Jordan 225 23 Uganda HRM Strategic Alignment and Visibility in Uganda John C. Munene and Florence Nansubuga Human resources management is in its infancy in Uganda despite the high demand cre ated by the rapidly changing business environment which requires an adaptable, innova tive and constantly learning labour force. To deal with these challenges, the HR function of NBL Uganda, a subsidiary of SABMiller, strategically aligned employees to cope with stiff competition. It embraced as its own line (functional HRM) strategy five corporate values, namely valuing people as the enduring advantage, making accountability clear and personal, working and winning as a team, understanding customers and consumers, and a shared rep utation, embraced by all. It tracked them through a cultural audit referred to as the Organ isational Effectiveness Survey in SABMiller/NBL. Using the People Balance Sheet to segment its labour force and track the bench strength, the department was able to identify a gap in its artisan level and locally designed, conducted and evaluated a remedial programme which generated a 25.75 percent return on investment. Using these strategies the department was able to mobilise and steer all activities to face in the same direction while making HRM vis ible by providing solutions to support the production manager to meet production targets. We explore how all this was made possible below. General Background Uganda has the world's youngest population with over 78 percent of its people below the age of 30. With about 8 million youth aged between 15-30, the country also has one of the high est youth unemployment rates in SubSaharan Africa and at an average annual growth rate of 3.03 percent, Uganda's population is projected to increase to 47.4 million in 2025 (UBOS, 2015). Coupled with the high level of fertility in the country (6.2 children per nuclear fam ily), the youthfulness of the population creates a very high youth dependency ratio (World Bank, 2011). On top of these, youth unemployment in Uganda stands at 32 percent as against 4.8 percent of Ugandan adults. More significantly, that of the graduates stands at 36 percent (UBOS, 2012). These demographics perhaps explain the decidedly low quality of life found in Uganda (World Bank, 2014). That is, very low on purchasing power and consumer price index (23 and 25 respectively), low on health care index (38) and rather moderate on the safety index (42) (World Bank, 2014). Uganda, nevertheless, has substantial natural resources, including fertile soils, regular rainfall, deposits of copper, gold, and other minerals, and recently discovered oil. Currently, agriculture is the most important sector of the economy, employing over 80 percent of the workforce. In this respect the country is also a leading producer of coffee and bananas and a major producer of tea, organic cotton, tobacco, flowers; it is making inroads in sericulture. Opportunities in the agribusiness sector include commercial farming and value addition. Other opportunities are found in the country's growing fish farming and processing sector with an expanding market in Europe for Uganda's fish recently estimated at approximately US$146 million annually. Uganda also possesses a rich tropical forest vegetation of over 4.9 million hectares with opportunities in afforestation and reforestation especially of medic inal trees and plants, and soft wood plantations for timber, pulp and poles. Tourism is perhaps Uganda's most untapped natural and renewable resource. The distinctive attraction of Uganda as a tourist destination arises from the variety of game stock and its unspoiled scenic beauty. Within a relatively limited space of just over 240,000 square kilometres, Uganda offers an interesting contrast ranging from the wide East Afri can plains and expansive savannah grasslands to the impenetrable mountain rainforests, home to gorillas, and snowpeaked mountains in the southwestern parts of the country. The country also boasts a wide range of bird species for viewing in addition to numerous sporting opportunities such as mountain climbing and water sports including whitewater rafting. In terms of cultural diversity, Uganda is home to up to 56 tribes with varying dialects and distinctive languages as well as cultures, providing a significant challenge in diversity management. Laws to tackle this issue have been made although implementation remains a challenge. There are also affirmative action programmes especially relating to gender diver sity management. In terms of global cultural values, Uganda cultures would be categorised as high on embeddedness, low on egalitarianism and high on environmental exploitation (Munene, Schwartz, and Smith, 2000). HRM in Uganda: A Background Human Resources Management (HRM) in Uganda has for decades centred on two func tions, namely administration and welfare. The situation however is slowly changing with the entry into the economy of competitive industry such as mobile telecommunication and a revamping of the other fast moving goods companies, such as Coca Cola and Pepsi Cola, that had deteriorated during a period of political anarchy and economic mismanagement (1971-1986). In Uganda economic mismanagement was kickstarted by the expulsion of Asians who had dominated the artisan labour market, worsened by the 1973 fuel crisis and com pounded by civil wars (1971-1979 and 1981-1986). This environment led to colossal loss of human capital quality accumulation, directly through expulsion of the Asians, a brain drain through fear of personal safety, and indirectly through the deterioration of educa tional institutions and general infrastructure, rated as among the best in Africa at the time (Wiegratz, 2009). Recovery in labour productivity has been slow and elusive even after economic stabilisation and structural adjustment interventions by IMF and the World Bank (1986-1997). For instance Uganda has the lowest labour productivity in SubSaharan Uganda 227 228 JohnC.MuneneandFlorenceNansubuga Africa, behind Kenya, Zambia and Tanzania in the sub region (World Bank, 2004 quoted from Wiegratz, 2009). The World Bank report referred to above put forward reasons for the low productiv ity. It identified the general health of the population, formal and informal training through learning on the job. With regards to health Uganda has a relatively high level of HIV/ AIDS infection in global terms, ranging from 6 percent to 13 percent (depending on the age group) of the productive age range (15-45yearolds). This has affected labour productivity signifi cantly through sick leave, and taking off time to attend burial services. Until two decades ago training in HRM was identified with Social Work and Social Administration, Political Science and Public Administration undergraduate degrees found at Makerere University and the postgraduate diploma in Human Resources Management offered at Uganda Management Institute, designed for the Uganda Public Service adminis trators. At Makerere University a single course unit focusing on personnel matters such as staffing was the only source available for human resources practitioners. Uganda Manage ment Institute was slow at revising its syllabus which until recently reflected the British per sonnel management training of the 1950s. All this changed in 1997 with the introduction of a Master's degree in Industrial and Organisational Psychology, followed five years later by a Bachelor's degree in Industrial Psychology at Makerere University and a Bachelor of Human Resources in Makerere University Business School seven years later. This was in addition to the founding of the Uganda Human Resources Managers' Association in 2005 by the Federa tion of Uganda Employers. Despite these advances, this short history serves to confirm that human resources man agement is in its infancy in Uganda even though there is high demand created by the rap idly changing business environment, which requires adaptable, innovative and a constantly learning labour force. It is against this background that the Federation of Uganda Employers instituted the Employer of the Year Award and created the Uganda Human Resources Man agers' Association to accelerate the modernisation of human resources management in the country. The Federation of Uganda's Employer of the Year Award The Employer of the Year Survey and Award (EYA) is a major activity carried out biannu ally by the Federation of Uganda Employers (FUE) since the year 2001. FUE is a national organisation that was instituted to represent the interests of Ugandan employers in mat ters dealing with employment and people management. Since its inception the EYA has recognised winners and runnersup. It also acknowledges best practice in a number of key HR functions. Most importantly, EYA provides a structured forum for employers to reflect on their employment and people management practices and how these may impact on their business goals. Early survey awards were based on overall performance on the HR function and strategic salience. More recent winners' awards are based on efforts to transform HR into an exter nally oriented function by aligning it with the expectations of the stakeholders including customers, shareholders, donors, investors, and employees through proactively partnering with line departments that have a direct impact on economic and public value creation. Following recent practice, the overall winners in 2009 were based on the theme of the year namely 'HR Strategic Alignment and Visibility: Links that Unlock Enterprise Performance'. For the purpose of the survey the operational description of the subject matter was given Uganda 229 as reflecting the essence of the business through people and/or mobilising and steering all activities to face in the same direction. HR Visibility and Strategic Alignment General Introduction Human resources as human beings operate in a paradoxical environment. They need free dom to do 'their own thing' but they also need guidance on how to do it! Human resources management is the profession and practice of creating a proper balance between assisting employees to do their work and giving them the social, psychological and professional free dom to do it. Alignment, the process of ensuring that everyone pulls in one agreed direction, is a generic strategy that can simultaneously guide employees and give them the freedom they need to perform their work related responsibilities. Alignment is routinely implied in recruit ment and selection where an individual is selected according to a given job description. It is also assumed that job descriptions are designed to contribute to an agreed strategy and/or mission of an organisation. This is a routine and quite often a passive form of alignment. It is alignment on 'automatic pilot' where once instruments have been set up and activated, then the pilot can take a nap or take a walk around the passenger cabin! The Human Resources Manual found in many organisations and the standard operating procedures (SOPs) found in governmentoriented organisations and agencies are archetypical examples of alignment on 'automatic pilot'. For alignment to be effective in Uganda, it must be made active and kept dynamic. The 'pilot' must be on manual instruments. EYA 2009 focused on the active dynamic alignment. Relatively recent work indicates that alignment may be most effective in four areas (Bour dreau & Ramstad, 2007; Ulrich, Brockband, Johnson, Sandholtz & Younger, 2008). The first area and the one from which alignment centrally derives its description (pulling in one direction), is strategy. It may be understood as the general business direction a corporation has set out to pursue such as brewing and marketing alcoholic and nonalcoholic beverages. The others are: articulated leadership proposition (where leaders need to focus their quality time), employee value proposition (that which an organisation promises its workers) and lastly the company's perceived strategic resource such as a brand or people (Ulrich et al., 2008). In this second edition of the Casebook, we present the case of Nile Breweries Uganda, an organisation that took part in EYA 2009, and examine the various ways it tried to achieve HR alignment and visibility. Alignment and Visibility at Nile Breweries Limited The following case tries to show that at the time of taking part in the EYA competition, Nile Breweries Uganda Limited (NBL) centrally relied on strategy and strategic resource as align ment and visibility instruments while experimenting with the employee value proposition. NBL Uganda is a subsidiary of SABMiller, a multinational brewing company operating on six continents and managed under regions, namely Africa, Asia Pacific, Europe, Latin America, and North America. With 28 percent net producer revenue, Africa is the largest among the regions and the second (29 percent) among the regions after Latin America (34 percent) in terms of the EBITA1 index. Strategy ensures that an organisation will meet its objectives by revealing the business or programme direction to be shared and adopted by all internal and external stakeholders including shareholders, donors, customers, employees, 230 JohnC.MuneneandFlorenceNansubuga and the community. Using a strategy lens the HRM function gets its most important clue on how to adopt or adapt organisational processes and structures and how to identify, deploy, motivate and retain the people resources (Ulrich et al., 2008). Nile Breweries Limited (NBL) was one of the corporations from the survey that clearly demonstrated alignment through one or more of these lenses. Alignment Through Strategy Lenses in NBL In EYA 2009, data from competitive firms suggested that keeping focus on the strategy could be tracked through soft measures reflecting organisational or corporate values. NBL has five corporate values that the HR Department embraced as its own line (functional HRM) strat egy. They include valuing people as the enduring advantage, making accountability clear and personal, working and winning as a team, understanding customers and consumers, and an undisputed reputation. These values are annually tracked through a cultural audit referred to as the Organisational Effectiveness Survey in SABMiller/NBL. The values are tracked through perceptions on management practices, performance management processes, selfmanagement, leadership, performance management practices, employment conditions, commitment, work environment, training and development, and talent management (see Table 23.1). Data collected in 2007 and 2009 indicated that NBL was leading the African SABMiller Group in all measures of these values, providing reasonable evidence that NBL is focusing on SABMiller Group strategy more than any other member of the group including the Hub (South Africa). The score also indirectly gave credence to the potential correlation between performance and the strategy lens since the Africa region, of which NBL was the leader at the time of the survey, was also leading in one key performance indicator in the Group and was second in another as shown in Table 3.1. In Figure 23.1, we examine the efforts Table 23.1 Tracking strategy through cultural survey Sample Size Total Organisational Effectiveness Score SelfManagement Practices Performance Management Process Conditions of Employment Commitment Work Environment Leadership Training and Development TalentManagement 54 45 69 69 79 76 73 71 71 74 70 71 70 71 65 68 61 59 53 55 231 248 511 68 60 64 79 73 79 67 60 58 63 52 55 66 56 62 69 58 58 66 58 60 65 53 61 61 51 56 363 219 223 61 73 77 76 84 81 60 76 75 57 66 70 58 69 73 56 72 75 56 69 73 61 74 77 51 64 67 2 Jan Smuts (Hub) - 2007 2 Jan Smuts (Hub) - 2009 Ghana - 2007 Ghana - 2009 Mozambique - 2007 Mozambique - 2009 Uganda - 2007 Uganda - 2009 Uganda 231 that NBL made in aligning the HRM function through people as their most important strategic resource. Alignment Through the Strategic Resources Lenses Another area is in aligning using an organisation's strategic resource. This is the single resource that distinguishes one organisation from its competitors or collaborators. It may be a brand, a niche, a mandate or people. A clear articulation of this resource provides a strong basis for determining and maintaining a human resources function including structures and processes. Through two examples we demonstrate below how NBL goes about the align ment process using this lens or instrument. The first is the People Balance Sheet by which NBL segments its labour force in terms of potential and actual productivity while the second shows the efforts NBL goes through to sharpen talent through controlled and contextualised learning. NBL uses the People Balance Sheet (PBS) to keep tabs on the people who matter in the identified pivotal positions. NBL's People Balance Sheet divides the labour force into ten cells based on the intersection between performance and potential (see also Berger, 2004). The segment referred to as Vexation indicates an individual who has high potential but fails to perform according to expectation. Another category is titled Major Leaguer, composed of those who are above average on potential as well as performance. Another category is that of High Flier with outstanding potential and outstanding performance. Other categories include 'Passive, Performer, Achiever, Negatively Plateaued, Positively Plateaued, and Solid Achiever' (See Figure 23.1 for descriptions of each segment.) NBL uses the People Balance Sheet to review its workforce every month to track potential gaps and action points. For instance when an employee has been in the bottom left hand cell and has been classified as negatively 'plateaued', he or she is given about two chances for poor ratings after which the process of gently edging him/ her out begins. It also aims to keep approximately 70 percent of the labour force in the Performer and Achiever cells. NBL believes that there are three cardinal reasons why organisations must conduct talent audits, namely to mitigate transition risks, enable staff to grow and develop, and curb succession risks. The People Balance Sheet is one way of achieving these objectives. The second example is a training initiative that was prompted by stiff competition from the industry. An HRM response to competition was to upgrade the skills of workers on the factory floor, specifically the packing and packaging line. The perceived strategic mis sion or intent of the initiative was to eliminate wastage at the packaging line and increase speed, quality and accuracy. Through a needs assessment, operational competence gaps were identified in machining, fitting, electricity, and pumping. Personal and team competence gaps were identified in team work, ability to work independently from the supervisor, low problem solving skills and poor attitude to work. The available training within the Group, accessible outside Uganda would cost NBL over $40,000, well above the allocated training budget for the Artisan level. The HRM Director decided to bring the training to Uganda by partnering with Nakawa Vocational Institute, a government institution that trains artisan level technicians in various skills such as electronics, electrical machining and fitting, motor vehicles, woodworking, sheet metal and plumbing, among others. The Institute was assessed for capacity to conduct the required training with the help of the Parent Company Artisan Competence Training Guide. Any necessary upgrades to the Institute's own curricula were Figure 23.1 The People Balance Sheet made with the collaboration of the Institute and the training of the artisans was undertaken at a cost of $16,010, which was within the budget. A careful design of the training as a strategic initiative enabled NBL to measure the prog ress of the delegates/trainees at the beginning, in the middle and at the end of the training. It also enabled the company, led by the HRM Director, his team and line managers to calcu late the changes and gains in package line efficiency (Key Performance Indicator [KPI] for the initiative) and the Return on Investment. The results were as interesting as the carefully laid out initiative. Thus as a result of the training the artisans were able to get the packag ing line to produce an additional 604.75 cases per week translating into $1,513.34. In addi tion, over the 40week period designated to measure the effect of the training, there was an increase of 138 cases per week representing a factory efficiency gain in US dollars of $503.13 and an actual gain of $20,125 over the 40week period. This represented a Return on Invest ment of ($20,125 - $16,010) $4115 or 25.75 percent. The above initiative had some unanticipated multiplier effects. Through the hard work described above the HRM Director won a Practice Award from the America Society of Training and Development (ASTD), the second on the African Continent. The successful initiative attracted members of the Group from China, Mozambique and Tanzania who came on a study tour. This increased the prominence of HRM not only in NBL Uganda but throughout the SABMiller Group. Moreover, SABMiller rolled the initiative out in two other countries with their franchise. Lastly the HRM initiative demonstrated a successful Public Private Partnership since the Institution incorporated the upgraded and retooled institutional capacity in its regular curricula and NBL continues to send its artisans for training whenever necessary. Lastly, NBL was the only company in the EYA 2009 that was close to openly declar ing its intentions in relation to its workforce. Such an intention is now captured through the Employee Value Proposition. It publicly declares what the organisation wants from its employees and what they will offer in return for what they get. Our Total Employment Offering: NBL offers a competitive salary and benefit package in the Uganda labour market. We aim to make our financial offering as attractive and equitable as possible which enables us to attract and retain the highest quality people and to motivate and reward high performance. We understand that money isn't every thing. Our total employment offering combines the opportunity for exciting development within SABMiller with a chance to work with great brands, strong leadership and bright motivated colleagues. In NBL there was evidence that the employment relationship was attractive in a differ ent way from many of the organisations that took part in EYA 2009. There was evidence that its policies ensured that employees who voluntarily leave tend to return. For instance, by the time of the EYA Survey, the Manufacturing Development Manager, the Quality Assurance Manager, the Services Engineer, the Utilities Manager, the Credit Controller and the Local Raw Materials Development Manager had left and returned within the last four years! Uganda 233 234 JohnC.MuneneandFlorenceNansubuga Conclusion The case provides anecdotal as well as hard evidence that the HRM function can be aligned successfully to play a strategic role in the realisation of business objectives and that with carefully crafted practices this role can be measured satisfactorily. According to the HRM Director of NBL, Kenneth Wanyoto, this is a result of introducing innovative HRM initia tives and actively steering the workforce to remain focused on the business strategy. NBL through its HRM Director and the solid support from the Managing Director was also not shy to apply apparently 'academic' concepts successfully and turn them into transformational alignment initiatives. We witnessed the effort to calculate the return on investment as a good example, which also won NBL an award and significant visibility for its HRM as well as for the company. HRM strategic alignment and visibility experiences can be perceived in different ways. Essentially organisations reflect on their core business by evaluating the competences and motivation levels of employees as well as the organisational structure and organisational core processes and how they address the achievement of the business goals. Practically, HRM strategic alignment means mobilising and steering all activities to face in the same direction while HRM visibility refers to HR's ability to provide solutions that will empower managers to redeploy and develop talents that support the evolving business needs and achieve employee alignment. Through the annual EYA surveys, it has been noted that organisational operations are consistently changing as a result of competition/market share challenges and the general national economic regulations. These factors have required employers to adopt new business models such as mergers and acquisitions, divestitures, expansion, and contraction. Whatever the model is, the EYA has demonstrated that HRM must play the principal role to realign the workforce with the overall goals of the changing business strategy or else the required adaptation is delayed, putting the competitiveness of organisations at significant risk. The case above demonstrates how NBL was strategically aligning its employees to deal with the demands of the changing business. It kept the focus on its business strategy by aligning its corporate values to employee performance measures as well as artisan reskilling in order to increase its returns on investment and remain a centre of excellence