Coke's HR pitch: play cricket

THE HUMAN FACTOR

Question: What keeps Coca-Cola India employees busy at the peak of summer?
Answer: Cricket.

Sourav's boys may be packing up when the mercury touches 40, but that's when the "men in red" (the colour of Coca-Cola's brand logo) take over. This cricket competition, named Summer Thunder, starts in April and ends around October. On offer is prize money worth a whopping Rs 70 lakh to Rs 80 lakh.

The rules of the game are quite simple. Every crate of Coke sold is counted as one run and every credit collection deal is considered a wicket taken. At the end of it all, the winners are given generous cash prizes at a gala do that is attended by the entire Coke India brass.

Says Adil Malia, Coke's vice president (HR): "We thought of cricket as the game is almost like a religion for Indians. It helps build the tantalising tempo we require at a time when our sales have to be at their peak. Summer Thunder is a big hit."

It certainly is: consider the huge surge in the company's sales over the last couple of years. What adds to the excitement is the frequent messages from Sanjiv Gupta, Coke's young president & CEO, who loves to lead the parade. A typical Gupta message would read like this: "Go for it guys. You have just two more wickets to take." This, Malia says, adds to the overall message Coke wants to convey: it's a fun place to work in.

The "fun place," however, has had its share of criticism. Critics have often complained about the ruthlessness of some global giants, including Coke, who follow the "vitality curve" made famous by Jack Welch of GE.

According to this policy, a certain percentage of the employees at the bottom of the rung is asked to leave every year. "The so-called fun places have a lot of tears to hide," says a former employee of one of the top multinationals. In fact, Gupta earned the title "Prince of darkness" after Coke got rid of about 80 managers, including a few top executives, in 2002.

Malia agrees Coke has a policy to identify under-achievers but denies that the company follows a blanket shape up or ship out policy. He claims Coke has the wherewithal to follow the statistical rigours that a proper annual ranking system requires to produce a hotbed of over-achievers who increase the overall calibre of an organisation.

Under the system, the company identifies the top 5 per cent performers as C (clearly exceed expectations) for whom the variable pay alone can exceed 40 per cent of the salary.

Another 25 per cent is categorised as ME (meets and exceeds expectations), 55 per cent comes under SM (steadily meets expectations) and 10 per cent MS (meets some expectations). The remaining 5 per cent is identified as FM (fail to meet expectations).

"We treat this bottom 5 per cent with cotton gloves," says Malia. Which means trying to understand why someone has failed and whether the company can help him in any way. Coke has often found very competent people performing poorly, simply because the job profile did not suit them.

For example, a brilliant assistant general manager in the finance department was made a profit centre head because he wanted to play a broader role. His next year's evaluation put him at the bottom 5 per cent category because he was just not suited for that role. The HR department explained the situation to him and shifted him back to the finance department. The AGM's transition from FM to C was instant.

Malia says one of the biggest challenges the Coke management faced was managing the "cultural migration" of the employees in the bottling plants after their takeover. The weaknesses in the systems in the bottling plants were huge with territories being treated like fiefdoms.

The plants were low-tech with an average capacity of 200 bottles per minute (Coke's global standards are between 1,200 and 1,600 bpm) and the HR systems in each of the plants were different from the other.

Now, the bottling plants are treated as individual profit centres and each of them is headed by an assistant general manager. In 2003, the company opened a new "corridor for careers" for 20 Grade 7 employees in the bottling plants by launching a one-month residential management programme called Fastrack at XLRI in Jamshedpur.

This will be supplemented by a three-month cross-functional programme across the company. At the end of the four months, they will be promoted to assistant manager.

The fallout of all this is worth noting: the attrition rate at Coke is 12 per cent compared to the industry average of 14.5 per cent; there is just one expatriate (vice-president-finance) in the Coke India top management, and some of the profit centre heads controlling over Rs 100 crore businesses are 26-year olds. A knowledge corporation is indeed in full bloom.