In this section, we will explore how well the Bank performs as an employer in this difficult situation and report on the attitudes of staff.

[ Determining staff priorities ]
The Bank's Mission Statement identifies a number of priorities for the Bank in terms of the treatment of staff. But, are these the areas of major concern for staff themselves? In order to find out, late in 1996 we commissioned Moseley Consulting Ltd to carry out focus group research at three of our major sites. The intention being to use this information to guide the production of a subsequent Staff Survey. Within these groups, staff identified the following as priority areas of concern.

However, when employees were asked to rate the relative importance of a number of issues, the results were significantly different as a result of the different methodology employed. Subsequent to the focus group work of 1996, a Staff Survey was organised during the second half of 1997.

In response to these findings, the following issues will be reported upon: Salary Package, Employability, Job Security and Equal Opportunities.

The issue of Personal Recognition was rated as an issue of importance in the Staff Survey, and almost half of staff expressed dissatisfaction on the performance of the Bank. However, it is not considered that we have sufficient data to hand at present to allow serious analysis of this area, but we commit to a full report in our next Partnership Audit.

[ Measuring the Bank's performance ]
The Staff Survey had the support of the trades union, BIFU, and all responses were collated by an independent third party, QCL Market Research, guaranteeing anonymity of response. In order to underline the importance the Bank placed on staff feedback, the survey was distributed as the first piece of formal correspondence to staff from the Bank's new Chief Executive.

The 1997 Staff Survey was the second survey to be undertaken in recent years and response grew from 12% to 30% of the workforce. The Bank is pleased to see the number of returned questionnaires increase, but is still disappointed by the overall level of response. It is likely that the principal reason for this low rate of response is a perception amongst some staff that the exercise would not lead to significant change. In order to address this, in 1998 the Bank will dedicate substantial resources to communicating the results of the Staff Survey and subsequent actions taken.

1a) Salary package

[ Existing commitment ]
As we state in our Mission Statement the Bank "seeks to be a responsible employer". Amongst other things, this means providing a fair day's pay for a fair day's work. To this end we are committed to a formal job evaluation process, which is undertaken jointly with the Banking, Insurance and Financial Services Union (BIFU), and to a salary package positioned around the median of the financial services sector in general.

[ Performance ]
The Staff Survey found that staff have varying opinions about the Bank's salary package. Around 1 in 4 employees (24%) consider the salary package at the Bank to be amongst the three best things about working for the Bank and in their overall assessment, 65% felt that the Bank was good as an employer in terms of the salary package offered. However, almost 1 in 3 employees (31%) consider it to be amongst the worst things about working for the Bank.

In addition to the basic salary, the following additional remuneration is available:

• Non-contributory Pension Scheme: This is open to all permanent staff irrespective of hours worked and the Bank's contribution amounts to 15% of salary.

• Large Town Allowance: This ranges between £298-£3,450, depending on location, and is paid to all eligible staff.

• Profit Share Scheme: This is a mechanism to distribute 5% of profits equally amongst staff once profits reach a certain level.

• Annual Group Bonus: This is a one-off payment of 2.5% of annual salary made to all staff who reach a certain minimum standard of performance.

• Profit Related Pay Option: Currently, staff have the option to participate in an Inland Revenue-approved scheme which allows a percentage of gross pay to be paid at a reduced tax rate as long as this pot is tied to the overall profits of the Bank.

The Survey also sought views on other aspects of associated benefits and, in an interesting variation on other employee surveys, we asked the respondents' partners also to offer an opinion. Responses were largely positive, from the perspective of both the employee and their partner, particularly with regard to Maternity Leave and Holiday Entitlement.
 

[ By comparison ]
The Bank's salary and benefits package is positioned around the median of the financial services sector in general. Where appropriate, external consultants are used to ascertain the median, and ensure that The Co-operative Bank's package is in line.

[ Comment ]
Regardless of the fact that The Co-operative Bank's salary and benefits package are positioned around the median of the financial services sector, there are a significant number of staff who think that we perform poorly with regard to salaries. While to some degree this may be inevitable, we aim to demonstrate a continued commitment to pay the 'going rate' for the sector. As part of the 1997 Partnership Agreement with BIFU, we are also currently engaged in reviewing various aspects of employee benefits, at both the level of the organisation as a whole and individual departments.

[ Future objective ]
The Co-operative Bank will continue to provide a fair and consistent process for formal job evaluation in consultation with the Banking, Insurance and Financial Services Union (BIFU).

MIKE WALTERS Human Resources Strategy Manager 

1b) Job security
The world of retail banking is always changing, but never as rapidly as today. Deregulation has allowed a multitude of new players to offer financial services, including major retailers. Simultaneously, technological innovation has meant that the 'traditional high street branch' is no longer the only means by which business can be conducted: customers can now access their accounts over the Internet, on their personal computers, via satellite on their television and via their mobile phone, or simply over the telephone. The Co-operative Bank needs to be at the forefront of technological developments in order to remain competitive. However, this means that our staff are currently in the midst of a period of unprecedented change.

[ Existing commitment ]
The Co-operative Bank has in place a series of job security policies, which aim to offer staff some degree of peace of mind in the face of change. However, at the same time, the Bank must reconcile employee aspirations with business needs, and cannot guarantee 'jobs for life'.

[ Performance ]
The Staff Survey found that more than a quarter of employees (27%) consider job security at the Bank to be amongst the three best things about working for the Bank. However, a fifth of employees (21%) consider it to be amongst the worst things about working for the Bank. Another way to consider 'job security' is in terms of the quality of the Bank's change management processes. We recently analysed the Bank's record on change management over the period April 1996-September 1997. We are glad to say that over this period of substantial organisational change there were no industrial tribunal claims and no compulsory redundancies.
 

Change Management April 1996-September 1997 Changes in the way the Bank is managed have meant that the equivalent of 450 full-time jobs have become redundant over the period April 1996-September 1997 inclusive (although as described, no compulsory redundancies followed for full-time staff). The loss of these jobs was managed in the following way:   In addition, between April 1997 and October 1997, 190 employees (on a full-time equivalent basis) involved in cash processing activity were transferred to the Midland Bank. All staff maintained continuity of service on the same or comparable terms and conditions of employment. The transfer included temporary contract, maternity leave and career break staff. The decision to out-source cash-handling was taken given our current and projected in-house costs and the potential requirement for major investment.

[ Comment ]
In 1997, The Co-operative Bank signed a three year Partnership Agreement with the finance union BIFU. The Agreement states that the Bank and BIFU do not anticipate that there will be any compulsory redundancies up to the year 2000. Furthermore, as part of the Agreement, the Bank has committed itself to a three year pay deal.

At a time when the retail banking sector as a whole is shedding staff by the tens of thousands, we consider that our Job Security Agreement marks us as a responsible and enlightened employer. Responsible in so far as we will work as hard as possible to ensure that not a single full-time employee of The Co-operative Bank will be made compulsorily redundant before the year 2000. And enlightened, in that the relatively high level of trust that exists between the Bank and its staff has allowed the Bank to move forward with its change management programme in an efficient manner.

[ Future objectives ]
i) The Partnership Agreement states that we do not envisage any compulsory redundancies up to the year 2000. Therefore, the Bank will continue to focus on redeployment, retraining and the use of a voluntary redundancy register to manage the human component of any necessary business changes.
ii) For the benefit of those staff opting for voluntary redundancy, we will establish a partnership with an outplacement agency in order to support employees through the difficulties and challenges involved.

MIKE WALTERS Human Resources Strategy Manager 

1c) Employability

[ Existing commitment ]
As directed by our Mission Statement, the Bank is committed to "the development and training of all staff" enabling its staff to have the skills needed to maximise their potential in the jobs market.

[ Performance ]
A key measure of an employer's commitment to employability is the quality of staff training and development provided. Late in 1997, The Co-operative Bank achieved the primary award available in this area, Investor in People, for the whole of the organisation. Investor in People (IIP) is a Government-backed initiative designed to raise the competitiveness of British business through investment in people. To achieve the standard, amongst other things, an organisation must have a written training plan which is integrated into the overall strategic planning of the business. It must conduct all training and development in line with the written plan and evaluate it afterwards. The award is widely considered to be the highest accolade that can be achieved as far as employee development is concerned.

The Staff Survey found that the majority of employees (66%) consider that the Bank is good at providing "on the job" training (and Heritage, Culture and Values training also). However, views are mixed about the effectiveness of training in a wide range of other areas, including the priority of management development. In information technology training, 49% of staff thought that the effectiveness of training was poor, and only 35% thought it was good. Product information training, an important factor in satisfying customers, showed staff to be equally divided between those who thought it was good and those that rated it poor.

A key aspect of employability is experience, and the Survey found that around a third of staff had been given the opportunity to be involved in projects outside of their normal job roles. A further 3% had been seconded to another organisation, and 5% had undertaken Bank-sponsored community work. About a third of staff expressed a desire to be either seconded to another organisation or to undertake Bank-sponsored community work.

[ By comparison ]
The Co-operative Bank is currently the only UK Clearing Bank to have received the Investor in People award for the whole organisation. As of December 1997, the number of businesses having received IIP recognition across the UK stood at 8,616.

[ Comment ]
The Bank is delighted to be the first UK Clearing Bank to receive the IIP award for the whole organisation. Over the last decade, the Bank has adopted a flexible and devolved approach to training and development in order to reflect the distinct needs and priorities of the different areas of the business. There are currently a number of different channels for the design and delivery of training and the results of the Staff Survey suggest that some of these channels are operating more effectively than others. Whilst some training needs are being met adequately there is clearly a need for improvement in other areas.

Also, as a result of recent reviews of training and development in the Bank, (including the Investor in People assessment), a gap has been highlighted in the Bank's mechanisms for planning, managing and evaluating training at a Bankwide, strategic level.

A third of staff expressed a desire to be either seconded to another organisation or to undertake Bank-sponsored community work. Whilst the former option can only take place when there is a strong business case, the latter is something that the Bank is committed to exploring in the future as part of its commitment to social responsibility and the pursuit of a Corporate Community Initiative (see Community for further details).

Employability can be considered from both an internal and external perspective. The evidence here indicates that the Bank performs well in terms of investing in its people, however, the Staff Survey also found that 40% of employees were concerned about career development opportunities at the Bank. To this end the Bank has established a 'Developing People Steering Group' which aims to establish more effective mechanisms for managing career development and succession planning.

[ Future objectives ]
To devise and communicate a Bankwide training and development strategy and action plan for 1998, with targets and measures to evaluate performance. Priorities to include:
i) enhancement of the Management Development Programme in relation to both senior management and pre-first line management;
ii) continued roll out of National Vocational Qualifications (NVQ) framework;
iii) revision of induction policy and open-learning induction package prior to Bankwide adoption;
iv) establish more effective mechanisms for managing career development and succession planning.

MIKE WALTERS Human Resources Strategy Manager 

1d) Equal opportunities

[ Existing commitment ]
The Co-operative Bank actively promotes a policy of equality of opportunity for all its employees regardless of sex, marital status, disability, colour, race or ethnic origin.

[ Performance ]
There are two key levels of performance in the area of equal opportunities: at the most basic level is compliance with existing equal opportunities legislation; more importantly there is the degree to which staff composition reflects representation in Society as a whole. We report on each of these below. It should be noted that the Staff Survey found that equal opportunities was considered as the third most important feature of the Bank as an employee (79% considered that the Bank's actual performance was good).
 

[ Comment & comparisons ]
Despite extensive efforts on the part of the Bank and its Human Resources Department, the composition of the Bank's workforce remains a cause for concern, however, as noted above almost 4 in 5 staff consider the Bank's performance in this area to be good.

i) Ethnic minority
The number of our employees from ethnic minorities remains unrepresentative of Society, and is therefore a cause for ongoing concern. A number of programmes have been developed to address the situation, but as yet there has not been an increase in the representation of ethnic minority staff within the Bank. In some areas changes have been seen, for example, working in partnership with the Race Relations Employment Advisory Service (RREAS) we achieved an increase in the level of ethnic minority job applications and subsequent appointments at our Telephone Banking Centres.

ii) Gender
Whilst the majority of our workforce and junior managers are female, the majority of middle and senior managers are male. In relation to other companies, the Bank does perform favourably in terms of countering gender biases - we have a significantly higher proportion of women in management than the average UK business and we even have slightly more than the average Opportunity 2000 member organisation (a scheme designed to address equal opportunity issues). It is considered that existing programmes will continue to produce more improvements in this area.

iii) Disability
We currently have a number of disability initiatives in place. For example, we recently introduced additional measures to ensure that we treat all job applicants with disabilities fairly and equally. And, in response to the recent Disability Discrimination Act we organised Disability Awareness Training for all staff. However, we do not, at present, actively monitor our employment of disabled people, and there exists a requirement for us to develop our recruitment monitoring systems in order that we can measure the impact of our disability initiatives on the employment of disabled people.

[ Future objectives ]
i) To review the case for adopting the broader and more comprehensive Managing Diversity approach to achieving equality.
ii) To develop a Diversity Policy, and devise an implementation programme with an action plan for 1998, which will be communicated across the Bank.
iii) To carry out the goals for 1998 and monitor the policy and programme effectiveness. Quarterly reports to be received by the Executive.