Employer of Choice, so what?

Last week, Fortune magazine published its rankings of the best 100 companies to work for and SAS came out on top. SAS is a leader in business analytics software and services and the largest independent vendor in the business intelligence market. It has claimed its position at the head of the pile by offering its employees high-quality child care at $410 a month, 90% coverage of the health insurance premium, unlimited days off for illness, a medical centre staffed by four physicians and 10 nurses (at no expense to employees), a paid for 66,000-square-foot fitness centre and swimming pool, a lending library, and a summer camp for children.The FORTUNE 100 Best list is produced each year by San Francisco-based Great Place to Work® Institute.

The winners are selected based on responses to the Institute’s proprietary employee survey, the Trust Index^©, and a systematic audit of the companies’ workplace practices and policies. The Institute’s methodology measures the level of trust that exists between employees and management, the pride employees express about the company and the camaraderie employees share.

The Sunday Times in the UK also publishes a list of the best companies to work for, a ranking provided by independent assessor, Best Companies. Each organisation that puts themselves forward for accreditation has an employee survey that measures their performance across eight key factors including leadership, personal growth, a fair deal (rewards & benefits) and giving something back. In 2009, Beaverbrooks the Jewellers came out on top whilst KMPG won the battle to be number 1 in the best big companies to work for list.

Now, I don’t want to knock the use of these rankings too much as they provide a useful source of information for prospective employees and a focal point for improvement that should mean a better working environment (a generic term for all of the factors measured in the surveys) for existing employees. However, there are two concerns that I have with them; the first is a minor irritation that not all companies are surveyed and therefore a realistic and comparative benchmark is not achievable. In fact, one organisation that I was working with withdrew their entry from the rankings because they were aware that due to a number of internal policy changes employee satisfaction would have dropped and so would their position on the list. It was deemed preferable not to participate and thereby minimise the risk to their employer reputation.

The second point is my concern that these lists drive an obsession with being an employer of choice, which in itself is not a bad thing. The problem is that most organisations do not understand what this involves, do not have the capability to address the inevitable issues that arise when conducting an employee survey and do not have the buy-in from senior management to effect necessary change. ”We want to be an employer of choice” HR Directors and Managers say to me and my reply is always the same, “An employer of choice, fine. But to whom”. In a market that is employer driven and where the volume of applicants for most vacancies has increased significantly the focus should be on being an employer of choice to the right people. In other words, organisations need to segment their target audience, identify the attributes, behaviours, skills and competencies that they are looking for and build a tailored employer value proposition that is going to attract the highest possible calibre of candidates. Not only that, it will enable them to establish the psychological contract between employer and employee (sometimes referred to as the deal) that will increase the likelihood of retention, loyalty and engagement further down the line.

There is no doubt that being a top 100 company to work for enhances an employer’s reputation but it is also important to really understand the stakeholder groups with whom that reputation is being managed. If you are building a set of compelling reasons why someone should join your company, it should also be as compelling to the wrong candidates as to why they should not be applying.

A bad month for...a good month for

J Greggs the Bakers:

They may not be everybody’s cup of tea (or sausage roll) but Greggs is certainly doing something right having sold over a million mince pies a week during the Christmas period, increased like-for-like sales by almost 1% for the financial year ending 2 January and reiterating its intention to open 50 to 60 new stores in 2010. They have recently launched their employer value proposition, www.greggsfamily.co.uk which is a ‘tell it as it is’ reflection of Greggs as a place to work and it was heartening to see their Chief Executive, Ken McMeikan pay tribute to the motivation and determination of his staff for battling through the wintry conditions that have dominated the start to the year.

JIBM:

IBM has been named the country’s most gay-friendly employer by gay rights campaigner Stonewall in its 2010 Workplace Equality Index. As part of its commitment to corporate diversity, IBM provides an enhanced monitoring scheme for GLBT (gay, lesbian, bisexual and transgender) staff to ensure they are being supported in career development and promotion as well as actively encouraging them to discuss issues through global and regional networking groups, leadership forums and task forces. IBM’s aim is to create an environment where staff can be open about their sexual orientation which fosters a culture of trust between employees. This is a great example of authenticity in the employer brand proposition.

K Thames Valley Police:

The difficulty in managing employer reputation is that it is determined by perception and in this case, there are two very different sides to the story. A film showing police officers from Thames Valley Police using their riot shields to sledge down a snowy hill whilst on duty has appeared on YouTube and prompted nearly 600 comments the vast majority of which saying how good it was to see officers having a sense of humour, being jovial and acting as human beings rather than robots. However, the officers were reprimanded by their employer and reminded that in no uncertain terms that tobogganing on duty, on police equipment and at taxpayers' expense was a very bad idea. This is a quick lesson in the power of social media and its growing role in employer reputation management.

K Goldman Sachs:

In the wake of the financial crisis and the furore over bankers’ bonuses, rumour has it that Goldman Sachs (GS) is considering forcing its top bankers to donate part of their bonuses to charity. The bank is expected to report profits in the region of £6.8bn and will award close to record pay and bonuses of up to £12.3bn. The investment bank is hoping that the charity gesture will reduce the animosity shown to it when the bonuses are announced. Charitable donations are an important part of corporate social responsibility (well done to GS for contributing £600k to the Haiti disaster fund) but there is something I find a little uncomfortable about ‘forcing’ employees to donate. The detail of the psychological contract between employer and employee is being altered to manage the risk to its corporate reputation which could set a dangerous precedent.

L Cadbury:

It would appear that after a protracted and aggressive takeover bid, Kraft will finally seal the acquisition of Cadbury. The deal will see Kraft become a global confectionary leader and signal the end of a British institution that has given sweet-toothed consumers the joys of Dairy Milk, Flake and Crunchie, not to mention the Creme Egg. The big concern for staff of Cadbury is the prospect of major job cuts despite Kraft’s assertion of the deal being good news for employees. Even if the losses are minimal, the turmoil and ill-feeling that has been created by such an acrimonious takeover will inevitably have long-term implications on employee engagement and the employer brand for those that survive. Organisations really need to learn to assess the impact on employer reputation, culture and values as part of the due diligence in M&A activity.

L British Airways/Unite:

Sadly, this is probably not the only time that the British Airways industrial action story will appear in the monthly column as I fear that there is a long way to go before a resolution is reached. The decision by Cabin Crew and Unite members to strike in the lead up to Christmas in response to cost-cutting measures and the subsequent media coverage of crew earnings meant the proposed action was met with very little sympathy by much of the British public. This will inevitably have had a negative impact on BA and its reputation as an employer. Is Unite really acting in the best interests of its members in this situation when the financial difficulties at BA may lead to huge job losses as a result? In this instance, is the union playing a divisive role when employee cohesion and loyalty may deliver a better outcome?

Cheats never prosper but football does...

I'm a sports fan. It doesn't matter what sport it is, watching or participating I'll give it a go unless it involves throwing yourself out of a plane, contorting in dark, confined spaces below ground or scaling mountains with little more than carabiners and crampons. Truth be told, I'm scared of heights and claustrophobic, oh and terrified of snakes as well. It's no wonder then that the snake pit scene in the Indiana Jones film, Raiders of the Lost Ark that manages to combine all of these activities and fears still gives me nightmares some 28 years on since I first saw it.

The joy of sport is about competition, speed, skill, agility, mental strength, unpredictable outcomes, teamwork, winning, participation and perhaps most importantly, sportsmanship. Which is why on Wednesday evening it was so disappointing to see someone who has for years encapsulated everything good about sport damage their reputation in an instant. When Thierry Henry decided to teach the much maligned England rugby team a thing or two about ball handling, he immediately wrote his name into the history books alongside Diego 'Hand of God' Maradona. I understand the arguments in his defence about reflex reaction, that it all happened very quickly but in my book whatever way you look at it, it's cheating. Mr Va Va Voom will forever have a reputation as a cheat.

At the CIPD annual conference that took place in Manchester this week, I was involved in a number of discussions about employer branding, psychological contracting and corporate values which led me to thinking about the role these have in football. What's the psychological contract that Christiano Ronaldo has struck with Real Madrid, what was it that attracted him to his new employers and what impact does that have on the other employees at the Santiago Bernabeu?

The deal on the part of his employers is reasonably straight forward - they expect high levels of performance, goals, trophies, revenue from merchandising, teamwork and an ambassadorial approach from their 'Galactico'. Did Ronaldo join Real for money, status, the heritage of the club, the chance to win trophies, a fresh challenge or all of the aforementioned? We'll probably never know the main factors of his 'deal' but we know that it exists. The real question is, "How much do football clubs work to build a mutually beneficial psychological contract"? When you're paying multi-millions of pounds and euros for a footballer, you'd hope it would be a lot because retaining and engaging them raises the employment stakes to almost unimaginable levels that are seldom replicated in the 'real' (not Real) commercial world. It's often said that it takes footballers a season to adjust to a new club - perhaps understanding the terms of the unwritten contract and developing a tailored induction programme may deliver a quicker return on investment.

And what impact does an employee earning more in a week than most will earn in 10 years or more have on those in administration, catering, hospitality and ground staff functions at the club? The answer is not a lot. The attraction at the lower end is likely to be based as much on the corporate brand and its values as it is any logical or well formulated employer brand. But that's the unique world of football as it is today.

Unfortunately it is money and success that are more important than values in football and the reason why cheating will continue to undermine the principles of the sport.

Corporate reputation - L&D's responsibility?

As Warren Buffett, the U.S. investor, businessman and philanthropist stated, "It takes 20 years to build a reputation and only five minutes to ruin it. If you think about that then you'll do things differently". Fitting it is therefore, that never has this quote been more appropriate than in recent times with the near collapse of the banking system and the subsequent onset of the global financial crisis.

You only need to skim through the newspapers or browse the internet to read of the damage to corporate reputation that is befalling some of our most recognised companies almost on a daily basis: Royal Mail and the ongoing dispute over modernisation; British Airways shedding 1,700 jobs and the threat of industrial action during the festive period; British Telecom announcing a u-turn on their decision to scrap their graduate scheme and insisting they are committed to investment in future talent.

Cause and effect

So, why is corporate reputation management important and what impact should this have for learning and development practitioners? Staying with the example of Royal Mail, its customers such as Amazon are already starting to take preventative action to secure service delivery and changing mail distribution provider. Royal Mail’s reputation is taking a battering and it’s costing them money now and probably a long way into the future.

"Everyone in the organisation has a responsibility for corporate reputation and that makes its management difficult."

According to the Reputation Institute, Corporate Reputation is the perception people have of an organisation - perception formed as a result of the personal experiences that people have, the messaging they see and hear, and the third party conversations they are exposed to. It differs from brand in the sense that brand is a promise and making a relevant and distinctive promise helps to build a brand. Corporate reputation is built by fulfilling that promise to stakeholders. A company therefore owns its brand, but stakeholders own its reputation. The difficulty this poses is that if someone else owns your reputation, how do you manage it?

The number of stakeholders for any organisation is likely to be multiple and diverse whether in the private or public sector. Take a moment to think about all of the different people you come into contact with; customers, suppliers, candidates, employees, shareholders, government representatives and influence groups to name but a few. The touch point with each may be formal or informal, planned or unplanned, frequent or infrequent yet the interaction has a bearing on how someone perceives you and the company you represent. It affects your corporate reputation.

With so many stakeholders to consider, it’s not that surprising that the responsibility for CRM in most organisations is segmented into key elements broadly speaking under the headings of consumer, investor, employee, supplier and general public reputation, with the individual functions owning each e.g. sales and marketing managing consumer reputation and finance (and the board) managing investor reputation with the assistance of PR and communications. What we really learn from this is that everyone in the organisation has a responsibility for corporate reputation and that makes its management difficult.

L&D's pivotal role

However, whilst the functional approach is correct, in my opinion it is employer reputation where most of the focus of attention should be applied which is good news for the influence that HR and L&D need to have in the corporate hierarchy. The Corporate Reputation Chain, developed by Professor Gary Davies and his team at Manchester Business School builds on the mid-eighties SERVQUAL framework. Essentially, the chain highlights the causal relationship between satisfied, motivated and engaged employees (the internal identity) and its positive impact (the external image) on customer satisfaction, loyalty, sales and therefore profit. This relationship isn’t mutually exclusive to customers as stakeholders but to investors, suppliers and the general public as well. The significance is the importance of the employee(s) in the chain and the need to establish, manage and enhance reputation as an employer.

"It takes 20 years to build a reputation and only five minutes to ruin it. If you think about that then you'll do things differently". Warren Buffett

This requires the organisation to: identify, communicate and live its employer brand; to focus its attention on the engagement factors that will help motivate and retain key talent; train and develop the leadership team and the wider employee population and communicate what makes the company a great place to work.

L&D plays a critical role in achieving this whether it’s teaching the importance of CRM to leadership and management, cascading it throughout the business, championing the company story or being ambassadors at all times. The induction and on-boarding process needs to have employer reputation as a key theme and customer service training should be delivered in the context of its direct impact on corporate reputation. I’m sure that BT, BA and Royal Mail are doing many of these things and doing some of them very well. The evidence of this will be how resilient they are to the damage that has been caused to their corporate reputation, how well they recover and how quickly.

Special Delivery Service

Early in the morning, just as day is dawning Pat feels he's a very happy man which is not necessarily a sentiment shared by all those parents who have endured countless re-runs of the jovial postman and his feline friend Jess. Complete with his replica van and Pat's 'copter' (a new addition in the recently updated version entitled Special Delivery Service), our 21-month-old son sings along to 'PoPo Pat' and shouts for more as soon as the credits roll. It's not until you really study the content of Postman Pat that you notice quite how incompetent the Greendale Postie is; damaging ice cream making machines, dropping pianos and getting balloons stuck on the roof of Ted Glen's workshop to name but a few mishaps. It makes you wonder how he's managed to keep his job for the last 27 years let alone achieve his recent promotion to Head of the Special Delivery Service in the bustling town of Pencaster. However, despite a degree of incompetence and no small measure of misfortune, Pat always manages to deliver on-time, with a smile on his face and upholding a strong set of morals and values. Pat's reputation remains intact.

So, how do we view the reputation of the Royal Mail following the decision by its 120,000 workers to approve strike action? In the current economic climate, it appears that there will be little sympathy for postal workers downing tools; on a corporate level businesses are battling hard to keep their heads above water and delays on customer deliveries and payments could be catastrophic; for the householder it means further disruption to service impacting on vital debt payments and messages of festive cheer at Christmas time not arriving. As with all disputes, there are at least two sides to the story. Royal Mail believe that it is doing the right thing by cutting costs, seeking to improve performance and modernizing at a time when they claim mail volumes are dropping 10% year on year. The Union (CWU), on behalf of its members, question the validity of the figures, highlight the hard work the postal workers do and seek to protect as many jobs as possible. The end result, the probability that the stand off will end up in industrial action, customers will take their business elsewhere and plunge Royal Mail further into financial difficulty thereby making the cycle increasingly vicious. The reputation of Royal Mail and its workers could be irreparably damaged in the weeks and months ahead as customers bemoan lack of or no service and the 'average man in the street' who is accepting pay freezes, cuts and redundancy has their own winter of discontent to cope with.

You see, the fortunate thing for Postman Pat is that he's not operating a commercial business. He's been able to modernize, introducing a new helicopter delivery service without budget constraints. The EU hasn't stepped in to Pencaster and insisted on deregulation, so he operates without competition. And, post volumes have remained consistent for the last 27 years with no sign of that changing. Pat can concentrate on the customer, Granny Smith (Royal Mail's pet name for its customers) which makes him and her happy.

The crux of the issue over reputation here is about timing; the scale of damage to corporate and employer reputation is likely to be greater because public opinion in the current climate will not be supportive to either Royal Mail or its workers and many people will be hoping that the only item of post that arrives on time is the special delivery of the striking postman's P45.

Unhappy Birthday

The melancholic tones and lyrics of Stephen Patrick Morrissey from The Smiths come to mind as we reach the first anniversary of the demise of Lehman Brothers, "I've come to wish you an unhappy birthday". In some ways it is hard to believe that was 12 months ago and that we have spent 365 days with the economy dominating the media landscape.

Undoubtedly, from that moment forward the reputation of the Financial Services industry has taken a battering and even those organisations in the City and in other global financial hubs who have not felt the pain on the huge scale of the likes of RBS or HBOS, have been tarnished by the the events that have taken place.

So what has been done to try and restore and rebuild the reputation? Judging by the continued coverage about banking bonuses, massive write downs and only last week the FSA published astonishing data about the number of banking complaints by customers http://tinyurl.com/ms6jnd, then not a great deal. And this negative reputation inevitably has an impact on the ability of financial organisations to attract top talent - not necessarily because their individual employer proposition is poor (in many cases it's probably very good) but because the combined reputation of the industry has been damaged. The sum of the individual parts in this case is not greater than the whole. If the Financial Services industry really wants to enhance its reputation not just as an employer, it may be time for businesses in the sector to work together for the common good. Time perhaps for an industry reputation task force?

As I approach my birthday on Friday which I'm sure will be a happy occasion (cards and gifts always welcome), I hope that in the next 12 months my reputation will have been built and enhanced more than has been achieved in the Financial Services industry one year on.

Wanna be startin' somethin'....

The two very kind followers of my blog will have noticed that I've been away and haven't posted anything for quite a while. The best intentions I set out in my first blog haven't materialised and I'm in danger of being another sporradic ranter and rambler of nothing of great consequence to anyone. However, allow me to put forward some mitigating circumstances that will help satisfy my conscience if nothing else - a mixture of the good and bad (the latter, an unintentional reference to the former owner of Neverland, MJ who features shortly) that has taken place over the last few months.

Top of the charts on the good side is that I got married, had a fantastic wedding shared with wonderful friends and family and then capped off by a brilliant honeymoon in New York. Whilst in the Big Apple, the King of Pop died and in the celebrity death equivalent of rubber necking at an accident on the motorway, we made our way to the Apollo in Harlem the following morning to see the start of the shrine to Wacko Jacko. A surreal experience where real and fake mourners met to share their grief, fans and pseudo-fans gathered to proclaim his genius and merchandisers reaped the rewards of their rapidly printed $20-RIP (off?) Michael T-shirts.

Bottom of the hit parade was the news on the day of our return from honeymoon that my former employer Barkers had gone into administration. Gone under. Kaput. No more. And with it they took my six months pay in lieu of notice and benefits totalling some £38,000. That's a whole lot of RIP Barkers T-shirts I'd need to sell to get that back. In the meantime, actually at exactly the same time, a pre-pack deal was being done with Penna to buy the assets. I am now a 'disgruntled ex-employee' (nice turn of phrase from the still employed CEO of Penna-Barkers) and creditor of Barkers in administration. I always knew that "I wanna be startin' somethin'" of my own and that hasn't changed. The Employer Reputation Company will launch officially in the next couple of weeks albeit with less working capital and less time to make it a success than I'd originally planned. As the next line goes, "I gotta be startin' somethin'".

So, what relevance are my mixed fortunes to reputation? How will Barkers be remembered? And of Michael Jackson, will his reputation and memory be one of musical genius or freakish episodes? The difficulty with reputation will always be, in the words of Warren Buffet that, "it takes 20 years to build a reputation and only 5 minutes to ruin it".