By Annie Hayes, HRZone Editor

Royal Mail has been abused, criticised and cursed by the press for some time now – its high-profile attendance reward scheme has been ridiculed, it was laughed at for failing its own set of 15 performance targets and its deputy chairman’s severance package has been labelled as ‘obscene’; Editor’s Comment takes a look at the allegations and finds that in the wake of the media spin the organisation might actually have the last laugh by pulling off the biggest industrial change for a quarter of a century.

When I sat down to research this feature, I have to admit I started with some contempt for the Royal Mail. During the run upto my recent wedding, I relied heavily on the efficiency of the system. This trust, however, was tested when friendships came under strain due to delayed and/or missing post. While I must admit most invitations arrived safely, there were those that were never to be seen again and while I was left feeling aggrieved that the invitee had never bothered to respond they in turn were going through the same motions albeit in reverse order.

Misunderstandings aside, the service was generally good and I was at least glad I could use the ‘post’ as an excuse for ‘should-invite’ family and friends who I had forgotten to include and last-minute invitations. ‘Oh dear didn’t you get it? I will send another?’ and for that I thank the Royal Mail!

Everyone has like me an opinion on the state of the postal service. It is an institution we feel safely educated to comment upon. There are few infact for whom the Royal Mail is not a part of everyday life.

But are these traditional perceptions of a poor service sprouting from bad management a fair assumption or are we so wrapped up in age-old assumptions that we can no longer acknowledge when change is bringing reform for the better?

The new Royal Mail attendance scheme is easy to damn, for example.

Certainly attendance levels at Royal Mail had risen to levels that required addressing. The organisation reports that as many as 10,000 Royal Mail staff are off work at any one time that is 6.5% of the operational workforce.

There are two sides to every story, however, and while rewarding staff simply for turning up to work may seem extreme, the organisation says it is simply admitting its failings.

A spokesperson speaking to HRZone commented: “The aim of the scheme is to reward good attendance by our employees. This is an incentive scheme to show our people how much we appreciate good attendance.”

Royal Mail staff with exemplary attendance records are rewarded with the chance of winning one of 12 weekend breaks. For staff who do not take any sick leave for a period of six months, a Ford Focus worth £12,000 could be theirs.

This cash-bonanza approach is certainly different but perhaps we should applaud their bravery. It is hard to acknowledge failure and learning how to do so is a management lesson we could all learn from.

Indeed the organisation is so convinced that it can improve performance with schemes such as this that it has vowed to give everyone in the company a ‘share in success payment’ of at least £800 if it reaches its target of making £400 million on its day-to-day operations for the 2004/05 financial year.

Reward schemes aside, the main criticism came when it flunked all 15 of its performance targets and was forced to pay out £50 million in compensation to disgruntled customers.

Speaking to HRZone a commentator said:

“It certainly is the case that last year was disappointing and we did fail the 15 targets. However, the key indicator of success for many people is the first class service and last year it came in at 90.1%, the target was 92.5% so we were a couple of percentage points below that.

“While we don’t regard it as satisfactory we refute the perception that our service has sunk to an all time low. Last year, for example was our second best year of the last four years.”

Indeed it is worth noting that the Royal Mail has never in its history attained its 92.5% target rate for first class service delivery.

A serious unofficial dispute last year also hampered progress and caused the service in that period to fall to a level where there was no possibility of ever hitting the goals. Added to this they had one of the worst strike records in the UK, staff were demoralised, their pay was too low and, amid numerous complaints about bullying and harassment, the organisation was facing an investigation by the Equal Opportunities Commission.

Riding this storm would have been enough for most organisations but in spring came the biggest test of all when the Royal Mail set about rolling-out the slimming down of its service from two deliveries a day to just one putting further pressure on the management to justify its tactics.

One might conclude that a ‘thinner’ service might equate to a system that is easier to operate. When I put this to the Royal Mail, they said:

“The changes impacted on jobs across the board. We couldn’t just stop deliveries because of re-organisation. The service has continued to go out day after day even during these modifications. This is the biggest industrial change for a quarter of a century and it has had an impact.

“Since May we have seen a very substantial improvement. More then nine out of ten letters sent first class is arriving the next day.”

Certainly an improvement from the findings by Postwatch in 2002, the independent body appointed to monitor the Royal Mail’s performance which estimated that between 27 and 52 million letters are lost every year. There conclusion was that more often then not they are simply misdelivered; explained by a combination of wrong postcodes and human error.

It is clear that a sense of responsibility still thrives among many Royal Mail staff, otherwise it simply wouldn’t work and things have certainly improved, the figures tell you that.

Just over two years ago, the organisation was losing a £1 million every working day.

Royal Mail told HRZone:

“It was heading rapidly to a position where it would have been insolvent. What we’ve done is kept the service going – we are hitting some of the best levels of service that we’ve seen for five years. We’ve also got the company back to profitability. We are the biggest workforce outside of the health service and right across the whole company, staff have responded to that challenge.”

Two and a half years into the renewal plan, Royal Mail is profitable and the cashflow is positive. A breakthrough also came last year when for the first time in a long history of dispute a national strike ballot resulted in a “no” vote. Subsequently days lost to industrial action have fallen to some of the lowest levels in a decade.

Postmen and women are also getting £300 basic pay a week as a result of a 14.5% pay package linked to productivity improvements.

Overheads have been cut, bullying and harassment is being dealt with, openly and fairly, and the EOC has suspended its inquiry because of the progress the organisation has made.

Despite these improvements, the Royal Mail still tops the charts for its bad press coverage.

It received a further battering today from the papers who poured shame on the decision to award quitting deputy chairman, Elmar Toime a severance pay of over £750,000 for an 18 month period in the post despite bemusement from the Royal Mail who say they have never released the true figures involved.

These problems aside the biggest hurdle is still to come. From January, 2006 the Royal Mail will be tested yet again when the market is opened up for the first time enabling other businesses to deliver everything from individual letters to bulk mail in competition with the organisation.

Only then will critics be able to really substantiate perceptions of a poor service with facts in light of competitive analysis. When the time comes we will be in a better position to see the resulting success or not of management tactics including bold reward schemes and modernisation plans.

For my part the original contempt I held for Royal Mail has been replaced with a new-founded enthusiasm for the organisation.

I hope I won’t be disappointed.