Haas School of Business
©2001 Oski OB, Proprietary and Confidential
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Organizational Behavior Presentation
November 29, 2001 - Fabiano, Tres, Toshi & Zeph
Safeway Supply Safeway Supply OrganizationOrganization
Haas School of Business
©2001 Oski OB, Proprietary and Confidential
Page 2
agenda Safeway Background
Our Engagement Interview Results Issue Identification Solutions
Haas School of Business
©2001 Oski OB, Proprietary and Confidential
Page 3
Safeway Company Safeway Company BackgroundBackground
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©2001 Oski OB, Proprietary and Confidential
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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
Haas School of Business
©2001 Oski OB, Proprietary and Confidential
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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
Haas School of Business
©2001 Oski OB, Proprietary and Confidential
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In-house Safeway In-house Safeway Branded ProductsBranded Products
2,500 products as Safeway, Lucerne and Mrs. Wrights
900 “premium products” as SAFEWAY SELECT
Haas School of Business
©2001 Oski OB, Proprietary and Confidential
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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
Haas School of Business
©2001 Oski OB, Proprietary and Confidential
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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
Haas School of Business
©2001 Oski OB, Proprietary and Confidential
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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
Haas School of Business
©2001 Oski OB, Proprietary and Confidential
Page 10
Our EngagementOur Engagement
Haas School of Business
©2001 Oski OB, Proprietary and Confidential
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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.
Haas School of Business
©2001 Oski OB, Proprietary and Confidential
Page 12
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
Haas School of Business
©2001 Oski OB, Proprietary and Confidential
Page 13
Safeway OrganizationSafeway Organization
Safeway
Retail Operations Supply
Compensation
Support
Haas School of Business
©2001 Oski OB, Proprietary and Confidential
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Supply OrganizationSupply Organization
Supply
Manufacturing FinanceOperations
Support
Human
ResourcesSmart Sourcing Logistics
Haas School of Business
©2001 Oski OB, Proprietary and Confidential
Page 15
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
Haas School of Business
©2001 Oski OB, Proprietary and Confidential
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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
Haas School of Business
©2001 Oski OB, Proprietary and Confidential
Page 17
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.
Haas School of Business
©2001 Oski OB, Proprietary and Confidential
Page 18
Interview ResultsInterview Results
Haas School of Business
©2001 Oski OB, Proprietary and Confidential
Page 19
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
Haas School of Business
©2001 Oski OB, Proprietary and Confidential
Page 20
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
Haas School of Business
©2001 Oski OB, Proprietary and Confidential
Page 21
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
Haas School of Business
©2001 Oski OB, Proprietary and Confidential
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Issue IdentificationIssue Identification
Haas School of Business
©2001 Oski OB, Proprietary and Confidential
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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.
Haas School of Business
©2001 Oski OB, Proprietary and Confidential
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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.
Haas School of Business
©2001 Oski OB, Proprietary and Confidential
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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
Haas School of Business
©2001 Oski OB, Proprietary and Confidential
Page 26
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.
Haas School of Business
©2001 Oski OB, Proprietary and Confidential
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SolutionsSolutions
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©2001 Oski OB, Proprietary and Confidential
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Potential SolutionsPotential Solutions
1. Improve existing process
2. Involve hiring manager in process of assigning hay points
3. Centralize control in compensation
Haas School of Business
©2001 Oski OB, Proprietary and Confidential
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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!
Haas School of Business
©2001 Oski OB, Proprietary and Confidential
Page 30
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!
Haas School of Business
©2001 Oski OB, Proprietary and Confidential
Page 31
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
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©2001 Oski OB, Proprietary and Confidential
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Safeway & HaasSafeway & HaasPartnering for SuccessPartnering for Success