Background
• RBS dated by 1727
• RBS and National Commercial Bank of Scotland merged to become
Scotland’s largest bank with a 40% market share
• 1980s, diversification of the business (set up an innovative car insurance
company, enter US banking market, online banking)
• In 1990, “Project Columbus” which sought to rejuvenate its retail banking
division via superior service delivered through customer segmentation.
• It increased revenue, lowering its cost-income ratio (used quantitatively
determine how efficiently management was performing)
• 2000, new CEO who required his 10-member executive team to meet every
weekday morning (The meeting is without prior agreed-upon agenda)
The Natwest Acquisition
• Included in the Group’s offer document was a point-by-point outline of how integration would be
managed, including potential cost savings, income gains, job losses, and delivery dates for new
initiatives.
• The Group’s brands and businesses were organized into customer-facing units focused solely on
growing revenues, while the manufacturing division drove efficiency-improving measures.
• As a result of the acquisition the Group predicted (and achieved) $4 billion worth of profit
enhancement, primarily through the creation of a “manufacturing” division to handle certain
shared services and back-office functions with a concurrent focus on promoting common
products, processes, policies and technology platforms across business units.
• They introduced their human capital strategy progressively across the business and supported
their business leaders by getting them the right information to make informed people (evidence-
based). It meant being able to measure the impact of the initiatives and to act quickly on
information from employee surveys
The Group in 2008
Since 2000 the group had nearly quadeupled in size
Structually, the group was organized into four main operation division :
1. Global Markets
2. Regional Markets
3. RBS Insurance
4. Group Manufacturing
5. Group Functions
Human Capital Strategy
• Initial Human Capital Measures
1997-2000 strong evidence-based HR function framed around a consultancy
model, supported by a shared services function led by Tony Williams. Roden
introduced an annual HR customer survey and bi-annual activity review to ensure
that the HR function was focused on delivering the business’ priorities.
• Turnover and Absence
Years ago, short-term tenure (less than 12 months) was high in some of their
business. Consequently, they intence focused on short-term tenure turnover,
absence. So, there was a saving in recruitment costs. According to survey data :
• Good Managers could only influence engagement to the extent that their
span of control allowed
• Reward programs, affected the whole organization but have less of an impact
on engagement thet leadership effectiveness
Human Capital Strategy
• Employee Engagement
In 2000, new human capital strategy used by managers for these three
elements was: ‘Say, Stay, Strive’
• Building Human Capital Buy-In
Employee engagement was not the only human capital metric utilized in this
analysis—indices were also created based on leadership effectiveness and linked to
customer service, as well as achievement of sales targets, staff absences and
turnover.
Human Capital Strategy
• Evidence-Based Management : Providing Insight
Since 1997 the Group had sent out an annual survey to all employees consisting
of about 100 different questions offered in multiple languages. In that time the
response rate to the survey had increased from 70% to 90%. The employee survey
helps to understand the effectiveness of key business initiatives such as the
continuous improvement framework ‘Work-Out’ within RBS. Feedback from the
employee survey also highlighted that one of the key drivers of employee
engagement was non-financial recognition. These “action plans” are then reviewed
at executive board level on a quarterly basis to track action against plan.
• Pulse Surveys
• Exit Surveys
• Acquisition Surveys
Applying Human Capital Analysis to a Business
Problem
• Branch Manager Performance Measurement
1. Control (If you haven’t got that, everything is going to be wasted)
2. Sales of Financial Services Products
3. People (Communication and Response)
4. Customer Service (have a service score for each of our branches)
• Utilization
• Taking The Next Steps
1. Financial Performance
2. Customer Service
3. The People Management Side
Key Problem
• Utilization of Human Capital measures
• Miscommunication and distance between HR (not involve in decision
making process) and Top Management
• Managers lack of human capital intelligence
