24765_RBS 19/3/07 07:37 Page 1

www.thetimes100.co.uk

Motivating through Total Reward CURRICULUM TOPICS

• Motivation
• Human needs and
Introduction rewards
• Remuneration, incentives
The Royal Bank of Scotland Group (RBS) is one of the largest financial institutions in the world. and job satisfaction
It is a global business with a range of operations in Europe, North America and Asia Pacific. • Human Resource
RBS has centres in thirteen European countries, sixteen North American states and eight major management
Asia Pacific cities.

RBS is one of the world's leading financial services companies providing a range of retail and
corporate banking, financial markets, consumer finance, insurance, and wealth management
services. It serves more than 36 million customers world-wide and employs more than
140,000 people. In addition to the provision of a full range of banking services under
GLOSSARY
The Royal Bank of Scotland and NatWest brands, RBS also includes Citizens Financial Group,
Ulster Bank Group, Coutts, Direct Line, Churchill and around 40 other brands.
Merit: the quality of being
good and deserving reward.
As a global business its operations are diverse. For example, in 2005, it bought a share in the
Bank of China, China’s second largest bank, opening up new opportunities such as a new
credit card business.

RBS Group global business centres

T H E R O YA L B A N K O F S C O T L A N D G R O U P

Roles and performance management at RBS

For RBS to offer world-class financial services, it is vital that it attracts the most talented people.
These are the business leaders of the future. At a time when there is fierce competition for
talented people, RBS positions itself as a world-class employer, with world-class employment
opportunities, not just in the UK, but across the globe - in China, Hong Kong, Singapore,
Japan and Australia as well as Europe and the USA. With different labour market conditions in
each location, RBS recruitment is based on merit, from the widest pool of talent available.

Due to its scale and diverse range of businesses, RBS has lots of different career opportunities
to offer. These include bankers, traders, sales, customer service, investment analysts, and
business advisors. There are also business support roles such as IT, marketing, human
resources, finance, and legal. Careers can start directly after leaving school on an
apprenticeship programme or from university on a graduate development programme.

121
24765_RBS 19/3/07 07:37 Page 2

www.thetimes100.co.uk
At RBS almost every role can be described in terms of specific job targets. This method of
performance management allows managers to measure each individual’s performance in a
specific way and reward them accordingly. RBS employees will agree job objectives and
targets with their line manager at the beginning of the year. Their performance is then
measured and reported on during the year. At the end of the year they will have a performance
review. Payments for results are an effective motivator for high performance.

GLOSSARY
Targets: what you intend
to achieve.
Bonus: an extra amount
of money given as reward.
Theorists: people who
develop ideas for
explanation.
Some jobs are paid according to the achievement of targeted results. This means that a bonus
is paid if the employee achieves agreed targets for the job. For example, a corporate banker
has responsibility for gaining a certain number of new business customers each year. If the
target is achieved or exceeded she/he will get a bonus payment. Particularly challenging or
difficult to achieve targets are known as 'stretch targets' and the reward for achieving these
will be greater.
What is motivation?
For many years, management theorists have tried to understand what makes some people
work harder than others. Some of the motivation factors identified by theorists can be seen at
work in RBS.

Motivation: the inner
drive to work hard.
Scientific
management: the
theory that all jobs could
be timed and measured
and payments could be
based on this.
Piece rate: an amount
received for every item
produced.
Early theorists on staff motivation always looked at factors outside the individual. Frederick W.
Taylor (1911) was the creator of ‘scientific management’. He felt that every job was
measurable and each element of a job could be timed. All managers had to do was pay for
every item the workers produced and they would work harder to get more money. This led to a
long established pay scheme called the ‘piece rate’, where workers received a fixed amount for
every unit of output. Schemes like this are usually associated with manufacturing industries and
are not appropriate for a complex service-led organisation like RBS.
Another theorist, Frederick Hertzberg (1959), carried out a large-scale survey into motivation in
American industry. The results of his survey led him to develop a 'two-factor' theory of motivation.
Firstly, he established that if an employee's basic needs (such as a suitable working environment
and a basic rate of pay) were not met, then this creates a source of dissatisfaction. Hertzberg
termed these 'hygiene factors'. On the other hand, the presence of less tangible factors, such as
the provision of challenging work and recognition for doing well, can create or increase work
motivation. Hertzberg termed these 'motivators'.

RBS has put in place several of Hertzberg’s ‘motivators’:

• employees get recognition for good work
• they have a collective sense of achievement when the whole business does well
• they gain extra responsibility and advancement through regular performance reviews
• when RBS people do well in their work, the company rewards them.

The theory of Abraham H. Maslow (1943) on staff motivation is also evident at RBS. Maslow
referred to a ‘Hierarchy of Needs’ which is usually drawn as a pyramid.

Maslow’s Hierarchy of Needs

Self-actualisation

Esteem needs

Social needs

Safety needs

Physical needs

According to Maslow, the most basic needs on this hierarchy had to be satisfied before workers
could look to the next level. Basic physical needs were things like shelter, food, warmth and
bodily functions. Next, people had to feel safe in their environment. RBS provides these basic
needs wherever it creates jobs.

Maslow’s higher levels of need are less obvious and less easy to describe but of great
importance. Social needs refer to the fact that we want to feel part of something we share in.
RBS creates the opportunity for its community of employees worldwide to share in its common
goals and vision for the group. It does this by rewarding the people who contribute to its success
through their commitment and hard work.

122
24765_RBS 19/3/07 07:37 Page 3

The next level – ‘esteem’ - refers to our need to feel valued, that what we do matters. The RBS
mindset is that employees can ‘make it happen’ for themselves. It provides opportunities for all
employees through promotion or training and then recognises their achievements. Through this
RBS employees can improve their self-esteem. www.thetimes100.co.uk
At the very top of Maslow’s hierarchy is our human need for ‘self actualisation’. This means we
work hard in order to be as good as we possibly can be. RBS meets this by offering recognition,
promotion opportunities and the chance to develop a lifelong career with the Group.
GLOSSARY
Motivation at RBS - Total Reward
Mindset: a way of thinking.
As Maslow describes, workers are not motivated by money alone. Individuals are motivated by
different things. Motivation can be about shaping a worthwhile career or it may involve having Profit-sharing: the
more flexibility with time. For example, at the start of your career, help to pay off your student debt system of sharing the
may be more important to you than retirement planning. Employees at RBS enjoy Total Reward – profits that a company
a specific benefits package designed by RBS that goes far beyond salary. It offers benefits for each makes between all the
member of staff that include not just money, but also personal choice in working hours and people who work for it.
security.
Personal development:
The RBS Total Reward package also offers flexible pension funding, health and medical benefits, acquiring skills to improve
paid holidays, and a confidential advice service. Employees have a generous holiday allowance work performance through
(between 25 and 30 days for full-time staff), with the option of buying or even selling days. training and education.
Employees may also choose from a wide range of lifestyle benefits, including discounted
shopping vouchers, childcare facilities and RBS financial products, such as mortgages, currency Annual performance
exchange, personal loans and banking at special staff discounted rates. review: the process of
identifying how successful
Results Based Payments a person has been in
At the core of the package is a competitive salary based on skills and experience regardless of achieving targets, in order
to make ongoing
where in the world RBS staff are based. Providing competitive pay means comparing what you are
improvements.
offering against salaries for similar jobs in other financial services companies. All staff receive their
salary credited monthly to their staff bank account. The terms and conditions of their employment
specify the basic rate of pay and any further payments that they may be eligible to receive.

However, within RBS the basic salary is only the starting point from which a number of additional
bonus payments can be earned. All employees share in RBS’ success through its profit-
sharing scheme. If the company meets its overall profit targets, then all employees will receive
a bonus worth 10% of their salary. On top of the profit-share bonus, as mentioned before, there
is also the chance to earn an individual performance-related bonus when employees achieve or
exceed their personal performance targets, for example, a project manager who delivers the
project ahead of time and within budget. So in a year when the company does well and the
individual performs well, the additional payments may be quite substantial.

Non Financial Rewards

Whilst money may be an incentive to go to work; at work, pay cannot motivate people to give
more. Theorists have long understood that staff need a combination of motivators. This is why
RBS offers so many non-financial rewards which can improve personal lifestyle.

One of the most important motivators for RBS employees is the recognition of good
performance by graded progression. At RBS, people are encouraged to ‘make it happen’
through personal development. This means RBS encourages employees to grow and
T H E R O YA L B A N K O F S C O T L A N D G R O U P

develop their skills and abilities. This in turn helps RBS to grow as a company. Employees identify
development needs with their line manager at their annual performance review. These are
documented in a personal development plan. Development can involve more training, attending
courses or gaining new understanding and skills. This can improve the prospects of promotion
and allow employees to move up the organisation and increase their Total Reward.

RBS also believes in giving its people the chance to help put something back into their own
communities. Wherever RBS operates, the Group supports community involvement in projects
that matter to its people. For every pound raised for charity by a member of staff, RBS will
double-match the donation, making every pound raised count three times.

In the last year, groups of RBS employees have supported many fundraising projects for local
communities and charities. These have included:
• a ‘pirate kidnap’ in South Wales for a youth charity
• taking part in the Microsoft UK Challenge for the NSPCC
• cycling across the Himalayas for British Wheelchair Sport.

123
24765_RBS 19/3/07 07:37 Page 4
www.thetimes100.co.uk
GLOSSARY
Regeneration: breathing
new life into something to
make it better or more
successful.
Work-life balance: the
policy of taking into
account individuals' needs
in agreeing working terms
and conditions.
Labour market: the
available pool of workers
within a country or region.
The Times Newspaper Limited and ©MBA Publishing Ltd 2007. Whilst every effort has been made to ensure accuracy
of information, neither the publisher nor the client can be held responsible for errors of omission or commission.
124
The RBS Group also contributes to various projects throughout the UK to improve communities
and the lives of the people involved. For example, over the last two years it has provided
funding and advice to:
• the regeneration programme of a housing estate in Scotland. This won a national award
for including the local residents
• the development of a hospital in Portsmouth and four schools across the country
• the provision of free-access cash machines in deprived areas in Scotland
• the setting up of school banks where students manage the banks themselves to learn a
practical approach to numeracy and personal finance.
Work-Life Balance
To attract and retain the highest qualified and motivated employees, RBS enables its employees
to develop a work-life balance between work and non-work commitments. RBS gives all
employees the ‘right to work flexibly’. This can be through a range of flexible working practices
covering job sharing, part-time working, home working, variable working hours, compressed
hours and term-time working. These are adapted to suit the local needs of each RBS centre. The
policies and procedures for applying are easily available on the RBS website. RBS provides a
free advice service called 'HelpDirect'. Employees can call for advice on making the most of
their time at and away from work. It also offers counselling on a range of life issues.
RBS recognises that in some circumstances, people may need time off from work for reasons
other than sickness. Some people have special family commitments or commitments in their
local community. In 2004, the RBS “Your time” programmes won the HR Excellence Award for
‘The Most Effective Use of Flexibility in the Workplace”.
The policies of RBS in relation to work-life balance help to create a working atmosphere that
relieves stress. They also help to create greater equality of opportunity for everyone. For
example, this flexibility enables employees to choose working patterns that fit with their childcare
arrangements or their personal lives.
Following these flexible practices allows RBS to attract more talented people. Theoretical work on
motivation by Elton Mayo in the 1920s showed that contented people, who are satisfied with their
working environment, were likely to be more productive. The distractions of home or community
pressures can be handled far more comfortably with the support of an employer such as RBS. In
return, RBS gains staff loyalty and commitment, which in turn drives higher performance.
Conclusion
RBS operates an exciting and forward thinking Human Resources (HR) strategy. It provides a
world-class employment package for every employee, at every level, wherever they work. It
adopts an attitude that motivates its staff in both financial and personal ways. By doing this, RBS
is able to compete for the best people and attract them to its business. In a world where local
labour market conditions can fluctuate from region to region, RBS must be sensitive to local
conditions and individual needs.
In RBS, motivation theory comes to life. RBS employees at all levels can enjoy a work environment
where effort is seen to be valued, where achievement is recognised, where individual progress is
rewarded and where a long term career is available for those who are able to grow with the
business. Where individuals are made to feel a part of the bigger picture and where the rewards
available are varied, practical, personal and tailored to the individual, there are motivators for all.
Questions
1. Name two motivating factors at RBS.
2. Describe the differences between the theories
of Taylor and Maslow.
3. How does RBS' Total Reward package fulfil
Maslow's higher levels of motivation?
4. How does Total Reward contribute to RBS'
overall strategy? www.rbs.com