Assignment
HRM and the Royal Bank of Scotland The RBS has been undergoing major changes in recent years, partly as a result of growth via merger and acquisitions (e.g. merged with the National Westminster Bank in 1999, and partly as a result of developments within the financial services sector in which it operates. The mission statement of the RBS includes: ‘to provide financial services of the highest quality'; as with other organisations RBS must then develop objectives and strategies in an attempt to provide more focus and guidance for employees in seeking to achieve the company's mission. The role of the HRM department will be to support the process of sharing an understanding about what needs to be achieved, and then managing and developing people in a way which will facilitate the achievement of these objectives. For example, in common with other companies in the financial services sector, the RBS is seeking to change from a culture that rewards performance using a ‘slow' incremental pay system, into one that more closely relates pay to personal performance and achievement.
The HRM department is therefore introducing new performance appraisal systems and incentive schemes in an attempt to help the company achieve its long-term strategic objectives. By introducing more beneficial bonus and profit-sharing schemes, whereby pay is more closely related to individual and corporate performance, employees will arguably become more motivated to contribute to the achievement of the overall goals of the RBS. A further internal factor that has influenced the HRM function at RBS is the merger with National Westminster Group. This merger was, of course, seen as being of potential benefit to many employees by creating new opportunities and offering enhanced career prospects in the new, larger business. It was recognised in 1999 that the merger would also place greater emphasis on the HRM function of the company and may even involve an expansion of the existing department and its operations. It was seen as necessary to review the current HRM practices of the new and enlarged business and consider revising them in order to bring them into line with the objectives of the RBS.
As well as increasing the activity of the HRM department in areas such as recruitment, selection, training and development, this expansion would inevitably also require the clear communication of the RBS's culture, values and strategy across a wider and more disparate cohort of employees. It was recognized to be essential that the HRM functions of both businesses be closely integrated so that there would be a well-defined, common goal for the new, expanded business. Due to increasing levels of competition within the financial services industry, all organizations in this sector are striving to improve productivity. It is argued that one way of achieving this improvement is to manage human resources more effectively.
The HRM department of the RBS could seek to achieve this by various means; for example, by empowering employees (i.e. allowing workers to make job-related decisions, thereby increasing staff involvement), by encouraging teamwork (in order to improve quality and efficiency) and introducing clear and consistently applied communication and assessment mechanisms (to enhance staff performance and increase awareness). By introducing these initiatives into the workforce, it may be possible for the RBS to encourage employee involvement, thereby maximising the contribution made by employees. The direct effect of involvement in the organisation is expected to be an increase in the individual employee's commitment to the workplace or the job (one of the four important categories under the Harvard model). This commitment will hopefully be reflected in increased productivity, lower labour turnover and reduced absenteeism. For the RBS this empowerment of employees may also call for new skills on the part of both the managers and employees and it will be the role of the HRM function to try to successfully implement these changes. The HRM department will be involved in designing policies and procedures to encourage employee involvement in line with the overall strategic plan of the RBS. For example, managers may need training in the techniques of participative management if they have been used to a control management style, and employees may require confidence-building sessions and training in decision making. This departure from a control culture which focuses upon close supervision can also have an impact on organisational structures; for example, the tall hierarchies with numerous reporting levels, traditionally associated with companies like the RBS, may need to be replaced by the more modern, flatter structures which better facilitate empowerment.
A further component of the external environment that HRM specialists within the RBS need to consider involves the workforce and the changes that are occurring within it. For example, the British labour force has increased by 1.6 million people over the past decade (i.e. from 27.8 to 29.4 million), with an estimated 1.3 million of this increase being women, so that by 2006 women will represent 46% of the entire British labour force. These statistics arguably highlight the importance to the HRM department of the RBS of effectively utilizing programmers for managing diversity among its workforce, whereby women and other minority employees receive support, recognition and the same opportunities as non-minority workers.
The increasing proportion of women in the workforce may be attributed in part to socio-economic influences such as the social acceptability of women in employment and the growing availability of part-time work. These factors may oblige the RBS to adopt more open approaches to recruitment and to consider the necessity of providing more extensive training. It will be the role of the HRM department to proactively implement strategies to successfully manage diversity amongst the workforce. This may involve addressing stereotypes to ensure that a job does not become ‘sex-typed' (i.e. deemed appropriate only for one gender) and developing gender-neutral job titles to encourage both male and female applicants. The HRM department of the RBS might be requested to undertake a thorough analysis of the internal environment in order for the organization to retain its competitive edge. These internal influences may include: the company's strategy, objectives and values; the leadership styles and goals of top management; the organizational structure, size and culture; and the nature of the business.
Question
1 Outline the strategic implications of this case study for the HRM function within an organization.
2 Can you identify policies which might support the four outcomes identified in the Harvard model, namely commitment, competence, congruence and cost efficiencies?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.