Agenda. Bonus Approach Process Practice. Other Reward Promotions LTI. Year-End Reviews Approach. Market Pay Approach Process.

Transcription

1 Agenda MyIMPACT Program Year-End Reviews Approach Market Pay Approach Process Bonus Approach Process Practice Other Reward Promotions LTI 1

2 MyIMPACT Suite Overview PowerPoint Multipurpose Theme. All Rights Reserved. 2

3 MyIMPACT Suite MyIMPACT Program (2017) DEVELOPMENT Our way that allows L48 employees to grow their careers to the fullest extent of their desires. CAPABILITY (2017) Our way of understanding the capacity, potential, and aspirations of L48 employees to shape individual and collective development decisions. REWARD Our way of recognizing the relative value that L48 employees generate. Individually and collectively. Rewards are differentiated based on value-added contributions Equipping managers to make impactful reward decisions Fewer restrictions and a less complicated evaluation process PERFORMANCE Our way of enabling every L48 employee to focus on priorities and understand the value each of us adds to the business. Elimination of performance ratings Introduced the new MyIMPACT priorities form Changed our mid-year performance conversation structure Employee owned 1:1 conversations 3

4 Putting It All Together MyIMPACT Roadmap New Year MyIMPACT Program Setting Priorities for the year begins with determining which activities will contribute value to the business, and how you will go about it. Understanding Our Talent Q1 Q The conversation day drives decision making, engagement and action rather than just information delivery. We will tell Team Leaders exactly what to talk about Development Planning All Year What value was added by the employee? Here is where we will be explicit about successes, learnings and improvements areas Determining Value & Reward Feb Jan Begin The Year By Setting Priorities Looking across the business and evaluate each person s unique value profile. These profiles will serve as guidance for managing talent and performance Jul Mid Year Conversations Development planning is a rich opportunity for employees and managers to plan for an individual's development with an eye toward mutual future needs. Dec Year End Performance Conversations Now that we know the value our people have generated, we will reward them according to that value. 1:1 Check-In Conversations With Your Manager 4

5 Total Rewards Components of your Total Reward Package Other Reward Promotions LTI 5

6 Year End Conversations PowerPoint Multipurpose Theme. All Rights Reserved. 6

7 MyIMPACT -Year End Conversations in December Closing out the Year Year-End Reviews Employees finalize their contributions that clearly indicate the value they have generated for the L48 this year. The true impact of contributions is discussed, and the Manager provides feedback on the yearly accomplishments. Employees confirm Code of Conduct and Ethics & Compliance awareness, and that they have had a development discussion with their manager during the year. 7

8 Determination of Participation Did the employee Deliver Value? Eligible for all reward types Will be eligible to receive their target bonus No Base pay increase No Bonus No LTI You will tell them during the YE conversation Year-End Reviews 8

9 Base Pay / Market Pay PowerPoint Multipurpose Theme. All Rights Reserved. 9

10 What s Changing? L48 MyIMPACT Reward Training What s Changing with Base Pay? What s Changing? BASE PAY is the financial compensation you receive for performing the day-to-day accountabilities of your job. We will now refer to the annual base pay adjustments as Market Pay adjustments Individual performance is de-emphasized in the base pay element and now shifted into the variable pay element. We will refer to a Recommended Minimum/Mid-Point/Recommended Maximum. People Ops will establish the initial allocation of the market pay increases for all L48 Employees. Our intent is to place people relative to the mid-point of their pay range +/- 15% (Formerly 12%) Those 15% above the recommended maximum range set for their job will not receive recommendations for pay increases.

11 What is Market Based Pay? What s Changing? Every Job has a market. We want our pay structure to mimic that market.

12 Who Do We Compare Our Market Pay With? What is the Market? Salary Surveys Comparator Analysis Mercer Energy 27 Survey. 12

13 Market Reference Point What s Changing? Competitive Range MEDIAN L48 determines the competitive range using the median from the surveys and a formula calculating the typical spread around the median for the job. Half the employees in the market are paid BELOW the median salary Half the employees in the market are paid ABOVE the median salary

14 Competitive Base Pay Pay Competitively Relative To The Market Some people will move up in base pay quickly Some people will stay flat The more value you drive for the L48, the higher your market value becomes. Employee Market

15 How Does It Work? Market Based Pay Adjustment Process 1. Annual budget for market adjustments and promotions is determined by the L48 CEO and CFO. 2. Employee Assessment (December) The Manager designates a yes or no on the MyIMPACT form, indicating the employee s eligibility to receive a market adjustment. 3. People Ops reviews each employee pay scenario and if warranted, determines market pay increases on behalf of the business within the established budget. 4. VPs can re-direct the budget money to those the business has determined should be placed differently within their market range. This is done at a high level, calibrated by each business according to their approach. 5. The leadership of each BU or People Ops can apply additional discretion as necessary. 15

16 Bonus Pay Short term Incentives Long term incentives PowerPoint Multipurpose Theme. All Rights Reserved. 16

17 What s Changing? L48 MyIMPACT Reward Training What s Changing with Bonus Pay? What s Changing? BONUS Pay is a lump sum amount received for delivering your MyIMPACT priorities. ACB Payout will be At Target for those determined eligible to participate. We will establish a discretionary pool to recognize high value-added work. After the year end conversations are complete, the Manager considers each employee s priority items business impact. Based on that assessment, within their allocated budget, the manager can distribute additional bonus money across the team according to their relative contribution. Any payout above target is done at management s discretion. CEO/CFO can increase or decrease the available funds depending on business performance and at their discretion. Initial ACB bonus adjustment recommendations will be made by the Manager, final approval rests with the VP of each BU.

18 Think Outside The Rating Boxes New Way Of Thinking About Performance Delivery Move from categorizing everyone s performance into a few groups To determining awards based on the individual s level of contribution Value-Add Contribution and focusing on small differences in whether or not they met job expectations and ensuring our top contributors receive more. 18

19 How Is The Bonus Awarded? Evaluating Contribution There will be a discretionary bonus pool made available to recognize strong individual value-add performance. This discretionary bonus pool can change based on L48 business performance. Discretionary treatment for every individual is not guaranteed. Managers will recommend awards for each eligible employee based on their assessment of the individual s contribution. 19

20 How Is The Bonus Awarded? Evaluating Contribution The L48 performance score could influence the size of the bonus pool. Management can distribute money from the discretionary pool according to their employee s relative contribution, at their discretion, and within their allocated budget. Eligibility for the bonus is defined by the MyIMPACT form. (Receiving a YES) Above target payout is completely discretionary for each individual. Max individual payout will not exceed 2x the employee s target bonus. 20

21 How Is The Bonus Awarded? Evaluating Contribution The budget is held at the BU level, thereby generating a larger pool of funds for individual teams to draw upon. The ACB Discretionary Bonus pool amount will generally be 20% of the sum total of the target bonus payout for each BU. With input from the Managers, each BU/Function VP will determine the final individual allocation of the discretionary budget. Boundary conditions for bonus allocations: Minimum and Maximum allocation amounts as communicated by People Ops. Below target payouts for eligible employees are not permitted. Not every employee will (or should) receive discretionary money. Budgetary restrictions (not to exceed by BU). Senior Leadership approvals required. Other (People Operations may recommend/implement further adjustments). 21

22 What Is A Value-Add Contribution? New Way Of Thinking About Performance Delivery Relative value-added contribution is considered by the Manager using the suggestions below as a guide against their priority/priorities for the year: Conditions - (How much effort, Risk, Level of Stress, Time demands) Impact on the Business (Short or Long term impact, Scalable) Impact on Others (Helped others work better, positive influence) Benefit to the Business (Saved time, financial/economic benefit) 22

23 Moved Other Compensation Items PowerPoint Multipurpose Theme. All Rights Reserved. 23

24 Promotion Philosophy Other Reward Promotions LTI Promotions in the L48 A PROMOTION is a business decision to change your job level due to increased responsibilities, job complexity, and movement into a role that has greater business impact. What makes you promotable? You must be adding significant value in your current role AND the value you can contribute in your new role is greater than your contribution in your current role THERE ARE 3 WAYS YOU CAN GET PROMOTED You apply for a bigger role and are selected. You are appointed to a bigger role. Career progression in your current role (may not apply for all roles). WHEN CAN I EXPECT A PROMOTION? Promotions can be granted at any time during the calendar year. Some people, through both opportunity, talent, and skills will have more growth than others. Not everyone will get promoted during their career in the L48, and that is okay. In some time periods, in some groups, there will be lots of opportunity and growth at L48. Other times opportunities will be more limited. 24

25 Long Term Incentive (LTI) Rewarding Long Term Contribution Other Reward Promotions LTI Part 1: Restricted Share Units (RSUs) equivalent to 33% of the award percentage at the time of grant Part 2: Performance Cash equivalent to 67% of the award percentage at the time of the award o Ending cash values will range from 0-2.0x the cash portion of the original award and will be determined by L48 performance against pre-determined long term metrics over the 3 year period. Part II: Performance Cash 67%

26 Code of Conduct PowerPoint Multipurpose Theme. All Rights Reserved. 26

27 Recourse Where to go if you have a problem Other Reward Promotions LTI Speak with your team leader if you have any concerns. The same standards of expected behaviors, the code of conduct, ethics and compliance are still applicable and will be enforced. If you become aware of inappropriate behavior that may violate the code of conduct (either by a manager or another employee), bring it to the attention of your manager or People Operations. If an employee does not agree with the Manager s assessment of their performance or the resultant allocation of pay, they should contact their manager first for clarification. If you still have questions, contact your People Operations advisor for guidance. Disagreement does not = Code of Conduct Violation. 27

28 Timeline PowerPoint Multipurpose Theme. All Rights Reserved. 28

29 Timeline Other Reward Promotions LTI Market Pay Bonus Pay 29

30 Thank You! PowerPoint Multipurpose Theme. All Rights Reserved. 30