This paper analyzes the human resource management strategies employed by Alliance & Leicester, a major UK-based financial services organization. It examines the company's combined approach to recruiting, its use of contracted specialist training providers, and its range of financial and non-financial motivational incentives. The paper also evaluates the strategic fit between the reward system and organizational goals, discusses the cost implications of each HR policy for key stakeholders, and proposes recommendations for improving transparency in the reward system and integrating training into the motivational framework. Background information on the company's history and financial performance is also provided.
Alliance & Leicester uses a combined approach to recruiting its staff members. First, it strives to meet its staffing needs through its organizational website. In doing so, it promotes the company not only as a leading banking institution, but also as a great place to work and a "community of 9,000 ambitious, capable people supporting one another to achieve personal and shared goals" (Official Website of Alliance and Leicester, 2009). The website lists available positions and the skills required from candidates.
A second recruiting method involves placing advertisements in specialized media channels to attract candidates. A relevant example is the job advertisements placed on the Your County website. Finally, the third and most traditional approach is sending information on available positions to employment agencies. When seeking to fill multiple vacancies simultaneously, the company enlists specialized recruitment firms such as Baxter Neumann or Hays Resource Management (Gumtree, 2009).
Alliance & Leicester recognized the necessity of employing capable and skilled employees not only because they represent the company's liaison with its customers, but also because — as the company does not offer a tangible product — customer satisfaction is closely tied to the quality of the services provided. This includes, to a significant degree, the impression created by interactions with organizational staff. Additionally, training is pivotal not just for customer satisfaction, but consequently for organizational profits.
Alliance & Leicester generally contracts the services of specialized training institutions to ensure that staff members benefit from the expertise of the best providers. One of the largest training contracts was signed in 2004 with QA, extended over a period of three years, during which "QA, the UK's largest independent provider of IT training and consulting, [was in charge of] the delivery and administration of technology and end-user desktop training to Alliance & Leicester employees throughout the UK" (Training Press Release, 2004).
Alliance & Leicester offers its employees a wide range of financial and non-financial incentives. The financial incentives are addressed in the following section. At this stage, however, it is important to note that the financial services company stimulates its employees by offering a broad series of benefits, including "flexible holidays, childcare vouchers and healthcare options" (Your County).
Another means of motivating staff is supporting their professional development. The company's management strives to identify its most reputable, skilled, and capable employees and present them with promotional opportunities. "Professional and special opportunities occur throughout the group in areas as diverse as: Financial Advice, Statutory Accounts Management, Business Support, Secured Loans & Impairment Group Finance, Branch Management and Financial Protection" (Your County).
The rewarding policies for human resources at Alliance & Leicester are generally not disclosed to the public. However, anonymous sources from within the organization indicate that the annual income for a product manager lies between £33,000 and £35,000; the salary of a database administrator is between £34,000 and £37,000; the wage of a computer operator ranges from £33,000 to £36,000; and the salary of a marketing communications manager is between £38,000 and £41,000. Information on premiums and bonuses is scarcer, but the same sources indicate that a product manager can receive a bonus of between £655 and £715 (Glass Door, 2009).
Since the rewarding system at Alliance & Leicester is not generally transparent, it is somewhat challenging to assess its correspondence with the strategic direction implemented by the organization. Nevertheless, it can be concluded that the management team recognizes the diverse challenges and responsibilities associated with each position and has accordingly developed a reward system that reflects the demands of each role. For instance, while the tasks and responsibilities of the product manager are crucial for overall business success, the reward system indicates that they are considered less critical than those of the marketing communications manager.
This suggests that the executives at Alliance & Leicester place considerable emphasis on customer-oriented activities, and that in pursuing this orientation, greater priority is given to maintaining ongoing communications with market representatives rather than to developing new products. Overall, the fit between strategic direction and reward system appears fairly strong, in that the reward structure reflects the company's strategic goals and the courses of action implemented to achieve them.
An analysis of the human resource management policies developed and currently implemented by one of the UK's largest financial retailers reveals several applications of theoretical models and concepts. One such model is the traditional principle whereby wages reflect the duties and responsibilities assigned to each position. The more complex and difficult to replace a role is, the higher the salary of its occupant. This is best illustrated by the salary discrepancies between the product manager and the marketing communications manager.
Another way in which Alliance & Leicester applies theoretical HR models is through its approach to staff motivation. The company has developed a broad set of incentives designed not only to increase employee job satisfaction, but also to improve performance and thereby enhance the organization's ability to achieve its objectives. A relevant example is the implementation of flexitime, or flexible working schedules, which offers a twofold advantage. As noted by Kanawaty (1992, pp. 68–69):
"Employees find that flexitime helps to reduce stress resulting from conflicting demands of work, family and personal life. It eliminates daily anxiety about punctuality, reduces travel time and costs and allows more daytime participation in non-work activities. It may result in improved productivity because of greater motivation and better morale of employees; absenteeism declines as employees no longer have to deal with personal matters during working hours; overtime costs are reduced; and in addition, it facilitates recruitment, as flexitime is attractive to potential candidates."
"Financial costs and stakeholder effects of each HR policy"
"Proposed improvements to training framing and pay transparency"
"Low-cost implementation and employee satisfaction metrics"
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