Mike Cutt, group HR director at Boots the Chemists, is harmonising benefits for staff as he tackles the integration of post-merger Boots and Alliance Unichem
While lying in a hospital bed four years ago with his legs broken in 18 places and contemplating the more important things in life, Mike Cutt, found his thoughts turning to recognition schemes. The then HR director for B&Q who is now HR director at Boots the Chemist, part of Alliance Boots, realised just how important HR had become to him.
HR wasn’t an early calling for Cutt who started out in operational and strategic roles at Nationwide Building Society. But he went on to spend three years as head of retail HR for the building society, before moving to Kingfisher Group’s corporate centre as director of resourcing and reward. He then served as human resources director at B&Q before joining Boots 18 months ago.
But, not even overcoming the aftermath of a serious road accident can lessen the daunting nature of some of the challenges Cutt currently faces. Following last year’s merger of Boots with Alliance UniChem to form Alliance Boots, Cutt is now tasked with harmonising employees’ reward packages.
“You can’t just harmonise everything straight away, typically, organisations will try and do it over a period of years. We’ve had to determine what the priorities are for harmonisation,” explains Cutt.
The merger brought approximately 70,000 Boots employees together with about 15,000 Alliance UniChem workers on the UK side of the business for which Cutt is responsible.
Keen for quick-wins to ensure staff unity, Cutt identified the main priorities as harmonising the bonus schemes, long-term incentive plans and pension plans for approximately 300 senior managers. He then worked on the likes of basic salaries, holiday and perks such as private medical insurance for the retailer’s pharmacists.
For the rest of Boots’ employees, Cutt has focused on providing a staff discount. Employees joining the firm from Alliance UniChem now receive the same average 20% discount in Boots stores as its original store staff. “It’s a cost we’re happy to take because staff discount is very visible and it’s at the forefront of people’s minds. We want to create a one-company feel, so not to have discounts available across the board was divisive.”
Although the merger is now bedding down, Alliance Boots is the subject of further corporate activity. As Employee Benefits went to press, the company was awaiting the outcome of a vote by shareholders on a £11bn takeover bid led by Kholberg Kravis Roberts. If the deal goes ahead then Cutt could have more work on his hands as venture capitalists are known for their cost-cutting.
His experience in retail should stand him in good stead. It has made him a passionate believer in the power of recognition schemes in an environment where a large number of people work in customer-facing roles, often for little more than the national minimum wage. In this arena, Cutt believes making someone feel special can be inexpensive but priceless.
So it comes as no surprise that he has also been busy putting in place a recognition scheme that celebrates Boots’ heroes. “These schemes are so often pitched at middle managers; senior managers and sales people. What I like to do with recognition [schemes] is take ‘wow’ prizes but make them available to the most lowly-paid people in the most ordinary jobs and make them feel as special as I possibly can,” he explains.
He too gets a buzz from the process. “The best experiences of my entire career have been these recognition events where you pick the winners; celebrate them and give them these great prizes,” he says.
It’s schemes likes these that give Cutt job satisfaction. “When I became HR director at B&Q, it was as if that was where my life had been leading – to be HR director of a company. It was similar [when] becoming HR director at Boots. I don’t look around and think ‘I want to do anything different or bigger than this’. I just want to do a good job of what I’m doing.”†
2005-present ††††Boots the Chemist, group HR director
2000-2005 ††††††††B&Q, HR director
1997-2000 ††††††††Kingfisher,director of resourcing and reward
1994-1997 ††††††††Nationwide, head of retail HR
1992-1994 ††††††††Nationwide, head of retail planning
1991-1992 ††††††††Nationwide, head of group profitability
1979-1991 ††††††††Nationwide, head of group management development
How would you describe yourself?
Down-to-earth; pragmatic, but resolute in what I believe in.
What would you change about yourself?
I’d be more organised and I’d give more time to people. I take on too much.
What is the greatest challenge you’ve faced in HR?
The greatest challenge in general terms is getting agreement; commitment and resources to do things like recognition awards from the board.
What lessons have you learned?
In terms of rewards and perks generally, I would say: number one, keep it simple and number two, only do what people value.