CASE STUDY
Centrica Business Services harmonises using total reward
Centrica Business Services has adopted a holistic approach to reward, whereby the financial benefits of base and variable pay and benefits are combined with the non-financial benefits of recognition, training and development and an enhanced quality of working life. A new case study by e-reward explores the new arrangements.
In October 2004 Centrica Business Services (CBS) implemented a new total reward package for its 1,100 call centre staff and junior managers. The package paved the way for the harmonisation of arrangements for the staff of British Gas Trading and Enron Direct, the two companies which constituted CBS when it was set up in 2002.
Previously, the two organisations had had very different terms and conditions. Both employees and managers were dissatisfied. Staff, the company says, did not appreciate the value of what they received, while managers wanted to forge a link between pay and performance and to end the relationship between status and benefits provision. Employee resentment at what they saw as the better deal enjoyed by their colleagues in the "other firm, inhibited team working and the creation of one company. Cost control was also an issue.
Company profile: Centrica Business Services
| Employees | 1,500 in UK. |
| Location | Leicester and Oxford. |
| Business activities | CBS sells the services of Centrica’ s constituent companies, including British Gas, Centrica Energy and One.Tel, to business customers. |
| Trade unions | Unison represents ex-British Gas Trading’ s employees Enron Direct, acquired by British Gas Business in 2001, did not recognise a union. |
| Web site | |
| Interviewee | e-reward interviewed Tracey Huskins and Marc Bishop in January 2005. Tracey is reward manager, Centrica Business Services and Marc is head of reward and recognition, British Gas. |
| What you will find in this report | Page no. |
| In this 20-page case study (6,100 words), written and researched by e-reward, we see how a company which has inherited legacy terms and conditions has used total reward as a means of harmonising pay and flexing benefits, with the full co-operation and participation of the recognised trade union in a "non-negotiated voluntary process". | |
| Executive summary | 5 |
| Company profile -- overview | |
| Background | 6 |
| Origins -- acquisitions -- pressures for change | |
| Approach to total reward | 6 |
| Aims -- advantages -- disadvantages | |
| Previous arrangements | 8 |
| Bonuses -- basic pay -- benefits | |
| Designing the new package | 9 |
| Employee involvement -- focus groups -- results -- validation | |
| New reward packages | 9 |
| Four different options | |
| Flexible benefits fund | 11 |
| Salary to spend on benefits -- benefits choices | |
| Basic pay | 11 |
| Broad bands -- pay aligned pay to market medians -- job families -- starter rate and market rate -- progression determined by individual performance | |
| Variable pay | 12 |
| Bonus potential -- payment frequency -- criteria | |
| Performance management | 12 |
| Linking pay to performance -- level 8 staff -- level 7 managers | |
| The process | 14 |
| "Delivering results" -- "how it is delivered" -- personal objectives | |
| Making it happen | 16 |
| Communication exercise -- personalised pack -- road shows | |
| Recognition | 16 |
| Based on company values -- four levels | |
| Development | 17 |
| CBS manager’ s driving licence -- themes -- job families | |
| Working-time flexibility | 17 |
| Four-day working week -- pilot projects | |
| Quality of working life | 17 |
| New building | |
| Problems and lessons learnt | 17 |
| Success criteria -- a final word | |
| List of boxes | |
| 1: How does Centrica define total reward? | 7 |
| 2: How does Centrica depict total reward? | 8 |
| 3: New Centrica reward packages, for level 8 staff and level 7 junior managers | |
| 4: Reward management cycle | 13 |
| 5: Centrica’ s Values | 14 |
| 6: Financial modelling | 18 |
Want to know more?
Title: Centrica Business Services harmonises using total reward.
Issue no.: e-research no. 30.
Date: February 2005.
Pages: 20 (6,100 words).
Availability: Published by e-reward.co.uk. Click on "Research Reports" on the left-hand navigation panel of the e-reward.co.uk web site and complete the simple online subscription form at www.e-reward-data.co.uk/content/ResearchReports.asp
For more details email: paul@e-reward.co.uk
Posted 23 March 2005