Binding Performance Management System Changes and Organisational Essay

Binding Performance Management System Changes and Organisational Culture - Essay Example The packaging industry has become increasingly lucrative, but local and international competition intensified. By the late 1990s, the global sales of the industry reached $400 billion, with the U.S. making up $115 billion, followed by Asia and Western Europe. Consumer packaging accounted for 70% of sales, followed by industrial packaging revenues at 30%. The influence of packaging on marketing products cannot be undermined. For traditional retailers, packaging is seen as more influential than advertising in affecting purchasing decisions and customer loyalty. The industry trends are increased corporate consolidation, market segmentation of domestic consumer packaging markets, and vertical integration of packaging business models. The challenges for Sonoco come from its ability to respond to external threats and opportunities by managing its internal weaknesses and strengths. The opportunities are one-stop packaging business models with high flexibility and customisation levels, the c ontinued demand for market-oriented packaging, especially for consumer markets, availability of global talent, and becoming more receptive to diversity and environmental issues at national and international levels. ... Hence, the primary challenge for Sonoco is using its strengths to reduce its weaknesses, and to ultimately handle the opportunities and threats in the packaging industry. The main tasks of Hartley are as follows: 1) to reduce HR cost by 20%; 2) to improve the linkage between HR functions and business strategies; and 3) to standardise HR systems and functions. Overall, Hartley is in charge of transforming the HR structure and organisational culture. Hartley’s total approach included professionalising the HR system and making it more business-oriented. She designed policies that shaped compensation, performance management, employee development, and succession planning. In order to support these policies, she created an advisory HR council that was comprised of divisional HR heads and key individuals from corporate HR. She also formed an advisory team of divisional GMs to help attain high buy in. This study discusses the theoretical framework of the main concepts and issues of th e case. Performance management (PM) is a critical aspect of Sonoco’s HR change efforts because it is linked with its organisational issues of compensation, employee development, and succession planning. The vision of the PM system must be distinct, clear, and compelling. This vision can be connected further to the corporate vision, so that management levels and personnel understand how PM affects the overall direction of the company. Hendry et al. (2006) stressed the link between company vision and HR functions (51). Greer and Virick (2008) asserted that diversity management is connected to successful succession planning. Furthermore, PM changes must be