British Gas HRM Case Study Essay
British Gas HRM Case Study
The UK enjoys a wealth of indigenous energy resources and has the technical expertise and experience to exploit them. Much of this expertise is being utilized in gainful commercial ventures overseas. In its position as one of the most energy-rich countries in Europe, the UK is uniquely placed to profit from a strong energy market. Expenditure on energy amounted to £99.87bn in 2008. UK householders spent £40.67bn on energy products, representing 5.2% of total consumer expenditure.
Privatization has provided the impetus for competition, resulting in a major restructuring of the energy industries and the companies involved. Restructuring commenced in the late 1980s with the privatization of the gas sector, closely followed by similar moves in the electricity, coal and nuclear sectors. Oil resources had always been in private hands. Full liberalization was achieved in May 1999, with the completion of the opening up of the electricity market. All consumers, both domestic and business, are now free to choose their supplier of gas or electricity.
A succession of bids, notably in the electricity sector where many of the regional electricity companies (RECs) are under new ownership, has changed the nature and structure of the energy industry. Thus, public electricity suppliers have evolved since privatization into complex structures embracing diverse businesses. Most have extended their interests into generation or are part of wider groups with major interests in generation. .
Acquisitions by foreign concerns, notably from the US and from Europe, have created a much more international industry. The £10bn take-over of Powered PLC by E.ON of Germany remains on track for completion in 2002. However, the cost of acquiring energy customers has become too high for some US energy groups. The collapse of Enron Corp., the energy trading group, in November 2001, was threatening to destabilize energy markets in the US and Europe.
1.1 BRITISH GAS British Gas is Britain’s favorite domestic energy supplier. As well as providing gas and electricity, they also install and maintain central heating and gas appliances in millions of homes throughout the country. Part of the energy group Centrica, British Gas provides gas, electricity and home repair services to eight million home and business customers in England, Scotland and Wales. It is the UK’s largest operator in the installation and maintenance of domestic central heating and gas appliances, serving 16.6 million customers. In addition, their customers turn to them to provide expert, hassle-free care that takes care of their kitchen appliances, home electrics and plumbing and drains.
Everything they do is driven by their desire to deliver high quality products and services. They operate in England and Wales under the British Gas brand name and as Scottish Gas in Scotland. Among a total workforce of 28,000, British Gas employs more than 9,000 trained engineers who carry out servicing and break-down calls. In 2008, 2.2% of its engineering workforce was female and 4.6% were from an ethnic minority background. Against the background of a highly competitive energy market, they continue to be the first choice gas supplier for millions of customers. What’s more, since the residential electricity market opened to competition in 1998, they’ve grown to become the largest supplier of electricity to residential customers in Britain.
2.0 Challenges faces by HR managers at British Gas
Over the last 20 years, the workplace has changed in more ways than one could have ever imagined, resulting from the increase in technology, innovation and globalization, new employment legislations, different attitude in society, economic recession and ethnic diversification. The next decade will bring even greater change, impacting all facets of the workplace, including major changes for the HR department and HR managers. In order to respond to the demands of globalization, HR managers at British gas will require new skills and competencies relating to language and culture, technology capabilities, methods to measure and quantify effectiveness and evaluate strategies and return on investment. Evidently, these skills and competencies will result in an emerging new role for HR managers, requiring them to be strategic business partner, supportive of the overall corporate strategy.
The role of HR managers has changed from a less administrative role to more of a strategic role. HR managers will continually be required to prove their effectiveness and their existence. They will be expected to understand strategic business practices and promote cultural diversity within the organization. They will need to understand the core business of the organization and become partners with line managers. They will need to prove that their initiatives and programs are result-oriented, providing specific measurable results in terms of business competitiveness that contribute positively to the bottom-line of the organization. They will be required to stay current with leading edge as more and more organization is faced with the demands of globalization and strategic alliances with other competitive organizations in the energy sector in UK. Whilst the current economic climate is clearly influencing the agenda for HR leaders, the challenges of retaining, motivating and aligning employees remain a priority.
The results show that more than ever there is pressure on HR to deliver real business impact, and to do so with HR costs constrained. (The green village, 2009) Intuitive talent management systems, designed for the business as well as HR, can play a critical part in ensuring the organizational adoption of any talent strategy. The number of respondents prioritizing the need for performance management, succession and career planning systems shows that HR managers realize the importance of enabling technology in executing talent management programs. Workplace flexibility is expected to be on the rise as the future workplace, the ‘virtual office’ is characterized by creative and flexible work arrangements. As more employees work off-site-up to two thirds of an organization in the 21st century – there will be an increase in emphasis on performance and results as opposed to the number of hours worked.
In addition, off-site employees can expect to attend fewer meetings. Specified work will become much more collaborative and management will spend nearly all its time managing cross-functional work teams who enjoy a lot of autonomy. In essence, there will be a movement, a trend towards a decentralized model of HR. HR managers will have to accommodate employees in their virtual work locations and find ways to manage corporate culture, socialization and employee orientation. In order to obtain and maintain a competent workforce, they must act as organizational performance experts and shape employees behavior without face to face meetings.( Research and markets, 2009) Globalization will impact HR managers by requiring new skills such as language capabilities. For e.g., in order to recruit employees from other cultures, HR managers will either have to learn new languages or else they will certainly have to have foreign speakers on staff. But in order to facilitate communication among people coming from a wide range of language backgrounds in UK.
Organization must take into account cultural differences that shape managerial attitudes, when developing multinational management programs. For e.g., British managers value individual achievement and autonomy, whereas French managers appreciate competent supervision, fringe benefits, security and comfortable conditions, while Indian managers gives more importance of their culture and tradition. HR managers in British gas must therefore be familiar with and understand other cultural norms to promote organization diversity. An organization that recognizes and promotes cultural diversity will benefit because it will be employing the market that it serves.
With increasing globalization and competition within the market, a diverse workforce is conducive to attracting and retaining a strong client base. While competing in an international market, employees from diverse national backgrounds provide language skills and understanding of other cultures. HR professionals will also be responsible for providing cultural sensitivity training for the organizations employees and for managers throughout the entire organization. (Czebter, Anamaria, 2002)
HR professionals play a critical role in the globalization process by helping companies evaluate the human resource prospects and possibilities involved in moving to different regions of the world (Marsnik and Luthans, 1997). As the global economic crisis continues to impact businesses, employee retention is seen as the greatest challenge overall. This reflects the need for organizations to identify and retain top talent during a period when internal mobility is essential to retain a competitive edge and ensure company survival as the UK economy slows.
Since 2006, the ‘HR Challenges’ research has found that employee retention is the biggest concern for HR managers. In an unstable economy, employee engagement tools such as effective goal alignment, internal mobility, career planning and succession programs are essential for motivating the workforce. According to reports, almost half of HR managers named ‘a system to improve performance management, succession and career planning’ as the one thing that would help them do their jobs better in 2009. Whilst the current economic climate is clearly influencing the agenda for HR leaders, the challenges of retaining, motivating and aligning employees remain a priority.
3.0 HRM Models
3.1 Guest’s model of HRM
David Guest’s (1989, 1997) model of HRM has 6 dimensions of analysis:
* HRM strategy
* HRM practices
* HRM outcomes
* Behavior outcomes
* Performance outcomes
* Financial outcomes
The model is prescriptive in the sense that it is based on the assumption that HRM is distinctively different from traditional personnel management .It is idealistic, implicitly embodying the belief that fundamental elements of the HRM approach (essentially those of the Harvard map) such as commitment have a direct relationship with valued business consequences. However, Guest has acknowledged that the concept of commitment is ‘messy’ and that the relationship between commitment and high performance is (or, perhaps, was – given the age of this material) difficult to establish. It also employs a ‘flow’ approach, seeing strategy underpinning practice, leading to a variety of desired outcomes. Like its American predecessors, this UK model is unitarist (tying employee behavior and commitment into the goals of strategic management) and lukewarm on the value of trade unions. The employee relationship is viewed as one between the individual and the organization.
3.2 The Harvard Model of HRM
This map is based on an analytical approach and provides a broad causal depiction of the ‘determinants and consequences of HRM policies.’ It shows human resource policies to be influenced by two significant considerations: * Situational factors in the outside business environment or within the firm such as laws and societal values, labor market conditions, unions, work-force characteristics, business strategies, management philosophy, and task technology. According to Beer et al these factors may constrain the formation of HRM policies but (to varying degrees) they may also be influenced by human resource policies.
* Stakeholder interests, including those of shareholders, management employees, unions, community, and government. Beer et al argue that human resource policies SHOULD be influenced by ALL stakeholders. If not, ‘the enterprise will fail to meet the needs of these stakeholders in the long run and it will fail as an institution.’ The authors also contend that human resource policies have both immediate organizational outcomes and long-term consequences. Managers can affect a number of factors by means of the policy choices they make, including:
– The overall competence of employees,
– the commitment of employees,
– the degree of congruence between employees’ own goals and those of the organization, and – the overall cost effectiveness of HRM practices.
3.3 HR Activities of British Gas
British Gas ran a number of diversity workshops, primarily for its senior and middle managers, to engage them and help them understand what the organization was trying to achieve and why it was trying to achieve it, and show them what a diverse workforce would look like ‘on their patch’. Meanwhile, all managers who are either involved in recruiting and/or managing staff and all recruitment specialists have undergone equality and diversity training to again ensure they fully understand what British Gas is trying to achieve and why, and are able to make decisions free from bias. When recruiting British gas use technical skills to undertake the work to the required standard to having the people skills to deliver excellent customer services. As a result, recruitment and selection of apprentices and trainees is increasingly focusing on recruiting for attitude. Examples of attributes and competencies that British Gas looks for are listed on the Recruitment website and include:
● Good communication, organizational and problem-solving skills
● Aptitude for team work
● Careful, accurate and methodical approach
● Polite, tactful, friendly, professional, with a pleasant manner for dealing with customers. With the change in emphasis away from pure technical skills to behaviors and attributes, there were initial concerns that the quality of the intake or the pass rates could drop within the Academy. Carole Willsher says: ‘We were a little worried that we would get apprentices and trainees with great people and communication skills, but who were technically not very good. But that’s not been borne out at all. The pass marks remain very high. It shows that if you’ve got the attitude to want to learn and get on, you can do really well
All the recruitment policies, practices and literature have been reviewed to remove any gender or race bias. In addition, a thorough audit of policies and practices to remove any age bias was carried out at group level by parent company Centrica ahead of the Employment Equality (Age) Regulations in 2006. It brought to light the need to make a number of changes, the most significant of which was the removal of upper age limits for entrance to the British Gas apprenticeship scheme (Previously, the scheme was targeted at young adults in the 17–23 age range).
British Gas is focusing this year on developing partnerships with organizations that have already built strong links with its target audiences, including Job centre Plus; the London Development Agency; housing associations and specialist groups including the Windsor Fellowship, a charity that offers educational and leadership programs to develop diverse young talent; Women and Manual Trades; and YWCA, a charity working with disadvantaged women in England and Wales.
4.0 Recruitment and selection
The overall aim of the recruitment and selection process should be to obtain at minimum cost the number and quality of employees required to satisfy the human resource needs of the company. The three stages of recruitment and selection dealt with are
1. Defining requirements – Preparing job descriptions and specifications; deciding terms and conditions of employment; 2. Attracting candidates – reviewing and evaluating alternative sources of applicants; inside and outside the company, advertising, using agencies and consultants; 3. Selecting candidates –sifting applications, interviewing, testing, assessing candidates, assessment centers, offering employment, obtaining references; preparing contract of employment. (Armstrong, 2007)
4.1 British Gas Recruitment and Selection Process
The greater focus on customer service skills and personal attributes is reflected throughout the recruitment process itself. The initial application form must now be completed online. Basic biographical information is requested, and applicants are required to complete basic Maths, English and logic tests. However, the key part of the application is a personality/work style questionnaire, which is used to assess an applicant’s suitability. Applicants must respond to a series of questions designed to assess their attitude to work and people. The questionnaire is lengthy, as similar questions are asked in a number of different ways to ensure consistency of responses. Applicants who score highly after this initial screening then have a telephone interview to confirm essential information – for example, to be eligible for the apprentice technical engineer program, applicants must be aged at least 17, must have four GCSEs at grade C or above, and must hold a full or provisional UK driver’s license.
Those who pass this stage are then invited to an assessment centre. There are three elements to the assessment day – an interview, a role play exercise and a manual dexterity test. The interview is largely based around questions relating to the candidate’s completed online questionnaire to further assess their personal attributes and competencies. Similarly, the role play is also used to assess a candidate’s attitude and whether they are able to understand and assimilate information, but more importantly, to see how they deal with customers. The test involves a practical assessment, but no gas-related knowledge is required – it is simply designed to assess whether the candidate is able to follow step-by-step instructions and handle small components. The recruitment process is lengthy but thorough and a big investment in terms of time and resources for British Gas, admits Carole Willsher. ‘But it’s been designed that way to ensure that we get the right people with the right skills who will fit into our organization and help us move closer to where we want to be in terms of having a diverse engineering workforce.’
Recruiting is an uncertain game, even at the best of times. On the other hand the larger your pool of candidates, the greater your chance of finding someone who is just right for you. However, this possibility has to be balanced again the fact that you can’t interview hundreds of candidates for every available post. So you need to develop the expertise of defining your job requirements, while ensuring that these requirements are presented to the widest possible field of candidates in the given context. (Pettinger and Allen, 2007)
British Gas ran a number of diversity workshops, primarily for its senior and middle managers, to engage them and help them understand what the organization was trying to achieve and why it was trying to achieve it, and show them what a diverse workforce would look like ‘on their patch’. Meanwhile, all managers who are either involved in recruiting and/or managing staff and all recruitment specialists have undergone equality and diversity training to again ensure they fully understand what British Gas is trying to achieve and why, and are able to make decisions free from bias.
Selection involves a number of costs; the cost of the selection process itself including the use of various instruments, the future costs of inducting and training new staff and the cost of labor turnover if selected staff is not retained. (Bratton and Gold, 2000)
4.2 British Gas Targeted advertising
British Gas uses a variety of ways and media to appeal to its target audiences, including: ● advertising in magazines like ‘Bliss’ and ‘Sugar’ which are aimed at teenage girls, careers-type websites like Voice and The Asian News, and the gay media ● redesigning its recruitment advertisements in terms of both images and language to reach Out to people from more diverse backgrounds
● ensuring that marketing materials such as recruitment brochures and its dedicated recruitment website (www.britishgasacademy.co.uk) portray a diverse range of individuals to help challenge stereotypical attitudes and project an inclusive image – for example, the website contains a number of real apprentice and trainee profiles including Kirk (a BME apprentice technical engineer) and Maria (a female BME trainee electrical field engineer) ● producing DVDs for schools and partner organizations
One of the key objectives of the diversity team is to increase the number of applications from under-represented groups. To attract as wide a range of talent as possible, the team has introduced changes to all areas of the recruitment and selection process, including developing partnerships with organizations that have already established relationships with their target audiences; reviewing all its policies and practices to remove any gender, race or age bias; and changing the emphasis from recruiting for technical ability to recruiting for attitude.
The diversity team adopts a number of positive action strategies to raise awareness of the different opportunities available at British Gas among under-represented groups including running taster days and building partnerships with organizations that already work with people who are among their target audience
4.4 Partnership working
Recognizing that there are difficulties gaining access to under-represented groups, British Gas is focusing this year on developing partnerships with organizations that have already built strong links with its target audiences, including Job centre Plus; the London Development Agency; housing associations and specialist groups including the Windsor Fellowship, a charity that offers educational and leadership programs to develop diverse young talent; Women and Manual Trades; and YWCA, a charity working with disadvantaged women in England and Wales. Another way that British Gas is developing partnerships is by working with other large employers, particularly those that experience similar issues in the recruitment of a diverse workforce, such as the London Fire Brigade and BT Open reach. The aim of these relationships is to share best practice and data for benchmarking purposes.
4.5 Taster days
British Gas regularly runs women-only and BME taster days, with the specific aim of attracting women and ethnic minorities into engineering and apprenticeships. The day is designed to give participants a clearer understanding of the engineering opportunities at British Gas. Attendees are given a presentation on the career paths available, an opportunity to meet engineers to find out what the job is really about, and a chance to question a panel of recruitment and training experts from the Academy. Taster days are usually planned to coincide with the availability of apprentice or trainee positions in a particular area, so that if people are interested by what they find out, they can apply while they are still keen.
British Gas has developed a network of engineering ‘ambassadors’ from its workforce – apprentices, trainees and qualified engineers – who provide support to the diversity team in recruitment and awareness-raising activities including school visits, careers events and taster days. They are able to promote a positive side to engineering and their ability to tell people firsthand what they do on a day-to-day basis and what it is really like to work for the organization is a powerful tool in changing perceptions and in motivating young people, women and those from a BME background to consider a ‘non-traditional’ career in engineering. The ambassadors are also used as role models in promotional materials such as DVDs, recruitment brochures and the Academy’s dedicated website, and in media campaigns.
5.0 Training and Development
Training enables people to perform better in their jobs, when they perform better they feel pride and fulfillment. (Allen, 1996)
To attempt to identify the dynamics in an organization which demonstrate that development of self and others is being taken seriously at all levels and that such investment is having a positive impact on individual and corporate performance. Such a quest begs all sorts of questions, Does strategic training only incorporate that which has a quantifiable effect on business objectives.( Mabey and Salaman ,1999)
5.1 British Gas Training & Development
At British Gas take training and development very seriously, beginning with an induction program that will give all the skills need to succeed. They want people training to be a rewarding and enjoyable experience, so have made sure that trainees are involved all the way through from day one until graduation. And trainees will find that the more they put in, the more they’ll get out, with the ultimate goal to be ready for a role within one of our existing British Gas Energy Sales teams. Trainees will learn not only about the history of British Gas, but also brand and what it means. Naturally this will include their fantastic products and services, so trainees’ have the confidence to talk to people about all their energy and home services needs. Company’ll also look at the important sales side of the role, helping trainees refine their existing skills, or develop new ones if they don’t come from a sales background.
Once completed training, they’ll be supported through their first few weeks by an experienced buddy who will be on hand to offer guidance and develop skills further. In addition manager will also regularly review progress and answer any queries so trainee won’t be left feeling on their own. In short, company has an excellent training package waiting for recruits. Training that will give them the skills and knowledge which, in addition to natural enthusiasm, will help take advantage of company position as the largest energy supplier in the UK when speaking with prospective and existing customers. Recruit’ll also be rewarded for efforts with continued development opportunities.
5.2 British Gas AcademyBBBBB Energy Academy
Box 2: The British Gas Energy Academy
Established in 2003, the British Gas Energy Academy (the ‘Academy’) was set up to address a severe shortage of qualified gas engineers. This was caused largely by the privatization of the gas industry in 1986, which led to major fragmentation of the industry – large organizations were broken up while new players entered the market, and the number of qualified engineers in the UK failed to keep up with demand. With a plan to recruit an additional 5,000 new engineers by 2007/08 to address this skills shortage, and recognizing the significant financial investment this would involve, British Gas created the Academy, bringing together existing internal training centers, the recruitment function and the management of third-party training.
This facility enabled British Gas to recruit and train large groups of suitable individuals to become fully competent engineers. The Academy runs two types of training programs for those who choose a career as an engineer: it offers apprenticeships for individuals wishing to become technical engineers responsible for central heating system maintenance and installation, and traineeships, primarily for people looking for a career change, so they become qualified engineers responsible for maintaining electrical and gas appliances. In addition to training new recruits, the training centers are used for mandatory competency training and three-yearly assessments of trained engineers to ensure they maintain their skills and keep up to date with new information and technologies.
Today: ● the remit of the Academy has since been expanded to handle all volume recruitment for British Gas, including call centre and sales staff as well as induction and skills training for call centre and operational agents and team leaders ● all recruitment is channeled through a dedicated website, www.britishgasacademy.co.uk, which has around 38,000 visitors a month ● the Academy invests around £30 million each year recruiting and training staff ● training is delivered at a number of purpose-built facilities across the UK, stretching from Hamilton in Scotland to hatcham in Berkshire.
6.0 Performance Management
Performance management is a process on performance measurement approaches, such as the balanced scorecard. While the balanced scorecard offers a framework for the collection of strategic information, performance management ensures that results are used to influence the selection of planned actions and to foster the renewal of dynamic, competitive strategy. Unlike most tools and techniques, performance management is a continuous, enterprise-wide process, rather than a one-time, isolated event. Six Performance Management imperatives are Compliance Management, Profitability Management, Cost Management, Performance Improvement, and Business Innovation
6.1 British Gas Performance Management
British Gas performance appraisals Serve as an objective basis for communicating about performance and Enable the employee to differentiate between unacceptable and acceptable results. Increasing job, inform new expectations about job performance and encouraging the open and trusting relationship with employees. Performance expectations are the foundation for appraising employee performance. Standards recognize is a baseline for measuring performance. From performance standards, supervisors can provide specific feedback relating the gap between expected and actual performance. 6.2 British Gas use following steps to review employee performances
Ask the employee to meet for the review; have the employee estimate progress-to-date. Begin meeting by asking employee to estimate progress-to-date toward each goal. Listen to employee’s comments and take notes. Discuss progress and praise employee, Manager and employee need to engage in fact-finding and determining progress-to-date. It is vital that regardless of how far away employee is from meeting the goal, manager praise him/her for his/her progress-to-date. Re-negotiate goals and/or resources where deviation is significant, If the deviation is downward, manager and his employee should discuss causes and solutions to agree on appropriate actions. Appropriate actions may include increasing available resources, agreeing on activities which will enable employee to meet goals or adjust the goals downward.
If, on the other hand, employee is exceeding goals, manager should discuss how added effort and/or resources may be utilized to further exceed the goal. Manager and his employee may decide to add additional goals at this time as well. Write down new agreements and set a follow-up date, Take notes during the discussion. These should be used as a summary of the agreements so that both manager and his employee can review them. A new follow-up session should be scheduled at a time when the data will be available to evaluate progress toward the goal(s). Thank employee, But what if the performance has been below agreed targets; the appraiser must be able to review and set objectives which will improve performance.
Performances discussions are monitored externally to ensure consistency .Staff are introduced to a series of mutual benefits. For the individual it stressed clarity of expectations, strengths, feedback on results and the improvement in motivation and ability to independently gain recognition. For the organization it stresses performance, team sprit, accountability, reduced errors and flexibility. Performance appraisals looks forward to agree standards, targets and training that will help improve performance and achieve company business objectives.
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Subject: Human resources,
University/College: University of Arkansas System
Type of paper: Thesis/Dissertation Chapter
Date: 17 October 2016
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