Safeway Supply Organization

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Safeway Supply Organization
Organizational Behavior Presentation November
29, 2001 - Fabiano, Tres, Toshi Zeph
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agenda

• Safeway Background
• Our Engagement
• Interview Results
• Issue Identification
• Solutions

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Safeway Company Background
4
History

• 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

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Retail Presence

• More than 1,650 stores in the US and Canada
• 327 Vons stores in southern California
• 114 Dominicks stores in Chicago
• 119 Randalls and Tom Thumb stores in Texas
• 21 Carrs stores in Alaska

Safeway retail locations
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In-house Safeway Branded Products

• 2,500 products as Safeway, Lucerne and Mrs.
  Wrights
• 900 premium products as SAFEWAY SELECT

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Vertical 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

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Supply Organization

• Safeway DOES NOT outsource the production of its
  in-house brands
• Safeways MA activity has fueled major growth in
  the Safeway manufacturing arm
• Manufacturing has been consolidated to gain
  economies of scale for production across the
  companys multiple retail chains

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Supply Org

• MANUFACTURING AND PROCESSING FACILITIES

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Our Engagement
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Beginning 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.

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Scope 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

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Safeway Organization
Safeway
Retail
Operations
Supply
Support
Compensation
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Supply Organization
Supply
Manufacturing
Finance
Operations Support
Human Resources
Smart Sourcing
Logistics
15
New 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

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New Position Process
New Job
Hiring Manager
Human Resources
Compensation
Who
What
Determines Salary range
Initiates new position
Assists
Where
Each division
Corporation
Each division
Committee Hay System
How
Creates JD
Formatting
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Hay 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.

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Interview Results
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Central 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 Compensations
  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

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Supply 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

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Supply 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

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Issue Identification
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Core 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.

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Flawed 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.

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Problems Created From Job 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

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Problems in Current Process

• Human Resources and Hiring Mangers have no
  understanding of how Hay points are assigned to
  new jobs.
• Hiring Managers misconceptions of the
  compensation committees 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.

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Solutions
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Potential Solutions

1. Improve existing process
2. Involve hiring manager in process of assigning
   hay points
3. Centralize control in compensation

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Solution 1 - Improve Existing Process
Hiring Manager
HR
Comp
Job Offer!

• 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.

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Solution 2 - Involve Hiring Manager in Hay Process
Hiring Manager
HR
Comp HR Hiring
Job Offer!

• Involve Hiring Managers and/or Human Resources to
  Compensation Committee.
• Compensation will be assisted in evaluating job.
• Managers will create more desirable job
  descriptions.

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Solution 3 - Centralize Control in Compensation
Central Job Review
Job Request
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.

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Safeway Haas Partnering for Success