The responsibility of postal service is collecting and delivering general mails and parcels for people (Royal Mail, 2010). Royal Mail, which was founded by the king Henry VIII in 1516, is the largest postal company in Great Britain (Articlesbase, 2010). Certainly, Royal Mail is the nationwide postal service of Britain and still a limited company owned by Britain authority (Sparrow, 2009). However, Royal Mail lost its 350-year monopolistic position in the postal industry of the UK from 1 January 2006. At the same time, the UK postal service market tended to completely open to competition. Royal Mail chief executive Adam Crozier announced that they had already prepared for the competition (BBC News, 2005). He aspired to achieve the victory in this competition. Due to this situation, the staff of Royal Mail needed to pull together to meet the challenge. Therefore, Royal Mail has established several HRM (Human resource management) strategies and policies to reach this target from 2005-2010. Admittedly, everything tends to have two sides. Some of HRM strategies and policies Royal Mail made were perfect, some of them seemed not to be satisfied.
This project will choose and illustrate two events of Royal Mail about HRM strategies and policies from 2005 to 2010. Furthermore, this project will make some comments to these two events. The first event is about recruitment and selection. Royal Mail use good strategies in this event. The second event is about strike. Royal Mail had a bad performance to lead to strike. After analysis the second event, this project will give an appropriate solution.
Recruitment and selection of Royal Mail
In this competition, Royal Mail has many powerful rivals, such as DHL and TNT (The New York Times, 2005). Royal Mail started compete every resource including HR (Human resource) in the postal service market with other competitors. Looked into the opening market in the UK by 2006, the competition became fiercer. As competition continued to increase, Royal Mail cut the expenditure and advanced efficiency by a reorganisation to ensure the sustained high quality of service. In addition, Royal Mail, similar with other competitors, was up against a serious problem to recruit and keep their staff loyal. This problem was especially severe in the South East of England (article 13 and CBI (Confederation of British Industry), 2005). In order to reduce the costs of reengage staff, Royal Mail have to change their conservative recruitment. Accordingly, how to plan a new style recruitment to gain a loyal person to work for them is very important. This has a brilliant reflection on Royal Mail. They divided the process of recruitment into two steps.
Firstly, Royal Mail needs to make a pool of suitable applicants. They must make sure all of the people in this pool seem to be loyal. As a result, how to attract as many loyal applicants as possible is very significant. The recruitment and selection tend to be "a two-way process" (Newell and Scarbrough, 2002, p. 89). That means applicants will appraise companies like companies will appraise applicants. In other words, applicants hope that they can achieve their dreams or expectations through working in the company that they might choose. The company also hope that the people who they will choose can have a good job performance in order to get a good outcome. According to a survey by Brenan and McGeevor (1987), 58 percent of graduates had transformed their jobs at least once during the period of their first 3-year employment. The reason of this is the graduates cannot feel satisfied with their works, and the company cannot achieve their expectations (Newell and Scarbrough, 2002, p. 89). Therefore, Royal Mail needs to change their pool to new suitable pool, because of their low satisfaction and achievement for staffs. There is a famous concept named psychological contract can give Royal Mail a good advice. This concept shows that some of company's and the staff's expectation or considerate were not written by the real contract. However, they can obtain them in spirit from each other (Bratton and Gold, 2007, p.14; Mullins, 2007, p. 13). This concept represents the "two-way process" from another aspect. If the psychological contract is affirmative, the employee will work hard and feel satisfied. For company is vice versa. This will bring an affirmative effect to the company (CIPD, 2010). Hence, Royal Mail should think about what kinds of people they could help to achieve their dreams.
In fact Royal Mail did a good job in this key link. Depending on the above situation, Royal Mail released a plan to solve it. The core target of this new programme was to attract employees who work within the company with their pleasure, feel confidence and enjoy their work. These include the disabled people and the people who are difficult to study. Based on caring people, who are the publicly excluded groups, the Royal Mail has responsibility to help them obtain jobs, while the company can also maintain its reputation (CBI (Confederation of British Industry) & article 13, 2005). Therefore Royal Mail tends to use new ideas to challenge conservative recruitment practices. They made a decision to hire the publicly excluded groups, which include 380,000 people who are homeless, 700,000 disabled people and 47,000 ex-servicemen. In the selection process, eight homeless people obtained the job successful and satisfied with the recruitment. All of the publicly excluded people had the excellent performance, and they were very enthusiastic in the selection process. In this case, the expectations of applicants who are the socially excluded groups are having a fairly process and identical chance, respected by their company. Royal mail can do this for them, and also can give them thoughtful and caring feelings for their individual difficulty. Meanwhile, the expectations of Royal Mail are all of their staffs can try the best to chase the company's objectives, keep loyal and be compatible with colleagues (Mullins, 2007, p. 14). Royal Mail tends to be kind to these kinds of staffs and recognise their performance, and staffs will have a good performance to make Royal Mail satisfied and achieve the company's target. Just like the psychological contract.
Secondly, Royal Mail has to consider about how to select and put the right people in the right post after making the pool. In HRM strategy, right people work in the correct post at the accurate moment would make more efficient for the company. This is the basic of revenue, job contentment and sustainability for the corporation (Ryan, 2007). Every company in postal industry, which wants to win in this competition, should need appropriate staffs to work for them. Furthermore, different people will be appropriate for the different post. Because of the individual differences, the company should make a right choice for recruitments and selections. For instance, thinking about the employee's attitude, psychological and physical characteristics (Bratton & Gold, 2007, p, 257). Company can choose staffs from their appropriate recruitment pool and train them flexibly in the light of above. There is a good example to support this idea. The biggest retailer named Tesco has over 2,200 stores in Great Britain in 2009. Now they have 280,000 employees in Britain and over 460,000 in the whole world. As a largest retailer, for HR adjusting, Tesco has its own workforce planning. They hire the right people, and classify these people. They put the people who have the same skills in the same post. They evaluate and make sure the post is right for these kinds of people. Meanwhile, Tesco train their staffs elaborately through a flexible approach (The Times 100, 2009). This perfect HRM strategy made them achieve a good staffs' performance to be a successful company. The case of Tesco reveals the significance of the right people working in the right position. Similarly, this workforce planning is propitious to Royal Mail.
Royal Mail needed to allocate their employees who will be competent for the postmen, mails sorting, deliverymen and drivers. Royal Mail has a rational method to arrange their staffs. They allocated the different people to the different positions. From the "right man" point of view, staffs can maximise their capability and efficiency. For example, ex-serviceman could participate a series of posts such as postmen, drivers and deliveryman, because their working experience gives them a great physique and system training. Postmen, drivers and deliverymen seemed to be perfect posts for ex-serviceman. They could do these jobs efficient without mistakes. In addition, people who without the good education background may be suit for posts that are more easily, such as sorting mails and some repetitive works.
Strike
Although the recruitment and select strategy of Royal Mail is excellent, Royal Mail has some terrible HRM strategies. The strike in 2009 reflected it.
As the recent development of Royal Mail, privatisation became the core object to the company. However, the company partly privatisation still not successful, because a bill was delayed arriving in the House of Commons by the financial crisis (Sparrow, 2009). Depends on this urgent situation and for the sake of boosting company privatisation, Royal Mail bosses expected the public would provide a different effort to privatise the corporation if they make the corporation unpleasant enough to affect the mostly postal service. They debased their postal service, made it more inefficient, raised the service price, and reduced the reliable. On this account Royal Mail wished the public could discover these bad shifts and customers could complain the badly service. As a result, Royal Mail wished they might achieve the purpose of company privatisation with this approach. However, they were not success at last. This reasonless action destroyed their own reputation, and made their staffs feel that company might only focus on the benefit of the short-term. According to the two process theory, the staff might try to change their job to another company which had a good reputation. Hence, this action could make Royal Mail lose some of their staffs. In fact, this is one of the reasons of strike.
Moreover, Royal Mail has reduced thousands of full-time jobs since 2002, including more than 50,000 posts. Finally, they even determined to use part-time workers or temporary contracts instead of mostly full-time job workers in 2009. Temporary workers just take the temporary wages, temporary pensions, temporary illness pay and temporary rights (Socialist worker online, 2009). At the same time, most of Royal Mail's staffs have to accept a wage freeze. Furthermore, the staffs must attend overtime work and with no pay. This action made lots of staffs feel unhappy, and lead them to strike. All of these result because Royal Mail wanted cut their costs in the economic decline climate. However, the method they choose is not good. They took reduction-in-force seemed to be not wise. There is a conceptual framework expresses the cost-reduction process in figure 1. Some companies such as GM, Ford have used this method. Royal mail seemed to use this method as well. In a way, this method can delay or avert the reduction-in-force (Gandolfi, 2008).
Fibgure 1. Conceptual framework of cost-reduction stages
Source: Adapted from Vernon (2003), George (2004), and Gandolfi (2008)
In fact, this method did not work in Royal Mail's case. Especially, cutting in overtime or overtime without pay was not a good idea. Admittedly, a majority of post workers, their salary is very low. They are only paid £100 per week. Hence, the payment of overtime is the lifeline for them. Most of them live by overtime. As a result, more and more staffs tended to find another job that can offer them overtime with pay. This seemed to be a disguised layoff. If staffs were not happy with this, they will strike. This brought an extreme terrible effect to Royal Mail. That is strike. These series wrong decisions of Royal Mail lead to almost staffs are discontent. Ultimately，up to 8,000 Communication Workers Union (CWU) members in London and approximately 160 workers in Scotland strike for 24 hours on 19 JUN 2009 Meanwhile, Royal Mail has been criticised by CWU because of defiance the national agreement and threatened modernisation. In addition, CWU will stop the strike for 3 months as well as Royal Mail deal with engaging the CWU over modernisation and move to get the company on a sound footing for the future (BBC News, 2009). However, Royal Mail had not embraced this deal. This had leaded to delivery staffs walk out for three days since 9 JUL 2009 directly (BBC News, 2009).
Royal Mail can establish a reward system instead of the cost-reduction process. In this way, they can avoid the strike as far as possible.
Reward system, a kind of HR strategy, is the core aspect of the relationship between employers and employees. Every company need to decide how to devise the optimal reward system. Moreover, the strategy decisions should be in keeping with company's target. A good reward system may minimise the company's costs (Bratton and Gold, 2007, pp. 358-400). Especially during the financial crisis in 2009, bosses tighten their belts. Therefore the payment was impossible to increase or just has a little increasing area (Beardwell and Claydon, 2010, p. 507). The company cannot pay the high wage to every employee under the severe situation. They tend to be save costs as more as possible. Nevertheless they also want their staffs have high motivation on the work. Hence, the reward system shows extreme significant. Firstly, companies can make a standard of basic pay, which is the basic minimum pay of the occupation that the company cannot decrease. Secondly, staffs that have an excellent working can be paid a corresponding performance pay. Performance pay is an extra pay to the employee who has the good performance individually. There is a famous system named "Individual performance-related pay" gives many advantages to companies. For instance, they can indicate key work actions and offer message about which belong to the recent performance levels, and reduce organise of management. Moreover, a reward system can also affect the attitude and the behaviours of staffs. It can induce staffs' commitment and motivation. If the staff discontent with the reward system, they will have a high rate to change jobs, and have the low commitment on the work with low job performance. (Bratton and Gold, 2007, pp. 358-400). A good reward system not only reduces costs of corporation, but also improves employee motivation. Staffs will enjoy their working, and avoid strikes effectively. All of these lead to achieve the double win. Royal mail can establish a reward system and take the following action:
Establish a regulation of reward
Evaluate the staffs' work
Approaches to rewarding, such as(pay, promotion, development opportunities or esteem)
Rewarding anyone who has a good performance in his/her job or accords with the regulation of reward
On this premise, Royal Mail can reduce the salary to minimize their cost. The staff would not feel so unhappy with the reducing pay, because they can try their best to earn the reward. For example, although the overtime with no pay, the staffs do the more overtime, the more possibility they will won the reward.
Similarly, if a staff does the job better than others, he/she will get the reward.
It not only induces staffs' commitment and motivation, but also improves the quality of work to obtain the profit for the company.
In addition, the reward system must be fair. How to make the reward fair is very important. The unfair reward will reduce the staffs' enthusiasm.
The equity theory proposed by Adams advocated social comparisons drove people to work hard or not. Staffs will compare their expending and return with other staffs. For example, if they found they spend more time and effort but less return than others, they tend to lose their enthusiasm and work worse than before to make the rewarding seem to be fair. On the contrary, if they found they get more return but spend less effort, they will feel guilty and intend to spend more effort on job to make the rewarding seem to be fair. What is more, as time goes on, these lucky staff tend to stop do the job on their best and feel the unfair reward is merited.
From the above mentioned, the HR manager needs to do the following things:
Reducing unfair reward policy. For example, avoiding doing the same job actually but have the different pay or reward, avoiding being partial to some staff specially.
The so-called fair is very subjective. It is difficult to control. Many people always did not see that others' payout with contributes. They always thought that their performance was better than others. The manager must communicate with staffs about these kinds of information and let staffs know their real performance.
The Adams' equity theory also provides a method to keep the reward fair. The HR can use the model of figure 2 to keep the reward fair. (Adams, 1963, p. 422-436)
Figure 2. Adams' Equity Theory
Source: Adapted from Adams (1965), Beardwell and Claydon, (2010, p. 506)
The 'Equity Theory' perfectly shows the relationship between rewards (outputs) and the devotions (inputs) of employees. The motivation of employees not only related to the reward, but also related to the equity of reward closely. People will compare their own devotions to the reward they received. Meanwhile, they will make a judgement to the equity. The result will affect their motivation and behaviour directly. If employees feel justice on the distribution, they will have more motivation on their work. In anther hand, employees will be negative and tend to reduce inputs if they feel unfair on the distribution (Beardwell and Claydon, 2010, p. 506). In spite of the fact that some scholars criticise that the 'Equity Theory' model is too simple, this model still can be considered as a classic theory for practice (Huseman, Hatfield & Miles, 1987, pp.222-234).
From the above mentioned, the HR manager needs to do the following things:
Make sure the reward system is fair (follow the Adams' 'Equity Theory).
Communicate with staffs frequently to collect the fair reward system ideas.
Using this method could help Royal Mail avoid the strike.
Conclusion
Due to the recent recession, the employees of Royal Mail needed to pull together to face the challenge. Therefore, Royal Mail has established several HRM strategy and policies from 2005-2010. This project chose and showed two events of Royal Mail about HRM strategies and policies from 2005 to 2010. Additionally, this project also made some interpretation to these two events. The first event is about recruitment and selection. They divided the process of recruitment and selection into two steps. Firstly, Royal Mail needs to make a pool of suitable applicants. Secondly, Royal Mail has to consider about how to select and put the right people in the right post after making the pool. Royal Mail used good strategies in this event and had a bright reflection. The second event is about strike. Royal Mail had a bad HRM scheme to lead to strike. By studying the second event, this project has given an appropriate solution.
Consequently, after studying this project of Royal Mail, it can be easily seen that a good HRM strategies and policies are really important to companies. The appropriate HRM strategies and policies could lead Royal Mail to achieve the great operation. Contrarily, the bad ones could make some crisis.
