RBS 2004 Annual Report Download - page 120

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Report of the directors
Report of the directors continued
Employee reward
Under Total Reward the Group offers one of the most
comprehensive remuneration and benefits packages in the
financial services sector, consisting of salary, bonus, share
schemes and competitive pension benefits. Salary awards
recognise both market competitor movements and individual
performance, with the largest increases being directed
towards high performers.
Through RBSelect, the Group's benefits choice programme, all
UK employees have the flexibility to customise their
remuneration and tailor it to their particular lifestyle needs. This
includes the opportunity to access subsidised childcare
vouchers, discounted personal insurance products and
discounted shopping vouchers at a range of high street stores.
In addition, employees can participate in bonus incentive plans
specific to their business and share in the Group's success
through profit sharing, Buy As You Earn and Sharesave
schemes, which align their interests with those of shareholders.
UK employees participate in profit sharing that is directly
related to the annual performance of the Group. For the last six
years this has amounted to a further 10 percent of basic salary.
The Group provides pension plan membership for most
employees in the UK and overseas. The largest plan is The
Royal Bank of Scotland Group Pension Fund, which has over
80,000 employee members in the UK. Through this and a
number of additional pension arrangements in the UK and
overseas, the Group ensures that employees benefit from
competitive pension provision as part of their Total Reward.
The actuarial valuation of the main UK pension scheme as at
31 March 2004 resulted in a deficit of £1,994 million. To
address this the Group made a special cash contribution of
£750 million to the scheme in December 2004. It also
increased its contribution rate to 21.5 percent of pensionable
salaries with effect from April 2004.
Employee learning and development
The Group actively encourages professional development and
lifelong learning and is committed to creating and providing
experiences outside the workplace that benefit the employee,
the community they work in and the Group. The Prince's Trust
initiative, for example, enables employees to participate in
volunteer and mentoring programmes and contributes to the
Group's Community Investment and Corporate Responsibility aims.
The Group acknowledges the importance of developing and
maintaining strong leadership capability across the
organisation, proactively developing future leaders and
creating succession plans for senior and executive
management roles. A core component of this ongoing activity
is the Executive Leadership Programme developed in
conjunction with the Harvard Business School and the
establishment of an on-site business school at the Group
Headquarters at Gogarburn, Edinburgh which is due to open
in Spring 2005. The introduction of emerging leader workshops,
which included employee representatives from Citizens Bank,
is further evidence of the Group’s commitment to global
executive development.
In addition, through Learning Awards, the Group provides
financial incentives to employees who take the banking
qualifications offered by the Chartered Institute of Bankers in
Scotland and The Institute of Financial Services.
Employee communication
Employee engagement is encouraged through a transparent
process of communication and consultation. This is achieved
through a corporate Intranet, divisional magazines, team
meetings led by line managers, briefings held by senior
managers and regular dialogue with employees and employee
representatives.
The Group Chief Executive and other senior Group executives
regularly communicate directly with employees through
‘Question Time’ style programmes, some of which are
broadcast on the Group’s internal television network. This is
used to convey information ranging from annual and interim
financial results to employee training and development issues.
Employee consultation
The Group recognises that the key to becoming (and
remaining) an employer of choice is to ensure that employees
are able to maximise their contribution to the Group. Each year
an independent specialist company conducts a global
Employee Opinion Survey on behalf of the Group to measure
how employees feel about a number of important issues.
With an overall response rate of 84 percent (some 20 percent
higher than the industry average) the Group remains confident
that employees value the survey as a method of expressing
their views and as a way of initiating change throughout the
organisation. Since the last Group-wide survey in January
2003, there were significant improvements in 14 out of 15
question categories. The RBS Group performs very well against
ISR’s Global Financial Services comparison companies, which
includes many of the Group’s key competitors in the UK and
abroad. The Group outperforms this comparison group in all
but one category.
Diversity
The Group continues to participate in a range of programmes
and activities designed to promote diversity and effective
people management. Reflecting its commitment to a business
model based on meritocracy and inclusiveness, the Group
encourages employees to develop their full potential,
irrespective of their race, gender, marital status, age, disability,
religious belief, political opinion or sexual orientation.