SONOCO PRODUCTS COMPANY

GOALS

HR to be linked to strategy HPWS

High

Performance Work Systems Come from systematic thinking

Laws of Systems thinking

Todays

Problems come from yesterdays solutions The easy way out usually leads back in Cause and effect are not closely related The highest leverage points are often the least obvious Cutting an Elephant in half does not give two smaller elephants

KEY ELEMENTS OF HPWS

Workplace opportunities for employee participation in substantive decision making

Recruitment

and selection procedures Incentive compensation practices Performance management systems Employee training etc.

THE CASCADE OF STRATEGIC HR METRICS

Business Strategy
What are strategic goals of the Business
Acquiring Business Intelligence Process Guidelines

Workforce requirement
what must HR deliver to enable the business to achieve its goals?

HR strategic focus
(Which actions will enable HR to deliver against its requirements?)

Strategy Map

Detailed measures
How can HR measure whether it is achieving its strategy?

Metrics Map

INDUSTRY DYNAMICS
Highly competitive Overcapacity Sonoco grew through acquisitions One stop shop

Process needs to be customer focused

INDUSTRY
Consolidating Globalizing New Products New technology Price as key differentiator Economic levers

1. Price X Volume= Revenues

2. Fixed +Variable= Costs

CONGRUENCE MODEL
Strategic Choices
Strategy Vision Obj

Critical Tasks

Exe Leadership
Competencies Demography Group Processes

People

Culture

Formal Organization

CRITICAL TASKS
Delivering comprehensive packaging sol to customers quickly Responding flexibly to customer demands and needs Increasing efficiency and effectiveness of the deployed HR assets

PEOPLE ASSETS
Long tenure employees Teamwork Hard edged business acumen Highly productive operational practices Pride in high quality products

grade employees a drag

CULTURAL FACTORS
Friendly practicality Down to earth style History of success leading to shared pride Family like paternalistic place to work Thinking themselves as a group of ordinary people doing extraordinary things

Again C players???

ORGANIZATION STRUCTURE
Divisional multi business structure Locally developed practices leading to a siloed and inconsistent policies across units Line management takes little responsibility for effective performance management HR assets are located at several business unit otrganizations

HUMAN RESOURCE AT SONOCO

1995 HR system was reactive and non strategic HR resources are haphazardly distributed. Some centralized, some highly decentralized. No coordination of ploicy Easy going, tolerant of low performers Back room process focused on transaction and compliance No influence on business Decisions

HR IN 2000

Policies for succession planning, leadership development, retention, pms and compensation consistent for all and line managers nominal responsibility of the process. Compensation simplified Pm helped by strategic objectives and linked to business goals Creation of HR council Generation of buy in by line management HR still located in several businesses but has a new service orientation and accountability.

CENTRALIZATION
More cost saving More values and culture consistency More strategic alignment Reduce cost by $3.3mn

HYBRID
More ability to get things done More influence in each business More accommodation of regional and business complexity Reduce cost by $2.7mn