More than 35 years after Peugeot and Citroën merged, the group has been getting into gear to unify its reward and benefits.
French car brands Peugeot and Citroën operated as two separate businesses until 1976, when the PSA Peugeot Citroën Group was formed from a merger. More than 35 years later, its toughest challenge in 2012 was to bring the two brands together into one UK headquarters, and deal with the impact this had on the organisation’s benefits package.
Previously, Peugeot had been based in Coventry, while Citroën was in Slough. To streamline its operations, the group decided to unite the brands at one site so they could share resources. The Slough premises were closed and staff were moved to Coventry.
Stephanie Palmer, group head of reward, relations and development, says the move had many HR implications and led to redundancy and relocation consultations. Then the focus turned to engaging the two workforces, while recognising that their reward offerings were very different.
Peugeot had 2,500 employees spread between a head office and a factory, while Citroën had 250 staff based in Slough. The group also includes a bank called Bank PSA Finance, with 280 staff, which sells credit and funding to customers to buy cars, as well as a parts logistics facility and a retail arm, which comprises the group’s dealerships.
“Employees had very different reward packages that were appropriate for different backgrounds,” says Palmer. “Over the past five years, we have been trying to get both companies closer together in terms of reward packages, so we could encourage people to move within the group, between the brands.”
Five legacy defined benefit (DB) pension schemes were closed to new entrants in 2002, and a single stakeholder defined contribution (DC) plan was rolled out to around 3,000 staff.
In January 2013, a harmonised company car scheme was introduced, the result of 10 years’ work. Previously, Peugeot offered all its staff at least one leased car as part of its benefits package, while Citroën offered employees up to six cars. The harmonised scheme offers all workers up to two leased cars a year, which can be used by family members, while managers can have up to four. Cars can be changed every 12 months or 9,000 miles.
“The company sells staff a car and agrees to buy it back at the end of the year for what it would be worth as a leased car for that period,” says Palmer. “Staff pay the loan difference on those two values over the 12 months.”
Another major project in 2012 was PSA Peugeot Citroën’s new reward brand and online benefits portal, Pretium, which means ‘reward’ in Latin. It has four streams: My Money, including a share incentive plan (Sip) and payroll giving scheme; My Life, including childcare vouchers, flexible working and information about holiday; My Future, including the pension scheme, personal accident insurance, and training and development; and My Extras, including the company car scheme, bikes for work and local retail discounts.
“We didn’t really have to spend any money on new benefits,” says Palmer. “It was just about rebranding and repackaging it.”
Pretium, which was designed and developed by Shilling Communication, was introduced after a 2010 employee engagement survey found that employees did not have a clear view of the benefits package on offer. Palmer says: “We felt, sitting centrally, that we had an amazing benefits package. We know that because we benchmark it and we have no problem attracting people.
“Part of the problem, we felt, was one of the positives of the organisation. There are people here, like Sarah [Weston, reward manager] and I, who come in thinking we are going to be here for a couple of years and, 20 years later, we are still here. Working within a great company with great benefits is the norm. We wanted to do something to say to people: ‘These are all the things you get by working here, but do you even realise it, do you recognise it as a benefit? Do you know how it compares to the outside world? Do you value it? Do you know what it costs to provide?’”
The reward and benefits team also wanted to create one central brand that tied everything together, so that if an email came through about a deal on tickets at Alton Towers or about free flu jabs from the occupational health department, employees would know these were part of the reward package.
“The other thing we wanted to achieve was to have all the information in one place,” says Palmer. “We had very disparate sets of information depending on which [brand] staff worked for.”
The online portal was launched in October 2012 with a communications campaign that played on the theme of a benefits and reward planet. Reward manager Sarah Weston says: “We did a launch programme which started with a countdown: three weeks to launch, two weeks to launch, and then there was lift-off, which resulted in everybody receiving their online boarding card.
“We emailed some people who were head office-based, but for the warehouse and dealership staff, we sent them a physical boarding card and a letter introducing Pretium, which had their own unique activation code.
On launch day, it was: ‘Have you discovered Pretium?’, and we coincided that with the emails being sent.” The online benefits portal is quite a departure for an organisation that is very corporate and conservative, says Palmer. “People are so sensitive about whether things are blue for Peugeot or red for Citroën, and mixing the Peugeot lion with the Citroën chevrons.
We wanted to get away from that, and have something that was not going to offend anybody and was very bold,” she says. “The tone we used on the site is very different from what we normally do. We have traditionally been quite formal: ‘we’re the company, you’re the employee’. It was about taking the facts and presenting them in a totally different way.”
Tailored to each employee
The site is tailored to each employee, based on which company they work for, which location they are based at, whether they are a manager, and whether there are any legacy benefits. Weston adds: “We have also taken the opportunity to highlight our benefits and compare them to statutory benefits.” For instance, the group’s maternity benefits are paid out at 100% pay for 26 weeks, then 90% for 14 weeks, then £200 for 12 weeks.
Palmer says: “What we have tried to do on each page is show how each benefit is good for the individual, how it compares to what is going on in other companies, and why we are a good employer for offering it, but in a subtle way.”
Another new benefit being highlighted through the Pretium portal is a discount on Microsoft Office Professional software, which can be purchased for use at home. Weston adds: “We communicated that offer to staff who were accessible via email. We had posters as well, with the Pretium branding. We are linking everything around reward to Pretium.”
The website also includes an area for questions and suggestions from staff. The group intends to use this feedback as it continues efforts to keep staff interested in their benefits packages, building on the phrase ‘Discover your benefits’. Palmer says: “We knew that ‘Discover your benefits’ comes with a responsibility to keep this live. We can’t be boring and have no change from one month to the next. So we have got plans to add on and promote to keep staff coming back.”
It may have been 35 years in the making, but the PSA Peugeot Citroën Group packed 2012 with harmonisation activities and benefits launches to ensure its diverse workforces are all on the same page, and that each employee, whether they work for Peugeot, Citroën or the retail network, truly appreciates, and values, the benefits they receive.
KEY BUSINESS DRIVERS
The automotive market is in the midst of a particularly challenging period. As the economic downturn drags on, PSA Peugeot Citroën Group’s big markets, including France, Italy and Spain, have been particularly hard hit by the eurozone’s financial troubles.
Small and low-emission Korean brands are also creating strong competition for UK and European car brands.
The group is focusing more on its retail networks, which in the past were independent dealerships, and tailoring reward packages to suit them.
PSA PEUGEOT CITROËN GROUP AT A GLANCE
The PSA (Peugeot Société Anonyme) Peugeot Citroën Group was created in 1976 with the merger of automobile brands Peugeot and Citroën.
The group operates in 180 countries. In the UK, it has a variety of businesses: its two car brands, Peugeot and Citroën, which are headquartered in Coventry; Bank PSA Finance, which sells credit and funding to customers to buy cars; a parts logistics facility; and a retail arm comprising its dealerships.
The majority of staff (1,700) are employed in the group’s retail network, among a total of nearly 3,000 employees across the UK.
The workforce is, on average, 70% male and 30% female, and the average length of service is 12 years. Group revenue for 2011 was €59.9 billion (£50.1 billion).
Stephanie Palmer has been head of reward, relations and development at the group since April 2012. She previously held an HR generalist role at Rolls-Royce Aerospace. Her first role when she joined Peugeot, 11 years ago, was as a personnel officer on the sales and marketing side.
Palmer is most proud of the work she has done over the past 12 months, which includes the harmonisation of the company car scheme, a project that has been under way for 10 years.
She also led the pay negotiations between the company and the trade union for the first time in 2012. Palmer says: “I have been party to the talks before, but I have not been lead negotiator. We agreed to implement a performance bonus for the manual population, which is something the company had been opposed to before. That was an achievement.”
Sarah Weston has been reward manager at the group since November 2009, and has held 10 different roles over 22 years with the company. She started off in a youth training scheme at the Coventry factory, which led to roles in recruitment, training and management development. In the latter, she managed pay, talent and career development for managers.
Weston says: “I managed management pay for northern Europe, putting together a submission to request a pay budget for those countries based on their economic situations, and then managing that budget, and deciding how it was allocated.”
Weston found it particularly interesting to work with the Scandinavian countries. “We worked well with them, understanding their operations and their cultures, taking the best of what they can offer, and helping them to develop and move forward,” she says.
CASE STUDY: Caroline O’Brien
Caroline O’Brien is an accounting manager for the Netherlands at PSA Peugeot Citroën Group. She has worked in the finance and accounting department since May 1999, supporting both brands.
She takes advantage of the organisation’s company car benefit, keeping one car for herself and taking two for her brothers. She is also a member of the defined benefit (DB) pension scheme, which was closed to new entrants in 2002, and the share incentive plan (Sip). “You have money deducted from your pay every month, which buys so many shares and you also get free shares from the company,” she says. “If you hold the shares for about five years, you can sell them back without having any tax implications.”
O’Brien was impressed by the roll-out of the online benefits portal. Previously, it was difficult to locate benefits information, she says. “I like the fact that everything is all in one place,” she adds. “Before [the portal] came along, you might be considering looking at something, but wouldn’t know where to go for it. You could troll around the system for a while and not find what you were looking for. Now it is all together and really easy to find things. It’s like a one-stop-shop, really.”
- Five legacy defined benefit (DB) schemes closed to new entrants in 2002.
- Stakeholder pension scheme with salary sacrifice arrangement. The company matches employees’ contributions, plus 2%, to a maximum of 7% for the majority of staff and 14% for middle managers and above.
- Auto-enrolment staging date is April 2013. Employees are already auto-enrolled.
- Private medical insurance (PMI) available to all managers as single-person cover. Senior managers receive free family cover. Bank PSA Finance provides free family cover for all employees. The rest of the workforce can buy PMI at a discounted rate.
- A health cash plan is available for all employees to purchase.
- Life insurance and death-in-service available via DB and DC pension schemes.
- Personal accident insurance for all employees.
- Head office staff have 100% sick pay for a full year.
- All employees have access to up to two Peugeot or Citroën cars; senior staff have access to up to four.
- Annual profit-sharing plan for all staff.
- Performance-based bonuses for all staff. Share plans
- Share incentive plan for all employees.
- Childcare vouchers via salary sacrifice.
- Payroll-giving scheme.
- Access to local discounts.
- Right to request flexible working.
- Bikes for work
- Minimum of 26 days. Employees can earn an extra day for every five years’ service, up to a maximum of 30 days.