Iceland Plans To Improve Employee Engagement

Iceland has made a remarkable turnaround in recent years, going from being on the brink of collapse to becoming one of the top companies to work for in the UK. In 2009, the Sunday Times ranked Iceland 14th out of the best big companies to work for, with 73% of staff expressing confidence in the leadership of the senior management team.

Just four years prior to this achievement, Iceland was struggling as part of the Big Food Group. Costs were high, sales were down, profits were non-existent, and employee morale was at an all-time low. The company’s reputation was severely damaged and there were doubts about its ability to recover.

Nexus Iceland is an employee portal that is designed for employees to access the employment information like

  • work schedule
  • payslips
  • other HR services

However, under the leadership of Chief Executive Malcolm Walker, Iceland underwent a remarkable recovery and restructure. The business experienced double-digit year on year sales growth and saw a 20% increase in sales within the first year of Walker’s return in 2005. By the end of 2006, investors had been repaid, and last year the company made a record operating profit of £136 million. Employee turnover has also been significantly reduced as staff engagement and morale have greatly improved.

To achieve this success, Walker focused on simplifying the business and improving its management approach and efficiency. In addition to financial success, Iceland has managed to rebuild the spirit of the company, making it once again a place where employees are proud to work.

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After the breakup of The Big Food Group, Iceland faced a number of challenges with its employees. There was confusion among staff about the company’s direction and a lack of transparency. The company had become too process-driven and risked losing the loyalty and motivation of its workforce. In order to address these issues, Iceland had to make significant changes.

The business plan outlined the need to simplify, focus, and accept reality, and this principle extended to the company’s approach to its people. The HR plan, labeled as “Get, Grow, and Keep,” aimed to attract, develop, and retain the best talent. This involved streamlining the recruitment and induction process, fostering personal growth and progression within the company, and implementing performance management and reward strategies.

Collaboration between the HR department and commercial colleagues was crucial to ensure that managing people became an integral part of everyday operations. Through effective business partnerships, all employees took ownership of people-related activities, which instilled confidence in the fairness of the processes.

A clear performance management process was introduced, featuring simplified reviews and clearly defined objectives for all employees. Performance-related pay was also implemented, allowing individuals to influence their own level of reward.

To promote the development of store managers, a modular-based coaching program was implemented. Over 160 managers have already completed this program, which has been endorsed by the ILM (Institute of Leadership and Management). Feedback indicates that managers are altering their approaches to their work. Notably, one store saved £30,000 in stock-loss after a store manager received coaching from their area manager to reach key performance indicators.

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To support Store Managers in making the best recruitment decisions, Iceland has developed new recruitment processes, application forms, and tools. In addition, a Recruitment Champion Programme has been implemented to provide Store Managers with local-level recruitment expertise.

Internal talent events have also been organized across the retail sector, resulting in an impressive 62% success rate in individuals gaining promotions.

Iceland recognizes the importance of open and two-way communication with all employees. The company values creating a fun and enjoyable work environment where employees can bond with each other while also learning about the business and their colleagues.

Annual conferences for Store Managers and Head Office colleagues play a crucial role in launching incentives and cascading key messages to the entire workforce.

Communicating with front-line colleagues is also made easy with straightforward channels of communication. Talking Shop meetings are held to give all employees the opportunity to voice their opinions on matters that affect their colleagues and suggest improvements.

Incentives at Iceland are clear and simple. For example, last year, an outstanding-performing Store Manager was rewarded with a BMW convertible. Stores that delivered exceptional standards over the Christmas period shared up to £15,000 among their team. There are also surprises like the Chief Executive arriving at a store with champagne and money.

This year, the retail conference will be held in Disneyworld Florida, providing an exciting and engaging experience for participants.

People plans are created and regular people reviews are conducted across different areas of the business. Iceland has also established partnerships with Retail Trust, who provide a comprehensive Employee Assistance Programme, and Reward Gateway, who offer voluntary benefits to employees.

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To ensure fairness and equality in reward for all staff, terms and conditions of employment have been harmonized. This process was successfully completed for all 17,000 employees within a short period of 7 months, and the feedback from employees has been highly positive about these changes.

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