The evolution of a total reward strategy at B&Q

TOTAL REWARD

The evolution of a total reward strategy at B&Q

In February 2001 B&Q, the UK's leading home improvement retailer, embarked on a root and branch shake up of its reward strategy and policies. A new case study published by e-reward.co.uk investigates how B&Q has redefined the entire premise of how it rewards, recognises, recruits and retains employees.

The pretext for B&Q switching from a fairly traditional pay scheme to a total reward system was a desire for better strategic alignment of reward programmes with its business objective in a labour market characterised by increasing diversity and changing social values.

As part of a two-year review, B&Q has put together a broad total reward offer that goes beyond standard remuneration by embracing the total work experience. The retailer's new strategic perspective seeks to reinforce desired behaviour in employees and at the same time create a compelling value proposition.

B&Q company profile

Employees: Equivalent of 25,000 full-time employees in UK.

Location: Head office in Eastleigh, Hampshire, employing 1,000 people with over 320 stores throughout the UK, of which 87 are large warehouse operations. In total, B&Q has 466 stores in seven countries, including China, Taiwan, Poland, Republic of Ireland and Turkey.

Business activities: Annual turnover of $6.4 billion. B&Q is the UK's leading DIY and garden retailer, offering over 45,000 home improvement and garden products for the occasional to serious DIY person, and trade professionals.

Web site: www.diy.com

What you will find in this report

E-reward.co.uk conducted an extensive interview with B&Q's reward manager, Will Astill, and analysed a raft of internal documents. Spread across more than 60 pages (18,000 words), this in-depth case study is divided into nine main sections:

Review process -- the approach used by B&Q to formulate its total reward offer, highlighting all the key phases involved in the process of analysis, diagnosis and design.

Development of a new reward philosophy -- which seeks to send the right signals to employees about corporate value and beliefs and provides management with guiding principles on how reward strategies and policies should be formulated, with the emphasis on delivering an excellent return on the organisation's investment.

The new employment value proposition -- B&Q's approach to positioning itself as an "employer of choice" and developing a distinct employment offer that will help to change the negative perceptions of the company as an employer.

Store team bonus -- a new bonus that has evolved out of the old company profit-sharing scheme which enables B&Q to reward performance against sales and shrinkage measures set at store level.

Family-friendly benefits -- a range of programmes to help employees balance their work, leisure, family and community time, replete with enhanced maternity, paternity and adoption policies as well as a raft of new flexible working options and an employee assistance programme.

Recognition programmes -- new and rebranded schemes (described by management as the "the best recognition schemes in retail") to publicly celebrate and thank B&Q's best people.

New pay and progression arrangements -- a new spot rate structure for the 20,000-strong customer advisors supported by a learning and development framework.

Total reward statements -- to increase the understanding and awareness of the cost of the total package on offer to employees.

Lessons learnt -- if you decide that there is a need to overhaul your reward practices, how can you ensure that you avoid some of the stumbling blocks associated with wide-ranging change initiatives? Will Astill, B&Q's reward manager, recommends you keep in mind nine guiding principles.

Document extracts

Our report also includes copies of original B&Q documentation:

  • Key results of external focus groups examining perceptions of B&Q as an employer
  • Results of strengths and weaknesses analysis
  • Reward philosophy and principles
  • Employment value proposition structure
  • Big idea -- the B&Q work ethic
  • Indicative examples of store team payments
  • Aims of employee assistance programme
  • Flexible working policy
  • Pay structure and package for customer advisors
  • Total compensation calculator


Want to know more?

Title: "The evolution of a total reward strategy at B&Q", E-research, issue no. 10, April 2003, published by e-reward.co.uk.

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