It depends what you mean by . . .

Professor C.E.M. Joad was a somewhat eccentric British philosopher and broadcaster who achieved a high level of popularity through his regular appearances on The Brains Trust - a 1940's antecedent of Any Questions. Most of his answer to questions were prefaced by the immortal words, "It all depends on what you mean by . . ."

Those words certainly need applying to the recent (OK, last month, but we've all been busy!) publication of the Management Today "Most Admired Company" Award. Guess who's top? BSkyB!

Admittedly, as Management Today (under pressure!) confess, "the awards aren't chosen by judges, at least in the traditional sense - it's all based on a peer review survey," but here are the scores on the doors:

1. BSkyB
2. Tesco
3. Johnson Matthey
4. Cadbury
5. GlaxoSmithKline
6. Rolls-Royce
7. BP
8. BG Group
9. Diageo
10. Cobham

Management Today: BSkyB is Britain's Most Admired Company 2009
 
Right. Time for a different view
 
Covalence are a Swiss-based organisation that track the ethical reputation of multinational companies, and produce a regularly updated ranking of such organisations.
 
The criteria that they use in determining ranking are largely based on the contribution of multinational enterprises to human development globally, with particular attention paid to the needs and realities of developing countries.
 
Here's how the Companies on the Management Today "most admired" list fare when a different set of measures are applied! Interesting that on that basis, BSkyB would be bottom of the list, not the top! The list shows where each company ranks in the list of 581 multi-national companies assessed by Covalence. 

1. BSkyB 323
2. Tesco 97
3. Johnson Matthey 299
4. Cadbury 26
5. GlaxoSmithKline 29
6. Rolls-Royce Not Listed
7. BP 130
8. BG Group 308
9. Diageo 39
10. Cobham Not Listed

Covalence Ethical Ranking 2009

• What do you, dear reader of HR Case Studies, think is worthy of admiration in a company?

The cost of poor HR: €1 billion and 25 lives

Regular readers of HR Case Studies will be familiar with the shocking series of suicides at France Télécom which have taken place while the Company has been implementing a modernisation drive.

Since February 2008, there have been 25 suicides and a further series of attempted suicides.

The cost of a badly managed restructuring programme now stands at a 6.4 per cent drop in third quarter profits, 25 lives and (announced yesterday) a €1 billion stress-reduction programme intended to enable staff aged over 57 to work part time. The part-time jobs would be made available on a voluntary basis to employees who felt that full time work was endangering their health.

Company Chairman Didier Lombard is blamed by unions for disorientating staff through a massive change programme since the business was privatised in 2004. Unions blame performance targets, tough management and imposed workplace mobility measures for the series of suicides.

The former state monopoly has been forced into a wide-ranging review of working practices overseen by Stéphane Richard, a former French government adviser who took over as deputy chief executive this month.

Mr Richards has already admitted that the group has ''gone too far'' into its attempts to supervise staff through the introduction of ''control tools''.

Times Online: France Télécom to invest €1bn to prevent suicides

• How could the engagement of a robust HR function have prevented this situation from developing?

Royal Mail dispute: what's all that about then?

Is it just me, or are you also in the dark over what the Royal Mail strike is actually about? OK, it’s obvious that management of Royal Mail want to “introduce modern working practices” (whatever that actually means) and striking staff feel the need to protest against Royal Mail for “making efficiency cuts without modernising the service” but beyond that, the details of the dispute seem to have evaded me.

With that in mind, I’m therefore not sure whether my local postie is a workshy, lazy, trouble-maker (assuming that he’s one of those on strike) or a strike-breaking scab (if he’s not!)

Terminology like this is the subject of a brief article in this week’s Personnel Today, which also explores the inevitable polarisation of opinion that takes place during any dispute. The forced choice for Royal Mail staff to nail their colours to the mast of either “striker” or “scab” leads to the inevitable creation of stereotypes which in turn brings about “a self-fulfilling cycle that further divides the groups, as they consistently look for positive similarities with their own group while making negative comparisons with colleagues in the other group. Any small or insignificant differences are quickly blown into major points of disagreement, leading to emotional, long-lasting divisions between once friendly and supportive colleagues”

So, as the article suggests, although the Royal Mail dispute may have a short-term resolution, the rifts that form during strike action tend to be long-lasting and deep.

Strikes: the psychological impact on non-striking staff

• One for teachers: research the background to the Royal Mail dispute to ensure that students are aware of the positions of both parties
• One for HR professionals: if you were part of Royal Mail, how could you improve the public’s awareness of what this dispute is actually about?
• One for the rest of you: where do your sympathies lie in this dispute?

France Télécom halts restructure amid suicides

HR Case Studies readers will be familiar with the shocking series of suicides at France Télécom which have taken place while the Company has been implementing a modernisation drive.

Since February 2008, there have been 25 suicides and a further series of attempted suicides.

Calls have been made for the resignation of Didier Lombard, France Télécom's chief executive. The French Government summoned Mr Lombard to a crisis meeting last month and demanded that he produced an urgent action plan.

With some similarities to the current situation in Royal Mail, there is a drive to dispense with many of the Company’s outmoded working practices and make the organisation more competitive in the international market. The vast majority of France Télécom’s workforce were recruited when the Company was a state monopoly, and when a job for life was practically guaranteed.

Although Mr Lombard had already eased up on a programme of compulsory job changes for managers, today’s announcement is of a complete halt to the restructuring until next year at the earliest.

How the company will use the 100 additional advisers in human resources that it recently recruited to address the issue of workplace stress is not yet clear

Times Online: France Télécom halts restructure amid suicides

• What lessons are to be learned from the problems that France Télécom has encountered?
• Are there particular sensitivities that need to be dealt with when undertaking restructures in former state monopolies?
• What, if any, are the similarities between the situation in France Télécom and that in Royal Mail?
• There was some heated debate a few days ago in response to an article in The Times entitled HR Departments: What's the point of them? Is there anything that the 100 additional advisers in human resources would be able to achieve in France Télécom to answer those critics who believe that HR is a waste of space?

Calls for France Télécom boss to resign as suicides reach 24

Regular readers of HR Case Studies will already be aware of the tragic cost of company restructuring at France Telecom, where there has been a rising number of suicides over recent months. The blame for these alarming statistics has been placed at the door of France Telecom’s 'modernisation' programme, which has seen 22,000 jobs lost and 10,000 people change jobs (often from a technical to a customer service or sales role).

In a further development today, Didier Lombard, the chief executive of France Télécom, faced calls for his resignation after another member of staff committed suicide yesterday, bringing the tally to 24 deaths in 18 months.

The latest in a list of deaths, which has shocked France and sparked debate over restructuring at the telecommunications giant, occurred on Monday when a 51-year-old employee killed himself in the French Alps. The man left a note blaming the ''atmosphere'' at work before throwing himself off a motorway bridge in Alby-sur-Chéran.

Like many of the suicide victims at the former state monopoly, he had recently switched jobs — in his case moving to a call centre where he had been given demanding performance objectives.

Visiting the site in Alby-sur-Chéran, Mr Lombard was booed by employees as he announced an end to the programme of compulsory job changes for managers. He also suspended staff performance indicators at the call centre, but failed to quell a storm of protest over the spate of suicides. The main Trade Union within France Telecom believe that the resignation of Mr Lombard is the only solution, but it seems that resignation is not on Mr Lombard’s agenda. The French government are already involved in the case, and ministers have urged a more ''humane'' approach to job changes at France Telecom, prompting Mr Lombard to hire 100 additional advisers in human resources and launch negotiations with unions on workplace stress.

France Télécom boss lambasted as suicides reach 24

• Review the questions in the previous article on France Telecom, and consider if your answers have changed in the light of this further development

The tragic cost of company restructuring at France Telecom

The female employee of France Telecom’s Orange subsidiary who threw herself out of a fourth floor window last week was the company’s 23rd suicide in the last 18 months. She had just attended a meeting to discuss a reorganisation of the customer service department she worked in. As Management Today has reported, it’s hardly surprising that the French government, which still owns a quarter of the company, has stepped in to reassure staff that the problem is being addressed. The company’s Trade Unions put the blame for these alarming statistics firmly at the door of France Telecom’s 'modernisation' programme, which has seen 22,000 jobs lost and 10,000 people change jobs (often from a technical to a customer service or sales role). Other employees have taken dramatic action when being told that their jobs are changing; last week a technician stabbed himself in the stomach in protest at being moved into a new role.

A spokesman for France Telecom pointed out that France as a whole has a high suicide rate, of 17.8 per 100,000 people. But since that's about the number of people France Telecom employs, its suicide rate is clearly well above average, and definitely high enough to cause serious concern. The company has promised to bring a temporary halt to its restructuring programme while it introduces measures to deal with workplace stress. The good news for French HR professionals is that France Telecom is recruiting a number of them.

France Telecom forced to account for human cost of restructuring

• What action would you expect the HR team in France Telecom to be taking following these events?
• How might France Telecom have anticipated its employees reacting in such a dramatic fashion?
• What are your views on the restructuring which has led to so many employees being required to change jobs?
• What actions do many organisations take to minimise workplace stress?
• As this latest even was the 23rd suicide in 18 months, should the company have taken action earlier and, if so, what?

Another U-turn on HR outsourcing

Outsourcing much of the transactional work of the HR department has been fashionable with many organisations over the last decade, especially when combined with the transformation of the remaining HR professionals into Business Partners. But not all companies have gone down this road, and some of those that have are now reversing their decision and bringing this activity back in-house. The latest example is UK insurance group Liverpool Victoria, whose HR Director believes that by doing so he has reduced the company's costs by £3m over the last year. As the business is growing, the Chief Executive demanded a change in HR strategy, and made it clear that he didn't want an outsourced HR function run by someone else, but wanted the activities to be undertaken in-house, enabling the HR team to be fully supportive of business growth and change. The U-turn on HR outsourcing has demanded a redesign of almost all of the HR processes, with particular attention being focused on recruitment and learning and development.

Liverpool Victoria saves £3 million by moving HR back in-house

• Why did many organisations outsource the work of the HR function, and what are the reasons for this decision now being reversed?
• Give some examples of transactional HR activities.
• The summary refers to HR Business Partners: what is meant by this phrase, and what are the sort of HR activities that they would be involved in?
• The first process that Liverpool Victoria re-engineered when bringing it back in-house was recruitment. What are the benefits but also the dangers of allowing an external organisation to manage a company's recruitment campaign?
• Further research: what other examples can you find of businesses that have been involved in outsourcing HR, and also in reversing this decision? (Hint: use the subject tags on the right!)
• Bringing the HR activity back in-house is said to have saved Liverpool Victoria £3m. Would there have still been an argument for doing this if the savings were lower, or even if by doing so it involved an additional cost?

Ryanair and Virgin: Compare and Contrast!

Blaming the decision on Manchester Airport's refusal to lower its charges, Ryanair is either closing or switching nine of the 10 routes that currently operate from Manchester, with a loss of up to 600 jobs in the area. This news once again brings controversial Chief Executive Michael O'Leary into the limelight, and provides an opportunity to compare the organisational cultures of Ryanair with that of Virgin Airlines.

Ryanair

• Michael O’Leary appointed as Chief Executive in 1985
• Concentrates on the short haul, mainly European market
• No frills approach
• O’Leary (Mr. Grumpy?) becoming infamous for his “earthy” language, controversial advertising and unusual practices including suggesting that passengers may have to carry their own bags” and pay to use the toilet (!)
• Ryanair operates in only one market
• Ryanair makes it clear that price is its main reason for gaining repeat business
• Ryanair cabin crew are employed by a third party
  

Virgin

• Founded by Richard Branson in 1984
• Mainly concentrate on long haul flights
• Positioned at the quality end of the market
• Branson (Mr. Happy?) often appears personally in publicity to indicate closeness to employees and customers
• Airline is part of a major brand including trains and financial services
• Virgin works hard at customer loyalty
• Virgin cabin crew (frequently glamorous blondes!) are employed by Virgin and are selected through a lengthy recruitment process
  

• What are the differing HR challenges in both of these organisations?
• How successful would these two organisations be if they had to switch the markets in which they operate?
• How well do you believe each organisation is placed to survive the current economic downturn?
• What are the advantages and disadvantages of outsourcing (or subcontracting) such a key element of the workforce as cabin crew?
• Could either organisation be successful without its dynamic, charismatic and controversial Chief Executive?

For a more detailed case study on Ryanair and Virgin, see "Management and Organisational Behaviour" by Laurie J. Mullins (FT Prentice Hall)

Problems for Royal Mail

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This week will see further strike action by members of the CWU (Communication Workers Union) within Royal Mail as a result of disagreements over job cuts and reductions in service. As ever, there are two sides to every dispute.

The Trade Union believes that Royal Mail is failing to invest properly in modernisation and is removing jobs without agreement;

Royal Mail believe that changes are essential, but the Trade Union is opposing them

The Trade Union believes that service quality will be compromised by the reduction in jobs;

Royal Mail believe that the Trade Union need to join the Company in tackling the challenge by the increase in electronic media

The Trade Union have called a series of strikes in key locations over the next week to highlight their case;

Royal Mail have condemned the CWU for striking locally over much-needed modernisation and change and said that they are expecting 90% of their staff to be working normally.

• Which government agency could be involved in mediating in such a dispute?
• What steps must a Trade Union take before calling its members out on strike?
• What action can (and can't!) a company take against striking employees?
• What other examples are there of organisations that have struggled to introduce change to working practices as a result of technological change?
• Now that the Royal Mail no longer has a monopoly over the delivery of mail in the UK, how is this likely to restrict the immediate impact of the strike action?
• Further Research Activity: compare the cost of sending a simple letter through thedomestic mail in different coutries. Do your findings make you more supportive of either the Royal Mail or the Trade Union

Quarter of managerial posts to go at Shell?

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A report in Management Today suggests that despite making a profit of $26bn last year, the Chief Executive of Shell Petroleum is expected to announce a delayering of the oil giant's senior management team, resulting in up to 600 managers being declared redundant. The old slogan of "You can be sure of Shell" may therefore sound rather empty for many of the employees.

• Other than the obvious financial savings, what are the benefits to a large organisation such as Shell of taking out layers of management?


• How would you expect Shell to communicate such a delayering programme to affected employees?


• Shell has a reputation for looking after its employees. Is it possible for this reputation to continue after such a delayering and redundancy programme?


• What particular skills will Shell be looking for in those managers who survive the downsizing activity?


• What will be the likely effect on those employees whose managers are removed?