BBA (10A)

Subject : HRM
Submitted To : Sir Fahad Javaid
Submitted By
Names Roll No’s
Abdul Manan 001
Usman Asim 112
Ali Hamza 012
Umair Ijaz 073
Asad Bashir 019
Ammar Shahid 016

Date: 03-05-2011
 Acknowledgements

First of all we would like to thank Allah Almighty for giving us the strength to complete
this exigent and challenging task. We would like to thank our instructor, Mr. Fahad
Javaid, for his guidance and tranquil, thoughtful insight. We thank him for his patience
and for his continuous assistance. The research in this project would have taken far
longer to complete without the encouragement from many others. It is a delight to
acknowledge those who have supported us.

Also we would like to thank M/s Sara Khan, HR manager-commercial and Mr Omer
Farooq, Territorial sales officer PepsiCo for their valuable time and a detailed interview
and a thorough visit.

The days would have passed far more slowly without the support of the group members,
whom we thank for putting up with our idiosyncrasies and for providing such a rich
source of conversation and learning. Finally, we wish to thank our parents for their love
and encouragement, without whom we would never have enjoyed so many opportunities.

Table of Contents:
Sr Topics Page

No No

1 Introduction 4

History 4

Products 4

Vision 4

Mission statement 5

2 HR hierarchy 5

3 HRM functions 6

Recruitment and selection 6

• Internal recruitment 6

• External recruitment 6

• Interviews for Recruitment 6

4 Performance management system and appraisal 7

5 Compensation practices 8

6 Career Planning 8

Job rotation 9

Succession planning 9

TNA 9

7 Organization training budget 9

8 In house training vs External training 10

9 Objectives of PepsiCo’s HR department 10

10 Monetary and non-monetary rewards 11

Introduction:

PepsiCo, Incorporated is a Fortune 500, American global corporation headquartered

in Purchase, Harrison, New York, with interests in the manufacturing, marketing and
distribution of grain-based snack foods, beverages, and other products. PepsiCo was
formed in 1965 with the merger of the Pepsi-Cola Company and Frito-Lay, Inc. PepsiCo
has since expanded from its namesake product Pepsi to a broader range of food and
beverage brands, the largest of which include an acquisition of Tropicana in 1998 and a
merger with Quaker Oats in 2001 - which added the Gatorade brand to its portfolio as
well.

As of 2009, 19 of PepsiCo's product lines generated retail sales of more than $1 billion
each, and the company’s products were distributed across more than 200 countries,
resulting in annual net revenues of $43.3 billion. Based on net revenue, PepsiCo is the
second largest food & beverage business in the world. Within North America, PepsiCo is
ranked (by net revenue) as the largest food and beverage business.

Indra Nooyi has been the chief executive of PepsiCo since 2006, and the company
employed approximately 285,000 people worldwide as of 2010. The company’s beverage
distribution and bottling is conducted by PepsiCo as well as by licensed bottlers in certain
regions. PepsiCo is a SIC 2080 (beverage) company.

PepsiCo’s product mix (based on worldwide net revenue) consists of 63 percent foods,
and 37 percent beverages. On a worldwide basis, the company’s current products lines
include several hundred brands.

The primary identifier of companies' main brands within the food and beverage industry
are those which generate annual sales exceeding $1 billion, and 19 of PepsiCo's brands
met this description as of 2009: Pepsi-Cola, Mountain Dew, Lay's, Gatorade, Tropicana,
7Up, Doritos, Lipton Teas, Quaker Foods, Cheetos, Mirinda, Ruffles, Aquafina, Pepsi
Max, Tostitos, Sierra Mist, Fritos, and Walker's.

Vision:

"PepsiCo's responsibility is to continually improve all aspects of the world in which we

operate - environment, social, economic - creating a better tomorrow than today."

Our vision is put into action through programs and a focus on environmental stewardship,
activities to benefit society, and a commitment to build shareholder value by making
PepsiCo a truly sustainable company.
Mission statement:

Our mission is to be the world's premier consumer products company focused on

convenient foods and beverages. We seek to produce financial rewards to investors as we
provide opportunities for growth and enrichment to our employees, our business partners
and the communities in which we operate. And in everything we do, we strive for
honesty, fairness and integrity.

HR Hierarchy of PepsiCo:

In HR hierarchy of PepsiCo, at the top of hierarchy there is a Head of HR followed by

Commercial HR manager and Organization development manager both lying on same
level, after Commercial HR manager and Organization development manager there are
three more positions under both of them that are HR controller, HR assistant and HR
coordinator. A chart of HR hierarchy of PepsiCo is given below:

Head of HR

Organization development
Commercial HR Manager Manager

HR Controller HR Assistant HR Coordinator

HRM functions in PepsiCo:

RECRUITMENT AND SELECTION:

The recruitment and selection process at PepsiCo is comprehensive the Pepsi cooperation
prefers to hire people internally but if PepsiCo wants to recruit at massive level it goes for
the external recruitment also.

Internal Recruitment

Pepsi Co always prefers internal recruitment and encourages its employees to apply. If a
vacant post comes first HR department sends an email to all its employees describing the
post and giving job specification which includes the qualification and criteria to apply.
Moreover it always motivates its employees to give application to the respective line
managers for the recruitment.

External Recruitment

Pepsi cooperation prefers internal recruitment but if the need arises it goes for external
recruitment also. If the Pepsi want to recruit for a higher post it prefers to go to
headhunters, For external recruitment at a massive level Pepsi Co Pakistan don’t
advertise its post in the news papers and any print media they will advertise on the
internet (on their web site) and also goes to good universities for hiring where they
conduct seminars and then recruit the best candidates available.

Interviews for recruitment

The interview format depends on the job specification because each post has different
requirements. Most of the interviews conducted in Pepsi Co are structured but
unstructured interviews are also done depending upon the job specification. According to
the HR manager “if she wants to hire a person very fast for a specific post she would
prefer a panel interview but if she has time to hire she would prefer sequential interview
in which the interviewer is first interviewed by 1st line manger then 2nd line manger then
finally by herself”

PERFOMANCE MANAGEMENT SYSTEM AND APPRAISAL:

The performance management system is an integral part of the HR department in any

company it basically tells us that how the employees are performing and what reforms are
needed in order to improve employee performance for this purpose every organization
has its own unique tools which it uses to evaluate the performance of its employees.

The process PepsiCo uses to evaluate the performance of its employees is PDR
(PERFOMANCE DEVELOPMENT REVIEW) in this in the beginning of the year each
and every employee is ordered to make a list of things he or she want to achieve in a
specific year then when they go to line managers to submit their list line mangers tell
them that ok you want to do these things but you should do a couple of things more
which were decided by the line manager. At the end of the year the self made list made
by each employee is evaluated and then the company sees that if they exceeds the
expectation, over exceeds or under exceeds and then according to that list each and every
employee is rated.

There are some common methods used by almost every firm to analyze the performance
of individuals and departments.

PepsiCo also uses following to measure the performance of the employees and
departments

1) Employee turnover rate

2) How many women and men are working in a specific department

3) Cost to conduct interviews (Cost of Hiring)

4) Cost to train the employees

Moreover PepsiCo regularly distributes questioners among employees to know are they
happy with their work their salaries and do they want any changes in the organization
which leads to the better work performance.

PERFOMANCE APPRAISAL

PepsiCo rewards its employees according to their performance, the appraisal tools
include

1) The yearly held award ceremony in which the best performing employees are
given awards on their excellent performances during the year.

2) Pay rises to the best performing employees

3) Holiday plan abroad for whole family for the employees

COMPENSATION PRACTICES

Compensation planning is an excellent practice done by the MNC’s to encourage and

motivates its employees like all MNCs PepsiCo also emphasizes on compensation
planning for its employees and give them fringe benefits like

1) Annual pay rise

2) Health benefits

3) Promotion depend upon the employee performance

4) Discount on the firm’s products

5) Pension plans

6) Gratuity fund

PepsiCo is doing everything possible in order to make its employees happy and content
with their job in order to get best out of them which is really vital for the organization’
success.

Career Planning
Career planning is an integral part of any company’s HR department in which HR
enables employees to better understand and develop their career skills and interests, and
to use these skills and interests more effectively.

Pepsi encourages its employees to develop their career plans and help them grow by
training them and using different tools and modules to help them develop their overall
skills

The tools includes

Job rotation

Job rotation is one of the things used by Pepsi to develop the skills in their employees
PepsiCo don’t force job rotation but encourage it this basically is the reason the people
you find in the top management of Pepsi have had experience in more than one field of
work

Succession Planning

Every successful organization uses succession planning it is an ongoing process of

systematically identifying, assessing and developing organizational leadership to enhance
performance. Moreover in this organization also prepares employees for the top
management jobs.

TNA

Training and Development is necessary for every company for its success. PepsiCo
focuses heavily on training and assessment process and train their employees in order to
flourish their skills and performance. The training and assessment is a ongoing process at
PepsiCo they held seminars and presentation in a regular manner for their employees they
also send their employees abroad for training moreover they conduct surveys to know the
effectiveness of the training department and focuses on, on the job training more because
an employ can learn more when he was actually performing the tasks and duties of the
job.

Organization training budget

As it is confidential data so company shows there inability to share it with us but
according to them the rough overall budget for training and development per year is
round about 50 million rupees.

In house training vs. external training

Pepsi focuses more on in house training of the employees because according to them the
people from inside can better train the employees then the outsiders because these people
know better how things works in the organization but Pepsi Co also hire outside firms to
train their employees. If they want to enhance and improve their management skills,
leadership skills and anger management skills they will hire a person/company from
outside to train them.

Objectives of PepsiCo’s HR department:

1. Decreasing the Training cost for the Company,

2. Increasing the number of suggestions generated by the employee,
3. Increasing the number of quality circle projects that the employees take up,
4. Increasing the nominations for valuable external training sessions,
5. Decreasing the absenteeism by few notches
6. Managing the budget allotted to increase the return in terms of employee
productivity, i.e. units/man-year or something similar,
7. Decreasing the employee turnover,
8. Ensuring some desired percentage of employee engagement,
9. Improving inter-dependence among different departments can be innovative.

Monetary Rewards:

Pay is seen as a main reason for working, Pepsi is providing its employees with salaries,
commission, profit sharing, bonuses and performance related pay. Salaries are fixed
payment that is given by the organization to its employees. In addition to a basic salary,
Pepsi also share profits with its employees whenever the business is successful. This will
motivate the worker because if the business does well then they will all share in its
success. In Pepsi, performance related pays are also been given to the employees. It
happens in the departments where measurement of efficiency of employees is near to
impossible.

Non Monetary Benefits:

In addition to monetary rewards, Pepsi also benefit its employees by giving fringe
benefits. Fringe benefit includes:

1. Discount on the firms product

2. Health care paid for
3. Company vehicle (car)
4. Free accommodation if a person goes outstation to work.
5. Foreign tours with families.
6. Free food to the blue collar workers at their work
Due to confidentiality of data Pepsi management were reluctant to give us any figures for
the research, but they do tell us the matrices they use in their HR score card.

This equation shows the number of days employees were absent during a specified
period.

This equation shows the cost of hiring an employee. If cost per hire is high this means
that HR department is not cost efficient. It is using improper mediums to hire people. So
it should move to those mediums that are cost efficient.

The equation shows the time taken by HR department to fill a vacancy. If the time taken
to fill the vacancy is more so this means that HR Department is not efficient at hiring
people in time because of which there may be serious long term problems. So they should
hire people in time.
Turnover Rate shows that how many people left the job in a specified period.

This equation shows the ratio of Human Resource Department Expense in comparison to
total operating expense. If this is high this shows that human resource department is not
operating cost effectively.