HRM648- COMPENSATION & BENEFITS

GUIDELINE FOR ASSIGNMENT 1:

CASE STUDY

This guideline is divided into 6 sections namely instruction, format, requirements,

submission, grading and reminder. Please read through all the 6 sections carefully
so you will understand what is expected of you.

1.0 Instruction

In a group of 4 students, you are required to write an assignment based on RBS’s 6-

page case study (the case is attached at the back). Please read through the case
study and answer the questions that followed.

2.0 Format

This assignment will be divided into 3 sections, namely introduction, content and
conclusion. Below is the suggested content in each sections:

Intro: Provide a brief introduction of the case, including identifying the main issue.
Content: Answer the 5 questions that followed. (Please elaborate in detail, including
provide examples from the case: events/programs/initiatives/awards etc.)
Conclusion: Conclude and provide recommendation/s (if any).

3.0 Requirements

Font: 12, Times New Roman, 1.5 spacing.

10 pages, excluding cover, table of content, students’s declaration, turnitin result,
references and appendices (if any).

4.0 Submission

Please submit this assignment on SEMINAR 5 through email:

hrm648compensation@gmail.com

All the best! 

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 Motivating through Total Reward
A Royal Bank of Scotland case study

Introduction

The Royal Bank of Scotland Group (RBS) is one of the largest financial institutions in
the world. It is a global business with a range of operations in Europe, North America
and Asia Pacific. RBS has centers in thirteen European countries, sixteen North
American states and eight major Asia Pacific cities.

RBS is one of the world's leading financial services companies providing a range of
retail and corporate banking, financial markets, consumer finance, insurance, and
wealth management services. It serves more than 36 million customers world-wide
and employs more than 140,000 people.

In addition to the provision of a full range of banking services under The Royal Bank
of Scotland and NatWest brands, RBS also includes Citizens Financial Group, Ulster
Bank Group, Coutts, Direct Line, Churchill and around 40 other brands. As a global
business its operations are diverse. For example, in 2005, it bought a share in the
Bank of China, China's second largest bank, opening up new opportunities such as a
new credit card business.

For RBS to offer world-class financial services, it is vital that it attracts the most
talented people. These are the business leaders of the future. At a time when there
is fierce competition for talented people, RBS positions itself as a world-class
employer, with world-class employment opportunities, not just in the UK, but across
the globe - in China, Hong Kong, Singapore, Japan and Australia as well as Europe
and the USA. With different labour market conditions in each location, RBS
recruitment is based on merit, from the widest pool of talent available.

Roles at RBS

Due to its scale and diverse range of businesses, RBS has lots of different career
opportunities to offer. These include bankers, traders, sales, customer service,
investment analysts, and business advisors. There are also business support roles
such as IT, marketing, human resources, finance, and legal. Careers can start
directly after leaving school on an apprenticeship programme or from university on a
graduate development programme.

Performance management

At RBS almost every role can be described in terms of specific job targets. This
method of performance management allows managers to measure each individual's
performance in a specific way and reward them accordingly. RBS employees will
agree job objectives and targets with their line manager at the beginning of the year.
Their performance is then measured and reported on during the year. At the end of

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the year they will have a performance review. Payments for results are an effective
motivator for high performance.

Some jobs are paid according to the achievement of targeted results. This means
that a bonus is paid if the employee achieves agreed targets for the job. For
example, a corporate banker has responsibility for gaining a certain number of new
business customers each year. If the target is achieved or exceeded she/he will get
a bonus payment. Particularly challenging or difficult to achieve targets are known as
'stretch targets' and the reward for achieving these will be greater.

What is motivation?

For many years, management theorists have tried to understand what makes some
people work harder than others. Some of the motivation factors identified by theorists
can be seen at work in RBS. Early theorists on staff motivation always looked at
factors outside the individual.

Taylor and the 'piece rate'

Frederick W. Taylor (1911) was the creator of 'scientific management'. He felt that
every job was measurable and each element of a job could be timed. All managers
had to do was pay for every item the workers produced and they would work harder
to get more money. This led to a long established pay scheme called the 'piece rate',
where workers received a fixed amount for every unit of output. Schemes like this
are usually associated with manufacturing industries and are not appropriate for a
complex service-led organisation like RBS.

Herzberg and 'two-factor' theory

Another theorist, Frederick Herzberg (1959), carried out a large-scale survey into
motivation in American industry. The results of his survey led him to develop a 'two-
factor' theory of motivation. Firstly, he established that if an employee's basic needs
(such as a suitable working environment and a basic rate of pay) were not met, then
this creates a source of dissatisfaction. Herzberg termed these 'hygiene factors'. On
the other hand, the presence of less tangible factors, such as the provision of
challenging work and recognition for doing well, can create or increase work
motivation. Herzberg termed these 'motivators'.

RBS has put in place several of Herzberg's 'motivators':

 employees get recognition for good work

 they have a collective sense of achievement when the whole business does
well
 they gain extra responsibility and advancement through regular performance
reviews
 when RBS people do well in their work, the company rewards them.

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Maslow's Hierarchy of Needs

The theory of Abraham H. Maslow (1943) on staff motivation is also evident at RBS.
Maslow referred to a 'Hierarchy of Needs' which is usually drawn as a pyramid.

According to Maslow, the most basic needs on this hierarchy had to be satisfied
before workers could look to the next level. Basic physical needs were things like
shelter, food, warmth and bodily functions. Next, people had to feel safe in their
environment. RBS provides these basic needs wherever it creates jobs.

Maslow's higher levels of need are less obvious and less easy to describe but of
great importance. Social needs refer to the fact that we want to feel part of
something we share in. RBS creates the opportunity for its community of employees
worldwide to share in its common goals and vision for the group. It does this by
rewarding the people who contribute to its success through their commitment and
hard work.

RBS provides 'self actualisation' by offering recognition, promotion opportunities and

the chance to develop a lifelong career with the Group.

The next level 'esteem' - refers to our need to feel valued, that what we do matters.
The RBS mindset is that employees can 'make it happen' for themselves. It provides
opportunities for all employees through promotion or training and then recognises
their achievements. Through this RBS employees can improve their self-esteem. At
the very top of Maslow's hierarchy is our human need for 'self actualisation'. This
means we work hard in order to be as good as we possibly can be. RBS meets this
by offering recognition, promotion opportunities and the chance to develop a lifelong
career with the Group.

As Maslow describes, workers are not motivated by money alone. Individuals are
motivated by different things. Motivation can be about shaping a worthwhile career or
it may involve having more flexibility with time. For example, at the start of your
career, help to pay off your student debt may be more important to you than
retirement planning. Employees at RBS enjoy Total Reward a specific benefits
package designed by RBS that goes far beyond salary. It offers benefits for each
member of staff that include not just money, but also personal choice in working
hours and security.

The RBS Total Reward package also offers flexible pension funding, health and
medical benefits, paid holidays, and a confidential advice service. Employees have a

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generous holiday allowance (between 25 and 30 days for full-time staff), with the
option of buying or even selling days. Employees may also choose from a wide
range of lifestyle benefits, including discounted shopping vouchers, childcare
facilities and RBS financial products, such as mortgages, currency exchange,
personal loans and banking at special staff discounted rates.

Results Based Payments

At the core of the package is a competitive salary based on skills and experience
regardless of where in the world RBS staff are based. Providing competitive pay
means comparing what you are offering against salaries for similar jobs in other
financial services companies. All staff receive their salary credited monthly to their
staff bank account. The terms and conditions of their employment specify the basic
rate of pay and any further payments that they may be eligible to receive.

However, within RBS the basic salary is only the starting point from which a number
of additional bonus payments can be earned. All employees share in RBS' success
through its profitsharing scheme. If the company meets its overall profit targets, then
all employees will receive a bonus worth 10% of their salary. On top of the profit-
share bonus, as mentioned before, there is also the chance to earn an individual
performance-related bonus when employees achieve or exceed their personal
performance targets, for example, a project manager who delivers the project ahead
of time and within budget. So in a year when the company does well and the
individual performs well, the additional payments may be quite substantial.

Non Financial Rewards

Whilst money may be an incentive to go to work; at work, pay cannot motivate

people to give more. Theorists have long understood that staff need a combination of
motivators. This is why RBS offers so many non-financial rewards which can
improve personal lifestyle.

One of the most important motivators for RBS employees is the recognition of good
performance by graded progression. At RBS, people are encouraged to 'make it
happen' through personal development. This means RBS encourages employees to
grow and develop their skills and abilities. This in turn helps RBS to grow as a
company. Employees identify development needs with their line manager at their
annual performance review. These are documented in a personal development plan.
Development can involve more training, attending courses or gaining new
understanding and skills. This can improve the prospects of promotion and allow
employees to move up the organisation and increase their Total Reward.

RBS also believes in giving its people the chance to help put something back into
their own communities. Wherever RBS operates, the Group supports community
involvement in projects that matter to its people. For every pound raised for charity
by a member of staff, RBS will double-match the donation, making every pound
raised count three times.

In the last year, groups of RBS employees have supported many fundraising projects
for local communities and charities. These have included:

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  a 'pirate kidnap' in South Wales for a youth charity
 taking part in the Microsoft UK Challenge for the NSPCC
 cycling across the Himalayas for British Wheelchair Sport.

The RBS Group also contributes to various projects throughout the UK to improve
communities and the lives of the people involved. For example, over the last two
years it has provided funding and advice to:

 the regeneration programme of a housing estate in Scotland. This won a

national award for including the local residents
 the development of a hospital in Portsmouth and four schools across the
country
 the provision of free-access cash machines in deprived areas in Scotland
 the setting up of school banks where students manage the banks themselves
to learn a practical approach to numeracy and personal finance.

Work-Life Balance

To attract and retain the highest qualified and motivated employees, RBS enables its
employees to develop a work-life balance between work and non-work
commitments.

Flexible working

RBS gives all employees the 'right to work flexibly'. This can be through a range of
flexible working practices covering job sharing, part-time working, home working,
variable working hours, compressed hours and term-time working. These are
adapted to suit the local needs of each RBS centre. The policies and procedures for
applying are easily available on the RBS website. RBS provides a free advice
service called 'HelpDirect'. Employees can call for advice on making the most of their
time at and away from work. It also offers counselling on a range of life issues.

RBS and 'Your time'

RBS recognises that in some circumstances, people may need time off from work for
reasons other than sickness. Some people have special family commitments or
commitments in their local community. In 2004, the RBS ´Your time´? programmes
won the HR Excellence Award for 'The Most Effective Use of Flexibility in the
Workplace´?.

The benefits of flexible working practices

The policies of RBS in relation to work-life balance help to create a working

atmosphere that relieves stress. They also help to create greater equality of
opportunity for everyone. For example, this flexibility enables employees to choose
working patterns that fit with their childcare arrangements or their personal lives.

Following these flexible practices allows RBS to attract more talented people.
Theoretical work on motivation by Elton Mayo in the 1920s showed that contented

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people, who are satisfied with their working environment, were likely to be more
productive. The distractions of home or community pressures can be handled far
more comfortably with the support of an employer such as RBS. In return, RBS gains
staff loyalty and commitment, which in turn drives higher performance.

Conclusion

RBS operates an exciting and forward thinking Human Resources (HR) strategy. It
provides a world-class employment package for every employee, at every level,
wherever they work. It adopts an attitude that motivates its staff in both financial and
personal ways. By doing this, RBS is able to compete for the best people and attract
them to its business. In a world where local labour market conditions can fluctuate
from region to region, RBS must be sensitive to local conditions and individual
needs.

At RBS, motivation theory comes to life. RBS employees at all levels can enjoy a
work environment where effort is seen to be valued, where achievement is
recognised, where individual progress is rewarded and where a long term career is
available for those who are able to grow with the business. Where individuals are
made to feel a part of the bigger picture and where the rewards available are varied,
practical, personal and tailored to the individual, there are motivators for all.

QUESTIONS

1. How are staffs given self-esteem by RBS employment? (10 marks)

2. What types of rewards are offered? (10 marks)

3. What is the ‘RBS mindset’? (10 marks)

4. Describe WLB’s effort at RBS and how is it relevant? (10 marks)

5. What is RBS’s non-financial rewards perspective and why is it important (10 marks)