You are on page 1of 76

ACHIEVING BEST PRACTICE

IN YOUR BUSINESS

High Performance Work


Practices: linking strategy
and skills to performance
outcomes
IN ASSOCIATION WITH

Published by the Department of Trade and Industry. www.dti.gov.uk


Crown Copyright. URN 05/665; 02/05
High Performance Work Practices:

linking strategy and skills to


performance outcomes
Johnny Sung

David Ashton

Acknowledgements

The DTI drives our ambition of


prosperity for all by working to
create the best environment for
business success in the UK. We would like to thank the many people who David Ashton is Emeritus Professor at the
We help people and companies have contributed to the research effort that Centre for Labour Market Studies of the
become more productive by has gone into this report. Special thanks go University of Leicester. He has published
promoting enterprise, innovation to the companies who were involved in the extensively in the field of international
and creativity. survey and case studies, without whom the human resource development and has
research would not have been possible. advised national governments and
We champion UK business at home international bodies on human resource
and abroad. We invest heavily in We are also grateful for the support of the development policy.
world-class science and technology. CIPD, especially Victoria Gill and Jessica
We protect the rights of working Javis, who facilitated the survey for us. The CIPD explores leading-edge people
people and consumers. And we Jonathon Austin and Aman Grewal of Best management and development which aims
stand up for fair and open markets Companies were invaluable in ensuring the at sharing knowledge to increase learning
success of the case studies. We would also and understanding among human resource
in the UK, Europe and the world.
like to thank Martin Quinn at the Centre for professionals. Our purpose is to make
Labour Market Studies for coordinating the people more effective in their jobs and
logistics of the survey. enhance their contribution to the business.

Thanks also to Nigel Crouch and Sam Hanna We produce many resources on people
of the DTI for their support and Barrie management and development including
Oxtoby, Susan Anderson, Peter Robinson guides, books, practical tools, surveys and
and Anthony Ridding for commenting on the research reports. We also organise a number
business relevance of the case studies. of conferences, events and training courses.
To find out more please visit www.cipd.co.uk.
Johnny Sung is currently Senior Research
Fellow at the Centre for Labour Market Best Companies Ltd. researches workplace
Studies at the University of Leicester. He has practices and compiles the national and
published extensively on national education regional Best Companies to Work for lists.
and training systems, workforce We use this research and in-depth
Achieving best practice in your business is a key development and workplace learning. experience to help companies look after their
theme within DTIs approach to business support people and deliver better organisational
solutions, providing ideas and insights into how performance.
you can improve performance across your
business. By showing what works in other
To find out about participating in the lists, or
businesses, we can help you see what can help
you, and then support you in implementation.
about our work with companies, please visit
This brochure focuses on these solutions.
our website www.bestcompanies.co.uk or call
us on 01978 856222.

01
Executive summary

Contents This report, funded by the Department of Trade and Industry


(DTI) brings together the results of ten case studies of high
03 Executive summary 22 The ten case studies performance work practices (HPWPs) facilitated by Best
24 Aspect Capital
05 The background to the study 29 Bacardi & Martini UK
Companies, and a survey of 294 companies facilitated by the
34 Data Connection Chartered Institute of Personnel and Development (CIPD).
10 The 2004 HPWPs survey 38 Flight Centre
43 i-level The case studies have been drawn from a include appraisals, flexible working and
18 The case studies 48 Pannone & Partners sample of companies included in The other practices that deliver business results.
What can we learn from the 53 Quest Diagnostics Sunday Times 100 Best Companies to Work
57 St. Lukes For 2004. The aim of the case studies is to A widely accepted definition of HPWPs is
case studies?

demonstrate the following: that they are a set of complementary work


How different are HPWPs? 62 Timpson
Good practice in a range of high practices covering three broad areas. These
How many HPWPs are needed? 66 W L Gore performance workplace practices; broad areas are sometimes referred to as
Different HPWPs are likely to be used Change management issues related to bundles of practices and cover 35 work
in different sectors and to achieve 70 Conclusion the implementation of high performance practices in this research:
work practices; 1. High employee involvement practices
different business outcomes The business benefits of implementation; e.g. self-directed teams, quality circles
The importance of people and 72 References The effects of implementation of high and sharing/access to company
people policies in HPWPs
performance work practices on information.
The importance of leadership skills policies. 2. Human resource practices e.g.
The purpose of the wider survey of CIPD sophisticated recruitment processes,
in HPWOs

members was to establish how far the performance appraisals, work redesign
What is the business case for HPWPs identified in the ten case studies and mentoring.
adopting HPWPs?
were adopted by other UK organisations and 3. Reward and commitment practices
Does high pay necessarily guarantee the relationship between the level of e.g. various financial rewards, family
adoption of high performance work practices friendly policies, job rotation and
the creation of a HPWO?
and a range of organisational outcomes. flexi hours.
The nature of skills in a HPWO
Implementing HPWOs and WHAT ARE HIGH PERFORMANCE Some practices can impact on more than
managing change
WORK PRACTICES? one area, for example, having flexible
High performance work practices are not working arrangements may enhance both
radical new practices, they are simply work employee involvement as well as employee
practices that can be deliberately introduced commitment to the organisation. Job
in order to improve organisational rotation is often used as a means to increase
performance. Those organisations that adopt the employees knowledge and long-term
HPWPs are referred to as High performance commitment to the organisation. But it is
work organisations (HPWOs). The concepts also by default a practice that will increase
of HPWOs and HPWPs may be unfamiliar to work involvement and at the same time
some businesses. However, the practices increase their level of skills.
associated with HPWOs are unlikely to be
new. Many of the staff that use and WHAT DID WE LEARN?
implement HPWPs would not necessarily see The survey of the CIPD companies confirms
themselves as in the vanguard of modern that many of the HPW practices have already
management practices, but merely as been adopted by UK organisations, e.g.
implementing what they see as common appraisals are used in 95% of the sample,
sense good practices. These practices whereas other practices, such as share

02 03
Executive summary

Contents This report, funded by the Department of Trade and Industry


(DTI) brings together the results of ten case studies of high
03 Executive summary 22 The ten case studies performance work practices (HPWPs) facilitated by Best
24 Aspect Capital
05 The background to the study 29 Bacardi & Martini UK
Companies, and a survey of 294 companies facilitated by the
34 Data Connection Chartered Institute of Personnel and Development (CIPD).
10 The 2004 HPWPs survey 38 Flight Centre
43 i-level The case studies have been drawn from a include appraisals, flexible working and
18 The case studies 48 Pannone & Partners sample of companies included in The other practices that deliver business results.
What can we learn from the 53 Quest Diagnostics Sunday Times 100 Best Companies to Work
57 St. Lukes For 2004. The aim of the case studies is to A widely accepted definition of HPWPs is
case studies?
demonstrate the following: that they are a set of complementary work
How different are HPWPs? 62 Timpson
Good practice in a range of high practices covering three broad areas. These
How many HPWPs are needed? 66 W L Gore performance workplace practices; broad areas are sometimes referred to as
Different HPWPs are likely to be used Change management issues related to bundles of practices and cover 35 work
in different sectors and to achieve 70 Conclusion the implementation of high performance practices in this research:
work practices; 1. High employee involvement practices
different business outcomes The business benefits of implementation; e.g. self-directed teams, quality circles
The importance of people and 72 References The effects of implementation of high and sharing/access to company
people policies in HPWPs performance work practices on information.
The importance of leadership skills policies. 2. Human resource practices e.g.
The purpose of the wider survey of CIPD sophisticated recruitment processes,
in HPWOs
members was to establish how far the performance appraisals, work redesign
What is the business case for HPWPs identified in the ten case studies and mentoring.
adopting HPWPs? were adopted by other UK organisations and 3. Reward and commitment practices
Does high pay necessarily guarantee the relationship between the level of e.g. various financial rewards, family
adoption of high performance work practices friendly policies, job rotation and
the creation of a HPWO?
and a range of organisational outcomes. flexi hours.
The nature of skills in a HPWO
Implementing HPWOs and WHAT ARE HIGH PERFORMANCE Some practices can impact on more than
managing change WORK PRACTICES? one area, for example, having flexible
High performance work practices are not working arrangements may enhance both
radical new practices, they are simply work employee involvement as well as employee
practices that can be deliberately introduced commitment to the organisation. Job
in order to improve organisational rotation is often used as a means to increase
performance. Those organisations that adopt the employees knowledge and long-term
HPWPs are referred to as High performance commitment to the organisation. But it is
work organisations (HPWOs). The concepts also by default a practice that will increase
of HPWOs and HPWPs may be unfamiliar to work involvement and at the same time
some businesses. However, the practices increase their level of skills.
associated with HPWOs are unlikely to be
new. Many of the staff that use and WHAT DID WE LEARN?
implement HPWPs would not necessarily see The survey of the CIPD companies confirms
themselves as in the vanguard of modern that many of the HPW practices have already
management practices, but merely as been adopted by UK organisations, e.g.
implementing what they see as common appraisals are used in 95% of the sample,
sense good practices. These practices whereas other practices, such as share

02 03
options for all employees, are only adopted brought results and the case studies
by 16% of organisations. demonstrate the context in which these
practices are used.
The background to the study
The report provides evidence that the level
of HPWP adoption as measured by the Key lessons in the case studies are also that
number of practices adopted, is linked to leadership is crucial in creating, shaping and
organisational performance. Those adopting driving these high performing organisations.
more of the 35 HPWPs have greater In none of the cases are high performance This report, funded by the Department of Trade and Industry (DTI)
employee involvement, are more effective in work organisations (HPWO) developing skills
delivering adequate training provision, for the sake of skills. Skills development is brings together the results of ten case studies of high
motivating staff, managing change and very focused and designed to achieve
providing career opportunities. Similarly specific business outcomes and levels of performance work practices (HPWPs) facilitated by Best
those adopting more of the 35 HPWPs have performance. The case studies show that all Companies, and a survey of 294 Companies facilitated by the
more people earning over 35,000 and fewer employers expect more than technical skills
people earning less than 12,000. from their employees. For example, in W L Chartered Institute of Personnel and Development (CIPD).
Gore, all recruits enter an induction
The case studies illustrate a relationship programme and are required to follow a
between the range of HPWPs used and the course in communication and listening skills
performance goals of the organisation, the as these are regarded as critical skills for the
The case studies have been drawn from a Those organisations that adopt HPWPs are
type of sector a business operates in and success of the organisation. St. Lukes, the
sample of companies included in The referred to as High performance work
how the relevant product strategy in a advertising agency, recognises that learning
Sunday Times 100 Best Companies to Work organisations (HPWOs). The concepts of
particular organisation is employed to and personal development are essential to
For 2004. The aim of the case studies is to HPWOs and HPWPs may be unfamiliar to
achieve results. For example, Timpson, in sustain the creativity and high skill levels on
demonstrate the following: some businesses, however, the practices
retail services, makes extensive use of which the business depends. To this end
Good practice in a range of high associated with HPWOs are not new. High
performance/turnover information for a wide appraisals are taken very seriously, as is the
performance workplace practices; performance working practices, in a nutshell,
range of purposes on a weekly basis e.g. idea of lifelong learning. Every employee is
Change management issues related to refer to the careful design of work
creating a sense of competition, cross- allocated 150 every year to make
the implementation of high performance organisation and practices so that they are
learning and immediate feedback. As a themselves more interesting and this can
work practices; systematically linked to the achievement of
result, Timpson, unlike all other case studies be spent on almost any relevant activity
The business benefits of implementation; organisational objectives and performance.
in the report does not have any formal they choose.
The effects of implementation of high They are work practices that are deliberately
performance appraisal. W L Gore has
performance work practices on skills introduced in order to improve
implemented a high degree of flexibility to In most of the case studies, training and
policies. organisational performance.
create innovative teamwork, leading to high continuous development was also regarded
levels of innovation, and Flight Centre as a given, and so it is not a matter of
The purpose of the wider survey of CIPD WHAT ARE HIGH PERFORMANCE
designs its system to maximise the benefits HPWOs training more. In a HPWO, it is
members was to establish how far the WORK PRACTICES?
of a standardised approach to an expanding more important to focus on training that is
HPWPs identified in the ten case studies The precise definition of HPWPs is subject
business known as the One Best Way. linked to performance requirements rather
were adopted by other UK organisations. to continuous debate. However, the general
than on quantity. Furthermore, tacit skills
In particular, the survey sought to ascertain definition that is widely accepted is that they
There is evidence that some of the bundles and institutional knowledge are relatively
whether there was correlation between the are a set of complementary work practices
of HPWPs work better than others in more important than technical skills in many
adoption of HPWPs and other organisational covering three broad categories: high
generating specific outcomes. For example, of the HPWOs studied. So in a HPWO, skills
outcomes and business benefits. Both the employee involvement practices, human
in order to achieve better support for staff policy is about creating a work environment
survey and the case studies were conducted resource practices, and reward and
and enhance organisational competitiveness, in which employees can learn all the time as
between June and October of 2004. commitment practices1. These broad areas
the use of the human resource and reward & part of their normal work and where they
are sometimes referred to as bundles of
commitment practices appear to be superior can take advantage of the system to effect
HPWPs have recently been brought to the practices and cover 35 work practices in
tools to employee involvement practices. performance and innovation.
attention of a much wider audience as a this research.
The case studies also suggested that
result of evidence about the impact of these
different HPWPs or bundles of practices, are High performing organisations tend to be
practices on business performance. In
likely to be used in different sectors to leaders in their industries, creating best
addition, they are also associated with the
achieve different business outcomes. For practice rather than following it. In most of
impact of globalisation and the emergence
example, the companies in the financial our case studies HPWPs have been used to
of the new knowledge economy. These
services sector made intensive use of create business success from the very birth
changes have all encouraged organisations
financial incentives, whereas in of these companies. However, to ensure their
to examine how they implement their 1 These categories are consistent with two recent UK
manufacturing and business services more continued success these practices are usually
workplace practices. reports Ashton and Sung (2002) and Thompson (2002).
use was made of high involvement practices. subject to constant modification in line with
But to all of these companies, HPWPs are the requirements of business objectives.
simply common sense practices that have

04 05
options for all employees, are only adopted brought results and the case studies
by 16% of organisations. demonstrate the context in which these
practices are used.
The background to the study

The report provides evidence that the level


of HPWP adoption as measured by the Key lessons in the case studies are also that
number of practices adopted, is linked to leadership is crucial in creating, shaping and
organisational performance. Those adopting driving these high performing organisations.
more of the 35 HPWPs have greater In none of the cases are high performance This report, funded by the Department of Trade and Industry (DTI)
employee involvement, are more effective in work organisations (HPWO) developing skills
delivering adequate training provision, for the sake of skills. Skills development is brings together the results of ten case studies of high
motivating staff, managing change and very focused and designed to achieve
providing career opportunities. Similarly specific business outcomes and levels of performance work practices (HPWPs) facilitated by Best
those adopting more of the 35 HPWPs have performance. The case studies show that all Companies, and a survey of 294 Companies facilitated by the
more people earning over 35,000 and fewer employers expect more than technical skills
people earning less than 12,000. from their employees. For example, in W L Chartered Institute of Personnel and Development (CIPD).
Gore, all recruits enter an induction
The case studies illustrate a relationship programme and are required to follow a
between the range of HPWPs used and the course in communication and listening skills
performance goals of the organisation, the as these are regarded as critical skills for the
The case studies have been drawn from a Those organisations that adopt HPWPs are
type of sector a business operates in and success of the organisation. St. Lukes, the
sample of companies included in The referred to as High performance work
how the relevant product strategy in a advertising agency, recognises that learning
Sunday Times 100 Best Companies to Work organisations (HPWOs). The concepts of
particular organisation is employed to and personal development are essential to
For 2004. The aim of the case studies is to HPWOs and HPWPs may be unfamiliar to
achieve results. For example, Timpson, in sustain the creativity and high skill levels on
demonstrate the following: some businesses, however, the practices
retail services, makes extensive use of which the business depends. To this end
Good practice in a range of high associated with HPWOs are not new. High
performance/turnover information for a wide appraisals are taken very seriously, as is the
performance workplace practices; performance working practices, in a nutshell,
range of purposes on a weekly basis e.g. idea of lifelong learning. Every employee is
Change management issues related to refer to the careful design of work
creating a sense of competition, cross- allocated 150 every year to make
the implementation of high performance organisation and practices so that they are
learning and immediate feedback. As a themselves more interesting and this can
work practices; systematically linked to the achievement of
result, Timpson, unlike all other case studies be spent on almost any relevant activity
The business benefits of implementation; organisational objectives and performance.
in the report does not have any formal they choose.
The effects of implementation of high They are work practices that are deliberately
performance appraisal. W L Gore has
performance work practices on skills introduced in order to improve
implemented a high degree of flexibility to In most of the case studies, training and
policies. organisational performance.
create innovative teamwork, leading to high continuous development was also regarded
levels of innovation, and Flight Centre as a given, and so it is not a matter of
The purpose of the wider survey of CIPD WHAT ARE HIGH PERFORMANCE
designs its system to maximise the benefits HPWOs training more. In a HPWO, it is
members was to establish how far the WORK PRACTICES?
of a standardised approach to an expanding more important to focus on training that is
HPWPs identified in the ten case studies The precise definition of HPWPs is subject
business known as the One Best Way. linked to performance requirements rather
were adopted by other UK organisations. to continuous debate. However, the general
than on quantity. Furthermore, tacit skills
In particular, the survey sought to ascertain definition that is widely accepted is that they
There is evidence that some of the bundles and institutional knowledge are relatively
whether there was correlation between the are a set of complementary work practices
of HPWPs work better than others in more important than technical skills in many
adoption of HPWPs and other organisational covering three broad categories: high
generating specific outcomes. For example, of the HPWOs studied. So in a HPWO, skills
outcomes and business benefits. Both the employee involvement practices, human
in order to achieve better support for staff policy is about creating a work environment
survey and the case studies were conducted resource practices, and reward and
and enhance organisational competitiveness, in which employees can learn all the time as
between June and October of 2004. commitment practices1. These broad areas
the use of the human resource and reward & part of their normal work and where they
are sometimes referred to as bundles of
commitment practices appear to be superior can take advantage of the system to effect
HPWPs have recently been brought to the practices and cover 35 work practices in
tools to employee involvement practices. performance and innovation.
attention of a much wider audience as a this research.
The case studies also suggested that
result of evidence about the impact of these
different HPWPs or bundles of practices, are High performing organisations tend to be
practices on business performance. In
likely to be used in different sectors to leaders in their industries, creating best
addition, they are also associated with the
achieve different business outcomes. For practice rather than following it. In most of
impact of globalisation and the emergence
example, the companies in the financial our case studies HPWPs have been used to
of the new knowledge economy. These
services sector made intensive use of create business success from the very birth
changes have all encouraged organisations
financial incentives, whereas in of these companies. However, to ensure their
to examine how they implement their 1 These categories are consistent with two recent UK
manufacturing and business services more continued success these practices are usually
workplace practices. reports Ashton and Sung (2002) and Thompson (2002).
use was made of high involvement practices. subject to constant modification in line with
But to all of these companies, HPWPs are the requirements of business objectives.
simply common sense practices that have

04 05
HIGH INVOLVEMENT REWARD AND COMMITMENT

High employee involvement practices encourage a much greater level of trust and Reward and commitment practices facilitate a greater sense of belonging and commitment to
communication between employers and employees through involving them more in the the organisation. Financial rewards such as profit-sharing, share options and performance-
organisation. High involvement is in turn accompanied by a high degree of empowerment related pay are powerful tools to establish a sense of stake-holding within the organisation.
and the exercise of discretion among the workforce. These practices are shown in our case Where it is effectively implemented, performance-related pay gives explicit recognition to the
studies and the survey results, to be linked to higher levels of staff motivation, leadership, contribution individuals and teams make towards organisational performance. However,
communication and teamwork. financial rewards are not the only tools that are used to create greater commitment among
employees. Egalitarian terms and conditions, free employee facilities and benefits (some
Common involvement practices are: extended to family members) and family-friendly policies also have significant effects in
creating a sense of identification with the organisation and, in some cases, a greater sense of
Circulating information on organisational performance and strategy
common purpose. In this way, rewards and commitment practices are used to create long-
Providing all employees with a copy of the business plan and targets term positive impact on employees and the achievement of organisational outcomes.
Staff Association
Internal staff surveys Common reward practices are:
Staff suggestion schemes Performance pay for some employees
Quality circles/total quality management Performance pay for all employees
Self-managed or self-directed teams Profit-sharing for some employees
Cross-function teams Profit-sharing for all employees
Kaizen specific efforts on continuous improvement in work systems Share options for some employees
Share options for all employees
Flexible job descriptions
Flexible working (e.g. hours, locations, job-share etc.)
Job rotation
Family-friendly policies
HRP HUMAN RESOURCE PRACTICES Non-pay benefits (e.g. free meals, gifts or health packages)
Benefits covering spouse or family members
Many of these practices are specifically targeted to create a greater depth of human capital
investment and hence skill formation within the organisation. The higher levels of skill in turn
are linked to improvements in the quality of work and the services delivered to the customer.
The evidence is that these will in turn lead to higher organisational performance e.g. higher
levels of productivity and innovation.
It is also important to point out that some practices and reward and commitment
practices can impact on more than one of practices to achieve organisational
Common human resource practices are:
these three broad areas. For example, having objectives. These objectives are depicted in
Annual appraisal flexible working arrangements may enhance the outer ring and may include financial
Formal feedback on job performance from superiors/employers both employee involvement as well as performance, innovation or other
Formal feedback on job performance from customers/clients employee commitment to the organisation. organisational objectives. The crucial point
Reviewing vacancies in relation to business strategy Job rotation is often used as a means to we seek to make through diagram 1 is that
increase the knowledge and long-term an organisation does not necessarily require
Formal assessment tools for recruitment (e.g. competencies etc.)
commitment of employees to the all of the HPWPs in order to move to the
Annual review of employees training needs organisation. But it is also by default a outer ring. However, it is important to
Training to perform multiple jobs practice that will increase work involvement recognise that some practices may form
Continuous skills development programmes and at the same time increase their level synergetic bundles that then produce a
of skills. greater impact on the organisational results
Structured induction training
identified in the outer ring.
Work-(re)design for improved performance Central to the effective implementation of
Workforce diversity for competitive edge HPWPs is organisational leadership and the As we have already mentioned, HPWPs are
Mentoring culture this creates. This is illustrated in not new. Ironically, the lack of public
QA assurance (e.g. ISO9000 or other similar schemes) Diagram 1 that also shows how this awareness about the link between these
leadership works through the three practices and higher levels of performance
The Business Excellence Model or equivalent
categories of HPWPs namely, high means that even some of those companies
involvement practices, human resource which have introduced what we term high

06 07
HIGH INVOLVEMENT REWARD AND COMMITMENT

High employee involvement practices encourage a much greater level of trust and Reward and commitment practices facilitate a greater sense of belonging and commitment to
communication between employers and employees through involving them more in the the organisation. Financial rewards such as profit-sharing, share options and performance-
organisation. High involvement is in turn accompanied by a high degree of empowerment related pay are powerful tools to establish a sense of stake-holding within the organisation.
and the exercise of discretion among the workforce. These practices are shown in our case Where it is effectively implemented, performance-related pay gives explicit recognition to the
studies and the survey results, to be linked to higher levels of staff motivation, leadership, contribution individuals and teams make towards organisational performance. However,
communication and teamwork. financial rewards are not the only tools that are used to create greater commitment among
employees. Egalitarian terms and conditions, free employee facilities and benefits (some
Common involvement practices are: extended to family members) and family-friendly policies also have significant effects in
creating a sense of identification with the organisation and, in some cases, a greater sense of
Circulating information on organisational performance and strategy
common purpose. In this way, rewards and commitment practices are used to create long-
Providing all employees with a copy of the business plan and targets term positive impact on employees and the achievement of organisational outcomes.
Staff Association
Internal staff surveys Common reward practices are:
Staff suggestion schemes Performance pay for some employees
Quality circles/total quality management Performance pay for all employees
Self-managed or self-directed teams Profit-sharing for some employees
Cross-function teams Profit-sharing for all employees
Kaizen specific efforts on continuous improvement in work systems Share options for some employees
Share options for all employees
Flexible job descriptions
Flexible working (e.g. hours, locations, job-share etc.)
Job rotation
Family-friendly policies
HRP HUMAN RESOURCE PRACTICES Non-pay benefits (e.g. free meals, gifts or health packages)
Benefits covering spouse or family members
Many of these practices are specifically targeted to create a greater depth of human capital
investment and hence skill formation within the organisation. The higher levels of skill in turn
are linked to improvements in the quality of work and the services delivered to the customer.
The evidence is that these will in turn lead to higher organisational performance e.g. higher
levels of productivity and innovation.
It is also important to point out that some practices and reward and commitment
practices can impact on more than one of practices to achieve organisational
Common human resource practices are:
these three broad areas. For example, having objectives. These objectives are depicted in
Annual appraisal flexible working arrangements may enhance the outer ring and may include financial
Formal feedback on job performance from superiors/employers both employee involvement as well as performance, innovation or other
Formal feedback on job performance from customers/clients employee commitment to the organisation. organisational objectives. The crucial point
Reviewing vacancies in relation to business strategy Job rotation is often used as a means to we seek to make through diagram 1 is that
increase the knowledge and long-term an organisation does not necessarily require
Formal assessment tools for recruitment (e.g. competencies etc.)
commitment of employees to the all of the HPWPs in order to move to the
Annual review of employees training needs organisation. But it is also by default a outer ring. However, it is important to
Training to perform multiple jobs practice that will increase work involvement recognise that some practices may form
Continuous skills development programmes and at the same time increase their level synergetic bundles that then produce a
of skills. greater impact on the organisational results
Structured induction training
identified in the outer ring.
Work-(re)design for improved performance Central to the effective implementation of
Workforce diversity for competitive edge HPWPs is organisational leadership and the As we have already mentioned, HPWPs are
Mentoring culture this creates. This is illustrated in not new. Ironically, the lack of public
QA assurance (e.g. ISO9000 or other similar schemes) Diagram 1 that also shows how this awareness about the link between these
leadership works through the three practices and higher levels of performance
The Business Excellence Model or equivalent
categories of HPWPs namely, high means that even some of those companies
involvement practices, human resource which have introduced what we term high

06 07
DIAGRAM 1: HPWPS AND ORGANISATIONAL OBJECTIVES
are therefore the leveraging links between These have been extensively documented in
work activities and the intended business Ashton and Sung (2002) and a summary of
outcomes2. these research findings and business
benefits is as follows:
Ma For example, there are many organisations
na
gi that claim to practise teamwork and to value Quantitative research has shown a strong
Rewar

ng
d
pra & c innovation. However, not all of these link between HPWPs and enhanced

ch
ct organisations have created a suitable performance using indicators such as

om es

an
t
Hig practic emen

ic
Innovation

ge
mi
environment by, for example, giving a higher productivity and profitability.

es

tmen
h involv
level of task discretion to employees, which The links between HPWPs and business
Leadership would enable them to transform the benefit performance can be identified in

t
culture etc. of team-working into higher levels of organisations located in many countries
innovation. A further example is the use of or territories, e.g. US, UK, Japan, Europe,
financial incentives. Performance pay Australia, Korea, Mexico, Brazil, Taiwan

H
um prac
an tices schemes may reward the employee for and New Zealand.
resource
doing their existing job well. However, they The links have also been identified in a
Pe
rfo
rmanc do not necessarily reward employees for variety of industrial contexts, e.g. paper
e
thinking of improvements beyond the mills, steel plants, apparel, service sector,
confines of their present job. The question is auto assembly, aerospace, financial
whether a one-off payment to reward good services, personal services and even
ideas is good enough to sustain an public sector administration.
performance working practices would not improvements in performance through the innovative culture. Furthermore, the The benefits have been identified using
have thought of their practices in these use of HPWPs. implementation of new ideas often means different study methods e.g. examining
terms. The practices listed for the three introducing new working arrangements and single-site companies, multiple-site
categories (high involvement, human Second, the use of different terminology by new skills to operate them. This in turn companies, long term studies and have
resources and reward practices) are either researchers has caused confusion. In some requires a positive attitude toward produced similar results in linking HPWPs
understood or used by most organisations. cases HPWPs are called high-commitment continuous learning on the part of all and enhanced performance.
management (Walton, 1985) or high employees. It is therefore worth finding out The practices may be more effective when
There are also problems in the way in which involvement management (Lawler, 1986). whether employees treat learning as a grouped together in bundles. A good
these practices have been used which may More recently they have been termed high positive and integral part of their work. It is example here is that the isolated use of
have led to confusion. First, instead of an performance organisations (Lawler et al, this form of holistic thinking, always quality circles is not as effective in
agreed list of practices, research on HPWPs 1998; Ashton and Sung, 2002) or high knowing the links between work practices producing results as when the practice is
has been characterised by the use of various involvement work practices (Wood, 2001). and performance outcomes that is central to supported by wider employee
lists, in some cases containing different Whilst these studies are referring to the the effective implementation of HPWPs. involvement/ empowerment practices.
practices. Take for example, Becker and same general phenomena the use of Other quantifiable benefits that have
Huselid (1998) who use more than thirty different labels has undoubtedly added to WHY ARE HPWPs IMPORTANT? been identified include increased sales
practices in their US study, while Guest the confusion. Without a single and well- Research from different parts of the world and increased market value for
(2000) uses eighteen practices in his UK defined term, researchers have missed many has consistently shown two main benefits of shareholders.
study. These lists overlap with each other, opportunities to sell the ideas to the policy HPWPs, both of which reinforce each other. Significant employee benefits have been
and while they are essentially studying the and business communities. Firstly, HPWPs may create sustained identified. These include greater levels of
same organisational phenomenon, the use of performance improvements in organisations. employee satisfaction, commitment and
different lists by researchers can create The approach in this study is to circumvent Secondly, HPWPs may create a better development of trust in work relations.
confusion. these debates and focus on the outcomes of workplace in terms of employee satisfaction These benefits are often accompanied by
the practices. The emphasis, both in the and a sense of personal achievement. When lower levels of turnover of employees.
The lesson here is that it is not necessarily presentation of the survey and case studies, these two benefits work together, this Workers in HPWOs may earn more and
the number or specific type of practices that is therefore on the relationship between translates into higher levels of financial are likely to benefit from higher levels
matter, but the way they are linked to these management and work practices and performance, strong employee commitment, of skill.
performance. This means that for organisational performance. sustained competitiveness and innovation.
newcomers to the subject of HPWPs, it The remainder of this report is divided into
would be wrong to seek one magic list. Although many of these individual HPWPs two parts in order to demonstrate some of
After all, it is quite possible to replace one are not new, what is new is the systematic the benefits in the UK context. The first part,
practice with another practice, or with way in which they are used (sometimes using the survey of CIPD members, studies
combinations of other practices that deliver through combinations of practices known as the extent and use of HPWPs in the UK. The
the same results. Indeed, the results of the bundles) to bring about a higher and 2 For an academic discussion about the nature of the second part shows how these HPWPs are
causality involved in establishing these links to
survey and the case studies show that there sustainable level of organisational used in ten UK companies to generate
performance see Guest, et. al. (2003) and de Menezes
are a variety of ways to deliver performance (Purcell et. al., 2003). HPWPs and Wood (2005). performance improvements.

08 09
DIAGRAM 1: HPWPS AND ORGANISATIONAL OBJECTIVES are therefore the leveraging links between These have been extensively documented in
work activities and the intended business Ashton and Sung (2002) and a summary of
outcomes2. these research findings and business
benefits is as follows:
Ma For example, there are many organisations
na
gi that claim to practise teamwork and to value Quantitative research has shown a strong
Rewar

ng
d
pra & c innovation. However, not all of these link between HPWPs and enhanced

ch
ct organisations have created a suitable performance using indicators such as

om es

an
t
Hig practic emen

ic
Innovation

ge
mi
environment by, for example, giving a higher productivity and profitability.

es

tmen
h involv
level of task discretion to employees, which The links between HPWPs and business
Leadership would enable them to transform the benefit performance can be identified in

t
culture etc. of team-working into higher levels of organisations located in many countries
innovation. A further example is the use of or territories, e.g. US, UK, Japan, Europe,
financial incentives. Performance pay Australia, Korea, Mexico, Brazil, Taiwan

H
um prac
an tices schemes may reward the employee for and New Zealand.
resource
doing their existing job well. However, they The links have also been identified in a
Pe
rfo
rmanc do not necessarily reward employees for variety of industrial contexts, e.g. paper
e
thinking of improvements beyond the mills, steel plants, apparel, service sector,
confines of their present job. The question is auto assembly, aerospace, financial
whether a one-off payment to reward good services, personal services and even
ideas is good enough to sustain an public sector administration.
performance working practices would not improvements in performance through the innovative culture. Furthermore, the The benefits have been identified using
have thought of their practices in these use of HPWPs. implementation of new ideas often means different study methods e.g. examining
terms. The practices listed for the three introducing new working arrangements and single-site companies, multiple-site
categories (high involvement, human Second, the use of different terminology by new skills to operate them. This in turn companies, long term studies and have
resources and reward practices) are either researchers has caused confusion. In some requires a positive attitude toward produced similar results in linking HPWPs
understood or used by most organisations. cases HPWPs are called high-commitment continuous learning on the part of all and enhanced performance.
management (Walton, 1985) or high- employees. It is therefore worth finding out The practices may be more effective when
There are also problems in the way in which involvement management (Lawler, 1986). whether employees treat learning as a grouped together in bundles. A good
these practices have been used which may More recently they have been termed high positive and integral part of their work. It is example here is that the isolated use of
have led to confusion. First, instead of an performance organisations (Lawler et al, this form of holistic thinking, always quality circles is not as effective in
agreed list of practices, research on HPWPs 1998; Ashton and Sung, 2002) or high knowing the links between work practices producing results as when the practice is
has been characterised by the use of various involvement work practices (Wood, 2001). and performance outcomes that is central to supported by wider employee
lists, in some cases containing different Whilst these studies are referring to the the effective implementation of HPWPs. involvement/ empowerment practices.
practices. Take for example, Becker and same general phenomena the use of Other quantifiable benefits that have
Huselid (1998) who use more than thirty different labels has undoubtedly added to WHY ARE HPWPs IMPORTANT? been identified include increased sales
practices in their US study, while Guest the confusion. Without a single and well- Research from different parts of the world and increased market value for
(2000) uses eighteen practices in his UK defined term, researchers have missed many has consistently shown two main benefits of shareholders.
study. These lists overlap with each other, opportunities to sell the ideas to the policy HPWPs, both of which reinforce each other. Significant employee benefits have been
and while they are essentially studying the and business communities. Firstly, HPWPs may create sustained identified. These include greater levels of
same organisational phenomenon, the use of performance improvements in organisations. employee satisfaction, commitment and
different lists by researchers can create The approach in this study is to circumvent Secondly, HPWPs may create a better development of trust in work relations.
confusion. these debates and focus on the outcomes of workplace in terms of employee satisfaction These benefits are often accompanied by
the practices. The emphasis, both in the and a sense of personal achievement. When lower levels of turnover of employees.
The lesson here is that it is not necessarily presentation of the survey and case studies, these two benefits work together, this Workers in HPWOs may earn more and
the number or specific type of practices that is therefore on the relationship between translates into higher levels of financial are likely to benefit from higher levels
matter, but the way they are linked to these management and work practices and performance, strong employee commitment, of skill.
performance. This means that for organisational performance. sustained competitiveness and innovation.
newcomers to the subject of HPWPs, it The remainder of this report is divided into
would be wrong to seek one magic list. Although many of these individual HPWPs two parts in order to demonstrate some of
After all, it is quite possible to replace one are not new, what is new is the systematic the benefits in the UK context. The first part,
practice with another practice, or with way in which they are used (sometimes using the survey of CIPD members, studies
combinations of other practices that deliver through combinations of practices known as the extent and use of HPWPs in the UK. The
the same results. Indeed, the results of the bundles) to bring about a higher and 2 For an academic discussion about the nature of the second part shows how these HPWPs are
causality involved in establishing these links to
survey and the case studies show that there sustainable level of organisational used in ten UK companies to generate
performance see Guest, et. al. (2003) and de Menezes
are a variety of ways to deliver performance (Purcell et. al., 2003). HPWPs and Wood (2005). performance improvements.

08 09
The 2004 HPWPs survey
Table 2 shows the level of HPWP adoption within the sample. A number of interesting patterns
are revealed.

TABLE 2: THE PERCENTAGE OF RESPONDENTS WHO HAVE ADOPTED THE PRACTICES

THE SAMPLE %
This joint DTI and CIPD survey was conducted in the latter part of 2004. Six thousand
questionnaires were sent out to a random sample of CIPD member organisations. 294 replies Annual appraisal 94.9
were received. Table 1 shows the industrial sectors from which the sample is derived. Structured induction training 92.5
Annual review of employees training needs 89.8
Circulating information on organisational performance and strategy 82.0
Formal feedback on job performance from superiors/employers 79.3
TABLE 1: THE INDUSTRY SECTOR OF THE SAMPLE (SIC 92) Family-friendly policies 78.6
Reviewing vacancies in relation to business strategy 74.6
No. %
Formal assessment tools for recruitment (e.g. competencies etc.) 73.6
Manufacturing 84 28.3 Continuous skills development programmes 70.9
Electricity, gas and water supply 5 1.7 Internal staff surveys 68.5
Construction 9 3.0 Benefits covering spouse or family members 68.1
Wholesales and retail 31 10.4 Flexible working (e.g. hours, locations, job-share etc.) 65.8
Hotels and restaurants 8 2.7 Training to perform multiple jobs 62.4
Transport, storage and communication 15 5.1 Non-pay benefits (e.g. free meals, gifts or health packages) 60.7
Financial services 26 8.8 Cross-function teams 59.3
Real estate, renting and business services 92 31.0 QA assurance (e.g. ISO9000 or other similar schemes) 56.3
Public admin, defence and social security 2 0.7 Mentoring 54.6
Education 3 1.0 Performance pay for some employees 51.9
Health and social work 3 1.0 Staff suggestion schemes 51.9
Other community, social and personal services 16 5.4 Flexible job descriptions 45.4
Formal feedback on job performance from customers/clients 44.1
Total = 294 Work-(re)design for improved performance 42.7
Providing all employees a copy of the business plan and targets 42.4
Workforce diversity for competitive edge 40.7
Quality circles/total quality management 35.3
Performance pay for all employees 35.5
Staff Association 31.5
THE SPREAD OF HPWPs Share options for some employees 30.9
We used this survey to: However, despite our best efforts, few Self-managed or self-directed teams 25.8
respondents provided information on the
Job rotation 24.1
1. Establish how HPWPs have been utilised financial performance of their organisations.
in the UK Consequently, the analysis of the survey is The Business Excellence Model or equivalent 23.7
2. Identify how respondents rated various based on the first two sets of information. Kaizen continuous improvement in work systems 23.7
organisational outcomes and Profit-sharing for some employees 22.0
3. Record the financial performance of the Profit-sharing for all employees 19.7
organisation.
Share options for all employees 15.9

10 011
11
The 2004 HPWPs survey Table 2 shows the level of HPWP adoption within the sample. A number of interesting patterns
are revealed.

TABLE 2: THE PERCENTAGE OF RESPONDENTS WHO HAVE ADOPTED THE PRACTICES

THE SAMPLE %
This joint DTI and CIPD survey was conducted in the latter part of 2004. Six thousand
questionnaires were sent out to a random sample of CIPD member organisations. 294 replies Annual appraisal 94.9
were received. Table 1 shows the industrial sectors from which the sample is derived. Structured induction training 92.5
Annual review of employees training needs 89.8
Circulating information on organisational performance and strategy 82.0
Formal feedback on job performance from superiors/employers 79.3
TABLE 1: THE INDUSTRY SECTOR OF THE SAMPLE (SIC 92) Family-friendly policies 78.6
Reviewing vacancies in relation to business strategy 74.6
No. %
Formal assessment tools for recruitment (e.g. competencies etc.) 73.6
Manufacturing 84 28.3 Continuous skills development programmes 70.9
Electricity, gas and water supply 5 1.7 Internal staff surveys 68.5
Construction 9 3.0 Benefits covering spouse or family members 68.1
Wholesales and retail 31 10.4 Flexible working (e.g. hours, locations, job-share etc.) 65.8
Hotels and restaurants 8 2.7 Training to perform multiple jobs 62.4
Transport, storage and communication 15 5.1 Non-pay benefits (e.g. free meals, gifts or health packages) 60.7
Financial services 26 8.8 Cross-function teams 59.3
Real estate, renting and business services 92 31.0 QA assurance (e.g. ISO9000 or other similar schemes) 56.3
Public admin, defence and social security 2 0.7 Mentoring 54.6
Education 3 1.0 Performance pay for some employees 51.9
Health and social work 3 1.0 Staff suggestion schemes 51.9
Other community, social and personal services 16 5.4 Flexible job descriptions 45.4
Formal feedback on job performance from customers/clients 44.1
Total = 294 Work-(re)design for improved performance 42.7
Providing all employees a copy of the business plan and targets 42.4
Workforce diversity for competitive edge 40.7
Quality circles/total quality management 35.3
Performance pay for all employees 35.5
Staff Association 31.5
THE SPREAD OF HPWPs Share options for some employees 30.9
We used this survey to: However, despite our best efforts, few Self-managed or self-directed teams 25.8
respondents provided information on the
Job rotation 24.1
1. Establish how HPWPs have been utilised financial performance of their organisations.
in the UK Consequently, the analysis of the survey is The Business Excellence Model or equivalent 23.7
2. Identify how respondents rated various based on the first two sets of information. Kaizen continuous improvement in work systems 23.7
organisational outcomes and Profit-sharing for some employees 22.0
3. Record the financial performance of the Profit-sharing for all employees 19.7
organisation.
Share options for all employees 15.9

10 011
11
The first point illustrated by Table 2 is the questions on how well the respondent Table 4 shows a range of organisational outcomes associated with adopting more HPWPs3.
enormous difference in the level of adoption thought the organisation had achieved a
of HPWPs in the UK. There is an almost range of outcomes. These included how
universal adoption of annual appraisals and effective they had been in creating TABLE 4: CORRELATION BETWEEN THE LEVEL OF HPWP ADOPTION AND
induction training, but many financial organisational flexibility, how well they ORGANISATIONAL OUTCOMES
rewards, such as profit-sharing and share managed change, how well they had created
options, are only offered by a minority of employee involvement, how well they had Creating employee involvement .391**
organisations. met organisational goals and so on. In
Delivery adequate training and development provision .371**
general we used a five point self-rated scale,
The second point is that many of the softer ranging from unsatisfactory to excellent to Motivating staff .364**
HPWPs, such as family-friendly policies and measure these outcomes. Those items not Managing change .357**
non-pay benefits, have been more widely measured by the scale: staff turnover rate, % Providing career opportunities .348**
adopted than previously thought. There are of staff earning less than 12,000 p.a. and %
actually more organisations which have of staff earning more than 35,000 p.a., are
Ensuring effective teamwork .331**
these types of practices than use self- reported as percentages.
managed teams, staff surveys, quality circles Ensuring job satisfaction among staff .323**
or job rotation. Previously, these softer, but The level of HPWPs adopted is measured Ensuring effective communication .314**
equally important practices, have largely through simply counting how many of the Providing quality leadership .310**
been ignored by researchers. 35 practices were reported by each Maintaining good industrial relations .282**
organisation. The 35 practices are those
Thirdly a number of important HPWPs listed under the three broad categories
including business excellence models, total earlier in the report. Within the sample, this Staff commitment .266**
quality management, job rotation and self- ranged from a minimum of one HPWP at the Creating innovation/new ideas .257**
managed teams, are only adopted by a bottom of the scale to 33 at the top. On Creating organisational flexibility .248**
minority of organisations. One explanation average (the mean) organisations adopted
Creating support for staff .243**
could be that these practices are too costly 18 practices. Table 3 provides a general
for some firms to implement; another could profile of HPWP adoption within the sample. Meeting business/organisational goals .192**
be lack of information about such practices. Around 60 percent of the sample has fewer
Another issue raised by these findings is the than 20 practices. Competitiveness .170**
low take-up of financial rewards in addition % earning more than 35,000 .170**
to basic salary and leads one to question
Minimising employee stress .153**
how important are they in enhancing TABLE 3: THE DISTRIBUTION OF
performance. These are some of the issues HPWP ADOPTION Ensuring workforce diversity .145*
we explore through the case studies. Ensuring work-life balance .139*
Number of practices % of sample
THE LINKS BETWEEN HPWPs AND
Providing job security .129*
ORGANISATIONAL OUTCOMES <10 5.1
One of the distinctive features of this survey Staff Turnover Rate (%) -.103
10 or <20 54.2 % earning less than 12,000 -.108*
was our attempt to explore the link between
HPWPs and a range of organisational 20 or <30 39.3 ** Correlation is significant at the 0.01 level (2-tailed).
outcomes, over and above that of financial 30 or more 1.4 * Correlation is significant at the 0.05 level (2-tailed).
performance. To establish these we used

Of particular interest are the facts that The more HPWPs an organisation uses
in general: the more effective it is in delivering
Those adopting more of the 35 HPW adequate training provision, motivating
practices score more highly on creating staff, managing change and providing
employee involvement; career opportunities;
Those adopting more of the 35 HPWPs The more HPWPs an organisation uses
have more people earning over 35,000 the lower the staff turnover.4
and fewer people earning less than
12,000;
3 For those who are unfamiliar with the correlation 4 % of Staff Turnover and % of staff earning less than
measures, 0.1 .29 represent a small correlation; 12,000 show negative correlations but these are positive
0.3 .49 represent a medium correlation. outcomes as it means that the adoption of HPWPs
reduces the staff turnover and the % of people earning
less than 12,000.

12 13
The first point illustrated by Table 2 is the questions on how well the respondent Table 4 shows a range of organisational outcomes associated with adopting more HPWPs3.
enormous difference in the level of adoption thought the organisation had achieved a
of HPWPs in the UK. There is an almost range of outcomes. These included how
universal adoption of annual appraisals and effective they had been in creating TABLE 4: CORRELATION BETWEEN THE LEVEL OF HPWP ADOPTION AND
induction training, but many financial organisational flexibility, how well they ORGANISATIONAL OUTCOMES
rewards, such as profit-sharing and share managed change, how well they had created
options, are only offered by a minority of employee involvement, how well they had Creating employee involvement .391**
organisations. met organisational goals and so on. In
Delivery adequate training and development provision .371**
general we used a five point self-rated scale,
The second point is that many of the softer ranging from unsatisfactory to excellent to Motivating staff .364**
HPWPs, such as family-friendly policies and measure these outcomes. Those items not Managing change .357**
non-pay benefits, have been more widely measured by the scale: staff turnover rate, % Providing career opportunities .348**
adopted than previously thought. There are of staff earning less than 12,000 p.a. and %
actually more organisations which have of staff earning more than 35,000 p.a., are
Ensuring effective teamwork .331**
these types of practices than use self- reported as percentages.
managed teams, staff surveys, quality circles Ensuring job satisfaction among staff .323**
or job rotation. Previously, these softer, but The level of HPWPs adopted is measured Ensuring effective communication .314**
equally important practices, have largely through simply counting how many of the Providing quality leadership .310**
been ignored by researchers. 35 practices were reported by each Maintaining good industrial relations .282**
organisation. The 35 practices are those
Thirdly a number of important HPWPs listed under the three broad categories
including business excellence models, total earlier in the report. Within the sample, this Staff commitment .266**
quality management, job rotation and self- ranged from a minimum of one HPWP at the Creating innovation/new ideas .257**
managed teams, are only adopted by a bottom of the scale to 33 at the top. On Creating organisational flexibility .248**
minority of organisations. One explanation average (the mean) organisations adopted
Creating support for staff .243**
could be that these practices are too costly 18 practices. Table 3 provides a general
for some firms to implement; another could profile of HPWP adoption within the sample. Meeting business/organisational goals .192**
be lack of information about such practices. Around 60 percent of the sample has fewer
Another issue raised by these findings is the than 20 practices. Competitiveness .170**
low take-up of financial rewards in addition % earning more than 35,000 .170**
to basic salary and leads one to question
Minimising employee stress .153**
how important are they in enhancing TABLE 3: THE DISTRIBUTION OF
performance. These are some of the issues HPWP ADOPTION Ensuring workforce diversity .145*
we explore through the case studies. Ensuring work-life balance .139*
Number of practices % of sample
THE LINKS BETWEEN HPWPs AND
Providing job security .129*
ORGANISATIONAL OUTCOMES <10 5.1
One of the distinctive features of this survey Staff Turnover Rate (%) -.103
10 or <20 54.2 % earning less than 12,000 -.108*
was our attempt to explore the link between
HPWPs and a range of organisational 20 or <30 39.3 ** Correlation is significant at the 0.01 level (2-tailed).
outcomes, over and above that of financial 30 or more 1.4 * Correlation is significant at the 0.05 level (2-tailed).
performance. To establish these we used

Of particular interest are the facts that The more HPWPs an organisation uses
in general: the more effective it is in delivering
Those adopting more of the 35 HPW adequate training provision, motivating
practices score more highly on creating staff, managing change and providing
employee involvement; career opportunities;
Those adopting more of the 35 HPWPs The more HPWPs an organisation uses
have more people earning over 35,000 the lower the staff turnover.4
and fewer people earning less than
12,000;
3 For those who are unfamiliar with the correlation 4 % of Staff Turnover and % of staff earning less than
measures, 0.1 .29 represent a small correlation; 12,000 show negative correlations but these are positive
0.3 .49 represent a medium correlation. outcomes as it means that the adoption of HPWPs
reduces the staff turnover and the % of people earning
less than 12,000.

12 13
THE LINKS BETWEEN HPWPs BUNDLES Where you see statistically significant employees and managers associated with
AND ORGANISATIONAL OUTCOMES correlations (marked with * or **) for all the use of this bundle.
Earlier we suggested that HPWPs could be practices and reward and commitment three HPWP categories, the results indicate Higher levels of earnings are associated
usefully grouped into three distinct areas or practices. Table 5 shows a range of that all types of HPWP are collectively with the adoption of reward and
bundles, namely: high employee involvement organisational outcomes associated with working together to improve organisational commitment practices. This finding is
practices, human resource management adopting more HPWPs by HPWP category. performance. For example, all 3 categories of probably expected in the sense that the
HPWP have a positive impact on motivating greater use of such a reward strategy in an
staff. However, for competitiveness, only organisation is likely to result in a higher
HPWPs categorised as human resource proportion of employees earning more,
TABLE 5: CORRELATION BETWEEN THE LEVEL OF HPWP ADOPTION AND management or rewards and commitment other things being equal. However, it is
ORGANISATIONAL OUTCOMES BY HPWP CATEGORY. would appear to be correlated with higher not significant in reducing the proportions
performance. of lower paid employees (those that earn
HPWP Bundles less than 12,000 per year). To achieve this
Several main findings stand out here: objective it may be that, as Table 4
Firstly, that some outcomes are positively suggested, you have simply to use as
High HR Reward &
associated with all three bundles. The many HPWPs as possible.
involvement commitment
three bundles appear to be
interchangeable and all appear to be ARE SOME BUNDLES MORE EFFECTIVE
Meeting business/organisational goals .084 .153** .224** equally effective in creating outcomes IN SOME INDUSTRIAL SECTORS
Ensuring job satisfaction among staff .217** .293** .260** such as staff satisfaction, motivation and THAN OTHERS?
Motivating staff .236** .357** .262** commitment, in providing leadership What our findings suggest here is that the
Staff commitment .211** .256** .163** quality, career opportunities, effective choice of which bundle or bundles of
communication and effective teamwork, practices to use in order to achieve a given
Providing job security .130* .123* .056
in creating employee involvement and organisational outcome or objectives is
innovation, and in delivering adequate influenced by the type of sector in which the
Ensuring work life balance .078 .141* .105 training, good industrial relations and organisation or company is operating. In
Providing quality leadership .179** .292** .260** managing change. other words, some of these bundles are
Other outcomes were linked with the use more effective in some industrial sectors
Providing career opportunities .188** .324** .310**
of only one or two bundles. For example, than others.
Ensuring effective communication .211** .295** .239** human resource and reward and
Ensuring effective teamwork .237** .333** .207** commitment practices appear to be the In order to highlight the differential use of
main driving forces behind the ability of HPWPs in the different industrial sectors, we
Creating support for staff .109 .281** .162** an organisation to meet its goals. Here focused on a smaller set of organisation
the effect of high employee involvement outcomes and examined how they relate to
Creating employee involvement .305** .361** .266**
practices, in contrast, appears to be weak. the three categories of HPWPs within four
Minimising employee stress .106 .171** .076 Yet, if the outcome is to create a better industrial sectors5. The survey data did not
Creating innovation/new ideas .178** .205** .238** sense of job security, then here the enable us to examine all industrial sectors as
Competitiveness .077 .162** .161** greater adoption of employee the number of companies was too small.
involvement as well as human resource
management practices are important. Table 6 shows the correlation between the
Creating organisational flexibility .118* .235** .229** In general the relationship between the three categories of HPWPs and a selected set
Ensuring workforce diversity -.002 .244** .055 use of HPWPs and ensuring work-life of organisational outcomes in the four
Delivery adequate training and development provision .274** .396** .194** balance is weak. However, whatever sectors. In order to simplify the presentation
Maintaining good industrial relations .204** .237** .232** positive effect HPWPs in general may of the results only significant results are
have on work-life balance is mainly reported. The absence of a symbol means
Managing change .208** .352** .278**
channelled through the use of a higher that HPWPs are not correlated with the
level of human resource management particular organisational outcome.
Staff Turnover Rate (%) -.129* -.093 -.029 practices. Similarly, human resource
% earning less than 12,000 -.121 -.071 -.076 management practices are the only
% earning more than 35,000 .065 .107 .245** effective HPWPs that generate a greater
level of workforce diversity. 5 The classification follows that of SIC92: (1)
** Correlation is significant at the 0.01 level (2-tailed).
Lower staff turnover is associated with the Manufacturing; (2) Real estate, renting and business
* Correlation is significant at the 0.05 level (2-tailed). use of all three bundles, but the employee services; (3) Financial intermediation;
(4) Combining (i) Wholesale and retail trade; repair of
involvement bundle is the only one with a motor vehicles, motorcycles and personal and household
statistically significant link. This may be as goods; (ii) Hotels and restaurants; and (iii) Transport,
a result of the high levels of trust between storage and communication.

14 15
THE LINKS BETWEEN HPWPs BUNDLES Where you see statistically significant employees and managers associated with
AND ORGANISATIONAL OUTCOMES correlations (marked with * or **) for all the use of this bundle.
Earlier we suggested that HPWPs could be practices and reward and commitment three HPWP categories, the results indicate Higher levels of earnings are associated
usefully grouped into three distinct areas or practices. Table 5 shows a range of that all types of HPWP are collectively with the adoption of reward and
bundles, namely: high employee involvement organisational outcomes associated with working together to improve organisational commitment practices. This finding is
practices, human resource management adopting more HPWPs by HPWP category. performance. For example, all 3 categories of probably expected in the sense that the
HPWP have a positive impact on motivating greater use of such a reward strategy in an
staff. However, for competitiveness, only organisation is likely to result in a higher
HPWPs categorised as human resource proportion of employees earning more,
TABLE 5: CORRELATION BETWEEN THE LEVEL OF HPWP ADOPTION AND management or rewards and commitment other things being equal. However, it is
ORGANISATIONAL OUTCOMES BY HPWP CATEGORY. would appear to be correlated with higher not significant in reducing the proportions
performance. of lower paid employees (those that earn
HPWP Bundles less than 12,000 per year). To achieve this
Several main findings stand out here: objective it may be that, as Table 4
Firstly, that some outcomes are positively suggested, you have simply to use as
High HR Reward &
associated with all three bundles. The many HPWPs as possible.
involvement commitment
three bundles appear to be
interchangeable and all appear to be ARE SOME BUNDLES MORE EFFECTIVE
Meeting business/organisational goals .084 .153** .224** equally effective in creating outcomes IN SOME INDUSTRIAL SECTORS
Ensuring job satisfaction among staff .217** .293** .260** such as staff satisfaction, motivation and THAN OTHERS?
Motivating staff .236** .357** .262** commitment, in providing leadership What our findings suggest here is that the
Staff commitment .211** .256** .163** quality, career opportunities, effective choice of which bundle or bundles of
communication and effective teamwork, practices to use in order to achieve a given
Providing job security .130* .123* .056
in creating employee involvement and organisational outcome or objectives is
innovation, and in delivering adequate influenced by the type of sector in which the
Ensuring work life balance .078 .141* .105 training, good industrial relations and organisation or company is operating. In
Providing quality leadership .179** .292** .260** managing change. other words, some of these bundles are
Other outcomes were linked with the use more effective in some industrial sectors
Providing career opportunities .188** .324** .310**
of only one or two bundles. For example, than others.
Ensuring effective communication .211** .295** .239** human resource and reward and
Ensuring effective teamwork .237** .333** .207** commitment practices appear to be the In order to highlight the differential use of
main driving forces behind the ability of HPWPs in the different industrial sectors, we
Creating support for staff .109 .281** .162** an organisation to meet its goals. Here focused on a smaller set of organisation
the effect of high employee involvement outcomes and examined how they relate to
Creating employee involvement .305** .361** .266**
practices, in contrast, appears to be weak. the three categories of HPWPs within four
Minimising employee stress .106 .171** .076 Yet, if the outcome is to create a better industrial sectors5. The survey data did not
Creating innovation/new ideas .178** .205** .238** sense of job security, then here the enable us to examine all industrial sectors as
Competitiveness .077 .162** .161** greater adoption of employee the number of companies was too small.
involvement as well as human resource
management practices are important. Table 6 shows the correlation between the
Creating organisational flexibility .118* .235** .229** In general the relationship between the three categories of HPWPs and a selected set
Ensuring workforce diversity -.002 .244** .055 use of HPWPs and ensuring work-life of organisational outcomes in the four
Delivery adequate training and development provision .274** .396** .194** balance is weak. However, whatever sectors. In order to simplify the presentation
Maintaining good industrial relations .204** .237** .232** positive effect HPWPs in general may of the results only significant results are
have on work-life balance is mainly reported. The absence of a symbol means
Managing change .208** .352** .278**
channelled through the use of a higher that HPWPs are not correlated with the
level of human resource management particular organisational outcome.
Staff Turnover Rate (%) -.129* -.093 -.029 practices. Similarly, human resource
% earning less than 12,000 -.121 -.071 -.076 management practices are the only
% earning more than 35,000 .065 .107 .245** effective HPWPs that generate a greater
level of workforce diversity. 5 The classification follows that of SIC92: (1)
** Correlation is significant at the 0.01 level (2-tailed).
Lower staff turnover is associated with the Manufacturing; (2) Real estate, renting and business
* Correlation is significant at the 0.05 level (2-tailed). use of all three bundles, but the employee services; (3) Financial intermediation;
(4) Combining (i) Wholesale and retail trade; repair of
involvement bundle is the only one with a motor vehicles, motorcycles and personal and household
statistically significant link. This may be as goods; (ii) Hotels and restaurants; and (iii) Transport,
a result of the high levels of trust between storage and communication.

14 15
When we undertook the case studies we In wholesale and retail, relatively little use is
TABLE 6: CORRELATION BETWEEN THE LEVEL OF HPWP ADOPTION AND SELECTED found that the companies in the financial made of these bundles in meeting their
ORGANISATIONAL OUTCOMES BY SECTOR services sector made intensive use of organisational objectives, which may mean
financial incentives (reward and commitment that the companies rely on more traditional
Manufact- Business Financial Wholesale practices), whereas in the manufacturing and command and control techniques of
uring service etc. services etc & retail etc. business service sectors more use was made management or that these objectives are not
of high involvement practices. This finding is that important to them.
Meeting business/organisational goals HR HR reflected in the survey results that show that
RC RC when we look at the achievement of different What is clear is that these HPW practices
Motivating staff HI business outcomes, then we find companies would appear to be used in different ways,
HR HR HR in different sectors making use of a different in different sectors, in order to achieve
RC RC RC combination of practices. For example, in given business objectives. This hypothesis
achieving innovation and generating new receives some support from the more
Providing quality leadership HI
ideas, we find that in manufacturing all three detailed examination of specific case studies
HR HR
bundles are used, whereas in business that follow.
RC RC RC RC
services, only human resource and reward
Ensuring effective teamwork HI HI and commitment practices are used. The case studies illustrate in detail how
HR HR HR Companies in financial services use a companies have developed and used a
RC RC combination of high involvement and reward variety of HPWPs. These case studies serve
Creating innovation/new ideas HI HI and commitment practices and in the to highlight the links between industrial
HR HR wholesale & retail sector, none of the HPWP sector and product market, the organisations
RC RC RC bundles are associated with generating product strategy and the adoption of
Competitiveness higher levels of new ideas. different HPWP bundles. A successful HPWO
HR needs to match the three factors
RC RC In providing quality leadership, companies in appropriately. The case studies also explore
manufacturing utilise human resource and the impact that the implementation of
Creating organisational flexibility
reward & commitment practices, as do HPWPs have on skills policies.
HR HR
companies in the wholesale and retail sector.
RC RC
Those in business services rely exclusively
Delivery adequate training and HI HI on reward and commitment practices to
development provision HR HR HR provide quality leadership and those in
RC RC financial services rely on a combination of
Managing change HI high involvement and reward and
HR HR HR commitment practices. Thus, the use of
RC RC these different bundles would appear to be
Staff Turnover Rate HR (-) influenced by the sector in which the
% earning less than 12,000 company operates and the business
outcome expected. Put another way, in order
% earning more than 35,000 HR
to achieve a given business outcome you
RC
would need to use a different bundle, or
HI High employee involvement practices combination of bundles, depending on the
HR Human resource practices industrial sector and the product market you
RC Reward and commitment practices are competing in.

The human resource practice and reward


and commitment practice bundles are
used to deliver the same outcomes across
most sectors and this is the case with regard
to staff motivation. The achievement of other
outcomes such as providing quality
leadership and managing change are usually
associated with the use of human resource
practices, although depending on the sector,
other bundles may also be used.

16
17
When we undertook the case studies we In wholesale and retail, relatively little use is
TABLE 6: CORRELATION BETWEEN THE LEVEL OF HPWP ADOPTION AND SELECTED found that the companies in the financial made of these bundles in meeting their
ORGANISATIONAL OUTCOMES BY SECTOR services sector made intensive use of organisational objectives, which may mean
financial incentives (reward and commitment that the companies rely on more traditional
Manufact- Business Financial Wholesale practices), whereas in the manufacturing and command and control techniques of
uring service etc. services etc & retail etc. business service sectors more use was made management or that these objectives are not
of high involvement practices. This finding is that important to them.
Meeting business/organisational goals HR HR reflected in the survey results that show that
RC RC when we look at the achievement of different What is clear is that these HPW practices
Motivating staff HI business outcomes, then we find companies would appear to be used in different ways,
HR HR HR in different sectors making use of a different in different sectors, in order to achieve
RC RC RC combination of practices. For example, in given business objectives. This hypothesis
achieving innovation and generating new receives some support from the more
Providing quality leadership HI
ideas, we find that in manufacturing all three detailed examination of specific case studies
HR HR
bundles are used, whereas in business that follow.
RC RC RC RC
services, only human resource and reward
Ensuring effective teamwork HI HI and commitment practices are used. The case studies illustrate in detail how
HR HR HR Companies in financial services use a companies have developed and used a
RC RC combination of high involvement and reward variety of HPWPs. These case studies serve
Creating innovation/new ideas HI HI and commitment practices and in the to highlight the links between industrial
HR HR wholesale & retail sector, none of the HPWP sector and product market, the organisations
RC RC RC bundles are associated with generating product strategy and the adoption of
Competitiveness higher levels of new ideas. different HPWP bundles. A successful HPWO
HR needs to match the three factors
RC RC In providing quality leadership, companies in appropriately. The case studies also explore
manufacturing utilise human resource and the impact that the implementation of
Creating organisational flexibility
reward & commitment practices, as do HPWPs have on skills policies.
HR HR
companies in the wholesale and retail sector.
RC RC
Those in business services rely exclusively
Delivery adequate training and HI HI on reward and commitment practices to
development provision HR HR HR provide quality leadership and those in
RC RC financial services rely on a combination of
Managing change HI high involvement and reward and
HR HR HR commitment practices. Thus, the use of
RC RC these different bundles would appear to be
Staff Turnover Rate HR (-) influenced by the sector in which the
% earning less than 12,000 company operates and the business
outcome expected. Put another way, in order
% earning more than 35,000 HR
to achieve a given business outcome you
RC
would need to use a different bundle, or
HI High employee involvement practices combination of bundles, depending on the
HR Human resource practices industrial sector and the product market you
RC Reward and commitment practices are competing in.

The human resource practice and reward


and commitment practice bundles are
used to deliver the same outcomes across
most sectors and this is the case with regard
to staff motivation. The achievement of other
outcomes such as providing quality
leadership and managing change are usually
associated with the use of human resource
practices, although depending on the sector,
other bundles may also be used.

16 17
The case studies
HOW MANY HPWPs ARE NEEDED?
We have already described a list of typical
HPWPs that may form performance bundles.
sharing of ideas, and the building up of
collective capabilities within the
organisation. In these companies, teamwork
From the DTI/CIPD survey, it is evident that and informal sharing of ideas, support for
there is a relationship between adopting learning, and constant questioning of
more HPWPs and performance outcomes. systems designed to enhance skills, are
However, for the purposes of learning from common. Also we find a greater emphasis
What can we learn from the case studies? the case studies, it is more important to on developing and maintaining trust within
identify the ways in which practices are the organisation and practices designed to
The case studies have been chosen from The Sunday Times 100 designed to support each other for specific celebrate the values of the company.
outcomes. In this sense, the case studies
Best Companies to Work For 2004 lists. The companies have been demonstrate the context in which these In the financial services sector, the case
chosen to represent a variety of industrial contexts, sizes and practices are used rather than the number of study there, Aspect Capital, suggests an
HPWPs adopted and outcomes. emphasis on personal rewards and using
product strategies. They therefore highlight a range of performance rewards as one of the central practices
The range and manner in which HPWPs are around which learning support and cultural
issues and different ways of using HPWPs to tackle these issues. used by the companies therefore depends on values are geared.
the specific performance goals of the
The names of the companies involved in the case studies are: organisation, the industrial context, and how In the legal industry, continuous
the relevant product strategy in a particular development in professional skills, such as
organisation is employed to achieve results. keeping in touch with changes in legislation,
Aspect Capital Before you read the cases, we would like For example, Timpson, in retail services, is a given by virtue of the needs of the
to highlight a number of points that have makes extensive use of performance/turnover industry. Hence, HPWPs focus on other areas
arisen from the analysis of the ten case information for a wide range of purposes on of organisational activities: this is illustrated
Bacardi & Martini UK studies in order to maximise what we can a weekly basis. These include creating a by Pannone & Partners who make use of
learn from them. sense of competition, cross-learning and team rewards for a job well done, rather
immediate feedback. As a result, Timpson, than rewarding individuals according to the
Data Connection HOW DIFFERENT ARE HPWPs? unlike all other case studies in the report, value of contracts they bring in. In an
As we have said HPWPs are not radical new does not have any formal performance organisation that has more than 500 staff
practices. The ten case studies show that appraisal. The fact that Timpson shops only members, this helps create and sustain a
Flight Centre what makes these practices effective is the have one or two people in each service unit coherent team culture.
very careful strategic combination of makes it less appropriate to place too much
i-level practices that are appropriate in tackling the emphasis on the general concept of THE IMPORTANCE OF PEOPLE AND
specific performances issue in question. The teamwork. Instead, they rely on the PEOPLE POLICIES IN HPWPs
irony is that many of the staff that use and combination of financial rewards and a good The majority of the HPWPs require the
Pannone & Partners implement them would not necessarily see communication system to support the front practices to be built on the basis of strong
themselves as in the vanguard of modern line staff who are located in different parts of employee commitment to the organisations
management practices, but merely as the country. strategy. This provides the basis for high
Quest Diagnostics implementing what they see as common levels of trust. In all the case studies, sound
sense good practices that deliver business DIFFERENT HPWPs ARE LIKELY TO BE USED and coherent people policies are therefore
results. All of the ten case studies illustrate IN DIFFERENT SECTORS AND TO ACHIEVE the basis for successful HPWPs and for
St. Lukes this. To name a few examples, W L Gore has DIFFERENT BUSINESS OUTCOMES sustained organisational performance.
implemented a high degree of flexibility to The quantitative survey has shown that the
Timpson create innovative teamwork leading to high use of HPWPs differs by sector but what What is also important here is that the
levels of innovation, while Flight Centre these case studies suggest is that the use of people policies have to be consistently
designs its system to maximise the benefits these practices may also be influenced by applied. This does not mean that the
W L Gore of a standardised approach to an expanding the dominant business objective. practices have to be rigidly implemented.
business which they describe as One Best Rather, it means that the objectives of the
Way. Others such as i-Level and Bacardi & For example, where the product market policies must be seen as fair and consistent.
Martini use strong organisation values to requires innovation and creativity, in the The intended effect is to make the people
guide work practices. Timpson concentrates development of new products as in W L policies meaningful to the employees in
on seeking the best personalities to ensure Gore a manufacturing firm, or the order that they can have a stake within the
high levels of customer care. To all of these development of one-off creative solutions as organisation. The lesson here is that HPWPs
companies, HPWPs are simply common in St. Lukes a services firm, the companies are less likely to be successful in a divided
sense practices that have brought results. tend to stress the importance of developing organisation with contradictory objectives
high levels of trust to enable a widespread and values.

18 19
The case studies HOW MANY HPWPs ARE NEEDED?
We have already described a list of typical
HPWPs that may form performance bundles.
sharing of ideas, and the building up of
collective capabilities within the
organisation. In these companies, teamwork
From the DTI/CIPD survey, it is evident that and informal sharing of ideas, support for
there is a relationship between adopting learning, and constant questioning of
more HPWPs and performance outcomes. systems designed to enhance skills, are
However, for the purposes of learning from common. Also we find a greater emphasis
What can we learn from the case studies? the case studies, it is more important to on developing and maintaining trust within
identify the ways in which practices are the organisation and practices designed to
The case studies have been chosen from The Sunday Times 100 designed to support each other for specific celebrate the values of the company.
outcomes. In this sense, the case studies
Best Companies to Work For 2004 lists. The companies have been demonstrate the context in which these In the financial services sector, the case
chosen to represent a variety of industrial contexts, sizes and practices are used rather than the number of study there, Aspect Capital, suggests an
HPWPs adopted and outcomes. emphasis on personal rewards and using
product strategies. They therefore highlight a range of performance rewards as one of the central practices
The range and manner in which HPWPs are around which learning support and cultural
issues and different ways of using HPWPs to tackle these issues. used by the companies therefore depends on values are geared.
the specific performance goals of the
The names of the companies involved in the case studies are: organisation, the industrial context, and how In the legal industry, continuous
the relevant product strategy in a particular development in professional skills, such as
organisation is employed to achieve results. keeping in touch with changes in legislation,
Aspect Capital Before you read the cases, we would like For example, Timpson, in retail services, is a given by virtue of the needs of the
to highlight a number of points that have makes extensive use of performance/turnover industry. Hence, HPWPs focus on other areas
arisen from the analysis of the ten case information for a wide range of purposes on of organisational activities: this is illustrated
Bacardi & Martini UK studies in order to maximise what we can a weekly basis. These include creating a by Pannone & Partners who make use of
learn from them. sense of competition, cross-learning and team rewards for a job well done, rather
immediate feedback. As a result, Timpson, than rewarding individuals according to the
Data Connection HOW DIFFERENT ARE HPWPs? unlike all other case studies in the report, value of contracts they bring in. In an
As we have said HPWPs are not radical new does not have any formal performance organisation that has more than 500 staff
practices. The ten case studies show that appraisal. The fact that Timpson shops only members, this helps create and sustain a
Flight Centre what makes these practices effective is the have one or two people in each service unit coherent team culture.
very careful strategic combination of makes it less appropriate to place too much
i-level practices that are appropriate in tackling the emphasis on the general concept of THE IMPORTANCE OF PEOPLE AND
specific performances issue in question. The teamwork. Instead, they rely on the PEOPLE POLICIES IN HPWPs
irony is that many of the staff that use and combination of financial rewards and a good The majority of the HPWPs require the
Pannone & Partners implement them would not necessarily see communication system to support the front practices to be built on the basis of strong
themselves as in the vanguard of modern line staff who are located in different parts of employee commitment to the organisations
management practices, but merely as the country. strategy. This provides the basis for high
Quest Diagnostics implementing what they see as common levels of trust. In all the case studies, sound
sense good practices that deliver business DIFFERENT HPWPs ARE LIKELY TO BE USED and coherent people policies are therefore
results. All of the ten case studies illustrate IN DIFFERENT SECTORS AND TO ACHIEVE the basis for successful HPWPs and for
St. Lukes this. To name a few examples, W L Gore has DIFFERENT BUSINESS OUTCOMES sustained organisational performance.
implemented a high degree of flexibility to The quantitative survey has shown that the
Timpson create innovative teamwork leading to high use of HPWPs differs by sector but what What is also important here is that the
levels of innovation, while Flight Centre these case studies suggest is that the use of people policies have to be consistently
designs its system to maximise the benefits these practices may also be influenced by applied. This does not mean that the
W L Gore of a standardised approach to an expanding the dominant business objective. practices have to be rigidly implemented.
business which they describe as One Best Rather, it means that the objectives of the
Way. Others such as i-Level and Bacardi & For example, where the product market policies must be seen as fair and consistent.
Martini use strong organisation values to requires innovation and creativity, in the The intended effect is to make the people
guide work practices. Timpson concentrates development of new products as in W L policies meaningful to the employees in
on seeking the best personalities to ensure Gore a manufacturing firm, or the order that they can have a stake within the
high levels of customer care. To all of these development of one-off creative solutions as organisation. The lesson here is that HPWPs
companies, HPWPs are simply common in St. Lukes a services firm, the companies are less likely to be successful in a divided
sense practices that have brought results. tend to stress the importance of developing organisation with contradictory objectives
high levels of trust to enable a widespread and values.

18 19
THE IMPORTANCE OF LEADERSHIP Whilst not all of the cases have attempted to The transmission and development of skills The above argument is consistent with
IN HPWOs design their work systems to achieve all of are seen as an essential part of the another recent CIPD study conducted by
Leadership is central in shaping issues such the above objectives simultaneously, many managers job. They are a crucial component Purcell et al (2003) in which an organisations
as the culture and expectations within an are in a position to do so by virtue of being of the companys competitive advantage and performance is found to be a function of
organisation. All of our cases show that a HPWO. therefore not something to be delegated to ability + motivation + opportunity. Like
leadership is very important in both the the training department. our current case studies, Purcell et al argue
conception as well as the development of a DOES HIGH PAY NECESSARILY GUARANTEE that beyond possessing the basic skills to do
HPWO. At the outset leadership is crucial to THE CREATION OF A HPWO? In nearly every case study, training and a job, what produces performance is the
identify the main business strategy and how In our survey, there was a positive continuous development can be regarded leveraging effects of motivation and the
HPWPs might deliver results6. However, once correlation between organisations with as a given, and it is not a matter of HPWOs opportunity to go the extra mile.
HPWPs start delivering results, leadership greater adoption of HPWPs and the training more. As we have already said, in a
goes beyond a few individuals and becomes proportion of employees earning over HPWO it is more important to focus on IMPLEMENTING HPWOs AND
embedded in the organisation and 35,000 p.a. However, the proportion of training that is linked to performance MANAGING CHANGE
leadership can be seen everywhere. For employees earning over 35,000 is probably requirements rather than on quantity. As leaders in their respective industries,
example, in the case of W L Gore, leadership a consequence of high performance working Furthermore, tacit skills and institutional HPWOs are adept at handling change. This is
can be readily identified in all the self- and not the other way round. In most of the knowledge are relatively more important clearly highlighted by the cases such as
managed teams. The delegation of authority case studies, good pay features in their than technical skills in many of the HPWOs Bacardi & Martini and Quest Diagnostics.
to make decisions, and the widespread success but while good pay is important in studied. As the training for tacit skills and Innovative practices in HPWOs mean that
commitment to organisational values, mean rewarding good performance, it is not institutional knowledge are more informal they are quick to respond to new business
that the conditions are present for most necessarily the cause of it. In this context, than formal, there are immense implications needs and can develop new capabilities.
members of the organisation to exercise most case studies would suggest that pay, for skills policy in HPWOs. Thus, in a HPWO, However, the irony of a HPWO is that they
leadership. The end result is that innovation, as far as the employees are concerned, is skills policy goes beyond the formalisation of tend to be leaders in their industries,
problem-solving and collaboration occur any often a hygiene factor (i.e. an underlying training (e.g. X spent every year per creating best practice rather than following
time and anywhere. Similarly, Flight Centre factor that sustains commitment) in a high employee). It is about creating a work it. In these circumstances, you will read
achieves widespread leadership through an performing organisation. Other business environment in which employees can learn many practical examples in the case studies
egalitarian culture that encourages the idea challenges and the quality of the work all the time as part of their normal work and about tools leading to change and the
that everyone is a leader. environment are more effective in retaining where they can take advantage of the system achievement of specific organisational
good employees and therefore their long- for performance and innovation. objectives. A further set of case studies by
WHAT IS THE BUSINESS CASE FOR term commitment to the organisation. John Stevens (2005) that focus particularly
ADOPTING HPWPS? The implication of making learning the on the problems and change issues
The survey results show a strong business THE NATURE OF SKILLS IN A HPWO normal environment of work is that, in a associated with implementing HPWPs in
case for adopting HPWPs. Twenty-two out of Our case studies provide a number of HPWO, skills policy has two components: (1) more traditional organisations is available
twenty-three of the organisation outcomes interesting lessons on skills and how skills a maintaining element training/learning that from the Wales Management Council.
tested were correlated with adopting more operate in the context of a HPWO. The case is necessary to maintain the basic operation
HPWPs. Some of the stronger correlations, studies show that all employers expect and (2) a motivating element that enables
such as those between HPWPs and something more than technical skills from employees to internalise training/learning so
motivating staff, managing change, effective their employees. As a result, they spend that training/learning is something that they
teamwork, communication and greater job considerable time and resources in enjoy and will make their work even more
satisfaction are clearly providing a business identifying those other skills during exciting and motivating.
case for HPWPs. Likewise, all of the case recruitment, developing them in employees
studies demonstrate the effect of HPWPs early years with the organisation, and The former element of the skill policy in a
on a range of areas such as innovation, subsequently maintaining and improving HPWO is therefore identifiable and often
performance, teamwork, employee them. In none of the cases are they measurable (e.g. we will give everyone
commitment, employee welfare, developing skills for the sake of skills. Skills induction training or continuous
competitiveness, productivity and creating development is very focused and therefore development, or X allocated to a training
the flexibility necessary to adapt to change. essential to business performance. As in budget), but the latter (the motivating
the case of Aspect Capital, vast resources component) is not. The greater the attention
and time are spent in training their paid to the motivating component of a
6 In the case studies on the relationship between people employees in both the sales teams and skills policy (e.g. making sure staff have a
management and organisation performance by Purcell et in the financial modelling teams and the high level of job satisfaction and an
al (2003), a similar characteristic of leadership was results of the training are reflected by the environment of empowerment and career
identified. Purcell et al called it the Big Idea i.e. a clear
mission underpinned by values and culture which in turn employees performance vis--vis their prospect), the more individuals obtain from
defines how organisational goals are to be achieved. performance targets. the effect of the skills policy as a whole.

20 21
THE IMPORTANCE OF LEADERSHIP Whilst not all of the cases have attempted to The transmission and development of skills The above argument is consistent with
IN HPWOs design their work systems to achieve all of are seen as an essential part of the another recent CIPD study conducted by
Leadership is central in shaping issues such the above objectives simultaneously, many managers job. They are a crucial component Purcell et al (2003) in which an organisations
as the culture and expectations within an are in a position to do so by virtue of being of the companys competitive advantage and performance is found to be a function of
organisation. All of our cases show that a HPWO. therefore not something to be delegated to ability + motivation + opportunity. Like
leadership is very important in both the the training department. our current case studies, Purcell et al argue
conception as well as the development of a DOES HIGH PAY NECESSARILY GUARANTEE that beyond possessing the basic skills to do
HPWO. At the outset leadership is crucial to THE CREATION OF A HPWO? In nearly every case study, training and a job, what produces performance is the
identify the main business strategy and how In our survey, there was a positive continuous development can be regarded leveraging effects of motivation and the
HPWPs might deliver results6. However, once correlation between organisations with as a given, and it is not a matter of HPWOs opportunity to go the extra mile.
HPWPs start delivering results, leadership greater adoption of HPWPs and the training more. As we have already said, in a
goes beyond a few individuals and becomes proportion of employees earning over HPWO it is more important to focus on IMPLEMENTING HPWOs AND
embedded in the organisation and 35,000 p.a. However, the proportion of training that is linked to performance MANAGING CHANGE
leadership can be seen everywhere. For employees earning over 35,000 is probably requirements rather than on quantity. As leaders in their respective industries,
example, in the case of W L Gore, leadership a consequence of high performance working Furthermore, tacit skills and institutional HPWOs are adept at handling change. This is
can be readily identified in all the self- and not the other way round. In most of the knowledge are relatively more important clearly highlighted by the cases such as
managed teams. The delegation of authority case studies, good pay features in their than technical skills in many of the HPWOs Bacardi & Martini and Quest Diagnostics.
to make decisions, and the widespread success but while good pay is important in studied. As the training for tacit skills and Innovative practices in HPWOs mean that
commitment to organisational values, mean rewarding good performance, it is not institutional knowledge are more informal they are quick to respond to new business
that the conditions are present for most necessarily the cause of it. In this context, than formal, there are immense implications needs and can develop new capabilities.
members of the organisation to exercise most case studies would suggest that pay, for skills policy in HPWOs. Thus, in a HPWO, However, the irony of a HPWO is that they
leadership. The end result is that innovation, as far as the employees are concerned, is skills policy goes beyond the formalisation of tend to be leaders in their industries,
problem-solving and collaboration occur any often a hygiene factor (i.e. an underlying training (e.g. X spent every year per creating best practice rather than following
time and anywhere. Similarly, Flight Centre factor that sustains commitment) in a high employee). It is about creating a work it. In these circumstances, you will read
achieves widespread leadership through an performing organisation. Other business environment in which employees can learn many practical examples in the case studies
egalitarian culture that encourages the idea challenges and the quality of the work all the time as part of their normal work and about tools leading to change and the
that everyone is a leader. environment are more effective in retaining where they can take advantage of the system achievement of specific organisational
good employees and therefore their long- for performance and innovation. objectives. A further set of case studies by
WHAT IS THE BUSINESS CASE FOR term commitment to the organisation. John Stevens (2005) that focus particularly
ADOPTING HPWPS? The implication of making learning the on the problems and change issues
The survey results show a strong business THE NATURE OF SKILLS IN A HPWO normal environment of work is that, in a associated with implementing HPWPs in
case for adopting HPWPs. Twenty-two out of Our case studies provide a number of HPWO, skills policy has two components: (1) more traditional organisations is available
twenty-three of the organisation outcomes interesting lessons on skills and how skills a maintaining element training/learning that from the Wales Management Council.
tested were correlated with adopting more operate in the context of a HPWO. The case is necessary to maintain the basic operation
HPWPs. Some of the stronger correlations, studies show that all employers expect and (2) a motivating element that enables
such as those between HPWPs and something more than technical skills from employees to internalise training/learning so
motivating staff, managing change, effective their employees. As a result, they spend that training/learning is something that they
teamwork, communication and greater job considerable time and resources in enjoy and will make their work even more
satisfaction are clearly providing a business identifying those other skills during exciting and motivating.
case for HPWPs. Likewise, all of the case recruitment, developing them in employees
studies demonstrate the effect of HPWPs early years with the organisation, and The former element of the skill policy in a
on a range of areas such as innovation, subsequently maintaining and improving HPWO is therefore identifiable and often
performance, teamwork, employee them. In none of the cases are they measurable (e.g. we will give everyone
commitment, employee welfare, developing skills for the sake of skills. Skills induction training or continuous
competitiveness, productivity and creating development is very focused and therefore development, or X allocated to a training
the flexibility necessary to adapt to change. essential to business performance. As in budget), but the latter (the motivating
the case of Aspect Capital, vast resources component) is not. The greater the attention
and time are spent in training their paid to the motivating component of a
6 In the case studies on the relationship between people employees in both the sales teams and skills policy (e.g. making sure staff have a
management and organisation performance by Purcell et in the financial modelling teams and the high level of job satisfaction and an
al (2003), a similar characteristic of leadership was results of the training are reflected by the environment of empowerment and career
identified. Purcell et al called it the Big Idea i.e. a clear
mission underpinned by values and culture which in turn employees performance vis--vis their prospect), the more individuals obtain from
defines how organisational goals are to be achieved. performance targets. the effect of the skills policy as a whole.

20 21
The ten cases studies
TABLE 7: HPWPs IN THE TEN CASE STUDIES CONTINUED

High employee HR practices Reward &


involvement commitment
practices

The ten case studies follow, but if you are interested in learning i-level Re-design work Continuous Profit-sharing.
Services for better development. Leveller of the
about the experience of a particular sector or the use of specific communication. Wild card training month award.
allowance.
practices, the table below provides a summary of the notable 360 degree
HPWPs found in each company. A synopsis of each case study, appraisals for all.

which details the specific learning points in each case, is also Pannone & Partners Extensive informal Continuous Work-life balance
Services communication professional priority.
located at the beginning of each case study. all under one-roof. development. A fairness
Appraisals for career incentive system.
development.
TABLE 7: HPWPs IN THE TEN CASE STUDIES
Quest Diagnostics Quality systems. Workforce diversity Performance-
High employee HR practices Reward & Services Road-map to define as source of related pay.
involvement commitment performance. competitiveness.
practices Personal
development plans.
Aspect Capital People culture Incubator for all Use Quarterly
St. Lukes Client-based Appraisals for life- Collective
Services through a round training. Individual Bonus
Services teamwork. long learning. ownership.
cultural plan. Appraising against or QUIB.
Quest Group to Extensive informal
9 attributes for all
look after collective continuous
round performance.
interest. development.
Making yourself
Bacardi & Martini UK Behaviour code Use PACT to Family-friendly
more interesting
Manufacturing through PACT. appraise. policies.
training fund.
Use Agile Team to Back to the floor Family/spouse
bring innovation. for managers. inclusive benefits.
Timpson Newsletter to Tailor-made Significant
Employee
Services recognise in-house training. performance-
Engagement Survey.
achievement, The Happy Index. related pay.
Morale indicators.
performance and to
create competition.
Data Connection Internal employee Recruit top Significant entry
Self-directed
Services survey. candidates salaries.
shop unit.
Quality circles for exclusively at the Significant profit-
improvement and entry level. sharing through an
W L Gore Extensive use of Extensive informal Collective
innovation. Life-long continuous Employee Trust.
Manufacturing autonomous teams. continuous ownership.
development.
Kaizen improvement development 100% performance
Strong internal
systems. related pay.
career development.

Flight Centre Seven channels of One Best Way for Profit-sharing.


Services communication at world-wide Wealth Wise.
all levels. operation. Money Wise.
Self-directed Continuous training
business teams. for leadership.

22 23
The ten cases studies TABLE 7: HPWPs IN THE TEN CASE STUDIES CONTINUED

High employee HR practices Reward &


involvement commitment
practices

The ten case studies follow, but if you are interested in learning i-level Re-design work Continuous Profit-sharing.
Services for better development. Leveller of the
about the experience of a particular sector or the use of specific communication. Wild card training month award.
allowance.
practices, the table below provides a summary of the notable 360 degree
HPWPs found in each company. A synopsis of each case study, appraisals for all.

which details the specific learning points in each case, is also Pannone & Partners Extensive informal Continuous Work-life balance
Services communication professional priority.
located at the beginning of each case study. all under one-roof. development. A fairness
Appraisals for career incentive system.
development.
TABLE 7: HPWPs IN THE TEN CASE STUDIES
Quest Diagnostics Quality systems. Workforce diversity Performance-
High employee HR practices Reward & Services Road-map to define as source of related pay.
involvement commitment performance. competitiveness.
practices Personal
development plans.
Aspect Capital People culture Incubator for all Use Quarterly
St. Lukes Client-based Appraisals for life Collective
Services through a round training. Individual Bonus
Services teamwork. long learning. ownership.
cultural plan. Appraising against or QUIB.
Quest Group to Extensive informal
9 attributes for all
look after collective continuous
round performance.
interest. development.
Making yourself
Bacardi & Martini UK Behaviour code Use PACT to Family-friendly
more interesting
Manufacturing through PACT. appraise. policies.
training fund.
Use Agile Team to Back to the floor Family/spouse
bring innovation. for managers. inclusive benefits.
Timpson Newsletter to Tailor-made Significant
Employee
Services recognise in-house training. performance-
Engagement Survey.
achievement, The Happy Index. related pay.
Morale indicators.
performance and to
create competition.
Data Connection Internal employee Recruit top Significant entry
Self-directed
Services survey. candidates salaries.
shop unit.
Quality circles for exclusively at the Significant profit-
improvement and entry level. sharing through an
W L Gore Extensive use of Extensive informal Collective
innovation. Life-long continuous Employee Trust.
Manufacturing autonomous teams. continuous ownership.
development.
Kaizen improvement development 100% performance
Strong internal
systems. related pay.
career development.

Flight Centre Seven channels of One Best Way for Profit-sharing.


Services communication at world-wide Wealth Wise.
all levels. operation. Money Wise.
Self-directed Continuous training
business teams. for leadership.

22 23

THE INDUSTRIAL CONTEXT AND ASPECT Vision alone, however, would not be enough
CAPITALS BUSINESS STRATEGY to guarantee success. In addition to a
The financial services sector is highly thorough understanding of the product
competitive in global terms and is often market, Aspect Capital has been very good at
CASE STUDY
characterised by the need to sustain a high developing and incorporating IT technology
level performance through very attractive to deliver its business objectives. As
ASPECT CAPITAL
financial incentives. So for Aspect Capital, computing and software costs came down,
striking the balance between rewards and Aspect Capital implemented another winning
performance is important. However, it is strategy using statistical modelling to
even more important to create a high develop new investment products, and to
performing workplace in which workers find provide superior information to enhance its
Service/Product: Financial services hard work both fulfilling and worthy of trading performance.
Turnover: 56.8m committing their career to.
Anthony and his team wanted to apply
Size of the workforce: 69 employees
Aspect Capital was founded in 1997, by quantitative techniques across a broader
Earning 35,000 p.a.: 74% Anthony Todd, Eugene Lambert, Martin range of financial products, believing that
Famous for: Consistent and high levels of return on Lueck and Michael Adam, who had all been this would provide a more stable
investment through quantitative investment techniques involved in the successful development of a environment to generate a superior rate of
for hedge funds management previous company. This previous venture return for investors. Thus, at Aspect Capital,
turned out to be a pioneer in quantitative research and development turned their
The business strategy: Achieving high performance through
investment management techniques for attention to a wider range of trading models,
people and technology
hedge funds management. using an extensive database of historical
data to ensure their performance across a
High performance learning points: Deriving their technical knowledge from diverse range of market conditions.
Commercial success through technical brilliance delivered
previous experience and their studies, the
through the support of good teamwork, effective leadership and
founders of Aspect believe that the financial BUILDING A TECHNOLOGICAL SYSTEM
a committed organisation;
markets do not function entirely as market WITH A PEOPLE STRATEGY
economics would suggest, i.e. the result of The other explicit goal of Aspect Capital is to
Uses nine key attributes to shape the culture of the business and
supply and demand. They believe there are build a business which people feel
teamwork. This counter-balances the industrys tendency to
real and persistent factors which influence passionate about working in. Anthony
emphasise high pay to attract good technical people;
relative market returns and as a result within commented, Aspect Capital is designed to
An innovative reward system, including the Quarterly Individual Aspect Capital, research and trading have re-capture some of the dynamism that we
Bonus, also addresses the need to achieve non-financial been designed specifically to capitalise on had in the previous company in the early
objectives at work; these market imperfections. 1990s. Aspect Capital was so serious about
Consciously learning from the past and identifying key elements the people strategy that it wrote a cultural
in order to build a better business model for the future; The founders of Aspect had a particular plan in 1998. The origin of the cultural plan
Strong focus on training including the imaginative use of high vision about financial markets. They believed was that, given the nature of the business
quality coaching and mentoring to build an incubator for the stock market had had a long period of and its environment in the financial sector, a
on-the-job and company specific training. growth that could not continue indefinitely. people culture was often hard to find.
Their view at the time was that there Issues such as looking after your staff,
would be a risk of an extended period of providing a challenging and dynamic
re-adjustment, consolidation or, possibly, a environment, focusing on team work,
serious decline in the stock market. They creating a fair, sociable and open workplace
also thought that if and when the returns are the things that are frequently over-looked
from the stock market started to wane, in the industry, commented Anthony.
A case of achieving high performance through people people would increasingly look to alternative A great working environment will increase
investments. Aspects founders wanted to our chances of success. We dont just want
and technology position themselves to be an attractive to build a successful business, but we also
alternative investment manager for want to build a workplace that we want to
institutions that were keen to diversify away actively work in ourselves.
With traditional investment in the stock Not only has Aspect Capital been very
from the long-only (expecting stock returns
market becoming increasingly uncertain, the successful in producing remarkable returns
to always be on the up) investment. The
financial services sector has seen the rapid for its investors since 1997, it has achieved
subsequent growth of hedge funds proved
growth of hedge fund managing companies. its successful profile by taking a different
that Anthony and his team were right.
Aspect Capital is one of these successful new approach from other financial companies.
companies in the financial services sector.

24 25
THE INDUSTRIAL CONTEXT AND ASPECT Vision alone, however, would not be enough
CAPITALS BUSINESS STRATEGY to guarantee success. In addition to a
The financial services sector is highly thorough understanding of the product
competitive in global terms and is often market, Aspect Capital has been very good at
CASE STUDY characterised by the need to sustain a high developing and incorporating IT technology
level performance through very attractive to deliver its business objectives. As
ASPECT CAPITAL financial incentives. So for Aspect Capital, computing and software costs came down,
striking the balance between rewards and Aspect Capital implemented another winning
performance is important. However, it is strategy using statistical modelling to
even more important to create a high develop new investment products, and to
performing workplace in which workers find provide superior information to enhance its
Service/Product: Financial services hard work both fulfilling and worthy of trading performance.
Turnover: 56.8m committing their career to.
Anthony and his team wanted to apply
Size of the workforce: 69 employees
Aspect Capital was founded in 1997, by quantitative techniques across a broader
Earning 35,000 p.a.: 74% Anthony Todd, Eugene Lambert, Martin range of financial products, believing that
Famous for: Consistent and high levels of return on Lueck and Michael Adam, who had all been this would provide a more stable
investment through quantitative investment techniques involved in the successful development of a environment to generate a superior rate of
for hedge funds management previous company. This previous venture return for investors. Thus, at Aspect Capital,
turned out to be a pioneer in quantitative research and development turned their
The business strategy: Achieving high performance through
investment management techniques for attention to a wider range of trading models,
people and technology
hedge funds management. using an extensive database of historical
data to ensure their performance across a
High performance learning points: Deriving their technical knowledge from diverse range of market conditions.
Commercial success through technical brilliance delivered
previous experience and their studies, the
through the support of good teamwork, effective leadership and
founders of Aspect believe that the financial BUILDING A TECHNOLOGICAL SYSTEM
a committed organisation;
markets do not function entirely as market WITH A PEOPLE STRATEGY
economics would suggest, i.e. the result of The other explicit goal of Aspect Capital is to
Uses nine key attributes to shape the culture of the business and
supply and demand. They believe there are build a business which people feel
teamwork. This counter-balances the industrys tendency to
real and persistent factors which influence passionate about working in. Anthony
emphasise high pay to attract good technical people;
relative market returns and as a result within commented, Aspect Capital is designed to
An innovative reward system, including the Quarterly Individual Aspect Capital, research and trading have re-capture some of the dynamism that we
Bonus, also addresses the need to achieve non-financial been designed specifically to capitalise on had in the previous company in the early
objectives at work; these market imperfections. 1990s. Aspect Capital was so serious about
Consciously learning from the past and identifying key elements the people strategy that it wrote a cultural
in order to build a better business model for the future; The founders of Aspect had a particular plan in 1998. The origin of the cultural plan
Strong focus on training including the imaginative use of high vision about financial markets. They believed was that, given the nature of the business
quality coaching and mentoring to build an incubator for the stock market had had a long period of and its environment in the financial sector, a
on-the-job and company specific training. growth that could not continue indefinitely. people culture was often hard to find.
Their view at the time was that there Issues such as looking after your staff,
would be a risk of an extended period of providing a challenging and dynamic
re-adjustment, consolidation or, possibly, a environment, focusing on team work,
serious decline in the stock market. They creating a fair, sociable and open workplace
also thought that if and when the returns are the things that are frequently over-looked
from the stock market started to wane, in the industry, commented Anthony.
A case of achieving high performance through people people would increasingly look to alternative A great working environment will increase
investments. Aspects founders wanted to our chances of success. We dont just want
and technology position themselves to be an attractive to build a successful business, but we also
alternative investment manager for want to build a workplace that we want to
institutions that were keen to diversify away actively work in ourselves.
With traditional investment in the stock Not only has Aspect Capital been very
from the long-only (expecting stock returns
market becoming increasingly uncertain, the successful in producing remarkable returns
to always be on the up) investment. The
financial services sector has seen the rapid for its investors since 1997, it has achieved
subsequent growth of hedge funds proved
growth of hedge fund managing companies. its successful profile by taking a different
that Anthony and his team were right.
Aspect Capital is one of these successful new approach from other financial companies.
companies in the financial services sector.

24 25
Whilst other financial sector employers We look for people with a particular skill Sales and marketing training in the hedge Aspect Capitals approach is embodied in the
distribute performance bonuses focusing on set. But in fact, it is relatively easy to find the fund context is very specific. As there is a quarterly review exercise (the Quarterly
the employees ability to achieve hard particular skills. To find the right kind of high demand for very good hedge funds, the Individual Bonus or QUIB). The main
(financially measurable) targets, Aspect people with whom you want to work, that is sales team is not just selling. They are purpose of QUIB is to ensure frequent
Capital uses its cultural plan in order to far more difficult. We spend a long, long essentially facilitating the due diligence planning. At the start of each quarter,
promote nine key attributes to make Aspect time hand picking key individuals who can process for the clients and also providing objectives are set for the company, for each
Capital a better workplace. A significant bring something else to the company, often after sales support on an on-going basis, department, and are agreed with each
proportion of Aspect Capitals bonus system taking eight or nine months before which includes performance updates. As a employee. All these are viewable by
takes into account an employees rating on appointing the right individual. Anthony result, training for sales and marketing staff everyone in the company. At the end of the
the following nine attributes: emphasised. relies on a complex process of identifying quarter, each employees performance is
Teamwork essential client opportunities through reviewed, with reference to these objectives
Initiative FINANCIAL APPRENTICESHIP networking, attending conferences, keeping and awarded a QUIB score ranging from 0 to
People Management Aspect Capital deals with very complex an eye on the press, reports and financial 200 in increments of 25. A score of 100
Project Management financial products and therefore must take surveys and successfully presenting a reflects a good performance with all
Attitude care and time to train its new recruits. For complex financial product to an investor. objectives achieved. A score in excess of 100
Attention to Detail example, a new recruit into the research It takes up to two years to train a competent is awarded for exceptional effort. A score of
Professionalism team will attend external courses on hedge sales and marketing employee, who is able 50 or below reflects concerns over serious
Communication funds and financial markets. Additionally, to deal with all of Aspect Capitals financial issues. Everyone in the company has a QUIB
Productivity recruits straight from academia can spend products effectively. multiple, which ranges from 10% for junior
time in the Financial Engineering team, employees, 15% or 20% for senior
To signal other values which are equally learning about Aspect Capitals quantitative LINKING REWARDS TO FAIRNESS, employees and 25% for directors. A bonus is
important to the workplace, Aspect Capital approach to hedge fund management, the HARD WORK AND PERFORMANCE paid each quarter equal to the individuals
creates specific social activities to encourage different areas of research and how research At Aspect Capital, everyone is regarded as QUIB multiple, times their quarterly salary,
a sense of community among staff, a wide interfaces with the sales team and its essential in running the business. You have times their QUIB score. The score focuses
range of benefits including healthcare investors needs. This training can take from to have the top flight researchers, the IT primarily on performance against objectives
covering spouses and dependants, and five days to one year to complete, depending technology to implement it. Then you have to and, to a lesser extent, personal issues and
external activities such as charity work to on the experience of the individual. This time have the top flight dealing team people future potential.
reflect Aspect Capitals concern about its spent within Financial Engineering, working who have the knowledge to place orders in
external environment. with senior financial engineers, is also a the market efficiently. Otherwise, the In addition there is an annual compensation
useful way of assessing a new recruits quantitative model wont be effective. You scheme at the end of the year where every
RECRUITMENT AND SKILLS strength in every area of Aspect Capitals have to have the most diligent sales staff to employee is entitled to enter into the
As a result of both these technical and research operation in order that they can be interface the products and clients. You also discretionary profit share scheme. The
cultural requirements, recruitment is not an effectively deployed. have to have the first class administration potential bonus pool is dependent on the
easy task. For example, Aspect Capital running the front office, the middle office and companys profitability during the previous
recruits some of the brightest For the sales team, the training is equally the evaluation. Anthony sees everything financial year. Each individual is assessed on
mathematicians and programmers for its thorough. Hedge funds have grown so fast, being important, and teamwork is defined at their contribution to the business during the
research and IT teams and they are the in a very short space of time, that there is a the enterprise level. The investors can see year. An important element in the process is
backbone of the quantitative approach to the relatively small reservoir of experienced and our performance out there, and this is a very a review of each individual against his or her
hedge funds management and identification successful sales people, which means that performance-driven industry, as far as hard peers on the basis of the nine characteristics
of new financial products. Often, these are Aspect Capital often needs to train its own financial results are concerned. You have to mentioned previously. In addition, at the
skills that you have to pay over the odds to sales and marketing staff. The long process pay people well in order to get the most employees discretion, the profit share can
recruit, as the industry has a very competitive of sales training is derived from a excellent people in the company. be deferred. Any deferred portion is
salary structure. Pay is important in attracting combination of internal on-the-job training increased by the company by 50% and
the highly skilled into the company, but it is and external training at specialist The financial industry tends to pay over the notionally invested in a range of Aspect
not sufficient to ensure that highly skilled institutions. Internally, the sales and odds to get the best people. Aspect Capital funds. These practices mean that Aspect
individuals will necessarily bring marketing staff have to work with, and learn uses its salaries and bonuses to ensure a Capital is able to create a balance between
performance into the organisation, especially from, the research team in order to build a balance between performance and other achieving measured performance and
an organisation that relies on teamwork. The high-level understanding of complex values. We are very keen to get excellent softer issues such as teamwork, people
fact that Aspect Capital is dealing with financial products. Externally, the sales staff people into the business. But also, it is true management skills and communication. At
complex financial products means that high receive formal training on sales, presentation that in addition to excellent skill sets, we are the same time, if profit share is deferred, the
skill is only a starting point. Trainability the and negotiation skills. looking for people to bring something else, stake so created helps to align the objectives
potential for future development and something different. of the employee with that of the company.
possession of the nine attributes is all
important for Aspect Capital.

26 27
Whilst other financial sector employers We look for people with a particular skill Sales and marketing training in the hedge Aspect Capitals approach is embodied in the
distribute performance bonuses focusing on set. But in fact, it is relatively easy to find the fund context is very specific. As there is a quarterly review exercise (the Quarterly
the employees ability to achieve hard particular skills. To find the right kind of high demand for very good hedge funds, the Individual Bonus or QUIB). The main
(financially measurable) targets, Aspect people with whom you want to work, that is sales team is not just selling. They are purpose of QUIB is to ensure frequent
Capital uses its cultural plan in order to far more difficult. We spend a long, long essentially facilitating the due diligence planning. At the start of each quarter,
promote nine key attributes to make Aspect time hand picking key individuals who can process for the clients and also providing objectives are set for the company, for each
Capital a better workplace. A significant bring something else to the company, often after sales support on an on-going basis, department, and are agreed with each
proportion of Aspect Capitals bonus system taking eight or nine months before which includes performance updates. As a employee. All these are viewable by
takes into account an employees rating on appointing the right individual. Anthony result, training for sales and marketing staff everyone in the company. At the end of the
the following nine attributes: emphasised. relies on a complex process of identifying quarter, each employees performance is
Teamwork essential client opportunities through reviewed, with reference to these objectives
Initiative FINANCIAL APPRENTICESHIP networking, attending conferences, keeping and awarded a QUIB score ranging from 0 to
People Management Aspect Capital deals with very complex an eye on the press, reports and financial 200 in increments of 25. A score of 100
Project Management financial products and therefore must take surveys and successfully presenting a reflects a good performance with all
Attitude care and time to train its new recruits. For complex financial product to an investor. objectives achieved. A score in excess of 100
Attention to Detail example, a new recruit into the research It takes up to two years to train a competent is awarded for exceptional effort. A score of
Professionalism team will attend external courses on hedge sales and marketing employee, who is able 50 or below reflects concerns over serious
Communication funds and financial markets. Additionally, to deal with all of Aspect Capitals financial issues. Everyone in the company has a QUIB
Productivity recruits straight from academia can spend products effectively. multiple, which ranges from 10% for junior
time in the Financial Engineering team, employees, 15% or 20% for senior
To signal other values which are equally learning about Aspect Capitals quantitative LINKING REWARDS TO FAIRNESS, employees and 25% for directors. A bonus is
important to the workplace, Aspect Capital approach to hedge fund management, the HARD WORK AND PERFORMANCE paid each quarter equal to the individuals
creates specific social activities to encourage different areas of research and how research At Aspect Capital, everyone is regarded as QUIB multiple, times their quarterly salary,
a sense of community among staff, a wide interfaces with the sales team and its essential in running the business. You have times their QUIB score. The score focuses
range of benefits including healthcare investors needs. This training can take from to have the top flight researchers, the IT primarily on performance against objectives
covering spouses and dependants, and five days to one year to complete, depending technology to implement it. Then you have to and, to a lesser extent, personal issues and
external activities such as charity work to on the experience of the individual. This time have the top flight dealing team people future potential.
reflect Aspect Capitals concern about its spent within Financial Engineering, working who have the knowledge to place orders in
external environment. with senior financial engineers, is also a the market efficiently. Otherwise, the In addition there is an annual compensation
useful way of assessing a new recruits quantitative model wont be effective. You scheme at the end of the year where every
RECRUITMENT AND SKILLS strength in every area of Aspect Capitals have to have the most diligent sales staff to employee is entitled to enter into the
As a result of both these technical and research operation in order that they can be interface the products and clients. You also discretionary profit share scheme. The
cultural requirements, recruitment is not an effectively deployed. have to have the first class administration potential bonus pool is dependent on the
easy task. For example, Aspect Capital running the front office, the middle office and companys profitability during the previous
recruits some of the brightest For the sales team, the training is equally the evaluation. Anthony sees everything financial year. Each individual is assessed on
mathematicians and programmers for its thorough. Hedge funds have grown so fast, being important, and teamwork is defined at their contribution to the business during the
research and IT teams and they are the in a very short space of time, that there is a the enterprise level. The investors can see year. An important element in the process is
backbone of the quantitative approach to the relatively small reservoir of experienced and our performance out there, and this is a very a review of each individual against his or her
hedge funds management and identification successful sales people, which means that performance-driven industry, as far as hard peers on the basis of the nine characteristics
of new financial products. Often, these are Aspect Capital often needs to train its own financial results are concerned. You have to mentioned previously. In addition, at the
skills that you have to pay over the odds to sales and marketing staff. The long process pay people well in order to get the most employees discretion, the profit share can
recruit, as the industry has a very competitive of sales training is derived from a excellent people in the company. be deferred. Any deferred portion is
salary structure. Pay is important in attracting combination of internal on-the-job training increased by the company by 50% and
the highly skilled into the company, but it is and external training at specialist The financial industry tends to pay over the notionally invested in a range of Aspect
not sufficient to ensure that highly skilled institutions. Internally, the sales and odds to get the best people. Aspect Capital funds. These practices mean that Aspect
individuals will necessarily bring marketing staff have to work with, and learn uses its salaries and bonuses to ensure a Capital is able to create a balance between
performance into the organisation, especially from, the research team in order to build a balance between performance and other achieving measured performance and
an organisation that relies on teamwork. The high-level understanding of complex values. We are very keen to get excellent softer issues such as teamwork, people
fact that Aspect Capital is dealing with financial products. Externally, the sales staff people into the business. But also, it is true management skills and communication. At
complex financial products means that high receive formal training on sales, presentation that in addition to excellent skill sets, we are the same time, if profit share is deferred, the
skill is only a starting point. Trainability the and negotiation skills. looking for people to bring something else, stake so created helps to align the objectives
potential for future development and something different. of the employee with that of the company.
possession of the nine attributes is all
important for Aspect Capital.

26 27
Aspect Capital uses financial incentives to
create excellent performance. The QUIB
scheme is also a way to ensure a sense of
fairness among those who participate. It is
understood that all staff are expected to CASE STUDY
perform reasonably in relation to their
position and although this does not mean BACARDI-MARTINI UK
that staff have to be super-performers, the
company will not carry anyone who
persistently performs below a reasonable
QUIB score. This ethos might seem harsh,
but the sense of fairness is widely shared Service/Product: Drinks manufacturer
among the staff, who all have to build and Turnover: 400m
contribute to team success in a very
Size of the workforce: 550 employees
demanding environment.
Earning 35,000 p.a.: 19%
The vision of Aspect Capitals founders has Famous for: A leader/inventor of the ready-to-drink market
been realised. Not only is Aspect Capital
The business strategy: Managing change and innovation
performing well but it has the commitment
through a value-based and people culture
of its staff. The Sunday Times 100 Best
Companies to Work For 2004 survey reported
that 93 percent of the staff thought that their High performance learning points:
leader was full of energy, and eight out of Consciously removes barriers between senior and shop-floor
ten were inspired by such leadership and its staff in order to ensure smooth operation at all levels;
strong principles. Nine out of ten employees
Successfully created a set of organisational values to
at Aspect Capital trusted their colleagues to
communicate, guide and reward behaviour appropriate to team
do a good job (the second highest score in
performance;
the survey), and 77 per cent of the staff got a
buzz from working at Aspect Capital. Clearly, Uses appropriate training and recruitment to enhance the match
Aspect Capital represents one of the rare between potential and existing employees and the needs of a
examples where, in a harsh target-driven value-based organisation;
environment, a job can still be fulfilling, Uses profiling instruments to support a better linkage between
enjoyable and most of all, extremely well recruitment, performance and career progression of employees;
rewarded. Uses surveys and the morale indicator to gauge/improve the
organisations performance on issues such as business direction,
leadership, performance, strengths and weaknesses;
Established appropriate behaviour, expectations and systems
including the Agile Team, to manage organisational change.

Managing change and innovation through a value-based and


people culture

Bacardi-Martini Limited is a UK-based, own wholly owned brands, Bacardi-Martini


international company with around 550 staff. also distributes brands for its trading
With a single UK site in Southampton, partners such as Jack Daniels, Southern
specialising in bottling and distributing Comfort and Glenmorangie malt whisky.
premium alcohol beverage brands, Bacardi- Over half of the Southampton plants
Martini has a turnover of 400 million a year. production is for export markets.
In addition to bottling and distributing its

28 29
Aspect Capital uses financial incentives to
create excellent performance. The QUIB
scheme is also a way to ensure a sense of
fairness among those who participate. It is
understood that all staff are expected to CASE STUDY

perform reasonably in relation to their


position and although this does not mean BACARDI-MARTINI UK

that staff have to be super-performers, the


company will not carry anyone who
persistently performs below a reasonable
QUIB score. This ethos might seem harsh,
but the sense of fairness is widely shared Service/Product: Drinks manufacturer
among the staff, who all have to build and Turnover: 400m
contribute to team success in a very
Size of the workforce: 550 employees
demanding environment.
Earning 35,000 p.a.: 19%
The vision of Aspect Capitals founders has Famous for: A leader/inventor of the ready-to-drink market
been realised. Not only is Aspect Capital
The business strategy: Managing change and innovation
performing well but it has the commitment
through a value-based and people culture
of its staff. The Sunday Times 100 Best
Companies to Work For 2004 survey reported
that 93 percent of the staff thought that their High performance learning points:
leader was full of energy, and eight out of Consciously removes barriers between senior and shop-floor
ten were inspired by such leadership and its staff in order to ensure smooth operation at all levels;
strong principles. Nine out of ten employees
Successfully created a set of organisational values to
at Aspect Capital trusted their colleagues to
communicate, guide and reward behaviour appropriate to team
do a good job (the second highest score in
performance;
the survey), and 77 per cent of the staff got a
buzz from working at Aspect Capital. Clearly, Uses appropriate training and recruitment to enhance the match
Aspect Capital represents one of the rare between potential and existing employees and the needs of a
examples where, in a harsh target-driven value-based organisation;
environment, a job can still be fulfilling, Uses profiling instruments to support a better linkage between
enjoyable and most of all, extremely well recruitment, performance and career progression of employees;
rewarded. Uses surveys and the morale indicator to gauge/improve the
organisations performance on issues such as business direction,
leadership, performance, strengths and weaknesses;
Established appropriate behaviour, expectations and systems
including the Agile Team, to manage organisational change.

Managing change and innovation through a value-based and


people culture

Bacardi-Martini Limited is a UK-based, own wholly owned brands, Bacardi-Martini


international company with around 550 staff. also distributes brands for its trading
With a single UK site in Southampton, partners such as Jack Daniels, Southern
specialising in bottling and distributing Comfort and Glenmorangie malt whisky.
premium alcohol beverage brands, Bacardi- Over half of the Southampton plants
Martini has a turnover of 400 million a year. production is for export markets.
In addition to bottling and distributing its

28 29
THE INDUSTRIAL CONTEXT AND BACARDI- Bacardi-Martini. This is particularly reflected PACT is visible everywhere at Bacardi- ENHANCING A VALUE-BASED
MARTINIS BUSINESS STRATEGY by a practice known as back to the floor. Martini on notice boards, printed ORGANISATION
Despite its relatively long history, Bacardi- Under back to the floor, every senior information, company gifts and mugs. In order to ensure a delicate balance
Martini has had a phenomenal success in the executive at Bacardi-Martini will return for a Within performance appraisals, training, between PACT, a people culture and a sense
recent trendy ready-to-drink market with the day to a shop-floor unit once every three to individual and team objectives are set of fairness, a number of issues became
creation of the Bacardi Breezer. Bacardi- six months. During that day, senior executives against PACT and reviewed on a regular important. Firstly, all assessors/managers
Martini told us that the company knew that will spend the day working as part of the basis. Progress made on these objectives is had to be trained in review techniques, inter-
the Breezer market was the next big product team in a particular unit of the business. More then linked to annual bonuses and profit and personal skills and reviewing collaboratively,
from its new market research, but it was importantly, however, they are managed by performance-related pay is applicable to all and were given full guidance on allocation of
surprised at the scale of its popularity and the the team leaders and the teams themselves. employees, regardless of status. PACT is points towards the bonus. Secondly, not
number of imitators who followed Bacardi- For that day, not only do senior executives therefore both a set of values and a means everyone was comfortable with the
Martini into the ready-to-drink market. take on a different role, they listen and learn of creating an effective organisation. organisational practices that Bacardi-Martini
while they are in that role. has adopted, hence, recruitment was a very
Behind these successes is Bacardi-Martinis To balance the demands PACT makes on important process in order to avoid
particular approach to its business. In fact, This back to the floor approach is an Bacardi-Martinis staff, the company has an disappointment.
apart from its much acclaimed family and unusual way to make senior staff visible and extensive range of benefits, assuring
people-focus culture, which has secured accessible. But, perhaps more importantly, it employees that they are valued by the Through a competency-based methodology,
four successive top-ten places in The Sunday is an opportunity to hear the views of company. Such provision includes free hot PACT also shapes the recruitment process at
Times 100 Best Companies to Work For 2004, individual employees, such as what the meals at the restaurant, private health care, Bacardi-Martini. In order to create career
Bacardi-Martini has implemented most issues are and what the constraints may be. life insurance, sports facilities, helplines, progression opportunities for staff, vacancies
aspects of a high performance working This information is taken back to subsequent discounted products and, a rare provision are always open to internal candidates first,
organisation (HPWO). This has been the senior executive meetings and informs the these days, the final salary pension scheme. regardless of their previous role, before
bedrock of its success and achievements. In development of appropriate action plans. A significant emphasis within these benefits being advertised externally. All candidates
order to take advantage of high performance Hence, Colleen Potter, the HR manager at is that employees family members are internal and external are assessed in terms
working, the leadership of a company has to Bacardi-Martini, describes the seriousness of automatically entitled to the benefits, of their suitability vis--vis the PACT values.
understand how high performance work the exercise, in order to bring about including live-in partners. Bacardi-Martini The emphasis in these competency-based
practices support its own strategy in relation listening, sharing and understanding, the believes that it is important to the business interviews is on what the candidates have
to its product market. Executive Board are prepared to roll their that staff feel good. It is important to signal done and not on what they would do. In
sleeves up and go and talk to people and find to staff, with concrete benefits, that addition, because PACT is supported by the
A VALUE-BASED PEOPLE CULTURE out what the issues are. organisational performance can safeguard behaviour code, candidates personality
THROUGH LEADERSHIP jobs and the wellbeing of all employees and profiles are also assessed through a formal
In the case of Bacardi-Martini, it starts with The high visibility and accessibility of the family members. By linking performance to profiling instrument. Bacardi-Martini has
the Chief Executive. Described by colleagues leadership has two major benefits. Firstly, benefits, Bacardi-Martini makes it explicit been very satisfied with the introduction of
as a slight lady in stature but with huge they facilitate the creation of an HPWO and that organisational performance and these techniques, as they brought a better
personality and charisma, Stella David not secondly, they enable the leadership to employee benefits are closely related. linkage between recruitment, performance
only created many aspects of the Bacardi- strengthen a value-based organisation, often and career progression.
Martini work practices and performance a characteristic of HPWO. At Bacardi-Martini, PACT is not just concerned with what people
systems, but was also singled out by the company values are embodied by what do, but also how people do it. Hence, As much as Bacardi-Martini is working hard
employees at Bacardi-Martini as inspiring they call PACT: Bacardi-Martini has also introduced the to ensure its PACT values amongst all
and accessible in the The Sunday Times Productivity behaviour code, which establishes the employees, the company is also very keen to
100 Best Companies to Work For 2004 Accountability expected social behaviour to underpin create two-way communication. In addition
survey. To the employees, Stella David is Creativity performance: to the back to the floor initiative there is a
highly visible within the everyday operations Teamwork Focus on the situation, issue or standard open door policy. There are also
of the business. It is a common event at behaviour, not on the person three formal channels the Involvement
Bacardi-Martini to see Stella David having PACT describes everything an employee Maintain the self-confidence and Group, the Employee Engagement Survey
her lunch breaks at the free restaurant with needs to know about Bacardi-Martinis self-esteem of others and the Morale Indicators. The Involvement
operations staff, forklift drivers and other business and its critical success factors. Maintain constructive relationships Group is attended on a monthly basis by the
shop-floor staff, where working relationships PACT is the way to do things. In other words, Take initiative to make things better HR department and representatives covering
are improved and informal discussion takes productivity, accountability, creativity and Lead by example the whole of the organisation including the
place. Not only is Stella on first name terms teamwork are thought to be the performance trade union. The Group discusses issues
with all staff, she sends them a birthday card factors. All employees should incorporate Within the above general principles, a local from different areas of the business and seek
and company gift each year. those factors into their daily work. As a behaviour code is also incorporated into solutions. Often, the Group covers matters
result of the importance of PACT, employees some departments, e.g. specific ranging from grievance procedures to social
Some may say that such activities are trivial. performance is measured by PACT. requirements on flexibility and attendance. events. The Involvement Group is an
However, the belief that senior staff have to The appraisal and bonus assessments take important channel for employees to deal
be close to front line staff is fundamental at into account both PACT achievement and with their immediate concerns.
measurements against the behaviour code.

30 31
THE INDUSTRIAL CONTEXT AND BACARDI- Bacardi-Martini. This is particularly reflected PACT is visible everywhere at Bacardi- ENHANCING A VALUE-BASED
MARTINIS BUSINESS STRATEGY by a practice known as back to the floor. Martini on notice boards, printed ORGANISATION
Despite its relatively long history, Bacardi- Under back to the floor, every senior information, company gifts and mugs. In order to ensure a delicate balance
Martini has had a phenomenal success in the executive at Bacardi-Martini will return for a Within performance appraisals, training, between PACT, a people culture and a sense
recent trendy ready-to-drink market with the day to a shop-floor unit once every three to individual and team objectives are set of fairness, a number of issues became
creation of the Bacardi Breezer. Bacardi- six months. During that day, senior executives against PACT and reviewed on a regular important. Firstly, all assessors/managers
Martini told us that the company knew that will spend the day working as part of the basis. Progress made on these objectives is had to be trained in review techniques, inter
the Breezer market was the next big product team in a particular unit of the business. More then linked to annual bonuses and profit and personal skills and reviewing collaboratively,
from its new market research, but it was importantly, however, they are managed by performance-related pay is applicable to all and were given full guidance on allocation of
surprised at the scale of its popularity and the the team leaders and the teams themselves. employees, regardless of status. PACT is points towards the bonus. Secondly, not
number of imitators who followed Bacardi- For that day, not only do senior executives therefore both a set of values and a means everyone was comfortable with the
Martini into the ready-to-drink market. take on a different role, they listen and learn of creating an effective organisation. organisational practices that Bacardi-Martini
while they are in that role. has adopted, hence, recruitment was a very
Behind these successes is Bacardi-Martinis To balance the demands PACT makes on important process in order to avoid
particular approach to its business. In fact, This back to the floor approach is an Bacardi-Martinis staff, the company has an disappointment.
apart from its much acclaimed family and unusual way to make senior staff visible and extensive range of benefits, assuring
people-focus culture, which has secured accessible. But, perhaps more importantly, it employees that they are valued by the Through a competency-based methodology,
four successive top-ten places in The Sunday is an opportunity to hear the views of company. Such provision includes free hot PACT also shapes the recruitment process at
Times 100 Best Companies to Work For 2004, individual employees, such as what the meals at the restaurant, private health care, Bacardi-Martini. In order to create career
Bacardi-Martini has implemented most issues are and what the constraints may be. life insurance, sports facilities, helplines, progression opportunities for staff, vacancies
aspects of a high performance working This information is taken back to subsequent discounted products and, a rare provision are always open to internal candidates first,
organisation (HPWO). This has been the senior executive meetings and informs the these days, the final salary pension scheme. regardless of their previous role, before
bedrock of its success and achievements. In development of appropriate action plans. A significant emphasis within these benefits being advertised externally. All candidates
order to take advantage of high performance Hence, Colleen Potter, the HR manager at is that employees family members are internal and external are assessed in terms
working, the leadership of a company has to Bacardi-Martini, describes the seriousness of automatically entitled to the benefits, of their suitability vis--vis the PACT values.
understand how high performance work the exercise, in order to bring about including live-in partners. Bacardi-Martini The emphasis in these competency-based
practices support its own strategy in relation listening, sharing and understanding, the believes that it is important to the business interviews is on what the candidates have
to its product market. Executive Board are prepared to roll their that staff feel good. It is important to signal done and not on what they would do. In
sleeves up and go and talk to people and find to staff, with concrete benefits, that addition, because PACT is supported by the
A VALUE-BASED PEOPLE CULTURE out what the issues are. organisational performance can safeguard behaviour code, candidates personality
THROUGH LEADERSHIP jobs and the wellbeing of all employees and profiles are also assessed through a formal
In the case of Bacardi-Martini, it starts with The high visibility and accessibility of the family members. By linking performance to profiling instrument. Bacardi-Martini has
the Chief Executive. Described by colleagues leadership has two major benefits. Firstly, benefits, Bacardi-Martini makes it explicit been very satisfied with the introduction of
as a slight lady in stature but with huge they facilitate the creation of an HPWO and that organisational performance and these techniques, as they brought a better
personality and charisma, Stella David not secondly, they enable the leadership to employee benefits are closely related. linkage between recruitment, performance
only created many aspects of the Bacardi- strengthen a value-based organisation, often and career progression.
Martini work practices and performance a characteristic of HPWO. At Bacardi-Martini, PACT is not just concerned with what people
systems, but was also singled out by the company values are embodied by what do, but also how people do it. Hence, As much as Bacardi-Martini is working hard
employees at Bacardi-Martini as inspiring they call PACT: Bacardi-Martini has also introduced the to ensure its PACT values amongst all
and accessible in the The Sunday Times Productivity behaviour code, which establishes the employees, the company is also very keen to
100 Best Companies to Work For 2004 Accountability expected social behaviour to underpin create two-way communication. In addition
survey. To the employees, Stella David is Creativity performance: to the back to the floor initiative there is a
highly visible within the everyday operations Teamwork Focus on the situation, issue or standard open door policy. There are also
of the business. It is a common event at behaviour, not on the person three formal channels the Involvement
Bacardi-Martini to see Stella David having PACT describes everything an employee Maintain the self-confidence and Group, the Employee Engagement Survey
her lunch breaks at the free restaurant with needs to know about Bacardi-Martinis self-esteem of others and the Morale Indicators. The Involvement
operations staff, forklift drivers and other business and its critical success factors. Maintain constructive relationships Group is attended on a monthly basis by the
shop-floor staff, where working relationships PACT is the way to do things. In other words, Take initiative to make things better HR department and representatives covering
are improved and informal discussion takes productivity, accountability, creativity and Lead by example the whole of the organisation including the
place. Not only is Stella on first name terms teamwork are thought to be the performance trade union. The Group discusses issues
with all staff, she sends them a birthday card factors. All employees should incorporate Within the above general principles, a local from different areas of the business and seek
and company gift each year. those factors into their daily work. As a behaviour code is also incorporated into solutions. Often, the Group covers matters
result of the importance of PACT, employees some departments, e.g. specific ranging from grievance procedures to social
Some may say that such activities are trivial. performance is measured by PACT. requirements on flexibility and attendance. events. The Involvement Group is an
However, the belief that senior staff have to The appraisal and bonus assessments take important channel for employees to deal
be close to front line staff is fundamental at into account both PACT achievement and with their immediate concerns.
measurements against the behaviour code.

30 31
Some Group representatives, who have encourages with initiatives such as making Over a period of four years, the Agile Team
been given training on listening and each meeting room representative of one of has achieved numerous successful waste
communication skills, also act as a source the brands. For example the Bombay and efficiency improvements on production
of buddy support should employees want Sapphire meeting room is decked out in the lines, sales activities, warehouse and
to talk to someone other than their line blue of the bottle with the ten botanicals that distribution, data management and
managers. go into the gin displayed in the cabinets. purchase, quality assurance, personnel, plant
These initiatives clearly work as Bacardi- services and stock control. The following are
The yearly Employee Engagement Survey Martini scored the highest of any company just some of the many examples:
deals with broader issues and is against the question Are you proud to work Line filler changeover (reduced from 4 hrs
anonymously completed by over 90 per cent for your company? in The Sunday Times 100 to 75 mins)
of the employees. The survey polls staff Best Companies to Work For 2004 survey. Production line packer changeover
views on the business direction, leadership, (reduced from 110 mins to 60 mins)
performance, strengths and weaknesses. Like most competitive organisations, Production process efficiency
Because the survey covers strategic issues, Bacardi-Martini has to demonstrate a high improvements 4.4 million per annum
it is the main tool for the company and level of plant-specific effectiveness. This Point of sale warehouse relocation with
departments to form action plans. Working means that continuous improvements have no disruption to the business
with the teams, line managers use the to be demonstrated and change and Pallet holding reduced from 1.2 million
information from the survey to identify innovation are part of a normal days work. to 457,000
specific issues to form local action plans. The Kanban system eliminated overstocks
link between the surveys and action plans Such a radical change took place in 1999 with no failed deliveries on customer
means that employees often see the with the appointment of a new operations orders
instrument as a means of empowerment. director, John Speirs. With the new Service level improvements in warehouse
The minute the survey is completed, the HR appointment, John was able to introduce the and distribution 85% up to 97%
department starts receiving queries from concepts of the Agile Team and Agile Warehouse Utilisation re-design of
line-workers asking when they can see the Thinking. At its heart, Agile Thinking is a layout and use of smaller bays greater
results. At times, the survey results also form of lean production with the emphasis space efficiency
generate a degree of competitiveness on continuous improvement. The concept More controlled management of
amongst the teams, with some teams involves an Agile Team comprising staff materials at suppliers based on a
wanting to know how to better their results from different areas of work. The team is replenishment system
in comparison to other teams. specially trained to examine every work Write off reduced finished goods 765k
process within the organisation in order to to 210k; materials 872k to 61k.
The morale indicator, in contrast, with only identify ways to reduce waste and improve
ten questions is a small monthly instrument efficiency and effectiveness. These examples only represent a small
to gauge the wellbeing of employees and selection from a long list of achievements.
how they feel about their work and support. The team members do not take over However, the real lesson to be learnt is the
The indicators provide a form of continuous ownership for continuous improvement but way change is nurtured and delivered. Like
feedback on the mood of the workforce, work with every department in order to most other companies, the barriers to
plugging the gap between the yearly identify new and improved working change included the inevitable scepticism,
Employee Engagement Surveys. processes. The ownership rests with the lack of trust and difficulties associated with
departments themselves. This approach behavioural change. In order to handle
MANAGING PERFORMANCE AND CHANGE means that new ideas may be derived from a possible resistance to change, Bacardi-
THROUGH INNOVATION variety of perspectives within the Agile Team Martini has ensured that the agile process is
These elaborate systems of values, culture, but, at the same time, ownership for clearly linked to other existing systems, e.g.
behaviour code, feedback and rewards have improvement stays with the relevant communication, the behavioural code and
not been created in isolation or for show. department concerned. This approach turns PACT values. In this sense, Bacardi-Martini
They are the foundations of Bacardi-Martinis out to be a subtle way of changing has created the classic culture of a HPWO,
ability to bring innovation, improve employees view about their jobs. Instead of adopting complementary systems to drive
performance and, most important of all, thinking, Oh, it is time that we came up performance in the most exciting way. What
manage change. with more ideas or thoughts, employees is also a real bonus for the employees is
believe that its part of my job that I that, as a result of Agile Thinking and the
As you may expect, the sales and marketing have to find better ways of working and resulting changes, people can now see the
departments are very passionate about the improvement. The success of Agile Team difference this has made to the business and
brands but what is surprising is the level of has removed the need for suggestion boxes that improved efficiency is important to
pride that employees across the organisation as innovation and better work processes are safeguard jobs.
also demonstrate in the business. This is now part of the job.
something that Bacardi-Martini actively

32 33
Some Group representatives, who have encourages with initiatives such as making Over a period of four years, the Agile Team
been given training on listening and each meeting room representative of one of has achieved numerous successful waste
communication skills, also act as a source the brands. For example the Bombay and efficiency improvements on production
of buddy support should employees want Sapphire meeting room is decked out in the lines, sales activities, warehouse and
to talk to someone other than their line blue of the bottle with the ten botanicals that distribution, data management and
managers. go into the gin displayed in the cabinets. purchase, quality assurance, personnel, plant
These initiatives clearly work as Bacardi- services and stock control. The following are
The yearly Employee Engagement Survey Martini scored the highest of any company just some of the many examples:
deals with broader issues and is against the question Are you proud to work Line filler changeover (reduced from 4 hrs
anonymously completed by over 90 per cent for your company? in The Sunday Times 100 to 75 mins)
of the employees. The survey polls staff Best Companies to Work For 2004 survey. Production line packer changeover
views on the business direction, leadership, (reduced from 110 mins to 60 mins)
performance, strengths and weaknesses. Like most competitive organisations, Production process efficiency
Because the survey covers strategic issues, Bacardi-Martini has to demonstrate a high improvements 4.4 million per annum
it is the main tool for the company and level of plant-specific effectiveness. This Point of sale warehouse relocation with
departments to form action plans. Working means that continuous improvements have no disruption to the business
with the teams, line managers use the to be demonstrated and change and Pallet holding reduced from 1.2 million
information from the survey to identify innovation are part of a normal days work. to 457,000
specific issues to form local action plans. The Kanban system eliminated overstocks
link between the surveys and action plans Such a radical change took place in 1999 with no failed deliveries on customer
means that employees often see the with the appointment of a new operations orders
instrument as a means of empowerment. director, John Speirs. With the new Service level improvements in warehouse
The minute the survey is completed, the HR appointment, John was able to introduce the and distribution 85% up to 97%
department starts receiving queries from concepts of the Agile Team and Agile Warehouse Utilisation re-design of
line-workers asking when they can see the Thinking. At its heart, Agile Thinking is a layout and use of smaller bays greater
results. At times, the survey results also form of lean production with the emphasis space efficiency
generate a degree of competitiveness on continuous improvement. The concept More controlled management of
amongst the teams, with some teams involves an Agile Team comprising staff materials at suppliers based on a
wanting to know how to better their results from different areas of work. The team is replenishment system
in comparison to other teams. specially trained to examine every work Write off reduced finished goods 765k
process within the organisation in order to to 210k; materials 872k to 61k.
The morale indicator, in contrast, with only identify ways to reduce waste and improve
ten questions is a small monthly instrument efficiency and effectiveness. These examples only represent a small
to gauge the wellbeing of employees and selection from a long list of achievements.
how they feel about their work and support. The team members do not take over However, the real lesson to be learnt is the
The indicators provide a form of continuous ownership for continuous improvement but way change is nurtured and delivered. Like
feedback on the mood of the workforce, work with every department in order to most other companies, the barriers to
plugging the gap between the yearly identify new and improved working change included the inevitable scepticism,
Employee Engagement Surveys. processes. The ownership rests with the lack of trust and difficulties associated with
departments themselves. This approach behavioural change. In order to handle
MANAGING PERFORMANCE AND CHANGE means that new ideas may be derived from a possible resistance to change, Bacardi-
THROUGH INNOVATION variety of perspectives within the Agile Team Martini has ensured that the agile process is
These elaborate systems of values, culture, but, at the same time, ownership for clearly linked to other existing systems, e.g.
behaviour code, feedback and rewards have improvement stays with the relevant communication, the behavioural code and
not been created in isolation or for show. department concerned. This approach turns PACT values. In this sense, Bacardi-Martini
They are the foundations of Bacardi-Martinis out to be a subtle way of changing has created the classic culture of a HPWO,
ability to bring innovation, improve employees view about their jobs. Instead of adopting complementary systems to drive
performance and, most important of all, thinking, Oh, it is time that we came up performance in the most exciting way. What
manage change. with more ideas or thoughts, employees is also a real bonus for the employees is
believe that its part of my job that I that, as a result of Agile Thinking and the
As you may expect, the sales and marketing have to find better ways of working and resulting changes, people can now see the
departments are very passionate about the improvement. The success of Agile Team difference this has made to the business and
brands but what is surprising is the level of has removed the need for suggestion boxes that improved efficiency is important to
pride that employees across the organisation as innovation and better work processes are safeguard jobs.
also demonstrate in the business. This is now part of the job.
something that Bacardi-Martini actively

32 33
idea is to impart innovation and the very
Data Connection has achieved its leading best quality into its service and products for
position through a combination of quality clients. Secondly, once its international
service, innovative products and world-class reputation is built up, Data Connection
technical workers. I thoroughly recommend targets return business as the basis of steady
CASE STUDY
Data Connection: the quality of their people, growth and a source of steady profit. Thirdly,
software and support has been first class Data Connection uses its profit to support a
DATA CONNECTION
every time we have worked with them, balance between research products, which
Lucent Technologies commented. In fact, in may not have any immediate return, and
addition to Lucent Technologies, Data services/products that will bring revenue in
Connection has won a long list of the current year. Research products are the
international clients including British source for future new products and
Service/Product: Computer software Telecom, General Dynamics, Lockheed innovation. The result is that Data
Turnover: 29m Martin, Nortel, Siemens, Cisco, IBM, NEC Connection now has hundreds of customers
and other international giants. Over 90% of and thousands of different products across a
Size of the workforce: 290 employees
Data Connections services and products are spectrum of communications technology.
Earning 35,000 p.a.: 47% for the export market, especially the USA,
Famous for: Winning contracts from some of the biggest where the competition has been the Like other leading companies in the same
clients in the global market through innovative products and toughest. Such an international profile has industry, Data Connection is currently facing
quality service twice earned Data Connection the Queens immense competition from the entry of
Award for export achievement and no matter companies from the developing countries,
The business strategy: Business performance through
how you measure performance, Data where the cost of software development is a
world-class talent and quality delivery
Connection is a world-beater. lot lower. The global downturn in recent
times has also affected the way Data
High performance learning points: THE INDUSTRIAL CONTEXT AND DATA Connection handles its market. In the early
A clear business strategy of quality and innovation is used to
CONNECTION BUSINESS STRATEGY days, Data Connections reputation alone
succeed in the hotly contested global market;
Data Connection was founded in 1981 by Ian would have secured enough customers to
Ferguson, the current chairman, and six make a handsome profit. In recent times,
Major focus on building business successes through the
colleagues who previously worked with him Data Connection has responded with a
recruitment of exceptional talent;
at IBM. This experience at IBM was significant marketing team comprising 25 to
Recruitment restricted to entry level. Systematic personal extremely useful as Ferguson and colleagues 30 staff to tackle the ever increasing
development plans and small group coaching used to nurture learnt much about successful operations, competition in the industry. However, Data
future talent; winning valuable clients and keeping them. Connection firmly believes that the original
Use an employee benefit trust to build stake-holding and As the communications technology industry strategy holds. Ferguson explained: Over
commitment among employees; has relatively low entry barriers, the last few years, customers have learned
Performance rewarded through generous profit sharing; international competition is high. Often only the hard way that it is necessary to scrutinise
the very best talent will bring the best suppliers for their financial stability, and for
Financial rewards complemented by other non-financial
results. As Ferguson explained Our success their ability to deliver what they promise.
practices, including flexible working, to create effective
is due to our sustained ability to recruit,
work-life balance.
develop and retain truly exceptional talent Another senior member of staff at Data
across the breadth of our operations, Connection concurred, The way we feel we
including engineering, support and have been successful in doing this is by
commercial management. ensuring quality. In this industry, quality is
something that you have a reputation for
This strategy served Data Connection well, and that is why you get customers coming
Business performance through world-class talent and as staff numbers grew steadily from a back to you again and again. Because if you
handful to over 290 employees, of whom 216 deliver what you say youre going to deliver,
quality delivery are software engineers. Profits grew in and it works, and you do it on time, in this
parallel fashion reaching $12m in 2002/2003. industry, thats very rare. And so you will
Data Connection is one of the worlds most has consistently achieved profits exceeding find that the customers are prepared to pay a
successful companies in communications 20% of total revenue during each of the past In its day-to-day operation, Data Connection premium for quality. This strategy means
technology and their performance record is 22 years. With IT industries experiencing a has adopted a three-pronged strategy. Firstly, that not only is Data Connection successful,
impressive. As well as winning the number significant downturn in the last two to three Data Connection recruits the very best it has also found a way to create a high
3 spot of the The Sunday Times 100 Best years, Data Connections performance is in candidates to work for the organisation. The value-added niche.
Companies to Work For 2004, the company stark contrast with its competitors.

34 35
idea is to impart innovation and the very
Data Connection has achieved its leading best quality into its service and products for
position through a combination of quality clients. Secondly, once its international
service, innovative products and world-class reputation is built up, Data Connection
technical workers. I thoroughly recommend targets return business as the basis of steady
CASE STUDY Data Connection: the quality of their people, growth and a source of steady profit. Thirdly,
software and support has been first class Data Connection uses its profit to support a
DATA CONNECTION every time we have worked with them, balance between research products, which
Lucent Technologies commented. In fact, in may not have any immediate return, and
addition to Lucent Technologies, Data services/products that will bring revenue in
Connection has won a long list of the current year. Research products are the
international clients including British source for future new products and
Service/Product: Computer software Telecom, General Dynamics, Lockheed innovation. The result is that Data
Turnover: 29m Martin, Nortel, Siemens, Cisco, IBM, NEC Connection now has hundreds of customers
and other international giants. Over 90% of and thousands of different products across a
Size of the workforce: 290 employees
Data Connections services and products are spectrum of communications technology.
Earning 35,000 p.a.: 47% for the export market, especially the USA,
Famous for: Winning contracts from some of the biggest where the competition has been the Like other leading companies in the same
clients in the global market through innovative products and toughest. Such an international profile has industry, Data Connection is currently facing
quality service twice earned Data Connection the Queens immense competition from the entry of
Award for export achievement and no matter companies from the developing countries,
The business strategy: Business performance through
how you measure performance, Data where the cost of software development is a
world-class talent and quality delivery
Connection is a world-beater. lot lower. The global downturn in recent
times has also affected the way Data
High performance learning points: THE INDUSTRIAL CONTEXT AND DATA Connection handles its market. In the early
A clear business strategy of quality and innovation is used to
CONNECTION BUSINESS STRATEGY days, Data Connections reputation alone
succeed in the hotly contested global market;
Data Connection was founded in 1981 by Ian would have secured enough customers to
Ferguson, the current chairman, and six make a handsome profit. In recent times,
Major focus on building business successes through the
colleagues who previously worked with him Data Connection has responded with a
recruitment of exceptional talent;
at IBM. This experience at IBM was significant marketing team comprising 25 to
Recruitment restricted to entry level. Systematic personal extremely useful as Ferguson and colleagues 30 staff to tackle the ever increasing
development plans and small group coaching used to nurture learnt much about successful operations, competition in the industry. However, Data
future talent; winning valuable clients and keeping them. Connection firmly believes that the original
Use an employee benefit trust to build stake-holding and As the communications technology industry strategy holds. Ferguson explained: Over
commitment among employees; has relatively low entry barriers, the last few years, customers have learned
Performance rewarded through generous profit sharing; international competition is high. Often only the hard way that it is necessary to scrutinise
the very best talent will bring the best suppliers for their financial stability, and for
Financial rewards complemented by other non-financial
results. As Ferguson explained Our success their ability to deliver what they promise.
practices, including flexible working, to create effective
is due to our sustained ability to recruit,
work-life balance.
develop and retain truly exceptional talent Another senior member of staff at Data
across the breadth of our operations, Connection concurred, The way we feel we
including engineering, support and have been successful in doing this is by
commercial management. ensuring quality. In this industry, quality is
something that you have a reputation for
This strategy served Data Connection well, and that is why you get customers coming
Business performance through world-class talent and as staff numbers grew steadily from a back to you again and again. Because if you
handful to over 290 employees, of whom 216 deliver what you say youre going to deliver,
quality delivery are software engineers. Profits grew in and it works, and you do it on time, in this
parallel fashion reaching $12m in 2002/2003. industry, thats very rare. And so you will
Data Connection is one of the worlds most has consistently achieved profits exceeding find that the customers are prepared to pay a
successful companies in communications 20% of total revenue during each of the past In its day-to-day operation, Data Connection premium for quality. This strategy means
technology and their performance record is 22 years. With IT industries experiencing a has adopted a three-pronged strategy. Firstly, that not only is Data Connection successful,
impressive. As well as winning the number significant downturn in the last two to three Data Connection recruits the very best it has also found a way to create a high
3 spot of the The Sunday Times 100 Best years, Data Connections performance is in candidates to work for the organisation. The value-added niche.
Companies to Work For 2004, the company stark contrast with its competitors.

34 35
RECRUITING NOTHING BUT THE A PROCESS OF CONTINUOUS managerial positions and responsibilities. people should not have to worry about their
BEST TALENT DEVELOPMENT, APPRAISALS AND It is the norm that staff who are at the very remuneration package. This leaves them free
Data Connection functions around teams. PERFORMANCE TARGETS senior level of management were taken on to concentrate on what theyre doing.
It builds its teams through recruiting Continuous development is a serious as graduates including managing a
individuals of exceptional ability. business in Data Connection and is a business unit that generates 10million a However, the low staff turnover cannot
Historically, Data Connection has found fundamental part of a managers year. Brooker commented. be attributed solely to profit sharing.
A-level results a better predictor than degree responsibility. During their first year, a new According to the The Sunday Times 100 Best
class for individual performance. Typically, recruit may also be given a mentor to Targets are set, but they are not part of an Companies to Work For 2004 survey, 83% of
the applicants are expected to have all A provide day-to-day advice and guidance. But, individuals appraisal or review. Targets are staff felt cared for by management and felt
grades at A-level. Beyond that, the company more importantly, everyone has a formal set for the five business units and the that they were always supported when they
looks for good interpersonal skills, technical individual development plan that records the manager has to manage the team to deliver needed to learn new skills.
aptitude, energy and enthusiasm. development process of an individual every the targets. All the business unit managers
three months. The development includes report to the Chairman. FLEXIBLE WORKING AND STAFF
To become a Data Connection employee is technical skills as well as personal skills RETENTION THE COMPANY MEETS
not easy. For a start, there are over 3000 development. The exercise is so important PERFORMANCE, REWARD AND YOU HALF WAY
applications for the 20-25 vacancies available that continuous development literally goes STAKEHOLDING If you have very good people, you want to
each year. Data Connection takes recruitment on forever. Everyone has at least one full Data Connection has a strong notion of profit hang on to them. In order to retain good
so seriously that there are a number of review and three or four development plans share. Through the employees benefit trust, staff, Data Connection encourages flexible
hurdles that potential candidates have to go each year. I can show you my development Data Connection is owned by the employees. working wherever possible to meet staff
through. Firstly, candidates attend a plan that goes back over 20 years, company Every year the majority of the profit that needs. This support is reflected by an
preliminary interview which lasts a whole accountant and human resource director, Data Connection makes is distributed to the unusual move that took place some years
day and includes tackling technical Derek Brooker, proudly emphasised. employees as the company is keen to reward ago. There was a feeling that some staff did
problems. Data Connection uses this employees handsomely for producing profits not want to work in the south-east in fact
preliminary interview to identify appropriate In addition to this, a review is carried out by year after year. they didnt want to work anywhere near
aptitudes in software engineering because the employees manager and normally held London. Data Connection therefore opened
thats what its all about. every nine months. In order that the Individual employees profit shares are an office in Chester, and those who wanted
manager pays sufficient attention and time based on contributions, which are carefully to move went to work there. This was further
Candidates invited back for a second to the development of an employee and still assessed and measured every six months. illustrated by the company opening offices in
interview face further tests. These include has time to do his/her work, Data Connection Each manager makes an assessment of the Edinburgh, Washington (USA) and San
attending a social gathering organised on makes sure that a manager only looks after 4 staff for whom they are responsible, that Francisco. This development of becoming a
their behalf. On a Wednesday afternoon, the to 6 employees. This review also doubles up then builds up into the units contribution multi-site, global company evolved partly as
candidates spend some time at Data as an appraisal and lists all the tasks that an which, in turn, builds up into a company list. a result of staffs desires to work in certain
Connection with current staff and then they employee has done. It gives an assessment In the final analysis, Data Connection has an areas and also from Data Connection's need
are taken out for a meal. The evening meal is and some advice about how they can overall list where every member of staff is to have people in different locations as the
intended to be a chance to get to know the improve their performance, and this overall ranked and the profit share is allocated business grew.
potential candidates socially. The candidates assessment is then linked to both long-term based on that ranking.
then spend the whole of the following day at and short-term development goals. Indeed, With many offices in different parts of the
Data Connection, during which time they do considerable investment is made into As the company has been making significant world, Data Connection has created another
a presentation as well as having another developing the 250 staff, with 3m spent profits since its beginning in 1981 profits employee benefit people can work from
interview with one of the senior managers. each year on training. exceeding 20% of total revenue every year Enfield, Chester, Edinburgh, overseas offices
profit sharing has been a very important or home. Not surprisingly, The Sunday Times
At Data Connection, recruitment is almost The review and development plan are very motivating factor for future performance. 100 Best Companies to Work For 2004
entirely for entry positions as they believe important in growing the business. Data It also forms a significant commitment factor survey also showed that 75% of staff were
that it is of utmost importance for future Connection uses this development process as profit sharing is only allocated to those happy with their work-life balance.
success, to identify young talent and train to identify the potential of a new employee, who are employees at the company. The
them in the companys culture. Graduates including strengths and weaknesses. An profit share scheme guarantees an additional To be a world class performing company,
that started in August 2003 will typically be employee will be encouraged to become a 7.5% of salary and depending on the Data Connection seeks and values its
earning a package of 30,000-40,000 by the technical guru if they are particularly strong contribution, an additional sum varying from exceptionally targeted workforce. It has a
end of their first year. As starting salaries, on the technical side. On the other hand, if 1,250 to more than 100,000 in 2003. simple formula, that is, with success, you
these are very high by any standard and the employee is good at managing people, Brooker emphasised, There is a lot of need to reward hard work, innovation and
postgraduates are often paid more. they move all the way up through loyalty amongst our employees. People are commitment handsomely. For 23 years, the
loyal to the company because they know that formula has worked wonders for Data
we look after them. One of the things that we Connection.
always try to achieve is the position where

36 37
RECRUITING NOTHING BUT THE A PROCESS OF CONTINUOUS managerial positions and responsibilities. people should not have to worry about their
BEST TALENT DEVELOPMENT, APPRAISALS AND It is the norm that staff who are at the very remuneration package. This leaves them free
Data Connection functions around teams. PERFORMANCE TARGETS senior level of management were taken on to concentrate on what theyre doing.
It builds its teams through recruiting Continuous development is a serious as graduates including managing a
individuals of exceptional ability. business in Data Connection and is a business unit that generates 10million a However, the low staff turnover cannot
Historically, Data Connection has found fundamental part of a managers year. Brooker commented. be attributed solely to profit sharing.
A-level results a better predictor than degree responsibility. During their first year, a new According to the The Sunday Times 100 Best
class for individual performance. Typically, recruit may also be given a mentor to Targets are set, but they are not part of an Companies to Work For 2004 survey, 83% of
the applicants are expected to have all A provide day-to-day advice and guidance. But, individuals appraisal or review. Targets are staff felt cared for by management and felt
grades at A-level. Beyond that, the company more importantly, everyone has a formal set for the five business units and the that they were always supported when they
looks for good interpersonal skills, technical individual development plan that records the manager has to manage the team to deliver needed to learn new skills.
aptitude, energy and enthusiasm. development process of an individual every the targets. All the business unit managers
three months. The development includes report to the Chairman. FLEXIBLE WORKING AND STAFF
To become a Data Connection employee is technical skills as well as personal skills RETENTION THE COMPANY MEETS
not easy. For a start, there are over 3000 development. The exercise is so important PERFORMANCE, REWARD AND YOU HALF WAY
applications for the 20-25 vacancies available that continuous development literally goes STAKEHOLDING If you have very good people, you want to
each year. Data Connection takes recruitment on forever. Everyone has at least one full Data Connection has a strong notion of profit hang on to them. In order to retain good
so seriously that there are a number of review and three or four development plans share. Through the employees benefit trust, staff, Data Connection encourages flexible
hurdles that potential candidates have to go each year. I can show you my development Data Connection is owned by the employees. working wherever possible to meet staff
through. Firstly, candidates attend a plan that goes back over 20 years, company Every year the majority of the profit that needs. This support is reflected by an
preliminary interview which lasts a whole accountant and human resource director, Data Connection makes is distributed to the unusual move that took place some years
day and includes tackling technical Derek Brooker, proudly emphasised. employees as the company is keen to reward ago. There was a feeling that some staff did
problems. Data Connection uses this employees handsomely for producing profits not want to work in the south-east in fact
preliminary interview to identify appropriate In addition to this, a review is carried out by year after year. they didnt want to work anywhere near
aptitudes in software engineering because the employees manager and normally held London. Data Connection therefore opened
thats what its all about. every nine months. In order that the Individual employees profit shares are an office in Chester, and those who wanted
manager pays sufficient attention and time based on contributions, which are carefully to move went to work there. This was further
Candidates invited back for a second to the development of an employee and still assessed and measured every six months. illustrated by the company opening offices in
interview face further tests. These include has time to do his/her work, Data Connection Each manager makes an assessment of the Edinburgh, Washington (USA) and San
attending a social gathering organised on makes sure that a manager only looks after 4 staff for whom they are responsible, that Francisco. This development of becoming a
their behalf. On a Wednesday afternoon, the to 6 employees. This review also doubles up then builds up into the units contribution multi-site, global company evolved partly as
candidates spend some time at Data as an appraisal and lists all the tasks that an which, in turn, builds up into a company list. a result of staffs desires to work in certain
Connection with current staff and then they employee has done. It gives an assessment In the final analysis, Data Connection has an areas and also from Data Connection's need
are taken out for a meal. The evening meal is and some advice about how they can overall list where every member of staff is to have people in different locations as the
intended to be a chance to get to know the improve their performance, and this overall ranked and the profit share is allocated business grew.
potential candidates socially. The candidates assessment is then linked to both long-term based on that ranking.
then spend the whole of the following day at and short-term development goals. Indeed, With many offices in different parts of the
Data Connection, during which time they do considerable investment is made into As the company has been making significant world, Data Connection has created another
a presentation as well as having another developing the 250 staff, with 3m spent profits since its beginning in 1981 profits employee benefit people can work from
interview with one of the senior managers. each year on training. exceeding 20% of total revenue every year Enfield, Chester, Edinburgh, overseas offices
profit sharing has been a very important or home. Not surprisingly, The Sunday Times
At Data Connection, recruitment is almost The review and development plan are very motivating factor for future performance. 100 Best Companies to Work For 2004
entirely for entry positions as they believe important in growing the business. Data It also forms a significant commitment factor survey also showed that 75% of staff were
that it is of utmost importance for future Connection uses this development process as profit sharing is only allocated to those happy with their work-life balance.
success, to identify young talent and train to identify the potential of a new employee, who are employees at the company. The
them in the companys culture. Graduates including strengths and weaknesses. An profit share scheme guarantees an additional To be a world class performing company,
that started in August 2003 will typically be employee will be encouraged to become a 7.5% of salary and depending on the Data Connection seeks and values its
earning a package of 30,000-40,000 by the technical guru if they are particularly strong contribution, an additional sum varying from exceptionally targeted workforce. It has a
end of their first year. As starting salaries, on the technical side. On the other hand, if 1,250 to more than 100,000 in 2003. simple formula, that is, with success, you
these are very high by any standard and the employee is good at managing people, Brooker emphasised, There is a lot of need to reward hard work, innovation and
postgraduates are often paid more. they move all the way up through loyalty amongst our employees. People are commitment handsomely. For 23 years, the
loyal to the company because they know that formula has worked wonders for Data
we look after them. One of the things that we Connection.
always try to achieve is the position where

36 37
Flight Centre needing to re-position and, The One Best Way approach has an added
with the continuous search for innovative benefit for staff mobility, both in
ways to create profit, the company has geographical and developmental terms.
continued to thrive. While there are many different units
throughout the world, staff can move from
CASE STUDY

THE INDUSTRIAL CONTEXT AND FLIGHT one branch to another, or set up their own
FLIGHT CENTRE UK
CENTRES BUSINESS STRATEGY branch, knowing that the basic operating
Like its competitors, Flight Centre UK prides systems will be the same. Susan Garret, who
itself on the one-stop client package and herself moved from South Africa to the UK
guaranteed cheapest flights. Travel just three months before, noted: I think
consultants at Flight Centre organise what we base that on is because we are a
Service/Product: Travel agency
everything for the client, from booking global company. It enables our staff to pick
Turnover: 19.4m flights, accommodation and tours through to up their business and move across to
Size of the workforce: 550 employees travel insurance and visas. But unlike others, Australia and know exactly how we operate,
Flight Centres approach is to provide a high because we all work in the same way.
Earning 35,000 p.a.: 14%
level of service that will not only surpass
Famous for: One of the worlds fastest growing travel customer expectations, but will have them This consistency is equally important in
agencies with over 1,000 locations in 2004 coming back regularly to Flight Centre and to customer service. The customers know no
The business strategy: Shared high performance and the same consultant. matter what country they are in, they will get
profit one big global family and One Best Way the same level of service. So our stores, no
Being part of a global company is seen as a matter where you go, look exactly the same,
major advantage in this business, giving our consultants wear the same uniform. The
High performance learning points: Flight Centre the ability to offer their flights way we handle our transaction is done the
Able to bring coherence to a global team through the practice of 50% cheaper than competitors in some same way throughout the world.
One Best Way and a variety of communication devices some cases. However, being global could also be a
traditional and some innovative; potential disadvantage, with shops spread all EVERYONE RUNS THE BUSINESS: PROFIT
Use the One Best Way system to enhance staff mobility over the UK and worldwide. In order to SHARE AND TEAM PERFORMANCE
globally and deliver customer satisfaction; ensure a sense of being part of a global Flight Centre UK wanted to create a hard-
Incentivise employee performance through ownership,
team, with a shared philosophy and culture working and fun company. One way to
self-managed teams, transparency and no-cap performance-
and equally importantly, to ensure consistent achieve that is to make ownership central to
based reward;
levels of service and high performance, what the company does. Following a recent
Flight Centre uses a system known as the corporate restructuring exercise, instead of
Use a flat hierarchy to encourage unity and the emergence of
One Best Way. being a centrally-organised company, each
leaders and leadership;
shop effectively became a business and now
Training and development, including the use of a learning centre, One Best Way is a standard organisational makes its own decisions about what costs
are fundamental in providing new skills and leadership; system for the everyday operation of Flight are required for the everyday running of that
Use of many company benefits such as Money Wise and Health Centre shops, wherever they are located. specific shop. It is about each business
Wise, to support the well-being of staff. The standard system is not static and actually owning what they do and being
unresponsive. If an innovative practice is accountable and responsible for what they
developed in one shop in the UK, it will be do, Lin Hilditch, Human Resources
extensively discussed and then, if useful, Manager, emphasised.
adopted across Flight Centre businesses
worldwide. As Susan Garret, Managing High performance is incentivised, not only
Director of Flight Centre UK, commented, through the shop level of ownership, but
Obviously, we dont say that there is only through individual ownership. As well as
Shared high performance and profit one big global family and one way, and we wont even look at other targets for each shop, and for each team
ways of doing things. Its become a best within that shop, each member of staff has
One Best Way practice and then, well decide whether thats their own targets to achieve. In addition,
the best way forward for all of us globally. each individual staff member profit shares
So thats something that we will continue to and manages expenditure in order to
Flight Centre, the low cost travel specialist, the flights and travel market. Not only had revisit but there is one best way. In fact, produce a profit. As such, business sense
began operating in the UK in 1995 and the prices and profits been slashed, but the staff at Flight Centre get together four or and performance are central skills for each
business grew rapidly. By 2004, Flight Centre downturn following the 9/11 attack had five times a year to work out as a global member of staff. Hilditch further commented,
had expanded to 84 high street shops with a meant that some of the major airlines were company which is the best practice and all of all of our people in our stores run their
total of 500 staff. Such rapid growth was no longer paying any commission to travel us follow that practice. own profit and loss statements. They all
unusual at a time of intense competition in agents, which used to be 10-15%. This left

38 39
Flight Centre needing to re-position and, The One Best Way approach has an added
with the continuous search for innovative benefit for staff mobility, both in
ways to create profit, the company has geographical and developmental terms.
continued to thrive. While there are many different units
throughout the world, staff can move from
CASE STUDY
THE INDUSTRIAL CONTEXT AND FLIGHT one branch to another, or set up their own
FLIGHT CENTRE UK CENTRES BUSINESS STRATEGY branch, knowing that the basic operating
Like its competitors, Flight Centre UK prides systems will be the same. Susan Garret, who
itself on the one-stop client package and herself moved from South Africa to the UK
guaranteed cheapest flights. Travel just three months before, noted: I think
consultants at Flight Centre organise what we base that on is because we are a
Service/Product: Travel agency
everything for the client, from booking global company. It enables our staff to pick
Turnover: 19.4m flights, accommodation and tours through to up their business and move across to
Size of the workforce: 550 employees travel insurance and visas. But unlike others, Australia and know exactly how we operate,
Flight Centres approach is to provide a high because we all work in the same way.
Earning 35,000 p.a.: 14%
level of service that will not only surpass
Famous for: One of the worlds fastest growing travel customer expectations, but will have them This consistency is equally important in
agencies with over 1,000 locations in 2004 coming back regularly to Flight Centre and to customer service. The customers know no
The business strategy: Shared high performance and the same consultant. matter what country they are in, they will get
profit one big global family and One Best Way the same level of service. So our stores, no
Being part of a global company is seen as a matter where you go, look exactly the same,
major advantage in this business, giving our consultants wear the same uniform. The
High performance learning points: Flight Centre the ability to offer their flights way we handle our transaction is done the
Able to bring coherence to a global team through the practice of 50% cheaper than competitors in some same way throughout the world.
One Best Way and a variety of communication devices some cases. However, being global could also be a
traditional and some innovative; potential disadvantage, with shops spread all EVERYONE RUNS THE BUSINESS: PROFIT
Use the One Best Way system to enhance staff mobility over the UK and worldwide. In order to SHARE AND TEAM PERFORMANCE
globally and deliver customer satisfaction; ensure a sense of being part of a global Flight Centre UK wanted to create a hard
Incentivise employee performance through ownership,
team, with a shared philosophy and culture working and fun company. One way to
self-managed teams, transparency and no-cap performance-
and equally importantly, to ensure consistent achieve that is to make ownership central to
based reward;
levels of service and high performance, what the company does. Following a recent
Flight Centre uses a system known as the corporate restructuring exercise, instead of
Use a flat hierarchy to encourage unity and the emergence of
One Best Way. being a centrally-organised company, each
leaders and leadership;
shop effectively became a business and now
Training and development, including the use of a learning centre, One Best Way is a standard organisational makes its own decisions about what costs
are fundamental in providing new skills and leadership; system for the everyday operation of Flight are required for the everyday running of that
Use of many company benefits such as Money Wise and Health Centre shops, wherever they are located. specific shop. It is about each business
Wise, to support the well-being of staff. The standard system is not static and actually owning what they do and being
unresponsive. If an innovative practice is accountable and responsible for what they
developed in one shop in the UK, it will be do, Lin Hilditch, Human Resources
extensively discussed and then, if useful, Manager, emphasised.
adopted across Flight Centre businesses
worldwide. As Susan Garret, Managing High performance is incentivised, not only
Director of Flight Centre UK, commented, through the shop level of ownership, but
Obviously, we dont say that there is only through individual ownership. As well as
Shared high performance and profit one big global family and one way, and we wont even look at other targets for each shop, and for each team
ways of doing things. Its become a best within that shop, each member of staff has
One Best Way practice and then, well decide whether thats their own targets to achieve. In addition,
the best way forward for all of us globally. each individual staff member profit shares
So thats something that we will continue to and manages expenditure in order to
Flight Centre, the low cost travel specialist, the flights and travel market. Not only had revisit but there is one best way. In fact, produce a profit. As such, business sense
began operating in the UK in 1995 and the prices and profits been slashed, but the staff at Flight Centre get together four or and performance are central skills for each
business grew rapidly. By 2004, Flight Centre downturn following the 9/11 attack had five times a year to work out as a global member of staff. Hilditch further commented,
had expanded to 84 high street shops with a meant that some of the major airlines were company which is the best practice and all of all of our people in our stores run their
total of 500 staff. Such rapid growth was no longer paying any commission to travel us follow that practice. own profit and loss statements. They all
unusual at a time of intense competition in agents, which used to be 10-15%. This left

38 39
work on incentives and commission. Theyre including details of everyones progress and Within the flat hierarchy, the front line staff In a matter of 8 weeks, weve gone from
all 100% in control of their own business. a national handbook is produced once a are seen by Flight Centre as the driving selling an average of six policies per person
When people are employed, we train them in month, providing individual rankings and force, being supported in their work by a to 15, and that is through driving the right
the Flight Centre way of running a business. team performance across the UK. Another range of departments. This flat hierarchy is behaviour. So I think its about
And I think if anyone asks me what is the communication tool is the Intranet, which consistent with both the One Best Way understanding peoples behaviour and
best thing that I have learned from Flight has figures, facts and successes updated on ethos and the companys core philosophy of listening to our consultants about how
Centre, and thats right from day one, its a daily basis. This tool is particularly useful Unity to ensure that all staff are treated difficult it is to sell a 64 flight and make
how to run a business. not only for sharing information, but in equally. For example, everyone wears the enough margin to make a profit off it. As
enabling teams to compare their same recognisable uniform regardless of such, it is not only about demanding high
Flight Centres approach is performance performance against others. This enables a their position. Flight Centre staff feel that this performance and outcome in certain areas,
oriented. Staff are paid a basic salary, and very high level of healthy internal increases the accessibility of the leaders. but about rewarding that behaviour.
there is no cap on the commission that they competition between teams to drive up Hilditch emphasised that: When staff see
can earn. Some of the most successful staff performance and profit. Sue Garret walking in and wearing the same DEVELOPING HIGH FLYERS AND TEAM
in 2003 earned 30,000 within a year of uniform, it really sends a very strong MEMBERS: TOP FOR TRAINING AND
joining. As each person has a profit and loss Regular conference calls are held between message to everyone. DEVELOPMENT
account, each individual has a target on HR managers or directors nationally and Leadership potential is continually sought
costs. So everyone pays for their own phone, they also attend national and global business Similarly, everyone is treated in the same among staff and this practice is backed by
their own desk, their own accounting fees forums in order to share good practice and way when it comes to benefits and perks of internal promotion. This internal career path
and when they make a profit, they get a information about what has worked the job, regardless of their position in the has meant that 90% of Team Leaders have
percentage of their profit. elsewhere. In addition, regular SWOT company. Garret emphasised that this been promoted internally. A continuous
(Strengths, Weaknesses, Opportunities and unity was not only a philosophy, but a programme of training and development
Flight Centre UK is keen to stress that every Threats) meetings are held among 6 of the discipline: I mean because everyone is starts from day one. This means that Flight
individual within each shop is part of the key UK management teams and everyone driven by the same end result, there are no Centre focuses on developing its own people
success of that shop. So while targets are attends a national conference in the UK. perks for anyone no-one has a private from the first day through to their full
monitored individually, the close-knit teams office. No-one has a secretary. Everyone potential. As a result, Flight Centre was
work together to support and develop In order to reward good performance, there does their own back office work. When we recently awarded the number one place for
people, new and established. As Hilditch are monthly meetings in each area to travel we all travel together in the same training and development at The Sunday
remarked, Theres the rest of your team. recognise the top performers. Those class. Its a very fair structure. You are Times 100 Best Companies to Work For 2004.
Even though we talk about the individual, recognised as among the very best travel to celebrating unity. You are celebrating unity
its very much a team focus and by keeping Flight Centres Global Competition on as a discipline. Its very flat. A range of training and personal
those teams small, it means they work for Performance, which has awards recognising development is provided both in the office,
each other. So if somebody is out on a different rankings including best improved SHAPING BEHAVIOUR AND DRIVING UP and in the Flight Centre UK Learning Centre,
training course or on holiday, the rest of the performance. This form of communication is PERFORMANCE AND INNOVATION and covers a range of areas that are built up
team will look after your client base for you important in sharing and developing the THROUGH INCENTIVES as the individual develops. A Leadership
and will be given the same level of service company culture and ethos across widely Profit sharing is a key element in driving up Development Programme is provided
because, at the end of the day, what goes spread units. It is also useful in creating a performance. However, a range of incentives specially for those identified as having
around comes around. In fact, the teams healthy competition. As Garret remarked, are used in order to shape the kinds of leadership potential. To support training and
are so important that ultimately the team everyone is talking to each other behaviours that Flight Centre recognise as development, monthly one-to-one sessions
chooses any new employee. Potential constantly. key to success. Innovation is highly are given. These one-to-one sessions are
recruits are sent to work at a shop for a day, rewarded, particularly in a market where even more regular for new employees, and
as part of the final stages of recruitment so LEADERSHIP, UNITY AND profit margins are slim and innovations can provide continuous feedback and the
that staff at the shop can see if they can EGALITARIAN TREATMENT make a big difference to the everyday opportunity for staff to air any problems or
work as a team. Flight Centre UK seeks to operate a flat business. Each year a Directors Award is areas for development.
hierarchy between their shop front given for innovation.
COMMUNICATION IS KEY travel consultants and the back office FIT, HEALTHY AND HAPPY AT WORK
Part of the continued success and high management and operations. Leadership by Indeed, as Garret, Managing Director in the Flight Centre sees staff fitness and well-
performance of Flight Centre UK is the example is key to their operations: we UK, reflected: There is no secret in Flight being as a key factor in high performance
constant communication between different dont have any managers at Flight Centre, Centre's successes. We highly incentivise and happiness at work. Staff have access to
shops in the UK, and between the leaders in everybody is a leader. That means that, in a and you get the right behaviour. One two benefits packages aimed at ensuring
different areas. This communication takes a store environment, the leader is in exactly example was in insurance policies, where their personal and financial health and well-
number of forms. the same role that the consultant is doing. profits are slim but, with innovation, good being. These are called Health Wise and
So they have proven they can do that and, commission can be earned. In order to Money Wise.
Information is shared in weekly meetings therefore, they can train and teach the other enhance performance in selling these
between management and team leaders, and guys how to do it by actually showing them potentially more profitable products, Flight As Hilditch commented, They actually
then fed through to everyone else. A the way as opposed to telling them how to Centre restructured its incentives system to originated with the CEO. For example, Health
newsletter is regularly circulated to all staff, do it, Hilditch commented. reflect the importance of these products. Wise was something that he wanted to offer

40 41
work on incentives and commission. Theyre including details of everyones progress and Within the flat hierarchy, the front line staff In a matter of 8 weeks, weve gone from
all 100% in control of their own business. a national handbook is produced once a are seen by Flight Centre as the driving selling an average of six policies per person
When people are employed, we train them in month, providing individual rankings and force, being supported in their work by a to 15, and that is through driving the right
the Flight Centre way of running a business. team performance across the UK. Another range of departments. This flat hierarchy is behaviour. So I think its about
And I think if anyone asks me what is the communication tool is the Intranet, which consistent with both the One Best Way understanding peoples behaviour and
best thing that I have learned from Flight has figures, facts and successes updated on ethos and the companys core philosophy of listening to our consultants about how
Centre, and thats right from day one, its a daily basis. This tool is particularly useful Unity to ensure that all staff are treated difficult it is to sell a 64 flight and make
how to run a business. not only for sharing information, but in equally. For example, everyone wears the enough margin to make a profit off it. As
enabling teams to compare their same recognisable uniform regardless of such, it is not only about demanding high
Flight Centres approach is performance performance against others. This enables a their position. Flight Centre staff feel that this performance and outcome in certain areas,
oriented. Staff are paid a basic salary, and very high level of healthy internal increases the accessibility of the leaders. but about rewarding that behaviour.
there is no cap on the commission that they competition between teams to drive up Hilditch emphasised that: When staff see
can earn. Some of the most successful staff performance and profit. Sue Garret walking in and wearing the same DEVELOPING HIGH FLYERS AND TEAM
in 2003 earned 30,000 within a year of uniform, it really sends a very strong MEMBERS: TOP FOR TRAINING AND
joining. As each person has a profit and loss Regular conference calls are held between message to everyone. DEVELOPMENT
account, each individual has a target on HR managers or directors nationally and Leadership potential is continually sought
costs. So everyone pays for their own phone, they also attend national and global business Similarly, everyone is treated in the same among staff and this practice is backed by
their own desk, their own accounting fees forums in order to share good practice and way when it comes to benefits and perks of internal promotion. This internal career path
and when they make a profit, they get a information about what has worked the job, regardless of their position in the has meant that 90% of Team Leaders have
percentage of their profit. elsewhere. In addition, regular SWOT company. Garret emphasised that this been promoted internally. A continuous
(Strengths, Weaknesses, Opportunities and unity was not only a philosophy, but a programme of training and development
Flight Centre UK is keen to stress that every Threats) meetings are held among 6 of the discipline: I mean because everyone is starts from day one. This means that Flight
individual within each shop is part of the key UK management teams and everyone driven by the same end result, there are no Centre focuses on developing its own people
success of that shop. So while targets are attends a national conference in the UK. perks for anyone no-one has a private from the first day through to their full
monitored individually, the close-knit teams office. No-one has a secretary. Everyone potential. As a result, Flight Centre was
work together to support and develop In order to reward good performance, there does their own back office work. When we recently awarded the number one place for
people, new and established. As Hilditch are monthly meetings in each area to travel we all travel together in the same training and development at The Sunday
remarked, Theres the rest of your team. recognise the top performers. Those class. Its a very fair structure. You are Times 100 Best Companies to Work For 2004.
Even though we talk about the individual, recognised as among the very best travel to celebrating unity. You are celebrating unity
its very much a team focus and by keeping Flight Centres Global Competition on as a discipline. Its very flat. A range of training and personal
those teams small, it means they work for Performance, which has awards recognising development is provided both in the office,
each other. So if somebody is out on a different rankings including best improved SHAPING BEHAVIOUR AND DRIVING UP and in the Flight Centre UK Learning Centre,
training course or on holiday, the rest of the performance. This form of communication is PERFORMANCE AND INNOVATION and covers a range of areas that are built up
team will look after your client base for you important in sharing and developing the THROUGH INCENTIVES as the individual develops. A Leadership
and will be given the same level of service company culture and ethos across widely Profit sharing is a key element in driving up Development Programme is provided
because, at the end of the day, what goes spread units. It is also useful in creating a performance. However, a range of incentives specially for those identified as having
around comes around. In fact, the teams healthy competition. As Garret remarked, are used in order to shape the kinds of leadership potential. To support training and
are so important that ultimately the team everyone is talking to each other behaviours that Flight Centre recognise as development, monthly one-to-one sessions
chooses any new employee. Potential constantly. key to success. Innovation is highly are given. These one-to-one sessions are
recruits are sent to work at a shop for a day, rewarded, particularly in a market where even more regular for new employees, and
as part of the final stages of recruitment so LEADERSHIP, UNITY AND profit margins are slim and innovations can provide continuous feedback and the
that staff at the shop can see if they can EGALITARIAN TREATMENT make a big difference to the everyday opportunity for staff to air any problems or
work as a team. Flight Centre UK seeks to operate a flat business. Each year a Directors Award is areas for development.
hierarchy between their shop front given for innovation.
COMMUNICATION IS KEY travel consultants and the back office FIT, HEALTHY AND HAPPY AT WORK
Part of the continued success and high management and operations. Leadership by Indeed, as Garret, Managing Director in the Flight Centre sees staff fitness and well
performance of Flight Centre UK is the example is key to their operations: we UK, reflected: There is no secret in Flight being as a key factor in high performance
constant communication between different dont have any managers at Flight Centre, Centre's successes. We highly incentivise and happiness at work. Staff have access to
shops in the UK, and between the leaders in everybody is a leader. That means that, in a and you get the right behaviour. One two benefits packages aimed at ensuring
different areas. This communication takes a store environment, the leader is in exactly example was in insurance policies, where their personal and financial health and well
number of forms. the same role that the consultant is doing. profits are slim but, with innovation, good being. These are called Health Wise and
So they have proven they can do that and, commission can be earned. In order to Money Wise.
Information is shared in weekly meetings therefore, they can train and teach the other enhance performance in selling these
between management and team leaders, and guys how to do it by actually showing them potentially more profitable products, Flight As Hilditch commented, They actually
then fed through to everyone else. A the way as opposed to telling them how to Centre restructured its incentives system to originated with the CEO. For example, Health
newsletter is regularly circulated to all staff, do it, Hilditch commented. reflect the importance of these products. Wise was something that he wanted to offer

40 41
to the staff as a more Flight Centre focused Taking all the Flight Centres practices
benefit, as opposed to outsourcing it to together, it is clear that Flight Centre strives
Medicare. He established the facility that hard to foster performance and to look after
could get to know the staff, would those who create the performance. This
understand the stresses and strains of the balance is reflected by the results in The
job, and could really look after our staff. Sunday Times 100 Best Companies to Work
CASE STUDY
For 2004 survey. Flight Centre came out top
Staff are introduced to the Health Wise on on more questions than any other company, i-LEVEL
joining. They have a personal health and coming number one on 17 out of a total of
fitness consultation, followed by a lifestyle 65 questions. For Flight Centre, driving for
assessment. An individual training plan can performance does not come at the expense
then be formulated. It could be a fitness of being a good employer. Service/Product: Digital media agency
assessment, it could be a lifestyle
Turnover: 12.3m
assessment, it might be youre wanting to
lose weight or you might be wanting to train Size of the workforce: 60 employees
for the London marathon and theyll actually Earning 35,000 p.a.: 33%
go out and assess that and set up the Famous for: One of the most innovative digital media
programme for you thats relevant, stated companies with 25 industry awards in five years and
Hilditch. Personal training sessions can be an ambition to become the defining media company of
organised to get them started, and training the decade
equipment can be taken home.
The business strategy: Spotting a new product, finding a
Fitness and being active are not only new approach and building a new industry
encouraged to promote well-being and
happiness, but are seen as key attributes of High performance learning points:
the kinds of high performers, who work hard
Builds the necessary expertise to support an emerging on-line
and play hard, that Flight Centre tends to
media market;
recruit. Indeed, an active social life is also a
priority for Flight Centre UK. Regular fun Uses a set of five values to guide the creation of better customer
team events and social events that bring service for a new industry;
together staff from different outlets are Uses work re-design to remove hierarchy, to encourage
organised by the Health Wise team. participation, creativity, communication and collaborative
teamwork;
Money Wise operates in a similar way, Uses 360 degree appraisals to encourage the transparent
providing professional financial advice to assessment of the performance of all, including the directors,
staff, helping them to make the most of their and to support the value-set of the organisation;
hard-earned rewards and profit. This again
Recruits on the basis of the personal attributes necessary to win
promotes staff performance and
over new business; these include the passion for success!
commitment. Money Wise staff regularly
visit the different Flight Centre branches Uses various devices to support creativity and innovation such as
around the UK, offering confidential advice personal recognition and team-based pitch competition.
as well as group presentations. Advice
covers pension schemes, healthcare and
bonus schemes that operate within Flight
Centre UK, and can also include advice on
issues from basic budgeting, money
management and tax, through to advice on A case of new product, new approach and building a new industry
products such as insurance, mortgages and
investments.
Compared with other established advertising 2004, the vision of its two founders
giants in the industry, i-level is a new kid on Charles Dobres and Andrew Walmsley has
the block. However, with a total of 25 come true.
industry awards in the past five years, plus
the latest accolade of Revolution magazines i-level originated from two separate ideas.
Agency of the Year and one of the Sunday Walmsley was doing an MBA project that
Times Top 50 small companies to work for in examined whether there was an emerging

42 43
to the staff as a more Flight Centre focused Taking all the Flight Centres practices
benefit, as opposed to outsourcing it to together, it is clear that Flight Centre strives
Medicare. He established the facility that hard to foster performance and to look after
could get to know the staff, would those who create the performance. This
understand the stresses and strains of the balance is reflected by the results in The
job, and could really look after our staff. Sunday Times 100 Best Companies to Work
CASE STUDY
For 2004 survey. Flight Centre came out top
Staff are introduced to the Health Wise on on more questions than any other company, i-LEVEL
joining. They have a personal health and coming number one on 17 out of a total of
fitness consultation, followed by a lifestyle 65 questions. For Flight Centre, driving for
assessment. An individual training plan can performance does not come at the expense
then be formulated. It could be a fitness of being a good employer. Service/Product: Digital media agency
assessment, it could be a lifestyle
Turnover: 12.3m
assessment, it might be youre wanting to
lose weight or you might be wanting to train Size of the workforce: 60 employees
for the London marathon and theyll actually Earning 35,000 p.a.: 33%
go out and assess that and set up the Famous for: One of the most innovative digital media
programme for you thats relevant, stated companies with 25 industry awards in five years and
Hilditch. Personal training sessions can be an ambition to become the defining media company of
organised to get them started, and training the decade
equipment can be taken home.
The business strategy: Spotting a new product, finding a
Fitness and being active are not only new approach and building a new industry
encouraged to promote well-being and
happiness, but are seen as key attributes of High performance learning points:
the kinds of high performers, who work hard
Builds the necessary expertise to support an emerging on-line
and play hard, that Flight Centre tends to
media market;
recruit. Indeed, an active social life is also a
priority for Flight Centre UK. Regular fun Uses a set of five values to guide the creation of better customer
team events and social events that bring service for a new industry;
together staff from different outlets are Uses work re-design to remove hierarchy, to encourage
organised by the Health Wise team. participation, creativity, communication and collaborative
teamwork;
Money Wise operates in a similar way, Uses 360 degree appraisals to encourage the transparent
providing professional financial advice to assessment of the performance of all, including the directors,
staff, helping them to make the most of their and to support the value-set of the organisation;
hard-earned rewards and profit. This again
Recruits on the basis of the personal attributes necessary to win
promotes staff performance and
over new business; these include the passion for success!
commitment. Money Wise staff regularly
visit the different Flight Centre branches Uses various devices to support creativity and innovation such as
around the UK, offering confidential advice personal recognition and team-based pitch competition.
as well as group presentations. Advice
covers pension schemes, healthcare and
bonus schemes that operate within Flight
Centre UK, and can also include advice on
issues from basic budgeting, money
management and tax, through to advice on A case of new product, new approach and building a new industry
products such as insurance, mortgages and
investments.
Compared with other established advertising 2004, the vision of its two founders

giants in the industry, i-level is a new kid on Charles Dobres and Andrew Walmsley has

the block. However, with a total of 25 come true.

industry awards in the past five years, plus

the latest accolade of Revolution magazines i-level originated from two separate ideas.

Agency of the Year and one of the Sunday Walmsley was doing an MBA project that

Times Top 50 small companies to work for in examined whether there was an emerging

42 43
digital media market. His research showed to clients, form the strategic principles to people? By allowing staff to chat as have to communicate it. This will lead you
an increasing gap between advertising their immediate success and i-levels informally and as often as they need, the to the market.
media buyers demands and what the market profitability in every year since its existence. environment creates what Dobres calls
could deliver. Dobres was disenchanted with ambient knowledge, seen as the necessary The connection between performance and
the inadequate treatment offered by Dobres analysis on the success or failure ingredient to enhance communication, ideas passion presents an interesting angle to
traditional advertising agencies for online of the industry is deceptively simple. In and collaborative work. For example, recruitment and development. As the
clients. The end result was the formation of advertising, including online media, there is people can place the wrong emphasis on industry is still relatively new, the chances
i-level in 1999. i-levels aim was to specialise a truism that says you win a client because teamwork. You dont make people be a team. are that many people do not have the
in digital media advertising, via the internet, of great work; youd lose a client because of You create an environment and processes, necessary skills. Hence, i-level tends to look
e-mail and mobile phones, with a declared poor service, but great work is quite and then theyll work as a team. for people who really want to make a
mission of becoming the decade-defining subjective. So the poor service is guaranteed difference in this industry, and not just
media agency. Its very focused approach to to lose you a client. If this open plan approach is done well, because they really like online advertising or
a new digital media industry which i-level i-level believes that, to some extent, this can digital media. Dobres explained, This is
helped to define resulted in immediate As a result of this understanding, i-levels even become the alternative to staff opinion someone who when they get into
success, with the signing of easyJet and then strategy was to create a workforce that surveys and appraisals. For example, i-level something, they will be absolutely
companies such as Yell and Smile as early would utilise the five values to deliver a believes knowledge is power and that, in passionate about it, and they will not just do
clients. i-level currently represents other dedicated customer service. And in order to traditional organisations, too many work the job. Hence, a lot of the recruitment
famous names such as Coca Cola create a well-defined market, i-level adopted arrangements enable only a few key effort at i-level is on ascertaining the attitude
Enterprises, BT, VSO, Specsavers, William the education campaign for their potential individuals to hold the relevant knowledge orientation of potential staff. In a fast
Hill and the governments publicity clients that: You need a specialist, and about the organisation. i-level wants as growing company, your recruitment is
procurement agency, COI Communications. online media is a specialist discipline which much information as possible to be available something that can bring a company down
requires new practices, unlike the press or to staff and to allow staff to participate in all if you dont get it right.
THE INDUSTRIAL CONTEXT AND i-LEVELS television. By projecting a proper solution the debates. An open plan office with all the
BUSINESS STRATEGY to the customer, i-level simply advertised necessary ambient knowledge is seen to The common denominator is passion, but i-
Despite the emergence of online advertising itself as We do online media. Thats it. facilitate this. Dobres explained, I think level wants to recruit as many different
opportunities in the latter part of the 1990s, With this strategy, i-level won the easyJet what we do for people is to help them feel I people as possible. i-level sees diversity as a
via web sites, email and mobile phones, account within the first few days. Other big know whats going on. And that sense of strength in an industry that requires different
most traditional advertising agencies were clients followed within the next six months. knowing whats going on gives people the ideas and innovation. In addition, i-level is
slow to capitalise on the emerging demand. permission and the environment to talk to constantly seeking appropriate staff to be
In fact, because the systems of television, CREATING AN ENVIRONMENT anyone else because if they are willing to tell promoted to lead the company. This gives
cinema, radio and press advertising had FOR SUCCESS me that, theyre probably willing to have a this passion for success a goal.
been so well established, most traditional i-levels five guiding principles humanity, discussion with me.
advertising agencies were treating online openness, diligence, enthusiasm, integrity i-level also finds that if passion is the
advertising as an add-on. As a result, are in effect a framework to ensure better i-level carries out a 360 degree appraisal fundamental building block for performance,
although these agencies had web or online internal and external fit. system once every year for everyone, pay takes on a different role. Pay is
media planning departments, most of these including senior management, and this is important. i-level put aside 15% of its pre-tax
add-on departments tended to be small, Internally, this has lead to a complete re another tool to link into its five values and profit in 2003-4 for performance bonuses,
consisting of just a few persons. Online design of the way that people work. Most appraise performance. But because i-level and share options are available to all staff.
advertising had yet to be treated as equal importantly, i-level sees hierarchy, and the places so much emphasis on the open office However, it is emphasised that: People want
within the traditional media advertising physical arrangements to support hierarchy, and its community environment, senior staff to work at i-level because it is the kind of
industry. Dobres recalls his observation of a as an obstacle to communication, creativity, actually believe that To appraise staff once workplace they want to work in. In this
previous traditional media advertising teamwork and organisational values. In the a year, that is good. But our approach is instance, pay becomes a hygiene factor
company: No-one really wanted to be traditional big media companies, hierarchy is also try to do it every single day, in that (i.e. there is a minimum level of pay that is
involved too much and the clients would get reinforced by putting workers in boxes or open office environment! important, but beyond that it is what i-level
a couple of slides on on-line stuff at the end rooms, in long corridors and on different represents that matters). Pay is necessary,
of a presentation or they would never floors. Dobres believes that these physical PERSONAL ATTRIBUTES FOR but not the primary motivating force.
spend any money on it. arrangements allow hierarchy to create a ORGANISATIONAL PERFORMANCE
degree of significant separation in various IN SEARCH OF PASSION SUPPORTING PERFORMANCE THROUGH
Deriving its guiding principles from five forums. So a complete open plan office is What is the difference between the CREATIVITY AND INNOVATION
values humanity, openness, diligence, the environment in which staff at i-level traditional media advertising market and i-level encourages staff creativity through
enthusiasm, integrity i-level wanted to conduct their normal day-to-day operations. the digital/online media market? From a recognition and support. Formal recognition
fundamentally change the way the functional point of view, the difference is is important and the i-leveller Monthly and
advertising industry dealt with clients for The benefits of such an approach, to an specialisation. But from an emotional point all-staff meetings help to do this. Through
online media. Dobres and Walmsley believe organisation with 60 staff, can be subtle of view, the difference is passion, Dobres these, recognition is regularly used to
that the five values, together with the way just how do you create an efficient commented. You cant create passion. celebrate innovation. For example,
they communicate i-levels service approach communication network among that many You have to have it, but if you have it you recognition is given through the Leveller of

44 45
digital media market. His research showed to clients, form the strategic principles to people? By allowing staff to chat as have to communicate it. This will lead you
an increasing gap between advertising their immediate success and i-levels informally and as often as they need, the to the market.
media buyers demands and what the market profitability in every year since its existence. environment creates what Dobres calls
could deliver. Dobres was disenchanted with ambient knowledge, seen as the necessary The connection between performance and
the inadequate treatment offered by Dobres analysis on the success or failure ingredient to enhance communication, ideas passion presents an interesting angle to
traditional advertising agencies for online of the industry is deceptively simple. In and collaborative work. For example, recruitment and development. As the
clients. The end result was the formation of advertising, including online media, there is people can place the wrong emphasis on industry is still relatively new, the chances
i-level in 1999. i-levels aim was to specialise a truism that says you win a client because teamwork. You dont make people be a team. are that many people do not have the
in digital media advertising, via the internet, of great work; youd lose a client because of You create an environment and processes, necessary skills. Hence, i-level tends to look
e-mail and mobile phones, with a declared poor service, but great work is quite and then theyll work as a team. for people who really want to make a
mission of becoming the decade-defining subjective. So the poor service is guaranteed difference in this industry, and not just
media agency. Its very focused approach to to lose you a client. If this open plan approach is done well, because they really like online advertising or
a new digital media industry which i-level i-level believes that, to some extent, this can digital media. Dobres explained, This is
helped to define resulted in immediate As a result of this understanding, i-levels even become the alternative to staff opinion someone who when they get into
success, with the signing of easyJet and then strategy was to create a workforce that surveys and appraisals. For example, i-level something, they will be absolutely
companies such as Yell and Smile as early would utilise the five values to deliver a believes knowledge is power and that, in passionate about it, and they will not just do
clients. i-level currently represents other dedicated customer service. And in order to traditional organisations, too many work the job. Hence, a lot of the recruitment
famous names such as Coca Cola create a well-defined market, i-level adopted arrangements enable only a few key effort at i-level is on ascertaining the attitude
Enterprises, BT, VSO, Specsavers, William the education campaign for their potential individuals to hold the relevant knowledge orientation of potential staff. In a fast
Hill and the governments publicity clients that: You need a specialist, and about the organisation. i-level wants as growing company, your recruitment is
procurement agency, COI Communications. online media is a specialist discipline which much information as possible to be available something that can bring a company down
requires new practices, unlike the press or to staff and to allow staff to participate in all if you dont get it right.
THE INDUSTRIAL CONTEXT AND i-LEVELS television. By projecting a proper solution the debates. An open plan office with all the
BUSINESS STRATEGY to the customer, i-level simply advertised necessary ambient knowledge is seen to The common denominator is passion, but i-
Despite the emergence of online advertising itself as We do online media. Thats it. facilitate this. Dobres explained, I think level wants to recruit as many different
opportunities in the latter part of the 1990s, With this strategy, i-level won the easyJet what we do for people is to help them feel I people as possible. i-level sees diversity as a
via web sites, email and mobile phones, account within the first few days. Other big know whats going on. And that sense of strength in an industry that requires different
most traditional advertising agencies were clients followed within the next six months. knowing whats going on gives people the ideas and innovation. In addition, i-level is
slow to capitalise on the emerging demand. permission and the environment to talk to constantly seeking appropriate staff to be
In fact, because the systems of television, CREATING AN ENVIRONMENT anyone else because if they are willing to tell promoted to lead the company. This gives
cinema, radio and press advertising had FOR SUCCESS me that, theyre probably willing to have a this passion for success a goal.
been so well established, most traditional i-levels five guiding principles humanity, discussion with me.
advertising agencies were treating online openness, diligence, enthusiasm, integrity i-level also finds that if passion is the
advertising as an add-on. As a result, are in effect a framework to ensure better i-level carries out a 360 degree appraisal fundamental building block for performance,
although these agencies had web or online internal and external fit. system once every year for everyone, pay takes on a different role. Pay is
media planning departments, most of these including senior management, and this is important. i-level put aside 15% of its pre-tax
add-on departments tended to be small, Internally, this has lead to a complete re- another tool to link into its five values and profit in 2003-4 for performance bonuses,
consisting of just a few persons. Online design of the way that people work. Most appraise performance. But because i-level and share options are available to all staff.
advertising had yet to be treated as equal importantly, i-level sees hierarchy, and the places so much emphasis on the open office However, it is emphasised that: People want
within the traditional media advertising physical arrangements to support hierarchy, and its community environment, senior staff to work at i-level because it is the kind of
industry. Dobres recalls his observation of a as an obstacle to communication, creativity, actually believe that To appraise staff once workplace they want to work in. In this
previous traditional media advertising teamwork and organisational values. In the a year, that is good. But our approach is instance, pay becomes a hygiene factor
company: No-one really wanted to be traditional big media companies, hierarchy is also try to do it every single day, in that (i.e. there is a minimum level of pay that is
involved too much and the clients would get reinforced by putting workers in boxes or open office environment! important, but beyond that it is what i-level
a couple of slides on on-line stuff at the end rooms, in long corridors and on different represents that matters). Pay is necessary,
of a presentation or they would never floors. Dobres believes that these physical PERSONAL ATTRIBUTES FOR but not the primary motivating force.
spend any money on it. arrangements allow hierarchy to create a ORGANISATIONAL PERFORMANCE
degree of significant separation in various IN SEARCH OF PASSION SUPPORTING PERFORMANCE THROUGH
Deriving its guiding principles from five forums. So a complete open plan office is What is the difference between the CREATIVITY AND INNOVATION
values humanity, openness, diligence, the environment in which staff at i-level traditional media advertising market and i-level encourages staff creativity through
enthusiasm, integrity i-level wanted to conduct their normal day-to-day operations. the digital/online media market? From a recognition and support. Formal recognition
fundamentally change the way the functional point of view, the difference is is important and the i-leveller Monthly and
advertising industry dealt with clients for The benefits of such an approach, to an specialisation. But from an emotional point all-staff meetings help to do this. Through
online media. Dobres and Walmsley believe organisation with 60 staff, can be subtle of view, the difference is passion, Dobres these, recognition is regularly used to
that the five values, together with the way just how do you create an efficient commented. You cant create passion. celebrate innovation. For example,
they communicate i-levels service approach communication network among that many You have to have it, but if you have it you recognition is given through the Leveller of

44 45
the Month award, in which a member of simultaneously. Work with a media client whats happened. In fact, a contingent
staff is nominated by staff for the greatest normally takes many stages, from planning redundancy plan had been made, but has
contribution to the agency and the winner to placing media space on websites and is since been destroyed.
also gets a prize. i-level believes that it is often labour and process intensive. i-level
important to promote a particular culture observed that the more complex the process Investing in staff during an economic down
and to back it with formal recognition and was, the greater the chance a mistake would turn, is almost a fantasy idea in human
sometimes spot bonuses. be made. From a commercial point of view, resource text books. But for i-level, it is true
i-level was not happy with the inefficiency because, as Dobres added, The way
i-level also enters a significant number of but, more importantly, it also meant that through is about belief and passion, and at
external competitions and awards. To put media practitioners were bogged down with the end of the day, we also make good
together a paper or a case study for an administration the kind of work that they money out of it.
award, requires an entire media campaign to did not find particularly motivating.
be condensed into just one or two sides of
A4. The practitioners write the competition The IT solution turned out to be a workflow
entry, but consult senior staff such as Dobres re-engineering project. Partnered with a
or Walmsley and then senior staff help junior software developer and taking 18 months,
staff to fine tune their output. Entry into i-level has designed its own campaign
these competitions, and winning such management system to manage workflow.
awards, brings the additional benefit of It was the first in the industry and i-level
giving exposure to this work not only retains part ownership of the intellectual
externally, but within the company. rights to the system. Under the new
campaign management system, it brings
In addition, an internal pitch competition is together all the stages of work into one
organised among teams, which are given single interface. This compares much more
fictitious briefs to respond to. This favourably with the previous system, which
competition is intended to encourage media required spreadsheets and other monitoring
practitioner innovation. Well-known people devices. Its really quite revolutionary.
from the industry are invited to judge the Which means that we have something which
competition and again prizes are given. is creative, and time-saving - we estimate
about 30% saving in the process so far, and
As well as the external courses for the its still developing. It is crucial to make the
necessary technical and craft skills in media job far more interesting for planner/buyers
advertising, i-level has an unusual wild while the administrative work is now
card training budget, whereby everybody handled with fewer mistakes.
who works at i-level is given an annual
allowance for personal training and PERFORMANCE IN MANY WAYS
development purposes which should have Walmsley and Dobres wanted to create a
no apparent connection with work. The idea different and high performing workplace
is to develop the skills and interests of staff and, at the same time, to be financially very
in areas not considered before. This is successful. The level of year on year
expected to enhance i-level employees profitability that i-level has delivered reflects
innovative ideas at work through that. This performance even carried i-level
experiences outside the immediate areas through the global downturn in 2001-2.
of work. Many media advertising agencies went
under, made redundancies or merged with
At i-level, innovation comes from rivals. Nobody was laid off at i-level, though
unexpected directions. This is a reflection of the industry was badly affected, and i-level
the kind of passion that means people want still managed to grow that year. i-level
to do things better and do them well. For continued to invest in training throughout
example, an IT information management the period and Dobres recalls his reaction to
system, known as the campaign the crisis: We think this will take 18 months
management system has been designed for us to come out of. If we dont lay
and introduced to significantly improve the anybody off, continue and develop, at the
quality of workflow and job satisfaction of end of it, we will be ahead in terms of
staff. The introduction of the IT management capacity and ability over everybody else.
system tackled a number of issues We will profit from it. And thats exactly

46 47
the Month award, in which a member of simultaneously. Work with a media client whats happened. In fact, a contingent
staff is nominated by staff for the greatest normally takes many stages, from planning redundancy plan had been made, but has
contribution to the agency and the winner to placing media space on websites and is since been destroyed.
also gets a prize. i-level believes that it is often labour and process intensive. i-level
important to promote a particular culture observed that the more complex the process Investing in staff during an economic down
and to back it with formal recognition and was, the greater the chance a mistake would turn, is almost a fantasy idea in human
sometimes spot bonuses. be made. From a commercial point of view, resource text books. But for i-level, it is true
i-level was not happy with the inefficiency because, as Dobres added, The way
i-level also enters a significant number of but, more importantly, it also meant that through is about belief and passion, and at
external competitions and awards. To put media practitioners were bogged down with the end of the day, we also make good
together a paper or a case study for an administration the kind of work that they money out of it.
award, requires an entire media campaign to did not find particularly motivating.
be condensed into just one or two sides of
A4. The practitioners write the competition The IT solution turned out to be a workflow
entry, but consult senior staff such as Dobres re-engineering project. Partnered with a
or Walmsley and then senior staff help junior software developer and taking 18 months,
staff to fine tune their output. Entry into i-level has designed its own campaign
these competitions, and winning such management system to manage workflow.
awards, brings the additional benefit of It was the first in the industry and i-level
giving exposure to this work not only retains part ownership of the intellectual
externally, but within the company. rights to the system. Under the new
campaign management system, it brings
In addition, an internal pitch competition is together all the stages of work into one
organised among teams, which are given single interface. This compares much more
fictitious briefs to respond to. This favourably with the previous system, which
competition is intended to encourage media required spreadsheets and other monitoring
practitioner innovation. Well-known people devices. Its really quite revolutionary.
from the industry are invited to judge the Which means that we have something which
competition and again prizes are given. is creative, and time-saving - we estimate
about 30% saving in the process so far, and
As well as the external courses for the its still developing. It is crucial to make the
necessary technical and craft skills in media job far more interesting for planner/buyers
advertising, i-level has an unusual wild while the administrative work is now
card training budget, whereby everybody handled with fewer mistakes.
who works at i-level is given an annual
allowance for personal training and PERFORMANCE IN MANY WAYS
development purposes which should have Walmsley and Dobres wanted to create a
no apparent connection with work. The idea different and high performing workplace
is to develop the skills and interests of staff and, at the same time, to be financially very
in areas not considered before. This is successful. The level of year on year
expected to enhance i-level employees profitability that i-level has delivered reflects
innovative ideas at work through that. This performance even carried i-level
experiences outside the immediate areas through the global downturn in 2001-2.
of work. Many media advertising agencies went
under, made redundancies or merged with
At i-level, innovation comes from rivals. Nobody was laid off at i-level, though
unexpected directions. This is a reflection of the industry was badly affected, and i-level
the kind of passion that means people want still managed to grow that year. i-level
to do things better and do them well. For continued to invest in training throughout
example, an IT information management the period and Dobres recalls his reaction to
system, known as the campaign the crisis: We think this will take 18 months
management system has been designed for us to come out of. If we dont lay
and introduced to significantly improve the anybody off, continue and develop, at the
quality of workflow and job satisfaction of end of it, we will be ahead in terms of
staff. The introduction of the IT management capacity and ability over everybody else.
system tackled a number of issues We will profit from it. And thats exactly

46 47
with that adopted by the firms competitors, Thus, for Pannone & Partners, the private
means two things. Firstly, the firm maintains client sector provides a certain degree of
its involvement in both the commercial and stability. This approach makes the firm
private client sectors. Pannone & Partners almost unique among its competitors.
strategy appears to be in the minority, as Deborah Ascott-Jones, Pannone & Partners
CASE STUDY
most of its large competitors have been Director of Marketing, said You cannot find
PANNONE AND PARTNERS
concentrating on the more lucrative another legal firm of a similar size in
commercial sector. Manchester who has the same profile as us!
And with stability, there comes enhanced job
Secondly, in order to maintain a more security and greater focus in work.
effective and coherent workforce with its
Service/Product: Legal firm
own brand of people culture, Pannone & However, it would be wrong to assume that
Turnover: 26m Partners has chosen to stay with a single-site Pannone & Partners wants stability for the
Size of the workforce: 500 employees strategy with all its staff based in the sake of it. The key to the firms strategy is to
Manchester office while many of its not be dependent on any one sector, in
Earning 35,000 p.a.: 29%
competitors have been opening offices in which case any significant economic
Famous for: Using work-life balance as a reward for a hugely other cities in order to build market share. fluctuation may create massive redundancies
committed workforce and the associated negative effect on staff
The business strategy: Balanced growth for competitive advantage THE INDUSTRIAL CONTEXT AND PANNONE morale, their commitment to the company,
& PARTNERS BUSINESS STRATEGY sense of achievement, and the immense
In 1989, changes were made to the interruptions in their career and private life.
High performance learning points: advertising law in the legal industry. The balanced approach gives us lots of
Builds a business strategy which reflects the organisations self- Subsequently, marketing professionals business continuity-type advantages.
awareness, which enables it to capitalise on its strengths; began to appear in large law firms, bringing Rachel Dobson, the Director of Human
Clearly demonstrates the importance of the managing director taking the about visibly greater competition among Resources emphasised.
lead to create the organisational culture necessary to support its strategy; legal practices. However, higher competition
Able to create a workplace environment through work-life balance which
also means that profit margins from client In addition to job security, the Partners in the
establishes the link between a highly motivated workforce and a strong
fees may be squeezed, especially in the firm are very clear that they want to strike a
commitment for organisational success for all;
private client sector. The knock-on effect balance between creating a successful firm
brought two developments in the legal and encouraging staff to have a life
Uses an emphasis on quality of work experience to cultivate a strong
industry: a growth in mergers in order to outside work. To the people working at the
sense of fairness within the workplace which secures the retention of the
capture greater market share and to diversify firm, at the end of the day, their work is part
best staff;
into a wider range of specialisms; and larger of achieving a particular lifestyle. If we
Rewards staff through time off to engage in private pursuits rather than legal firms concentrating on the commercial wanted to have a mega, mega successful
the use of financial incentives. Performance appraisals not linked to the sector where higher fee returns are possible. firm and earn twice what we earned, then I
financial reward system. Values employees own time above excessive guess we could. But the fact is that we dont
time commitments to the company; Pannone & Partners chose to maintain an want to. To do that I think you would have to
Use of an under-one-roof strategy to tap into the benefits of internal equal profile between the commercial and grow more rapidly, with more mergers and
communication through undefined networks. This effective form of private client work. As well as being a have multi-sites, but were not interested in
communication creates a sense of openness and ownership of historical factor, achieved through early either. Rachel Dobson commented. When I
organisation. mergers between legal firms with different joined, there was a turnover of 6m and I
client bases, this strategy of having a think the total staff was about 200, and now
balanced approach brought greater stability its almost 30m and a total staff of over 500.
to the business. But the firm has retained its character which
is quite an astonishing achievement.
In the commercial sector, there are more Pannone & Partners is very careful about
Balanced growth for competitive advantage peaks and troughs in terms of the volume of how the firm grows and how it may affect
business compared with the private client the employees welfare. Namely, achieving
sector. Indeed, the commercial sector has high performance should not be at the
had a very difficult period in which growth expense of quality of life.
In May 2004, Manchester Online reported of England, returning a 20% growth in has been relatively flat. This has been
that whilst the majority of legal firms in the turnover and a 22% growth in profit. reflected by the general slow growth among
region had been struggling to make any most commercial client firms in 2004. The
growth in what was a very difficult year for Pannone & Partners success was based on a private client sector such as personal
the industry, Pannone & Partners was the balanced growth strategy. The balanced injuries, on the other hand, is largely
fastest growing legal firm in the Northwest growth strategy, which contrasts strongly unaffected by fluctuations in the economy.

48 49
with that adopted by the firms competitors, Thus, for Pannone & Partners, the private
means two things. Firstly, the firm maintains client sector provides a certain degree of
its involvement in both the commercial and stability. This approach makes the firm
private client sectors. Pannone & Partners almost unique among its competitors.
strategy appears to be in the minority, as Deborah Ascott-Jones, Pannone & Partners
CASE STUDY most of its large competitors have been Director of Marketing, said You cannot find
PANNONE AND PARTNERS concentrating on the more lucrative another legal firm of a similar size in
commercial sector. Manchester who has the same profile as us!
And with stability, there comes enhanced job
Secondly, in order to maintain a more security and greater focus in work.
effective and coherent workforce with its
Service/Product: Legal firm
own brand of people culture, Pannone & However, it would be wrong to assume that
Turnover: 26m Partners has chosen to stay with a single-site Pannone & Partners wants stability for the
Size of the workforce: 500 employees strategy with all its staff based in the sake of it. The key to the firms strategy is to
Manchester office while many of its not be dependent on any one sector, in
Earning 35,000 p.a.: 29%
competitors have been opening offices in which case any significant economic
Famous for: Using work-life balance as a reward for a hugely other cities in order to build market share. fluctuation may create massive redundancies
committed workforce and the associated negative effect on staff
The business strategy: Balanced growth for competitive advantage THE INDUSTRIAL CONTEXT AND PANNONE morale, their commitment to the company,
& PARTNERS BUSINESS STRATEGY sense of achievement, and the immense
In 1989, changes were made to the interruptions in their career and private life.
High performance learning points: advertising law in the legal industry. The balanced approach gives us lots of
Builds a business strategy which reflects the organisations self- Subsequently, marketing professionals business continuity-type advantages.
awareness, which enables it to capitalise on its strengths; began to appear in large law firms, bringing Rachel Dobson, the Director of Human
Clearly demonstrates the importance of the managing director taking the about visibly greater competition among Resources emphasised.
lead to create the organisational culture necessary to support its strategy; legal practices. However, higher competition
Able to create a workplace environment through work-life balance which
also means that profit margins from client In addition to job security, the Partners in the
establishes the link between a highly motivated workforce and a strong
fees may be squeezed, especially in the firm are very clear that they want to strike a
commitment for organisational success for all;
private client sector. The knock-on effect balance between creating a successful firm
brought two developments in the legal and encouraging staff to have a life
Uses an emphasis on quality of work experience to cultivate a strong
industry: a growth in mergers in order to outside work. To the people working at the
sense of fairness within the workplace which secures the retention of the
capture greater market share and to diversify firm, at the end of the day, their work is part
best staff;
into a wider range of specialisms; and larger of achieving a particular lifestyle. If we
Rewards staff through time off to engage in private pursuits rather than legal firms concentrating on the commercial wanted to have a mega, mega successful
the use of financial incentives. Performance appraisals not linked to the sector where higher fee returns are possible. firm and earn twice what we earned, then I
financial reward system. Values employees own time above excessive guess we could. But the fact is that we dont
time commitments to the company; Pannone & Partners chose to maintain an want to. To do that I think you would have to
Use of an under-one-roof strategy to tap into the benefits of internal equal profile between the commercial and grow more rapidly, with more mergers and
communication through undefined networks. This effective form of private client work. As well as being a have multi-sites, but were not interested in
communication creates a sense of openness and ownership of historical factor, achieved through early either. Rachel Dobson commented. When I
organisation. mergers between legal firms with different joined, there was a turnover of 6m and I
client bases, this strategy of having a think the total staff was about 200, and now
balanced approach brought greater stability its almost 30m and a total staff of over 500.
to the business. But the firm has retained its character which
is quite an astonishing achievement.
In the commercial sector, there are more Pannone & Partners is very careful about
Balanced growth for competitive advantage peaks and troughs in terms of the volume of how the firm grows and how it may affect
business compared with the private client the employees welfare. Namely, achieving
sector. Indeed, the commercial sector has high performance should not be at the
had a very difficult period in which growth expense of quality of life.
In May 2004, Manchester Online reported of England, returning a 20% growth in has been relatively flat. This has been
that whilst the majority of legal firms in the turnover and a 22% growth in profit. reflected by the general slow growth among
region had been struggling to make any most commercial client firms in 2004. The
growth in what was a very difficult year for Pannone & Partners success was based on a private client sector such as personal
the industry, Pannone & Partners was the balanced growth strategy. The balanced injuries, on the other hand, is largely
fastest growing legal firm in the Northwest growth strategy, which contrasts strongly unaffected by fluctuations in the economy.

48 49
OBTAINING PERFORMANCE THROUGH Ultimately, Pannone & Partners uses this glamorous. This approach could create a It is a common mistake to see good
WORK-LIFE BALANCE AND RETAINING strategy to retain good people. By retaining tension between individuals and teams. communication as having some magic
GOOD STAFF good people, who are important to the firms Pannone & Partners considers this sort of formula. There is no communication
Within this brand of people culture, work-life future success, Pannone & Partners can give tension to be potentially harmful to the solution that can be bought off the shelf
balance is seen as the most strategic tool to more to its employees for a better work-life performance and cohesion of the and introduced within any given
build a competitive organisation. balance. The result is therefore a reinforcing organisation as a whole. A performing organisation. Indeed, Pannone & Partners
virtuous cycle. organisation needs to go forward together. shows that in a firm with more than 500
Recruitment agencies have told Pannone & Staff who do well will be paid better than people, it is difficult to talk about a system.
Partners that it is one of the most sought Keeping staff here is hugely important to those who dont, but doing well is made up It is more a case of creating the kind of
after employers by people who are on the us, and it is a top priority. We have a very of much more than just billing, Dobson environment and expectation that generates
market looking for a better employer. The low turnover of staff, and that isnt an explained. It would not be fair that a vast amount of useful communication
firms well-known work-life balance policy accident. I think one of the big reasons that performance is somehow linked to the within the organisation. Much of it is in an
and strong market position mean that the people stay is because of our approach to department that theyre in, and some staff organic form that occurs without any pre-
firm does not have to consider offering people and work, Dobson emphasised. are in a position to bill more than somebody defined mechanisms. We often describe our
special packages in order to attract the best Another reason is the philosophy and the who is just as good and just as able, and approach to communication as cream bun
people. In the south, it is well known that recognition that people have a life outside works just as hard in another department. management. Dobson commented. When
legal firms are often competing with each work, and Joy believes that it is the most the cream buns appear one afternoon in the
other for better candidates through endless important thing to absolutely everybody. As fairness is the basis on which to judge office, all employees know that good work
offers of flexible packages. People just want It doesnt matter who they are, time is the performance and rewards, a four-year has been done and that they will be
to work for us, Dobson explained. one thing that you cant buy, and the ability qualified solicitor in one department will rewarded with days off. This form of
to have time back is something that people earn broadly the same as a four-year communication is highly dependent on
To some extent, the north-south divide in the value hugely, and its one of the ways that qualified solicitor in the other departments. human interaction and the tacit knowledge
job market has enabled Pannone & Partners we reward people. And so, if something The same rule applies to other personnel. In of how an organisation works. It may,
to chart the course it wants. The conditions good happens, like winning a major client, Pannone & Partners case, financial reward therefore, explain Pannone & Partners overt
in the south-east, in comparison, are more we do give people days off. At Pannone & for good performance is therefore distributed desire to maintain a one-site policy.
buoyant than those in the Northwest. Partners, giving days off to staff means on a collective basis. When the firm has a
However, good fortune alone cannot giving time off to all 500 staff. And that is good year, everyone will be entitled to a TECHNOLOGICAL INNOVATION TO
guarantee a leading position, and Pannone & one big successful and happy family. bonus and days off, rather than just a chosen SUPPORT BALANCED GROWTH
Partners way of creating an exciting and few. Appraisals are used, but there is no Technology is often not used to any
happy workplace has not been achieved by INCENTIVISING WORKPLACE direct mechanism to link appraisal to pay. significant extent in the legal industry. For
accident. Indeed, one person, Joy Kingsley, PERFORMANCE IN THE LEGAL PROFESSION Appraisals are more of a vehicle to examine Pannone & Partners IT is used just like other
the Managing Partner, was singled out as FAIR PLAY AND FAIR PAY career and developmental issues. work practices, as a tool to enhance its
responsible for developing the firms Teamwork is very important in legal work, chosen approach to performance.
particular performance ethos. which is normally organised around SUPPORTING WORKPLACE PERFORMANCE
specialisms. At Pannone & Partners - these WITH OPENNESS AND COMMUNICATION The one-site approach has been most useful
At the conceptual level, most effective ideas include commercial litigation, insolvency, Joy Kingsley is keen to encourage an in enabling the firm's culture to drive
are often quite simple, and Kingsleys personal injury, family and intellectual extremely open workplace in which performance. However, it has also put the
approach is no different. Fundamentally, property. Normally, good performance would information and ideas are allowed to flow firm at a potential disadvantage, as it may not
Kingsley sets out to create an excellent be measured by the results of each team, freely among all staff. Dobson explained be able to offer the same kind of service to
working environment so that all staff such as the value of contracts. However, the that, You will get to know just about clients in other localities. Pannone & Partners
partners and other employees alike can firm places an emphasis on fairness when it everything, though sometimes this can therefore developed its own proprietary
work effectively together as a closely-knit comes to judging performance. Performance create some difficulties. But, as a general software to overcome this disadvantage.
unit, all under one roof. Within this incentives are not based upon the amount of practice, what a fantastic thing And The software essentially enables the firm to
organisational format, hard work, billing, but on doing a job well. because Joy does it, everybody else does it. manage, maintain and serve clients via the
informality, good communication, People just love openness to information internet on a national basis.
participation, fairness and a good work-life The potential problem with legal work is that and discussion.
balance are all basic ingredients of a high if billing were the sole criterion for The software is very important for Pannone
performing workplace. To this end, good performance, then all lawyers would cherry A new partner once commented, during his & Partners as complaints by clients would
performance is not only rewarded financially pick their work. In other words, they would induction to the firm, that secretaries at not be acceptable within the quality
through bonuses but also through more do the work which they thought was easiest Pannone & Partners could tell him more assurance process. It is vital to create a
time off for private pursuits and other to bill and which had the largest billing about the financial report than he had ever quality audit trail for the clients, within an
activities outside work. Indeed, Kingsley potential, as opposed to the work which was known as a co-owner of his previous firm. easily accessible environment. Clients want
emphasises the latter over the former. more difficult or, on the face of it, less

50 51
OBTAINING PERFORMANCE THROUGH Ultimately, Pannone & Partners uses this glamorous. This approach could create a It is a common mistake to see good
WORK-LIFE BALANCE AND RETAINING strategy to retain good people. By retaining tension between individuals and teams. communication as having some magic
GOOD STAFF good people, who are important to the firms Pannone & Partners considers this sort of formula. There is no communication
Within this brand of people culture, work-life future success, Pannone & Partners can give tension to be potentially harmful to the solution that can be bought off the shelf
balance is seen as the most strategic tool to more to its employees for a better work-life performance and cohesion of the and introduced within any given
build a competitive organisation. balance. The result is therefore a reinforcing organisation as a whole. A performing organisation. Indeed, Pannone & Partners
virtuous cycle. organisation needs to go forward together. shows that in a firm with more than 500
Recruitment agencies have told Pannone & Staff who do well will be paid better than people, it is difficult to talk about a system.
Partners that it is one of the most sought Keeping staff here is hugely important to those who dont, but doing well is made up It is more a case of creating the kind of
after employers by people who are on the us, and it is a top priority. We have a very of much more than just billing, Dobson environment and expectation that generates
market looking for a better employer. The low turnover of staff, and that isnt an explained. It would not be fair that a vast amount of useful communication
firms well-known work-life balance policy accident. I think one of the big reasons that performance is somehow linked to the within the organisation. Much of it is in an
and strong market position mean that the people stay is because of our approach to department that theyre in, and some staff organic form that occurs without any pre
firm does not have to consider offering people and work, Dobson emphasised. are in a position to bill more than somebody defined mechanisms. We often describe our
special packages in order to attract the best Another reason is the philosophy and the who is just as good and just as able, and approach to communication as cream bun
people. In the south, it is well known that recognition that people have a life outside works just as hard in another department. management. Dobson commented. When
legal firms are often competing with each work, and Joy believes that it is the most the cream buns appear one afternoon in the
other for better candidates through endless important thing to absolutely everybody. As fairness is the basis on which to judge office, all employees know that good work
offers of flexible packages. People just want It doesnt matter who they are, time is the performance and rewards, a four-year has been done and that they will be
to work for us, Dobson explained. one thing that you cant buy, and the ability qualified solicitor in one department will rewarded with days off. This form of
to have time back is something that people earn broadly the same as a four-year communication is highly dependent on
To some extent, the north-south divide in the value hugely, and its one of the ways that qualified solicitor in the other departments. human interaction and the tacit knowledge
job market has enabled Pannone & Partners we reward people. And so, if something The same rule applies to other personnel. In of how an organisation works. It may,
to chart the course it wants. The conditions good happens, like winning a major client, Pannone & Partners case, financial reward therefore, explain Pannone & Partners overt
in the south-east, in comparison, are more we do give people days off. At Pannone & for good performance is therefore distributed desire to maintain a one-site policy.
buoyant than those in the Northwest. Partners, giving days off to staff means on a collective basis. When the firm has a
However, good fortune alone cannot giving time off to all 500 staff. And that is good year, everyone will be entitled to a TECHNOLOGICAL INNOVATION TO
guarantee a leading position, and Pannone & one big successful and happy family. bonus and days off, rather than just a chosen SUPPORT BALANCED GROWTH
Partners way of creating an exciting and few. Appraisals are used, but there is no Technology is often not used to any
happy workplace has not been achieved by INCENTIVISING WORKPLACE direct mechanism to link appraisal to pay. significant extent in the legal industry. For
accident. Indeed, one person, Joy Kingsley, PERFORMANCE IN THE LEGAL PROFESSION Appraisals are more of a vehicle to examine Pannone & Partners IT is used just like other
the Managing Partner, was singled out as FAIR PLAY AND FAIR PAY career and developmental issues. work practices, as a tool to enhance its
responsible for developing the firms Teamwork is very important in legal work, chosen approach to performance.
particular performance ethos. which is normally organised around SUPPORTING WORKPLACE PERFORMANCE
specialisms. At Pannone & Partners - these WITH OPENNESS AND COMMUNICATION The one-site approach has been most useful
At the conceptual level, most effective ideas include commercial litigation, insolvency, Joy Kingsley is keen to encourage an in enabling the firm's culture to drive
are often quite simple, and Kingsleys personal injury, family and intellectual extremely open workplace in which performance. However, it has also put the
approach is no different. Fundamentally, property. Normally, good performance would information and ideas are allowed to flow firm at a potential disadvantage, as it may not
Kingsley sets out to create an excellent be measured by the results of each team, freely among all staff. Dobson explained be able to offer the same kind of service to
working environment so that all staff such as the value of contracts. However, the that, You will get to know just about clients in other localities. Pannone & Partners
partners and other employees alike can firm places an emphasis on fairness when it everything, though sometimes this can therefore developed its own proprietary
work effectively together as a closely-knit comes to judging performance. Performance create some difficulties. But, as a general software to overcome this disadvantage.
unit, all under one roof. Within this incentives are not based upon the amount of practice, what a fantastic thing And The software essentially enables the firm to
organisational format, hard work, billing, but on doing a job well. because Joy does it, everybody else does it. manage, maintain and serve clients via the
informality, good communication, People just love openness to information internet on a national basis.
participation, fairness and a good work-life The potential problem with legal work is that and discussion.
balance are all basic ingredients of a high if billing were the sole criterion for The software is very important for Pannone
performing workplace. To this end, good performance, then all lawyers would cherry A new partner once commented, during his & Partners as complaints by clients would
performance is not only rewarded financially pick their work. In other words, they would induction to the firm, that secretaries at not be acceptable within the quality
through bonuses but also through more do the work which they thought was easiest Pannone & Partners could tell him more assurance process. It is vital to create a
time off for private pursuits and other to bill and which had the largest billing about the financial report than he had ever quality audit trail for the clients, within an
activities outside work. Indeed, Kingsley potential, as opposed to the work which was known as a co-owner of his previous firm. easily accessible environment. Clients want
emphasises the latter over the former. more difficult or, on the face of it, less

50 51
to be able to look at their files over the
internet. They want to see what were doing
almost at the time of our doing it. The clients
demand incredibly high standards for
reporting back to them e.g. how often they
have to be contacted, and what quality CASE STUDY
standards have to be adhered to. The
software enables us to serve clients QUEST DIAGNOSTICS
nationally without necessarily having
local offices.

One can observe the different efforts that Service/Product: Clinical trials, diagnostic products
have been made to maintain an effective but and services
simple approach to performance. The few
devices that Pannone & Partners has to drive Turnover: 32.6m
performance are all geared towards Size of the workforce: 243 employees
supporting the work ethos that the firm Earning 35,000 p.a.: 12%
wants to pursue. Therefore, if we contend
that a happy, well-balanced and highly Famous for: Quality service and systems to cater for a
committed staff is the basic ingredient for a global client base
competitive and high performing workplace, The business strategy: Quality service, innovation and
then Pannone & Partners is well on its way workforce diversity for global competitive advantage
to winning the race. Pannone & Partners
work-life balance and staff retention strategy
is reflected in their position in The Sunday High performance learning points:
Times 100 Best Companies to Work For 2004 Use of various systems to create the quality necessary to
survey, with their number one spot in terms achieve success in a highly regulated industry and build a very
of lowest numbers of staff reporting that particular business culture;
they would leave the company tomorrow if Use of a Road Map' to define targets and systems to meet
they had another job (12%) and reporting business goals;
work-related stress (15%). Use of flexible and innovative work organisation to meet the
needs of a global market;
Use of a single review system to link performance and
personal development to reward;
Use of measurable indicators to link progress in workforce
diversity to organisational goals as defined by the Road Map.

Quality service, innovation and workforce diversity for global


competitive advantage

Having a formal workforce diversity policy became a reality. When Quest Diagnostics
and programme is extremely rare in most was rated one of the best 50 small
industries. Not only has Quest Diagnostics employers to work for in the UK.
established such a forward-looking policy, it
has also achieved one of the goals that it set Quest Diagnostics is an international leading
out to achieve within its workforce diversity company of biomedical diagnostic testing,
programme - namely, becoming one of the information and services. Their clients
best companies to work for. In 2004, this goal include patients and consumers, doctors,

52 53
to be able to look at their files over the
internet. They want to see what were doing
almost at the time of our doing it. The clients
demand incredibly high standards for
reporting back to them e.g. how often they
have to be contacted, and what quality CASE STUDY
standards have to be adhered to. The
software enables us to serve clients QUEST DIAGNOSTICS

nationally without necessarily having


local offices.

One can observe the different efforts that Service/Product: Clinical trials, diagnostic products

have been made to maintain an effective but and services

simple approach to performance. The few


devices that Pannone & Partners has to drive Turnover: 32.6m

performance are all geared towards Size of the workforce: 243 employees

supporting the work ethos that the firm Earning 35,000 p.a.: 12%

wants to pursue. Therefore, if we contend


that a happy, well-balanced and highly Famous for: Quality service and systems to cater for a

committed staff is the basic ingredient for a global client base

competitive and high performing workplace, The business strategy: Quality service, innovation and

then Pannone & Partners is well on its way workforce diversity for global competitive advantage

to winning the race. Pannone & Partners


work-life balance and staff retention strategy
is reflected in their position in The Sunday High performance learning points:
Times 100 Best Companies to Work For 2004 Use of various systems to create the quality necessary to
survey, with their number one spot in terms achieve success in a highly regulated industry and build a very
of lowest numbers of staff reporting that particular business culture;
they would leave the company tomorrow if Use of a Road Map' to define targets and systems to meet
they had another job (12%) and reporting business goals;
work-related stress (15%). Use of flexible and innovative work organisation to meet the
needs of a global market;
Use of a single review system to link performance and
personal development to reward;
Use of measurable indicators to link progress in workforce
diversity to organisational goals as defined by the Road Map.

Quality service, innovation and workforce diversity for global

competitive advantage

Having a formal workforce diversity policy became a reality. When Quest Diagnostics
and programme is extremely rare in most was rated one of the best 50 small
industries. Not only has Quest Diagnostics employers to work for in the UK.
established such a forward-looking policy, it
has also achieved one of the goals that it set Quest Diagnostics is an international leading
out to achieve within its workforce diversity company of biomedical diagnostic testing,
programme - namely, becoming one of the information and services. Their clients
best companies to work for. In 2004, this goal include patients and consumers, doctors,

52 53
hospitals, pharmaceutical companies, biotech Quest Diagnostics has adopted a quality For example, quality delivery is underpinned success of the company. The bonus scheme
companies, health insurers, employers and service approach to secure the business of by specific targets, as well as the adoption of is based partly on the local business unit's
government agencies. Although the testing its customers. This approach means that it quality systems. Specific targets may include financial results and partly on the corporate
facilities in the UK are located in the south achieves its values and goals through its report amendment reduction by x per cent financial results of Quest Diagnostics world
east of England, its operation covers samples people and flexible approaches to reports that require amendments mean that wide USA, UK and Europe, and on
from wherever Quest Diagnostics operates in customers needs. Our quality approach the completion of a job is delayed. Quality achievement of operational goals. And
Europe and beyond. means that whoever is contracting our systems may include the use of Six Sigma depending on how each business unit
service they can to be absolutely 100% (a data-driven quality control technique) as a performs, employees can earn 10% of their
Quest Diagnostics achieved its best confident in the quality of service that we tool for operation as well as for building base salary if they achieve all the goals and
employer goal against a context of difficult provide the 100% confidence goal is the business culture. Fairley emphasised that as targets, up to a maximum of15% if they
circumstances. Recent times have been very only thing that differentiates between a result of these activities and systems, We exceed all targets.
difficult for the industry as a whole. Many ourselves and our competitors, Linda can demonstrate to the clients that whatever
companies continued to suffer from the Fairley, the Human Resources Director sample you send here, we treat in the same INNOVATION AND BUSINESS
global business downturn after 9/11. Equally, explained. The quality focus in fact drives way regardless of whether it comes in on a PERFORMANCE
the many pharmaceutical company mergers everything Quest Diagnostics does, including Monday or a Friday, January or June, you Innovation at Quest Diagnostics takes many
took place leading to generally lower levels the way Quest Diagnostics markets itself. can be confident of our results and the forms and it may involve processes or
of research and development activities, plus quality of the work If you send a sample products. The Road Map provides some
combined and rationalised operations. As a QUALITY IN EVERY SENSE to the US or the UK youll get exactly the examples of the types of innovation:
result, testing activities also declined Very few people would realise that same quality results. accelerating the process of development of
significantly. By maintaining rigorous effort diagnostic testing is the starting point of DNA extraction; increasing the number of
in applying its core values, of which quality quality patient care management. Quality PERFORMANCE, MOTIVATION tests in a particular area of testing;
and innovation are crucial, Quest Diagnostics service at the diagnostic testing stage allows AND REWARDS identifying partnerships for better services or
has seen strong financial performance in doctors to detect disease earlier, make Employees performance is established products, and adopting technology to enable
2004, which was reflected in global earnings diagnoses more accurately, prescribe through a review process. This review then new services.
per share up 20% from 2003. therapies sooner and monitor results with links to two elements: continuous
better information. Every client, whether in development for the staff concerned and The last item is an interesting illustration of
THE INDUSTRIAL CONTEXT AND QUEST the private sector or public hospitals, relies performance feedback. The review is a innovation at Quest Diagnostics. The service
DIAGNOSTICS' BUSINESS STRATEGY on this foundation to deliver their quality standard meeting between managers and at Quest Diagnostics emphasises not just the
The clinical testing industry has a particular care. Establishing this connection means that employees in a particular business unit to quality, but also consistent quality with fast
environment that makes gaining a Quest Diagnostics can secure the business. discuss various aspects of their work in the turnaround time. This is particularly
competitive advantage an interesting period under review. The outcome includes a important to make the global operation of
endeavour. On the one hand, the industry Not only does Quest Diagnostics recognise personal development plan for the following the different testing facilities seamless and
has to comply with stringent standards and this link, it educates its workforce that quality year. The personal development plan defines irrelevant to the location and time zone of
regulations. This means that, in comparison delivery underpins their systems and is the what developments will take place and also a the customers.
to other industries, there is less room for any reason behind their success. A lot of what rating based on the previous years
vendor to differentiate its services from its the industry does is driven by the regulatory performance. Already, Quest Diagnostics operates on a
competitors. Everyone has to have high bodies and following standards often leads seven-work-days-a-week pattern. Working
standards. On the other hand, there is plenty to the misunderstanding that it is enough to Depending on the budget allocation, the quicker is one thing, but working quicker and
of room to innovate technologically for new be compliant. Quest Diagnostics knows that, performance rating may attract a salary bringing the results to the customers in the
services and better testing of products. It is in this sense, standards are in fact a increase. So, a commendable rating might form they want is even more critical. Quest
important that companies innovate to stay common denominator. Exceeding the lead to an x percent increase in salary. Diagnostics therefore introduced a report
ahead of rivals in the industry. minimum will win business customers over. Sometimes its not so much the salary system online so that the customers can see
increase that the workers are motivated by, their data in real time'. This means that for
On top of this, a large part of the demand in As a result of this quality strategy, Quest because the increases are in line with general those customers who do not want to wait for
the industry is of a derived demand nature. Diagnostics has a specific Road Map to market increases. Fairley commented. A lot a lab report to be posted or faxed to them,
Business volume is highly dependent upon performance, supported by specific targets of employees are more motivated by the they can track the results by logging on to
the research and development activities of under five headings quality of service actual performance rating they get. They the internet and monitor the progress of the
the large international pharmaceutical comes first, followed by satisfied employees, want to be an excellent or an outstanding. test online. The customers have been most
companies. When changes such as mergers satisfied customers, aggressive innovation impressed, and the innovation has attracted
take place, this can substantially affect the and profitable growth. By hitting targets There is another source of recognition, a great deal of positive feedback.
future of the clinical testing companies if under each heading each year, Quest which is in the form of a bonus. This is a
they are not sufficiently diversified. There is Diagnostics is making progress towards its practice introduced from the US parent However, the most interesting point here is
also a cyclical pattern in which there can be performance Road Map. company and it has now become a global not the innovation itself. It is the way that
a period of mergers, which is followed by a scheme. By comparison, the bonus scheme innovation has been formalised into the
period of consolidation and expansion, when is a more explicit and important recognition Road Map. The Road Map does not restrict
business will increase again. of employees' contribution to the financial innovation as, by definition, innovation takes

54 55
hospitals, pharmaceutical companies, biotech Quest Diagnostics has adopted a quality For example, quality delivery is underpinned success of the company. The bonus scheme
companies, health insurers, employers and service approach to secure the business of by specific targets, as well as the adoption of is based partly on the local business unit's
government agencies. Although the testing its customers. This approach means that it quality systems. Specific targets may include financial results and partly on the corporate
facilities in the UK are located in the south- achieves its values and goals through its report amendment reduction by x per cent financial results of Quest Diagnostics world
east of England, its operation covers samples people and flexible approaches to reports that require amendments mean that wide USA, UK and Europe, and on
from wherever Quest Diagnostics operates in customers needs. Our quality approach the completion of a job is delayed. Quality achievement of operational goals. And
Europe and beyond. means that whoever is contracting our systems may include the use of Six Sigma depending on how each business unit
service they can to be absolutely 100% (a data-driven quality control technique) as a performs, employees can earn 10% of their
Quest Diagnostics achieved its best confident in the quality of service that we tool for operation as well as for building base salary if they achieve all the goals and
employer goal against a context of difficult provide the 100% confidence goal is the business culture. Fairley emphasised that as targets, up to a maximum of15% if they
circumstances. Recent times have been very only thing that differentiates between a result of these activities and systems, We exceed all targets.
difficult for the industry as a whole. Many ourselves and our competitors, Linda can demonstrate to the clients that whatever
companies continued to suffer from the Fairley, the Human Resources Director sample you send here, we treat in the same INNOVATION AND BUSINESS
global business downturn after 9/11. Equally, explained. The quality focus in fact drives way regardless of whether it comes in on a PERFORMANCE
the many pharmaceutical company mergers everything Quest Diagnostics does, including Monday or a Friday, January or June, you Innovation at Quest Diagnostics takes many
took place leading to generally lower levels the way Quest Diagnostics markets itself. can be confident of our results and the forms and it may involve processes or
of research and development activities, plus quality of the work If you send a sample products. The Road Map provides some
combined and rationalised operations. As a QUALITY IN EVERY SENSE to the US or the UK youll get exactly the examples of the types of innovation:
result, testing activities also declined Very few people would realise that same quality results. accelerating the process of development of
significantly. By maintaining rigorous effort diagnostic testing is the starting point of DNA extraction; increasing the number of
in applying its core values, of which quality quality patient care management. Quality PERFORMANCE, MOTIVATION tests in a particular area of testing;
and innovation are crucial, Quest Diagnostics service at the diagnostic testing stage allows AND REWARDS identifying partnerships for better services or
has seen strong financial performance in doctors to detect disease earlier, make Employees performance is established products, and adopting technology to enable
2004, which was reflected in global earnings diagnoses more accurately, prescribe through a review process. This review then new services.
per share up 20% from 2003. therapies sooner and monitor results with links to two elements: continuous
better information. Every client, whether in development for the staff concerned and The last item is an interesting illustration of
THE INDUSTRIAL CONTEXT AND QUEST the private sector or public hospitals, relies performance feedback. The review is a innovation at Quest Diagnostics. The service
DIAGNOSTICS' BUSINESS STRATEGY on this foundation to deliver their quality standard meeting between managers and at Quest Diagnostics emphasises not just the
The clinical testing industry has a particular care. Establishing this connection means that employees in a particular business unit to quality, but also consistent quality with fast
environment that makes gaining a Quest Diagnostics can secure the business. discuss various aspects of their work in the turnaround time. This is particularly
competitive advantage an interesting period under review. The outcome includes a important to make the global operation of
endeavour. On the one hand, the industry Not only does Quest Diagnostics recognise personal development plan for the following the different testing facilities seamless and
has to comply with stringent standards and this link, it educates its workforce that quality year. The personal development plan defines irrelevant to the location and time zone of
regulations. This means that, in comparison delivery underpins their systems and is the what developments will take place and also a the customers.
to other industries, there is less room for any reason behind their success. A lot of what rating based on the previous years
vendor to differentiate its services from its the industry does is driven by the regulatory performance. Already, Quest Diagnostics operates on a
competitors. Everyone has to have high bodies and following standards often leads seven-work-days-a-week pattern. Working
standards. On the other hand, there is plenty to the misunderstanding that it is enough to Depending on the budget allocation, the quicker is one thing, but working quicker and
of room to innovate technologically for new be compliant. Quest Diagnostics knows that, performance rating may attract a salary bringing the results to the customers in the
services and better testing of products. It is in this sense, standards are in fact a increase. So, a commendable rating might form they want is even more critical. Quest
important that companies innovate to stay common denominator. Exceeding the lead to an x percent increase in salary. Diagnostics therefore introduced a report
ahead of rivals in the industry. minimum will win business customers over. Sometimes its not so much the salary system online so that the customers can see
increase that the workers are motivated by, their data in real time'. This means that for
On top of this, a large part of the demand in As a result of this quality strategy, Quest because the increases are in line with general those customers who do not want to wait for
the industry is of a derived demand nature. Diagnostics has a specific Road Map to market increases. Fairley commented. A lot a lab report to be posted or faxed to them,
Business volume is highly dependent upon performance, supported by specific targets of employees are more motivated by the they can track the results by logging on to
the research and development activities of under five headings quality of service actual performance rating they get. They the internet and monitor the progress of the
the large international pharmaceutical comes first, followed by satisfied employees, want to be an excellent or an outstanding. test online. The customers have been most
companies. When changes such as mergers satisfied customers, aggressive innovation impressed, and the innovation has attracted
take place, this can substantially affect the and profitable growth. By hitting targets There is another source of recognition, a great deal of positive feedback.
future of the clinical testing companies if under each heading each year, Quest which is in the form of a bonus. This is a
they are not sufficiently diversified. There is Diagnostics is making progress towards its practice introduced from the US parent However, the most interesting point here is
also a cyclical pattern in which there can be performance Road Map. company and it has now become a global not the innovation itself. It is the way that
a period of mergers, which is followed by a scheme. By comparison, the bonus scheme innovation has been formalised into the
period of consolidation and expansion, when is a more explicit and important recognition Road Map. The Road Map does not restrict
business will increase again. of employees' contribution to the financial innovation as, by definition, innovation takes

54 55
place in many circumstances. What the Road As well as the benefits already mentioned,
Map does is to direct a collective focus on workforce diversity has made impacts in
the importance of achieving high level many other areas of Quest Diagnostics
business performance through innovation, operation. For example, Quest Diagnostics
and the targets are just a start. And most does not have an employee association.
important of all is that the effort for Better communication and industrial CASE STUDY
innovation at least for those targeted in the
Road Map is measured. This is a very
relations, as Quest Diagnostics shows, can
be built by mechanisms such as workforce
ST. LUKES
different approach to most other companies diversity and employees' satisfaction as a
where it is accepted that innovation is more performance goal.
organic and fluid. The consequences are that Service/Product: Advertising agency
most organisations simply focus on the Diversity is not a management-led initiative.
Turnover: 19m
conditions for innovation and the recognition There is a Diversity Committee, which is
for it. Quest Diagnostics shows that you can made up of employees at the grass roots Size of the workforce: 80 employees
approach innovation differently. level. The Committee comes up with ideas Earning 35,000 p.a.: 48%
and it looks at the different elements that Famous for: Social responsibility, creativity and
WORKFORCE DIVERSITY AND make up diversity and decides each year co-ownership by its employees
PERFORMANCE what the company should try to improve.
As Quest Diagnostics has recognised that the So this year for example, one of the goals The business strategy: Sustaining performance through an
basis for quality work is the ability to get the that the Committee has set is to investigate innovative culture
best involvement from its workforce, then how possible it is to obtain the two-tick
workforce diversity has become one of the symbol (for disabled workers), Fairley High performance learning points:
main vehicles to establishing the link explained. They set targets each year and,
Challenge conventional models of managing an advertising
between workplace performance and human at the end of the year, the company will
agency in order achieve high levels of creativity;
resource practices in an organisation. review each business units diversity plan
and whether we achieved what we set out Use work and organisational re-design to experiment with new
Diversity at Quest Diagnostics is a formal to achieve. ways of supporting employee development and creativity;
policy of inclusion, and it is fundamentally Focus on delivering creative solutions to meet clients' needs;
about valuing the strengths each individual As a case study, Quest Diagnostics has much Innovative concept of teams is designed to ensure high levels
brings to the business, and striving to create to offer in many aspects of its operation - of client retention;
a work environment where each individual e.g. service quality, flexible working, staff
Created support systems necessary to enhance the
can succeed and contribute. Through development and innovation. However, the
effectiveness of these client teams;
inclusion, diversity creates a means for formalisation of workforce diversity and
higher employee satisfaction for all. Through approach to innovation are worthy to be Use culture of social responsibility, trust and accountability,
inclusion, diversity also creates a business singled out as unusual and inspiring. While together with co-ownership, to cement the common interests
case as Quest Diagnostics has the workforce many companies are still thinking only about of workers and the organisation;
to tackle its ever-increasingly diverse compliance with equal opportunities Use of a variety of forms of learning to support and
business environment globally and legislation, Quest Diagnostics seems to be grow creativity.
professionally. The 4 Rs of workforce thinking a few years ahead. But,
diversity respect, reputation, representation fundamentally, workforce diversity makes
and results are measurable and built into perfect sense for a company which is keen to
the Road Map to bring specific achievement derive performance from people and
to the organisation. For example, respect perform business on a global scale.
leads to specific diversity education in the A case of sustaining performance through an innovative culture
organisation; reputation leads to the
recognition of best employer;
representation leads to recruitment and
development practices; results should be INDUSTRIAL CONTEXT AND BUSINESS The first thing that hits you as you enter St.
demonstrated by critical business feedback STRATEGY Luke's building is the absence of a reception
such as employees and customers St. Lukes was created as a co-operative in area - you are immediately in the heart of the
satisfaction surveys. 1996 and rapidly achieved the status of a organisation.
leading-edge company using innovative
practices. St. Lukes is about using the Having grown to 120 employees from the
creativity of its co-owners to produce initial 26 co-owners in the boom years of the
marketing solutions for its clients in the industry it has since shrunk to 80 as it
extremely competitive world of advertising. weathered the recent recession in marketing

56 57
place in many circumstances. What the Road As well as the benefits already mentioned,
Map does is to direct a collective focus on workforce diversity has made impacts in
the importance of achieving high level many other areas of Quest Diagnostics
business performance through innovation, operation. For example, Quest Diagnostics
and the targets are just a start. And most does not have an employee association.
important of all is that the effort for Better communication and industrial CASE STUDY
innovation at least for those targeted in the
Road Map is measured. This is a very
relations, as Quest Diagnostics shows, can
be built by mechanisms such as workforce
ST. LUKES

different approach to most other companies diversity and employees' satisfaction as a


where it is accepted that innovation is more performance goal.
organic and fluid. The consequences are that Service/Product: Advertising agency
most organisations simply focus on the Diversity is not a management-led initiative.
Turnover: 19m
conditions for innovation and the recognition There is a Diversity Committee, which is
for it. Quest Diagnostics shows that you can made up of employees at the grass roots Size of the workforce: 80 employees
approach innovation differently. level. The Committee comes up with ideas Earning 35,000 p.a.: 48%
and it looks at the different elements that Famous for: Social responsibility, creativity and
WORKFORCE DIVERSITY AND make up diversity and decides each year co-ownership by its employees
PERFORMANCE what the company should try to improve.
As Quest Diagnostics has recognised that the So this year for example, one of the goals The business strategy: Sustaining performance through an
basis for quality work is the ability to get the that the Committee has set is to investigate innovative culture
best involvement from its workforce, then how possible it is to obtain the two-tick
workforce diversity has become one of the symbol (for disabled workers), Fairley High performance learning points:
main vehicles to establishing the link explained. They set targets each year and,
Challenge conventional models of managing an advertising
between workplace performance and human at the end of the year, the company will
agency in order achieve high levels of creativity;
resource practices in an organisation. review each business units diversity plan
and whether we achieved what we set out Use work and organisational re-design to experiment with new
Diversity at Quest Diagnostics is a formal to achieve. ways of supporting employee development and creativity;
policy of inclusion, and it is fundamentally Focus on delivering creative solutions to meet clients' needs;
about valuing the strengths each individual As a case study, Quest Diagnostics has much Innovative concept of teams is designed to ensure high levels
brings to the business, and striving to create to offer in many aspects of its operation - of client retention;
a work environment where each individual e.g. service quality, flexible working, staff
Created support systems necessary to enhance the
can succeed and contribute. Through development and innovation. However, the
effectiveness of these client teams;
inclusion, diversity creates a means for formalisation of workforce diversity and
higher employee satisfaction for all. Through approach to innovation are worthy to be Use culture of social responsibility, trust and accountability,
inclusion, diversity also creates a business singled out as unusual and inspiring. While together with co-ownership, to cement the common interests
case as Quest Diagnostics has the workforce many companies are still thinking only about of workers and the organisation;
to tackle its ever-increasingly diverse compliance with equal opportunities Use of a variety of forms of learning to support and
business environment globally and legislation, Quest Diagnostics seems to be grow creativity.
professionally. The 4 Rs of workforce thinking a few years ahead. But,
diversity respect, reputation, representation fundamentally, workforce diversity makes
and results are measurable and built into perfect sense for a company which is keen to
the Road Map to bring specific achievement derive performance from people and
to the organisation. For example, respect perform business on a global scale.
leads to specific diversity education in the A case of sustaining performance through an innovative culture

organisation; reputation leads to the


recognition of best employer;
representation leads to recruitment and
development practices; results should be INDUSTRIAL CONTEXT AND BUSINESS The first thing that hits you as you enter St.
demonstrated by critical business feedback STRATEGY Luke's building is the absence of a reception
such as employees and customers St. Lukes was created as a co-operative in area - you are immediately in the heart of the
satisfaction surveys. 1996 and rapidly achieved the status of a organisation.
leading-edge company using innovative
practices. St. Lukes is about using the Having grown to 120 employees from the
creativity of its co-owners to produce initial 26 co-owners in the boom years of the
marketing solutions for its clients in the industry it has since shrunk to 80 as it
extremely competitive world of advertising. weathered the recent recession in marketing

56 57
business. While its competitors were sacking CREATING THE CONDITIONS FOR To facilitate the effective operation of these management to co-owners and to sustaining
staff, St. Lukes successfully followed a policy SUSTAINED CREATIVITY teams, a whole set of support activities and creativity. Once they reached about 80 staff
of no redundancies. This is a small Having rejected the conventional approach practices have been established. Some of they found that they could not operate as a
company that lives and breathes innovation, to organising work in functional groupings, these central services include, the traffic and single group. They tried to reintroduce a
having made extensive use of high St. Luke's decided to group its work activities production departments which ensure system of two sub-groups but found that this
performance practices as a means of around the needs of the client. This meant projects happen in time, the art-buying was splitting the company culture. St Lukes
sustaining an innovative culture, although using teams dedicated to specific clients. department who manage all print has now settled on a more formal structure
the staff that use them would not necessarily As a minimum, these consist of an account communication, and the TV production consisting of a Board of four members with
use those terms. handler, a planner to conduct the research, department which manages all TV some external expertise brought in to
identify trends and come up with initial advertising. Of crucial importance is the fact provide a wider business perspective.
Although advertising companies depend on ideas, and creatives who work on the ideas that knowledge is made freely available. However, the decisions made by this group
creativity, they are generally somewhat for the advert and turn it into a reality. Once Everyone has access to business can be, and have been, challenged by the
conservative and traditional in their the client presents a problem, the goal of the information. The financial accounts of the Quest group. This consists of six staff
organisation. Typically, they have a Board at team created to work with them is to explore various teams are open to all staff. In shareholders who are voted for annually by
the top of the hierarchy, under them the that problem and deliver a creative solution addition, there is a knowledge manager who employees and their remit is to represent the
creatives who develop the adverts, under through a collaborative effort. is responsible for disseminating knowledge interests of shareholders (who are also the
them the planners who create the strategy, and information and whose job it is to keep workers of the company).
then the suits who handle the accounts and To facilitate this process, work is located in everyone up-to-date with information,
at the bottom the support staff. Each group brand-rooms', these are spaces dedicated to research and trends in the market. The The company has experimented with
of staff remains relatively self-contained in each client, where the team works together knowledge manager also works as a different forms of management system over
their own section. The way they operate is on the solution. These rooms provide the member of different client teams. Extensive the years. Initially a Board of two members,
that the client first presents the agency with shared space for interaction between team use is made of IT and email for plucked from experienced staff, was
a problem. The planners then develop a members, with the clients' materials all communications. However, as the use of established to meet legal requirements. They
strategy following which they present the around them. There, the team members workspaces and practices such as hot- later experimented with the use of groupings
creatives with the brief. Having produced the immerse themselves in the business of the desking encourage people to move around, of co-owners described as Chambers', there
solution, the creatives then hand it over to client, in their product or service and through most of the effective communication, was a knowledge chamber, an operational
the suits who have the job of selling it to that process of interaction create solutions. dissemination of information and decisions chamber and a welfare chamber and so on.
the client. Nina Kowalska, Social Entrepreneur at St. making, takes place through face-to-face These provided a forum where people met
Luke's commented, We believe that the interaction. to discuss business issues. This proved
St. Lukes set out to challenge this model. work is better because of the way that we unsatisfactory and was replaced with a
From the start, there was a very strong work. And if the work is better, the client will As for other management practices, these system of operational heads and more
commitment to being experimental, to doing be happier. If the client is happy, we will are continually changing. This is partly recently by the Board of four members.
things differently. As Nina Kowalska work with that client longer; we will have a because of the growth in the number of co- In addition to this formal arrangement,
explained, they threw out the conventional great relationship with them. Therefore, they owners, but primarily a result of the fact that the company uses focus groups to discuss
model, their fundamental belief was that will stay with us a longer time, and you if procedures are not working the co-owners business issues and it is not at all
Organisations are about individuals, and in know that will give us financial stability. For can, through their position in the company, uncommon for people talk to the Quest
order to get the best out of people you have the team, it is crucial that the client is question them. This usually instigates a group over a cup of tea. Informality still
to create an environment where people will involved in the process, thereby arriving at a debate within the company about what more reigns supreme.
thrive. We looked at every part and way that solution that is right for them and which they appropriate procedures would look like. In
we functioned in terms of relationships have actively been involved in producing, this way the staff are fully empowered and However, there is always room for
between different departments, creative giving the client ownership. It creates a participate in shaping management improvement and a genuine sense that if
processes, benefits of employees, and we strong relationship with the clients, resulting practices. The organisation has to be you experiment you have to be willing to
tried to see what we could do in each of in high levels of client retention. responsive to its members and it is likely admit if its not working, and you need to be
those areas. that this, more than anything else, has brave enough to try something different. For
The implementation of these high resulted in the extremely strong commitment example, there is an awareness that middle
The result is an organisation that continues performance work practices is not without its among staff to the organisation, with over management requires some help in
to re-invent itself in a purposive manner problems. It is hard work to bring together 80% describing their employment at St. developing their people management skills,
through the use of a strong culture. the right mix of people and skills in the Lukes as a dream job. and forms of peer mentoring and external
Underlying this process of change are at project teams and it is costly in terms of the mentoring are being looked at as possible
least two guiding principles. The first is to time spent in meetings and negotiating The growth in size of the organisation ways of tackling this. It is a hallmark of high
develop ways of working that ensure clients solutions. Many hours are spent discussing presented significant problems in performance work organisations that they
receive a creative solution to their options and strategies. However, these are maintaining the responsiveness of are constantly seeking better ways of
advertising needs. The second is to ensure seen as the necessary costs of producing managing people.
that the employees have space to develop creative solutions and high levels of client
their own creativity and learning. satisfaction.

58 59
business. While its competitors were sacking CREATING THE CONDITIONS FOR To facilitate the effective operation of these management to co-owners and to sustaining
staff, St. Lukes successfully followed a policy SUSTAINED CREATIVITY teams, a whole set of support activities and creativity. Once they reached about 80 staff
of no redundancies. This is a small Having rejected the conventional approach practices have been established. Some of they found that they could not operate as a
company that lives and breathes innovation, to organising work in functional groupings, these central services include, the traffic and single group. They tried to reintroduce a
having made extensive use of high St. Luke's decided to group its work activities production departments which ensure system of two sub-groups but found that this
performance practices as a means of around the needs of the client. This meant projects happen in time, the art-buying was splitting the company culture. St Lukes
sustaining an innovative culture, although using teams dedicated to specific clients. department who manage all print has now settled on a more formal structure
the staff that use them would not necessarily As a minimum, these consist of an account communication, and the TV production consisting of a Board of four members with
use those terms. handler, a planner to conduct the research, department which manages all TV some external expertise brought in to
identify trends and come up with initial advertising. Of crucial importance is the fact provide a wider business perspective.
Although advertising companies depend on ideas, and creatives who work on the ideas that knowledge is made freely available. However, the decisions made by this group
creativity, they are generally somewhat for the advert and turn it into a reality. Once Everyone has access to business can be, and have been, challenged by the
conservative and traditional in their the client presents a problem, the goal of the information. The financial accounts of the Quest group. This consists of six staff
organisation. Typically, they have a Board at team created to work with them is to explore various teams are open to all staff. In shareholders who are voted for annually by
the top of the hierarchy, under them the that problem and deliver a creative solution addition, there is a knowledge manager who employees and their remit is to represent the
creatives who develop the adverts, under through a collaborative effort. is responsible for disseminating knowledge interests of shareholders (who are also the
them the planners who create the strategy, and information and whose job it is to keep workers of the company).
then the suits who handle the accounts and To facilitate this process, work is located in everyone up-to-date with information,
at the bottom the support staff. Each group brand-rooms', these are spaces dedicated to research and trends in the market. The The company has experimented with
of staff remains relatively self-contained in each client, where the team works together knowledge manager also works as a different forms of management system over
their own section. The way they operate is on the solution. These rooms provide the member of different client teams. Extensive the years. Initially a Board of two members,
that the client first presents the agency with shared space for interaction between team use is made of IT and email for plucked from experienced staff, was
a problem. The planners then develop a members, with the clients' materials all communications. However, as the use of established to meet legal requirements. They
strategy following which they present the around them. There, the team members workspaces and practices such as hot later experimented with the use of groupings
creatives with the brief. Having produced the immerse themselves in the business of the desking encourage people to move around, of co-owners described as Chambers', there
solution, the creatives then hand it over to client, in their product or service and through most of the effective communication, was a knowledge chamber, an operational
the suits who have the job of selling it to that process of interaction create solutions. dissemination of information and decisions chamber and a welfare chamber and so on.
the client. Nina Kowalska, Social Entrepreneur at St. making, takes place through face-to-face These provided a forum where people met
Luke's commented, We believe that the interaction. to discuss business issues. This proved
St. Lukes set out to challenge this model. work is better because of the way that we unsatisfactory and was replaced with a
From the start, there was a very strong work. And if the work is better, the client will As for other management practices, these system of operational heads and more
commitment to being experimental, to doing be happier. If the client is happy, we will are continually changing. This is partly recently by the Board of four members.
things differently. As Nina Kowalska work with that client longer; we will have a because of the growth in the number of co- In addition to this formal arrangement,
explained, they threw out the conventional great relationship with them. Therefore, they owners, but primarily a result of the fact that the company uses focus groups to discuss
model, their fundamental belief was that will stay with us a longer time, and you if procedures are not working the co-owners business issues and it is not at all
Organisations are about individuals, and in know that will give us financial stability. For can, through their position in the company, uncommon for people talk to the Quest
order to get the best out of people you have the team, it is crucial that the client is question them. This usually instigates a group over a cup of tea. Informality still
to create an environment where people will involved in the process, thereby arriving at a debate within the company about what more reigns supreme.
thrive. We looked at every part and way that solution that is right for them and which they appropriate procedures would look like. In
we functioned in terms of relationships have actively been involved in producing, this way the staff are fully empowered and However, there is always room for
between different departments, creative giving the client ownership. It creates a participate in shaping management improvement and a genuine sense that if
processes, benefits of employees, and we strong relationship with the clients, resulting practices. The organisation has to be you experiment you have to be willing to
tried to see what we could do in each of in high levels of client retention. responsive to its members and it is likely admit if its not working, and you need to be
those areas. that this, more than anything else, has brave enough to try something different. For
The implementation of these high resulted in the extremely strong commitment example, there is an awareness that middle
The result is an organisation that continues performance work practices is not without its among staff to the organisation, with over management requires some help in
to re-invent itself in a purposive manner problems. It is hard work to bring together 80% describing their employment at St. developing their people management skills,
through the use of a strong culture. the right mix of people and skills in the Lukes as a dream job. and forms of peer mentoring and external
Underlying this process of change are at project teams and it is costly in terms of the mentoring are being looked at as possible
least two guiding principles. The first is to time spent in meetings and negotiating The growth in size of the organisation ways of tackling this. It is a hallmark of high
develop ways of working that ensure clients solutions. Many hours are spent discussing presented significant problems in performance work organisations that they
receive a creative solution to their options and strategies. However, these are maintaining the responsiveness of are constantly seeking better ways of
advertising needs. The second is to ensure seen as the necessary costs of producing managing people.
that the employees have space to develop creative solutions and high levels of client
their own creativity and learning. satisfaction.

58 59
PROVIDING THE CONDITIONS FOR come in, so were bringing people in community-based activities through a system
PERSONAL GROWTH constantly. Creatives are probably walking of social shares and the provision of time to
The second principle that underpins this around now going off with their camera and enable them participate in external activities.
company is that work should be organised doing stuff because thats the nature of the This currently involves 40% of staff. The
around the needs of individuals for personal people. They almost do their own training in company also implements an extensive
growth. This is seen as essential for the a funny kind of way. You know sometimes a environmental strategy, monitors emissions
personal development of staff but also creative might say Id really like to go on a and funds projects aimed at nurturing the
necessary to sustain the creativity and comedy course, or something and thats fine: next generation of creative talent.
high skill levels on which the business they can go and do that, Nina Kowalska
depends. To this end appraisals are taken commented. The important point here is that Maintaining this strong culture and its
very seriously, as indeed, is the idea of all learning is valued and efforts are made to associated high performance working
life-long learning. introduce opportunities for it whenever practices requires time and effort. Some of
possible in order to enhance the skills of this is through formal activities such as the
St. Lukes initially started with a 360o annual employees. making the agency more interesting fund
review, conducted by line managers and a which provides 1000 for each of 8 teams to
person nominated by the appraisee. An email As for rewards, salaries are determined come up with ideas to make the place more
was sent out to relevant staff asking for individually and then subject to an annual interesting. This can be a physical idea, a
information under five different criteria. increase determined by the pay review. After policy or an event and reflects the fact that
A written report was then prepared for six months with the company all new innovation is central. They are currently
discussion during the appraisal, covering employees obtain shares in the company exploring how they can make better use of
personal development, training needs, pay, and these are distributed every twelve space through the use of adjustable meeting
holidays etc. After five years there was some months to all staff. Here again the company spaces and are experimenting with a new
dissatisfaction as some staff felt their is continually seeking to improve its internet system that will provide virtual
appraisals had been hurried, while others practices. Under consideration is the use of a brand rooms, accessible by their clients.
felt they were more thorough. This base salary supplemented by individual and
dissatisfaction was important because business performance components, but Driving this is a central concern about
the appraisals affected their personal there remain problems of how you measure people: Its about people, it's about
development and pay review. To counter this, individual performance and so on to be individuals who have got passions and
a more formalised and thorough approach overcome. beliefs, who really care about things beyond
was developed. In addition to the annual advertising, frankly. You know, for a lot of
review for those who have an identified CREATING A CULTURE OF COMMITMENT people, being here is a tool to do other
development need, there is 4-6 month check AND TRUST TO WELD THE CO-OWNERS things in life, and it just so happens that this
(known as an MOT) on progress. TOGETHER is a really great place to work and we do
At St. Lukes, change is continuous and some great work, but actually their passions
Other support for lifelong learning takes a regarded as central to the generation of the lie elsewhere as with most people, Nina
number of forms. 150 is provided annually creativity that provide its competitive Kowalska commented.
for staff to make themselves more advantage. Trust and accountability are at
interesting which can be spent on almost the core of this culture. Staff are trusted to To maintain such a culture means celebrating
any relevant activity. Training courses are work from home, to determine when they achievements when you win pitches and
used where appropriate, for example for need time off. In return their commitment is galvanising people when they are a bit flat,
developing time management, social 100%. The company aims to provide an perhaps after they have just lost one. It also
communication skills and writing skills. attractive working environment which means continually changing the rules,
The planners all go through formal courses reflects its commitment to the staff. Yoga practices and procedures to ensure that all
provided by the Institute of Practitioners classes are provided once a week, aerobics staff are fully motivated to give their best.
of Advertising (IPA) and they also use a twice a week, there is an excellent caf
similar course provided by the IPA for which provides subsidised healthy food, St Lukes is an organisation dedicated to
account handlers. free fruit and breakfast. Each employee is sustaining its market position through
provided with access to a confidential innovation. To achieve this, it has built a
However, much of the learning that takes helpline which can give advice on a range culture that focuses firmly on the clients and
place is through more ad hoc and informal of issues from personal hobbies to taxation, their needs. To ensure that the solutions
activities. This is especially important for the house purchase, mortgages, legal matters as provided to their clients are creative, St
creatives. You know any training that well as counselling. Lukes has taken the time and trouble to
creatives do is giving them access to stuff guarantee that the development of such
that is going to stimulate them, so we have a The commitment to environmental and creativity is encouraged and fully supported
really extensive library, we have people who social issues is also strong. St. Lukes by the company.
organise trips to galleries, we have artists supports staff involvement in external

60 61
PROVIDING THE CONDITIONS FOR come in, so were bringing people in community-based activities through a system
PERSONAL GROWTH constantly. Creatives are probably walking of social shares and the provision of time to
The second principle that underpins this around now going off with their camera and enable them participate in external activities.
company is that work should be organised doing stuff because thats the nature of the This currently involves 40% of staff. The
around the needs of individuals for personal people. They almost do their own training in company also implements an extensive
growth. This is seen as essential for the a funny kind of way. You know sometimes a environmental strategy, monitors emissions
personal development of staff but also creative might say Id really like to go on a and funds projects aimed at nurturing the
necessary to sustain the creativity and comedy course, or something and thats fine: next generation of creative talent.
high skill levels on which the business they can go and do that, Nina Kowalska
depends. To this end appraisals are taken commented. The important point here is that Maintaining this strong culture and its
very seriously, as indeed, is the idea of all learning is valued and efforts are made to associated high performance working
life-long learning. introduce opportunities for it whenever practices requires time and effort. Some of
possible in order to enhance the skills of this is through formal activities such as the
St. Lukes initially started with a 360o annual employees. making the agency more interesting fund
review, conducted by line managers and a which provides 1000 for each of 8 teams to
person nominated by the appraisee. An email As for rewards, salaries are determined come up with ideas to make the place more
was sent out to relevant staff asking for individually and then subject to an annual interesting. This can be a physical idea, a
information under five different criteria. increase determined by the pay review. After policy or an event and reflects the fact that
A written report was then prepared for six months with the company all new innovation is central. They are currently
discussion during the appraisal, covering employees obtain shares in the company exploring how they can make better use of
personal development, training needs, pay, and these are distributed every twelve space through the use of adjustable meeting
holidays etc. After five years there was some months to all staff. Here again the company spaces and are experimenting with a new
dissatisfaction as some staff felt their is continually seeking to improve its internet system that will provide virtual
appraisals had been hurried, while others practices. Under consideration is the use of a brand rooms, accessible by their clients.
felt they were more thorough. This base salary supplemented by individual and
dissatisfaction was important because business performance components, but Driving this is a central concern about
the appraisals affected their personal there remain problems of how you measure people: Its about people, it's about
development and pay review. To counter this, individual performance and so on to be individuals who have got passions and
a more formalised and thorough approach overcome. beliefs, who really care about things beyond
was developed. In addition to the annual advertising, frankly. You know, for a lot of
review for those who have an identified CREATING A CULTURE OF COMMITMENT people, being here is a tool to do other
development need, there is 4-6 month check AND TRUST TO WELD THE CO-OWNERS things in life, and it just so happens that this
(known as an MOT) on progress. TOGETHER is a really great place to work and we do
At St. Lukes, change is continuous and some great work, but actually their passions
Other support for lifelong learning takes a regarded as central to the generation of the lie elsewhere as with most people, Nina
number of forms. 150 is provided annually creativity that provide its competitive Kowalska commented.
for staff to make themselves more advantage. Trust and accountability are at
interesting which can be spent on almost the core of this culture. Staff are trusted to To maintain such a culture means celebrating
any relevant activity. Training courses are work from home, to determine when they achievements when you win pitches and
used where appropriate, for example for need time off. In return their commitment is galvanising people when they are a bit flat,
developing time management, social 100%. The company aims to provide an perhaps after they have just lost one. It also
communication skills and writing skills. attractive working environment which means continually changing the rules,
The planners all go through formal courses reflects its commitment to the staff. Yoga practices and procedures to ensure that all
provided by the Institute of Practitioners classes are provided once a week, aerobics staff are fully motivated to give their best.
of Advertising (IPA) and they also use a twice a week, there is an excellent caf
similar course provided by the IPA for which provides subsidised healthy food, St Lukes is an organisation dedicated to
account handlers. free fruit and breakfast. Each employee is sustaining its market position through
provided with access to a confidential innovation. To achieve this, it has built a
However, much of the learning that takes helpline which can give advice on a range culture that focuses firmly on the clients and
place is through more ad hoc and informal of issues from personal hobbies to taxation, their needs. To ensure that the solutions
activities. This is especially important for the house purchase, mortgages, legal matters as provided to their clients are creative, St
creatives. You know any training that well as counselling. Lukes has taken the time and trouble to
creatives do is giving them access to stuff guarantee that the development of such
that is going to stimulate them, so we have a The commitment to environmental and creativity is encouraged and fully supported
really extensive library, we have people who social issues is also strong. St. Lukes by the company.
organise trips to galleries, we have artists supports staff involvement in external

60 61
change to meet new demands and its ability upside-down management, reflecting that
to bring together a workforce that can meet his lack of expertise in shoe repairs probably
these challenges. helps him to focus on the development of the
business and supporting his staff. Rather
Not only is Timpson successful in business, than focusing on mending shoes or cutting
it received two awards in 2004 for being one keys himself, John focuses on enabling
CASE STUDY of the best places to work ranked 2nd on others to provide a great service to
the European Great Place to Work list customers. I suppose the thing Ive learnt is
TIMPSON
and 6th on The Sunday Times 100 Best that its a great advantage in some ways to
Companies to Work For 2004 list. So where run a business that youre not capable of
does Timpson get its winning strategy from doing yourself. I cant repair shoes, I tried but
and what are the secret ingredients of Im useless. You can be just as effective as
Service/Product: High street shoe repair and key cutting
Timpsons success? long as you actually listen to people, stand
Turnover: 57.7m back and let other people get on with it.
Size of the workforce: 2869 employees John Timpson learned his business ideas the
hard but natural way as a sales assistant in This may appear a simple approach, but the
Earning 35,000 p.a.: 2%
the shoe shop in the 1960s. And there are no Timpson strategy is actually very elaborate
Famous for: A family business that transformed its original secrets to Timpson's success he wrote a as it is built on motivating and empowering
shoe business to a multi-product high street shop book, entitled Upside Down Management, staff to maximise sales while working
The business strategy: A people strategy for superior to tell everyone about his ideas. without the constraint of many rules. Firstly,
customer service and business performance we invest total authority in our shop staff to
THE INDUSTRIAL CONTEXT AND BUSINESS do what they think is best, no company rule
STRATEGY OF TIMPSON must get in the way. Secondly, we have to
High performance learning points: Having made a successful transformation amaze our customers. If we can do that
The ability to continue to diversify and to handle change is from selling shoes to shoe repairs in the with every customer, things will start to
crucial to continuous success; 1980s, the business environment for change. John gave the following example:
The application of upside down management to create Timpson continued to change. In the early If a kid comes into the shop and only has
leadership, empowerment and customer service; days, shoe repairs represented 95% of 10 from his saving tin to do an engraving
Combines the development of skills which are no longer widely
Timpson's turnover but this business has for his granny, our shop staff can take a
available such as shoe repairing, with the development of
since steadily declined. The shoe repairs decision to accept the business even though
effective business management skills for every employee;
market is now 10% of its former size. we would have charged a lot more under the
Timpson's strategy to address this has been normal circumstances. As a result, Timpson
Uses network organisation, to link geographically dispersed
to diversify into complementary services that does not advertise in the media. The aim of
shop units, in order to enhance competition among shop units.
it can deliver from its existing high street its quality service and empowerment
Units' performance is transparent to all and is rewarded
shops and to constantly seek new services to approach is to harness the power of their
through bonuses for achieving excellent performance;
replace declining demand. Key-cutting, customers and get them to do their
Continuous innovation used to enhance long-term engraving and watch repairs are examples of advertising. This means that if there are
competitiveness and viability. successful replacement services that have 250,000 customers a week, the target is
been developed. New services such as 250,000 word of mouth recommendations
locksmiths and jewellery repairs are for Timpson.
currently being put into place.
BUILD YOUR OWN STAFF FOR SUCCESS
Interestingly, despite the continuous change John Timpsons approach to business
in the variety of services provided, Timpson performance means that everyone runs the
The people strategy for superior customer service and has not altered its approach to building a business. But the question is: where do you
successful business; namely: a customer find the right staff? Recruitment can be a
business performance focused/quality service strategy. John problem. For a start, there are very few shoe
Timpson learned two things from his shop- repairers in the country and most of them
Timpson is one of the few British high street Now Timpson not only repairs shoes - the assistant days: customers are the beginning are probably already working for Timpson.
businesses that comes with a long family original service since the shoe retail business of everything a shop does; and managers Given its customer focus, Timpson is quite
history stretching back to 1868 when the ceased in 1987 - it also sells services in have to learn to delegate and instead clear on this: We dont recruit skills. We
first shop was opened in Manchester. The engraving, key-cutting, house signs, watch concentrate on supporting front line staff. develop them. We recruit personalities.
current chairman, John Timpson, is the repairs, signs and locksmiths. Since the Hence, he strongly adheres to the principle Timpson therefore looks for the right
fourth generation of the family who 1980s, the number of shops has grown from that because the people who serve our attitude to work e.g. outgoing, happy and
transformed Timpson from the original shoe 150 to 315 and this continuous diversification customers run the business, everyone else is having can-do attitudes.
business to a multi-product high street shop. and growth reflects Timpson's ability to there to help. John described this as

62 63
change to meet new demands and its ability upside-down management, reflecting that
to bring together a workforce that can meet his lack of expertise in shoe repairs probably
these challenges. helps him to focus on the development of the
business and supporting his staff. Rather
Not only is Timpson successful in business, than focusing on mending shoes or cutting
it received two awards in 2004 for being one keys himself, John focuses on enabling
CASE STUDY of the best places to work ranked 2nd on others to provide a great service to
the European Great Place to Work list customers. I suppose the thing Ive learnt is
TIMPSON and 6th on The Sunday Times 100 Best that its a great advantage in some ways to
Companies to Work For 2004 list. So where run a business that youre not capable of
does Timpson get its winning strategy from doing yourself. I cant repair shoes, I tried but
and what are the secret ingredients of Im useless. You can be just as effective as
Service/Product: High street shoe repair and key cutting
Timpsons success? long as you actually listen to people, stand
Turnover: 57.7m back and let other people get on with it.
Size of the workforce: 2869 employees John Timpson learned his business ideas the
hard but natural way as a sales assistant in This may appear a simple approach, but the
Earning 35,000 p.a.: 2%
the shoe shop in the 1960s. And there are no Timpson strategy is actually very elaborate
Famous for: A family business that transformed its original secrets to Timpson's success he wrote a as it is built on motivating and empowering
shoe business to a multi-product high street shop book, entitled Upside Down Management, staff to maximise sales while working
The business strategy: A people strategy for superior to tell everyone about his ideas. without the constraint of many rules. Firstly,
customer service and business performance we invest total authority in our shop staff to
THE INDUSTRIAL CONTEXT AND BUSINESS do what they think is best, no company rule
STRATEGY OF TIMPSON must get in the way. Secondly, we have to
High performance learning points: Having made a successful transformation amaze our customers. If we can do that
The ability to continue to diversify and to handle change is from selling shoes to shoe repairs in the with every customer, things will start to
crucial to continuous success; 1980s, the business environment for change. John gave the following example:
The application of upside down management to create Timpson continued to change. In the early If a kid comes into the shop and only has
leadership, empowerment and customer service; days, shoe repairs represented 95% of 10 from his saving tin to do an engraving
Combines the development of skills which are no longer widely
Timpson's turnover but this business has for his granny, our shop staff can take a
available such as shoe repairing, with the development of
since steadily declined. The shoe repairs decision to accept the business even though
effective business management skills for every employee;
market is now 10% of its former size. we would have charged a lot more under the
Timpson's strategy to address this has been normal circumstances. As a result, Timpson
Uses network organisation, to link geographically dispersed
to diversify into complementary services that does not advertise in the media. The aim of
shop units, in order to enhance competition among shop units.
it can deliver from its existing high street its quality service and empowerment
Units' performance is transparent to all and is rewarded
shops and to constantly seek new services to approach is to harness the power of their
through bonuses for achieving excellent performance;
replace declining demand. Key-cutting, customers and get them to do their
Continuous innovation used to enhance long-term engraving and watch repairs are examples of advertising. This means that if there are
competitiveness and viability. successful replacement services that have 250,000 customers a week, the target is
been developed. New services such as 250,000 word of mouth recommendations
locksmiths and jewellery repairs are for Timpson.
currently being put into place.
BUILD YOUR OWN STAFF FOR SUCCESS
Interestingly, despite the continuous change John Timpsons approach to business
in the variety of services provided, Timpson performance means that everyone runs the
The people strategy for superior customer service and has not altered its approach to building a business. But the question is: where do you
successful business; namely: a customer find the right staff? Recruitment can be a
business performance focused/quality service strategy. John problem. For a start, there are very few shoe
Timpson learned two things from his shop- repairers in the country and most of them
Timpson is one of the few British high street Now Timpson not only repairs shoes - the assistant days: customers are the beginning are probably already working for Timpson.
businesses that comes with a long family original service since the shoe retail business of everything a shop does; and managers Given its customer focus, Timpson is quite
history stretching back to 1868 when the ceased in 1987 - it also sells services in have to learn to delegate and instead clear on this: We dont recruit skills. We
first shop was opened in Manchester. The engraving, key-cutting, house signs, watch concentrate on supporting front line staff. develop them. We recruit personalities.
current chairman, John Timpson, is the repairs, signs and locksmiths. Since the Hence, he strongly adheres to the principle Timpson therefore looks for the right
fourth generation of the family who 1980s, the number of shops has grown from that because the people who serve our attitude to work e.g. outgoing, happy and
transformed Timpson from the original shoe 150 to 315 and this continuous diversification customers run the business, everyone else is having can-do attitudes.
business to a multi-product high street shop. and growth reflects Timpson's ability to there to help. John described this as

62 63
Recruitment includes a two-day residential The relationship between the area manager retail business. You have got the sales New ideas also come from a very different
course to ensure the right kinds of attitudes and the shop staff is one of the key figures every week. The performance is in angle. For example, since 2004 Timpson has
and behaviour are identified so that the performance drivers. Friday is the call day front of you. No one can escape from that. run a charity week and for every 10 in sales
quality service approach can be delivered. and the area manager is expected to call the So we know whats happening out there. Timpson donates 1 to charity. As well as
This approach has proved to be very reliable, shops and review the weeks sales As a result, Timpson has done away with being an act of charity, the gesture is
as over a third of the new recruits normally performance. Within Timpson how the performance-related type of annual Timpson's direct approach to its customers
come through recommendation of the successful a shop is in reaching its target is appraisal. The weekly sales figures make the in order to create a particular customer
existing workforce. interpreted as a reflection of the quality of performance appraisals redundant, though relationship. Since the scheme has been
the area managers support for the shop. other forms of development-related introduced the feedback from customers has
The real skills training begins with Timpson's meetings continue to take place between the been most positive.
own apprenticeship scheme, which lasts for A recent innovation at Timpson is the area managers and the shop staff.
22 weeks and everyone must complete. The quarterly Happy Index. This is an At the technology level, new practices and
Timpson Apprenticeship Scheme focuses on instrument that measures the mood' of shop INNOVATION FROM EVERYTHING YOU DO innovation are often used as a means to
critical success elements and these include staff by business area. As well as providing The nature of Timpson's business means tackle cost control. For example, the
the three levels of technical skills (including information on the morale of staff, the Index that innovation often occurs in the day-to- introduction of computer-assisted engraving
health and safety) for the four disciplines - also provides a rough measure of the day work environment. For John Timpson, has improved the quality and consistency of
e.g. shoe repairs, key-cutting and so on, plus relationship between the area manager and innovation can be found everywhere if one engraving products. More importantly, the
customer service and Timpson's culture the shop staff. Timpson regards this cares to look. For example, he was curious technology increased sales because
training. Much of the training is on the job information as very useful in improving the about the exceptionally high level of sales customers liked the products and Timpson
and is supported by Timpsons bespoke manager-staff performance. John Timpson for house signs in one area. John made a estimated that sales went up by 50% in some
training manuals. emphasised, The biggest problem you can visit to the shop and noticed that the shop areas. In order to introduce new technology,
have in our business is when the area had simply positioned a freestanding display again, Timpson relies on its in-house training
Timpson is keen to encourage staff to manager loses touch with the people. Yes, sign on the pavement outside the shop and courses and self-learning materials so that
develop and move up to the next level of the area manager is in an absolutely critical as a result sales doubled in this shop. skill training has the minimum impact on
training. Every time an employee achieves a position to look after the people.. daily operations.
higher level or a diploma in management, a In another instance, a shop had recorded
bonus point is awarded. This emphasis on PERFORMANCE DRIVER PAY AND BONUS an exceptionally high turnover in watch USING CHANGE TO ENHANCE
staff development is reflected by the THROUGH COMPETITION repairs soon after the service was launched. PERFORMANCE AND LONG-TERM VIABILITY
changing performance focus in Timpsons. If you examine the content of the Timpson The shop's turnover was thirty times better At Timpson, new product lines have ensured
John Timpson explained: My father used to weekly newsletter the major emphasis is on than the lowest performer. John visited the continuing profitability and performance.
tell me that if only we could sell one extra ranking the sales performance of the shop and discovered that the increased sales A number of important products/services
pair of shoes in each shop per day, we previous week. Each business discipline', were the result of the way staff talked to have been introduced in the last 10 years in
would have made a fortune. Now I tell my e.g. weekly sales, weekly profit of key- the customers. addition to shoe repairs. As well ensuring
son, James and everyone that success would cutting, watch repairs etc., has a ranking of the survival of the business, Timpson uses
be assured if we had a good manager in the top performers and there is also a yearly For most of these examples, John then these changes as opportunities to enhance
every shop. award event that formally recognises the returned to the office and wrote a training its main performance driver i.e. earnings
top performers. course to communicate the idea through the and bonuses. Because the bonus scheme is
EXCELLENT PERFORMANCE THROUGH business and this also reinforced how much so important as a performance driver, weve
WORK ORGANISATION These practices have instilled a sense of he valued staff ideas. In fact, John Timpson got to keep giving our people more chance
Performance is driven by a network of area informal competition within the organisation. writes a wide range of training manuals to earn more money. This is one of the
managers who are the key motivators for the It is always difficult to obtain sales figures which are also used to communicate drivers to develop the business, John
shop staff and their business. These for competitors, so in the absence of such Timpson's attitude to business and its Timpson explained. The shoe repairs
managers do not manage in the traditional information, internal sales figures serve a culture. These manuals serve many operation may not last another few years.
sense. Having picked the staff with the right' similar purpose. purposes. Firstly, they have bespoke training The recent introduction of locksmiths and
attitudes, the area manager is expected to content specific to Timpson's own operation jewellery operations are good examples of
support the shop staff in every way so that To reinforce this performance driver, and market conditions. Secondly, they what we have to do for our people. The
sales targets can be achieved. This means bonuses are paid out regularly whenever contain specific soft skills e.g. customer new operations allow staff to develop new
that the area manager has to have an in- targets are exceeded. The targets are not set focus and the Timpson culture on skills and maximise their level of income.
depth knowledge of their shop staff, they uniformly but interestingly, the target is performance. Thirdly, unlike other
need to reward and praise them, discuss proportional to the total wages in a particular organisations, Timpson relies on these In an interesting kind of way, the owner of
problems, be a good listener, organise social shop. In some areas, the bonus is worth training materials to communicate good the company is constantly seeking ways to
events, support apprentice training, lead by almost 80-90% of the basic wage. practices to every shops up and down the safeguard the company's long-term
example and so on. But most important of country. These practices are clearly competitiveness and viability, but the
all, they must gain the respect of their staff. The weekly sales figures are a key element performance-oriented as well as being an starting point is the welfare of its employees.
of many of the performance systems at innovation in their own right.
Timpson. This is the great thing about the

64 65
Recruitment includes a two-day residential The relationship between the area manager retail business. You have got the sales New ideas also come from a very different
course to ensure the right kinds of attitudes and the shop staff is one of the key figures every week. The performance is in angle. For example, since 2004 Timpson has
and behaviour are identified so that the performance drivers. Friday is the call day front of you. No one can escape from that. run a charity week and for every 10 in sales
quality service approach can be delivered. and the area manager is expected to call the So we know whats happening out there. Timpson donates 1 to charity. As well as
This approach has proved to be very reliable, shops and review the weeks sales As a result, Timpson has done away with being an act of charity, the gesture is
as over a third of the new recruits normally performance. Within Timpson how the performance-related type of annual Timpson's direct approach to its customers
come through recommendation of the successful a shop is in reaching its target is appraisal. The weekly sales figures make the in order to create a particular customer
existing workforce. interpreted as a reflection of the quality of performance appraisals redundant, though relationship. Since the scheme has been
the area managers support for the shop. other forms of development-related introduced the feedback from customers has
The real skills training begins with Timpson's meetings continue to take place between the been most positive.
own apprenticeship scheme, which lasts for A recent innovation at Timpson is the area managers and the shop staff.
22 weeks and everyone must complete. The quarterly Happy Index. This is an At the technology level, new practices and
Timpson Apprenticeship Scheme focuses on instrument that measures the mood' of shop INNOVATION FROM EVERYTHING YOU DO innovation are often used as a means to
critical success elements and these include staff by business area. As well as providing The nature of Timpson's business means tackle cost control. For example, the
the three levels of technical skills (including information on the morale of staff, the Index that innovation often occurs in the day-to- introduction of computer-assisted engraving
health and safety) for the four disciplines - also provides a rough measure of the day work environment. For John Timpson, has improved the quality and consistency of
e.g. shoe repairs, key-cutting and so on, plus relationship between the area manager and innovation can be found everywhere if one engraving products. More importantly, the
customer service and Timpson's culture the shop staff. Timpson regards this cares to look. For example, he was curious technology increased sales because
training. Much of the training is on the job information as very useful in improving the about the exceptionally high level of sales customers liked the products and Timpson
and is supported by Timpsons bespoke manager-staff performance. John Timpson for house signs in one area. John made a estimated that sales went up by 50% in some
training manuals. emphasised, The biggest problem you can visit to the shop and noticed that the shop areas. In order to introduce new technology,
have in our business is when the area had simply positioned a freestanding display again, Timpson relies on its in-house training
Timpson is keen to encourage staff to manager loses touch with the people. Yes, sign on the pavement outside the shop and courses and self-learning materials so that
develop and move up to the next level of the area manager is in an absolutely critical as a result sales doubled in this shop. skill training has the minimum impact on
training. Every time an employee achieves a position to look after the people.. daily operations.
higher level or a diploma in management, a In another instance, a shop had recorded
bonus point is awarded. This emphasis on PERFORMANCE DRIVER PAY AND BONUS an exceptionally high turnover in watch USING CHANGE TO ENHANCE
staff development is reflected by the THROUGH COMPETITION repairs soon after the service was launched. PERFORMANCE AND LONG-TERM VIABILITY
changing performance focus in Timpsons. If you examine the content of the Timpson The shop's turnover was thirty times better At Timpson, new product lines have ensured
John Timpson explained: My father used to weekly newsletter the major emphasis is on than the lowest performer. John visited the continuing profitability and performance.
tell me that if only we could sell one extra ranking the sales performance of the shop and discovered that the increased sales A number of important products/services
pair of shoes in each shop per day, we previous week. Each business discipline', were the result of the way staff talked to have been introduced in the last 10 years in
would have made a fortune. Now I tell my e.g. weekly sales, weekly profit of key- the customers. addition to shoe repairs. As well ensuring
son, James and everyone that success would cutting, watch repairs etc., has a ranking of the survival of the business, Timpson uses
be assured if we had a good manager in the top performers and there is also a yearly For most of these examples, John then these changes as opportunities to enhance
every shop. award event that formally recognises the returned to the office and wrote a training its main performance driver i.e. earnings
top performers. course to communicate the idea through the and bonuses. Because the bonus scheme is
EXCELLENT PERFORMANCE THROUGH business and this also reinforced how much so important as a performance driver, weve
WORK ORGANISATION These practices have instilled a sense of he valued staff ideas. In fact, John Timpson got to keep giving our people more chance
Performance is driven by a network of area informal competition within the organisation. writes a wide range of training manuals to earn more money. This is one of the
managers who are the key motivators for the It is always difficult to obtain sales figures which are also used to communicate drivers to develop the business, John
shop staff and their business. These for competitors, so in the absence of such Timpson's attitude to business and its Timpson explained. The shoe repairs
managers do not manage in the traditional information, internal sales figures serve a culture. These manuals serve many operation may not last another few years.
sense. Having picked the staff with the right' similar purpose. purposes. Firstly, they have bespoke training The recent introduction of locksmiths and
attitudes, the area manager is expected to content specific to Timpson's own operation jewellery operations are good examples of
support the shop staff in every way so that To reinforce this performance driver, and market conditions. Secondly, they what we have to do for our people. The
sales targets can be achieved. This means bonuses are paid out regularly whenever contain specific soft skills e.g. customer new operations allow staff to develop new
that the area manager has to have an in- targets are exceeded. The targets are not set focus and the Timpson culture on skills and maximise their level of income.
depth knowledge of their shop staff, they uniformly but interestingly, the target is performance. Thirdly, unlike other
need to reward and praise them, discuss proportional to the total wages in a particular organisations, Timpson relies on these In an interesting kind of way, the owner of
problems, be a good listener, organise social shop. In some areas, the bonus is worth training materials to communicate good the company is constantly seeking ways to
events, support apprentice training, lead by almost 80-90% of the basic wage. practices to every shops up and down the safeguard the company's long-term
example and so on. But most important of country. These practices are clearly competitiveness and viability, but the
all, they must gain the respect of their staff. The weekly sales figures are a key element performance-oriented as well as being an starting point is the welfare of its employees.
of many of the performance systems at innovation in their own right.
Timpson. This is the great thing about the

64 65
Human Resource Manager at Gore These principles are followed in all the local
commented. So confident are they of their plants and operations.
ability to sustain innovation that they have a
policy of moving out of product areas once BUILDING TRUST AND WORKING
their patents expire and other companies THROUGH TEAMS
start to compete on the basis of price, to In the UK, these principles provide the basis
devote their creative energies to developing for building extremely high levels of trust
CASE STUDY
new products. In this organisation, change is within the company between all the
W L GORE
the only constant. Their success is measured associates and leaders that comprise it.
not just by the ability of the company to These are manifest in the way in which work
make a profit but also by the number of is organised, in the way in which learning is
Service/Product: Gore-Tex manufacturer patents they register. supported, the ways in which work is
rewarded and in the unique way in which
Turnover: 26m
TURNING MANAGEMENT PRINCIPLES knowledge is shared, decisions made and
Size of the workforce: 426 employees ON THEIR HEAD communication is fostered. All this requires
Earning 35,000 p.a.: Not disclosed All this and more has been achieved through that substantial skills are built up among
the inversion of traditional management staff at all levels. Together these create a
Famous for: Inventing world-renowned high-performance
principles. This has been done so thoroughly powerful sense of identification with the
fabrics for leisure, industrial, electronic and medical
that at Gore there are no managers, no job company and attachment to its values. From
purposes
descriptions, no bosses to tell you what to this flows a high level of performance in the
The business strategy: Delivering continuous innovation do, just associates and leaders. Whereas in a form of constant innovation.
by turning management principles on their head conventional company an employee does
what he or she is told to do, at Gore their One of the keys to this form of work
associates do what is needed to make the organisation is the fact that the operating
High performance learning points:
whole organisation successful. In this units are kept small, ideally between 150 and
Unique form of work organisation designed to support organisation no one can release you to work 170 associates. All are members of multi-
employee collaboration and creativity; on a project because there is no fixed job to disciplinary teams, for example, an HR team,
Leaders replace managers to deliver high levels of be released from. At Gore you are not paid teams of engineers, manufacturing teams,
innovation; to do a job. You are rewarded for the but these are constantly changing in terms of
Use of informal communication to achieve high levels of contribution. Your colleagues see you their composition. Some are global in their
trust; making the success of the business. At Gore, membership, such as the IT team and the
Use of sponsors' to facilitate continuous development and
you are not allocated to a position of leadership team in fabrics, the latter being
training and achieve a close link between personal
authority over others. You achieve leadership made up of a German, American and UK
development and organisational needs;
by convincing others of the quality of your person. Most teams are local in that if a
ideas and your contribution to the goals of person comes up with the idea for a new
Remuneration system based on peer evaluation;
the business. This is how it is possible that product, say in connection with motorcycle
Uses strong organisational culture to underpin everything 50% of employees, when asked in an clothing, then he or she takes on the
that the company does. independent survey, described themselves leadership of that team, followed by others
as leaders. who have an interest or specialist knowledge
in the area. The result is that teams are
How has this been achieved? How is it constantly changing, creating an organisation
possible that half of all employees see that takes on an amoeba-like quality.
Delivering continuous innovation by turning management themselves as leaders? In part it is through
applying the lessons learnt by the founder Members of the team determine their
principles on their head Bill Gore, from his experience at DuPont. objectives, their mode of operating and their
He identified four guiding principles for work composition. If a person wishes to join a
INDUSTRIAL CONTEXT AND BUSINESS creative research and development and organisation in the company: new team, because they are interested in the
STRATEGY through getting close to their customers and Fairness to each other; idea and feel they would like to contribute to
This is the story of the UK branch of a US exploring new ways of satisfying their needs. Freedom to encourage people to grow in it, then they discuss their commitments to
multi-national company that for the last They have developed new products for next- knowledge and responsibility; their core team with other members and sort
three decades has achieved continuous generation electronics, for medical implants The ability to make commitments and how their commitments can be met while
innovation in its products. Starting with its as well as high-performance fabrics, we keep them; and freeing time for their involvement in the
unique textile, Gore-Tex, for which it is best provide the marketplace with differentiated Consultations with others in the company new team.
known, the company has created new products that add value to the customers before undertaking actions that would
fluoropolymer products by sustained business and make a profit, Ann Gillies, the affect the reputation of the company.

66 67
Human Resource Manager at Gore These principles are followed in all the local
commented. So confident are they of their plants and operations.
ability to sustain innovation that they have a
policy of moving out of product areas once BUILDING TRUST AND WORKING
their patents expire and other companies THROUGH TEAMS
start to compete on the basis of price, to In the UK, these principles provide the basis
devote their creative energies to developing for building extremely high levels of trust
CASE STUDY
new products. In this organisation, change is within the company between all the
W L GORE the only constant. Their success is measured associates and leaders that comprise it.
not just by the ability of the company to These are manifest in the way in which work
make a profit but also by the number of is organised, in the way in which learning is
Service/Product: Gore-Tex manufacturer patents they register. supported, the ways in which work is
rewarded and in the unique way in which
Turnover: 26m
TURNING MANAGEMENT PRINCIPLES knowledge is shared, decisions made and
Size of the workforce: 426 employees ON THEIR HEAD communication is fostered. All this requires
Earning 35,000 p.a.: Not disclosed All this and more has been achieved through that substantial skills are built up among
the inversion of traditional management staff at all levels. Together these create a
Famous for: Inventing world-renowned high-performance
principles. This has been done so thoroughly powerful sense of identification with the
fabrics for leisure, industrial, electronic and medical
that at Gore there are no managers, no job company and attachment to its values. From
purposes
descriptions, no bosses to tell you what to this flows a high level of performance in the
The business strategy: Delivering continuous innovation do, just associates and leaders. Whereas in a form of constant innovation.
by turning management principles on their head conventional company an employee does
what he or she is told to do, at Gore their One of the keys to this form of work
associates do what is needed to make the organisation is the fact that the operating
High performance learning points:
whole organisation successful. In this units are kept small, ideally between 150 and
Unique form of work organisation designed to support organisation no one can release you to work 170 associates. All are members of multi
employee collaboration and creativity; on a project because there is no fixed job to disciplinary teams, for example, an HR team,
Leaders replace managers to deliver high levels of be released from. At Gore you are not paid teams of engineers, manufacturing teams,
innovation; to do a job. You are rewarded for the but these are constantly changing in terms of
Use of informal communication to achieve high levels of contribution. Your colleagues see you their composition. Some are global in their
trust; making the success of the business. At Gore, membership, such as the IT team and the
Use of sponsors' to facilitate continuous development and
you are not allocated to a position of leadership team in fabrics, the latter being
training and achieve a close link between personal
authority over others. You achieve leadership made up of a German, American and UK
development and organisational needs;
by convincing others of the quality of your person. Most teams are local in that if a
ideas and your contribution to the goals of person comes up with the idea for a new
Remuneration system based on peer evaluation;
the business. This is how it is possible that product, say in connection with motorcycle
Uses strong organisational culture to underpin everything 50% of employees, when asked in an clothing, then he or she takes on the
that the company does. independent survey, described themselves leadership of that team, followed by others
as leaders. who have an interest or specialist knowledge
in the area. The result is that teams are
How has this been achieved? How is it constantly changing, creating an organisation
possible that half of all employees see that takes on an amoeba-like quality.
Delivering continuous innovation by turning management themselves as leaders? In part it is through
applying the lessons learnt by the founder Members of the team determine their
principles on their head Bill Gore, from his experience at DuPont. objectives, their mode of operating and their
He identified four guiding principles for work composition. If a person wishes to join a
INDUSTRIAL CONTEXT AND BUSINESS creative research and development and organisation in the company: new team, because they are interested in the
STRATEGY through getting close to their customers and Fairness to each other; idea and feel they would like to contribute to
This is the story of the UK branch of a US exploring new ways of satisfying their needs. Freedom to encourage people to grow in it, then they discuss their commitments to
multi-national company that for the last They have developed new products for next- knowledge and responsibility; their core team with other members and sort
three decades has achieved continuous generation electronics, for medical implants The ability to make commitments and how their commitments can be met while
innovation in its products. Starting with its as well as high-performance fabrics, we keep them; and freeing time for their involvement in the
unique textile, Gore-Tex, for which it is best provide the marketplace with differentiated Consultations with others in the company new team.
known, the company has created new products that add value to the customers before undertaking actions that would
fluoropolymer products by sustained business and make a profit, Ann Gillies, the affect the reputation of the company.

66 67
These teams are linked through networks create the right conditions they look forward also important that those entering the problems, The effect of building this plant
which ensure that all associates are aware of to coming to work and that they are driven company should share the same values. and having all these outsiders joining our
what is going on in the company. This by being part of a team where they feel good Recruitment is therefore about securing company started to have a detrimental affect
requires considerable communication, hence about themselves. In this context, W.L. Gore people who are able to accept responsibility, on the bottom line ... effectively, the
the need to keep the size of the units small. minimises the number of rules. It relies on have strong communication skills, are able introduction of a group of new staff from
In this context Gillies explains: Its really the individual associate to identify and act on to influence others and, crucially, who will outside the Gore culture was diluting its
important that you know who's doing what what is best for the achievement of company share knowledge and have a team approach. impact. To re-establish the Gore culture,
because it changes all the time. That's the objectives. For example, when it comes to This means that it is the success of their they brought over established Gore staff from
core of the things that we advise new people bereavement leave, guidelines are weak on team that is seen as crucial rather than their the US and Germany, and together with key
early on to do, is to build a network and the basis that some people may need five personal success. Formal recruitment local Gore staff they undertook cultural
know who does what so that you know who weeks off for the death of a near relative processes are kept to a minimum, but training, to show how the Gore culture
to ask and to have your questions whereas others who had a more distant considerable care is taken to ensure that, worked.
answered. To this end all new recruits are relationship with a relative would only need once employed, the new associate has the
required to undergo a training course on a day or so. The belief is that in these, and support required to become fully acquainted They learnt from this and since then every
listening and communication skills. similar circumstances, the individual with the new culture. All recruits enter an effort has been put into sustaining the
concerned is best placed to make the induction programme and all are required to culture. Gillies explains, We really believe
Teams are led by leaders, but there are decision. As the associates are highly follow a course in communication and that our culture energises associates.
many, many different kinds of leaders. committed to meeting organisational listening skills, as these form the bedrock of Energised associates make effective teams,
Some are leaders of projects, some are objectives and have the knowledge to do so, the company culture. For the company, the effective teams make business results,
teams of leaders, some leaders of countries there is literally no need for written rules. process is seen to have failed in those business results need effective teams ...
but the difference in our organisation is The rules form part of the conscience of circumstances where a person needs to be and so on. The maintenance of the culture is
you are only a leader if you have followers. the associate. told what to do. therefore seen as intrinsic to sustained
And people will only follow you because business success and central to their
they respect your knowledge and your skill In circumstances such as this, where MAKING INNOVATION THE NORM everyday activities rather than a separate
and you have a bit of a vision, so you need individuals are relied on to exercise their The focus on innovation within the company change management project.
to have followers. Gillies emphasises. It is own judgment, often after consultation with is all-encompassing. New information
the leader that focuses on achieving the colleagues, it is crucially important not only technology is exploited to the full and used To secure their success in creating an
objectives of the group and co-ordinates the that staff are highly skilled and well informed in all areas. In sales, it is used to ensure that organisation dedicated to continuous
activities of team members. Leaders do not but also that the links between individual anyone in the company can see what is in product innovation, Gore has implemented a
command, they facilitate the achievement of achievements and business performance are the pipeline. In manufacturing, it is used to set of high performance practices that have
objectives. However, all the members of the transparent. At Gore, this is achieved make the processes more efficient, while in turned traditional management practices on
team will have an intimate knowledge of the through a system of payment that is 100% materials handling it has been used to their head. By nurturing trust, their practices
products they are working with. Such teams performance related. Thus, when it comes to automate the process. In addition, the have ensured that all associates are fully
can have a short life or a long life depending determining individual earnings, these are a company have implemented Kaizan and committed to the values and objectives of
on the progress of the project or the core result of a process of evaluation conducted similar management techniques. However, the company. Central to this is the sharing of
activities of the team. by colleagues. They are asked to rank each what is distinctive here is that there are no knowledge in pursuit of group objectives.
other in terms of their respective management programmes involved, instead,
DEVELOPING THE PEOPLE contribution to company performance and continuous improvement is at the core of Equally central is the abandonment of
The continuous development of people is that then determines their earnings. In what all the teams are engaged in, namely management directives and their
crucial to the achievement of team objectives addition, any money the company makes identifying bottlenecks and constraints, replacement by constant communication
and to sustained creative innovation. This is above its agreed objectives is shared identifying what needs to be done within and between teams on the use of best
ensured through the activities of sponsors. amongst all associates globally. Each differently. The drive comes from the teams practice to achieve these objectives. Together
These are chosen by the associate, and their associate also has a stock option which themselves, not from externally imposed these generate a perpetual search for
function is to help develop the person within represents a proportion of their earnings. practices and pressure. All targets are set by improvements and new ideas.
the organisation. This is done through In this way the commitment of the associate the teams themselves, by the people affected
helping them to network within the towards the success of the company is by them. However, care is always taken to As reported in The Sunday Times 100 Best
organisation, to acquire appropriate skills rewarded directly and unambiguously. ensure they are balanced, for example, to Companies to Work For 2004 survey, in this
and enhance their performance. The In order to ensure that the resultant pay is ensure that if you focus only on on-time type of environment almost 90% of staff
sponsors help the associate pull together a competitive, each year the pay of a number delivery that you do not run into problems believe that they make a valuable
development plan and obtain feedback from of associates, from a range of roles and with quality. contribution to business success while 86%
colleagues to identify areas for further functions, is compared with peers in other believe that they can make a difference at
development. companies. MAINTAINING THE CULTURE the company. This high performance
The implementation of these practices has workplace provides the basis for continuous
When it comes to personal motivation, the SHARING VALUES not been without problems. When they built innovation and success.
fundamental belief is that people want to do In a company such as this where a new plant some time ago and staffed it
well, that they dont skive, that if you tremendous trust is shared between all, it is with new external recruits, they ran into

68 69
These teams are linked through networks create the right conditions they look forward also important that those entering the problems, The effect of building this plant
which ensure that all associates are aware of to coming to work and that they are driven company should share the same values. and having all these outsiders joining our
what is going on in the company. This by being part of a team where they feel good Recruitment is therefore about securing company started to have a detrimental affect
requires considerable communication, hence about themselves. In this context, W.L. Gore people who are able to accept responsibility, on the bottom line ... effectively, the
the need to keep the size of the units small. minimises the number of rules. It relies on have strong communication skills, are able introduction of a group of new staff from
In this context Gillies explains: Its really the individual associate to identify and act on to influence others and, crucially, who will outside the Gore culture was diluting its
important that you know who's doing what what is best for the achievement of company share knowledge and have a team approach. impact. To re-establish the Gore culture,
because it changes all the time. That's the objectives. For example, when it comes to This means that it is the success of their they brought over established Gore staff from
core of the things that we advise new people bereavement leave, guidelines are weak on team that is seen as crucial rather than their the US and Germany, and together with key
early on to do, is to build a network and the basis that some people may need five personal success. Formal recruitment local Gore staff they undertook cultural
know who does what so that you know who weeks off for the death of a near relative processes are kept to a minimum, but training, to show how the Gore culture
to ask and to have your questions whereas others who had a more distant considerable care is taken to ensure that, worked.
answered. To this end all new recruits are relationship with a relative would only need once employed, the new associate has the
required to undergo a training course on a day or so. The belief is that in these, and support required to become fully acquainted They learnt from this and since then every
listening and communication skills. similar circumstances, the individual with the new culture. All recruits enter an effort has been put into sustaining the
concerned is best placed to make the induction programme and all are required to culture. Gillies explains, We really believe
Teams are led by leaders, but there are decision. As the associates are highly follow a course in communication and that our culture energises associates.
many, many different kinds of leaders. committed to meeting organisational listening skills, as these form the bedrock of Energised associates make effective teams,
Some are leaders of projects, some are objectives and have the knowledge to do so, the company culture. For the company, the effective teams make business results,
teams of leaders, some leaders of countries there is literally no need for written rules. process is seen to have failed in those business results need effective teams ...
but the difference in our organisation is The rules form part of the conscience of circumstances where a person needs to be and so on. The maintenance of the culture is
you are only a leader if you have followers. the associate. told what to do. therefore seen as intrinsic to sustained
And people will only follow you because business success and central to their
they respect your knowledge and your skill In circumstances such as this, where MAKING INNOVATION THE NORM everyday activities rather than a separate
and you have a bit of a vision, so you need individuals are relied on to exercise their The focus on innovation within the company change management project.
to have followers. Gillies emphasises. It is own judgment, often after consultation with is all-encompassing. New information
the leader that focuses on achieving the colleagues, it is crucially important not only technology is exploited to the full and used To secure their success in creating an
objectives of the group and co-ordinates the that staff are highly skilled and well informed in all areas. In sales, it is used to ensure that organisation dedicated to continuous
activities of team members. Leaders do not but also that the links between individual anyone in the company can see what is in product innovation, Gore has implemented a
command, they facilitate the achievement of achievements and business performance are the pipeline. In manufacturing, it is used to set of high performance practices that have
objectives. However, all the members of the transparent. At Gore, this is achieved make the processes more efficient, while in turned traditional management practices on
team will have an intimate knowledge of the through a system of payment that is 100% materials handling it has been used to their head. By nurturing trust, their practices
products they are working with. Such teams performance related. Thus, when it comes to automate the process. In addition, the have ensured that all associates are fully
can have a short life or a long life depending determining individual earnings, these are a company have implemented Kaizan and committed to the values and objectives of
on the progress of the project or the core result of a process of evaluation conducted similar management techniques. However, the company. Central to this is the sharing of
activities of the team. by colleagues. They are asked to rank each what is distinctive here is that there are no knowledge in pursuit of group objectives.
other in terms of their respective management programmes involved, instead,
DEVELOPING THE PEOPLE contribution to company performance and continuous improvement is at the core of Equally central is the abandonment of
The continuous development of people is that then determines their earnings. In what all the teams are engaged in, namely management directives and their
crucial to the achievement of team objectives addition, any money the company makes identifying bottlenecks and constraints, replacement by constant communication
and to sustained creative innovation. This is above its agreed objectives is shared identifying what needs to be done within and between teams on the use of best
ensured through the activities of sponsors. amongst all associates globally. Each differently. The drive comes from the teams practice to achieve these objectives. Together
These are chosen by the associate, and their associate also has a stock option which themselves, not from externally imposed these generate a perpetual search for
function is to help develop the person within represents a proportion of their earnings. practices and pressure. All targets are set by improvements and new ideas.
the organisation. This is done through In this way the commitment of the associate the teams themselves, by the people affected
helping them to network within the towards the success of the company is by them. However, care is always taken to As reported in The Sunday Times 100 Best
organisation, to acquire appropriate skills rewarded directly and unambiguously. ensure they are balanced, for example, to Companies to Work For 2004 survey, in this
and enhance their performance. The In order to ensure that the resultant pay is ensure that if you focus only on on-time type of environment almost 90% of staff
sponsors help the associate pull together a competitive, each year the pay of a number delivery that you do not run into problems believe that they make a valuable
development plan and obtain feedback from of associates, from a range of roles and with quality. contribution to business success while 86%
colleagues to identify areas for further functions, is compared with peers in other believe that they can make a difference at
development. companies. MAINTAINING THE CULTURE the company. This high performance
The implementation of these practices has workplace provides the basis for continuous
When it comes to personal motivation, the SHARING VALUES not been without problems. When they built innovation and success.
fundamental belief is that people want to do In a company such as this where a new plant some time ago and staffed it
well, that they dont skive, that if you tremendous trust is shared between all, it is with new external recruits, they ran into

68 69
Conclusion

The case studies and the survey have generated a number of


learning points. Firstly, they demonstrate a strong link between
organisational success and the use of HPWPs.

These case studies show that these practices Fourthly, there is no one best way' or one HPWOs studied. So in a HPWO, skills policy
can be implemented in a number of different best set of practices'; this is not a tick-box is about creating a work environment in
ways so long as the following principles are approach. The crucial component is the which employees can learn all the time as
followed: business strategy, because this underpins the part of their normal work and where they
That senior management leads the choice of practices, the way they are can take advantage of the system to improve
process and develops a strong implemented and their effectiveness in performance and innovation.
supporting culture; improving performance. It is the business
That the appropriate people management strategy that gives the high performance Finally, a high performing workplace is not
policies are consistently and effectively working practices their dynamism and about instant success but about long-term
applied; provides the framework against which viability. All the case studies show that
That the high performance organisational performance can be evaluated and improved. HPWPs need time to establish, nurture and
practices are clearly linked to organisational improve. However, once established, HPWPs
objectives and business goals. The findings also suggest that the choice of are capable of producing a range of business
which bundle of practices to use in order to benefits, ranging from reduced staff
Paying attention to these factors is very achieve a given organisational outcome or turnover, to higher levels of innovation,
important in making the link between objective is influenced by the type of sector better quality goods and services and
performance and the day-to-day operation of in which the organisation or company is enhanced competitiveness.
the organisation. In this respect, every operating. Some bundles of practices are
organisation has the opportunity to more effective in particular industrial sectors
becoming a HPWO. than others.

Secondly, the case studies have Similarly the case studies provide a number
demonstrated that you do not have to be of interesting lessons on skills and how skills
only a successful organisation to afford operate in the context of a HPWO. In HPWOs
high performance practices. They show that skills development is very focused on
many HPWPs do not have significant cost achieving specific business outcomes and
implications, and that in the majority of cases levels of performance. In none of the case
it was the adoption of HPWPs that created a studies were the organisations developing
HPWO, not the prior financial successes of skills for the sake of skills. The case studies
the company. Nevertheless, it still remains show that all employers expect more than
true that in many cases, having created the technical skills from their employees.
HPWO, HPWPs do become the tools through
which an organisations competitive edge is In most of the case studies, training and
maintained and improved. continuous development was regarded as a
given, and so it is not a matter of HPWOs
Thirdly, our case studies also show that training more. As we have strived to point
when a specific combination of practices is out in a HPWO, it is more important to focus
working well, the company may not need to on training that is linked to performance
adopt additional practices; to do so may just requirements rather than on the quantity of
entail a waste of effort. A good example is training. Furthermore, tacit skills and
Timpson, which does not have formal institutional knowledge are relatively more
appraisals. important than technical skills in many of the

70 71
Conclusion

The case studies and the survey have generated a number of


learning points. Firstly, they demonstrate a strong link between
organisational success and the use of HPWPs.

These case studies show that these practices Fourthly, there is no one best way' or one HPWOs studied. So in a HPWO, skills policy
can be implemented in a number of different best set of practices'; this is not a tick-box is about creating a work environment in
ways so long as the following principles are approach. The crucial component is the which employees can learn all the time as
followed: business strategy, because this underpins the part of their normal work and where they
That senior management leads the choice of practices, the way they are can take advantage of the system to improve
process and develops a strong implemented and their effectiveness in performance and innovation.
supporting culture; improving performance. It is the business
That the appropriate people management strategy that gives the high performance Finally, a high performing workplace is not
policies are consistently and effectively working practices their dynamism and about instant success but about long-term
applied; provides the framework against which viability. All the case studies show that
That the high performance organisational performance can be evaluated and improved. HPWPs need time to establish, nurture and
practices are clearly linked to organisational improve. However, once established, HPWPs
objectives and business goals. The findings also suggest that the choice of are capable of producing a range of business
which bundle of practices to use in order to benefits, ranging from reduced staff
Paying attention to these factors is very achieve a given organisational outcome or turnover, to higher levels of innovation,
important in making the link between objective is influenced by the type of sector better quality goods and services and
performance and the day-to-day operation of in which the organisation or company is enhanced competitiveness.
the organisation. In this respect, every operating. Some bundles of practices are
organisation has the opportunity to more effective in particular industrial sectors
becoming a HPWO. than others.

Secondly, the case studies have Similarly the case studies provide a number
demonstrated that you do not have to be of interesting lessons on skills and how skills
only a successful organisation to afford operate in the context of a HPWO. In HPWOs
high performance practices. They show that skills development is very focused on
many HPWPs do not have significant cost achieving specific business outcomes and
implications, and that in the majority of cases levels of performance. In none of the case
it was the adoption of HPWPs that created a studies were the organisations developing
HPWO, not the prior financial successes of skills for the sake of skills. The case studies
the company. Nevertheless, it still remains show that all employers expect more than
true that in many cases, having created the technical skills from their employees.
HPWO, HPWPs do become the tools through
which an organisations competitive edge is In most of the case studies, training and
maintained and improved. continuous development was regarded as a
given, and so it is not a matter of HPWOs
Thirdly, our case studies also show that training more. As we have strived to point
when a specific combination of practices is out in a HPWO, it is more important to focus
working well, the company may not need to on training that is linked to performance
adopt additional practices; to do so may just requirements rather than on the quantity of
entail a waste of effort. A good example is training. Furthermore, tacit skills and
Timpson, which does not have formal institutional knowledge are relatively more
appraisals. important than technical skills in many of the

70 71
References

Ashton, D. and Sung, J. (2002) Supporting Lawler, E. E. with Mohman, S. A. and


Workplace Learning for High Performance Ledford, G. E. (1998) Strategies for High
Working, Geneva: ILO7. Performance Organizations, CEO Report,
San Francisco: Jossey-Bass.
Becker, B. E. and Husled, M. A. (1998) 'High
Performance Work Systems and Firm Purcell J., Kinnie, N., Hutchinson, S., Rayton,
Performance: A Synthesis of Research and B. and Swart, J. (2003) Understanding the
Managerial Implications, Research in People and Performance Link: Unlocking the
Personnel and Human Resource Black Box, Chartered Institute of Personnel
Management, Vol. 16, Stamford: JAI Press, and Development: London.
Stamford, CT. pp 53-101.
Stevens, J. (2005) High Performance Wales:
de Menezes, L. M. and Wood, S. Identifying Real Experiences, Real Success, High
Human Resource Management in Britain Performance, Wales Management Council,
using the Workplace Employee Relations Wales: Cardiff.
Survey, International Journal of Human
Resource Management, forthcoming 2005. Thompson, M. (2002) High Performance
Work Organisation in UK Aerospace The
Guest, D. (2000) HR and the Bottom Line SBAC Human Capital Audit, London: The
Has the penny dropped? People Society of British Aerospace Companies.
Management, 20 July, pp 26-31.
Walton, R. (1985) From control to
Guest, D., Michie, J., Conway, N. and commitment in the workplace, Harvard
Sheehan, M. Human Resource Management Business Review 63 (2), pp 77-84.
and Corporate Performance in the UK,
British Journal of Industrial Relations 41:2 Wood, S. (2001) with de Menezes L. M. and
June 2003, pp. 291-314 Lasaosa, A., High Involvement Management
and Performance, paper delivered at the
Lawler, E. (1986) High-involvement Centre for Labour Market Studies, University
Management, San Francisco: Jossey-Bass. of Leicester, May 2001.

GENERAL BUSINESS ADVICE


You can also get a range of general business advice
from the following organisations:

England
Call Business Link on 0845 600 9 006
Visit the website at www.businesslink.gov.uk
Scotland
Call Business Gateway on 0845 609 6611
Visit the website at www.bgateway.com
Wales
Call Business Eye/Llygad Busnes on
08457 96 97 98
Visit the website at www.businesseye.org.uk
Northern Ireland
7 The ILO has made this book freely available to the public. Examples of products and companies included in this leaflet do not
in any way imply endorsement or recommendation by DTI. Bear in
Call Invest Northern Ireland on 028 9023 9090
For a free copy, please email Johnny Sung at
johnny.sung@leicester.ac.uk mind that prices quoted are indicative at the time it was published. Visit the website at www.investni.com

72
References

Ashton, D. and Sung, J. (2002) Supporting Lawler, E. E. with Mohman, S. A. and


Workplace Learning for High Performance Ledford, G. E. (1998) Strategies for High
Working, Geneva: ILO7. Performance Organizations, CEO Report,
San Francisco: Jossey-Bass.
Becker, B. E. and Husled, M. A. (1998) 'High
Performance Work Systems and Firm Purcell J., Kinnie, N., Hutchinson, S., Rayton,
Performance: A Synthesis of Research and B. and Swart, J. (2003) Understanding the
Managerial Implications, Research in People and Performance Link: Unlocking the
Personnel and Human Resource Black Box, Chartered Institute of Personnel
Management, Vol. 16, Stamford: JAI Press, and Development: London.
Stamford, CT. pp 53-101.
Stevens, J. (2005) High Performance Wales:
de Menezes, L. M. and Wood, S. Identifying Real Experiences, Real Success, High
Human Resource Management in Britain Performance, Wales Management Council,
using the Workplace Employee Relations Wales: Cardiff.
Survey, International Journal of Human
Resource Management, forthcoming 2005. Thompson, M. (2002) High Performance
Work Organisation in UK Aerospace The
Guest, D. (2000) HR and the Bottom Line SBAC Human Capital Audit, London: The
Has the penny dropped? People Society of British Aerospace Companies.
Management, 20 July, pp 26-31.
Walton, R. (1985) From control to
Guest, D., Michie, J., Conway, N. and commitment in the workplace, Harvard
Sheehan, M. Human Resource Management Business Review 63 (2), pp 77-84.
and Corporate Performance in the UK,
British Journal of Industrial Relations 41:2 Wood, S. (2001) with de Menezes L. M. and
June 2003, pp. 291-314 Lasaosa, A., High Involvement Management
and Performance, paper delivered at the
Lawler, E. (1986) High-involvement Centre for Labour Market Studies, University
Management, San Francisco: Jossey-Bass. of Leicester, May 2001.

GENERAL BUSINESS ADVICE


You can also get a range of general business advice
from the following organisations:

England
Call Business Link on 0845 600 9 006
Visit the website at www.businesslink.gov.uk
Scotland
Call Business Gateway on 0845 609 6611
Visit the website at www.bgateway.com
Wales
Call Business Eye/Llygad Busnes on
08457 96 97 98
Visit the website at www.businesseye.org.uk
Northern Ireland
7 The ILO has made this book freely available to the public. Examples of products and companies included in this leaflet do not
in any way imply endorsement or recommendation by DTI. Bear in
Call Invest Northern Ireland on 028 9023 9090
For a free copy, please email Johnny Sung at
johnny.sung@leicester.ac.uk mind that prices quoted are indicative at the time it was published. Visit the website at www.investni.com

72
High Performance Work Practices:
linking strategy and skills to
performance outcomes
Johnny Sung
David Ashton
Acknowledgements
The DTI drives our ambition of
prosperity for all by working to
create the best environment for
business success in the UK. We would like to thank the many people who David Ashton is Emeritus Professor at the
We help people and companies have contributed to the research effort that Centre for Labour Market Studies of the
become more productive by has gone into this report. Special thanks go University of Leicester. He has published
promoting enterprise, innovation to the companies who were involved in the extensively in the field of international
and creativity. survey and case studies, without whom the human resource development and has
research would not have been possible. advised national governments and
We champion UK business at home international bodies on human resource
and abroad. We invest heavily in We are also grateful for the support of the development policy.
world-class science and technology. CIPD, especially Victoria Gill and Jessica
We protect the rights of working Javis, who facilitated the survey for us. The CIPD explores leading-edge people
people and consumers. And we Jonathon Austin and Aman Grewal of Best management and development which aims
stand up for fair and open markets Companies were invaluable in ensuring the at sharing knowledge to increase learning
success of the case studies. We would also and understanding among human resource
in the UK, Europe and the world.
like to thank Martin Quinn at the Centre for professionals. Our purpose is to make
Labour Market Studies for coordinating the people more effective in their jobs and
logistics of the survey. enhance their contribution to the business.

Thanks also to Nigel Crouch and Sam Hanna We produce many resources on people
of the DTI for their support and Barrie management and development including
Oxtoby, Susan Anderson, Peter Robinson guides, books, practical tools, surveys and
and Anthony Ridding for commenting on the research reports. We also organise a number
business relevance of the case studies. of conferences, events and training courses.
To find out more please visit www.cipd.co.uk.
Johnny Sung is currently Senior Research
Fellow at the Centre for Labour Market Best Companies Ltd. researches workplace
Studies at the University of Leicester. He has practices and compiles the national and
published extensively on national education regional Best Companies to Work for lists.
and training systems, workforce We use this research and in-depth
Achieving best practice in your business is a key development and workplace learning. experience to help companies look after their
theme within DTIs approach to business support people and deliver better organisational
solutions, providing ideas and insights into how performance.
you can improve performance across your
business. By showing what works in other
To find out about participating in the lists, or
businesses, we can help you see what can help
you, and then support you in implementation.
about our work with companies, please visit
This brochure focuses on these solutions.
our website www.bestcompanies.co.uk or call
us on 01978 856222.

01
ACHIEVING BEST PRACTICE
IN YOUR BUSINESS

High Performance Work


Practices: linking strategy
and skills to performance
outcomes
IN ASSOCIATION WITH

Published by the Department of Trade and Industry. www.dti.gov.uk


Crown Copyright. URN 05/665; 02/05