The announcement that Royal Mail will be privatised in the Autumn won’t come as a shock to many. Chief Executive Moya Greene has been openly talking about the need for external investment since January this year, and her tenure has repositioned the group as a viable opportunity for potential investors. So where does this leave the employees of this historic institution?
As part of the flotation plans, each of the 150,000 staff will be given their share of 10% of the share capital on offer – equivalent to around £1500 to £2000 worth each.
Employee ownership like this is a great way to reward and incentivise and it’s something which the government have been actively promoting over the past year. It’s not just about making businesses a more rewarding place to work. Jo Swinson, Minister for Employee Relations, recently wrote on the Cooperative News site about the strong links between employee ownership and key business performance areas likes productivity, absenteeism, resilience and ultimately profitability. So it would seem to be the natural strategic move for Royal Mail, which is focussed on securing its future by competing with the big private communication companies. But Royal Mail isn’t just any other business. It’s been open for public use for nearly 380 years and its history as a national institution isn’t matched by any other organisation in the country, possibly the world.
That normal rules don’t apply was demonstrated over 10 years ago, with the short-lived name-change of the Post Office Group (including Royal Mail) to Consignia plc. A rebranding exercise to set the group up for diversification and competitiveness, the name was boycotted by unions and disliked by the much of the public who have such a deeply ingrained emotional tie with the service.
This doesn’t mean that Royal Mail can’t modernise in a way that’s accepted by employees and its customers. Since Moya Greene took over in 2011, Royal Mail has turned from a loss-making business into one that announced nearly £400 million in pre-tax profits as recently as this year.
There have been disputes and strikes, notably in 2007, but staff eventually signed up to modernisation plans and the group continues its turnaround.
The most recent staff satisfaction survey revealed some precarious results though that mean the group can’t afford to be complacent. Only 36% support their employer’s strategy and objectives and 74% don’t agree with the pace of change. Privatisation is bound to raise anxiety around these issues further, about a further loss of control for employees, fears that they will be asked to cope with increased workloads, and worry about cuts. In that context, it’s difficult for employees to feel the benefit of the share capital that they’ll receive. Many will feel it’s an award to soften the blow of the sell-off, which changes the dynamic where employee ownership can be empowering and motivational.
The economic situation may have pushed the government into selling Royal Mail before there has been sufficient time to prepare employees for the change. What difference if they had announced a commitment to employee ownership in the event of privatisation, a long period in advance of any sale? Or if more successful profit-share initiatives were operated before this announcement was made?
We await more details of the share sale to come but it has already highlighted the problems of announcing engagement initiatives at the same time as a major change in an organisation. Royal Mail must make sure that such worthwhile initiatives don’t get lost in the processes of privatisation, and the new owners can’t afford that to happen – getting employees motivated and on side will be key to making Royal Mail thrive.
The new well-being resources hub founded by @profcarycooper and Roberston Cooper. Join for FREE and access blogs, videos, downloads, podcasts and more.
MD of Cary Cooper's business psychology firm, Robertson Cooper - for all things well-being, engagement and resilience at work.
Professor Cary Cooper, Director and Founder of Robertson Cooper Ltd, Distinguished Professor of Organizational Psychology and Health at Lancaster University.
When it comes to stress management, usually the first thing to suffer and the last thing to think of restoring...
Robertson Cooper Ltd
Manchester Science Park
Lloyd Street North
Tel: +44 (0) 161 232 4910