bat sustainability report 2007 - Creating the right environment

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For the last decade our Guiding Principles have reflected and expressed our values and distinctive culture.

We seek to live by these values and to track how far we do so with our biennial employee surveys, through which our employees describe their perceptions of their working environment.

We feel that we are starting from a good base in our aim to further develop the right environment as there is considerable flexibility in many areas of our employment approach.

However, achieving our aim will not be without challenges.

Over the past few years we have seen substantial changes in our operations, with factory closures and supply chain adaptations. Some regions have seen significant changes to management structures and, through acquisitions, an influx of new employees. These events require us to draw on our ability to create great workplaces and we foresee these changes continuing. We have recently designed a global framework which aims to support managers in leading people successfully through change. We have also introduced a programme to enable individuals in the organisation to deal more effectively with change.

Our Employment Principles make clear that we are committed to carrying out any restructuring in a responsible manner.

Group companies implementing closure or downsizing are encouraged to carry out a social assessment and to consider ways of mitigating the impact. Where such situations do occur, our companies adopt responsible local approaches and procedures, including severance pay, outplacement support to help displaced employees to find alternative employment and other measures as may be appropriate to the situation and location.

For more information on our labour practices see www.bat.com/careers 

How are we doing?

While we have many informal ways of ascertaining employee satisfaction, our main diagnostic is the biennial ‘Your Voice’ survey of employee opinion. All employees throughout the Group are invited to participate and response rates are usually very high – 89 per cent in the last exercise. The survey is conducted independently by International Survey Research (ISR) who benchmark our performance against a comparator group of other FMCG companies.

Our last global survey results were published in February 2007 (the next are due in February 2009). The high level category results for the last survey were as follows:

British American Tobacco vs. ISR global FMCG companies norm

Yellow

Blue

In all 15 categories, employee opinion at British American Tobacco was more positive than in the FMCG companies norm benchmarked by ISR.

The results showed that 90 per cent of the respondents were proud to be associated with our organisation and 92 per cent responded that they understood how their role contributed to the achievement of the Group strategy.

In response to scores that were less positive, we have committed to put more focus on areas such as leadership and talent. Recent actions include setting clear targets for local representation on senior management teams and in succession plans.

One of the major challenges we face in career progression, and one which our stakeholders raised with us, is that of achieving greater diversity at our more senior levels. While we have strong geographic diversity, we would like to see more gender diversity in senior management. Regional programmes have been working on this, but progress will take time and we are open to considering better ways of achieving greater diversity in senior management.

What’s next?

We have set up a global employer brand project to look into these issues and to determine the unique and compelling distinguishing features that we believe make us a good career proposition. We recognise that some people do not wish to work in the tobacco industry. Also, our stakeholders informed us that they feel we could do more to explain the ‘unique story’ of British American Tobacco as an employer. We will report on our progress in the next Report.

Measuring the impact of our people on the organisation’s performance is also a key determinant in business decision making. In the past, we have focused on our employee opinion research and a range of talent metrics. Currently, we are reviewing a wider set of human capital metrics. These will be trialled in four Group companies in 2008.

There are 26 of these human capital metrics including:

• Wealth created per employee;
   
• Human capital return on investment;
   
• Workforce diversity;
   
• Retention ratios;
   
• Human resources costs vs. total costs;
   
• Learning and development rates;
   
• Succession pipelines;
   
• Revenue/profit and cost per employee;
   
• Career progression of management trainees and mid-career recruits.

If our trial of these produces meaningful results, we will review our reporting approach.