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Lucy Adams, the BBC's director of people, sparked protests when she was quoted recently in PM saying that one of her greatest strengths was "not being an HR person". Several readers jumped to her defence in our Letters column in the current issue (11 March) - and fuel is added to the fire when, in Linda Holbeche's article on HR leadership, former Asda people director David Smith is quoted saying that the mark of a good HR leader is "to be as un-HR-like as possible".

Now I suspect that Lucy Adams and David Smith would wish to point out that their comments need to be taken in context, and that they're not denigrating the profession. Yet most of us have heard others saying similar unguarded things at one time or another. Why is it that anyone in an HR leadership position feels the need to distance themselves from the profession?

What Adams, Smith and others are really trying to emphasise is that they're focused on the business rather than the function; strategic and flexible in their thinking rather than procedural and rules-based; financially numerate and focused on results. It's unfortunate but true that many colleagues in other business roles regard these as "un-HR-like" qualities.

But that situation is changing fast. Almost every issue of PM touches on another way in which vigorous HR professionals are helping to drive sustainable business performance. The best already operate at the front edge of strategic thinking and innovation in their organisations, and they couldn't operate effectively if they didn't speak the language of the business. This is a step change in role being well articulated by the CIPD in its new professional standards - known as the HR profession map - and in the Next Generation HR research project.

It so happens that in our next issue (25 March), we'll look in-depth at the working relationships between three HR directors and their chief executives - at Mouchel, McDonald's and Guardian Media Group. These HR leaders are just as business-focused as Lucy Adams or David Smith. But the emphasis is not on what they left outside the boardroom. It's at least as much on the people skills they brought into it. There's plenty to be proud of in the HR profession.

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Imagine being the chief executive of a company that loses £6.7 billion. The following year, things get a little better, but you still lose £6.3 billion. Here’s a question – how much would you expect as a bonus? The answer for most of us would be a round number – a big fat zero to be exact– but if your name is Eric Daniels of Lloyds Banking Group, then the answer is a more pleasing £2.3 million.

To his credit, Daniels waived his right to the bonus. But some Lloyds shareholders (and since the bank is 41 per cent taxpayer-owned, that category includes all of us), have been quite rightly asking how this reward is calculated. What variety of success is the incentive recognising, if it’s not to do with making a profit or raising the share price?

This question becomes all the more pertinent when you realise that the figure of £2.3 million – 225 per cent of Daniels’ basic salary of £1.03 million – is actually the maximum allowable he could have been awarded by the Lloyds remuneration committee. They are saying his performance over the year was right at the top of the range.

To understand how this could be, let’s take a look at way the bank’s executive remuneration is structured, as explained in the Lloyds’ annual report and accounts for 2009 (the 2010 version is not published yet). This says that 50 per cent of the bonus is set according to “group financial targets, relating to profit before tax and economic profit”, while 50 per cent is determined by a “balanced scorecard, covering customers, people, risk, and franchise building”.

Lloyds’ profit before tax in 2009 - £1.04 billion – was actually not disastrous. While it was only about a quarter of what Lloyds TSB was achieving on its own before the crash, at least it’s a profit. What plunged things into the red was the scale of bad debts (especially property loans) left over from the HBOS part of the business, which have ballooned from £14.9 billion to £24 billion in the past 12 months. Since this was a legacy factor outside Daniels’ control, the remuneration committee have obviously taken the view that he has met his financial targets as they relate to this single year. The fact that Lloyds has successfully raised huge sums from shareholders – and reduced its public stake from 43 to 41 per cent – will also have helped in this regard.

The other half – the balanced scorecard based on non-financial factors – is a bit harder to quantify, but the biggest task in hand is the integration of the new group, which is now the largest ever UK bank. Lloyds has shed 15,000 jobs since it was officially created at the start of 2009, so the drive for “synergy savings” is clearly proceeding apace. Lloyds has denied that there is a specific target for the number of jobs cut, but “integration” and “cuts” are two sides of the same coin. It’s intriguing to think that their executives might be being rewarded for reducing the workforce, at a time when the largest shareholder (the government) is keen to maximise employment. There’s also a contrast with the US – where Obama has vowed to break up banks that are too big to fail – that one of the effects of the banking crisis on the corporate landscape was to create this super-bank, which will dwarf much of its competition when the economy recovers.

Once this painful period is over, it has dumped all its toxic assets and “integrated” its staff, there’s every possibility that Lloyds will once more be a roaring success. How much of this will be down to the good work of the chief executive, and how much to the safety net provided by the taxpayer, will continue to be the subject of much debate.

Daniels’ announcement that he was waiving his bonus only came after his counterparts at Barclays and RBS made similar gestures. This has led some to speculate that he made the move reluctantly, and that both he and the company believe he is doing a grand job. It’s also worth noting that when all elements in his reward package are considered (salary, bonus and long-term share plan incentive) Daniels earns significantly less than his counterparts at Barclays, RBS and HSBC. Perhaps he offers good value for money after all.
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I hope I’m wrong, but the latest set of cuts proposed by the BBC seem simply another act of self-flagellation enacted to keep the current licence fee arrangement in place.

First there was Jonathan Ross, arguably its biggest star, banned for several months for an ill-judged telephone prank, then finally hounded out of the corporation. He became too big for the Beeb, which prefers its stars be bland and inoffensive, not Brand and offensive.

Now director-general Mark Thompson has today announced plans to close the 6 Music and Asian Network radio stations, halve (halve!) its web output, curb spending on foreign shows such as Mad Men by 20 per cent, as well as capping investment in sports coverage. This, Thompson says, will free up £600 million a year to be reinvested into programme making. It will also, suggests the Guardian, affect up to 600 staff and freelancers.

Now, I must come clean in saying I’m a big fan of 6 Music – in fact, it’s one of the reasons I bought a digital radio in the first place. Surely the interests of a large percentage of the population are covered by Mad Men/Heroes/any quality US show/BBC websites/sports/6 Music… you see where I’m going with this. Thompson talks about “the interests of the licence payer”, but I’m not entirely convinced.

This seems more a case of being seen to be doing something drastic for the sake of being seen to be doing something drastic. This can then be served up on a plate, with a side serving of humble pie, the next time the government – whoever that may be – looks at the licence fee tender and thinks, “Gosh, this is a rather eccentric arrangement.” Eccentric it may be, but how else could such a wonderfully eclectic, inclusive and truly representative output be created? That is the BBC’s strength.

I, for one, would happily sacrifice an Eastenders special or two for the sake of having a wide array of high-quality, multi-media coverage at my fingertips. And, if we want to be emotive about it, for the sake of those 600 staff and freelancers’ jobs too. But, as I said earlier, I hope I’m wrong.

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So another Valentine’s Day has been and gone. But Sunday night wasn’t the greatest night for it, was it? Not many people feel like wining and dining until the early hours when they’ve got a meeting first thing on Monday morning. Unless, of course, if you’re in the HR and IT departments – but more of that later.

Cuddling up in front of the telly last night seemed the least worst option. And that actually revealed an unexpected romantic gem in the previously unimaginable guise of Gordon Brown. Yes, that Gordon Brown.

The prime minister of Great Britain and Northern Ireland poured his heart out to Piers Morgan, the former tabloid editor and Britain’s Got Talent judge, on the latter’s chat show. It was unprecedented insight into Brown’s private life. Of course, the timing was convenient with a general election just round the corner. And it’s nice, but naive, to think it was a coincidence that the programme was aired on Valentine’s Day, when we’re feeling a bit warm and lovey (for those who weren’t, there was Mel Gibson’s gore-fest Apocalypto on the other side). But the stand-out part of the interview was not his relationship with Tony Blair – they didn’t always get on, quelle surprise – but his relationship with his wife Sarah, which he described as “a great love story”. Although it was the desired outcome of the programme makers and his private advisers, we saw a side of him that all too often gets missed out in the ongoing debate among politicians, their parties and the public.

And what was that about HR and IT? Well, if love is hard for the prime minister to talk about, it’s nothing compared with how difficult employers and employees find it to communicate on the subject. Are companies better off sidestepping the tricky legal implications by banning relationships between colleagues, or fostering a thriving employer brand by being open-minded about the issue? It’s a question that’s remained unanswered for many a year. To try to help you solve the issue in your workplace, I’ve looked at both sides of the argument in my latest feature. And, in asking for insights on the CIPD community pages, I have also uncovered a previously unknown alliance between the HR and IT departments. IT turns you on, but not off again, it seems.

Relationships developed in secrecy outside the assumed knowledge of manager and colleagues often tend to end badly. In Brown’s case, though, a little secrecy didn’t hurt. He proposed on a beach in Scotland, without a ring. He joked with Morgan: “If I’d have walked into a jeweller’s as the chancellor of the Exchequer and asked for a wedding ring, I think that might have made the papers.”

Comments [0] Welcome to my new blog , in which I take a look at the business and the HR facts and figures behind the FTSE -100 companies making the news.

Soon after 22 February’s ballot for industrial action closes, we’ll learn the outcome of the latest chapter in the saga that is the BA dispute. Cabin crews affiliated to Unite are voting on whether they should walk out in protest at job cuts and changes to working practices. Considering that the previous ballot – albeit one that was spoiled because some ineligible people voted – recorded 92 per cent in favour of a strike on an 80 per cent turnout, it would be surprising if the result were anything other than a repeated mandate for action. BA’s plans to keep services going during the disruption, including bringing back departed staff and training ground crews as substitutes, only show how worried the company is at the prospect.

The public is unsure about where its sympathies should lie – many customers are simply wondering whether they’ll still be able to get to Tenerife for their Easter getaway, of course – but any objective analysis must focus on the state of the company’s finances. The chief executive, Willie Walsh, has said that BA is in a “fight for survival” and sacrifices must be made, but the union has pointed to the latest results – a relatively trifling £50 million loss for the quarter – as a sign that the situation is not as bad as all that. So who is right?

Whichever way you look at it, BA is in dire straits. The latest quarterly loss might have been less than what most analysts were predicting, but the firm has still shed £342 million in the first nine months of the 2009-10 financial year after posting a £401 million total loss in 2008-09. The airline has a cash balance of about £2 billion so, while it’s not about to go under, it can’t afford too many years like this one. And that’s before you consider the biggest millstone around the company’s neck: its pension scheme. This is showing a deficit of £3.7 billion – well over the company’s market value of £2.38 billion. (The old joke is that BA is a pension company that also runs a few jets.) The deficit is so large that a proposed merger with Iberia, which might still make sense, is on ice because the Spanish company is insisting that BA sorts it out first. The management team is committed to paying an extra £131 million a year towards filling the hole and, even if radical action is taken, this is going to be a drain on resources for many years yet.

Reducing costs seems the only option, but where to make the cuts? Cutting staff from 15 to 14 on each long-haul flight (one of the most controversial issues in the dispute) is predicted to save BA about £140 million annually and would lead to 1,000 redundancies among BA’s 12,000 cabin crew members. It’s not a palatable option for the workforce, but neither is the alternative of across-the-board pay cuts. Softer options such as voluntary leave, periods of unpaid work etc have been tried without conspicuous success. When left with a choice of equally painful options, a union’s default position can be to resist everything. Given that a strike would itself cost the airline an estimated £25 million a day, BA’s overall position is going to be made even worse by such resistance.

While the biggest factors behind the current problems – high fuel costs, intense competition and fewer business travellers – are industry-wide, BA is being hit hardest because of its historically high staff costs. The airline’s troubles are sad but inevitable. Whatever the outcome, I’m not sure that the union can win. Either the company succeeds in forcing through cuts and culture changes or a prolonged industrial battle becomes another dead weight to bring the airline down.
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Welcome to my new blog , in which I will take a look at the business and HR facts and figures behind the FTSE -100 companies making the news.


Cadbury is in the process of being taken over by US cheese maker and all-round food giant Kraft. For anyone who has missed the details (or has switched off during the interminable negotiations and games of bluff that have taken place in the last few months), the Cadbury board has finally accepted a bid for the firm valued at around £11.5 billion. This means that shareholders have until 2 February to decide whether or not to accept the deal.

Notwithstanding the complaints of Warren Buffett, one of Cadbury’s largest shareholders – owning 9 per cent of Cadbury shares – the deal is almost certain to go ahead. Around 40 per cent of Cadbury’s shares are owned by US investors who aren’t likely to be swayed much by the “great British brand” argument, while another 20 per cent are owned by hedge funds that are only there at all because they hope to profit from the takeover. In fact, few shareholders of any kind will turn down the chance of a short-term profit – as the Cadbury board well knows, which is why it has finally seen the writing on the wall and accepted the offer (but not before a desperate search for another buyer to save Cadbury from Kraft’s clutches).

The big HR story in all this is the fate of Cadbury’s 4,500 UK-based staff, especially those at the firm’s historic site of Bournville in Birmingham. The union Unite certainly fears the worst, and some of these fears might be justified: Kraft has financed the takeover with borrowings of around £7 billion, a debt that will fall on the new firm and is bound to affect its financial priorities. There are some parallels with the Glazer family’s takeover of Manchester United FC – except that while the Glazers could make some of their money back by selling Cristiano Ronaldo, Kraft is more likely to seek a return on its investment by making “synergies” that include cutting front-line jobs.

But perhaps some of the pessimism has been overdone. Far from being a quaint British institution that is about to be swept away by a new tide of American efficiency, Cadbury is itself very international in outlook - it employs 46,000 people in 60 countries – and also very profitable (its last full year results showed a turnover of £5.4 billion and an operating profit of £638 million). Despite the philanthropic roots of Cadbury’s 19th century founders, the company has not up until now been run as a charity. If it was desperately uneconomic to continue making chocolate bars on these shores, then sentiment alone would not have been enough to preserve jobs this long. Instead, Cadbury is actually a British success story, and Kraft, while it clearly believes itcan enhance its profitability further, would be foolish to move in and destroy the foundations of that success. And before too many political points are made about foreign predators swooping on UK firms, it should be remembered that Cadbury has made its fair share of acquisitions over the years, including some American ones such as the Adams chewing gum firm it bought for $4.2 billion (£2.6 billion) in 2003. If a business is worth its salt, it is worth keeping - whatever the nationality of the owners.

An interesting footnote to the saga is that Cadbury’s chairman Roger Carr has called on the government to review its list of firms that enjoy state protection from overseas bids. Currently, only Royal Mail, BAE Systems and Rolls Royce enjoy this status. It would be stretching it to argue that chocolate-making is an issue of national security, but there are rumours that UK energy firms such as National Grid and Centrica are on the shopping list of Russian giant Gazprom. That would certainly raise some political hackles. Watch this space.
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After watching the news last night you’d be forgiven for thinking the onset of Armageddon is upon us. Journalists in helicopters reported swirling masses of clouds heaping their icy misery upon Britain’s timid terrain. Meanwhile, brave vigilantes battle the vengeful gods with shovels and grit, praying for an end to this unforeseen, unjust plight.

Erm, hang on – this is mid-winter, isn’t it? Cold and icy weather does have a bit of a habit of appearing at this time of year. And, yes, it’s a lot of snow – in some parts of Britain it has very much brought things to a standstill. But, again, I would argue that snow comes as little surprise to even the most junior weather enthusiast who has noticed that with each of the four seasons comes a change in the skies, and subsequently one on the ground too.

Adverse seasonal weather, once put through the mincers of some newscasters, becomes evil hordes from above shelling us with their flakes of fear. The problem being that this then scares some people into not even venturing out of the house to try to go to work. If even bothering to ring the office (it being a fair assumption that the office has collapsed under the weight of white gloom), the call would simply be to say: “It’s ok, I’m safe – we’ve locked ourselves in and have enough tinned food to last us for two weeks… Now go, save yourselves!” Or, for the more cunning out there, the hyperbole becomes a good excuse to not even try to go to work: “Come in? Are you mad? Have you not seen the news? There’s a ton of frozen water falling from the sky! My sofa seems the safest place, thanks.”

Now, before anyone complains, I do acknowledge that some parts of the country really are in dire straights. And we are not Canada or Finland, or any other country that has a whole infrastructure tailored to extreme winters. Our seasons rarely become so severe. We’re mostly happy if it doesn’t rain too much during Wimbledon fortnight, and our children grow up having known the sight of their local lake/canal/puddle fully frozen over. But my point is that the current weather is not that shocking. And in cities, especially, where there is public transport aplenty, it’s a pretty poor excuse not to make it to work. It was certainly noted in London that while the underground and buses were mostly running fine this morning, many were strangely more empty than usual…

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It’s finally arrived. After many months of hype and hyperbole, the 15th UN climate change conference began in Copenhagen today.

And you’d be forgiven if you already feel exhausted by the coverage. The media, bloggers and online forums have been frenzied to the point of delirium. We are, apparently, now divided into two camps: the “believers” and the “deniers”. The former are those who choose to believe the overwhelming weight of scientific evidence that supports the argument that mans’ actions are causing an increase in greenhouse gases, thus warming the Earth. And the latter are those who deny that mans’ post-industrial expansion, and in particular the mass extraction and burning of fossil fuels, has any negative consequences.

But no matter which camp you are in, it’s undeniable that the days of this issue being the sole domain of Greenpeace activists and the odd renegade politician are firmly behind us. The fight against climate change is now mainstream. And this is what the Copenhagen conference is emblematic of. No matter how much mud-slinging and squabbling occurs (or sweeteners offered and bullets bitten) in the next two weeks, it is a significant historical moment – the time that the world’s leaders came together with the serious intention of working towards a man-made solution to a man-made problem.

But ultimately it’s not emblems or “staging posts” that really matter – it’s actions and solutions. And, from a business perspective, the importance of this conference all comes down to how actions taken by politicians will affect the business community.

To help you make sense of it all for your business, away from all the hubris of denial and belief, we’ve lined up a team of experts to keep you up-to-date with the goings-on in Copenhagen and consider the consequences of upcoming regulations. So to keep abreast of the issues that effect you and your employees, keep http://www.peoplemanagement.co.uk/copenhagen your one-stop-shop for the next two weeks.

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Out has gone the relaxed small-town, tea-and-scones charm of Harrogate and in has stepped the large-city, latte-and-croissant cosmopolitan bustle of Manchester.

Some might have feared that such a move could have been at the expense of intimacy for the annual gathering of CIPD members. It hasn’t felt that way to me. The venue, a winning mix of Victorian brick and 21st century glass and steel, is right in the beating heart of central Manchester, and has a sense of vibrancy about it. The exhibition hall is suitably massive, but with seminar rooms clustered together and a small central hallway always bustling with people, there has been a definite feeling of community here.

The nature of the change in location also seemed in keeping with the changing nature of HR – the theme that linked many of the sessions I attended. The CIPD’s flagship Next Generation HR project was the vanguard of this. It showed how far HR had moved on from the transactional, past hand-wringing over the “top table” (although that was still lurking in the shadows of some sessions) – even past partnering – towards a pure business model.

It’s not HR hanging around and asking what it can do to help, handing out the cream teas. Rather it’s HR being so attuned to the business that it knows the strategy and priorities inside out, knows what it needs to do and gets on with it. In that sense, this year’s conference felt more like an urgent gathering, a priority meeting, before delegates rushed off to do the job in hand – and perhaps grabbed a latte and croissant if there was time.

But just a quick caveat. This is not to say that HR has become so business-like or focused on the senior team that it’s lost its connection with people. More than once I came across delegates and speakers rubbishing the term “human resources”, as indeed Deborah Baker from Sky recently did when I talked to her. The preferred term is fast becoming “people”, not “HR” – and the concept of being a bridge between the senior team and employees, not an island which neither side visits all that regularly, came across strongly. The message seemed to be that being astute number crunchers and strategic planners does not mean forgetting the people – rather it’s that very knowledge of people that makes HR unique among business functions.

So, here’s to a successful Manchester conference. Now, back to work for all of us.

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The case of Grainger plc v Nicholson has already received a hell of a lot of coverage for extending the religion or belief discrimination regulations to cover belief in climate change. To summarise: the head of sustainability (Nicholson) was made redundant from property company (Grainger), and claims he was unfairly dismissed because of his belief in climate change.

But what really interests me is this – why does a company have a head of sustainability if it’s going to baulk over the incumbent’s belief that climate change is, you know, a bit bad, and that the firm should maybe try to do something to help the cause? We must, of course, point out that Grainger disputes this issue – its corporate affairs director Dave Butler told the Independent: "Grainger absolutely maintains that Mr Nicholson's redundancy was driven solely by the operational needs of the company during a period of extraordinary market turbulence.”

Some rather illuminating points, however, did come out of the mud-slinging. John Bowers QC, arguing on behalf of the company, said: “What Mr Nicholson asserts is a scientific claim – that if we don't urgently cut carbon emissions we will not avoid catastrophic climate change. There is nothing philosophical about that.” Well, OK, but it pretty much sums up what you’d want your head of sustainability to believe, doesn’t it?

So let’s assume that Grainger is as green as the Jolly Green Giant, and that Nicholson was merely another victim of the recession. Even then, the case does raise the spectre that there may be one or two companies with sustainability or CR professionals, environmental plans, campaigns entitled “Let’s Go Green”, etc, that are, in fact, merely paying lip service for the sake of good PR. That, perhaps, such companies don’t fully believe the hype but are happy to let people with token job titles make it look like they do. The problem is, once you allow those token professionals to look into the issue, they will soon realise the scale of the problem, the paucity of the employer’s actions to tackle it and the urgent need for wide-scale change.

With the UN conference on climate change fast approaching, all these issues will soon be brought into sharp relief. Those companies who truly are green can add their signature to the Copenhagen Communiqué – a call from businesses for an international climate deal to be signed in Copenhagen this December. I’ve just checked – Grainger isn’t one of the signatories. Yet.

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