| Introduction | | | | Company is doing is not an isolated incident as it |
| Marks and Spencer (M& S) is a company | | | | offered similar bonuses in the year 2006. Last |
| based in Britain. It is one of the most successful | | | | year it gave seventy three million pounds in |
| retailers in the United Kingdom with about seven | | | | bonuses to its employees. (Staff writer, 2007) |
| hundred and sixty stores all over the world. It | | | | M& S do not mind such generous |
| was founded by Michael Marks and Thomas | | | | contributions to go to their members of staff in |
| Spencer and has Sir Stuart Rose as its Chief | | | | terms of bonuses because the team has |
| Executive. Some of the countries in which the | | | | predicted increases in he profits they receive. |
| retail sores are found include Japan, Switzerland, | | | | Besides, the company's shares have almost |
| Kuwait, India, Poland, Italy, Saudi Arabia, Indonesia, | | | | doubled in the Stock exchange indicating that it is |
| Turkey, and Jersey among others. Most of the | | | | in steady rise and can afford to give mouth |
| stores are found in the UK i.e. they are five | | | | watering schemes and bonuses to employees. |
| hundred and twenty in number. The company | | | | The Company has a problem when it comes to |
| deals in the sale of clothing items and also in the | | | | pension schemes. This is due to the fact that the |
| food sector. Other items that the company sells | | | | Company recorded a deficit of about seven |
| include household items, furniture, electronics and | | | | hundred and four million in 2007. This means that |
| other technological devices, it also engages in the | | | | there must be strategies to solve the problem. |
| sale of coffee. The company has been relatively | | | | The Company has put in place a scheme that |
| successful in the industry and even recorded a | | | | allows it to deal with all the one hundred and |
| profit of one billion pounds about nine years ago. It | | | | twenty three members' expecting pension |
| was however faced with a crisis in the year 1998, | | | | payments from it. Members of staff normally |
| but it has since recovered from this crisis and is | | | | receive a specific fraction of their salary for |
| no on a stead rise again. (Faragher, 2007) | | | | every year that they have worked for M & |
| The company has been well known for some of | | | | S. (Sparrow, 1994) |
| the policies it offers to its consumers. One of the | | | | The company has done this through collaboration |
| policies was that items can be refunded back to | | | | with the M & S pension scheme fund. Here, |
| customers as long as they had receipts even if | | | | M& S gives out property to the pension |
| the products had been purchased a long time ago. | | | | scheme fund then this same property is leased |
| The Company recorded a profit of slightly over | | | | back to the retailer as the company pays back |
| half a billion pounds in the year 2006. M& S | | | | the pension deficit for a period of fifteen years. |
| also boasts of having a large employee base-it | | | | This scheme will enable the pension fund to be |
| has close to seventy one thousand staff | | | | self sufficient because if the retailer is unable to |
| members under its wing. | | | | make payments, then the property is redirected |
| John Lewis was a company is also another retail | | | | to the fund. This is the breakdown of payments |
| chain of stores that is slightly smaller than the | | | | made by the Company with regards to pension |
| former mentioned Company. John Lewis (JL) has | | | | schemes for the past two years |
| one hundred and twelve super markets and | | | | 2006- forty million pounds in the first quarter |
| twenty six stores under its name. There are | | | | 2007- five hundred million |
| sixty eight thousand employees working for the | | | | Another plan which the company has implemented |
| Company. JL is well known for the way it shares | | | | towards the pension scheme is through direct or |
| profits, partnership with emeployees and equity. | | | | indirect contribution from emeployees' salaries. |
| Marks and Spencer | | | | The Company has issued out three alternatives |
| Staff management at Mark and Spencer | | | | to members of the pension scheme; members |
| Marks and Spencer is well k own for the kind of | | | | could decide not to contribute any amount at all |
| management system that it adopts. This is one | | | | to the pension scheme and could consequently |
| of the major contributors towards its corporate | | | | receive very low rates on their pensions, or |
| identity. Corporate identity is a crucial part of any | | | | members could give about seven percent of their |
| business because it is what customers recognise | | | | salary in the next three years and lastly, |
| about the Company. M& S prides itself in the | | | | members could also choose to neglect payments |
| fact that it has a very strong corporate culture. | | | | but they must put a limit on the level which their |
| This simply means that the Company has been | | | | pensioned salaries will reach. This method of |
| having a strong sense of culture and management | | | | solving the pension deficit problem puts the choice |
| skills. This has even led to some emulation from | | | | in the employee's hands. If they choose to |
| certain companies with reference to M&S. | | | | contribute from their salaries, then they will earn |
| However, this does not men that staff | | | | more pensions in the end and if they decide not |
| management at the Company has not had some | | | | to, then the amount received will be very low. |
| flaws. This was especially visible when the | | | | John Lewis |
| Company was forced to close down stores in | | | | Staff management at John Lewis through |
| parts of France. This occurred due to the fact | | | | cooperation with staff |
| that there were inadequacies about the benefits | | | | John Lewis most outstanding feature when it |
| and job protection offered by Marks and Spencer | | | | comes to employees is the fact that the |
| yet the same incentives were what the Company | | | | Company is a worker-coop. This means that |
| had become identified with. The Company also | | | | members of staff are part owners of the |
| failed in communicating adequately to staff | | | | Company. There are set rules and principles on |
| members prior to closure. This meant that the | | | | operation o the Company by the employee trust. |
| Company had found itself in bridge of the law and | | | | There are several benefits that have resulted |
| had therefore revealed weaknesses in its | | | | from such an arrangement, the first one being |
| management system. (Dale, 2001) | | | | that employees perform to their maximum |
| Trainee Management Schemes in Staff | | | | potential. This is because they will not look at |
| management | | | | consumers and buyers as a means towards an |
| This kind of scheme has earned the Marks and | | | | end, but they will consider them as an income |
| Spencer Company an award from the Times. | | | | source. They give them utmost attention because |
| This was ion recognition of the fact that the | | | | they realise that there are direct benefits that |
| Company employs a high number of graduates to | | | | come from increased sales. (Guerby, 2006) |
| work for them. It was given position seventeen in | | | | The motivating factor behind this kind of |
| this category for this role. | | | | treatment is the fact that employees realise that |
| This kind of scheme normally involves provision of | | | | success of the business means success for them. |
| training for graduates who may be new to the | | | | Other types of emeployees simply do not care |
| company or those who may have worked for | | | | because they know that whether sales are low or |
| the company before but are interested in | | | | high, they will still get their salaries. Productivity of |
| developing themselves within the organisation. This | | | | members in John Lewis staff is quite high because |
| training lasts for a period of twelve months. But | | | | of the reasons mentioned above. This model was |
| before one becomes an accepted trainee within | | | | adapted after it had been discovered that most |
| the company, they pass through rigorous training | | | | professional businesses that were successful were |
| and selection before gaining access into the | | | | partly owned by workers, these included |
| Company. | | | | accounting firms, law firms, medical practitioners |
| First of all, applications are done openly and | | | | and others. Other benefits of co ownership |
| transparently through the internet. This method is | | | | include; |
| quite appropriate because it ensures that all people | | | | - Standards have been raised in the retail industry |
| who are interested gain access to the process | | | | because of co ownership and competition |
| without segregation. All applicants do this through | | | | - Retailers are able to have professional |
| a Communication Centre belonging to Marks and | | | | autonomy |
| Spencer. After sending their applications to the | | | | - Retail workers can come together and |
| Centre, applicants are required to do a | | | | exchange ideas on best retail practises |
| psychometric test. Those who pass the test will | | | | - It places a lot of emphasis on human capital as |
| be deemed capable of performing managerial | | | | the most vital asset thus showing that property |
| tasks. | | | | rights theories in economics are true. |
| The tests come in two categories. The first is | | | | John Lewis has served as a role model in this |
| numerical while the other is verbal. The purpose | | | | regard for companies who plan on adopting this |
| of providing two types of tests is to give a fair | | | | kind of partnership. One such example of a |
| chance to differing personalities. This is a very | | | | company is the cosmetics company and chain |
| crucial aspect of any fair recruitment process. | | | | store Lush which is preparing to follow the JL |
| Reason being that some people are bubbly and | | | | direction. (Armitage, 2007) Most people may be |
| talkative and may seem quite impressive during | | | | misguided by the term co ownership and may |
| the verbal tests yet such people may be very | | | | mistake this to mean that decision making is slow |
| poor at performing tasks. The numerical tests are | | | | and more emphasis is placed on sustaining the |
| also important in analysing other types of | | | | relationship of the company members rather than |
| personalities. Some people may be shy and | | | | getting any work done. On the contrary, decision |
| withheld during verbal interviews. Others may | | | | making is not delayed in the Company because |
| panic suddenly and consequently loose composure. | | | | the company does not have any stakeholders |
| This other types of tests allow M& S | | | | externally. This means that it can focus on long |
| management to zero in on the most suitable | | | | term decisions instead of making choices that |
| candidates and overcome initial barriers in | | | | suite the short term. (Guerby, 2006) |
| selection. (Berry, 2007) | | | | Pension scheme arrangements |
| Applicants are then subjected to an Occupational | | | | John Lewis has some challenges in the |
| Personality Test. This type of test aims at | | | | administration of pension schemes. This is because |
| investigating what type of personality the | | | | in the year 2002, the Company had a deficit of |
| applicant possesses. This is because managerial | | | | about two hundred million. Yet at that same time |
| positions can only be done by certain types of | | | | the company's assets in the pension scheme fund |
| personalities. Not everyone is cut out for this kind | | | | were about one billion yet liabilities were 0.18 billion |
| of position. People who take up managerial | | | | more. The Company was however optimistic that |
| positions must be leaders. This means that they | | | | those differences were caused by changes in |
| must be influential and must be able to affect the | | | | market forces. (Cope, 2002) |
| actions of other members of staff towards | | | | Some of the workers in the company began |
| achievement of the goal. This is the reason why | | | | registering complaints that John Lewis was |
| the test is done as the last thing during the | | | | focusing mostly on pension schemes as the |
| application. | | | | amount that was going into the fund was rapidly |
| Finally, members who get accepted into the | | | | increasing. However, this was not the case with |
| Company undergo rigorous training for a period of | | | | bonuses. So they were requesting for more funds |
| one month. The reason why the duration is | | | | into the bonus schemes rather than pension. The |
| slightly long is because the Company would like | | | | Company decided to examine the issue and |
| trainees to be well equipped for the challenges | | | | change payments because members whose ages |
| that lay ahead in the managerial positions which | | | | were far from retirement preferred receiving |
| they will hold. This Company has the advantage | | | | more bonuses and fewer pensions than vice |
| of having young members of society working for | | | | versa. The Company had close to sixty thousand |
| it thus encouraging injection of new ideas and | | | | emeployees under its wing. All the emeployees |
| brainstorms. A company that is characterised by | | | | are considered as co owners in the Company. |
| young people working for it is quite progressive | | | | (Cope, 2002) |
| and always incorporates new and creative ideas | | | | Salaries and payments to workers |
| of doing things. The Company also has | | | | JL has put in place a policy that allows employees |
| unconventional ways of management because of | | | | to receive a level of performance salary plus the |
| recruiting young staff members to work for it. | | | | commercial rate that is prevalent at that time. In |
| Customer service training in staff management | | | | the year 1998, workers received a bonus of |
| The Company uses a method called Mary Gober | | | | approximately two thousand pounds more than |
| to train its staff members. This helps members | | | | their salaries. This was a considerably good level |
| of staff to be on top of their game when it | | | | of pay because most workers in retail worked |
| comes to treatment of customers. This implies | | | | for very long hours and earned little. This meant |
| that staff members become very well versed in | | | | that the government had to chip in to be able to |
| treatment of customers and service delivery is | | | | cover this difference in payment through income |
| improved. What the training normally provides | | | | support payments. But this was not the case for |
| members of staff is that they are able to treat | | | | JL employees who are catered to adequately. |
| customers in a friendly way; they are also able to | | | | Shown below is a summary of earnings in that |
| give courtesy to customers and to show them | | | | year |
| that they are interested in serving them. In | | | | Total employees 41,100 |
| addition, members of staff are also equipped with | | | | Full-time employees 24,800 |
| the knowledge to serve customers in the best | | | | Part-time employees 16,300 |
| possible way. This means that they are able to | | | | Total employees, weighted for part-timers 31,000 |
| answer any questions asked by clients and their | | | | Partnership bonus GBP 57.0 mill |
| abilities are maximised. (Thomson, 2003) | | | | Pay (before bonus) GBP 371.3 mill |
| Members of staff are required to attend seminars | | | | In the year 2007, the Company had one fifty five |
| where they are informed on how to deal with | | | | million in bonuses for all its employees. This was |
| consumers. These kinds of seminars are common | | | | about eighteen percent of what partners receive |
| in most of the stores that are affiliated to the | | | | in their salary. This was a record increase of |
| chain stores. Consumers and other parties have it | | | | twenty nine percent of what partners got in the |
| easy when they require details about certain | | | | year 2006. |
| issues in the Company because they are able to | | | | The Company has also instituted a mechanism for |
| identify members that have undergone training | | | | distributing profits as follows; JL removes a |
| because they normally wear a brooch on items of | | | | percent of the profits earned, this is fifteen |
| clothing. | | | | percent of the amount earned in profit. The rest |
| Charity Awards for volunteer employees – | | | | is then invested back in the business and used for |
| staff management | | | | operation costs or expansion processes. However, |
| Marks and Spencer has a programme that has | | | | there are also net assets that are left behind and |
| been put in place called Mark and Start. This | | | | these are the one that should be allocated to |
| programme aims at involving most members of | | | | shareholders. |
| staff in volunteer efforts especially towards the | | | | Acceptance of critism from employees at JL |
| disadvantaged in society. In so doing, employees | | | | The Company has instituted a system that |
| identify with the Company and it creates a strong | | | | attempts to control how managers perform. This |
| sense of loyalty and commitment to Mark and | | | | is done through anonymous letters that are |
| Spencer. | | | | published internally in a magazine belonging to the |
| The Company gives awards to those who have | | | | Company. Employees can be able to register any |
| performed well in charity work. This can be | | | | problems or complaints that they may have and |
| regardless of the fact that the volunteer work | | | | can therefore bring about change in the Company. |
| was done outside of work time. Awards are also | | | | (Maund, 2001) |
| given to those who support a Breast Cancer | | | | Managers themselves are required to respond to |
| Campaign or to those who work with local issues | | | | these anonymous letters in a manner that is |
| that may need assistance. Normally what the | | | | truthful. They are also supposed to treat each |
| Company does, is that it receives applications | | | | member with respect regardless of their status in |
| from is employees. These employees are the | | | | the Company. Such an attitude contributes |
| ones who feel that they have participated well in | | | | towards employee satisfaction and ensures that |
| Charity events. In the year 2006, there were | | | | all staff members feel like they are part of the |
| about three hundred and fifty applicants | | | | team in spite of the amount they earn or skills |
| interested in receiving awards. The Company then | | | | they posses. |
| follows set criteria to determine who is most | | | | This level of transparency could be the treason |
| suitable for an award and in which category will | | | | why the JL partnership is quite a success at this |
| that person fall under. This process is done with | | | | moment. Managers who accept public scrutiny and |
| the assistance of experts in that area, one such | | | | critism ensure that they are at their best |
| example is the Charity Aid Foundation. This latter | | | | behaviour to minimise these critisms and to make |
| mentioned group also examines applications and | | | | a good name for themselves. Consequently, |
| gives its recommendations to M&S | | | | critisms raise the standard because managers |
| management concerning judgements. (Staff | | | | know that they are subject to correction. |
| writer, 2007) | | | | Consultation with staff management |
| Such awards are a conscious effort in use by the | | | | John Lewis is well known for giving its staff the |
| M& S Company to ensure that its | | | | ability to influence decisions and actions in the |
| employees feel appreciated as any awards given | | | | company through creation of democratic bodies. |
| to them are an indication that the Company | | | | One such body is the Partnership Council that is |
| recognises their efforts ad is willing to boot these | | | | made up of all the members of staff. This body |
| efforts through awards. Employees will | | | | has a board and together, members have been |
| reciprocate this sign of care through more output | | | | granted the power to change management they |
| in the Company. | | | | feel unhappy with after intense consultation. This |
| Payroll giving Schemes – staff management | | | | is especially due to the fact that the Partnership |
| The M&S has receives awards from the | | | | Council even has the mandate to vote out a |
| charity Aid Foundation (CAF) for having payroll | | | | Chairman. This type of management style |
| giving scheme in place. These awards are given to | | | | ensures that there is accountability as managers |
| employers who engage in causes that are geared | | | | are kept on their toes. Some administrators like |
| towards employee motivation and support. For an | | | | Personnel director Tracey Killen have even pointed |
| employer to qualify for an award, they need to | | | | out that they have to rigorously adjust to such a |
| be offering a payroll giving scheme. The first thing | | | | method because every move they make is |
| given to such Companies is a logo to indicate that | | | | subject to scrutiny. |
| it has implemented such a scheme. Then the | | | | In line with this kind of attitude, John Lewis gives |
| company is given an award depending on the | | | | its line managers relative autonomy to go about |
| degree which it rewards its employees. This can | | | | its business. Most of the decisions are independent |
| be ranging from bronze awards. These are | | | | and it is only when the matter is very serious |
| awards that are given to employers who pay | | | | when the line managers involve the Human |
| relatively few employees using this scheme, then | | | | Resource Department. This also means that the |
| there are the silver and gold awards given to | | | | company is not trying to create an image as |
| employers who engage slightly more than the | | | | being a good employer to the rest of the world |
| bronze category and also for those who engage | | | | or to other competitors; instead it focuses its |
| the highest percentage respectively. M& S | | | | energies on internal practices. |
| fell in the gold category and has shown | | | | Other benefits offered by the Company |
| commitment towards staff management and | | | | John Lewis caters for its partners through |
| motivation. | | | | introduction of certain schemes designed to boost |
| IT systems that protect pension scheme details | | | | employee's plans and ensure that they can |
| On 5th May, this year, the Company lost a laptop | | | | achieve some of the goals that they have set. |
| that had a lot of information regarding staff | | | | The first benefit is the ‘Bonus Save' scheme. |
| member's pension scheme details, names, | | | | Here employees are allowed to invest some or |
| addresses and other personal details. This | | | | their entire bonus as shares to the respective |
| potentially put all the people who were enlisted in | | | | contributor. The maximum allowable investment is |
| the laptop at risk of identity theft if a person with | | | | about four thousand five hundred pounds. |
| a hidden agenda accessed the information in the | | | | (Faragher, 2007) |
| laptops. But the Mark and Spencer Company had | | | | The ‘golden Jubilee trust' is another benefit |
| come up with a strategy in Information | | | | that comes with the Company. Here employees |
| Technology to protect their employees. The | | | | are allowed to work for any charity vent for long |
| Company had installed passwords to protect the | | | | durations and may still be paid for the duration |
| laptop and this meant that information could not | | | | when they were away. The company also gives |
| be easily accessed without having a go ahead | | | | awards for participation in charity events and |
| from relevant authorities. This simple yet | | | | therefore shows care and concern towards its |
| effective method of protecting personal | | | | emeployees that establishing a sense of loyalty |
| information ensured that no one faced identity | | | | amongst them. ‘Once in a lifetime'- This is a |
| theft and that they were secure. Such kind of | | | | trip that can be undertaken by members in the |
| protection by the Company contributes towards a | | | | partnership who have formed a group or clubs |
| feeling of security among employees and | | | | and societies. Members who apply for funds can |
| consequently leading to motivation. | | | | go to a destination of choice which they have |
| Personal loans and other types of loans | | | | never visited all their lives. |
| The Company offers a number of loans for its | | | | Incentives to retired members of the Company |
| employees towards the system. The Company | | | | are also given. Here, members are given benefits |
| offers a low interest rate on such loans for its | | | | even after retirement. Some incentives include |
| employees. This is 8.9 % for loans that range | | | | access to financial loans, a monthly magazine and |
| between ten thousand and twenty thousand | | | | also a reunion lunch. Lastly, the Company allows all |
| pounds. The firm does not charge any extra | | | | members of staff to ask for flexible workers |
| charges for the loan regardless of time. This is a | | | | hours regardless of marital or family |
| relatively fair deal for its employees because | | | | commitments. This means that even if one does |
| most people complain of spending most of their | | | | not have children or other commitments, they |
| time and resources towards servicing the loan | | | | can be granted flexible working hours. (Faragher, |
| rather than clearing the whole debt. M& S | | | | 2007) |
| recognises this inadequacy in loaning systems and | | | | Conclusion |
| solves it by providing affordable cover. (Berry, | | | | The two companies examined above have played |
| 2007) | | | | their parts in providing pension benefits to their |
| The Company has also instituted a number of | | | | employees, engaging them in trusts and also in |
| buying plans for employees who are need of | | | | management styles. John Lewis is identified with a |
| purchasing certain items. One such example is the | | | | flexible management style and coop ownership. |
| Car buying plan. The loan is replayed at a very | | | | Mark and Spencer is identified with provision of |
| low rate. This is probably because these | | | | good benefits to its emeployees and allowances. |
| payments can be deferred. M& S allows up | | | | (Maund, 2001) |
| to sixty percent of the loan to be differed. | | | | Reference: |
| There are several other types of loan schemes | | | | Cope, N (2002): John Lewis weighs final salary |
| offered by M and S that are all designed towards | | | | pensions revamp; the Independent (29th April) |
| ensuring that employees can plan for their future | | | | Guerby, L. (2006): John Lewis and school reform; |
| or they can implement important projects in their | | | | Retrieved from accessed on 1st January 2008 |
| lives. This kind of commitment by the Company | | | | Armitage, J. (2007): Lush to adopt John Lewis set |
| gives members of staff the feeling that they | | | | up; retrieved from accessed on 1st January 2008 |
| have strong back up and that the Company is | | | | Faragher, J. (2007): John Lewis Partnership; |
| committed towards their progress. Some other | | | | working in partnership; Personnel Today Magazine |
| schemes that available in the Company include | | | | (17th April) |
| Holiday Home Safe, Fixed Rate Savings, Save and | | | | Staff writer (2007): Marks and Spencer: neat |
| invest, Travel Money and other types of buying | | | | pension fund arrangement; Insurance Business |
| plans. | | | | Review |
| Provision of good pension schemes and bonuses | | | | Berry, M. (2007): Mark and Spencer to revamp |
| to employees | | | | final pension scheme; retrieved from accessed on |
| The Company rewards its employees through | | | | 1st January 2008 |
| bonuses after the Company has recorded a rise | | | | Dale, M. (2001): The Art of HRD: Developing |
| in profits. This was witnessed this year when the | | | | Management Skills , Vol. 3, Crest |
| Company recorded approximately one billion in | | | | Publishing House, New Delhi |
| profits. The profits were an indication of the sales | | | | Sparrow, P. and Hilltop, J. (1994): European Human |
| recorded this year and they were around eight | | | | Resource Management; Melbourne Press |
| point eight billion pounds. These profits need to be | | | | Maund, L. (2001): An Introduction to Human to |
| enjoyed by the members who contributed the | | | | Human Resource Management: Theory |
| most to its delivery, these are the employees. | | | | And Practice: Macmillan, Palgrave |
| Mark and Spencer took a large portion of this | | | | Maundy, L. (2001): An Introduction to Human |
| amount and gave back to staff members. It | | | | Resource Management: Theory and Practice: |
| gave them eighty million pounds in bonuses. | | | | Macmillan, Palgrave |
| The bonuses will be enjoyed by all members of | | | | Thomson, C. and Rampton, L. (2003): Human |
| staff in the country. There are about seventy | | | | Resource Management. Melbourne press, New |
| thousand of them. However, the Company will | | | | York |
| give different amounts to different members of | | | | Sparrow, P. and Hilltop, J. (1994): European Human |
| staff depending on the weight of their job. For | | | | Resource Management in |
| example the Chief executive is due to receive | | | | Transition: Prentice Hall, New York |
| about 1.23 million pounds more that his personal | | | | Maund, L. |
| salary which is close to a million pounds. What the | | | | |