Aller Petfood Denmark | Russia

Challenges

Aller Petfood Group acquired their Russian division in 2004, which at the time solely consisted of a dry pet food production plant with a traditional Russian organizational structure and management. At that point, the flat hierarchy and humanistic organizational traditions of Denmark were very far away from Russian reality. Therefore, the company embarked on a journey towards a Nordic corporate culture.

Some of the major challenges inherited from the Russian traditions included:

• a historical habit of ‘receiving’ rather than ‘earning’ wages due to the USSR employment structure
• a lack of understanding of the link between your performance as an employee and the performance of the company
• employees not willing to take responsibility for low performance or productivity levels
• a general low level of motivation coupled with lack of interest in personal development in the job in order to improve performance
• a general distrust of senior and middle management and an ‘us-against-the- employer’ view with focus on fairness and labour rights – the obvious solution seems to be to fight rather than to enter into a dialogue
• employees are used to and find comfort in the traditional highly hierarchical organizational structure
• a clear focus on fending for yourself rather than working as a team
• a tradition of a laissez faire attitude to alcohol in the workplace

These characteristics were most common among blue-collar workers.

Journey toward a new corporate culture

The main goals of the journey toward a Nordic corporate culture were:

• to create an atmosphere of open-mindedness and team work
• to ensure staff at all levels are involved in continuous professional improvement
• to radically reduce the number of staff • to ensure a radical reduction in stafffluctuation by 1.5 times
• to increase labour productivity by 1.5 times

To achieve these goals, a comprehensive three-year programme was developed. Within the programme, the company developed a number of measures aimed at changing stereotypical thinking, increasing motivation among production staff as well as involve them in continuous professional improvement.

Forming a solid team

Selection and screening of new employees

First of all, the selection and screening processes of new employees were adjusted. The requirements for prospective employees were defined in order to assure that they are adaptable and trainable to fit in with the workplace. As a result, a new system for evaluating prospective employees was designed and implemented.

Implementation of induction training

In order to reduce staff rotation and the time required for a new employee to adapt to new work conditions and the house rules of Aller Petfood, induction training was implemented. This in-house training programme involves the leading specialists of the quality department, technology department, accounting and other departments introducing new employees to the company.

New recruits will have an idea how the company as a whole operates, and of the relationships and involvement of different people and units in consolidated production processes.

Induction training gives employees the necessary information on all areas of activities: knowledge of the company, production technology, labour safety, organization of work to comply with workers’ labour rights (including payroll schemes), rules of conduct and interaction in a team, and ways ofexchanging information and suggestions for improving the operation of the enterprise. This gives the employee as well as the company the active choice of going ahead with the employment.

Mentor scheme

If both parties want to go ahead with employment, the new employee is transferred to the mentor scheme. The mentor scheme has been implemented to speed up adaptation of newly hired employees. Employees who are capable of sharing their skills and knowledge have been selected from experienced blue-collar workers. In the induction and training period, new employees are paired with one of these mentors who supervise their activities, train them and evaluate their performance. In this way teaching the knowledge of the trade becomes part of the team work process. Ongoing assessments of all team members are carried out to ensure that their skills and potential promotions are constantly upgraded. A lot of attention is paid to retaining qualified and experienced employees in the company. Therefore, an annual bonus is given for each year an employee has worked with the company, in addition to which Aller Petfood gives a special award to the best employee of the year.

Motivating the team to reach higher efficiency

Defining the basic principles of motivation

Understanding that staff motivation is
an extremely important aspect for a continuous improvement of processes and efficiency, the basic elements of worker mentality were analysed and the basic principles of motivation were defined.

As a result, focus has been placed on the following principles:

• transparency and objectivity
• encouragement to achieve results
• use of intangible as well as material methods of motivation
• increasing independence and responsibility
• increasing involvement in decision- making and providing new opportunities
• underlining the connection between the result of everyone’s work and general achievements

Formulating incentives for workers

Based on these principles, a system of tangible and intangible incentives for workers has been designed. This started with the formation of a unified team of the company from all levels to overcome the distrust of production staff of management.

To this end, joint training and corporate events involving various categories of staff are being organised. By participating in these joint activities, people have learned to overcome psychological barriers and have begun trusting each other more. Annual meetings between the work force and the Managing Director and heads of departments are organised to discuss the results of the company’s operations, goals and objectives, difficulties and achievements in great detail. Managers get feedback from employees, as well as suggestions for work improvements.

One of the most efficient ways of informing staff, receiving feedback, promoting intangible incentives and providing an opportunity to openly express opinions is a staff magazine, which has been published for over seven years now. 

Employees’ independence and responsibility is stimulated by enabling them to participate directly by making suggestions of how to improve work, performance in a specific work scenario, to participate in work groups working on various projects.

Implementing a KPI system

Alongside the introduction the incentive system, a KPI system was implemented at the enterprise, which is transparent and understandable to all staff. Implementation of the production plan and meeting the quality requirements have become the main criteria. A

team approach, which is the result of everyone’s work combined, has been incorporated in the system.

Results of the transformation

This journey of corporate change has required the entire team to make significant changes in their basic approaches and work principles. As a result, all employees now have a clear understanding of situations in which they control the circumstances and consequently now work more efficiently. The overall result is an eradication of typical characteristic of Russian people which has made them more ‘trusting to change’. Now, employees offer their own suggestions as to how to optimise their work and are interested in opportunities to further develop Aller Petfood. It has been a long journey of five years and has taken much effort to reach this point.

As a very tangible result of the change, labour productivity over the last three years has increased by 70%.

This radical transformation of corporate culture was achieved alongside an explosive production increase and the challenges of having to train the majority of new employees to work in a Western- oriented pet food company – pet food is still a young trade in Russia hence no skilled workers could be found in the labour market.

Elena Krisnikova, HR Manager of Aller Petfood Russia says: “Aller Petfood is a family company, and this has formed the base for setting up a modern, efficient, and creative team.” She continues:

“We are very proud that national characteristics of the people and the requirements of modern European management have been successfully combined.”