Name of the Student

Program
Class Roll Number
Enrolment Number
Name of Faculty guide
Case study title

Sanya Kapur
MBA (G)
B-24
A0101913003
Prof.(Dr.) J.K Sharma
Performance
management system at
Coca-Cola India.

Declaration
I declare (a) That the work presented for assessment is my own, that it has not previously
been presented for another assessment and that my debts (for words, data, arguments and
ideas) have been appropriately acknowledged (b) That the work conforms to the guidelines
for presentation and style set out in the relevant documentation. (c) The Plagiarism as taken
by Turnitin is ________ %.

Date:

Student Signature

Dr. J.K Sharma

Professor
Department of Operations

PERFORMANCE MANAGEMENT SYSTEM IN COCA-COLA

INDIA: A CASE STUDY

Abstract
Today major challenges faced by any organisation is to come up with an effective
performance management system as personnel need direction, independence for getting their
work done and to feel encouraged. Performance management system is not an activity where
we dwell on the past and conduct post mortems. In its true sense such review exists so that a
forward looking path is built for the employees so that they are able to achieve their targets
and make better use of their talent, skills and competencies which in turns increases their
employability value. This systems help in delivering combined and continued success to the
business concern by improving their employee performance. There are number of techniques
such as job analysis, performance appraisal, coaching and feedback, communication and
counselling career development etc. which help in performance management.

This case study reviews performance management system as human resource management
activity of Coca-Cola India. It also identifies the actual problems the company faced because
of implementing performance management system in the food and beverage industry which is
labour intensive. As this case study has been conducted on food and beverage industry and
used a single organization, it is not possible to generalize the findings. Thus the context of the
study lies analysing that how the company overcame the problems in its performance
management system and re-invented the system to meet organisational success.

Keywords: Performance Management System, food and beverage Industry, Human Resource
Management.

The Coca-Cola Company engages in the manufacture, distribution, and marketing of nonalcoholic beverage concentrates and syrups worldwide. It principally offers sparkling and still
beverages. The company's sparkling beverages include non-alcoholic ready-to-drink
beverages with carbonation, such as energy drinks, and carbonated waters and flavoured
waters. Its still beverages consist of non-alcoholic beverages without carbonation, including
non-carbonated waters, flavoured waters and enhanced waters, juices and juice drinks, teas,
coffees, and sports drinks. The Coca-Cola Company also offers fountain syrups, syrups, and
concentrates, such as flavouring ingredients and sweeteners. It sells its finished beverage
products primarily to distributors, and beverage concentrates and syrups to bottling and
canning operators, distributors, fountain wholesalers, and fountain retailers. The Coca-Cola
Company was founded in 1886 and is headquartered in Atlanta, Georgia.
Since its return Coca-Cola estimates it has invested around US$1 billion in India, making it
one the countrys biggest international investors. Coca-Cola for years trailed rival PepsiCo in
the Indian market. PepsiCo began selling its cola in India a few years before Coca-Cola
returned in 1993, giving it an edge. Homegrown Indian colas like Parle Agro Pvt. Ltd.'s
Thums Up also became popular.On its return, Coca-Cola bought Parle's four leading soft
drinks brandsThums Up, Limca, Gold Spot and Maazagiving the company an instant
60% share of the Indian soft drinks market. At the time, PepsiCo had less than 30%.

The company produces its beverages locally with around 7,000 employees at 27 whollyowned bottling operations supplemented by 17 franchisee-owned bottling operations. In
addition to its own employees, Coca-Cola says it indirectly creates employment for another
125,000 people via its procurement, supply and distribution network. In addition,
performance management system is introduced to improve both the quality and quantity of
work done and to bring all activity in line with an organizations objectives as the company
deals with large number of employees it is important to have performance management
system in order to attain the organisational goals and survive in the market. The major impact
of this system is to measure the impact of employee performance management on business
processes as well as employee development for better organisational performance.
As human resources become increasingly critical to the growth of businesses, measuring
human capital, identifying, developing, rewarding and managing employee performance is

being looked at more strategically than ever before. With investors and other stakeholders
evaluating company performance on a quarterly basis, performance management system is
being improvised regularly to suit the business needs.
The appraisal system in the company was very complex and time consuming as it involved
too many ratings which were confusing. There was not much interaction among the
employees and their managers in relation to their performance. There were delays in feedback
from the managers or supervisors which gave room to lot of dissatisfaction. In some cases
even the supporting documents were not attached which made it difficult to verify the
performance.
As the business performance went down in the past Hindustan coca cola beverages Pvt ltd
decided to go for a change in its PMS system. Rationale for going for change was as that
Ratings in the PMS followed & the business achievements do not match, Linkage of Key
Result Areas to the business result was not clear, Bench mark rating and performance
standard was not been identified clearly, Duplication of development plan of individuals and
Online process not accessible to up country managers.
Where the problem lied in the system?

Manual process: the performance management system is done

manually with lot of paper work which leads to errors. This whole procedure makes the
system lengthy and more prone to mistakes.

Biasness and Prejudices: Although steps are taken to make system

free from biasness and prejudices but the kind of forms that are used in evaluation of
performance can give scope for biasness.

Communication: Proper communication is required at coca cola to

make their performance management system a success system. As the system is very
complex and time consuming proper communication with the employees is a must.

Link between Key Result Areas with the business results is not
clearly mentioned: during the interactions with the employees one of the problems that
came across in the system was that there was a lack of linkage between the Key result
areas and business targets.

Bench mark rating and performance standard was not been

identified clearly : During the interactions held the major concern that employees had
with the system was that they were not very clear with the what are their performance
standards. The employees were not very confident as to against what standards their
performance is being measured at Coca-Cola
The company decided that there is a need to adopt the new system as it faced immense
pressure to first integrate the company as one, second was establish the necessary focus areas,
and third was to achieve the goals of the company and the last was to meet the customer
expectations successfully drawn from their needs and desires. The company saw this as an
opportunity to re-invent itself.
They have implemented this system at the executive, business unit, team and individuals
levels. Each level has its own standardised procedures, tools and practices to design
implement and review their scorecards and strategy maps. The strategy map at the executive

level captures the firms ambitions, corporate objectives, and government regulatory
objectives. This executive strategy map is then the reference point for the development of
further strategy maps and scorecards at lower levels. The company has five main
performance reviews which are used to manage the performance in the company they are
strategy meetings, quarterly meetings, regional meetings, team briefings and coaching
meetings.
New Performance Management System at Coke: Salient Points

Objective setting: objectives for evaluation are set in consultation between the employee
and the supervisor.

Communication of objective: the mutually agreed and set objectives and targets are
communicated to the employees.

Alignment between associates & mangers: there is communication and alignment

between associates and manger.

Mid-year feedback & discussion (no ratings): in the middle of the year feedback and
discussion are held. No ratings are awarded in these mid-year reviews.

Final performance appraisal at the end of year: a final appraisal is done at the end of
the year annually. This involves filling up the performance appraisal forms and having a
discussion with the employees. Here the final ratings are given to subordinates after
evaluating their performance on mutually set objectives.

Clear and Transparent system : From the before mentioned system of performance
management followed at coca- cola it is apparent and understood that the system is very

clear cut and transparent as employees are aware that how their performance is evaluated.
Provides for dialogues with the supervisor: the performance management system at
coca- cola India provides its employees and their supervisors to have a discussion on the

issues so that a mutual way out is looked up to.

Specific Targets: The system offers an opportunity to the employees to set specific

targets for themselves after a number of discussions.

Highlights achievements: The performance management system at Coca-Cola provides

an opportunity to the employees to show their achievements and progress.

Overall evaluation: The performance is evaluated according to a form that is divided

into three key resource areas. This provides for overall comprehensive evaluation.
Supporting documents: To arrive at authenticate results it is made sure that supporting
documents are attached to verify the achievements.

Mid-year feedback: To see that no discrepancies occur mid-year feedbacks and reviews

are timely taken.

Brings in objectivity: It has been observed from the system followed in the organisation
that procedure brings in more of objectivity then subjectivity.

Duplication of development plan of individuals: A number of

managers while being interviewed did mention that in Coca-Cola performance
management system there is lot of duplication of the developmental plans.
Companys experience in PMS shows a mix of positive as well as negative effects from
performance management systems.
Eight main positive effects were regarded by company as the most important contributions
from its PMS. The top one is the fact that performance management systems focus
employees attention on important issues to the company, by linking key objectives to
employees jobs and continuous reviews. Furthermore, as a result of its performance
management systems, companys customer satisfaction improved. In this kind of business,
customers seldom ring to say thank you for todays light, they usually contact the company
when they have problems with their products.
Nevertheless, after the implementation of new performance management system in company,
commendation letters increased and the company met its targets on time. The results of its
most recent survey show that customers have indeed perceived a better satisfaction level. One
of the less visible but powerful benefits at the company has been the change in employees
behaviour. PMS has improved the tolerance to failure, improved the transparency of
information, improved vertical and horizontal cooperation, and encouraged friendly
competition between teams. As a result, the culture has moved from a reactive and commandand-control culture to an open and proactive one. Currently, the company is focused on
continuously improving performance in company productivity and customer satisfaction.
However, coca cola has also identified a few negative impacts too. The most significant of
these is that some of company employees found PMS too time-consuming, especially at the

initial implementation stage because the benefits were then uncertain. They did not know the
process and therefore everything was new, difficult to remember and implied more work to be
done. At the strategic level, some of companys senior managers found that PMS can be
mechanistic thereby limiting the freedom for intuitive management. At the tactical level
too, the performance review process of PMS can be quite monotonous. This means that
managers have to continuously refresh the way in which performance is reviewed to keep it
interesting and attractive. Hence the leadership of local managers plays a key role on the
success of the performance management systems; moreover, they are crucial to moderating
the outcomes of PMS implementation too.
The job ahead in this vital area of performance management is clearly a difficult and
challenging one. The human resource department will need more technical competence
and better professional training to make all employees contribute to the success of the
organization

in

an

ethical

and

socially

responsible way. The

focus in the

coming years must be on people-sensitive management styles and practices. With it, not only
corporate welfare but also the well-being of the individual will be insured.