hrm-case-examples-2-.doc

HUMAN RESOURCE MANAGEMENT CASE EXAMPLES

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Strategic human resource management

Strategic human resource management at Lucent 3–4

Human resource strategy at AEHN 4–5

HR strategic review at Guide Dogs for the Blind 5–6

Buckingham County Council: key success measures in the people strategy 6–7

Developing HR: change management at the Children’s Trust 7–8

A value-based change programme at Birmingham City Council 8–9

Strategic HR at Gore-Tex 9

Organization of the HR function

HR organization at the National Australia Bank Group 10

The HR shared services model at PricewaterhouseCoopers (PwC) 11

Structure of HR at Lloyds TSB 11–13

Reorganizing HR in the Greater Manchester Fire Service 13–14

Organizational effectiveness

Enhancing engagement in the Mace Group 15–16

Land Registry: modernizing in the public sector 16–17

Resourcing

Recruitment and retention strategy at Buckingham County Council 18–19

Recruitment and retention at Paul UK 19

Talent management and leadership development at Standard Chartered

Bank

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Recruitment assessment processes at Embarq 20–21

Absence management at Westminster City Council 21–22

Learning and development

Developing a learning strategy for Remploy 23

Training overhaul for Scottish police 23

Integrated e-learning at Cable & Wireless 24

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HRM case examples

Training and learning at the Comet Customer Support Centre 24

Career coaching at Orange 24–25

Coaching at Marks & Spencer 25

Implementing a basic skills programme at TNT 26

Self-directed learning in Vestas Blades UK Ltd 26–27

Measuring the contribution of learning to business performance at Lyreco

UK

27

Leadership development at Diageo 28

BT Apprenticeship Scheme 28

Performance management

Performance management at CEMEX UK 29–30

Performance management at DHL 30–35

Performance management at Hitachi Europe 35–38

Performance management at the Royal College of Nursing 38–41

Reward management

Reward strategy at BT 42–43

Total reward strategy at GlaxoSmithKline (GSK) 43

Integrated approach to reward at AEGON UK 44

DSG International: aligning reward with the business plan 44

Kent County Council: successful reward 45

KPMG: reward strategy 45

McDonald’s: demonstrating reward effectiveness 45

Standard Chartered Bank: using a human capital approach to inform reward

plans

45

The NSPCC: approaches to achieving reward effectiveness 46

Changing the pay structure at Marks & Spencer 46

Employee relations

Employee involvement at Harrod 47

Involving unions in outsourcing decisions at Co-operative Financial Services 47

Mediation at Arts Council of England 47–48

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HRM case examples

STRATEGIC HUMAN RESOURCE MANAGEMENT

Strategic human resource management at Lucent

Lucent Technologies was spun-off from AT&T in 1996. It is one of the world’s leading

designers, developers and manufacturers of communications systems, software and

products. Lucent conducts business in 94 countries and has more than 130,000

employees. The company is dedicated to breaking with the legacy of the way AT&T

managed human resources, and this required a major culture change led by HR. The

goal was to shift from the old ‘entitlement’ culture to a new culture that focuses on

individual accountability and results.

The new HR function was intended to be fast, focused on business needs and

flexible. Its personnel achieve these goals by emphasizing both operational excellence

and value creation, the latter reflecting a move away from an activity focus to a focus on

results. The structure is now organized around a client service model that focuses on the

leaders in the major business units. A key feature of this strategy is the movement of as

much of HR as possible to these business units. The priorities were:

HR operational excellence;

acquisition, development and retention of talent that creates value for

shareholders;

compensation and performance management that encourages employees to

build a successful future as well as share in that success;

building an operating style and culture that supports Lucent’s mission and

strategy.

The linchpin for value creation throughout Lucent, however, is the role of the HR

business partner, in which HR leaders work directly with the senior business leaders to

implement strategy. A new competency framework was produced to support the

development of the business partner role in HR. The competencies are:

understanding the Lucent business, the client’s business, and HR business;

customer focus;

defining, managing and implementing HR solutions to business problems by

identifying, securing and leveraging resources;

managing in a changing, competitive environment;

personal impact.

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Human resource strategy at AEHN

Albert Einstein Healthcare Network (AEHN) is a private, not-for-profit organization

located in Philadelphia, Pennsylvania. A large-scale business development programme

at AEHN’s was based on a three-pronged approach to crafting emergent business

strategies that more than doubled revenues, while the number of employees decreased

slightly. The prongs were:

Initiate – Continuous, timely addition of new services through both external

means (eg mergers, acquisitions and joint ventures) and internal development.

Adapt – Ongoing anticipation of opportunities and threats, and timely actions to

capitalize on the former and mitigate the effects of the latter.

Deliver – Offer consistently high-quality services while breaking even financially,

partly by initiating and adapting and partly by staying focused on AEHN’s raison

d’etre.

Early on, AEHN’s CEO and Vice President of Human Resources both realized that the

organization’s culture, characterized at the time as paternalistic, stable and comfortable,

had to change. So they set out to craft a human resource strategy designed to develop a

workforce capable of simultaneously creating and learning to operate and flourish in a

dynamic organization. Clearly, AEHN’s three-pronged approach to business strategy

required a radical redefinition of requisite employee behaviours. This meant achieving

the goal of improving the capacity of employees to:

Seek out and help pursue new business opportunities.

Anticipate potential threats to the network’s current and future operations and

take action to minimize their probable effects.

Consistently deliver world-class services while carefully controlling costs,

irrespective of the continuous changes taking place in and around the

organization.

To encourage and facilitate these behaviours, AEHN identified the need to develop five

personal competencies across all levels and types of employees. These were:

business-driven;

values-driven;

focused;

generative;

resilient.

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Developing these new behaviours and competencies was a tall order given the

organization's stable and paternalistic past. To move forward, AEHN relied on the

following three key human resource initiatives: 1) achieving contextual clarity; 2)

embedding core values; 3) enriching work.

HR strategic review at Guide Dogs for the Blind

A major strategic review was conducted, producing a business strategy that:

re-defined the purpose of the organization;

emphasized that the core purpose will continue to be given absolute priority;

set out the need to secure the future of activities outside its core purpose; and

importantly

made proposals designed to shape and secure the financial future.

HR issues emerging from the strategic review

The key HR issues emerging from the strategic review were that:

Effectively, it declares an intention to transform the organization.

This involves major cultural changes, for example:

– some change in the focus to activities other than the core activity;

– a move away from a paternalistic, command-and-control organization;

– introducing processes that enable the organization to operate more flexibly;

– clarifying expectations but simultaneously gaining commitment to managing

and carrying out activities on the basis of increased self-regulation and

decision making at operational level rather than pressures or instructions

from above;

– more emphasis on managerial as distinct from technical skills for managers;

– greater concentration on the financial requirement to balance income and

expenditure while continuing to develop and improve service delivery;

– a significant change in the regional organization and the roles of the

management team and regional controllers/managers, which means that new

skills will have to be used.

From a human resource planning viewpoint, decisions will have to be made on

the capabilities required in the future at managerial and other levels, and these

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may involve establishing policies for recruiting new managerial talent from

outside the organization rather than relying on promotion from within.

Management development and career planning activities will need to be

introduced that reflect the changing culture and structure of the organization and

the different roles managers and others will be expected to play.

The provision of the core HR services such as recruitment and training is not an

issue.

Buckingham County Council: key success measures in the

people strategy

Being the best employer

Percentage labour turnover.

Percentage sickness absence.

Percentage of employees reporting that they enjoy working for the council.

Percentage of unfilled vacancies.

Bringing in additional talent

Time to recruit.

Cost to recruit.

Agency costs.

Developing our existing talent

Percentage of employees with confidence in senior management.

Percentage of employees with development plans.

Percentage of development plans completed.

Percentage of jobs filled from within.

Championing diversity

Workforce profile that reflects Buckinghamshire’s population.

Ensuring that the profile of top 5 per cent of earnings reflects demographics.

Balance of younger and older employee employed.

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Transforming the organization

Comprehensive performance rating.

Customer satisfaction rating.

Percentage of employees who feel that change is well managed.

Developing HR: change management at the Children’s Trust

A few years ago the Children’s Trust was facing a chronic skills shortage, high staff

turnover and loss of morale. There was a culture of avoidance when it came to tackling

difficult HR issues such as poor performance or sickness absence. There was also a

‘can’t do’ attitude, because people were constantly under pressure as a result of staff

shortages. Following the change programme summarized below, which was planned

and managed by the new head of HR Sue Kaemena, the Trust has won awards from

both Charity Times and Nursing Times for being a great place to work, based on the

views of its staff. The change programme consisted of a series of sensible, well-planned

HR interventions, spearheaded by Kaemena and implemented gradually over 18 months

with the full backing of the board.

The main features of the change programme were:

HR issues were put on the agenda of the senior team, which met more often and

considered issues such as recruitment and retention.

A development programme for senior managers was delivered by an external

consultancy to help them improve their skills and confidence; it included a

training needs analysis, psychometric testing and 360-degree appraisal.

Everything was done in a low-key, non-threatening way that emphasized

development opportunities rather than the need for change.

Nurses and carers were asked what they liked about working for the Trust. They

said that they had time to build relationships and really care for the children, that

there was high-quality training on offer – and that ‘everyone smiles around here’.

These personal testimonials were used to devise new recruitment campaigns for

nurses and, as a result, the number of job applications soon increased, helped by

a recruitment video filmed at the Trust.

Pay scales for carers were reviewed and the time it would take them to reach

higher rates shortened.

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The Trust’s NVQ course in health and social care was developed, and it became

an accredited centre, able to issue its own awards.

New job descriptions were produced with five to seven headings detailing

people’s accountabilities, plus a series of behavioural competencies.

A new performance-appraisal system was implemented.

Better sick pay was provided combined with tools to help managers handle

absence more effectively, with the result that it fell 10 per cent in the first year

and 12 per cent in the next year.

A fast-track nursing training programme was developed to build a cavalry of

cross-trained nurses that would allow the Trust to react quickly to changing

circumstances.

A value-based change programme at Birmingham City Council

A survey by Mori found that many employees of Birmingham City Council didn’t feel

proud to work for the council or very motivated. Confidence in management was also

low, with only 24 per cent of staff saying that change was well managed at the council.

These were worrying findings for an organization embarking on a £450 million

technology-based transformation programme to meet customers’ changing expectations

and deliver services in new, more efficient ways.

Two years on, an e-mail survey of more than 300 employees found that 90 per

cent felt proud to work for the council and 83 per cent felt motivated in their job

(compared with 56 per cent in the 2006 Mori survey). How did Europe’s largest local

authority get so far so fast? Part of the answer, at least, seems to be ‘Best’, an

innovative programme intended to improve performance by engaging and empowering

employees.

Learning the lessons from past initiatives, the council decided to involve staff in

the design of the programme instead of imposing it. When asked, employees

emphasized the importance of employees believing in themselves, using their initiative,

taking responsibility for getting results and treating others with respect. Encapsulated in

the words ‘Belief–Excellence–Success–Trust’, these values – together with the

behaviours underpinning them – became the basis of the Best programme.

This involved creating workshops where people would talk about the values as

they saw them day-to-day and score themselves against those values on a scale of 1 to

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10. The task was then to identify three or four things that teams could do that didn’t

require huge amounts of money or time but could have an impact on their scores. Best

team leaders were nominated by their colleagues and were not necessarily line

managers. 1,800 of them were trained in only six weeks.

Every Best team is expected to hold at least one workshop a year. Teams

assess their own performance against each of the Best values, with follow-up

assessments taking place after workshops. To date, around 25,000 people have taken

part in Best workshops, which have generated more than 6,000 innovations and service

improvements.

Strategic HR at Gore-Tex

The firm, which produces Gore-Tex fabric clothing, has embedded a culture of belief in

both the individual and the power of small teams. Each employee has a sponsor, who

acts as both mentor and coach. Staff choose their own sponsor, based on who they

think will best help them to develop, since the business is not structured hierarchically

(as such, all staff are known as ‘associates’). Staff tended to go to their sponsors with

grievances and that culture encouraged them to resolve disputes. A culture of trust was

nurtured. Performance reviews are a three-way conversation among an associate, their

sponsor and the leaders, helping to match the individual’s development needs with those

of the business. The firm has no pay grading – individuals are paid according to their

contribution to the business, based on feedback from team members and sponsors.

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HRM case examples

ORGANIZATION OF THE HR FUNCTION

HR organization at the National Australia Bank Group

HR at the National Australia Bank Group has a number of centres of expertise, business

partners, solutions consultants, project managers, a shared services centre and a

telephone advisory service for employees (the people advisory helpline).

Centres of expertise

Centres of expertise cover areas such as reward, employment policy, talent

management, culture management, diversity and performance. The staff in the centres

are specialists in their respective fields, while the other parts of HR can be found in the

HR service centre, with the exception of recruitment, which is conducted by line

managers.

Business partners

Business partners attend business unit leadership team meetings and set the company’s

people strategies and deliver the HR requirements emerging from various projects. They

tend to work in the areas of talent, performance, leadership, diversity and culture, and

their job is to facilitate the implementation of corporate people initiatives with the relevant

specialist HR partners. Unlike shared services staff, they only get involved in HR’s daily

operational matters if projects escalate and extra help is required.

Solutions consultants

Solutions consultants deal with operational queries referred to them from the people

advisory helpline – mainly issues of case management and other more complex

enquiries. They are a key point of contact for people leaders on matters of policy and

procedure, although they do participate in some transaction work as well.

Project staff

Project staff work on projects that emerge from strategic discussions.

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The HR shared services model at PricewaterhouseCoopers

(PwC)

The HR shared services model at PwC consists of transactional and professional areas.

Transactional functions include payroll, benefits administration and the joiners/leavers

process department. The transactional functions also provide services for their

professional counterparts. In contrast, professional areas are organized into centres of

expertise, including functions such as recruitment, learning and development, reward,

diversity, and legal and advisory.

The centres of expertise sit within the central human capital services centre but

there are definite lines between them. Every centre of expertise is a cost centre, but for

the annual budgeting process all are looked at together as part of the HR shared

services function.

The results of introducing the centres of expertise has been that specialist

knowledge is now organized into discrete units that allow know-how and experience to

be more easily shared. The new structure means there is less duplication and the

improved efficiencies allow more time to be dedicated to strategic issues. Additionally, a

decrease in costs has been achieved via a combination of reductions in headcount,

economies of scale and related efficiencies.

Structure of HR at Lloyds TSB

Lloyds TSB’s research into HR effectiveness showed that high-achieving HR

departments have five broad characteristics in common:

They clearly articulate what activities are to be performed, what is to be done,

and why and how the tasks are to be completed, as well as how all this relates to

the line.

They achieve a low ratio of HR to staff as a whole.

They employ high-performing, highly-skilled specialists placed at the centre of

the system.

They have a low level of duplication.

They have an effective talent pipeline.

With this in mind and using a balanced scorecard approach, Lloyds TSB set about

considering how current systems and processes in the HR function operated and how

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these could be changed to ‘better support people goals and objectives to move the

business forward’. The balanced scorecard approach considered five areas – people

development, customers, building the business, finance and risk, while spanning the

whole process were five core objectives:

defining the business needs and aligning them to a commercial context;

creating a future vision for people and HR;

benchmarking performance against competitors;

identifying strengths and weaknesses;

defining new systems, processes and structures to meet needs.

Design principles

The key design principles emerging from this analysis were:

to focus on commerciality;

to put the HR resource closest to the drivers of business performance;

to create clearer accountability;

to be joined up across the organization;

to establish consistency in ways of operating;

to minimize duplication;

to increase spans of control and reduce the number of layers;

to recognize and reward top talent and to tackle weak performers;

to be aspirational;

‘to support HR in its execution of group wide high-volume, standardized

processes including issues such as staff changes, policy queries, offers and

contract, administration and records and payroll’.

HR organization

There are two centres of expertise: reward and employment policy; and organization,

talent and learning development. The rest of HR is organized according to the divisions

UK retail banking, wholesale and international banking, insurance and investments, IT,

operations and executive functions.

The service delivery area includes an HR service centre and functions dealing

with HR legal, mergers and acquisitions and change, employee relations, commercial

management, HR risk, health and safety, and a managing information section.

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Dedicated HR areas

The four dedicated HR areas employ business partners, human resource managers and

divisional specialists dealing with areas such as resourcing, talent and learning, and

reward. Each of these aims to provide HR leadership for the division and executive

team, as well as developing an HR agenda within set strategies and policies defined at

the centre.

Business partners and line managers

The boundaries governing the roles and responsibilities of business partners and line

managers have been changed by moving some of the responsibilities previously borne

by HR into the realm of line managers so that there was a need for fewer business

partners. Numbers were therefore reduced. Following the reduction, line managers now

have responsibility for resourcing, talent management, absence management and

employee engagement.

Reorganizing HR in the Greater Manchester Fire Service

Following major changes in operations, it was decided by senior management that the

role of the fire service’s HR function was to provide high-level strategic advice from

advisers who could work closely with the function, backed up by specialists: in other

words, a business partner model. So the brigade began to recruit business partners –

placing a special emphasis on those with expertise in employee relations — and

specialists to cover areas such as occupational health, equality and diversity, reward,

pensions and recruitment. Finding candidates with sufficient gravitas to act as top-level

strategic advisers was difficult. There weren’t many true business partners about. A lot of

people calling themselves business partners were really HR advisers.

When the team was in place the major developments were:

A more transparent promotions process was introduced.

Work was done on the organizational climate and leadership – a series of away-

days for leaders using organizational climate tools, such as 360-degree feedback

and the Belbin Team Inventory.

The recruitment process was also modernized by putting together a resourcing

team, building a microsite and developing an applicant tracking system.

Training was re-organized.

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A departmental competency framework was put in place to ensure HR staff

would be able to move easily within the organization rather than becoming

bogged down in specialist areas.

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ORGANIZATIONAL EFFECTIVENESS

Enhancing engagement in the Mace Group

The Mace Group is an international consultancy and construction company. It has a

projected £700 million turnover for 2009 and employs approximately 2,800 staff in 35

countries. By engaging employees, Mace aims to attract and retain the best people. The

company has developed its own engagement model, which focuses on providing

interesting work, opportunities for two-way communication, training and development,

and corporate social responsibility. But the company also believes that line managers

play a critical role in engaging employees, and consequently invests considerable

resources in training and supporting them. Good basic management skills, rather than

specific training on how to engage staff, have improved engagement across the

company.

Roles at Mace are designed to be challenging, varied and rewarding in order to

sustain interest and encourage engagement. Employees are encouraged to move

around the company to vary their work and support their development. They are given

responsibility for decision making and the independence to deliver in ways they see fit.

This flexible approach to job organization has challenged Mace to develop

effective line management. Micro-management would undermine the autonomy that

Mace believes is crucial for engaging staff; as Mace’s Employee Engagement Manager

said, ‘It is not the job of our managers to constantly look over their team members’

shoulders.’ Instead, Mace have developed a Manager’s Charter, which defines a new

role for line managers as people who successfully recruit, lead, enable, appraise,

develop and evaluate people in their teams. Mace has also instituted leadership

programmes and skills training called ‘Managing people @ Mace’ to support those in line

management roles.

A recent survey of Mace employees conducted by Kingston Business School’s

Employee Engagement Consortium shows that investment in good line management is

paying off and that roles remain engaging. Approximately 90 per cent of employees

strongly or very strongly agreed that they were intellectually and affectively engaged in

their roles, and 80 per cent agreed that their manager helped them to fulfil their potential.

Mace has also found other business benefits to engagement: engaged employees are

more prepared to recommend their organization to others as a good place to work,

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which is an important objective for Mace. Engagement has also benefited retention, with

94 per cent of employees saying they plan to stay at the company. Mace has a lower

turnover rate than the industry average. Although it is hard to directly measure the

impact of engagement on Mace’s profit margins, the company believes that having

engaged employee’s increases customer satisfaction and loyalty, which in turn boosts

profitability.

Land Registry: modernizing in the public sector

Land Registry is a government executive agency employing 300 people. Engaging and

enthusing its staff has been a challenge. The Swansea Office in 2000 was an under-

performing office within an otherwise successful organization. Today it is one of the most

productive Land Registry offices as a result of a planned high-performance working

change process.

The change process focused on the engagement of individuals at all levels. An

internal project board masterminded a series of staff surveys and conferences. Senior

management team away-days and line management training and coaching to improve

performance management and the development of soft skills were all resourced in-

house. Training initially focused on senior management team development, so they

could understand and lead the changes, building middle management skills so that they

could lead change and create an atmosphere in which employees could have

confidence in an open appraisal process, and team building and development. Service

to customers was always at the centre of the process. Personal development plans,

based on Land Registry’s national core competency framework, provided the opportunity

to discuss knowledge, skills and ‘most importantly’ attitudes. The framework bands nine

competencies in five main performance areas:

Delivering results – Planning and organizing the workload; and dealing effectively

with/managing change.

Effective teamwork – Contributing to the team’s performance; and building and

leading a team.

Knowledge and experience – Acquiring and applying technical/specialist

knowledge.

Providing a quality service – Meeting customers’ needs; and anticipating

problems and achieving solutions.

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Personal effectiveness – Communicating effectively; and showing initiative; and

determination.

Each of these competencies can be demonstrated at four levels from entry to senior

management level.

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RESOURCING

Recruitment and retention strategy at Buckingham County

Council

Attracting and retaining high-quality staff is considered key to the corporate strategy of

Buckingham County Council, which employs around 14,000 people. Resourcing is one

of the most important things the Council does to improve performance.

Resourcing and people strategy

The resourcing strategy complements and reinforces the people strategy, which has five

targets:

being the best employer;

bringing in additional talent;

developing existing talent;

championing diversity;

transforming the organization.

The people dashboard

A people-strategy dashboard has been created to ensure that human resources are

managed more effectively. This extends the people-strategy targets and is used to

monitor progress in achieving them.

Improving recruitment and selection

This involved:

strengthening the employer brand;

developing a better recruitment website;

developing a talent bank to ensure that vacancies were filled quickly;

streamlining processes to reduce the time to fill vacancies;

the development of a competency framework used for competency-based

selection.

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Retaining talent

A holistic approach is adopted to retaining talent. This involves paying attention to every

aspect of the employment relationship and setting a best-employer target. A staff survey

is used to measure employee engagement.

Total reward strategy

A total reward approach is adopted including the use of total reward statements.

Talent management

A talent management toolkit is used to identify and develop potential high performers at

every level in the organization.

Recruitment and retention at Paul UK

Paul UK operates a chain of 22 retail patisserie and bakery shops employing 400

people. Its staff turnover rate of 168 per cent was below the sector’s average but still too

high. The steps taken to overcome this problem were:

A robust recruitment process was introduced using branded application forms

and centralized recruiting.

Role descriptions and skills specifications were created for posts.

A competency-based approach to recruitment was introduced – the

competencies are closely linked to the company’s values and define the

behaviours and attitudes required.

Recruitment literature was professionally designed by an agency.

An employer brand was built – the promotional leaflet highlights the benefits of

working for the company.

An employee referral scheme was introduced (helped by the employer brand).

A resource centre for recruitment and training was established.

A rolling induction training programme was introduced.

A career progression framework was developed.

The outcome was that within two years staff turnover had dropped by 30 per cent and

retention rates had doubled.

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Talent management and leadership development at Standard

Chartered Bank

A ‘strengths-based’ philosophy underpins Standard Chartered bank’s approach to both

talent management and leadership development. It is based on the idea that people will

be successful because they play to their strength; not because they manage their

weaknesses. In addition to personal interviews for top managers, about 6,000

employees have taken an online Strengths Finder test, which identifies their top five

attributes. This approach was developed by the Gallup Organization, whose research

found that the most successful organizations were those where people focused on what

they did best. At Standard Chartered about 200 HR managers worldwide are specially

trained to help individuals interpret their test results and give feedback.

Appraisal is a key part of talent management at Standard Chartered, not only in

its own right but also because it’s used to classify employees into five categories:

High potentials – People with significant headroom, who would be expected to

rise at least two further levels in the foreseeable future.

Critical resources – People who have the potential to improve and whom the

bank certainly wants to keep, but who are not real high-flyers.

Core contributors – People who are valuable resources and who are probably

doing what they do best now.

Underachievers – Those who could be doing better and should be helped to do

so.

Underperformers – Those who are in the wrong job and should be moved into

another role or ‘managed out’.

Recruitment assessment processes at Embarq

Embarq is the largest independent local telecoms provider in the United States, but it

suffered catastrophic rates of staff turnover in its call centres. Then a new assessment

process designed by PreVisor reduced turnover from 33.5 per cent in the first 90 days to

12.5 per cent.

The new process begins with an online screening tool that identifies

characteristics and motivations that define long-term success in the roles, such as

‘customer focus’ and ‘persistence’. There follows a behaviour-based structured interview

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and a sales-based role-play exercise. This exercise takes place over the phone, which

tests candidates in the most realistic way possible, and is more convenient and cost-

effective.

Sales have since increased by 24 per cent, and customer service has also

improved.

Absence management at Westminster City Council

Monitoring

Sickness absence is recorded by line managers on the intranet system.

Return-to-work interviews

A return-to-work interview is held between the manager and the employee after any

length of absence, even one day, although this may only take a couple of minutes.

Employees are required to complete a self-certification/return-to-work form. Employees

who have been absent for eight days or more are informed that they will be referred to

occupational health.

Absence trigger points

An employee who has had more than seven days’ sickness absence in any rolling 365-

day period is dealt with through the ‘enhanced sickness management procedure’. If

sickness absence exceeds 20 days, the long-term sickness procedure is applied.

The enhanced sickness management procedure

Line managers complete a referral form, which is forwarded to occupational health staff

who decide to conduct a face-to-face consultation or make a desktop assessment and in

either case provide any advice necessary to the manager or the individual and send a

report to the manager and HR.

Within 10 days of receiving the report the manager meets the employee to review

the sickness record, consider any further explanations for the absence, discuss the

report from occupational health and agree action to improve attendance and minimize

sickness.

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As necessary, especially in cases of disability, occupational health will discuss

with the manager and the employee any reasonable adaptations to the work

environment that may be helpful.

Long-term sickness absence management

Every four weeks managers review cases of long-term absence with the

occupational health service and also contact the employee.

The managers and occupational health service hold a case conference to assess

the situation. The employee is required to meet someone from occupational

health if this is possible.

The manager makes an assessment following the case conference covering the

nature and likely length of the illness, the impact of the absence on the work and

how any impact will be managed.

Following this assessment a face-to-face meeting is held with the employee to

ensure that other relevant factors and personal circumstances are taken into

account.

A sickness absence hearing may be called as a result of this meeting and the

case conference.

Employee assistance programme

An EAP is available through an external provider. Employees can raise problems with

helpline staff and face-to-face counselling can be made available.

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LEARNING AND DEVELOPMENT

Developing a learning strategy for Remploy

Remploy is a government-funded organization that provides employment and

development opportunities for disabled people. It operates 83 factories. The company’s

strategy for learning is explicit and well understood in the organization, and was

developed from the bottom up rather than top down. Its starting point was recognition

that a number of local initiatives in the factories were proving successful and could be

developed on a national basis.

The trade unions advocated enhanced opportunities for skills development in

basic areas. As a result a national strategy was developed with learning centres as a

major element in all 83 sites. Although the use of each learning centre is locally

determined, they all have the following in common: a physical location (with at least

some PCs); a relationship with a local college whose tutors will visit the site to advise

and facilitate; access to a suite of e-learning programmes, made available from the

LearnDirect library (the national e-learning initiative).

Training overhaul for Scottish police

A radical overhaul of training for the Scottish police has created more opportunities for

promotion and culminated in a prestigious National Training Award in December. The

improved training scheme uses facilitated learning delivery, where trainees pre-read all

information before attending sessions and then discuss issues and learn from each

other. Responsibility for learning is now firmly placed on the shoulders of the individual –

you have got to want to be a police officer and you have got to want to learn. After 15

weeks of initial training, a two-week ‘reconvention’ period helps staff with the areas they

particularly need to address. This training is tailored to individual requirements:

syndicates of recruits with similar needs are put together to receive it. This ‘partnership

approach’ has helped the participants to focus on communication and problem-solving

skills. A certificate of higher education in policing, accredited by the University of Stirling,

is awarded on completion of the programme. There are also opportunities to take a

diploma in management skills.

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Integrated e-learning at Cable & Wireless

E-learning at Cable & Wireless is based on the establishment and promotion of a single

platform for learning. This has been delivered through an outsourcing arrangement with

the e-learning company SkillSoft. The core platform is a learning management system

that is available to Cable & Wireless colleagues as a portal labelled iLEARN. All training

delivery channels are linked to this portal.

The library of generic material accessible consists of some 15,000 items plus

about 60 modules commissioned by Cable & Wireless.

In the first year after the e-learning system was launched, three-quarters of the

workforce used it and this penetration figure is rising. Some 20,000 e-learning activities

were accessed and 15,000 hours of e-learning undertaken in total.

Training and learning at the Comet Customer Support Centre

The Comet Customer Support Centre employees 300 people at Clevedon. Customer

service agents work in a group of five known as a pod. One of the pod members will be

a team coach, who provides support and advice to his or her agent colleagues.

A working knowledge of each customer support system is essential to do the job,

and one of the central tasks of the training department is to bring new entrants to

competence as quickly as possible. The following pattern is adopted. New entrants join

in cohorts of 8–10 and spend their first week in the training room. As the week

progresses, they spend periods in a pod sitting next to a ‘buddy’, listening to calls. At the

end of that week they are allocated to a pod team and receive close ongoing support

from the pod team coach.

Given the emphasis on learning in the workplace, the role of the team coach is

critical and there are a number of steps in place to support and enhance their role. A set

of skills and needs have been defined and these are delivered to the 30 centre team

coaches in 90-minute modules in the training room.

Career coaching at Orange

Within Orange, coaching is used in various ways to support people on the job and in

leadership and personal development programmes. The career coaching programme

uses volunteer line managers who have been trained to provide coaching to staff with

whom they have no reporting relationship.

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The two objectives for career coaching are:

As part of its overall talent management strategy, Orange wants to see

employees take greater responsibility for their own career.

Orange is in a competitive market as far as skills and resources is concerned,

and this effort is intended to help with retention by engaging employees in

conversations about their career before they look elsewhere. Career coaching is

offered to all staff, regardless of grade. The programme consists of three

sessions of one-and-a-half hours each with a line manager coach trained

specifically in career coaching.

Employees complete an online application, which must have their line manager’s

approval, and commit to the time required for the coaching process over an 8–10-week

period. Included on this form is the question ‘Why do you want to be coached?’ with

some examples of the reasons someone might choose.

The coaching process is tightly structured. The planned outcome is for the

employee to develop career goals, which are discussed with the individual’s manager at

the next performance review. Coaches give employees exercises to work on between

the meetings, drawn from a large selection offered by the talent management team.

After the process is completed, individuals are asked to complete an evaluation

form describing their experience of the scheme, their coach’s style and the outcomes

they’ve achieved.

Coaching at Marks & Spencer

Traditionally M&S trained its customer assistants by taking them off the shop floor for

classroom-style training, but the company has introduced a new role, that of coach.

When trainees join M&S, their coaches take them through all of the training required for

their immediate role, as well as any additional training they may need once qualified.

Formal coaching cards are used, which address both service and technical skills and tell

the coaches what to assess and what the learning should be. Each trainee is also

provided with a booklet.

Implementing a basic skills programme at TNT

TNT UK Ltd has over 9,500 staff working throughout the UK and Ireland. Its core

business is express and logistics delivery services both within the UK and internationally.

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The basic skills programme was established as a joint initiative between TNT and

the Transport and General Workers’ Union (T&G). T&G provided the trainers and a

contribution from the Union Learning Fund to establish the programme; it also provided

the resources including the office space, computers and refreshments. The role of the

T&G’s learning representative was crucial in identifying staff with basic skills needs.

Individuals were identified and encouraged by the union representative to join the

programme. The challenge was to motivate staff to take part in the programme without it

being perceived as a stigma. Tactics included selling the benefits of the programme, for

example improving communication skills such as reading, rather than focusing on

tackling problem areas or deficiencies.

The programme was designed to take place over five days. A continuous course

over several days has benefits over a modular approach; for example, staff are less

likely to lose interest or suffer teasing from colleagues. Areas included reading, writing,

numeracy and PC skills. At the end of the programme the participants received

certificates from senior managers, such as the operations director.

Self-directed learning in Vestas Blades UK Ltd

Vestas Blades UK Ltd is a wind turbine blade research, development and manufacturing

company, and at the time of this example was based in the Isle of Wight and

Southampton. The learning and development policy adopted by Vestas was to give

ownership of learning to individuals. Learning needed to be continuous, timely and

relevant for people whose roles would present new challenges as the business grew.

They wanted employees to have choice about what they learned, when and how. A

menu of training courses not only seemed unattractive but was also seen to have limited

effectiveness in terms of the transfer of learning to the workplace. A requirement of any

new approach was that it should motivate employees by serving their own individual

learning needs but at the same time meeting those of the business.

The self-directed learning programme began by introducing the concept of

personal awareness (via the Myers Briggs Type Indicator) and its relevance to learning.

In conjunction with Acuition consultants, an inquiry tool Known as the Needs Analysis

Process (NAP) was developed to help participants identify their own learning needs and

decide the learning goals that would have the greatest benefit to them and their part of

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the business. The NAP focused attention on the impact the business’s strategic and

operational objectives had on each participant’s current and future level of performance.

Once participants were made aware of the wealth of learning resources available

through books or e-learning, they chose the learning group they wanted to join. Each

group consisted of four people from across the organization and would meet regularly

every six weeks in confidence – serving as a support structure for its members. Such

support was critical. The opportunity to talk about how to apply learning in the workplace

not only helped group members make sense of the effect their learning had but also

supported fellow learners in the group working on the same or similar topics.

During the first year each group had its own facilitator, drawn primarily from

Acuition but also from within the company. The facilitator’s role was to accelerate the

group’s capability to learn.

Measuring the contribution of learning to business performance

at Lyreco Ltd (UK)

Lyreco UK is part of a large family-owned office supplies group operating extensively in

Europe, Canada and Asia.

Metrics are a central part of all management processes at Lyreco and these

inform the learning investment and planning processes. In field sales, measures include

sales turnover, margin and new business, whilst in customer service the performance

and productivity metrics include costs per line, abandoned call rate, average call time,

and average wait time. Monthly performance results in all areas are scrutinized to

identify areas for attention, and the learning and development team run learning

sessions and activities aimed at helping people to improve their performance. When

sales margin was identified as an area for attention, over 150 people attended focused

workshops, and subsequent performance results were tracked to measure

improvements. Similarly, warehouse supervisors with the highest staff turnover attended

learning programmes, and as a consequence staff turnover fell to its lowest-ever levels.

Leadership development at Diageo

A series of development strategies, particularly for leadership, have been based on

Diageo’s five values, which were created as the common heartbeat of all the component

businesses, The values – ‘Be the best’, ‘Passionate about consumers’, ‘Proud of what

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we do’, ‘Freedom to succeed’ and ‘Valuing each other’ – have become central to

Diageo’s success, alongside a comprehensive performance management framework.

Conversations about performance are now on a ‘partnership’ basis, where managers are

expected to meet with their employees to discuss their aspirations and how their growth

needs can be satisfied by the business.

The company’s first leadership development programme, 1998’s ‘Building Diageo

talent’, was designed to help link strategy and organizational performance with individual

performance. This had many components, including coaching and benchmarking for

leadership development for 4,000 managers. Over the past six years the company’s

leadership training has evolved to focus more on building ‘a core Diageo mindset’. The

senior team has prioritized developing a ‘total talent strategy’ and HR processes have

been thoroughly embedded in management thinking worldwide.

BT apprenticeship scheme

BT had 1,150 apprentices in 2007 and in the same year it won the Learning and Skills

Council’s apprenticeship of the year award. The main features of the apprenticeship

scheme are:

It focuses on three developmental strands: academic achievements, work skills

and life skills.

Apprenticeship lasts three years.

Apprentices are strongly supported through coaches (BT employees), who teach

the craft and technical aspects of the job, and ‘buddies’, co-workers who are able

to pass on their knowledge and report to the coach about the progress

apprentices are making.

Apprentices are given 11 weeks of academic training in the first year, which

leads to a BTEC; their experience and learning leads to an NVQ qualification.

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PERFORMANCE MANAGEMENT

Performance management at CEMEX UK

CEMEX UK is a supplier of cement, ready-mixed concrete and aggregates with 4,000

employees. It is a subsidiary of the Mexican company CEMEX.

Aims

The aims of the Performance and Potential Assessment scheme at CEMEX UK are to:

promote strategic alignment and respond to business needs;

facilitate clear communication and understanding of standards;

ensure objective grading and differentiation of potential levels;

promote continuous feedback and development;

reinforce high-performance attitudes.

The annual cycle

CEMEX’s performance management scheme runs over the calendar year as follows:

1. The company’s overall budget is set in January and from this the most senior

managers’ objectives are established, which are then cascaded down the

organization.

2. Around July there is a mid-year review of initial objectives set and discussions on

how the individual is progressing over the first part of the year.

3. Finally, between November and January an ultimate meeting takes place where

line managers and individuals meet and staff are rated between one and five by

their line managers.

Objective setting

CEMEX states that the purpose of objectives is to communicate clearly the kind of work

to be performed. The company says that there are three types of objectives that can be

set:

Operative/functional goals – Activities designed to strengthen the quality of

service and to make the existing processes or procedures more efficient by

innovation.

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Continuous improvement – Responsibilities that are inherent to the position and

functional area of the employee.

Development and training – Activities that will help the employee improve their

performance.

Setting objectives is a two-way process and all objectives must align with the common

acronym ‘SMART’. Two more conditions are laid down – first, that objectives should be

relevant, and second, that they should be limited in number (no more than 10, on the

grounds that research has shown that any more than this limits impact and causes

dilution).

Objectives are cascaded down through the organization, which promotes the

alignment of objectives with the corporate strategy and ensures the level of challenge

among the overall team is calibrated. In practice, direct supervisors can cascade

objectives down by up to two levels, while indirect supervisors can do so by one level.

In addition, the various objectives are weighted and each has a specific unit of

measure. For example, a salesperson might have a specific amount of a product to sell,

which means that there is no ambiguity and it is easy to determine whether this sort of

target has been achieved or not.. By using clear evaluation criteria with a description of

what it means to accomplish them, CEMEX believes that there can be no disagreement

when it comes to determining a score for the year.

Mid-year and final review

CEMEX recognizes that the individual’s and company’s situation can change over the

course of the year, so a further mid-year review is held in July. This ensures that

managers can amend objectives as a consequence of any work or other changes that

have taken place. The end-of-year meeting takes place between November and

January, when there is a one-to-one discussion between the employee and his or her

immediate supervisor. At the meeting, a final rating is agreed that helps determine the

bonus to be received the following March.

Performance management at DHL

DHL is a global market leader in the international express and logistics industry with

45,000 staff in Europe.

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DHL’s annual performance management process begins in August, when the

bonus framework and core elements of the scheme are designed at the top level.

Following this, in mid-November, based on the aims decided upon in August, targets are

set for the year by a panel of senior staff. Once devised, these targets are cascaded

down the organization into individual personal objectives following discussions between

line managers and HR.

The cascading process is designed to ensure that targets are refined and altered

to align with each individual’s actual job. Further discussions then take place to decide

what each target means for employees in practice, and their implications for

competencies. Around the same time, attainment levels and scoring based on the

previous year’s performance take place to determine bonus levels and salary rises.

Following this, with targets already set, around the middle of January an outline for

recording performance targets for personal and financial performance for the coming

year is designed. In mid-February the company’s financial results become known, and

this makes it possible to determine the pot available for bonus payments and salary

increases relating to the previous year. Bonuses are paid in either March or April, while

salary reviews take place in April.

The initial stage of establishing overall objectives and the target-setting

framework sets the tone for the year. From year to year, conditions change, with the

priorities of senior management reflecting the current state of affairs. As a result, each

year there are a number of overarching themes, such as serving customers or health

and safety. These core individual key objectives (IKOs) are strictly adhered to, although

local managers can determine how to manage their attainment. In contrast, more

flexibility exists for other objectives, with managers at lower levels able to alter them to

align with their particular needs. There is further flexibility in the system with regard to its

timing.

Performance management tools

To ensure the smooth running of the system, managers and staff alike are provided with

a number of tools to help them during the performance management process. These

include:

A performance evaluation template – This template enables the appropriate

competency model to be reviewed and evaluated.

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An objective agreement template – This template is located within the

performance evaluation template and is used to capture both performance and

personal objectives.

Competency models: are available as support tools for personal development

planning.

Technical competencies – These represent a support framework for identifying

core technical competencies for key operational roles.

Development guides – Guidelines for use in support of developing a personal

development plan.

Personal development plan (PDP) – A template for assessing an individual

against management competencies and developing actions for them to progress

their career.

Career ladder – A guide to support the development of a personal development

plan.

Passport of success – A small booklet retained by the individual (non-

management) that identifies completed training.

Site succession plan – A plan developed utilizing information from the

performance review and PDP process.

The annual face-to-face meeting

A key element of the performance management cycle is the face-to-face meeting

between line managers and each member of their team. For operational employees

(non-management) the company recommends, as a minimum, that this should be a

discussion of around 30 minutes, while for managers, a one-hour meeting is suggested.

During the meeting, the managers and their direct reports examine performance over the

last 12 months with reference to the previous year’s objectives. Discussions cover what

was achieved, whether support provided was sufficient and, if relevant, what could have

been done differently for a more effective result.

Following this they agree performance objectives for the coming year, along with

any support in the form of training and development that can be offered. Objectives are

documented in a ‘target agreement form’, information on levels of attainment are

captured on the ‘performance evaluation tool’, and training and support needs are

recorded in the ‘performance development plan’. In addition, as mentioned, further

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support tools used include competency models, development guides, technical

competencies and career ladders.

Unlike performance objectives, development objectives are primarily the

individual’s responsibility to identify, with support provided by managers via the supply of

appropriate resources and by contributing objectivity in discussions on staff potential. In

some circumstances, DHL guidance says that it may be appropriate to develop a full

performance development action plan, while in others this may not be necessary. In

either case though, the tools mentioned above are available to assist. DHL says it is

committed to personal development planning because it supports the growth of

individuals across the organization, stating that ‘growing its people develops talent to

meet the organization’s future management and leadership requirements’. Further, it is a

‘motivator for the individual and allows development priorities to be clearly identified,

creating opportunities to fully achieve their potential.’

Competencies

Closely linked to objectives, competencies play an important part throughout DHL’s

performance management process. In addition to the management of performance, they

are used for recruitment, selection, induction and job sizing, and feed into decisions on

pay increases. There are different competencies for different roles.

Progress meetings

In addition to the main performance management meetings, managers are advised to

arrange periodical progress meetings. The number will depend on the individual in

question, but the company suggests that there should be at least one every 12 months.

In this meeting, discussions cover how attainment against objectives and competencies

is progressing, whether training and development support aligns with expectations and

whether additional support can be provided. Moreover, in some cases, certain senior

employees are consulted on their own aspirations, and questions, such as whether they

want to move upwards or into a different role or perhaps to change location, are asked.

Performance measurement/scoring

At the end of the year, in the subsequent annual meeting, the process begins again,

while at the same time, ratings for the last 12 months are given based on performance

against objectives and the individual’s competencies. To aid in the evaluation process,

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the ‘performance evaluation tool’ is used which includes a competency and development

needs assessment. Using this, progress against last year’s performance evaluation is

discussed, particularly drawing on successes during the year. Individual achievement is

based on a combination of two ratings. First, there is a measure of achievement against

personal objectives – also known as personal targets or individual key objectives (IKOs).

This concentrates on what is achieved, as distinct from a second rating which examines

how things are achieved, drawing on competencies. While there is no particular formula,

both ratings are taken into account when making decisions on pay, bonuses and career

progression. Under the first measure, target achievement level is linked to IKOs and

scores are on a scale of zero to 133.33 per cent. On-target performance gives a score of

100 per cent. Competency ratings are on a scale of one to five, where five is exceptional

and one is unsatisfactory, as follows:

1. Far exceeds – consistently demonstrates the competency behaviours effectively,

role model.

2. Exceeds – demonstrates the competency behaviours beyond what is expected.

3. Fully meets – behaviours fully correspond with what is expected in the current

role.

4. Partially meets – demonstrates minor deficiencies (coachable) in the behaviours.

5. Does not meet – does not demonstrate behaviours expected in the current role.

When it comes to decisions on salary increases, ratings are moderated by employees’

positions in their pay bands, local budget constraints and the market. Ratings are used

to determine bonus levels and they also tie in to decisions on promotion and succession

planning.

Succession planning

Following the evaluation and rating stage, the line manager’s immediate superior

reviews the results and, in the light of them, considers, among other things, succession

and career planning. By using the overall results, senior managers can determine where

there are skills gaps or other deficiencies. In addition, it enables them to take a closer

look at individual employees to consider whether they might be more suited to being

employed elsewhere in the organization. Similarly, managers can examine strengths and

weaknesses, which might flag up a shortage of certain abilities, such as commercial

acumen, for example. Such issues can therefore be addressed and recruitment can be

directed appropriately. Moreover, it also helps when employees leave the organization,

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making it simple to determine the corresponding skills and behaviours that leave the

organization with that individual. To aid with this task, managers are also able to draw on

an additional rating for certain senior staff, termed ‘potential for job’. This gauges

potential for the future and helps by feeding into future decisions on promotion and

succession planning.

Performance management at Hitachi Europe

Hitachi Europe has a well-established performance management system that has been

in place for a number of years. It is designed primarily to enhance staff development in

order to add value to the organization, and all of the company’s 450 staff are covered by

the system.

The process is intended to be an open, two-way discussion between employees

and their managers, with meetings taking place at least twice a year. During meetings,

staff and managers focus on current and past performance and future development, and

although there is no direct link to pay, the system does help inform pay decisions. In

contrast, appraisal results for two-thirds of staff are directly linked to one of the

company’s five bonus plans, with performance ratings determining payout levels.

The process is as much about building relationships with employees in order to

agree what is reasonably attainable in the year as it is about setting objectives. It is

effective because it focuses people’s intentions and produces new thinking on the way

they work rather than their simply continuing to perform at the same level day-in, day-

out.

The performance management cycle

Hitachi Europe’s year begins in April, and prior to this managers and staff are advised to

consider performance over the previous year and expectations for the coming 12

months. Around March, managers meet with employees to devise a performance

development plan, which in practice involves two discussions:

Performance Planning Meeting;

Development Planning Discussion.

The Performance Planning Meeting is focused primarily on whether past objectives have

been achieved and what future targets should be. In contrast, the Development Planning

Discussion helps the manager and employee consider the individual’s development

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needs and ties in with training and other requirements necessary to help people achieve

future objectives.

Hitachi Europe’s performance management guidance says that the purpose of

these meetings is:

To ensure that an open, two-way discussion takes place between an employee

and their manager. The discussion should review both past performance and

development, identify whether past objectives have been met and agree future

objectives. The objectives set should align with both group and team

objectives.

Performance Planning Meeting

During the Performance Planning Meeting, managers are encouraged to use examples

to illustrate to employees where they have performed adequately, exceptionally and

below expectations. In addition, they also refer to information acquired via consultation

with other managers and colleagues of the employee.

This rounded approach ensures they have a good understanding of how the

employee is performing, and while the focus of the discussion is on the employee’s

performance, managers must also be prepared to discuss the role they themselves

played in helping or hindering employees in achieving their objectives. Throughout the

meeting, Hitachi Europe says that there should be mutual understanding and

agreement, especially regarding decisions on past objectives and key actions for the

future.

Objectives

Objectives emerging from discussions should be SMART – specific, measurable,

achievable, realistic and time bound. From a time perspective, while the process is an

annual event, some objectives are likely to have differing timescales. In some cases,

these may cover periods of less than six months, so managers and staff are given the

option to meet more frequently than the twice a year if they wish.

While the company’s guidance says that objectives need to be business related,

in practice this is not always strictly the case for all staff. Those in more senior roles, for

example, have objectives linked to overall business objectives such as market share and

profit targets, while lower down the hierarchy aims are often more closely aligned to

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specific jobs and sales-specific targets. In practice, the company says that objectives are

really intended to encourage individuals to perform beyond the level normally associated

with their job role.

In addition to setting objectives, Performance Planning Meetings provide time for

managers to outline key dates and deadlines, and while the documentation associated

with the process is paper-based, all forms and related information are also available on

the firm’s intranet.

Development Planning Discussion

Unlike the Performance Planning Meeting, the Development Planning Discussion is

employee-led. This is because Hitachi believes it is the employees’ responsibility to

consider their own development requirements for the coming year. To help them do this,

there are a number of development tools available, while managers also guide and

coach where necessary. The range of development tools available is explained in a

dedicated section available in the company’s guidance and includes information on a

learning log, a development record and a career plan.

In addition, in the past the company used a competency framework as part of a

previous incarnation of its performance management system. While this is no longer

formally in use, employees can refer to its ‘success factors’, as the company says they

are a useful reference point when exploring and diagnosing development needs.

Using these tools, and prior to the Development Planning Discussion, employees

are encouraged to consider their development needs, looking back over the past 12

months and looking forward over the coming year. Moreover, they need to review their

previous development objectives, thinking about what they wish to achieve in the future.

To aid in the process, employees are advised to collate evidence in order to clarify their

strengths and areas for improvement. Using this information, they can prepare a plan of

recommended solutions to aid in their development for discussion with their manager.

While these meetings are employee-led, in some cases, Hitachi employees may

be unclear or need guidance on their development needs, so managers can help them

reach a decision. Similarly, and where appropriate, managers can challenge the

proposed development options, but in both cases only after employees have voiced their

own opinions.

Hitachi is aware of the dangers of the manager leading the process and provides

clear guidance outlining certain boundaries that they should not cross. For example,

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while the guidance says that is acceptable for managers to question employees’

proposed development strategies, it adds that they should avoid trying to make career

choices for employees. Similarly, they are told not to try to push someone to develop if

they are not ready but rather, let the employee make up his or her own mind.

Training not always the best option

The company finds that in many cases employees conclude that they require a training

course as this is an obvious option. Despite this, Hitachi advises employees to avoid

jumping to this conclusion as there are often a number of other less-obvious but more

appropriate options that are also available. The company guidance, for example,

highlights on-the-job training and learning because it believes that these are the most

effective way of developing and acquiring new skills, knowledge and experience. This is

not to say that training is discouraged, however, as the company states that training

courses are a very good way of supporting development needs, providing a foundation

for future skills and knowledge.

Link to bonus scheme but not directly to pay

Ratings awarded as a result of the performance management system have no direct link

to pay, but there is an indirect link to the January salary review process. Pay awards at

the firm are performance-related, and the outcomes of interim review discussions in

September and October influence decisions on pay increases in January. There is no

formal link or performance rating and managers are given a merit pot to allocate awards

among their teams. The pot is allocated to each business or division, and managers

distribute awards to staff after discussions with HR.

Performance management at the Royal College of Nursing

The Royal College of Nursing (RCN) represents nurses and nursing, promotes

excellence in practice and shapes health policies. In total, the RCN employs around 800

staff. All employees are covered by a performance management system, the aim of

which is to provide a structure that allows managers to manage and, in this context,

ensure that poor levels of performance unacceptable.

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Performance management annual cycle

Appraisals occur between January and March, after operational and financial planning is

completed between September and December. Following this, midway through the year

there is a six-month review that provides an opportunity to reassess and document

progress against objectives and agreed development aims. It also allows for the

changing work context to be incorporated into staff’s day-to-day work activities; this is

not a compulsory part of the process but one the RCN recommends as ‘best practice’.

The RCN appraisal process

The appraisal process is designed to support the performance and development of staff

by providing individuals with an opportunity to review past and current performance and

plan future activity. It is summarized as follows.

The appraisal meeting itself is a two-way discussion and covers:

Exploration of achievements – What contributed to success in the year?

Exploration of challenges – What they were, how they were overcome? This

includes learning for the future, with feedback on performance with reference to

relevant competencies if available.

Objective setting, linked to the operational and strategic plans for the year ahead.

Career and succession planning.

Future work areas and any development needs associated with these.

In addition, meetings also cover discussions of how objectives will be met, who will help

achieve them and whether any training or other type of course is required.

Preparing for appraisal

The RCN appraisal guidance recommends that both the appraiser and the employee

should prepare prior to the appraisal meeting. For this purpose, an ‘appraisal preparation

form’ is provided. Both parties complete the form and send it to the other at least two

weeks prior to the appraisal meeting. This, the guidance says, will provide a structure to

the meeting agenda and also ensures that there are no surprises.

When completing the preparation form, both groups consider the following:

departmental operational plan;

job description/person specification;

RCN management and leadership competencies (for managers in the

organization);

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Officer Development Framework (for officers/assistant officers);

last year’s appraisal;

performance/achievements during the appraisal period;

priorities for coming year;

knowledge, skills and experience;

ways to maintain/improve performance;

possible training and development needs.

In addition, the appraiser should seek input on the appraisee’s performance and future

work areas from the employee’s supervisor prior to the appraisal meeting.

Objective setting

Key to performance management at the RCN is the setting of objectives for the coming

year. Objectives filter down to one degree or other from the organization’s overall

strategic plan, which sets out the college’s aims and aspirations for the coming five

years. The intention is that all objectives should align with the strategic plan, and this is

achieved by the overall strategy being translated into more specific operational plans for

the RCN’s various sections. These, in turn, determine the objectives of senior managers

in each department, which then filter down to determine the individual objectives of more

junior staff, as illustrated in the January and February sections of the annual cycle

outlined above.

Identifying development needs

Appraisals also help to identify development needs to support staff in achieving their

objectives via personal development plans that are reviewed every six months. The RCN

says that employees should not consider development needs to be a ‘wish list’ of

desired training courses to attend instead they should be aligned to the work objectives

identified during the appraisal. Moreover, to ensure that the training budget is managed

effectively and does not overrun, the HR department conducts training needs analyses

based on the information provided from appraisals.

In addition, RCN guidance says that consideration needs to be given to how

learning from any development activity can be applied in practice. Therefore, as well as

training courses, there are a variety of other activities that can support staff

development, which are outlined on the ‘staff development’ pages of the RCN’s intranet

site.

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HRM case examples

Career planning and succession planning

As well as identifying work and development areas, the appraisal discussion is an

opportunity to incorporate future planning for the career of the employee. There may be

work areas or development needs linking to the operational plan, for instance, that would

support the career of the individual, and this is an opportunity to ensure that these are

identified. In addition, while letting the employee know that the RCN is interested in their

own career aspirations, this aspect of the appraisal process can also assist in

succession planning where appropriate.

After the appraisal

Following the appraisal, the appraiser completes a form that summarizes the

discussions that took place. This occurs as soon as possible after the meeting so the

facts are still fresh in the mind, and once complete, the form is sent to the appraisee for

agreement.

Following this, there is a three-way meeting between the employee, the appraiser

and the countersigning manager, who review and sign off the documentation of the

appraisal discussion. The meeting is also an opportunity for those overseeing the whole

process to ensure that objectives set across the department reflect all areas of the

operational plan, and that there are no gaps or duplications. In addition, this allows the

person countersigning to ensure that a consistent approach is being applied by line

managers.

If a situation arises where those being appraised disagree with the outcome of

their appraisal, they are advised to discuss the situation immediately with their appraiser

as it is possible it may be the result of a simple misunderstanding. If disagreement runs

deeper, however, then a three-way discussion takes place between the same three

people to resolve any issues arising. As a last resort, if there is still no agreement, a

meeting with HR and a union representative is arranged to mediate a discussion

between the concerned parties with the objective of reaching agreement.

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HRM case examples

REWARD MANAGEMENT

Reward strategy at BT

Reward strategy at BT (British Telecom) is a fairly broad-brush affair that simply

indicates the general direction in which it is thought reward management for the

company’s 90,000 staff should go, with an emphasis on adopting a more holistic, total

reward approach. It is summarized as follows:

Use the full range of rewards (salary, bonus, benefits and recognition) to recruit

and retain the best people, and to encourage and reward achievement where

actions and behaviours are consistent with the BT values.

Guiding principles

BT’s reward strategy is underpinned by a set of guiding principles that define the

approach the organization takes to dealing with reward. These guiding principles are the

basis for reward policies and provide guidelines for the actions contained in the strategy.

They express the reward philosophy of the organization – its values and beliefs about

how people should be rewarded. The six guiding principles governing the design of the

reward system at BT are as follows:

business linkage;

clarity and transparency;

market competitiveness;

performance differentiation;

choice and flexibility;

equal pay.

The three principal elements driving individual reward are:

The individual’s performance and contribution in the role – What does it mean to

have high individual performance?

The competitiveness of the individual’s existing salary, together with the actual

(and anticipated) salary movement in relevant local markets – How does salary

align to the external market?

The company’s business results and ability to pay – Can the company afford to

invest money in terms of additional reward?

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HRM case examples

Underpinning these pillars are the principles of clarity (a ‘focus on roles’), equal pay and

choice.

Total reward strategy at GlaxoSmithKline (GSK)

TotalReward, the name by which GSK refers to its approach to reward, consists of three

elements:

Total cash (base salary and bonus), plus long-term incentives for managers and

executives.

Lifestyle benefits (healthcare, employee assistance, family support, dental care).

Savings choices (pension plan, ShareSave, ShareReward).

The complete package, the concept of which is based on employees understanding the

total value of all the rewards they receive, not just the individual elements, is designed to

attract, retain, motivate and develop the best talent. The proposition for employees is

that TotalReward gives them the opportunity to share in the company’s success, makes

it easier to balance home and working life, and helps them to take care of themselves

and their families.

Total cash

The basic element of TotalReward is total cash. This consists of base salary and bonus.

The philosophy behind this is that superior performance deserves superior reward. This,

says the company, is ‘performance with a sense of urgency and integrity, performance

that enables our patients and consumers to do more, feel better and live longer, and

performance that will enable GSK to achieve its strategic goals’.

Total cash has been designed to reinforce the achievement of business

objectives – when GSK and the business unit do well, the individual employee will do

well too. The key features of total cash are:

‘Pay for performance’ is a key principle.

GSK and business unit performance drive bonus plans.

It is aligned with the achievement of business objectives.

It reflects competitive leading market practices.

It rewards team and individual contributions.

It is aligned with roles and responsibilities.

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HRM case examples

Integrated approach to reward at AEGON UK

Like many companies, AEGON UK (a large insurance company) had pay systems and

supporting processes such as job evaluation and performance appraisal that used to

stand alone, apart from other HR processes. The company adopted a more holistic

approach to the development of its new reward system – which it calls the Human

Resources Integrated Approach – so that from whatever angle staff now look at the

elements of pay management, performance, career development and reward, they are

consistent and linked.

The stated objective of this programme is ‘to develop a set of HR processes that

are integrated with each other and with the business objectives’. In other words, AEGON

UK aims to ensure that the processes of recruiting, retaining and motivating people, as

well as measuring their performance, are in line with what the business is trying to

achieve.

The Human Resources Integrated Approach is underpinned by a competency

framework. The established competencies form the basis of the revised HR processes:

Recruitment – Competency based with multi-assessment processes as the basic

approach.

Reward – Market driven, with overall performance dictating rate of progress of

salaries within broad bands rather then existing grades.

Performance management – Not linked to pay, concentrated on personal

development, objective setting and competency development.

Training and Development – Targeted on key competencies and emphasizing

self-development.

DSG International: aligning reward with the business plan

In a difficult economic environment, DSG simplified their complex mix of reward

arrangements to establish a close alignment between rewards and the five components

of a new business turnaround plan, primarily through the re-design of executive incentive

plans. The change was designed to enhance the perception of line-of-sight between

individual performance, group performance and reward. It illustrates the vital role of

communications to explain the ‘why’ of reward change, what it means for the business

and how each component of reward links to a business plan.

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HRM case examples

Kent County Council: successful reward

The Council attributes success in its reward policies to a strong and united political

direction from the top; a long-term consistency of purpose, but with the appropriate

phasing of changes and with adaptation to local circumstances; and a high-involvement

approach.

KPMG: reward strategy

A clear reward strategy has underpinned KPMG’s growth in recent years, focused on the

twin objectives of strongly rewarding performance and meeting the needs of a large,

diverse workforce with a comparatively young average age profile through a

sophisticated total rewards approach. The firm monitors a set of 13 key performance

indicators based on each of their reward strategy principles, using a traffic light system

of assessment against them. Targets are set, and results compared with prior-year

performance, on each of the 13 measures.

McDonald’s: demonstrating reward effectiveness

McDonald’s is a company with a strong culture of measurement and it has built its own

people–profit-chain methodology to produce impressive evidence that demonstrates how

rewards can enhance employee engagement and thereby business performance. The

operational and cost focus in the business means that reward arrangements are

reviewed regularly and changed if they are not found to be delivering. But the subtler

processes of consultation and change management are equally vital in maintaining and

strengthening reward effectiveness.

Standard Chartered Bank: using a human capital approach to

inform reward plans

Since 2005, the bank has maintained a human capital scorecard to gather, organize and

report on key trends linked to the achievement of business goals. This information is

used as an important input into reward plans and processes. But the alignment of reward

policies with the bank’s values is especially important, and this has been particularly

evident in its most recent review of executive remuneration arrangements and incentives

in the context of widespread criticism of practices in the sector.

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The NSPCC: approaches to achieving reward effectiveness

The experience of the NSPCC was that while measures of organizational and reward

effectiveness may differ, the delivery of them is every bit as critical, if not more so, in

voluntary organizations as in commercial organizations. It also shows that limited

resources need not be a barrier to assessing and demonstrating effectiveness.

Establishing links to the core purpose of the organization was the major driver behind

the extensive research undertaken into effectiveness. The culture of the organization

and its values were important considerations, as was ensuring that the values of the

people in the organization were aligned to them.

Changing the pay structure at Marks & Spencer

Prior to 2005 there were 429 different rates for customer assistants, ranging from £4.94

an hour for new staff up to £10 an hour for long-serving employees. In May 2005, M&S

announced it would reduce these to four standard rates for customer assistants (with

regional variations), which would be tied to specific roles: trainee and qualified, which

already existed, and two newly created positions – coach and section coordinator. The

move was designed to give staff better career progression opportunities.

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HRM case examples

EMPLOYEE RELATIONS

Employee involvement at Harrod

Harrod UK is a manufacturer of sport equipment that has adopted the following

approach to employee involvement:

The whole workforce is involved in the business planning.

Company-wide meetings are held to plan and review corporate strategy.

The HR processes of a company training plan and profit-related pay based on

the achievement of continuous improvement measures support the consultative

culture.

Involving unions in outsourcing decisions at Co-operative

Financial Services

When Co-operative Financial Services (CFS) began thinking of outsourcing its life and

savings administration business, it decided to bring the unions in right at the start of a

process. A ‘pre-consultation period’ enabled Amicus, the National Association of Co-

operative Officials and the Transport and General Workers’ Union, which between them

represent an estimated 70–80 per cent of the CFS workforce, to understand what was

being contemplated and to talk to shortlisted outsourcing providers before the company

made its final decisions on which ones to choose.

CFS was able to bring one of the outsourcing firms together with its potential new

employees to discuss terms and conditions, organizational culture and other issues that

mattered to both parties.

Following the success of this process, CFS agreed with the unions a set of

principles that would govern any future outsourcing deals between CFS and external

partners.

Mediation at Arts Council of England

When workplace relationships go wrong at the Arts Council of England, staff now turn to

TCM, an external provider of mediation services to manage the conflict and help bring

the parties to a workable solution. Mediation will typically be used for a conflict between

a liner manager and a staff member, and when this happens a TCM mediator will take

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over the case until resolution. There is a regular follow-up for a year after that to see how

the parties are getting on.

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