI Noodles, and 38 distribution centres
where we store our products. These are under Nestls direct control. From these distribution
centres we sell to 1400 distributors. Once the products are bought by these distributors they are
no longer under Nestls direct control. The distributors sell them on to other distributors, or to
direct retail. We also sell directly to big chains like Walmart, Reliance, ABL and Big Bazar. We
estimate that we are in 3.5 million retail outlets in India. Around half of these 3.5 million outlets
are covered by the supply chain through these 1400 distributors, the rest are the result of other
routes to market.
We are recalling 27,420 tonnes of MAGGI Noodles

We
announced
the
withdrawal
on
5th
June,
2015
and
the
operation[https://www.nestle.in/aboutus/ask-nestle/answers/maggi-noodles-india-recall-process]
was fully operational 2 days later. We estimated that there were 27,420 tonnes of MAGGI
Noodles in the factories / distribution centres / distributors / market on 5th June. This is an
estimate because although we knew with certainty how much was in our factories and in our
distribution centres, the stock which was with customers and retailers and in consumers homes
was not under our control, making it difficult to be certain how much had been consumed and
how much was stored.
There are three parts to the withdrawal

Step one was blocking the distribution of stock at our own warehouses and distribution centres.
This was done immediately.
Step two was blocking orders by our 1400 distributors so that no more stock went into the
market. This was done immediately.

Step three is more complicated. It involves getting the stock back from our 1400 distributors, and
their distributors, and their customers, and from consumers.
Getting loose packets of MAGGI Noodles back to our distribution centres

CARTONS: We estimate that 40% of the 27,420 tonnes of MAGGI Noodles we are recalling is
no longer in cartons, but in packets on the shelves at home or in the retailers. So we need to
source 1.4 million cartons to move the packets of MAGGI Noodles back to our facilities. We are
buying
cartons
from
all
over
the
country.[https://www.nestle.in/aboutus/asknestle/answers/maggi-noodles-india-recall-process]
TRUCKS: 27,420 tonnes of MAGGI Noodles would fill 2,500 trucks. But there are multiple
journeys involved (from the retail outlet to the distributor, from the customer to our distribution
centre, from the distribution centre to the incineration plant etc). MAGGI Noodles are sold all
over the country so many thousand truck journeys will need to be made to complete the task.
[https://www.nestle.in/aboutus/ask-nestle/answers/maggi-noodles-india-recall-process]
HIGH TEMPERATURE THERMAL DESTRUCTION: The packs of MAGGI Noodles are
mixed with fuel and subjected to high temperature thermal destruction in cement kilns. The
process has been approved by the Indian government, and the fact that the noodles are being
used for fuel reduces the environmental impact. The current capacity is 700 tonnes a day across
five facilities, meaning that it will take at least 40 days to destroy 27,420 tonnes.
[https://www.nestle.in/aboutus/ask-nestle/answers/maggi-noodles-india-recall-process]
REFUNDS: There are multiple cash and credit transactions that need to be paid throughout the
process as the product changes its hands on its way back to Nestl India. This adds to the
complexity of the situation. Nestl Indias salesforce is supporting this process. In supply chain
there are around 50 people working on it full time, along with others from our customers and
other partners. We have also put in place measures to ensure consumers can easily get
information on the withdrawal from the company. [https://www.nestle.in/aboutus/asknestle/answers/maggi-noodles-india-recall-process]
Business continuity

The other logistical challenge is that Nestl Indias supply chain is at the same time continuing to
supply customers with our other brands. Usually product flows in one direct from Nestl India to
its customers. Now the system has had to be reconfigured to manage product flowing in both
directions MAGGI Noodles returned to the company while other products are transported to
customers.[https://www.nestle.in/aboutus/ask-nestle/answers/maggi-noodles-india-recallprocess]
Around 400 million packets of MAGGI Noodles are being destroyed.

Are MAGGI Noodles safe?

Yes. We have received test results from all three laboratories mandated by the Hon'ble Bombay
High Court to test MAGGI Noodles.[https://www.nestle.in/aboutus/ask-nestle/answers/magginoodles-india-safe]
All 90 samples - covering six variants - were found safe for consumption, with lead levels well
within the permissible limits.
In compliance with the orders of the Bombay High Court, we began manufacturing MAGGI
Noodles and submitted the new batches for testing as well. All three NABL (National
Accreditation Board for Testing and Calibration Laboratories) accredited laboratories have
reconfirmed that MAGGI Noodles are safe for consumption. [https://www.nestle.in/aboutus/asknestle/answers/maggi-noodles-india-safe]
Now that the orders of the Bombay High Court have been complied with, Nestl India has made
MAGGI Noodles available for sale once again[https://www.nestle.in/aboutus/asknestle/answers/maggi-noodles-india-safe]
We have always maintained that MAGGI Noodles are safe. Nestl India has conducted over
3,500 tests, representing over 200 million packs, in both national as well as international
accredited laboratories and all reports are clear. In addition to these, various countries including
USA, UK, Singapore, Australia and others have found MAGGI Noodles manufactured in India
safe for consumption.

Nestl Indias Appeal Before The Honble Supreme Court Against

NCDRC Order
NESTL HOUSE, DECEMBER 16, 2015: The Appeal filed by Nestl India against the NCDRC
orders dated 9th and 10th December, 2015 came up for hearing before Honble Supreme Court
today.[https://www.nestle.in/media/statements/update-on-maggi-noodles]
Honble Supreme Court has directed the following:
1. The proceedings before the NCDRC are stayed.
2. As against the directions of NCDRC to send the samples for testing to Export Inspection
Agency, Chennai Laboratory, Nestl consented to send the same samples to NABL accredited

government referral laboratory viz. CFTRI, Mysore. This

[https://www.nestle.in/media/statements/update-on-maggi-noodles]

request

was

accepted.

3. Reports of the 13 samples already sent to CFTRI Mysore and the additional 16 which are
being sent to CFTRI now, are to be forwarded to the Supreme Court instead of NCDRC.
In recent months alone, Nestl India has conducted over 3500 tests representing over 200 million
packs in both national as well as international accredited laboratories for testing and all reports
are clear. In addition to these, various countries including USA, UK, Singapore, Australia and
others have found MAGGI Noodles exported from India to be safe for consumption.
[https://www.nestle.in/media/statements/update-on-maggi-noodles]
100% of the samples tested show MAGGI Noodles is safe for consumption
and indicate lead to be much below the limit stipulated by the regulatory
authorities. This was also validated by the reports from 3 accredited
laboratories mandated by the Honble Bombay High Court to test the
samples.

Food safety at Nestl: in India and around the world

Food safety is Nestl's number one priority.
We do more food testing than any other entity in the world. In total, around 100 million analyses
a year are carried out for Nestl and we have 8,000 people working to assure quality and food
safety in our products worldwide.[https://www.nestle.in/aboutus/ask-nestle/answers/food-safetynestle]
We have many stringent, inbuilt controls to guarantee safety, from raw material selection to
processing and packaging.
In fact our approach to food safety has now evolved from looking for defects in finished products
to trying to identify their root cause as early as possible in the supply chain, so that we can
understand it and prevent it. As part of this new approach, we have developed an early warning
system to help us pinpoint signals that may turn into issues. [https://www.nestle.in/aboutus/asknestle/answers/food-safety-nestle]
We also use highly sophisticated technology to rapidly test for a wide range of microorganisms
and substances that are harmful to human health. In 2013 we opened the most advanced
laboratories of their kind in the industry to study food borne pathogens and help us respond to
emerging risks.

We have the same rigorous approach to food safety in India that we have everywhere else.
We have 300 people working to ensure quality and food safety in our products in India. We have
nine laboratories dedicated to quality assurance and also work with two more external
laboratories for independent analysis. [https://www.nestle.in/aboutus/ask-nestle/answers/foodsafety-nestle]
Adhering to Nestl's rigorous quality policies and testing protocol, these 11 laboratories test the
raw materials used in our products as well as the finished product to ensure food safety.

MAGGI Noodles timeline of events

9 November 2015
Now that the orders of the Bombay High Court have been complied with, Nestl India has made
MAGGI Noodles available for sale once again[https://www.nestle.in/aboutus/asknestle/answers/maggi-noodles-india-overview-timeline]
4 November 2015
All three NABL (National Accreditation Board for Testing and Calibration Laboratories)
accredited laboratories - mandated by the Bombay High Court find samples of the newly
manufactured MAGGI Noodles to be safe for consumption, with lead content well within
permissible limits. [https://www.nestle.in/aboutus/ask-nestle/answers/maggi-noodles-indiaoverview-timeline]
16 October 2015
Test results from all three laboratories mandated by the Bombay High Court show MAGGI
Noodles to be safe, with lead content well within the permissible limits.
[https://www.nestle.in/aboutus/ask-nestle/answers/maggi-noodles-india-overview-timeline]
In compliance with the orders of the Bombay High Court, Nestl India commences
manufacturing MAGGI Noodles and submits the new batches for fresh tests to reconfirm they
are safe for consumption. [https://www.nestle.in/aboutus/ask-nestle/answers/maggi-noodlesindia-overview-timeline]
13 August 2015
The Bombay High Court overturns the government's ban on MAGGI Noodles, arguing that the
move was "arbitrary" and "that principles of natural justice were not followed."

The court rules that Nestl India can bring the product back to the market if fresh tests
conducted in three accredited laboratories on the existing samples and subsequently on the
freshly manufactured product find the product safe. [https://www.nestle.in/aboutus/asknestle/answers/maggi-noodles-india-overview-timeline]
11 August 2015
The National Consumer Disputes Redressal Commission (NCDRC) files a class action lawsuit
against Nestl India on behalf of Indian consumers.
It asks for close to USD 100 million (INR Rs 639.95 crore) in damages on grounds of "unfair
trade practices, sale of defective goods and sale of goods to the public by selling MAGGI Oats
Noodles without product approval." [https://www.nestle.in/aboutus/ask-nestle/answers/magginoodles-india-overview-timeline]
30 June 2015
The Bombay High Court allows Nestl India to continue exporting MAGGI Noodles.
[https://www.nestle.in/aboutus/ask-nestle/answers/maggi-noodles-india-overview-timeline]
11 June 2015
Nestl India files a legal petition with the Bombay High Court, seeking a judicial review of this
order. As the case progresses the company cites a number of arguments, including the following:

The FSSAI order was passed without giving Nestl a proper hearing

The government laboratories that tested MAGGI Noodles for lead on behalf of the
FSSAI and some Indian state FDAs (food and drug administration) - were not accredited
for lead testing.

Tests by Nestl and an independent accredited laboratory have found MAGGI Noodles
safe to eat

Tests by food standards authorities in six countries USA, Canada, UK, Australia, New
Zealand and Singapore also found Indian-made MAGGI Noodles safe for consumption.

MAGGI oats Noodles was launched when the FSSAI 'Product Approval' system was
under suspension.

While legal proceedings are ongoing, Nestl continues to comply with the FSSAI order and
destroys over 35,000 tonnes of the product. [https://www.nestle.in/aboutus/asknestle/answers/maggi-noodles-india-overview-timeline]
5 June 2015

In light of growing consumer confusion, Nestl India decides to temporarily stop selling MAGGI
Noodles in India until the situation with the authorities is resolved.
Later in the day, the Food Safety and Standards Authority of India (FSSAI) issues an order to
Nestl India which includes, among others, the: [https://www.nestle.in/aboutus/asknestle/answers/maggi-noodles-india-overview-timeline]

Recall of all nine variants of MAGGI Noodles from the market

Halt of commercial activities related to the product, including sale and production

Removal of the "No Added MSG" claim from product packs

Withdrawal / recall of MAGGI oats Noodles as it did not have 'Product Approval'

April 2015
The referral government laboratory in Kolkata says it has detected lead levels above permissible
limits and the presence of MSG in its sample of MAGGI Noodles.
Ensuing tests on MAGGI Noodles samples - representing 165 million packets - by both Nestl
India's own accredited laboratories and independent accredited laboratories show lead levels to
be within the limits set by the Indian food safety authorities.
Nestl India states that although it does not add MSG to MAGGI Noodles, the product contains
glutamate from hydrolysed groundnut protein, onion powder and wheat flour, which can produce
a positive result in a test for MSG. [https://www.nestle.in/aboutus/ask-nestle/answers/magginoodles-india-overview-timeline]
Nestl India says it will remove the "No added MSG" claim on the pack although 'factually
correct and not in violation of regulations'.
January 2015
The second sample is received by the referral laboratory in January 2015.
It is analysed from January 2015 to April 2015 significantly after the product's shelf-life.
[https://www.nestle.in/aboutus/ask-nestle/answers/maggi-noodles-india-overview-timeline]
March 2014
Authorities in the State of Uttar Pradesh inform Nestl India that MSG was detected in a sample
of MAGGI Noodles that carried a "No added MSG" claim on the pack.

Nestl India states it does not add MSG to MAGGI Noodles and requests a second sample to be
sent to a referral government laboratory in Kolkata. [https://www.nestle.in/aboutus/asknestle/answers/maggi-noodles-india-overview-timeline]

Refrences:
Baron, J.N. & Kreps, D.M. (1999). Consistent human resource practices. California Management
Armstrong-Stassen, M. (2006).Encouraging retirees to return to the workforce. HR. Human
Resource Planning
http://www.nestle.com
https://www.nestle.in/aboutus/ask-nestle/answers/maggi-noodles-india-recall-process
https://www.nestle.in/aboutus/ask-nestle/answers/food-safety-nestle
https://www.nestle.in/aboutus/ask-nestle/answers/maggi-noodles-india-overview-timeline
https://www.nestle.in/aboutus/ask-nestle/answers/maggi-noodles-india-safe
https://www.nestle.in/aboutus/ask-nestle/answers/maggi-noodles-india-lead
https://www.nestle.in/media/statements/update-on-maggi-noodles