Involving employees in meeting corporate objectives

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Introduction

Effective Human Resource Development (HRD) involves matching an organisation's needs with the needs of its employees. For example, an organisation's corporate objectives may include being within its own industry:

  • the market leader
  • the most efficient firm
  • the most highly respected firm
  • the firm with the best safety record.

An employee's personal objectives may include:

  • having greater workplace responsibility
  • receiving appropriate training for career advancement
  • feeling 100safe in the workplace.

Good HRD involves creating a fit between two sets of objectives:

This case study shows how one of this country's leading international housing and development companies is creating a benchmark for this human resource fit.

Taylor Woodrow plc employs around 6,000 people worldwide. Its primary business is housebuilding. In the UK it builds homes through its Bryant brand and also has housing operations in the USA, Spain, Gibraltar and in Canada, through its Monarch brand.

It offers property development expertise UK wide through its network of regional offices. Its construction business is focused on activities such as Private Finance Initiative, Facilities Management and specialist engineering consultancy.

Together, Taylor Woodrow's combination of skills in housebuilding, property and construction give the company a powerful competitive edge in the area of urban regeneration and brownfield development.

The Taylor Woodrow way of working

Like people, organisations have distinguishing characteristics. These usually feature in an organisation's vision and culture.

An organisation's vision statement describes what it sets out to achieve. Such a statement needs to be:

  • believable
  • feasible
  • inspiring (to those involved in the company).

Taylor Woodrow? vision is:

'To be the leading developer of living and working environments in the UK and other chosen markets.'

An organisation's culture is the network of relationships and patterns of behaviour within the organisation - what the Americans refer to as 'the way we do things around here'.

Taylor Woodrow? culture is based on seeking:

'To ensure that its companies and employees continue to improve and develop in a culture of excellence'.

This places Human Resource Development at the centre of the company's culture.

Besides having a strong people focus to the way it operates, Taylor Woodrow also has a strong customer emphasis, and the teams of people working for the organisation continually strive to exceed customer expectations. Taylor Woodrow wants its customers to feel certain that they can rely on it to deliver products and services (e.g. a new house) at the agreed price and to the highest standard. Employees therefore play a key role in enhancing shareholder value to the benefit of the Group and its stakeholders.

Most of Taylor Woodrow's competitors are other large housebuilders. Its Unique Selling Point (USP) that sets it apart from rivals, is the skill base of its workforce and the fact that it can meet just about every engineering need from within the company.

A major problem facing UK housing and construction projects is a shortage of available greenfield sites at a time when demand for property continues to rise. A major strength of Taylor Woodrow is its expertise in developing complex brownfield sites (on reclaimed land that once might have been an industrial area) using integrated teams of specialists brought together for particular projects.

Brownfield site development includes remediation: the removal of toxic waste so that the environment is safe for people to live in. This is a highly complex operation. When working on these complex projects it is essential that the workforce is familiar with corporate objectives in order to enhance company performance and thus gain competitive advantage.

Taylor Woodrow´s workforce

One common misconception is that housebuilders only employ people like bricklayers and labourers. Taylor Woodrow does employ these skilled tradesmen, some of whom are sub-contracted: brought in from other firms as and when required. However, Taylor Woodrow's core employees also include:

  • Quantity Surveyors and Commercial Managers
  • Business Development Managers
  • Project, Estate and Land Managers
  • Architects and Interior Design specialists
  • Civil Engineers.

The usual promotion route is for specialists in these areas to become managers. Today, the company is looking at taking on more generalists such as business graduates who can then train to become managers.

In addition, Taylor Woodrow employs central services staff including Human Resource specialists and people working in Finance, IT, Sales & Marketing.

Individual performance and corporate objectives

Performance management is an HRD process concerned with getting the best performance from:

  • individuals
  • teams
  • the organisation as a whole.

Effective performance management involves sharing with employees an understanding of what needs to be achieved and then managing and developing people in a way that enables these shared objectives to be attained.

Ideally, an organisation will have all of its employees 'pulling in the same direction' and 'singing from the same hymn sheet'. Supporters of this HRD approach argue that this two-way process can be effective only where there is a clear psychological contract between employers and employees based on mutual trust and commitment.

The Taylor Woodrow group is committed to a Performance and Development Review process for all employees, departments and companies.

In an individual Performance Review, a manager and a fellow employee sit down together to:

  • agree on meaningful task objectives for that employee and for the team(s) within which he/she operates
  • identify individual development needs and aspirations.

In preparing for such a review, individuals write down their career aspirations and training and development needs, as well as their successes in meeting previous targets and objectives. Managers will read this prior to the Performance and Development Review and also plan ways of communicating to the employee the various objectives of the local management team (and how they support Taylor Woodrow's wider objectives) that are particularly relevant to that individual.

It is then possible at the review meeting to identify the successes of the individual in attaining previously decided objectives, and to identify new targets. With such a system in place, it is possible to establish for a period of time ahead the Key Result Areas against which an individual's performance will be assessed.

In this way, performance is measured against agreed standards. Salaries and bonus payments then reflect the success of each individual's performance based on a rating system.

Taylor Woodrow believes that the effective management of individual performance rests on managing the performance cycle, which is an ongoing process of performance planning, support and review.

The planning stage involves agreeing the objectives. The supporting stage involves identifying development needs and how these can be addressed, and then the manager giving ongoing coaching, feedback, and support. Reviewing performance involves both informal employee/manager discussions and a formal Performance Review tied to the reward process.

Each employee receives two formal Performance and Development Reviews each year. A January review establishes objectives for the coming calendar year. An interim July review then examines any further development needs of the individual and the teams within which he/she works.

It is essential for managers to feel that they 'own' this process and fatal if they see it only as a chore. Properly carried out, the system can operate at every level within a company.

The Performance Review process encourages even the humblest employees undertaking the most routine of tasks to support the company by accepting greater responsibility for their own actions. For example, a mailroom worker used his own initiative to ensure that outgoing mail posted on a Friday was sent 2nd class. His reasoning was that no receiving firm would read it until Monday, so why waste the company's money on next-day delivery? This constructive move continues to save Taylor Woodrow considerable sums annually.

Motivation, performance and pay

In the UK, there is a movement towards relating pay and promotion to measured performance. The PRP (Performance Related Pay) approach is based on a philosophy of agreeing:

  • the key results areas of the job
  • clear standards of performance and target levels of competence
  • regular, objective reviews of performance and competence.

In 2000 a Taylor Woodrow survey of its employees showed that 94favoured a Performance Review and Pay Review Cycle. This is typical of many companies, where employees prefer objective standards for measuring their performance rather than rely on the subjective views of their line manager.

Individual rewards for employees are therefore based upon:

  • the Group's and the individual company's overall business performance and ability to pay
  • each individual's contribution to the company's success
  • the level of salaries and benefits necessary to attract and retain people, taking into account competitive salary arrangements elsewhere.

The Performance Review examines:

  • the level of skills, competencies and knowledge an employee demonstrates in his/her particular role
  • the degree to which set objectives have been achieved.

These are documented and evidence is provided. Employee rewards are then tied to this Performance Review, which is rated using a scale of 1 to 5, with 5 being the highest. Bonuses and salaries are then related to this rating, after consideration of company financial performance. Where employees have skills that are in short supply, the review also considers wages being paid elsewhere for similar work.

Salary increases based on the past calendar year's performance are effective from April 1. Bonus payments in respect of the previous year are paid at the end of March.

A major aim of the company's Performance and Development programme is to create commitment and motivation at all levels of the organisation; by the organisation itself, managers, and all employees.

Conclusion

The management theorist Frederick Herzberg has shown that real motivation has to come from within an individual. Committed employees are people who feel that they have a shared purpose with their employer, and this comes about when they take ownership of their own development and performance targets, and when they feel that they are being judged fairly against a set of clearly determined performance ratings. Taylor Woodrow is committed to a total process of Human Resource Development based on Development and Performance Reviews. As a result, its employees are working towards a shared set of objectives, and are able to monitor their contribution to creating a successful organisation.

Taylor Woodrow | Involving employees in meeting corporate objectives