THE CADBURY EXPERIENCE
How Effective Are Performance Appraisals?
The Cadbury Experience
Research Methods Used
The research methods employed consist of online note-taking and consulting with research journals on the topic of performance appraisal with regards to Cadbury PLC. However, few pieces of information were obtained due to the fact that information for a business entity is usually private. The author attempted to gather qualitative and quantitative data in order to support points that answer to the guide questions given.
Cadbury is a multinational confectionery company from the United Kingdom owned by Mondelez International, Inc. (formerly Kraft Foods, Inc.). It carries a wide portfolio of products from milk chocolates, pretzels, Turkish delights, and even chocolate beverages. It is a unique company with identifiable quality and rich history. This paper attempts to discuss the organization with focus on the human resources. Particularly, the performance appraisal system will be tackled and evaluated for its effectiveness in terms of certain criteria.
Organizational Mission, Values, Customers and Competitors
Cadbury’s mission statement is “to be the world’s best and biggest confectionery company” (Tsagas, 2012). The company values include performance, quality and responsibility (Zaman, 2011). First, performance means having the passion to win and thinking strategically. Second, quality reflects not only the products, but also the safety of people and partnerships. Lastly, responsibility means accountability of actions, being fair to people and protection of environment.
Cadbury is a market leader in this category just next to Mars-Wrigley at the top spot. It was founded back in 1824 by John Cadbury (Bryson & Lowe, 2002). His enterprise was continued by his sons Richard and George Cadbury. The latter was the mastermind behind Bournville estate. Initially, their factory was located in Birmingham, considered an urban area. With a vision to improve the life of the company employees, Bournville became a model community where conditions are better not just for Cadbury employees, but also for their families. The location was also strategic for its manufacturing facility because of access to railroads and waterways. Furthermore, Cadbury has established its reputation of quality products through branding, technology, and new product development (Bryson & Lowe, 2002). Fast forward, Cadbury Public Limited Company has been acquired by Kraft Foods, Inc. in 2009. In 2012, the parent company Kraft Foods, Inc. is now Mondelez International, Inc. Never the less, the Cadbury brand remains strong. The main customers of Cadbury’s product are generally the young and the adult population who has developed the love for its line of confectionery. Cadbury products are sold in different countries with a big customer base in Europe and Northern America. Main competitors include Mars-Wrigley (Mars, Twix, Maltesers, M&Ms, 3 Musketeers), Hersheys (Kisses, Nuggets, Syrup) and Nestle (Kitkat, Smarties, Crunch, Butterfinger).
Organizational Environment and Culture
The environment is dynamic with respect to the recent company merger. However, since its foundation in 1824, the company has experienced several changes due to several factors. These factors include manufacturing technology, product development, location, outsourcing of raw materials, ownership, and marketing (Bryson & Lowe, 2002). First, in terms of technology, the original cocoa process employed by John Cadbury has changed. The brothers, Richard and George adopted the Dutch method (original process by Van Houten) of creating chocolates. Cadbury also adopted the conching process in modifying the texture of the final products. In new product development, Cadbury has modified their recipe such that their milk chocolates have a high fraction of milk. This innovation was very liked by the consumers. The “milk chocolate” has then become their major product thereon.
In terms of location, the Bournville estate revolutionized how companies view its employees. The Cadbury brand has been identified with this new philosophy of combining sound strategy -access to railroad and canals and employee welfare -community providing housing, sports facilities and gardens. This culture of greater good has been the trademark of Cadbury management. Next is outsourcing of raw materials from African countries and allotting a fund for development projects. Another aspect is in terms of ownership. The company started from a sole proprietorship (John Cadbury) to partnership (Richard and George) to an organized family firm. This family firm has acquired J.S. Fry & Sons (specializing in Turkish delights) and Schweppes (specializing in beverage) and has developed into a public limited company. There was initial hesitation for the loss of the culture and values held by the brand for the merger with Kraft Foods, Inc. (United States-based company). Kraft Foods, now rebranded as Mondelez International, is very competitive in developing its categories of consumer brands. Last is unique marketing. Marketing efforts from selling the chocolate experience in the past has been successful. Advertisements were made in newspapers, and packaging was improved. The iconic glasses and the purple packaging have been identified with Cadbury since.
Managing Innovation and Change
In terms of performance appraisal as an innovation, Cadbury has been successful in implementing systems to ensure that company objectives are met. Three points can be obtained from the company experience. The behavior of employees in the workplace is assessed in quantitative and qualitative areas of job functions. Performance here pertains to targets or specific activities that contribute to the company’s success.
First is the performance assessment of the management committee. In 2007, Egon Zehnder made an assessment in terms of qualitative dialogue and quantitative questionnaire to analyze the committee’s effectiveness and group dynamics (The Institute of Chartered Secretaries and Administrators, 2009). The assessment report summarized that the management committee deliberate important issues through constructive debate and team decision making.
Second is the community-spirit ethos imbibed by the founders into the employees. According to Michael Higgins, a plant operator (Dawson, 2009) at Cadbury, this guiding principle embraces the concept of employees volunteering their time for community outreach and the company supporting these endeavors. It all started in Bournville.
Third is the integration of management information systems in performance appraisal. Cadbury established this in 2007 through their IT partners, E-skills U.K. and SuccessFactors. The project covered 18,000 employees in 60 countries. Also, mid-year review was done using this online system. The main objective was to standardize the review process. With sufficient training, the performance management system went live by July 2007 (E-skills U.K., 2008). The software in particular has different functions from recruitment, setting goals, analyzing succession data, compensation planning and 360° review. The recruitment process starts with job descriptions and responsibilities and then matching them with current staff and the not-yet-hired talent pool. Operational goals are set aligned with the strategic goals of the organization. For instance, in the manufacturing setting, the gross profit is a financial indicator of the efficiency of a plant in utilizing its resources. These key performance indicators are grouped into key result areas. These are metrics that are measurable and attainable. Another component is the succession data analysis. Usually, an advancement planning deck is made to look into certain leadership traits and technical competencies of future leaders. Based on established criteria, employee skills are classified as entry level, contributor, integrator, team leader, or strategist. Staff are then categorized as ready now, ready later, etc. Another is compensation planning which is based on the performance review. Weights, targets, and allocation guidelines are considered for this. Last is the 360 degree review which is more than the usual competency-based review. This engages not just supervisors and managers, but also the colleagues in giving advice to the employee. This also creates a sense of trust towards each other.
Organizational Structure and Leadership
Last 2010, Cadbury introduced the 720-degree feedback. Input does not only come from direct reports and colleagues, but also from family and friends. Cadbury (Smedley, 2010), recognized the aspects of leadership capabilities outside of work. The management sees the potential of employees as leaders involved in long-term community projects. This is partly due to the ethos previously discussed in the preceding paragraphs notably that of George Cadbury and the Bourneville model. He has shown leadership with a vision of greater good. It is not just about the profit, but also serving the community. In terms of company structure, Cadbury can be divided into several groups: marketing, IT, production, quality assurance, maintenance, supply chain, and human resources (Zaman, 2011). Each group has its role in the utilization of the resources -man, machine, method, materials and environment to convert raw material of low value to a product of high value.
In terms of diversity management, Cadbury has responded well through its presence in 60 countries. For instance, in India, it has launched local flavors of milk chocolate which has been positively by the Indian people. Moreover, it has supported programs to alleviate poverty particularly in West Africa where they source out their cocoa beans. It spends an average of 7.2 million US $ for livelihood projects in Ghana, India, Caribbean and Southeast Asia (Social Justice Board of Uniting Church in Western Australia, 2012).
The company faces challenges in terms of improving their performance appraisal and employee management systems. The challenge is to guide the employees towards a common goal, a common direction. There is still opportunity such as on coaching and mentoring of new employees and sustaining the good projects started by older employees.
Bryson, J. R., & Lowe, P. A. (2002). Story-telling and history construction: rereading George Cadbury's Bournville Model Village. Journal of historical geography, 28(1), 21-41.
Dawson, K. (2009, December 14). Cadbury: The Factory in the Garden. Retrieved July 25, 2015 from http://news.bbc.co.uk/2/hi/uk_news/england/8411696.stm
E-skills U.K. 2008. Reaching Dispersed Audiences Rapidly at Cadbury Schweppes- See How Cadbury Schweppes Rolled out their New Performance Management System on a Limited Budget and Even Tighter Timeframes. Retrieved July 25, 2015 from http://www.towardsmaturity.org/elements/uploads/cadbury_schweppes.pdf
Smedley, Tim (2010, April 22). HRD 2010: Cadbury Introduces ‘720-Degree’ Feedback. Retrieved July 25, 2015 from http://www.cipd.co.uk/pm/peoplemanagement/b/weblog/archive/2013/01/29/hrd-2010-cadbury-introduces-720-degree-feedback-2010-04.aspx
Social Justice Board of Uniting Church in Western Australia (September 2012). Chocolate Company Commitments to ending abuses in cocoa production in West Africa. Retrieved July 25, 2015 from http://www.laborrights.org/publications/chocolate-company-commitments-ending-abuses-cocoa-production-west-africa
The Institute of Chartered Secretaries and Administrators (2009, February). Board Performance Evaluation: Review of 2008 Annual Reports of UK Listed Companies. London, U.K.
Tsagas, G. (2012). Reflecting on the Value of Socially Responsible Practices Post Takeover of Cadbury’s Plc by Kraft Foods Inc: Implications for the Revision of the EU Takeover Directive. European Company Law, Kluwer Law International, Special Issue on CSR and SRI, 9(2), 70-80.
Zaman, N. U. (2011). Cadbury's Employee Relationship Management.