Measuring performance

Group performance is measured through Key Performance Indicators (KPIs), in the context of our strategy.

We have four KPI segments, People, Customer, Performance and Financial, as represented in our business model and Corporate Balanced Scorecard.

 

 

 

 

 

 

  • People

    Safety

    measured by Lost Time Accident Frequency Rate: the number of work-related accidents resulting in an absence on the next day, or shift, per 100,000 hours worked.

    In 2014-15 we further reduced the amount of time lost to accidents. We continue our focus on road safety and ran our annual Dangerous Dog Awareness Week in June 2014. A change to legislation in May 2014 means our postmen and women are now protected beyond the garden gate.

    Employee Engagement

    measured by an annual Ipsos MORI survey of the involvement, alignment and loyalty of our colleagues.

    In September 2014 we launched a Save As You Earn share scheme for eligible UK employees. More than 36,000 opted to take part. We launched 60 joint projects with the CWU as part of our Together for Growth agreement and held some 350 on-site engagement sessions in our face-to-face communications programme.

    Customer Focus

    our annual Ipsos MORI survey measures our people’s focus on delivering improvements in customer service.

    Christmas is a key trading period for us and we begin planning early. In 2014 we delivered one our highest every quality of service performances for parcel deliveries in December (1).

  • Customer

    First Class Quality of Service

    measured by an independent audit, which may be adjusted for force majeure (2)

    Our regulatory Quality of Service targets are amongst the highest of any major European country. In 2014-15 we met or exceeded the minimum target of 91.5 per cent for First Class delivery in 109 out of 118 postcode areas.(3)

    Customer satisfaction

    measured by average customer satisfaction scores on issues including price, service quality and customer experience.

    We maintained very good levels of satisfaction among our business customers. We have extended e-retailers access to our network and are being more flexible about the size and shape of parcels we can deliver.

    Customer complaints

    measured by the number of complaints opened by our Customer Service team.

    For the first time in four years, in 2014-15 we delivered a reduction in customer complaints across all our major categories: redirections, redeliveries, misdeliveries and ‘Something for You’ cards.

    (1)  Based on records from 2002 for stamped and meter first class parcels. Types and sizes of parcels sampled have changed over time and reflect our live traffic profile.

    (2)  Factors beyond Royal Mail’s control, such as weather

    (3) 113 postcode areas reached the minimum floor target when adjusted for force majeure

  • Performance

    Group Revenue

    measured by Group revenue adjusted for foreign exchange movements.

    Revenue, including discontinued operations, increased in the year through parcel revenue growth in UKPIL and revenue growth in GLS, which offset a decline in UKPIL letter revenue.

    Productivity for collections, processing and delivery

    measured through the percentage change year-on-year in the number of weighted items per gross hour paid in Delivery and Mail Centre units.

    We reduced hours in the core network at a faster rate than workload, which was broadly flat.

    Parcels quality of service

    measured by the overall Quality of Service performance of core network parcels, delivered by their service specification and weighted by traffic volume.

    We saw further progress in our performance this year, delivering one of our best ever parcel quality performances in December 2014.

  • Financial

    Total UK costs

    measured by total reported costs for UK businesses, before transformation costs.

    In 2014-15 total reported UK costs (before transformation costs) were broadly flat. People costs in UKPIL increased, due to the three per cent pay award and increase in the pension service charge. This was offset a reduction in non-people costs.

    Group operating profit

    measured by reported Group operating profit before transformation costs, adjusted for foreign exchange movements.

    Our reported Group operating profit before transformation costs reduced, mainly as a result of the increase in the pension service charge.

    Free cash flow

    measured by free cash flow

    Free cash flow (excluding net cash flows from the London property portfolio) reduced in the year due to increased investment and one-off benefits to working capital in the prior year.