Sony Pictures Entertainment looks to perks to boost employee engagement with the business and its culture, says Debbie Lovewell
Making movies is a big, but risky business. A blockbuster can be highly profitable for the production company and distributor, but if a film bombs at the box office and fails to recoup its costs, millions can be lost. Sony Pictures Entertainment appears to have hit gold with its latest James Bond film, Quantum of Solace, which took £4.9m at the box office on its opening Friday, breaking the previous record set by Harry Potter and the Goblet of Fire in 2005.
Produced under the Columbia Tristar label, Quantum of Solace is the latest in a series of big-name releases from Sony in recent years, that includes Casino Royale, The Da Vinci Code, Hancock and Spider Man 3.
In the UK, cinema-going is enjoying a boom, with the Cinema Exhibitors Association recording the highest monthly cinema admissions for more than 30 years in July and August.
However, for the fiscal year ending 31 March 2008, Sony Pictures posted an 11.2% decrease in sales. This was attributed to the fact that it released fewer films than in the previous financial year. Despite this, the firm’s overall operating income rose by 26.5% to 54 billion yen (£372m), due to the performance of the previous year’s film releases in the home entertainment and television markets.
But Sony Pictures does not only hope that consumers engage with its movies. It uses in-house screenings of its films at its London site to help boost employee engagement with the organisation. Staff are regularly invited to watch the company’s latest releases in its state-of-the-art on-site cinema during the working day. Sometimes, screenings are also held at weekends for staff and their families.
Roger Fairhead, vice-president, head of international compensation and benefits, says this perk has a clear business benefit. “We have a screening once a month of films we are releasing, with the idea that, invariably, employees see these films before they are on general release. This provides great entertainment for employees and engagement with the product we are producing, so we can enthuse employees about it.”
This direct link with the movie-making business plays a key role in helping Sony Pictures to build its reputation externally, a vital factor when it comes to recruitment. “People join because they think it is a really cool, funky business that they are now working for,” says Fairhead.
Not every employee is directly involved in making movies, so the screenings can help them to feel part of the process. “People who work in the motion picture group see all the films all the time, but it’s sometimes easy to forget there are a lot of employees who don’t see that as part of their day job,” he adds. “They are either working in a finance capacity or HR and, to some extent, it can be much like any other job where staff are in that particular function.”
Engaging employees in the business by tapping into its culture has been a key focus for Fairhead in the 18 months since he joined Sony Pictures.
“I think it is a great shame and a missed opportunity if businesses don’t embrace the culture,” he says. “Otherwise, what happens is that employees join and are really excited for the first few weeks, and then reality dawns that this is much like any other company. It doesn’t need to be like that.”
Fairhead believes having an actively-engaged workforce can help to improve issues such as high staff turnover and sickness absence levels. “We are trying to bring about that cultural change of engaging employees in the business so they are not mere participants between nine and five, but actually are fully engaged with what the business is about, what it is trying to achieve, and will help to do it,” he says. “If you get that right, then you don’t have to worry about a lot of the little things like absence management, people taking unauthorised holidays or abusing expenses, because you have got employees who feel they are part of this, are rewarded by it, and want to come to work. We are at the early stages of that now.”
To boost staff engagement further, a number of initiatives have been introduced at Sony Picture’s London site in the past year. One of these is an on-site events and seminar programme that is not only designed to highlight the pension and healthcare perks offered to staff, but also to provide support and information and help staff to enhance their general wellbeing. The financial seminars cover topics such as mortgages, pensions and savings, while the health and wellbeing events offer health assessments and flu vaccinations. Sony’s private medical provider, PruHealth, helps to run some of the events.
“People work long hours here, under a great deal of pressure, particularly when we are releasing films,” says Fairhead. “So we do as much as we can to help employees and make work a fun place to be where they get stimulation, not just from their work, but also other stuff that they might not ordinarily be able to access. That makes it an engaging place to work.”
To better meet employees’ needs going forward, the seminar programme will be tailored to suit different segments of the workforce, says Anne Teggart, international compensation and benefits manager.
“Although the seminars will be more targeted, they will still be open to everyone,” she says. “We are just trying to segment it a little bit more for the different demographics we have in the company.”
Fairhead and Teggart are both keen to ensure the perks are valued by staff, and help to support the organisation’s culture and aim of achieving greater employee engagement. However, they will also consider staff requests for particular perks. “If there is something they suggest, we will look into it and decide if it is going to be relevant even for a small proportion of the employee population,” says Teggart.
Communicating the perks on offer is key to making sure they are valued. So, in January, a benefits booklet will be distributed containing details of all the perks offered by Sony Pictures. It may seem surprising that a media company with staff familiar with the latest technology has opted for a traditional method of communication. But Fairhead hopes the paper booklet will stand out. “If you put a DVD on somebody’s desk, they would lose it among all the other DVDs on their desk because they have DVDs of all the films that are coming out and various other bits and pieces,” he says.
“They also use the internet an awful lot. What our employees do not get a lot of is booklets. It’s going to stand out because a book is something they do not often see on their desks. We have differentiated the communications that way by going with something that some might consider to be quite basic, but it is a deliberate ploy to move away from all the high-tech stuff [staff] normally get.”
All of the changes that have been introduced over the past year have not been confined to the UK. A number of benefits policies and practices have also been brought into line internationally. “What we inherited was no real clear strategy and philosophy in terms of what it is that we do and what we want to give our employees,” says Fairhead. “We have [developed] a philosophy and strategy now, although it hasn’t been fully implemented yet. We have identified three core benefits for that: medical, some kind of income protection, and life assurance protection for the family.
“It is not going to be at exactly the same levels across the world because you have to be conscious of what the state is offering in each of these countries [in which we operate] and what the local market offers. [However], we need some kind of consistency on that, because we have got some countries where there is no secondary medical cover at all and that is inappropriate, not only in the market, but in terms of Sony Pictures’ philosophy around protecting employees’ health and protecting their families. We have already started to roll this out, and it will continue to be our focus over the next 12 months.”
Another international project is to bring into line each country’s annual pay review, where possible, to take place on 1 July. So far, the Asia Pacific region and Europe have been brought onto the new date and they will be joined by most of Latin America next year.
Amid the plethora of projects that are currently under way at Sony, both Fairhead and Teggart will be keeping the company’s overarching aim of engaging employees firmly in sight. “I think that we have a duty within a broader HR function to look after the culture of the business,” says Fairhead. “Why I feel so passionately about it is if you get the culture right, all the other little things are put right and business performance is so much better.”†
Sony Pictures Entertainment at a glance:
Sony Pictures Entertainment is the television and film production and distribution business of Sony Corporation.
The Japanese media conglomerate first moved into the movie business in 1989 when it acquired US film and television production company Columbia Pictures Entertainment from Coca-Cola Enterprises. This was renamed Sony Pictures Entertainment in 1991 and includes the film production business Columbia Tristar. Sony, along with a number of equity partners, went on to acquire Metro-Goldwyn-Mayer in 2005.
Sony Pictures Entertainment comprises three divisions: a motion picture group, a home entertainment business, and a television business which produces shows such as Seinfeld, Dawson’s Creek and Dragons’ Den, and owns more than 50 television networks in over 100 countries. Recent film releases include Quantum of Solace, Hancock, The Da Vinci Code and Spider Man 3.
For the fiscal year ending 31 March 2008, Sony Pictures Entertainment reported a 26.5% rise in operating income to 54 billion yen. This was despite an 11.2% decline in sales, which it attributed to a fall in worldwide movie sales after fewer films were released than in the previous year.
The firm employs 7,700 people in 37 countries, with 380 staff based in the UK.
Roger Fairhead, vice-president, head of international compensation and benefits at Sony Pictures Entertainment, began his career at accountancy firm Ernst and Young where he worked as a tax specialist in several roles.
He fell into compensation and benefits by accident rather than design when a former client, Universal Music, approached him with an offer to work in its in-house compensation and benefits team as head of international compensation and benefits. “The rest, as they say, is history,” says Fairhead. “Having done that, I really enjoyed doing that kind of thing in-house and have continued to do so.” From Universal Music, he moved on to join leisure organisation the Rank Group as its director of group compensation and benefits.
He then spent a year at the BBC as head of reward, before joining Sony Pictures Entertainment in June 2007.
Fairhead has had a number of highlights during his career, such as putting structures in place around compensation and benefits at Universal Music, and changing the design and communication of employees’ bonus plans while at the Rank Group.
At the BBC, Fairhead met Anne Teggart, who joined Sony Pictures in September 2007, working initially as a compensation and benefits analyst, before taking on the role of international compensation and benefits manager.
Teggart first got the taste for reward in the three years she spent working for Vue (previously Warner Brothers) Cinemas, immediately before joining the BBC.
Implementing a flexible benefits scheme at the BBC is one of her career highlights. “Working on flexible benefits at the BBC last year was quite an eye-opener, and quite good because there were a lot of stakeholders involved in terms of internal branding and a lot of systems that were very BBC-specific, so that was quite interesting,” she says.
Benefits at Sony Pictures:
Defined benefit pension scheme, which is closed to new members.
Stakeholder scheme for all employees. The organisation will match employee contributions on a two-for-one basis, up to a maximum 10% employer contribution.
Healthcare and wellbeing
Employer-funded private medical insurance (PMI) for all staff.
On-site wellness events, such as health screening, flu vaccinations and wellbeing seminars.
Employee assistance programme (EAP).
25 days as standard for all employees. Staff can carry over five days each year, but these must be used in the first three months of the new holiday year.
Enhanced maternity, paternity and adoption pay.
Film screenings in on-site cinema.
Staff drinks in on-site bar held approximately once a month.
Available on products from Sony businesses.
Case study: The value of perks adds up
Darren Hopgood, financial accounting manager, has worked for Sony Pictures Entertainment for three years.
He is responsible for looking after the company’s statutory obligations around accounting and financial reporting.
Hopgood values a number of the benefits he receives from the organisation, including its defined benefit pension scheme, which has now been closed to new members. “[The DB scheme] is a really good benefit,” he says. “Associated with that is life assurance and group income protection, which thankfully I have never had to use.” However, Hopgood has made use of the employer-funded private medical insurance.
On a lighter note, he adds that the on-site film screenings are also appealing, particularly when movies are shown before their release date. “It is good as you get to know the product,” says Hopgood.
He also values the discounts that are available on products across Sony’s businesses.