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The mail services play an important role in human life from a long period ago. Even in this modern world mails play a vital role. Now many new modes of mail services are there like google mail, yahoo mail, msn messenger but still the old traditional mail services has its own importance. Almost every country is having its own mail service, in India there is India Post, in UK it is Royal Mail and so on. The Royal Mail is the traditional mail service of the Great Britain.
HISTORY OF ROYAL MAIL:-
The history of the Royal Mail can be traced back in 1516 when the Henry VIII established the ``Master of the posts", a post which have evolved into the office of the postmaster General. The service of the royal mail is first made available to the public on 31 July 1635 by the Charles I. The general post office (GPO) was officially established by the Charles II in 1660. In 1838 the money order system was introduced by the Royal Mail and in 1870 the post office started the telegraph service. The Royal Mail holded the monopoly power in the mail service for a long period of 350 years. The monopoly of the Royal Mail came to an end in January 2006 when the postal service was open to the new entrants. With the entry of the new firms better services has been provided to the customers.
The Royal Mail was confident about facing the competitors. But it couldn`t efficiently withstand the competition from the new entrants. The Pension Scheme of the Royal Mail brought loss to the firm. For overcoming the losses the Royal Mail is going to be privatised.
HUMAN RESOURCE STRATEGY OF ROYAL MAIL FROM 2005 - 2010 :-
The Royal Mail treats HR as the top priority. The Royal Mail considers people as the centre of every thing they do. The HR team of Royal Mail is split into three main areas in which people and organisational development service (P& ODS) is the largest. A HR professional in Royal Mail should focus on the important areas like talent management, diversity and leadership development.
Basically the HR function consist of recruitment, selection, performance appraisal and rewards management. The royal mail used to give advertisements regarding the vacancies they have in websites and other sources. They also publishes the vacancy details in their website. The interested candidates can submit their CV online and if the candidate meets the company requirements, their application will be handed to a higher level and in the end the candidates will be selected by the HR managers.
TRAINING AND DEVELOPMENT:-
The business partners are considered as the HR directors for every business area, they works closely with the business leaders for applying HR thinkings and approaches for acheiving corporate goals. By collabrating with those people the employee was able to apply high qualified strategic HR thinking for acheiving the desired objectives.
The front line employess are supported by a team of experts including executive members, finance, human resource and sales and marketing members. There are many career opportunities in each of the specialised areas. The main agendas are the following:-
a) Recruiting the correct people at the correct time to drive through the transformation.
b) Quickly to succeed competitive environment.
c) Developing talent and leadership.
d) Adapting the engaging and involving employees.
e) Creating an atmosphere for the employees where they can be innovative.
The time spent in HR service in a regional or central team will give hands on experiance in some of the following areas: recruitment, reward, learning, health and safety and advice and support. The placements will give the opportunity to develop a wide range of skills, which will help the candidates in gaining experiance and skills in the fields of project management, data analysis, management information, business planning and process improvement.
The expert teams develop the strategic HR solutions in areas like talent management, diversity, organisational development and learning and development. This will give a high level exposure to the business HR strategy and will be having a better understanding of the expert fields. The training the internal project teams in modelling methods and business process analyis which were used to involve the staff and union representatives and front line managers in identifying and agreeing the causes of operational failure.
The performance appraisal of the employees are being done by the HR managers of the royal mail. The necessory training and development will be provided to the employees to reach upto the desired standard. The performance appraisal allowes the HR managers to correct the employee if the job is not done in the correct way.
IMPLEMENTATION OF A NEW BUSINESS STRATEGY FUNCTION:-
A new business strategy function has to be implemented in the royal mail head quarters and in the strategic business units and the divisions. This involves:-
a) Designing and delivering a development programme for the directors of planning and integration and in their counter parts in HQ.
b) Coaching the new directors on a 1: 1 basis.
c) Supporting the new strategic heads of the planning and integration in the definition of the strategic programmes.
THE EMPLOYEE BENEFITS AND HR STRATEGY:-
Reward means not only pay but also other types of services like pensions, medical care, children education etc. The employees are provided good pay, good location and the good benefits package. The pension scheme was also provided by the royal mail. The labour was be provided job flexibility and the work life balance. Medical facilities are also being provided to the employee and his family members. Royal mail offers flexibility in job timings to the employees. The travel benefits are also being provided to the employees by the royal mail. The royal mail followed the same system of benefits provided by the Kings till now, it was also a reason for the royal mail`s credit crunch.
Royal mail provides shift allowances to the employees for working flexible hours. The royal mail gives four and half week`s paid holidays to the employees every year. The employees are allowed to contribute to the defined contribution pension plan after a waiting period. The Royal Mail Group makes significant contributions to the pension plan. The employees in royal mail gets other benefits like seasonal ticket loan, discounts on car, discounts on gym benefits etc. The HR strategy of royal mail aims to provide flexible working arrangements for supporting a variety of different lifestyle choices, form policies supporting maternity and paternity leave, to career breaks and time off in exceptional circumstances. The asistance and advice is available to the employees on a range of issues such as debt, health in relation to work, relationships, critical situations and deaths etc.
INTERNAL AND EXTERNAL FACTORS:-
The business of the royal mail was affected by both internal and external factors. The internal factors include inefficient management, lack of co - ordination between top level and lower level management. The external factors include the trade union strikes, competition from DHL, TNT, UPS , recession etc. Both the internal and external factors play an equal role in the affairs of the royal mail. The internal factors are:-
a) Lack of co - ordination between top level and lower level management- The royal mail failed to co - ordinate the top level and lower level management. There was a communication gap between the high level and lower level management. The HR managers failed to pass the correct commands and information at the correct time to the employees.
b) Inefficient management- Though the HR directors of the royal mail was experianced they didn`t manage the affairs of the company efficiently. The inefficient management was a reason for the financial crisis of the royal mail.
The external factors are the following:-
a) Trade union strikes:- The royal mail had to face some serious labour union strikes. The members of the Communication Workers Union (CWU) have protested for their pay, competition and the modernisation. In October 2009 there was a labour strike in royal mail. The royal revealed that the strike in october have delayed around 40 million letters, which is about 40% of a typical days post. The national wild cat strikes in 2003 is considered to be the largest strike in the history of the royal mail. The labours also striked on 2010 for their benefits. Royal mail failed to deliver letters due to these strikes in the present time.
b) Competition:- After the end of the monopoly period royal mail had to face competition. The companies like DHL, TNT, UPS etc were a big threat to the royal mail. The new generation mails like gmail, yahoo mail etc also reduced the demand for the royal mail.
ROYAL MAIL AS A MONOPOLIST:-
The Royal Mail enjoyed the monopoly power in the mail service for a long period of 350 years. During that period no other firms where allowed to enter the market. The royal mail had the complete freedom in the market. The monopoly period of the royal mail was ended by the business service group Hays. During the monopoly period the royal mail didn`t extended its business across the borders. It was considered as the biggest drawback of the royal mail.
From the period of King Henry viii the royal mail enjoyed monopoly. No one dared to stop it for around 35o years. During the monopoly period royal mail introduced the first mail train in 1830.
COMPETITION FACED BY ROYAL MAIL:-
The royal mail enjoyed monopoly in the mail market for a long period of 350 years. The royal mail had to face competition when the mail market was open to public in 2006. The main competitors of royal mail are DHL, TNT, UPS etc. The royal mail had a tight competition with the TNT.
The royal mail was shocked when the Scottish government awarded a multi - million pound contract to the TNT. The deal of £ 8m allowes the TNT to deliver mail to dozens of the public bodies. The royal mail was awarded a first class contract of £ 17 m but at the same time second class contract is won by the TNT. The royal mail lost £ 1m a day in 2008. Because of the extensive competition the royal mail made an operating loss of £279 million. The Sunday Times in 2007 reported that the royal mail lost hundred`s of pounds due to the extensive competition. The royal mail has to struggle a lot for overcoming these competitors.
SWOT ANALYSIS OF ROYAL MAIL:-
SWOT analysis evaluates the strengths, weaknesses, opportunities and threats of a company. It identifies the internal and external operations of the company. The SWOT analysis of Royal Mail is as follows:
STRENGTH:- The main strength of the royal mail is its brand name. The customers have a brand loyalty towards the royal mail and its the greatest strength of the royal mail. There was a time when the customers didn`t even know that there is other companies other than royal mail in the market. The monopoly enjoyed by royal mail in the mail market was the biggest strength of the royal mail.
WEAKNESS:- The main weakness of royal mail is the insecurity in delivering mails. There are many complaints against the royal mail reporting that the mails are not delivered to the correct addresses. Many customers didn`t get the letters because of the in efficient delivery system of the royal mail.
OPPORTUNITY:- The royal mail has less opportunities in this modern era. By formulating good strategies and policie s royal mail may have some opportunity. Royal mail hasn`t tried to capture the market in different countries till now. Extending the business across the world is an opportunity for the royal mail.
THREATS:- The royal mail is facing several threats in this internet age. After the end of the monopoly period of the royal mail many competitors like DHL, TNT entered the market. These companies are a serious threat to the royal mail. The new generation mails like google mail, yahoo mail etc are also a threat to the royal mail.
RECESSION/ CREDIT CRUNCH OF ROYAL MAIL:-
The in efficient management was pointed out to be a reason for the credit crisis of the royal mail. The royal mail has the monopoly in the letter business for around 350 years but during its golden period no attempt was made by the management people to spread the business of the royal mail across the border. The royal mail was much confident in its brand name and its strength that`s why it didn`t make much changes in its marketing strategies and policy when the mail market is open to the public. As a result the competitors like TNT, DHL captured the major market share.
The royal mail faced greater competition and falling demand and it was reported that the half year group profits of the company had fallen from £ 184 million to £ 52 million. The letter business of the company itself faced a loss of around £ 66 million. The royal mail was paying for the pension plan around £ 800 million a year, which has a £ 10 billion deficit. It also became a reason for the royal mail`s present credit crunch. The royal mail failed to maintain the customer reliability and many customers move away from the royal mail. The fall in demand also pushed royal mail to a stage of the credit crunch.
The Royal mail was badly affected by recession during the period from 2005 - 2010. The situation of the royal mail became worse when the human resource director Kevin Green leaved the company. The HR director Tony McCarthy also left the company after a few weeks when the Green walked away from the company. The resignation of the two experianced directors is a big loss to the company.
STEPS TAKEN BY ROYAL MAIL TO OVERCOME CREDIT CRUNCH:-
The royal mail is aiming for an increase in revenue for overcoming the recession. The royal mail is aiming for the additional revenue to help to maintain the pace of its modenisation programme. For increasing the revenue the royal mail is going for an increase in its stamp price. It was reported that there will be a 5pence increase in price for the first and second class stamps.
Dominic O` Connell the Business editor in The Sunday Times in 07-11-10 reported that the royal mail has secretly demanded the cost cuts of atleast 20% from its suppliers in a desperate bid to shore up the company`s worsening cash position ahead of a planned privatisation. The top 150 suppliers were called for a meeting in Central London and in the meeting the procurement director stunned the audiences by presenting a plan for the drastic cuts. The royal mail is in transformation and needs cash. So a radical cost - out programme is required to support the transformation. The urgency and speed of the cuts will fuel fears of a cash crisis at the royal mail which is nominated for the privatisation.
The cash problems of the company has called into the question of the timing of the privatisation. The company is also planning to sell some of its assets, and a sale at least back of the part of its property portfolio. The royal mail is the largest organisation to put the squeeze on the suppliers.
The royal mail should secure a timely, clear and a balanced solution to a cash constrained future. Royal mail is implementing different measures for raising cash like reducing head count, raising cash from asset sales and tightening spend with the suppliers. The royal mail should implement a strategy for securing the additional revenue. The royal mail is now implementing the modernisation strategy like introducing the new machinery and changing the present working practisesl. But still the royal mail have to go a longer way to reach the financial stability.
PRIVATISATION OF ROYAL MAIL:-
The royal mail was passing through serious financial problems after the monopoly priod of the company came to an end. The pension scheme of the company was not good and it was running on deficit. It was been pointed out that if the same situation continues the company wont be having money to pay the pension and may after some time the company wont be having funds to pay the employee salary. Because of the shortage of funds and lesser scope for development the company`s HR directors Kevin Green and Tony McCarthy moved away from the company. The situation became worse with the resignation of the two experianced HR directors.
Many employees left the company fearing that they are in a sinking ship. It was also pointed out that the employees wont be putting their maximum effort because they cant trust the company any more with the fear of losing their job and salary.
For helping the royal mail to get rid of this financial crisis, Post Com the regulator of royal mail announced the privatisation of the royal mail. The Vince Cable The Business Secretary declared that that the private buyers will be allowed to purchase 90% of the royal mail, at the same time post office may be mutualised. MR Cable also stated that the government wont oppose any foreign company`s decision/ step to buy the royal mail. The staffs of the royal mail will be offered at least 10% of the shares of the company. The trade unions are opposing the move for privatisation. The CWU is opposing the move for privatisation because there is chances of job loss for the labours in the organisation.
By analysing the HRM strategy and the present position of royal mail we can conclude that even the HR strategy of the company was formulated by experts, it doesn`t reach upto the desired standard. The company failed to face the competition effectively when the mail market was open to the public. Because of this reason the royal mail fall to more loss. A solution formulated to save the royal mail was privatisation. But the CWU is opposing the move for privatisation because of the fear of that many of the existing employees will loss their jobs. So the future of the royal mail still remains as a question mark in the history of the Great Britain.