Case 1: Motivating through Total Reward
The Royal Bank of’ Scotland Group (RBS) is one of the largest financial services companies in the world. It provides a range of services including banking and insurance. The RBS` Group operates in Europe, the US and Asia, serving more than 36 million customer’s world-wide. It employs more than 140,000 people.
As a major company, RBS needs to recruit the best employees it can. RBS is a leading employer and therefore offers a range of great job opportunities. People can start their working life by joining from school or from university. There are many types of job available, for example. working in a branch of the bank, or at head office in roles like marketing or sales.
What is it that makes people want to work harder than others? Some key theories are:
* Taylor and ‘scientific management’. This theory said that every job could be measured by the amount of work done or the number of pieces made (this is known as the ‘piece rate’). Workers would work harder because they would earn more.
* Herzberg and the ‘two factors’. Herzberg’s theory showed that certain motivation flews needed to be in place first. These were called Wed ‘hygiene’ Wtors, for example, a clean work place and good bade pay. Only once these were in place could other factors be brought in to motivate workers. RBS uses a number of factors to
motivate its people. These include recognition for a job well done, promotion and other rewards.
* Maslow and the hierarchy of needs’. This theory showed that workers had to have their basic needs, such as feeling safe and secure, met first. Only then could they move on to be motivated by other things. However, RBS believes that meeting these higher needs, for example, by recognizing achievement, will motivate employees and help the company to grow. It has put in place a number of benefits to meet these needs.
RBS has a special benefits scheme called Total Reward. At the one of the scheme is good basic pay. RBS also provides many flexible benefits in areas like health cover, pensions and childcare. It uses this as part of its strategy to motivate employees. In addition to these benefits, every employee is set targets. These are measured to see how well he or she is doing. Employees can earn a bonus if their targets are reached. There is also a profit-sharing scheme. All employees are paid a bonus of 10% if the company as a whole does well. RBS also supports community projects and charities that is people care about, for example, the NSPCC and youth charities. It does this by trebling any money the employees raise.
RBS knows that it is important to have a good work-life balance. This is the trade off between time spent at work and spent outside of work. RBS employees have the opportunity to work more flexibly. The RBS “Your Time” programme also helps by recognising that employees may need time off work for reasons other than sickness. They may want to spend more time with their family or perhaps take a career break to go travelling.
RBS knows its employees are its future and rewards and encourages them. It provides a world-class employment package of benefits for every employee, at every level. In RBS, motivation theory comes to life.
Issues for Discussion
- Name two motivating factors at RBS.
- Describe the differences between the theories of Taylor and Maslow.
- How does RBS’ Total Reward package fulfill Maslow’s higher levels of motivation?
- How does Total Reward contribute to RBS’ overall strategy?
Case 2: Using aims and objectives to create a business strategy
Kellogg is the world’s leading supplier of breakfast cereal. It has 39 brands and a 42% share of the UK market. Kellogg makes a range of products for the various segments of the UK’s market. The market is worth 1.1 billion a year. Kellogg’s success is achieved through careful planning. It sets clear aims and objectives. It then uses the strength of its brands to help it reach them. Kellogg ensures that each brand has a unique place in the minds of its customers. This is called product positioning.
Kellogg’s managers set aims. These must match what consumers want. In recent years, consumers have shown that they want to lead more healthy lives. Kellogg wanted to be part of this debate. It promotes the message ‘Get the Balance Right’. It also wanted to show that it corporate responsibility. This means showing that it is a company that cares for both its consumers and the environment. An aim is a broad statement of where a business wants to be. Kellogg’s aim was therefore to reinforce the idea of a healthy lifestyle.
Once a broad aim is put in place, objectives can then be set. These should be SMART. This stands for:
- . Specific:
- Realistic and
- Time related.
They were set in three main areas
* promoting physical activity for health
* using packaging to promote a balanced lifestyle
* using food labeling to help consumers make healthy choices.
A strategy is a set of’ plans designed to reach the aims set. Kellogg’s strategy included helping people become active. It has worked with the Amateur Swimming Association (ASA) since 1997. The ASA’s want everyone to ‘enjoy swimming as part of’ a healthy, lit style’. These closely match those of Kellogg. Swimming, is also a family activity and a skill for life’. Kellogg became the main sponsor of swimming in the UK, providing over 1.8 million per The link with the ASA also helped Kellogg to support active lit stylesin other ways. It linked with Sustrans, which promotes sustainable transport. This led Kellogg to develop a cycling based promotion. It also encourages walking. A free pedometer given away with All Bran inspired people to walk further. Kellogg has also sponsored other walking events. Kellogg uses symbols on its packs to show healthy Guideline Daily Amounts of ingredients such as salt, sugar and fat. This helps consumers to make choices.
Kellogg’s success in reaching its aims is due to the clear ways by which it conveys them to customers. It uses cartoon characters to advise children and parents about exercise. It has also produced leaflets. These can be obtained from its website. Internally, Kellogg uses its in-house magazine to promote the message.
Kellogg knows from research that a balanced diet and regular exercise help people stay Healthy. It is communicating this message through its brands and promotions.
Issues for Discussion
* Explain what is meant by a premium brand.
* Describe the difference between an aim and an objective
* Outline the purpose of Kellogg’s work with the ASA.
* Using examples to support your dialogue, evaluate how Kellogg communicates and discuss how this enables it to position its brand.
Case 3 : Continuous improvement within an organisation
Leyland Trucks is part of a US company called Paccar Inc. It makes trucks under the DAF brand at Leyland, near Preston, as well as in Holland and Belgium. Leyland aims to gain a 20% market share. It has a strategy to help it reach this target. This is a set of plans linked to its aims. Sometimes a business can improve by taking a giant leap forward. Leyland Trucks improves through many small steps. This system of continuous improvement is called ‘Kaizen’.
A Kaizen action is one designed to bring about improvement. Often this involves teams meeting to see where problems might lie. Lots of these small steps can lead to big improvements. A good example is Leyland’s introduction of robots in its paint process. Before going ahead.
Leyland sets itself targets. It uses
it made sure that it had the views of everyone who had been involved in a previous change and learned from this. Continuous improvement is vital for Leyland to meet its targets, keep customers happy and stay c
ompetitive. Added efficiency also keeps costs down and helps to protect jobs.
It uses measures to see if it is reaching its goals. These are called Key Performance Indicators (KPIs). Leyland clusters its KPIs under themes. These are:
- on-time performance
- quality, using a Quality Index target
- financial pleasures
- stock control
- health and safety
Information from these KPIs is charted. Managers can see from charts how close they are to targets and set new targets. Kaizen is measured through a statistical tool called Six Sigma.
`Culture’ describes the way in which a business works. The culture at Leyland Trucks is one of continuous improvement. It is based on all being involved. Everyone is trusted to take part in the process and to contribute where they can. Its values are based on team building and training. It involves everyone in decision making and gives them responsibility and power. It encourages everyone to try out new ideas. People ‘live the values’ every day by sharing working in teams and celebrating success.
Kaizen in action
The success of Kaizen can be seen through a recent example. In May 2006, a Kaizen, event was held in the vehicle finishing part of the plant. A team of project leaders worked with other staff. All tried to spot problems and suggest solutions. This led to more than suggest solutions. This led to more than greater efficiency in a number of areas.
200 ideas for improvement and greater efficiency in a number of areas.
For Leyland Trucks, Kaizen is a key part of its success. Kaizen has helped it to achieve results across all of its KPIs. In 2006 alone, there were:
multi-million pound savings from Six Sigma
- a rise in on-time delivery to 95%
- a fall in both defects on units and injuries.
Issues for Discussion
1 . What is Kaizen? I low is this different from a one-step leap forward?
- How is Kaizen expected to help Leyland Trucks to increase its market share?
- How does Leland Trucks measure Its continuous improvement? Can you suggest K KPls for another type of business organisation e.g. a retailer or a leisure centre’?
- Why is continuous improvement most likely to be achieved in a company with a culture of trust’? Start your answer by explaining what is meant by a culture of trust.
Case 4 : Managing risk through effective. team-based decision making
RWE npower is an integrated energy company. It is the third largest supplier of electricity, through its npower brand and one of the largest electricity generators. It is part of the RWE Group, which is one of the largest European energy Utilities. Energy Companies have a responsibility to maintain supplies of energy 24/7. This means that they have to be aware of and manage risk. There is a risk involved in all business activity. Managing risk successfully means striking a balance between risk, cost and returns.
RWE npower is an important contributor to the economy. It provides jobs, helps people maintain and increase their standard of living by supplying energy and invests in large capital projects. The most visible face of the business is its huge power stations but it is also involved in developing alternative forms of energy such as biomass plants and wind farms. It seeks green or sustainable solutions to problems wherever possible.
Types of problems
There are different types of business problems and therefore different solutions to them.
- Deviation problems are where targets are not heing met. Problem solving in this case is centred on closing the gaps.
- Improvement problems. Here Solutions need to address how the business can become for example more efficient or more green.
- Open-ended problems where conventional solutions will not work. Solutions are generally linked to the idea of ‘thinking outside the box’ i.e. coming up with new and untried ideas.
Engineers at RWE npower have to handle these problems all the time. In the first two cases, there are often proven techniques and solutions which can be worked out in teams. Team work brings together engineers with different skills and experience. Teamwork encourages team members to bounce ideas off each other so can be fun as well as leading to solutions have saved RWE npower millions.
This is linked to open-ended problems. New solutions mean new risks, however, and engineers need to understand these. They have to take into account possible costs and health and safety issues along with the technical aspects of the solution. Solutions must take into account the needs of the customer. For example, small defects in turbine blades in power stations are inevitable during their working life. When these are reported, managers need weigh up the various options repair, up the various options (shutdown, repair, replace etc.), The first priority is health and safety, but then they consider commercial criteria, including cost and customer needs.
RWE npower employs graduate engineers straight from university. They are trained and
have a good career path in the company. They are encouraged to think for themselves and solutions to problems. Some solutions can save the company millions so as its investment in graduates is worthwhile.
develop creative solutions to problems. Some solutions can save the company millions so RWE npower knows its investment in graduates is worthwhile.
RWE n power needs good engineers to be able to fulfil its commitment to supply energy 24/7. These engineers need to be not Just skilled at their specialisms, but able to solve. problems in a creative way.
Issues for Discussion
- What do you understand by the term, ‘thinking outside the box’? Give an example of how this can be applied to engineers working for RWE npower.
- How does encouraging thinking outside the box help RWE npower to make improvements in the way in which it operates?
- Explain how encouraging engineers at RWE npower to think outside the box has led to increased motivation for these employees.
- Recommend wavy in which another organisation of your choice might improve its employees to think in creative ways about work. results through encouraging its employees to think in creative ways about work-related problems.
Creating a high performance culture
The culture of an organisation is a way of describing the typical way in which that organisation operate. It Is something that is created over time by the organisation and the people that work for it. Siemens is built on a high performance culture. This means that everyone share One shares the same vision and, values and busts each other’s contribution.
Siemens is a global electronics business with a turnover of around £60 billion a year. Its global headquarters are based in Germany but has sites around the world including around
100 in the UK with its UK HQ in Berkshire. Siemens products touch all our ranging
from kitchen equipment to power generation and from traffic lights to hospital scanners.
Siemens is committed to helping its employees to develop and fulfil themselves at work. They may want more training, more interesting jobs or just a better work-life balance. Siemens knows that to maintain and develop the excellent workforce that, it has
good people management. It believes that its human resources should be actively involved (called ‘engagement’) in its activities. This is a key plank of Siemens’ business strategy.
This is the name given to the part of the strategy that relates to people management. It consists of four main elements:
* achieving a high performance culture
* increasing the global talent pool
* strengthening expert careers
* Siemens Leadership Excellence Programme (SLE).
At its heart is the building of a high performance culture. Employees know that they are valued and busted and this helps to motivate them. Siemens uses a number of ways to make sure that it shows its appreciation of employees. This all helps them to feel part of a successful team and helps Siemens compete more effectiveIy.
Creating the culture
The high performance culture is based on teamwork. Targets are set for the business and these are related to individual and team targets. In this way, everyone is working towards better results. As team performance improves over time, so does the business.
Siemens makes sure that all of its employees, not just the high fliers, are supported to reach their potential. It matches individuals’ talents with tasks. Talent management allows for:
* job enrichment. where extra tasks or responsibility can make a job more rewarding and
* job enlargement, where the scope of a job is widened and extra skills developed.
Talent management is applied to the business globally as a key par! the business strategy. It is closely linked to performance management. Performance management is Used to monitor progress and set objectives for employees. It allows an honest dialogue to take place so everyone knows how well they are performing and how they might improve. This feeds directly into the high performance culture.
The success of an organisation can be traced back to its people. Siemens demonstrates thins well. Its high performance culture supports people and helps them to reach their potential. This helps Siemens to be competitive.
Issues for Discussion
- How does Siemens seek to provide good career opportunities for employees?
- Describe one of the systems that Siemens has created which provides development opportunities for employees at work
- How important is the appraisal system in helping to create shared understandings the objectives of the organization and personal objectives of individual employees?
- How effective do you think the Siemens approach to people management will be 2 in creating great results?