DEVELOPING THE RIGHT REWARD SYSTEM THAT WILL MOTIVATE F&N FOODS’ EMPLOYEES TO WORK TOWARDS MEETING SET CORPORATE OBJECTIVES OF THE COMPANY

Research Proposal

Author: Iloka Benneth Chiemelie

Published: 4/3/2014

About F&N

Following its establishment in 1883, Fraser and Neave, Limited (F&N) has been quenching the taste of customers across generation and it is presently the leading player in Singaporean and Malaysian food and beverage industry (F&N, a, 2014).

Organizational strategy

Organization strategy of the company is built on creating reputable brands that meet consumers’ need for quality as well as healthy enjoyment. Present, it has been successful in doing such by creating numerous brands such as F&N, 100PLUS and F&N SEASONS for Soft Drinks, F&N MAGNOLIA, F&N NUTRISOY and F&N FRUIT TREE FRESH for Dairies, and Myanmar Beer, Myanmar douible Strong and Andaman Gold for Beer (fraserandneave.com, 2014)

Corporate Objectives

The corporate strategy governing operation in the company is the need to meet health and wellness needs of consumers in their markets and across the world. The brand is drive by its longstanding philosophy of Pure Enjoyment, Pure Goodness. The company has model its brand by building more emphasis on healthy enjoyment (F&N, a 2014).

Mission and values

In line with the brand’s mission towards delivering Pure Enjoyment and Pure Goodness, five key values that guide their activities and they include: Trust, Thoughtfulness, Excitement, Innovation and Progressiveness (F&N, b 2014). These values have helped to shape the brand and aid its growth as consumers’ favorite.

Pestle of Singapore

Political factors: Singapore has a well-established political system and is globally viewed as one of the least corrupt nations (Huong and Ken 2006). This is positive for the brand because it will provide them with needed political security that will allow them to compete effectively in the market.

Economic factors: Singapore is one of the advanced nations in the Asian pacific region and maintains huge GDP per capita as well as high disposal income per household (Huong and Ken 2006). Additionally, this is positive for growth as it will create sustainability in demand but it should be noted that it was one of the heavily affected Asian nations from the 2007-2009 recession. This means that success can heavily be affected with change in economic situations in the country.

Social-cultural: filled with pride of their nation, there is much appreciate for made in Singapore products as compared with imported goods (Huong and Ken 2006). On the same hand, the busy nature of life means that soft drinks are on high demand and this is a positive atmosphere for sales in the country.

Technological factors: the country is highly technologically advanced (Huong and Ken 2006). This means that brands such as F&N have less worries with respect to needed production technologies.

Legal factors: Singapore has one of the most advanced legal systems in the world, thus, providing brands with the power to protect their assets peacefully.

Environmental factors: the country has experienced a number of disasters in recent years such as flooding and this is a big issue of concern for brands looking to establish operations in the country. However, soft drinks are easily accessible through different sales units, which is positive for the brands success.

Generally, Singapore provides a positive atmosphere for continued success of F&N in the country.

Business life cycle

Following numerous years of success, the brand is presently on the maturity stage of its life-cycle. It has been able to maintain this stage for a very long time as a result of its continued product innovation.

Reward and pay strategies]

Just like other companies in the industry, the need to retain employees is viewed as necessary in F&N and the brad has been successfully in adopting a number of strategies to meet such needs as described below.

For meeting its overall organizational strategy

In order to meet its corporate objectives, the group employs a number of safety measure to protect its employees from work related accident and as such keep them active and productive throughout the year. In 2013, F&N maintained a zero LTA (last time accident) in all of its production plant (F&N, c 2014), which helped them to ensure sustainability in production as all staffs were sound and healthy. This record also brought in two accolades for being a safe working environment and having quality employees’ relationship (F&N, c 2014).

For maintaining competitive advantage in the face of new challenges and changing conditions.

In order to ensure competitiveness, the group constantly compare the rewards and recognition packages obtainable in order soft drink industries across the country and align their own reward systems with these record (F&N, c 2014). This effectively reduces the level of employees’ turnover while increasing retention and commitment.

From the nonfinancial wing, the group also invests heavily in training and development programs that are regard towards equipping its staffs with latest skills as well as helping them to develop individually and achieve their self-actualization goals.

Conclusion

Two views dominate the strategic pay literature. The first view is “best fit” perspective which is of the notion that the reward system of firms should be aligned to provide support for the organization’s business strategy in order to attain competitive advantage while the “best practice” is of the view that firms should adopt HR policies that motivate employees and make them committed as they are key to the organization’s competitive advantage (Lawler, 1996; Sparrow and Hiltrop, 1994; Thorpe and Homan, 2000; Schuster and Zingheim, 1992, 993; Lawler, 1995). Presently, F&N foods is adopting best practice as the company constantly compare its reward system with what is obtainable from labor force. However, this can drift company’s ability to meet its set goals is the rewards system in the labor force continues to increase. The reason for such is that increase in employees’ reward package will result to increase in operating cost and overall decrease in profit. Thus, it is recommended that the company adopts “best fit” strategy in which a standardized financial reward system is applicable and supported by nonfinancial rewards. This will ensure that it maintains sustainable operating cost while effectively increase its profit. The justification for such is that nonfinancial reward has been proven to sustainable in long-term in creating effective commitment and loyalty from employees.

References

F & N (2014a), “Corporate profile.” Available at: http://www.fnnfoods.com/about/index.php [Accessed on: 3^rd – April – 2014].

F & N (2014b), “Brand values.” Available at: http://www.fnnfoods.com/about/brandvalues.php [Accessed on: 3^rd – April – 2014].

F & N (2014c), “Corporate structure.” Available at: http://announcements.bursamalaysia.com/EDMS/subweb.nsf/7f04516f8098680348256c6f0017a6bf/659663e2b865ea4748257ae20023469c/$FILE/F&N-Page%2017%20to%20ProxyForm%20(3.6MB).pdf [Accessed on: 3^rd – April – 2014].

Fraserandneave.com (2014), “Our Business: Foods and Beverages.” Available at: http://www.fraserandneave.com/FN_ourbusiness.asp [Accessed on: 3^rd – April – 2014].

Huong, H and Ken, C. (2006), “E-Government in Singapore: A Swot and Pest Analysis.” Available at: http://www.dlsu.edu.ph/research/journals/apssr/pdf/200612/science_4.pdf?origin=publication_detail [Accessed on: 3^rd – April – 2014].

Lawler, E. (1995) ‘The New Pay: A Strategic Approach, Compensation and Benefits Review’, 27 (4), p.14-22.

Lawler, E. (1996) The Design of Effective Reward Systems. In Motivation and Leadership at Work, sixth edition, eds. R. Steers, L. Porter and G.Bigley, p. 527-550. New York: McGraw Hill International Press.

Schuster, J. and Zingheim P. (1993) ‘New pay strategies that work,’ Journal of Compensation & Benefits, 8 (6), p. 5-9.

 Schuster, J. and Zingheim, P. (1992) The New Pay, San Francisco: Jossey-Bass.

Sparrow, P. and Hiltrop, J. (1994) European Human Resource Management in Transition. London: Prentice Hall.

Thorpe R & Homan G. (2000) Strategic Reward Systems. London: Pearson Education Limited.