HSBC 2009 Annual Report Download - page 22

HSBC HOLDINGS PLC
Report of the Directors: Operating and Financial Review (continued)
KPIs / Reconciliation of reported and underlying profit before tax
20
reflect HSBC’s range and breadth of activities. As
the comparator group includes companies listed on
overseas markets, a common currency is used to
ensure that TSR is measured on a consistent basis.
The TSR levels at the end of 2009 were 128.3, 103.6
and 120.6 over one, three and five years respectively.
HSBC’s performance did not meet the target of
being in the top half of the comparator group over
any of the required time periods.
Management believes that financial KPIs must
remain relevant to the business so they may be
changed over time to reflect changes in the Group’s
composition and the strategies employed.
Non-financial KPIs
HSBC has chosen four non-financial KPIs which
are important to the future success of the Group
in delivering its strategic objectives. These
non-financial KPIs are reported within HSBC
on a local basis.
Employee engagement
Employee engagement is a measure of employees’
emotional and rational attachment to HSBC. It is
critical to the long-term success of the Group and, as
such, an employee engagement target was included
in the 2009 objectives for Group executives (see
Directors’ Remuneration Report, page 334).
In 2009, HSBC conducted the third Global
People Survey of its workforce worldwide. The 2009
participation rate of 91 per cent was one of the
highest in the industry.
The Group’s employee engagement score rose
from 67 per cent in 2008 to 71 per cent in 2009. In
achieving 71 per cent, HSBC exceeded its target for
2009 of 69 per cent and the external global and
sector averages. HSBC aspires to progressively
improve its engagement score to best in class levels
by 2011.
The 2009 survey covered 14 aspects. Employees
rated HSBC above the external global average across
all aspects.
Brand perception
In order to manage the HSBC brand most
effectively, the Group tracks brand health among
Personal Financial Services and Business Banking
customers in each of HSBC’s major markets. The
survey is conducted on a consistent basis by
accredited independent third-party organisations.
A weighted scorecard of brand measures produces
an overall score for each market on a 100-point
scale, which is then benchmarked against HSBC’s
main competitors. The scores from each market are
then weighted according to the risk-adjusted
revenues in that market to obtain the overall Group
score.
In 2009, Personal Financial Services’ customers
judged HSBC’s brand to be 6 points stronger than its
competitors, up from 4 points in 2008 and above the
target. Business Banking customers also judged the
brand to be 6 points higher than HSBC’s
competitors, the same as in 2008.
Customer recommendation
Customer recommendation is an important driver of
business growth for HSBC. HSBC uses a consistent
measure of customer recommendation around the
world to continue to improve the services provided
by the Group to customers of Personal Financial
Services and Business Banking. This measurement is
carried out by accredited independent third-party
organisations and the resulting recommendation
scores are benchmarked against competitors. A
100 point scale is used to measure the score.
The 2009 customer recommendation score for
Personal Financial Services increased from +1 to +2
compared with a target of +3.
Business Banking customer recommendation
was also +2 points ahead of HSBC’s competitors but
below the target of +4.
IT performance and systems reliability
HSBC tracks two key measures as indicators of IT
performance; namely, the number of customer
transactions processed and the reliability and
resilience of systems measured in terms of service
availability targets.
Number of customer transactions processed
The number of customer transactions processed
reflects the dependency on IT of the delivery
channels that customers use to interact with HSBC.
Monitoring the volumes by channel enables the
Group to allocate resources appropriately. Despite
a fall in total volumes, the transition of customer
transactions from labour intensive channels
(branch/call centre) to automated channels (credit
card, internet, self-service and other e-channels)
continued in 2009. The following chart shows the
2005 to 2009 volumes per delivery channel: