haas school of business ©2001 oski ob, proprietary and confidential page 1 organizational behavior...

Haas School of Business

©2001 Oski OB, Proprietary and Confidential

Organizational Behavior Presentation

November 29, 2001 - Fabiano, Tres, Toshi & Zeph

Safeway Supply Safeway Supply OrganizationOrganization

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agenda Safeway Background

Our Engagement Interview Results Issue Identification Solutions




Safeway Company Safeway Company BackgroundBackground




HistoryHistory

Founded 1915 by M.B. Skaggs in Idaho Went public in 1928 Invented pricing produce by the pound Started product-dating practice Invented the parking lot




Safeway retail locations

Retail PresenceRetail Presence

More than 1,650 stores in the US and Canada

327 Vons stores in southern California

114 Dominick’s stores in Chicago

119 Randall’s and Tom Thumb stores in Texas

21 Carrs stores in Alaska




In-house Safeway In-house Safeway Branded ProductsBranded Products

2,500 products as Safeway, Lucerne and Mrs. Wrights

900 “premium products” as SAFEWAY SELECT




Vertical IntegrationVertical Integration

Safeway has moved up the value chain in order to capture more profit from its branded goods

Does it make sense for a super market to manufacture food products?

Economization – sacrifice of technical efficiency for vertical gains




Supply OrganizationSupply Organization

Safeway DOES NOT outsource the production of its in-house brands

Safeway’s M&A activity has fueled major growth in the Safeway manufacturing arm

Manufacturing has been consolidated to gain economies of scale for production across the company’s multiple retail chains




U.S. CANADA

Milk plants 7 3

Bread baking plants 6 2

Ice cream plants 4 2

Cheese & meat packaging plants1 2

Soft drink bottling plants 4 -

Fruit & vegetable processing plants2 3

Other food processing plants3 1

Pet food plant 1 -

Total 28 13

Supply OrgSupply Org

MANUFACTURING AND PROCESSING FACILITIES




Our EngagementOur Engagement




Beginning of RelationshipBeginning of Relationship

Catherine Dussik, Human Resources Director for Supply Operations presented “jobs descriptions” as the issue to be addressed in our project.

Job Descriptions are the means by which Safeway currently hires and compensates its employees.




Scope of Our WorkScope of Our Work

Initially, Safeway asked us to rewrite all of the job descriptions in the supply organization

This represented over two weeks of fulltime work for one Safeway employee

We retargeted expectations and confined our scope to problem diagnosis and analysis of job description processes




Safeway OrganizationSafeway Organization

Safeway

Retail Operations Supply

Compensation

Support




Supply OrganizationSupply Organization

Supply

Manufacturing FinanceOperations

Support

Human

ResourcesSmart Sourcing Logistics




New Hire ProcessNew Hire Process

Existing position – hired quickly based on established salary range

New position (does not currently exist) - complex process that is the focus of our project

Supply Group initiates lots of new positions because they are growing fast and they differ substantially from the retail side of Safeway




Hiring Manager

Human Resources

CompensationNewJob

Creates JD

AssistsDeterminesSalary range

Each division CorporationEach division

Initiates new position

“Formatting” CommitteeHay System

Who

What

Where

How

New Position ProcessNew Position Process




Hay SystemHay System

The hiring manager is responsible for completing a job description for a new position with the Compensation template, and an org. chart.

The Compensation Department then applies the Hay System for grading jobs. They use multiple criteria for point allocation such as: skills, exposure, impact, creativity, etc.

Hay evaluation does not take into consideration market data, though Safeway periodically compares salaries with other organizations.




Interview ResultsInterview Results




Central CompensationCentral Compensation

Carolyn Finnegan and Kathy Rhone, Compensation Analysts

The process is working just fine There may be a few issues within the individual

groups, but these are outside of Compensation’s responsibility

The “New Form” should clear up any past confusion Language is critical in assigning points, yet

Compensation does not want to impact its use Hay system does not require much detail




Supply HRSupply HR

Catherine Dussik, Director of Supply HR, and Carolyn Lee, Supply HR Analyst

Job Descriptions are currently misaligned in Supply Even if all of the descriptions were cleaned up, the

process issues may cause future breakdown No idea how the Hay System works

Hay System requires too much detail




Supply Hiring ManagerSupply Hiring Manager

Patti Ryland, Smart Sourcing Group Manager Has never used the new job process Bypasses HR and Compensation by modifying

existing job descriptions to fit unrelated positions Needs to turnaround new jobs quickly Has no idea how the process is supposed to work




Issue IdentificationIssue Identification




Core Issue at SafewayCore Issue at Safeway

Job Descriptions are only a symptom of a more fundamental issue at Safeway.

Core issue is the process of creating new jobs.

Process is too slow and is often bypassed by forcing new jobs into existing jobs.

Hiring Managers create overly detailed job descriptions in an attempt to receive an accurate Hay score.




Flawed Job DescriptionsFlawed Job Descriptions

Output from existing process are flawed job descriptions.

Too specific and task oriented.

Current job descriptions are 8 pages long.

Duplicate job descriptions across departments and within departments.

Outdated and no longer portray the actual job functions and responsibilities.




Problems Created From Problems Created From Job DescriptionsJob Descriptions

Employees have no documented career path.

Performance appraisals do not reference job descriptions.

Managers have no justification for levels of job titles. Example – Buyer I, Buyer II, Buyer III, Buyer IV

Job titles are not uniform across departments

Job Postings are created from scratch by Human Resources




Problems in Current Problems in Current ProcessProcess

Human Resources and Hiring Mangers have no understanding of how Hay points are assigned to new jobs.

Hiring Managers misconceptions of the compensation committee’s process creates overly detailed job descriptions.

Lack of communication between Human Resources and Hiring Mangers with Compensation.

Lack of control to prohibit Mangers from bypassing process.

Process is too time consuming.




SolutionsSolutions




Potential SolutionsPotential Solutions

1. Improve existing process

2. Involve hiring manager in process of assigning hay points

3. Centralize control in compensation




Solution 1 - Improve Solution 1 - Improve Existing ProcessExisting Process

Reduce time to create new job position.

Force managers to follow and not to bypass process.

Educate human resources in how compensation determines hay points.

Hiring

Manager HR Comp Job Offer!




Involve Hiring Managers and/or Human Resources to Compensation Committee.

Compensation will be assisted in evaluating job.

Manager’s will create more desirable job descriptions.

Solution 2 - Involve Hiring Solution 2 - Involve Hiring Manager in Hay ProcessManager in Hay Process

Hiring

Manager HR

Comp

+ HR

+Hiring

Job Offer!




Centralize process under one department Compensation becomes involved in every new hire. Forces process to be under control and stops

redundancy. Facilitates better communication between Hiring

Managers, Human Resources and Compensation.

Solution 3 - Centralize Solution 3 - Centralize Control in CompensationControl in Compensation

Job Request Job OfferCentral Job Review




Safeway & HaasSafeway & HaasPartnering for SuccessPartnering for Success


haas school of business ©2001 oski ob, proprietary and confidential page 1 organizational behavior...

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canada s

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texas s

chicago s

practice s

wrights s

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