France Telecom Case Study

1. France Telecom Case Study II- Business Strategy and Management of KEY Competencies Lecture 4

2. Some more features of the corporate context that have been pre-requistes for the implementation of Competency Management • Conducting the privatization process • Introducing a new Classification System based on a limited number of reference jobs • Focusing on the Yearly Progress Interview (performance appraisal) for revising Human Resources Management Practices

3. To summarize 10 years of fast evolution at FT From : - A technical administration evolving in a monopolistic context To : - A commercial service provider evolving in a competitive context

4. Technical administration with monopoly Employment Security Scale-based salary Mobility on wishes Civil servant status of the staff Technical legitimacy The technique impacts the service offered The subscriber is a captive market All activities are monopolistic Administrative accounting «Administrative» management Prices are based on non-optimized costs Service company in competitive market Fear on employment Individualised and Merit-based salary Mobility for the service Employee shareholder of the company Commercial legitimate The technique is the answer to match demand The Client is in the heart All activities are in competitive environment Private law accounting Management based on «quality-cost-deadlines», productivity and profitability Prices are determined by the competitive market

5. Breakdown of France Telecom staff (France) Early retirement planat 55 instead of 60 years with 70% of salary + one-year bonus Orange, Wanadoo thousands Fixed and distribution

6. Key issues to be developed • Re-classification • Appraisal • Career management

7. New issues of HR Management... • From one PTT administration towards a Private company.. • How to manage administrative personnel (civil servants rights) in coherence with private rights personnel in a competitive sector company ? • From a « qualification » approach towards a «competency » logic point of view. • How to warrant employment criteria in the work environment today? • How to warrant the group performance combining both individual and multi-skills? • How to ensure evolution in skills?

8. HR Management Evolution • This evolution was closely followed by a deep social reform that lead to a really coherent and innovative HR management policy (although conforming to the civil servant rules). The key issue of this new management : Re-reclassification (from a grade to a specific job-type)

9. Re-classificationFrom grades to classification • Objectives and principles : • Identify all functions in place in the organization • Facilitate coherence between functions and professional qualifications • Recognize the value of professional experience acquired during the career and through promotion • The different steps : • Identify key functions (~130) which cover all fulfilled functions • Position these functions with an appropriate rating scale • Design evaluation and weighting tool • Use this tool to fix all functions on levels on which build the new Human Resources salary scales

10. Re-classificationFunction levels • 15 function levels identified and organized in 4 classes • Class I corresponds to the functions of low-skilled employees without required diploma (3 sub-levels) • Class II groups the functions of team members and supervisors (3 sub-levels) • Class III corresponds to the front-line Managers (3 sub-levels) • Class IV corresponds to Executive Managers (6 sub-levels)

11. lev 1 220 to 332 over 16 yrs 379 to 904 in 13 yrs 298 to 544 in 18 yrs 3230 to 638 in 14 yrs lev 1 lev 1 lev 1 lev 2 238 to 365 over 16 yrs 427 to 966 in 15 yrs lev 2 384 to 592 in 16 yrs lev 2 379 to 735 in 13 yrs lev 2 lev3 440 to 841 in 15 yrs 274 to 474 over 17 yrs 425 to 638 in 12 yrs lev 3 Lev 3 Lev 3 Lev 6 Re-classification: Function levels Class I : specialized agents Recruiting : without any diploma Class II : Team Members and Supervisors Recruiting : A-level Recruiting mode 500 grades Class III : Exploitation and management executives Recruiting : bachelor degree Class IV : Top executives Recruiting : master of engineering

12. Re-classificationPositioning tool : weighting • Responsibility Criteria 35% • Management level 14 % • Specific Responsability (finance, security, etc,.) 10% • Impact status 11% • Competency Criteria 28% • Experience, skills 14% • Problem solving ability 14% • Autonomy Criteria 22% • Relationship Criteria 12% • Hardship Criteria 3%

13. Re-classificationCriteria and weighting degrees • Management level : • Degrees from 0 to 3000 persons • Relational Dimension: nature, frequency, quality of relationship • Degrees : collection, analysis, simple restitution, with factual persuasion or no, for whom, for which purpose,... • Competency – experience • Degrees : knowledge, know-how, behaviour requirements, (in one or various fields) acquired through experience or studies • Autonomy • Degrees : simple tasks, complex ones, with or without procedures to apply • Problem solving ability : unusual situation or not.. • Responsibilities extend : limited, concerned with others.. • Impact: with or without risks, recommendation needed,.. • Hardship :physical, psychological, mental strain,..

14. Re-classificationJob description - functional links • Objective : allowing the establishment of a link between an employee and a targeted function • Methodology • From occupied job posts and the link to a function, a proposal is made to every employee through a job description which includes: • The hierarchical connection • A structural position • A position in the classification scale • A corresponding salary scale • Internal promotion perspectives

15. An Appraisal tool : the Progress Interview (PI) • Implementation of PI allows: • Evaluation • Post activities and associated skills mastering • Fixed objectives achievement and performance • Employee potential capability • Fixing objectives for the period to come • Raising needs in terms of skills development • Promoting individual expectations • PI becomes a real management tool which permits: • a compensation evolution • a promotion for the employee • Consideration for evolution wishes in terms of career

16. Conducting of Annual Progress Interview (PI) • A progressive implementation processA top-down approach, without any exception • Preliminary Preparation of those conducting the interviewsA face-to-face training session, complemented with a probationary period allowing HR Managers to master their facilitator’s role • Detailed information of those being assessedAn opportunityto put into practice the up-dated rules concerning internal communication (cascading dissemination, intensive use of the Intranet,listening practices and bottom-up information flows) • Conducting the annual interviewWith a strong will to eliminate any prejudice and in order to conciliate collective interest with individual expectations

17. Job Description: Key features • Creation date • Job title • Duty station • Job title of the Supervisor • Main duties • Size and importance of the position: • of the post itself (allocated budget, staff) • of the business unit (overall budget, staff) • Specific context/ environment/ contribution to the value chain

18. Job Description: Key competencies (Managerial and Executive levels) • To decide • To direct • To make happen • Ensure data security,..while delegating the responsibility • Analyse disfunctionning causes • To Lead • Supervise the personnel management team • Support and take training actions • To Communicate • Coordinate the different interlocutors • Inform and assist the users • To Solve problems • Define, coordinate, organise and manage TEAMS’activities • Be aware of new techniques

19. The Management of Career DevelopmentMapping of Critical Competencies Make happen Direct Lead Communicate Decide Problem-solving

20. Career evolution (1/2) • Career orientation complements the individual appraisal • To be organized in line with the Progress Interview and without any hierarchical constraint • Through the implementation of ad-hoc committees whose members are Heads of Operational Units or HQ Departments: • Already prepared to identify competency profiles- Aware of job vacancies in the concerned regional area andconcrete opportunities for filling these posts - Able to design transitional scenarii for moving step-by-step from the current post to the target position

21. Career evolution (2/2) Management of internal re-deployment is considered as a real process- In order to create a genuine employment market at the level of each regional area, reflecting the diversity of job opportunities in compliance with the national and international Human Resources policy of the company. - Based on a clear identification of the responsibilities of the originatingand terminating branches of the organization,…..that should not be limitedneither to an excessive confidence in the employee’s goodwill, norto sub-contracting the HR Manager the whole re-deployment process- Recognizing the importance of eventual transitional situations for a smoothtransfer of know-how

22. From a local HRM towards a « virtual » one« From the HR executive office to HRCC and Intranet »New upcome... • The Front line manager (Group Manager) becomes the first HRAdviser of his/her Group (team). • The Business Unit HR Director is required to provide support to the group manager. • Usual actions related to HR management are carried out through the Intranet. Every employee becomes an actor of his/her own management => Reduction of HR structure in the units • HRCC creation : HR platform (Call Center) to bring together resources providing support to several units…..and provide corporate visibility on Job Vacancies

23. Bibliography www.francetelecom.comBernard MERK: Equipes RH acteurs de la str@tégie