HRM Case Examples 2

HUMAN RESOURCE MANAGEMENT CASE EXAMPLES
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Strategic human resource management
Strategic human resource management at Lucent
Human resource strategy at AEHN
HR strategic review at Guide Dogs for the Blind
Buckingham County Council: key success measures in the people strategy
Developing HR: change management at the Childrens Trust
A value-based change programme at Birmingham City Council
Strategic HR at Gore-Tex
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Organization of the HR function

HR organization at the National Australia Bank Group
The HR shared services model at PricewaterhouseCoopers (PwC)
Structure of HR at Lloyds TSB
Reorganizing HR in the Greater Manchester Fire Service
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Organizational effectiveness
Enhancing engagement in the Mace Group
Land Registry: modernizing in the public sector
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Resourcing
Recruitment and retention strategy at Buckingham County Council
Recruitment and retention at Paul UK
Talent management and leadership development at Standard Chartered
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Bank
Recruitment assessment processes at Embarq
Absence management at Westminster City Council
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Learning and development

Developing a learning strategy for Remploy
Training overhaul for Scottish police
Integrated e-learning at Cable & Wireless
Training and learning at the Comet Customer Support Centre
Career coaching at Orange
Coaching at Marks & Spencer
Implementing a basic skills programme at TNT
Self-directed learning in Vestas Blades UK Ltd
Measuring the contribution of learning to business performance at Lyreco
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UK
Leadership development at Diageo
BT Apprenticeship Scheme
Performance management
Performance management at CEMEX UK
Performance management at DHL
Performance management at Hitachi Europe
Performance management at the Royal College of Nursing
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Reward management
Reward strategy at BT
Total reward strategy at GlaxoSmithKline (GSK)
Integrated approach to reward at AEGON UK
DSG International: aligning reward with the business plan
Kent County Council: successful reward
KPMG: reward strategy
McDonalds: demonstrating reward effectiveness
Standard Chartered Bank: using a human capital approach to inform reward
plans
The NSPCC: approaches to achieving reward effectiveness
Changing the pay structure at Marks & Spencer
Employee relations
Employee involvement at Harrod
Involving unions in outsourcing decisions at Co-operative Financial Services
Mediation at Arts Council of England
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This resource is part of a range offered free to academics and/or students using Armstrongs Essential Human
Resource Management Practice as part of their course. For more academic resources and other FREE material,
please visit www.koganpage.com/resources and then click on Academic Resources.
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 worlds 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 Lucents 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 clients business, and HR business;
customer focus;
defining, managing and implementing HR solutions to business problems by

identifying, securing and leveraging resources;
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managing in a changing, competitive environment;
personal impact.
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 AEHNs 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 AEHNs raison
detre.
Early on, AEHNs CEO and Vice President of Human Resources both realized that the
organizations 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, AEHNs 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 networks 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;
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focused;
generative;
resilient.
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.
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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
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 Buckinghamshires population.
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Ensuring that the profile of top 5 per cent of earnings reflects demographics.
Balance of younger and older employee employed.
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 Childrens Trust

A few years ago the Childrens 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
cant 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.
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Pay scales for carers were reviewed and the time it would take them to reach
higher rates shortened.
The Trusts 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
peoples 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 didnt 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 Europes 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 BeliefExcellenceSuccessTrust, these values together with the
behaviours underpinning them became the basis of the Best programme.
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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
10. The task was then to identify three or four things that teams could do that didnt
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 individuals 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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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 companys
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 HRs 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 TSBs 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.
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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.
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 services 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 werent 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 awaydays for leaders using organizational climate tools, such as 360-degree feedback
and the Belbin Team Inventory.
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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.
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 Maces 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 Managers 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 Schools
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 Maces profit margins, the company believes that having
engaged employees 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 underperforming 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 inhouse. 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 Registrys 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 teams 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 sectors 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.
competency-based
approach
to
recruitment
was
introduced
the
competencies are closely linked to the companys 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 banks 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 its 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 costeffective.
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 365day 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 companys
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 810 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 managers
approval, and commit to the time required for the coaching process over an 810-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 individuals 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 coachs style and the outcomes
theyve 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&Gs 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
the business. The NAP focused attention on the impact the businesss strategic and
operational objectives had on each participants current and future level of performance.
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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 facilitators role was to accelerate the
groups 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
Diageos 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
we do, Freedom to succeed and Valuing each other have become central to
Diageos success, alongside a comprehensive performance management framework.
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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 companys first leadership development programme, 1998s 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 companys
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
Councils 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

CEMEXs performance management scheme runs over the calendar year as follows:
1. The companys 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 individuals and companys 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.
DHLs annual performance management process begins in August, when the
bonus framework and core elements of the scheme are designed at the top level.
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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 individuals 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 years 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 companys 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.
An objective agreement template This template is located within the

performance evaluation template and is used to capture both performance and
personal objectives.
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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 (nonmanagement) 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 years 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
support tools used include competency models, development guides, technical
competencies and career ladders.
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Unlike performance objectives, development objectives are primarily the

individuals 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 organizations 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 DHLs
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 individuals competencies. To aid in the evaluation process,
the performance evaluation tool is used which includes a competency and development
needs assessment. Using this, progress against last years performance evaluation is
discussed, particularly drawing on successes during the year. Individual achievement is
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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 managers 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,
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
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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 companys 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
companys 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 peoples intentions and produces new thinking on the way
they work rather than their simply continuing to perform at the same level day-in, dayout.
The performance management cycle

Hitachi Europes 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 individuals development
needs and ties in with training and other requirements necessary to help people achieve
future objectives.
Hitachi Europes performance management guidance says that the purpose of
these meetings is:
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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 employees
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 companys 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
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.
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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 firms 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 companys 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,
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
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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.
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
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progress against objectives and agreed development aims. It also allows for the
changing work context to be incorporated into staffs 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);
Officer Development Framework (for officers/assistant officers);
last years appraisal;
performance/achievements during the appraisal period;

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knowledge, skills and experience;
ways to maintain/improve performance;
possible training and development needs.
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In addition, the appraiser should seek input on the appraisees performance and future
work areas from the employees 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 organizations overall
strategic plan, which sets out the colleges 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 RCNs 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 RCNs intranet
site.
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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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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
companys 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
BTs 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 individuals performance and contribution in the role What does it mean to
have high individual performance?
The competitiveness of the individuals existing salary, together with the actual
(and anticipated) salary movement in relevant local markets How does salary
align to the external market?
The companys business results and ability to pay Can the company afford to
invest money in terms of additional reward?
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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 companys 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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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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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 KPMGs 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.
McDonalds: demonstrating reward effectiveness

McDonalds is a company with a strong culture of measurement and it has built its own
peopleprofit-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 banks 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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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 Cooperative Officials and the Transport and General Workers Union, which between them
represent an estimated 7080 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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48
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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HUMAN RESOURCE MANAGEMENT CASE EXAMPLES

Organization of the HR function

Learning and development

HRM case examples

HRM case examples

STRATEGIC HUMAN RESOURCE MANAGEMENT

acquisition, development and retention of talent that creates value for

compensation and performance management that encourages employees to

understanding the Lucent business, the clients business, and HR business;

defining, managing and implementing HR solutions to business problems by

HRM case examples

managing in a changing, competitive environment;

Human resource strategy at AEHN

Initiate Continuous, timely addition of new services through both external

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

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

Seek out and help pursue new business opportunities.

Consistently deliver world-class services while carefully controlling costs,

HRM case examples

HR strategic review at Guide Dogs for the Blind

re-defined the purpose of the organization;

made proposals designed to shape and secure the financial future.

HR issues emerging from the strategic review

Effectively, it declares an intention to transform the organization.

This involves major cultural changes, for example:

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

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

greater concentration on the financial requirement to balance income and

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

HRM case examples

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

Management development and career planning activities will need to be

Buckingham County Council: key success measures in the

Percentage labour turnover.

Percentage sickness absence.

Percentage of unfilled vacancies.

Bringing in additional talent

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.

Workforce profile that reflects Buckinghamshires population.

HRM case examples

Balance of younger and older employee employed.

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 Childrens Trust

A development programme for senior managers was delivered by an external

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

HRM case examples

A new performance-appraisal system was implemented.

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

A value-based change programme at Birmingham City Council

HRM case examples

HRM case examples

ORGANIZATION OF THE HR FUNCTION

HRM case examples