How’s the buzz in your workplace? Tony Blair pronounced earlier this year that a nation’s human capital was its greatest asset, following the example of chief executives who laud employees in their company’s annual report and accounts.
Blair’s government has significantly increased investments in the population’s education and health in recent years. But how far have we seen matching progress in the experience and management of people in the workplace?
The CIPD organises an annual People Management Award and the six winners and overall victor were announced at our Harrogate conference last month. They illustrate some positive trends in people management evident across a wider swathe of UK employers.
The winners cover a diversity of sizes and sectors. Three - the Crown Prosecution Service, Royal Mail and NHS Greater Glasgow - are from the public sector. The rest - Royal Bank of Scotland, Jaguar/Land Rover and Kwik-Fit Financial Services - have a range of experiences and workforces. So what are the common components of how these and other organisations are improving their people management and performance?
First, far from always being annoyingly successful, these organisations had generally experienced recent difficulties. Like 11,000 postal staff not turning up for work every day at Royal Mail; or the CPS being accused of inefficiency and institutional racism in an independent report in 2001; or weak financial performance leading to three changes of ownership in quick succession at KFFS. The HR director at the latter, Keren Edwards, said “the buzz had gone”, with staff turnover of 52%. However bad the starting point, change and improvement can be achieved, sometimes with surprising speed.
Second, reforming the HR department itself was a prelude to better people management across the organisation. At CPS, director Angela O’Connor set out to build a “professional, competent, credible HR function”. Total staffing was reduced, and five business centres and partner roles were introduced.
Recruitment turnaround times have since been reduced from 25 weeks on average to 7; staff turnover in London has fallen from 14% to 4%; and more than 14% of employees now come from ethnic minority backgrounds.
The Royal Mail similarly introduced service centres and business partners to support impressive performance gains. Absence savings total £80m, and improved customer service levels triggered all staff bonuses earlier this year. Improved systems, information and
measurement were a third element. At RBS, director Neil Roden’s team built a huge human capital database, covering all 140,000 staff across 28 countries. This allows managers, for example, to identify in a particular location the business costs of low morale or absenteeism, and management bonus targets now reflect these types of measure.
But line managers themselves have to motivate and manage their staff. The Jaguar/Land Rover Academy team built an internet-based suite of tools to help the firm’s 230 franchised dealerships to improve the way they manage their 7,000 strong workforce. Labour turnover has since reduced from 30% to 20%, while employee morale and safety have both increased measurably. The Royal Mail similarly provided managers with training and coaching support to address staff attendance.
The final ingredient in achieving these fantastic improvements was the recognition that people management and business performance are indivisibly intertwined. NHS Greater Glasgow successfully reduced social deprivation and addressed severe skill shortages by training and recruiting 150 of the local long-term unemployed. As HR director Ian Reid explains: “We realised those people, who were most often the recipients of NHS services, could become our employees.”
But KFFS was the CIPD’s overall award winner. It went beyond bland statements about the relationships between employee and customer satisfaction and financial returns and, to an astonishing extent, put them into practice in the entire functioning of the organisation. In 2003 all 600 staff attended workshops to come up with ideas to make the organisation a fantastic place to work and do business with.
They responded with 6,500 suggestions. Staff worked on teams to develop and implement the ideas. KFFS has invested more than £1m in the project and the results in terms of business and people performance have been phenomenal. Profits have almost doubled and all performance indicators have improved. Staff turnover has fallen by 17%. As Edwards puts it, “the buzz is back”.