An entirely new set of terms and conditions was a key HR contribution to the success of the Lloyds TSB merger.
Peter Chadwick, head of employee relations at Lloyds TSB, told the recent Involvement and Participation Association annual conference at Grantham that HR positioned itself close to the new management team during the merger to avoid being seen as "peripheral" to the process.
He said, "When we suggested a new set of terms and conditions the executive practically fell over. They asked if we really thought it was practicable."
But Chadwick said HR pushed ahead with the move, believing it crucial to creating a forward-looking culture that would help the two organisations mould together.
He said, "In eight months we went from researching, debating, and negotiating, to implementing it in January 1997.
"It brought people together. They didn’t talk about what they used to do. They were part of a new set of terms and conditions."
Lloyds employed 69,000 staff at the time of the merger four years ago, compared to TSB’s 28,000. The merged organisation has 87,500 employees.
Chadwick said around 12,000 jobs have been lost since 1996 but without any compulsory redundancies.
Another potential difficulty was that each organisation had a distinct identity based on customers with different backgrounds.
Although the Lloyds TSB brand was launched 15 months ago, Chadwick said he views it as a measure of the merger’s success that people often say they thought the name was introduced much earlier.
Chadwick said the changing political environment four years ago and management’s determination to make the merger work influenced the decision to closely involve the unions. This, he said, had creating a working relationship that has continued.
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He added, "In comparison with the first few weeks there has been a real step change in union management relations. Union consultation is now a fundamental part of everyday life."
By Helen Rowe
