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Pay in a high performance organisation: case study of Lloyds TSB

CASE STUDY

Pay in a high performance organisation: case study of Lloyds TSB

When you are one of the UK's largest financial institutions, the sheer size and complexity of the organisation can make it difficult to get close to the customer and offer a seamless service across a wide range of business units. But as a new case study by e-reward.co.uk reports, a number of reward initiatives are currently underway at Lloyds TSB designed to create a "compelling offer" that really helps reinforce core business goals.

Spread across 48 pages e-reward.co.uk explores:

  • how the bank used the opportunity presented by the merger of Lloyds and TSB to rethink strategic reward
  • the impact of the 1994 strategic vision on reward strategies and compensation practices and how they serve to reinforce the corporate strategy
  • the move towards local pay management and the development of new performance management and equal pay policies
  • the approach to total reward and why Lloyds TSB integrates financial and non-financial rewards
  • how the newly-launched flexible benefits package works and take up so far
  • the structure of the share incentive plan.

Company profile: Lloyds TSB

Employees:

70,000 employees in UK 80,000 worldwide.

Location:

2,100 branches in UK operates in 27 countries.

Business activities:

  • half of staff are in direct service roles, offering its 16 million customers a range of financial products
  • among the 10 largest organisations in the UK
  • second biggest bank in Europe based on market capitalisation.

Web site:

www.LloydsTSB.co.uk

Interviewee:

e-reward.co.uk interviewed Tim Fevyer in September 2003. Tim is senior manager, compensation and benefits, Lloyds TSB.

 

What you will find in this e-reward.co.uk report

Written and researched by e-reward.co.uk, this 48-page case study (21,800 words) investigates how, during the past decade or so, Lloyds TSB has redefined the entire premise of how it rewards, recruits and retains employees.

Page no.

Section 1: Executive summary

Company profile -- overview -- Lloyds TSB's strategic review: a summary -- A to Z of total reward package

5

Section 2: Impact of merger on reward programmes

Historical context -- managing the merger -- integrating benefits

12

Section 3: Developing a reward vision

Business goals and reward strategy -- people strategy goals -- five-year reward vision -- 1994 vision

14

Section 4: Strategic reward at Lloyds TSB

Guiding principles -- basic pay linked to market -- market-driven benefits -- pay decisions devolved to line managers -- performance management introduced -- variable pay matrix -- pay guidelines -- pay reflects contribution -- introduction of pay zones -- simple ratings -- complying with equal pay principles -- variable pay linked to performance -- wealth creation and share ownership is encouraged -- reward and HR practices are managed in an integrated way

19

Section 5: Lloyds TSB's total reward programme

Adopting an integrated approach -- total reward strategy -- money is not the only motivator -- tailoring rewards to employee needs -- daring to be different -- creating a compelling employment offer -- total reward programme -- performance and development -- career management and resourcing -- flexible working -- employee involvement

27

Section 6: Flexible benefits

Gauging employees' feelings -- implementing flexible benefits -- how flavours works -- items on the flex menu -- progress so far -- improved benefits in 2004 -- total package statement

36

Section 7: Share incentive plan

Profit sharing wound up -- tailoring SIP to business needs -- what is a share incentive plan?

43

Section 8: Verdict and lessons learnt

Principles to bare in mind -- a final word

46

 

A final word

"You cannot succeed without focusing on business goals and understanding what these mean for your core people goals. Shareholder value was our ultimate objective. But we unbundled this objective and examined how we would generate shareholder value through our reward strategy.

We wanted to recruit, retain and engage good people. You might do that in the short term by throwing more money at people but we wanted a long-term solution that really focussed on the individual and their contribution within the business. Meeting individual needs by providing flexibility within a framework has enabled us to generate significant value for both employees and the company alike."

Tim Fevyer, senior manager, compensation and benefits, Lloyds TSB.

 

Want to know more?

Title: Pay in a high performance organisation: a case study of Lloyds TSB

Issue no.: e-research no. 17.

Date: December 2003.

Pages: 48 (21,800 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 11 March 2004