This content was subject to assurance by SGS Italia S.p.A. (14 March 2014).

Performance and Leadership management: yearly calendar

At the beginning of each year, managers discuss individual targets with each team member.

Then, at year-end, individuals are evaluated on performance (i.e., achievement of business targets) and leadership (i.e., the ability to lead change, work as part of a team and manage people). These two dimensions - performance and leadership - are plotted on a nine square grid which indicates a summary appraisal of the employee’s results. Consistency in the  evaluation process is ensured by comparing the rating of other employees in the same category/role. Calibrations within an expected distribution curve reduce the risk of inequity and align appraisal outcomes through defined criteria. The final results are discussed in a meeting between the manager and the employee, during which an open dialogue on areas identified for improvement contributes toward validating the employee’s performance and strengthening the bond with the organization. Upon completion of this process, employees can access their evaluation on-line, add details on their professional aspirations and request specific training to address identified areas of improvement through a variety of actions (such as coaching, exposure to senior management, etc.).

Other individual performance evaluation systems

In addition to the PLM evaluation process, other performance evaluation processes are in place for individual performance related compensation. For salaried and hourly employees working at plants in Brazil, Group companies have a variable bonus called Profit Sharing Plan (PLR), which entails participation in profit and results (normally negotiated on a yearly basis). The bonus is paid individually and takes into account collective and individual key performance indicators such as annual production, World Class Manufacturing scores, quality index, customer satisfaction and individual attendance. This system applies to 19,534 employees.