pladis - Innovative Use of Technology in Human Resources
Company: pladis (Turkey), Istanbul, Turkey
Company Description: pladis is one of the world’s leading snacking companies. We are the proud steward of over 300 years of family baking and confectionery experience, and home to the some of world’s most loved snacking brands, including McVitie’s, Ulker and GODIVA.
Nomination Category: Human Resources Categories
Nomination Sub Category: Award for the Innovative Use of Technology in Human Resources - All Other Industries
Nomination Title: HR and Reward Analytics
The Need:
pladis started using HR analytics technology as a guide in managing the reward and pay processes beginning of 2018.
At the end of 2017;
- Even though a grading (band) system was used to determine the position salaries, the salaries of 14% of the employees were outside the wage ranges determined for their positions.This created a serious injustice in terms of internal equity. At the same time, managing pay increases made the process more difficult every year for out-of-band employees.
- In the band grading system, positions were placed on the bands after previous job evaluation process.However, fair remuneration could not be made for tasks that were not in the correct band. Therefore, all tasks had to be re-analyzed within the scope of job evaluation with a new perspective.
- In pladis, gender pay gap was undesirably seen in favor of men.A man was paid 5.2% more than a female employee on same position.
- Salary increase adjustment decisions were made instantaneously, based on the needs of the current staff and the individual opinion of the manager. Since the managers did not have data to guide them in determining the rate of increase, the increases were independent from the positioning of the individual's salary within the organization or the individual's other HR data (performance, potential, etc.).
- Since there is no holistic analysis, inequalities such as those in critical roles staying below the band or paying well above the band of low performers cannot be detected; this, in turn, affected wage justice and ability to keep critical positions within the company.
Considering all these needs, pladis started to use HR analytics in its processes in 2018.
The Solution:
1.Phase: Job Evaluation and Grading:
As a first step, all positions were graded with the job evaluation study.
While doing this study, contrary to what is usual in the country, pladis HR carried out this process with its own internal resources without using a consulting firm. In this way, triple check was achieved by using 3 different salary and grading systems (Hay, Mercer and Tower-Watson) together, without adhering to the approach of only one consulting firm.
2nd Phase: Detailed Analysis on Reward and Pay Processes using HR Analytics
Besides reporting HR analytics on monthly basis, pladis also taken into consideration a more specified one “Reward Analytics”.
As the main base line Gartner Analytics Maturity Model is used on both descriptive and Diagnostic Reward Analytics to find an answer“Why did it happen?"
When using descriptive analysis, pladis measured and analysed periodically;
-Percent of employees below/above salary band
-C/R distribution (employees distribution) within band on TENURE basis
- on FUNCTION basis
- on TENURE & FUNCTION basis
- on TENURE & TALENT CODE basis
- on GENDER basis
- on GENDER & LEVEL basis
With the help of all analysis, the improvement points were revealed in the light of the data.
3rd Phase: Process Improvement by Diagnostic Reward Analytics:
While analyzing the current salary system; On the other hand, HR analytics were used for the points where action should be taken based on these analysis findings. All data requiring follow-up was shared with HRBP teams continuously, providing an input for all HR decisions.
Additionally, in order to protect internal equity, it was aimed to ensure efficiency with the use of HR analytics in subsequent salary decisions. With these visions, an analytical model has been developed that can be used by HR and management teams when determining wages.This decision-support system is used in decision-making processes likepromotional increase, in-range salary adjustment and pay reviews.
Results and Benefits:
Internal Pay Equity:
Overall internal equity enhanced:
- % of employees falling out of band was 13% starting 2018; itenhanced to 4%at the end of 2020
- Moreover % of employees under lower end band is around2%which was 7,4% in the beginning of 2017
Effects on Employee Loyalty
Using HR analytics enables pladis to come up with more fair/equitable pay. Employees trust the company and directly or indirectly have an impact on turnover: White Collar employee turnover decreased from 13% to6,7%in last 3 years.
In addition, the rate of employeeturnoverin the "top talent" box in 9-box system used by the company as a potential assessment techniquedecreased from 6.3% (2018) to 2,6% in 2020.That meansnearly 60% improvementis achieved on retaining company's top talents, which is the most critical resource for the company.
Gender Pay Gap:
Using HR analytics, enabled pladis to enhance gender equity on pay.
2017 year-end overall gender pay gap was 5,2% (in favor of men) whilstits 0,2% (in favor of woman)currently (end of 2020). This helps pladis to be one of the main companies in the market in terms ofgender pay equityin Turkey.
Financial Saving and Organizational Process Effectiveness:
Thanks to the continuation of the job evaluation work with internal resources, job evaluation studies for many positions required during the year were carried out with the internal resources without hiring consultants. In this way,100.000+ euro saving per positionwas provided. (You can see a sample of the job analysis done in additional documents.)
HR Analytics was also used while organizational optimization within the company. While the number of position layers was maximum 7 in 2018, it has been reduced to5 layersby making a simplification over the years. This contributed to a more horizontal management approach.
In general,12.7% improvementwas achieved in the EMPLOYEE COT / NET SALES ratio.
Effects on Employee Brand and Perception and Preferability:
Thanks to more balanced gender pay gap and pay equity, pladis employer brand is impacted positively.
-In the "Universum Most Preferred Companies List" in 2020, pladis hasrisen4 stepsin the preferences of university students and10 stepsin the preferences of all professionals.
- LinkEdin followers of pladisincreased by 21.6%in 2020.
-Brand awareness of Ülker, the leading brand of pladis, has also increased:
the leader of the mind among all sectors, further strengthened its mind share by+6 pointsin 2020. (24 to 30)
Although it cannot be said that the positive effect of this brand awareness and preference is solely due to the revision in the HR Analytics process, it is still seen that fairer wage perception and gender pay gap have a positive effect on brand perception.
Knowledge Sharing and Internal Communication:
pladis HR team get attraction on Hr anaytics usage and invited to many becnhmark studies, knowledge sharing sessions.
Korn Ferry invited pladis to share its experience on Korn Ferry FMCG conference as a best practice.
HR analytics team is alsoawarded by CHROof the pladis group internally. CHRO, Mr. Faruk Gözleveli said;
"Your successful work in determining all white and blue-collar positions, setting up wage structure and ensuring title standardization in the Kazakhstan Region has been appreciated and worthy of praise. For this reason, you are entitled to receive rewards under the Instant Reward System. Thank you for your contribution and wish you continued success