Royal Mail To Change Its Business Plan And Strategies Business Essay

august institutionalise To Change Its Business Plan And Strategies Business Essay royal direct HRM Strategies an Overview (2005-2010)AbstractThe rapid growth in the Digital Communication applications such as internet, fax, e position, online shopping, and the Postal Service Act (2000), liberalization of commercialize, drives violet chain mail to change its agate line plan and strategies to survive in the current dynamic completivepostal market and in a broader way its future business is uncertain. This experiment aims to depictthe empurpled harness Human Resource prudence (HRM) policies and strategies, and mainly focus for the period of 2005-2010. It also covers how purple Mail is dealing withcompetition from the new-made entrants, and how it mete outd the juvenile credit crunch and itsimpact on the gallant Mail business.IntroductionIn recent times, this company has been confronting with various problems. The group reportedloses for virtually(prenominal) quarters. So, the government had asked the postal regulatory body PostalService Commission (Postcomm1) to liberalize the postal market. Initially, in 2003 licensewere allotted to hush-hush company to handle the bulk mail. In 2006, the markets were fullyliberalized and the group loses its monopoly2 status. All the licensed operators were able todeliver mails to both the residential and business customers.Postal Service in the UK1 An Independent regulatory body set p up in the year 2000, to regulate the postal go in UK2 A preponderating player in the postal service market with full control over the market.3 http//www.royalmail.com.In spite of the forwarding in the communication regularitys resembling internet, email and otherelectronic messaging options, people be trusting on postal service for sending parcel andletters and peculiarly in elderly, disabled, and the low income groups, and the smallbusiness spheres. Every week the group serves 20 one million million customers3 through it s net tame of more or less 12000 post office branches and deliver some 400 million parcels a year throughgeneral logistics systems and parcel force .The universal service and the uniform pricing ar the two distinguished attributes of the RoyalMail postal service. Based on these attributes only the Universal Service4 Obligation (USO)was formed. As per the USO, the cost of delivering the letter is same ir heedive of thelocation. To regulate the postal service in the UK, the Postal Service Act was put in placewith the Postcomm. The main task of the Postcomm includes,4Delivery both working day to every premise regardless of price and location , some exceptionalconditions permitted by UK and Europe Union law.5 Handling with customers complaints in the postal services and monitoring the standards and feelof the services depictd by the Royal Mail.. Grant license to other companies.. Provisioning the uniform pricing and universal service.. Controlling Royal Mail pricing strategy and it s tone of services.. Advising the government on the development in the post services.To watch dog the Royal Mail quality services, an independent make-up Post Watch 5 wasformed to monitor and control the quality standards.Royal Mail Group HistoryRoyal Mail was naturalized by Henry VIII, in 1516 downstairs a Master of Post . Royal Mail wasavailable to public in1635, with postage being paid by the recipient. In 1660, Charles IIofficially established the General Post Office (GPO). Telegraph services was introduced in1840 by Royal Mail, and in 1912 the group started the telephone service.Post code was introduced in 1959. In 1969, the GPO became a public corporation from itsexisting government de musical compositionment. The post office made acquisition and partnership withGerman parcel, Katipos and TNT post group to encrypt into international market. In 2000, thecompany reported losses and it continued for some(prenominal) quarters. In 2001, the post office wasrenamed Consignia. I n 2002, Consignia was renamed as Royal Mail group plc.The Royal Mail Group lost its monopoly status when the 2006 liberalization was introduced.In 2007, government proposed to privatize the group but the election, change in thegovernment and the recent financial turmoil is the key factors for the postponement of theproposal without any further date.Literature ReviewOver the years, it is apparent that disposals are considering Human Resource concern policies as the key factor to succeed in the business. HR department is actingas a strategic business partner within the organization to make the good strategicbusiness and human resource policies to achieve the organization goals and objectives,rather than managing the employees and payroll, as was conventionally the case. Senior HRpractitioners and experts are more than in demand in the today s corporate world.Through the years, there is lot of organizational level studies and research across thebusiness sectors manifested measured relationship between the effective HR practices(recruitment and selection, performance appraisal, rewards and recognitions, training anddevelopment) and business performance. According to Mark Huselid (Huselid, 1995)seminal study related the adoption of HR practices across 968 US companies with theirfinancial performance (controlling for performance in previous years) .HRM authors such as Becker and Huselid (Becker and Huselid, 2006) emphasize the needfor HR strategy to be clearly joined to the business strategy and for the constituent HRPractices to operate in a joined-up way, this being seen as key in order for the strategy to befocused on what matters, avoid duplication and optimize outcomes . Therefore HR functionhas vital role in understanding the stakeholder s business goals, transforming those intocommercial business perspective and identifying the challenges and opport unities from theemployee s perspective and address them in their final approach.Combs, et al. (2006) aggr egated 92 large scale studies conducted at the organizational levelto produce a robust analysis across a large sample. This research revealed that on anaverage, having a progressive HR system (e.g. objective selection, training, appraisals,employee surveys, etc.) related to an average of 4% higher revenue per employee where fiveor six major HR practices were in place within an organization .Business ModelRoyal Mail Group operates through its subsidiaries Royal Mail, Post Office contain, GeneralLogistics Systems (GLS) and Parcel force worldwide. Royal Mail is responsible for collectingand delivering the mail in the UK and handles around 71 millions of letters and packages to28 million addresses in every working day, in line with its unique Universal Service Obligation(USO). Producing and Designing the stamps and, philatelical products are also taken care byRoyal Mail.The Post LimitedIt has national net work across the UK. Larger post offices in urban area were directlymanaged by the Post office limited and other branches are managed by franchise partners.General Logistic SystemsRoyal Mail acquired the General Logistic Systems in 1999 to enter into the European parcelmarket. GLS was market leader in the integration parcel distribution and express customerservice in the European market.Parcelforce WorldwideParcelforce Worldwide is responsible for collecting and delivering the parcel and expresspackages throughout the world and in the UK for both the individual and businesscustomers.Royal Mail Competition and ChallengesRoyal mail is facing tough competition in postal market after the full liberalization act, and inparticularly express package business. Its main competitors6 in the package language marketare world net, Deutsche Post, TNT, UPS, and other airline which provide express packageservices. approximately of its key competitors such as UPS, Deutsche Post, and TNT have large scaleof operations, which could put Royal Mail at a competitive disadvantage .6 h ttp//www.datamonitor.comThough the letter market is declining due to the digital communication advancements, RoyalMail s profitability and efficiency is vital for the future of the UK postal sector and it alsoplays a major role in the UK economy and providing and safeguarding millions of business organisations in therecent financial down turn, where as all other public and private sector firms are reducing itswork force in large numbers.. But Royal Mail faces a lot of challenges. The group has beenreporting looses for several quarters, and its pension deficit is widening Modernizationprocess is being very slow and also the tough competition from the new entrants in thedomestic and European markets are constantly increasing.The culture change is one of the biggest challenges Royal Mail has been facing from quitesome time. It required consistent high quality delivery from everyone in the company, valuefor money. According to, Adam Crozier7, Royal Mail must have the freedom and flexib ility toset the right prices, found on real(a) costs. If that happens, I think the new competitiveenvironment will succeed. Competitors are already targeting profitable business mail. Weneed to compete with them on price as well as service if we are to keep the universalservice8 in business .Improving the Customer ServiceOne of the main objectives for the Royal Mail was to reach everyone, everywhere, morethan any other business in the UK through its mail, post office, and parcel and packagebusiness services . There were many complaints from customers roughly loss of letters butafter working with Post Watch, the quality and service standards were cleansed whencompared to the previous years. Price is the predominate factor in the competition. bracingentrants are providing higher value services with the modern technologies. Royal Mail has tooffer high standard services to the customers.IT Initiatives7 The CEO Of Royal mail (2003-2010(June) )8 http//news.bbc.co.uk/1/hi/business/427 4335.To modernize its services and operations, Royal Mail streamlined its IT departments incollaboration with BT and Xansa. Royal Mail web based customers are growing vastly, so toimprove the communication with online users. Royal Mail has also utilise the SAP9Software to main its sales order and other process. As part its IT initiatives the groupintroduced the recruitment and employment process through online.Financial Crisis Impact on Royal Mail9 SAP Systems, Application and Products in data processing. ERP (Enterprise Resource Planning)software to automate the customer and payment details .10 Royal Mail Holdings plc Annual Report and Financial Statements for the period 0f 2009-2010Royal mail made unspoiled progress in (2008-2010), when compare on the previous year records.Due to the subprime mortgage crisis, all the major economies are misfortunate from the so-called credit crunch. Royal mail made profit, despite when the world economy in downturnand the mail market is declin ing in UK and in all part of the globe. Due to the weak globalmarket conditions, the group revenue dipped to 9,349 million 10in first time in a decade,but all it is quartette business groups (mail, post office, GLS, parcel force worldwide) made inprofits through their pricing strategy and good customer service. Royal Mail implementedmodernization and efficiency measures to automate the mail processing and the agreementthe made with Communication instituteers Union (CWU) also made positive impact among itsemployees.Business unit performance External Revenue Operatingprofit/Loss*M M2010 2009 2008 2010 2009 2008Royal Mail LettersGLSParcelforce WorldwidePost Office LimitedOther businessesGroup6,5646,7076,83012158(3)1,4871,4951,232112124114399399379171288389089117241(34)6151368286779,3499,5609,179404321162 start Royal mail financial repotsRoyal Mail HR Approach and StrategiesTo modernize the organization and create world class HR function, McCarthy 11 was found as the director in 2003. According to him, there was lack in coherent HR strategywhich was characterized by disparate spread of HR master copy across the group . The groupspent most of its cost on employment. Royal Mail reduced its HR employee strength from3700 to 2400 and saved 57 million in two years span. There were only few HR specialists andexperts in the entire organization. The HR functions were separated and payroll was the onlycentralization team.Profitability, Modernization, might and Employee Relationship are the key words forsuccess of any public limited company. Developing the good HR frame work and strategy arevital for the public limited organization like Royal Mail to sustain in the today s globalizedcompetitive postal market.Due to the advancement in the technologies, communication industry changed quickly.Internet, fax and other electronic options are dominating the traditional letters. Managingthe huge work force and trade union royal are the challenging task for Royal Mail, inparticula r to the HR Managers. With strong HR strategic plans and polices, Royal Mail canhandle their manpower effectively.Royal Mail HR Metrics11Royal Mail HR director(2005), http//www.personneltoday.com/articles/2005/01/25. People Strategies. Organizational Development. Shared ServicesThe main goal of the HR team is to build strong HR strategies and polices to manage andretain the human resources. It includes Recruitment and Selection, Learning, Careerdevelopment, Rewards and Recognition. Organizational Development and effectiveness arethe main objectives to provide the zero tolerance work place and working closely with thebusiness partners and HR directors. The training team conducts the lead, personal andcareer development programs to improve the leadership qualities and other work relatedtrainings.Royal Mail s people strategy key areas. Creating meaningful, challenging jobs with flexible working structure. Treating customers with value and respect. Building the organization to improve and respond according to the changes in themarket and environment. Recruiting and developing the core potentialities to prosper in the open competitivemarket. Recruiting and developing the leadership capabilities to deliver the goals and toretain the talent to contend successfully.Royal Mail HR PracticesRecruitment and SelectionRoyal mail follows equal luck as an employer. Employment practices are based onregardless of age, sex, disability, race, color, religion, and sexual orientation. Royal Mailemploys diverse mix of people who reflect the communities where we live and work. AtRoyal mail, selection and recruitment goes on for both the experienced professionals andfresh graduates. Different type of jobs are available permanent, part-time, apprenticeship,and seasonal (Christmas) jobs.Training and DevelopmentRoyal Mail believes in training and development. So, the training team organizes varioustraining programs for their employees which includes from starting induction training to thecustomized individual training suits12 through the on job training, mentoring, e- learning,and coaching. Major training programs provided by Royal Mail are12 http//www.royalmail.com/portal/rm/content1?catId=24400706mediaId=24400710. Information Technology. Health Safety. Communication Skills. Performance Management. Project Management. Leadership SkillsThe group also has self learning centers where employees can utilize different packagesaccording to their needs, and Royal Mail is having partnership and joining with different localinstitutes to improve the skills of their employees with various external trainings.Compensation and BenefitsRoyal Mail offers compensation package based on the employees skills and experience. Toattract the skilled employees, Royal Mail offers good compensation package based on thetype of the employment status like full time or part time, and long-lived or contract. RoyalMail offers the following benefits to all the employees based on their employme nt type.1313 http//www.royalmail.com/portal/rm/content1?catId=24500655mediaId=1600017414 http//www.ocp.co.uk/_Attachments/Re http//www.ocp.co.uk/_Attachments/Resources. Health and Welfare. holiday Entitlement. Basic pay/allowance. Pension. Time Out. Benefits /discounts/ ongoing discounts. Support for Disabled ApplicantsPerformance ManagementPerformance Management is an effective method to analyze the employees potential andcapabilities, if it is properly implemented. Measuring the performance of the employee is anindicator of the success of the organization.Royal mail introduces new performance management practices14. The objectives of theprograms were to 1.introduce a set of unwashed validated numerical indicators which hadbeen standardized for similar units/businesses. 2. Apply the Pareto principle and exceptionreporting. 3. Create a focus on looking forward, forecasting improvements (rather than abackward-looking nibble culture) .Work life Balance (Flexible working)Royal Mail is offering the flexible working option. This includes where employees areallowed to work from home for their personal commitments, leaving early for the baby careand compensating the time as per the business needs. It generally gives moral support tothe employees and the best way to recruit and retain the talent resources which in turnimprove the productivity.Corporate Social ResponsibilityRoyal Mail strongly believes in luck to society. Royal Mail and its employees play alpha role in serving to the community. Royal Mail s ambition is to become the leadingorganization in corporate office is a priority of our Chief Executive and every one ofour Managing Directors . Employees also fund to the good cause via their payroll regularly.Royal Mail also takes part in controlling the climate change employ renewable sourceelectricity to make the environment green. It raised 1.8 million15 via charitable donations in2009. As a leader in corporate social responsibility initiatives, the group won the followingawards in the last two years.BITC Example of Excellence (Healthy Workplace Award) 2009Shortlisted for Personnel Today Awards2009 Award for Health at WorkRoyal Society for the Prevention of Accidents Awards 2009 Gold Award, SafetyInstitute of Fundraising Awards 2008 Winner, Best Use of Payroll Giving AwardWinner Quality in marking Media Environmental Award, Quality in Print Awards 2008 .Findings and Suggestions15 ww.royalmailgroup.com/portal/rmg/content1. Prioritizing the HR strategy according to the key business goals and objectives.. Identifying the challenges and opportunities to moving ahead.. Develop and define the HR strategy backed by strong analysis with good HR metrics.. Reviewing the defined strategies and approaches with stake holders and businesspartners.. Finalize the HR polices and strategies.. Building the right-sized productive work force to achieve the business goals.. Automate and standardize the mail process with modern technologies andequipments to compete in the business market with skilled and efficiency handswhere the market and environment is changing rapidly.. Analyzing the data with help of employee and customer satisfaction survey, opinionpool and feedback data.Understanding the external market environment and competitor strategies is importantwhile framing the HR policy. HR metrics will vary with each organization depending upontheir vision and mission statements. Metrics should be cover the organization goals,rather than following the best industry practice. Stakeholders and business partnersshould be engaged while framing the strategy, to make the strategy effective.ConclusionDue to the advancement in digital technologies and internet, the postal industry and marketis changing quickly. Mailing market is declining and online shopping and other commercialactivities through internet are growing speedily. So, Royal Mail has to modernize andrestructure their business strategies to survive in the liberalized competiti ve market place.As many studies, research, and survives demonstrated the strong relationship between thegood HR strategic policy and the business performance. So, Royal Mail has to develop thestrong HR policies and strategies to streamline the HR practice to achieve the organizationalobjectives and goals. Implementing the effective HR strategies in public organization likeRoyal Mail is very challenging task for HR mangers and, where trade union and pensionproblems are widening year by year. The strong determination from the HR mangers, topmanagement, regulatory bodies, and the government can help the Royal Mail to implementthe HR and business strategies to shape the UK postal industry and economy and inparticularly in the current economic crisis condition where unemployment is already in peak.