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Case Study: Royal Mail Group
Royal Mail Group is a firm that belongs to the UK government. The organization is a company with lots of success in previous years. The company's annual turnover account was seen to reflect its degree of success. Despite past success, Royal Mail Group has continued to witness a high level of competition. The company is now experiencing financial and performance problems. Royal Mail is a national institution with over 200,000 employees. The business has poor industrial relations and would account for 50 percent of lost working days due to strike. The company was nearing insolvency, and workers knew Royal Mail Group to have low pay for long working hours. The company had an over-reliance on agency workers. The company's adaptation of its culture and internal structures to the fast-changing external environment was failing.
Royal Mail HR function in terms of people working in and out of the specialized HR function was 200 million yearly. Each year the company had to employ 3,700 employees in the HR department. It meant that the ratio of Human Resource staff to Employees was 1:55. For every 55 employees, only one HR member was available. The company's HR had the part with numerous procedures and policies covering every aspect of management and employment of workers, which was contrary to the primary role of HR. The role defines the state of the firm's employee relations. Unfortunately, the Royal Mails increasing influence on centralized human resource function led to the de-franchising of the company's managers. They felt unable to engage with the team directly.
Why the Company Chose To Transform its HR Component
The group had a very large volume of managers in a surplus pool, being paid well for limited business. In fact, some employees were actively fighting to be in the surplus pool. The company saw that this situation was completely hindering the achievements of the group. The management decided to partner with Rialto to drive a step of change in performance. Also, this move sought to support employees in delivering the change. Royal Mail Group had to transform its human resources to be able to change the culture of its business. It was done basing their transformation on a clear understanding of the needs of workers. The process was to involve a reduction of costs in general. There was to be a modernization of the employment procedures and processes, to professionalize the HR function. Strategic values were to be added through a change in the company's relationship with trade unions.
Royal Mail Group had to empower their line managers, for them to drive the change. The company was able to achieve the transformation when they decided to create new human resource architecture. It was based on clear distinctions between different contributions of the requirements of the HR. The new HR was to base their functions on three distinctive domains. First, it was to establish the functional expertise to support the line. Second, it had to create business partners to work in the trade. Thirdly, they had to have shared services capability to deliver efficiency in the administrative duties. A company having a good reputation has the benefit of attracting the labor market. Royal mail knew this was a core requirement to enable them to frame new sets of HR strategies.
The Challenges Faced
It is very demanding the HR to build a commercial future. Royal Mail was facing challenges while trying to develop business partnerships with unions. Consequently, it required the company to involve partnerships in key projects to help drive positive development, world-class service, and staff engagement. The real challenge was that Royal Mail Group had to invest considerably in the development of their HR team. The company was facing radical business changes with increasing financial pressure and competition. It was to reduce costs to increase profitability. Royal Group was to focus more commercially, thus a culture change that reflects the new business model of the group was needed. The department was to have new talent that could lead to changes. The results of the company's transformation were impressive. The ratio of HR workers to employees increased to 1:130. There was a new attitude that led to a transformation in relationships and attitudes. As a result, there were restrictive business practices and industrial disputes with a reduced headcount of 34,000. It is clear that it was the beginning of the transformation and not the end of the process. The stiff competition due to the change in monopoly status the company had before the year 2006 was weakening. The company was not able to procure enough funds for restructuring. It led to the need to raise the company's productivity levels and jobs. Therefore, the HR contributions were expected to be made if they were to ensure that there was a new relationship with line managers.
The Transformation Phase
Initially, Rialto had to work with the Group's HR director to get a clear understanding of the challenges that the business was facing. Then, they agreed to have a strategy and approach to be able to solve the issues. It was aimed at providing individuals with future responsibilities. It was an option to align new business requirements with obligations or choose alternative routes. Royal Mail had to focus on developing prior human resource management skills, such as diversity, leadership quality, and organizational experience. The business partners became involved with HR managers and were scattered across different business locations. Royal Mail (by combining these strengths of HR strategy) believed that business would flourish in these areas as improvements were being made. The five different areas within their technology function had their own specialized focus. It enabled working with different experts within a wide range of commercial and technical backgrounds. Royal mail used Rialto to undertake an extensive assessment and strategy phase. Interviews and 10 executive stakeholders were made to help understand and develop a new way of managing people and the business. It was a strategy for aligning individual workers to the future requirements of Royal Mail Group. Rialto made an integrated delivery plan with relevant sets of recommendations for the business.
Royal Mail gave service notice to redundancy terms, entering into negotiations with unions to make new agreements. The transformation was supposed to involve changing the obligations and conditions of people currently in a surplus pool. Royal Mail had to renegotiate the change. The process was significant in sending a very strong message to the team that Royal Mail was going to pursue. Royal Mail used coaching programs that provided managers with tools necessary to instill confidence, understand organizational messages, and develop skills to enable managers to handle complex conversations and provide positive assessments.
Outcomes and What Process Used to Change Royal Mail Group
After the transformation, Royal Mail was able to reduce the headcount targets without making high costs of redundancy which, was done by the use of unions in reducing surplus pools. The unions were to encourage and support their members to ensure they take ownership of their careers. As a result, the surplus population went from 1620 managers to 10 after 9 months. Performance management conversations led to managers using skill's talent from Rialto coaching programs. Over the years, there was voluntary redundancy available as a tool for change at the Royal Mail Group. Unfortunately, the best employees were self-selecting, so they left the group and low performers remained in the business.
Changes to the HR Department Structure or Team
Royal Mail Group's success needed to create a culture that could support, encourage, and invest in the organizational development of their employees. The HR department was to ensure continuous professional development for their team, as well as ensure that they have clear mission-critical competencies. Another area was planning for continuous development in terms of anchoring the company's performance to the business mission, objective, goals, and needs. The development was supposed to be tied to career goals and the work of every single employee. Workplace programs were used to change and improve organizational and individual performance using training, retreats, and conferences. Employees had the responsibility of working with managers and supervisors to meet the company's development needs. On the other hand, HR management had the primary responsibility of initiating communication regarding business. They were to work in partnerships, or with individual employees to assess their needs and coordinate business units. Managers had to ensure the implementation of the staff development plans, in addition to incorporating development and training into the performance appraisal. Most importantly, the HR management was seeking to develop supervisory and management skills in their employees.
Changes that HR needs to commit to preserving the future are significant. They have to acquire and apply a stronger business orientation in their designs and delivery of HR services and activities. It is a major implication on the mindset and skills of an HR professional about selection and recruitment. Another commitment is to be clear about priorities employees pursue and explain why certain activities are more important than others. It inevitably means that HR agendas and deployment of resources are influenced and not determined. Development of future HR expertise, which involves competencies and skills, allows the delivery of solutions. It would offer advice and support to the company's managers. Lastly, HR managers have to have the aptitude to motivate, build relationships, and seek to build commitments.
Assessment of Royal Mail Group
Organizations should hold unique strengths of efficient recruiting that step the firm to a higher level of development. Royal Company should involve group coordination that is realized through exploration of the company's strengths and power. Innovative ideas in the business should be given a chance for development, thus creating an environment for a new culture. HR management ought to be the top priority for the management agenda in Royal Mail Group. For this purpose, the company would require its employees to stick to strict timelines. Royal mail did well to organize its structure to facilitate HR management. It enhanced the clarification of roles, responsibilities, and relationships in the business. Additionally, the levels of authority and reporting or supervisory roles became clear. HR managers were then able to determine the financial, human, or technical resources available, and their allocation.
Shared organizational services are self-explanatory within professional services organizations. They turn knowledge into productivity via deep centers of expertise that turn information into solutions. The Royal mail human resource department can learn from and adapt the company's culture according to this model. The plan addresses organizational needs that Royal Group needs to address; define the organizational basic design choices, as well as organize HR experience to client productivity. Furthermore, this approach allows aligning the business organization in line with HR requirements, as well as clarifying the role and responsibilities for each HR and creating a contract of engagement on how HR roles would work.
Conclusively, the future of Royal Mail Group tends undoubtedly to be influenced by the new developments in technology and organizational forms. The capability of line managers to take more responsibility for their staff is also a factor to be considered. It might also be argued that the group's future would always be the responsibility of those working in the human resources department. The question is whether they are in a position to rise to the emerging challenges that are confronting the profession.