B&Q COMAPNY

The Company The first B&Q store was opened in Southampton in 1969. Since then the company has developed into the UKs best known DIY retail chain with some 320 stores throughout the country employing more than 33,000 people. In 1998 B&Q merged with Frances leading DIY retailer, Castorama, becoming the largest DIY retailer in Europe. International expansion continued with the opening of a B&Q store in China in 1999 and one in Ireland in 2002.

Industrial relations background

B&Q do not recognise a trade union. The company regards its pay and benefits package as "advantageous" and consistent with its aim of being an "employer of choice". Although a non-union company, B&Q accepts that some employees elected as Grass Roots representatives may be trade union members. According to head office HR staff, employee involvement arrangements have existed within B&Q "pretty much from the outset". Prior to the introduction of the "Grass Roots" initiative in 1998, the existence of store-level consultative committees, with the possibility of pursuing unresolved issues to divisional office level, provided a vehicle for some information and consultation activity.

 The introduction of Grass Roots was intended to give more structure and scope to B&Qs employee consultation arrangements, and ensure its companywide coverage and relevance through the establishment of a multi-tiered consultation framework operating at store, regional, divisional (in geographic terms) and national level. As well as the Grass Roots structure there is a National health and safety committee, which meets every two months and is chaired by a member of the main board. Alongside Grass Roots, B&Q operates a range of other means of employee communications.

Reward system in Action

The 20,000 customer advisors are paid on one of six different spot rates in the upper quartile of similar jobs. Pay progression is based on the acquisition and application on the shop floor of skills and knowledge. There are four additional spot rates beyond the established rate designed to reward excellence in the role. There is a store team bonus, based on sales, shrinkage (resulting from losses such as theft and stocktaking errors) and customer service measures set at store level, and a formal recognition scheme.

Integrated reward strategy

Business strategy
To improve productivity and profitability and maintain B&Q as the number one home retailer in the UK

HR Strategy Enhance employee commitment and minimize the loss of B&Qs key people Position B&Q as one of the best employers in the UK

Reward Strategy Develop new reward philosophy which sends the right signals on corporate values and beliefs Create a new employment value proposition which makes B&Q an employer of choice Introduce new store team bonus Develop family-friendly benefits Introduce recognition programmes Introduce new pay and progression arrangements Provide total reward statements

 Some organizations do not have a graded structure at all for any jobs, or for certain jobs such as directors. Instead they use spot rates. B&Q use spot rate for customer service. At B&Q, customer advisors are paid on one of six different spot rates.

Advice from Practitioners

B&Q carried out a thorough investigation into the context of the organization its internal and external environment and the characteristics of the existing reward system and the views of all the relevant stakeholders. The company gathered and marshalled data from two perspectives:

External perspective The analysis of the external environment included: Examination of the changing labour market; Literature review of employers responses to emerging employment trends and how competitors reward staff; An analysis of the HR and reward strategies typically adopted by high-performing organizations; A survey of 50 high-performing people in a sample of 20 highperforming organizations, examining what these staff need in the reward package; Two commissioned surveys of 200 people each to examine external perceptions of B&Q as an employer; A benchmarking exercise using retail industry salary.

Internal perspective The analysis of the internal environment included: A full audit of the current reward investment and its focus; Consideration of existing use of bonus schemes; Examination of pay for performance arrangements; Current provision of financial and non-financial rewards; Findings of 20 focus groups comprising people from different levels of B&Q and different divisions.

Will Astill, B&Qs reward manager, recommend these guiding principles: Without cooperation change strategies are likely to fail. Secure directors buy-in right away. Never underestimate the value of in-depth employee consultation. Remember that strategy formulation is an evolutionary process. Look at how well you communicate your reward package. No initiative should be implemented without examining the return on investment. Evaluate the effectiveness of programmes and take action as required. Budget well in advance.