Top Employers HR Best Practices 2018 Report

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Learnings from the world’s Top Employers

HR BEST PRACTICES 2018

TABLE OF CONTENTS Introduction ............................................................................................................................P 3

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01- Social learning ................................................................................................................P 4

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02- New approaches to succession planning ..................................................................P 5

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03- Career management tooling.........................................................................................P 6

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04- Driving change from the bottom up............................................................................P 8

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05- Corporate Social Responsibility (CSR) / volunteering activities..........................P 11

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06- Driving culture change through leadership commitment..................................... P 13

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07- Reinventing the employee survey with innovative tooling................................... P 15

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08- New approaches to Diversity & Inclusion (D&I).................................................... P 17

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09- Leadership development............................................................................................ P 20

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10- Best practices in mentoring........................................................................................ P 22

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11- Work-life Balance and Well-being............................................................................ P 25

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12- Workforce planning and organisational redesign.................................................. P 27

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13- Compensation and benefits....................................................................................... P 30

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14- Performance management......................................................................................... P 33

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INTRODUCTION Our daily work with over 1,300 of the very best employers around the world means that we come across many excellent examples of innovative thinking within the Human Resources division. We support HR policies and practices that truly make an impact, both on businesses, as well as on their people. In this report, we present you with a number of proven HR Best Practices we have come across with the official certified Top Employers for 2018. In this report, we consider a ‘best practice’ to be: • Measurable (fact-based). • Globally applicable. • Easily transferrable between different industries.

Develop. Always. Our certification recognises organisations with world-class employee conditions for the great employers they are, which in turn helps them advance successfully. If you are not yet participating in our research, but you feel that your organisation is at the top of its field, we invite you to get in touch with us. Since we were founded in 1991, hundreds of enterprises have joined us, creating a community of more than 1,300 Top Employers across 115 countries today. Together, we are positively impacting the lives of over 5,000,000 employees and we look forward to growing that figure in the future. After all, our motto is: Develop. Always. On behalf of the HR Insights Lab Team, Benoit Montet Country Manager: France

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SOCIAL LEARNING Industry: Energy Population targeted: Employees and External Collaborators Timing of Implementation: 2017-2018 Social Learning allows employees to learn from colleagues and peers. Top Employers that promote such initiatives are dedicated to allocating resources and materials for training to ensure these initiatives are scalable.

Top Employer in the Energy Industry (Europe and North Africa, 7800 employees) This Top Employer needs to frequently train its manufacturing, customer care and after-sales teams because of the fast-changing technology it works with. In addition to this, the company’s resellers also need training to be able to properly serve their end-customers efficiently. With this in mind, this company has implemented a social learning tool in the form of an educational website where all internal and external technicians can collaborate and post information. The focus of this channel is to encourage interested parties to share video tutorials of product installations where the technicians have utilised innovative methods or have come up with out-of-the-box solutions. The aforementioned tool creates a dialogue between in-house and external team members and allows all of them to upload their own training materials and contribute to the development of others in the field. To support the initiative, all technicians were trained on how to film themselves and create these tutorial videos. In addition, they were provided with resources like GoPros, masks, lamps and other props to ensure high-quality recordings.

The web manager of the company is also a technician and is responsible for codifying and ranking the videos to allow them to be easily searchable. The company can measure the impact of this practice via tracking its customer satisfaction levels, which have been positive. These results relate to the time saved in cases where previous solutions could be re-used. The time gained is particularly valuable during the maintenance phase. The noticeable limitation of this practice is the amount of content available and the quality of these tutorials. To ensure scale (and to keep the technicians engaged), an incentive programme could be developed in the future.

Our Conclusion Social learning is a key aspect of creating a collaborative working culture. Employee engagement and involvement can be enhanced by including employees in designing the content for training. Such initiatives not only recognise efforts of the employees, but will encourage a culture of sharing knowledge and expertise that can only be beneficial for any organisation. £

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NEW APPROACHES TO SUCCESSION PLANNING Industry: Automotive

Region: Europe



Timing of Implementation: 2017-2018

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Succession Planning is a time-consuming process, requiring a fair amount of effort from the leaders and HR professionals involved. To make Succession Planning more impactful and transparent, Top Employers are evolving their practices in this area.

Top Employer in the Automotive Industry (Europe, 5600 employees) After finding that only 40% of its succession plans had a successful outcome, this Top Employer had to make a difficult decision; either stop investing a large portion of time and effort into succession planning, or refresh the process to make it more beneficial. The company analysed the reasons behind why certain employees were nominated as candidates for succession plans alongside the ‘gaps’ between those candidates and the individuals who were eventually selected as the successors. As a result of this analysis, this Top Employer defined new practices for nominating and developing candidates for succession plans (endorsed by the CEO). An example of this, is the fact that the company has created cross-functional pools of candidates for some roles instead of direct function-to-function candidates. It has also promoted more transparency for candidates on succession plans, so that employees can plan their professional development accordingly. The organisation has also invested in the training and development of those employees currently involved in succession plans, therefore setting up an e-readiness scale for those currently on succession plans to track their progress.

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To see the outcome of this approach, the company is implementing rigorous measurements, which the HR leader will present to the company’s executive committee annually. Measurements include: calculating the percentage of hiring from succession plans each year, monitoring the percentage of internal promotions versus external hires, and analysing the reasons behind unexpected career moves (e.g. cross-functional) to re-apply the criteria to other internal moves.

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Our Conclusion

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By infusing quality, diversity and transparency into its succession planning practices, this Top Employer has professionalised its approach. This is a best practice that any large company could implement, and it is valuable because it is likely to reduce the “always second best” concern sometimes found with succession candidates.

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CAREER MANAGEMENT TOOLING Industry: Banking

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Timing of Implementation: 2017-2018

02 With the significant changes happening in the labour market, Top Employers understand that everyone’s career path is different. As fewer employees nowadays wish to follow a ‘traditional’ career path, leading companies to offering their employees the opportunity to self-manage their careers.

Top Employer in the Banking Industry (Global, 130,000 employees) This Top Employer is experiencing rapid changes in their industry, and knows that the current competency framework will need to be updated to reflect future business needs. A changing business landscape also means changing workforce needs. As a result, this Top Employer has developed an online career management tool with two main purposes. Firstly, to help its people (as well as HR, who play the role of career development facilitators) to identify potential career paths within the company and to connect them with career opportunities available internally. Secondly, to use the Big Data from their employee feedback to redefine the company’s competency frame-work (once the tool has been completely rolled out globally in 2018). The tool operates using a tailored algorithm, where staff feed their personal data into the system by uploading their CV’s or their LinkedIn profile. They then fill out a self-assessment form, detailing their competencies, as well as tagging themselves as ‘experts’ on certain topics, where they can make themselves available as mentors.

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The tool stores this data in a central repository and benchmarks employees against the existing data in the system. From there, it proceeds to recommend personalised career opportunities within the company. An example of this would be the suggestion of a role that the employee did not know existed previously, or a specific career path that the employee could possibly follow, or a subject matter expert the employee could connect with (for example; mentoring).

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After that, it’s up to the employee to reflect on the learning and development implications, in partnership with their manager and HR playing a facilitating role in the process. This tool was created to serve as a prompter of new, previously unconsidered opportunities that may not have necessarily been considered in the past.

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At the time of release, it is too early to share detailed results on the impact of this tool across the entire organisation, as the firm is currently testing the tool with a pilot group of around 1300 employees. Top Employer will continue to solicit feedback from a wide range of stakeholders involved in the pilot group testing and satisfaction among employees will be tracked via a question in the company’s employee survey covering the topic of internal mobility. We will monitor these results and provide feedback in the upcoming months. w

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Our Conclusion We believe this tool is useful as it creates transparency on the opportunities within the company and it helps staff to identify where they need to develop. Also, the Big Data it generates will be exceptionally useful for the organisation to gauge its skills gaps, as well as for individual employees to identify unfamiliar career paths that might not have been obvious to them (for example, moving across different functional areas). Launching the tool also helps HR position itself as a connector and a facilitator, while allowing employees the freedom and flexibility to drive their own careers. We do however, understand that one tool alone cannot create a culture where employees manage their own careers. Next to providing the right tools, the key to success is having a human filter to properly map individual capabilities to organisational realities, so that realistic career expectations are generated and managed.

Next to providing the right tooling, the key to success is having a human filter to properly map individual capabilities to organisational realities, so that realistic career expectations are generated.

It seems likely that such a tool will work best in global organisations with a large offering of internal opportunities and a strong HR presence to guide employees on how to take full advantage of the available options and tools for developing their careers. £

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DRIVING CHANGE FROM THE BOTTOM UP Industry: Various Timing of Implementation: 2017-2018

Bringing a diverse range of ideas and perspectives into the change journey – at all levels of the organisation – increases the likelihood of achieving the desired outcomes.

Top Employer in the Retail Industry (Europe, 4500 employees) Bringing a diverse range of ideas and perspectives into the journey of change at all levels of the organisation increases the likelihood of achieving the desired outcomes. This Top Employer is looking to act on feedback from employees saying that its organisational culture is too bureaucratic and slow to resolve issues and to adapt to new changes. In a ‘bottom up’ change management approach, this organisation has decided to ask for ‘change agents’ to help tackle the root causes and provide insight into the actions needed for improvement.

propositions. Trust will be an important success factor to ensure the allocated change agents feel free to share courageous, honest proposals. The activity has recently been launched and we will monitor its progress and development.

Top Employer in the Manufacturing Industry (North America, 2000 employees) This Top Employer is currently setting up an employee ‘culture change network’ comprising of 5% of employees across the U.S. who will spend 20% of their working week driving change from the bottom-up. This change looks to provide a faster response rate to changes in the market, to improve entrepreneurial spirit and to help the company become more people-oriented.

These volunteers are currently being trained by external consultants so that they can properly think through the solutions needed for their organisation – not only taking into account their personal perspectives, but challenging managers and teams in the organisation to improve processes, deliver simpler ways of working and make the execution of decisions more efficient.

This initiative is sponsored by the executive committee, meaning that this translates into leadership commitment. More so, the team are in direct contact with the company’s CEO regarding these objectives and the development and realisation of their activities, which creates a bottom-up link and helps the company listen to the voice of its people.

HR and senior leaders sponsor the initiative and executives have been asked to be open-minded to all the change agents’ ideas and

Members of the network have been given adjusted performance objectives to formalise their participation in the programme, which w

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means this work will become a fundamental part of their roles, rather than an add-on which they perform in their spare time.

Top Employer in the Pharma Industry (Africa, 200 employees) Every year, the country organisation of this global pharmaceutical company hosts a two-day workshop with local managers and a group of ‘change advocates,’ who are nominated by employees to improve the internal work environment and culture. The group identifies issues via a short pulse survey which focuses on how to improve trust, innovation and focuses on high efficiency/less bureaucratic behaviour. The group then proposes a list of ideas and action plans, which are decided upon by the local leadership team. Though the workshop requires significant time investment, the ROI appears to be high. The results so far have showed an improved engagement survey score around the ‘level of participation’ employees have within the company. Employees appreciate the fact that management is listening to what they have to say.

Top Employer in the Business Services Industry (United Kingdom, 200 employees) As an employee engagement initiative, this Top Employer has introduced an online platform where staff can share business improvement ideas, such a digital version of the traditional ‘suggestion box’. The employer has also set up a formal process to act upon promising ideas. A member of the HR team takes ownership of developing each idea and possibly finding someone to ‘own’ that idea. This means that colleagues know that sharing their ideas or suggestions are worthwhile, and they have an open opportunity to make their voice heard. The introduction of the tool has resulted in an increase in engagement

levels, owing to the fact that the employees now know that their ideas or suggestions will not go ignored. This is a practice that can be carried either by HR or by the Internal Communications team. Having these suggestions publicly visible to the organisation means that people are encouraged to share worthwhile ideas and the volume of ideas are manageable.

Top Employer in the Telecoms Industry (Eastern Europe, 3000 employees) Based on external benchmarking and results from its own engagement survey, this Top Employer realised it could do more to empower employees to improve their own work environment. Two years ago, it set up a network of employees who volunteered to analyse the survey results and explore the ideas provided by the other employees, which were then shared in an internal social media community group. Facilitated by HR and business analysts, the employee network meets weekly for a six-month period each year to provide action plans in response to relevant employee results. There are several tasks for them to do: to analyse all results across the company, to take into consideration the ideas shared by the rest of the employees and identify the right action plans (some of the employees also take part of the implementation of these action plans. Throughout this process, HR provides support and guidance, and senior leaders get involved in building the action plans per department. Since setting up this structure, many of the actions designed by the network have been successfully implemented. A positive side effect of the programme is that it contributes to the employee’s experience and gives them an active voice in shaping their well-being and quality of life at the workplace. w HR Best Practices 2018 | © Top Employers Institute | 9

The limitation of this practice seems to be its focus on what is going wrong rather than what is going right. Therefore, the Communication or HR departments need to able to demonstrate the success of the initiatives coming out of these discussions to avoid feelings of never-ending work.

Our Conclusions

In a Top-Down approach, the HR function has an architect role instead of an operational one. It gives them a strategic positioning.

Giving people an opportunity to make their voice heard and co-drive change, rather than having it purely driven from the top down, can have an impact on people engagement. It means people can confidentially take ownership of change instead of being a prisoner of it. Managing expectations in this arena is vital. In reality, all change processes take time. Not all decisions (especially important ones like reorganisations) can be decentralised. As much as companies want to drive change from the bottom up, having the focus of high-level leadership commitment (top down management) remains a vital ingredient. Top-down seems to be the fastest route as here, decisions can be made quickly with minimal involvement from the shop floor, but it still takes time to explain the decisions that these leaders have taken. They must then manage expectations from employees to convince them to accept the change. In this way, by adopting a bottom-up approach, employees can feel part of the change from the beginning! £

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CORPORATE SOCIAL RESPONSIBILITY (CSR) / VOLUNTEERING ACTIVITIES Industry: Consumer Goods (Telecoms and Catering) Number/Category of Employees Impacted: White-collar employees in France Timing of Implementation: 2017-2018

Corporate Social Responsibility (CSR) activities help businesses to improve their reputation and enhance their influence with customers, suppliers and networks. This can directly help Top Employers to attract, retain and engage employees, and to be an employer of choice

Top Employer in the Telecoms Industry (Europe, 3000 employees) This Top Employer runs a CSR programme to support young people from disadvantaged socio-economic backgrounds in ‘sensitive urban areas’ to enter the world of work. The programme has two components. The first is a training initiative to enhance the skills and abilities of young people and give them support to achieve their career aspirations. For example, between 2016 and 2017, more than 750 employees took part in volunteering activities targeting youths at risk of school dropouts, as well as focusing on females and ‘future talents’.

The limitation of this example for smaller-sized companies may be the size and scale of the numbers involved. However, even if done on a smaller scale, this type of CSR activity could be valuable to raise the engagement of all employees. The inclusion component helps build pride in the company and can often have the added benefit of driving innovation thanks to the new perspectives brought in by these diverse employees or trainees.

Top Employer in the Food and Beverage Industry (Europe, 500 employees)

The second component is recruitment. The company has pledged to hire 5000 young work-study trainees and 2500 trainees, with a particular focus on the youth from disadvantaged neighbourhoods.

This Top Employer is running ‘School Relations Weeks’ focusing on universities in disadvantaged areas. In 2017, employees spent four weeks involved in training activities reaching out to 450 students. The focus was on professional development and business-related exercises with participants being offered the chance to apply for internships at the company after taking part in the sessions.

During this 2016-2017 recruitment campaign, the overall rate of youths (26 years and under) recruited from sensitive urban areas was 18.2%, which is an impressive number considering that only around 7% of the French population live in these areas.

In a follow-up survey, 88% of the students recommended the programme. Qualitative feedback also showed the volunteer activities were personally rewarding for the 40 employees who took part in facilitating and delivering these sessions. w HR Best Practices 2018 | © Top Employers Institute | 11

The limitation of this practice would be the time invested by the volunteers. Management can often be reluctant to take team members’ attention away from core tasks. Thus, the role and the implication of middle management in deciding how to set up such a CSR activity is the key to its success.

All stakeholders of a company are positively impacted by CSR practices. For a Top Employer, being actively involved in CSR can make a significant difference for clients, investors and shareholders, and of course, it supports being an employer of choice. £

Top Employer in the Beverage Industry (Africa, 1300 employees) This Top Employer strengthens its role in the community by extending its volunteering programme to employees’ families. For example, families are invited to participate in beach clean-ups organized by the company. In terms of social engagement, the company has also set up a dedicated programme of activities for employees’ families, including an annual excursion for staff and their families called Family Day, special competitions for children and weekend hiking activities to encourage healthy living. The company has a high level of staff retention thanks to these benefits. The practice is sometimes covered within the social activities of companies. However, in many countries, getting families involved in company (CSR) activities is a source of pride for employees. A key success factor in such activities is the involvement of the families of management, as this helps to engage lower level employees and create a feeling of ‘accessibility’ to senior management.

Our Conclusion CSR activities are best practices not only for their valuable social impact, but also because of the fulfilment it can bring to employees who take part in rewarding activities outside of their day jobs. It can be eye-opening to have direct contact with the (diverse) community the company serves, and such activities are also likely to have a positive impact on a company’s consumer and employer brand.

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DRIVING CULTURAL CHANGE THROUGH LEADERSHIP COMMITMENT Industry: Various Timing of Implementation: 2017-2018

Manager resistance to change can be a common occurrence. To help management focus attention on the critical levers of change, Top Employers can encourage managers to get involved from the early stages of the change cycle.

Top Employer in the Construction Industry (Global, 170,000 employees) Leaders at this Top Employer had two strategic questions they needed to answer: what challenges will they face in the years ahead and what key attitudes are needed to succeed? Through a purpose-built digital platform, this Top Employer collected data and responses to these key questions from 68 work groups covering 37 nationalities, diverse age groups and employees in different position types and levels of seniority. From this considerable volume of qualitative “bottom up” data, the company classified the results into 45 topics (business challenges) and then into five further categories, which has helped it define the five attitudes needed to succeed. Having involved employees from the beginning of the process, the company considers that this practice has been a huge success. Deployment of the exercise was spontaneously cascaded by employees and even communicated outside to suppliers and clients. In some countries, the key “attitudes” identified were immediately incorporated into the annual performance appraisal form,

demonstrating the enthusiasm generated across the entire organisation. The limitation of this practice is the time and the cost involved (IT costs as well as people costs). In the example above, the scale of implementation was global, but it could be launched at a smaller scale for an equally strong result.

Top Employer in the Consumer Goods Industry (Africa, 300 employees) A leading sports brand in South Africa evaluates its managers not only on their results, but also on their behaviours to drive the desired culture change within the company. As input for this evaluation, the employer makes use of an online survey tool. Managers invite feedback from their team once per year on how well they practice the company’s leadership competencies and lead people through change. Based on this, managers then receive individual reports, comparing their team’s feedback with that of the previous year and showing where improvement is needed. Following that, there is a debrief discussion between managers and their team to clarify questions and give managers an opportunity to share their commitments towards their teams. w HR Best Practices 2018 | © Top Employers Institute | 13

Finally, managers incorporate this feedback into their individual development plan and encourage their teams to do the same.

Our Conclusions The conclusion of those two examples is that the approach to change – bottom up, top down or a mix of both – needs to be chosen depending on the circumstances. This top-down approach can be a great way to kick-start the change process and start implementing a programme, as the decisions will be made centrally by the executive team. This can then allow the company to start solving problems immediately. It must be noted that this change also requires detailed and dense communication to make it successful. A two-way dialogue is needed to successfully drive change. Where the change requires innovation, for example, a participative (bottom-up) approach is often appropriate. Innovation relies on the ideas of employees at all levels of an organisation. By allowing everyone to participate in the change process, people experience the responsibility of contributing to the change they want to see in their company. £

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REINVENTING THE EMPLOYEE SURVEY WITH INNOVATIVE TOOLING Industry: Various Timing of Implementation: 2017-2020

Top Employers are taking innovative approaches to allowing their people to share feedback on the things that will make the biggest difference in terms of engagement.

Top Employer in the Consumer Goods Industry (Global, 80,000 employees) In 2017, this Top Employer refreshed its employee survey using an innovative format. The company is currently going through a culture change, and the new survey format uses artificial intelligence (AI) to analyse employee responses and connect the dots between behaviours, actions and outcomes. The focus of this survey looks at different aspects of the company’s transformation journey. Based on the results analysed through artificial intelligence, each round of the survey is adapted to dig deeper into those areas where employees have voiced their concerns. This way, the firm can reliably track improvements over time. Instead of pushing the survey out to all their people, the company uses a small-scale distribution sample, with each edition going out to around 10,000 employees. The survey follow-up is mainly driven at a local level. Each market/ region developed an action plan to follow up on the local results, and different countries could view the progress of each other’s initiatives so they could see what worked in different contexts.

We believe this is a best practice because the survey uses an innovative format. Features of the survey include gamification and word games, which mean teams cannot manipulate their answers. (Many companies experience cases where managers direct employees how to respond to certain questions and this is no longer possible with this kind of format.) AI is a new frontier in HR. For companies considering using AI in their employee surveys or other HR practices, possible limitations include the cost and the scale needed to make the outcomes impactful. Employers will also want to keep in mind that management will often be resistant to changes in employee surveys, because new versions can produce more negative scores (which reflect badly on management) than previous measurements.

Top Employer in the Construction Industry (Europe, 1600 employees) This Top Employer (a French construction firm), is running its employee engagement survey using a collaborative feedback tool, hosted by an external vendor, which is a way for employees to voice their feedback in real time on the issues that matter most to them. w

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Rather than release the survey at set intervals, the online feedback tool is available to all employees all year around, without time restrictions, and is updated daily to show results in real time with the latest responses. In fact, the open comments are viewable to all employees and this is known upfront by respondents and therefore encourages people to share quality feedback. On an annual basis, the survey shows a higher overall response rate than with a ‘traditional’ engagement survey. The employee group showing the highest response level is middle management and since the new concept was launched in 2017, some managers have taken the initiative to launch the suggested improvements with their teams in response to the feedback. HR continues to play a key role in the process. Towards the end of each year, HR kicks off the “official” follow-up process, to ensure that the follow up actions remain business-aligned. We believe that this collaborative engagement survey is a best practice because of the high overall response rates and because the process comes across as less ‘regimented’ than a traditional engagement survey that is sometimes forced on employees.

Our Conclusions Feedback from employees remains crucial for measuring the impact of the strategies deployed by companies as well as to monitor the quality of the work environment. With external actors proposing new methods of measuring pride, motivation and cultural issues, all Top Employers have an opportunity to truly involve their people in shaping the future direction of their companies. £

For companies considering this kind of collaborative survey approach, the challenge remains on the “social” scale, therefore making sure conversations focus on possible action plans rather than possibly ignoring could be going wrong. Also, Top Employers will want to make sure managers and teams move away from a “waiting” position where they expect the company to propose actions and initiatives, so that they can truly take improvement into their own hands. Employers should also keep in mind that this kind of survey may be impractical to implement for blue-collar workers given the high dependency on technology and year-round connectivity. HR Best Practices 2018 | © Top Employers Institute | 16

NEW APPROACHES TO DIVERSITY & INCLUSION (D&I) Industry: Various Regions: Asia, Europe Timing of Implementation: 2017-2018

Diversity and inclusion enables a Top Employers’ business success. When employees feel respected and connected, they create a richer ideas and better approaches to problem-solving. This helps companies to attract and retain high-performing people.

Top Employer in the Female Beauty Industry (Global, 40,000 employees) Given that this Top Employer is a global brand selling cosmetic products to a predominantly female customer base, it positions itself as a female-friendly employer in the highly competitive beauty industry. In 2014, this company began a Global Women Strategy. Key elements include bi-annual checks on salary and bonus levels to ensure gender pay equality; a leadership development programme for women, including mentoring by senior female leaders and caregiver-friendly working policies (which are set at country level). The impact of these activities resulted in a rising number of women filling critical roles worldwide. For example, in managerial roles, the percentage of women went from 38% to 46% globally. In 2016, 39% of successors for senior leadership roles in the talent pipeline were women, up from 37% the year before. Over the past few years, the company has received several awards

for the its D&I practices. It has also benefited from a lower staff turnover because of the flexible work policies it has introduced. The limitation of this practice is the female labour supply available in some domains, which may make targets difficult to reach. The gender diversity targets can be accessible for activities such as marketing, sales and the like, but may be more difficult for technical or manual-labour functions.

Top Employer in the Construction Industry (Europe, 20,000 employees) As a way to promote intergenerational collaboration and knowledge sharing, this Top Employer decided to pilot a reverse mentoring programme in its offices. The objective? To help senior leaders understand the main challenges of the digital world and give visibility to young talent without having to set up traditional training. The programme comprised six one-hour sessions for each pair of participants, with regular meetings between mentors and the project team to monitor progress and refine the practice. w

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The pilot programme proved successful, with positive feedback from participants and mentors. Because of this, the company will now roll out this programme across Europe.

Rather than simply educate, workshop participants also discuss actions they can take to overcome their personal biases as a follow up on what they learned in the sessions.

This is an extremely interesting and enlightening experiment as it showcases an ideal way for different generations to connect with each other. Top Employers in different sectors may consider using this practice to close the Digital gap between people of different ages.

In this example, we find the most impactful outcome of this style of training is to apply the knowledge learned. The limitation for other companies considering introducing such training is that if the employee does not have any practical way to implement the new knowledge, the impact of the training could be limited. Therefore, such trainings appear to be best directed towards managers rather than the general employees.

Top Employer in the Consumer Goods Industry (Eastern Europe, 400 employees) This employer has a unique challenge; it has a very young workforce and only 1% of employees hired over the past five years were aged 46 years and above. As a result, the employer needs to increase its age diversity. As a way to create a more inclusive culture for older staff members, it hired three retired people in 2016 on half-time contracts. It also hired three disabled people and offered coaching to the line managers involved, so that they could manage this diversity effectively. The pilot was successful and the programme is expected to be repeated in the future. This practice may be useful for young, start-up companies looking to diversify. The most successful start-ups leverage diversity of all sorts - including age - to fully understand the global market they are serving.

Top Employer in the Banking Industry (Asia, 200 employees) This Top Employer runs a workshop to train managers to overcome “unconscious bias” to promote awareness of diversity issues. Topics covered in the workshop include implicit stereotypes (male vs female) and the unconscious “prototype” of an ideal leader (white/male).

Top Employer in the Telecoms Industry (Eastern Europe, 1000 employees) Unfortunately, people with disabilities suffer from negative stereotypes in the workplace. Some co-workers may be uncomfortable around employees with disabilities because they simply don’t know how to act or what to say. Disability training can help employees and disabled people understand each other. For example, training sessions can include tips for interacting with employees in wheelchairs, such as not assisting them unless they ask for help. Educating managers and employees about disability also helps prevent stereotyping and possible unfair judgments. Some companies are going one step further. One of our Top Employers explored an innovative way to help employees (and customers indirectly) to understand disability issues. The company, which sells telephone packages to consumers, equipped their retail outlets with virtual reality headsets showing a five-minute simulation of what it feels like to be in a wheelchair. The outcome was that customer-serving staff became better aware of how to serve customers with special needs. w HR Best Practices 2018 | © Top Employers Institute | 18

The limitation of this example however, is the cost involved. Cultural sensitivities are also important here. It could be that in some countries, disabled co-workers might perceive such an initiative as an uncomfortable or patronising experiment.

Our Conclusion Diversity & Inclusion is an increasingly visible strategic imperative for businesses worldwide and this is positive attribution for their employer branding. Research shows that this also has a measurable impact on business performance. While we have covered various isolated best practices here, we believe that there is no one-size-fits-all solution to tackling diversity. Employers need to plan initiatives, taking into consideration their specific industry, their current workforce and, of course, the social/ cultural context they operate in. Many organisations are champions in creating diversity, but many have yet to find the way to make their work environment more inclusive. Leaders often hire ‘people like them’ and they tend to promote people because they share similar and traits and common norms. To neutralise exclusion, Top Employers should proactively review the access of all groups with regards to employee to training, professional development and networking. This will ensure all employees have the same chance to be recognised for what they achieve. £

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LEADERSHIP DEVELOPMENT Industry: Various Timing of Implementation: 2017-2020

Who will the leaders of tomorrow be? This question has a profound impact on the way companies train and develop their leaders to be successful not only in their own roles, but also as change advocates for others.

Top Employer in the Construction Industry (Global, 170,000 employees) This Top Employer needed to update its managerial skills framework to reflect the behaviours needed to bring about changes in its industry and accelerate business growth over the coming years.

This change management plan is still in progress but the initial feedback from managers has been positive. As the attitudes were co-created by managers themselves, the content used feels more relatable than the old repository of managerial skills that did not address wider organisational needs.

As part of its Management Development Programme, the company involved leaders in analysing the business challenges the company will face in the years ahead – as well as the key attitudes employees will need to show in order to succeed.

The company will gradually measure the adoption of these attitudes through engagement surveys, hiring practices and leadership development plans. The goal is for these attitudes to spread gradually across all levels of the organisation and to become part and parcel of the company’s culture.

As a collaborative work, the one-year MD programme involved 68 working groups and more than 300 participants from approximately 40 nationalities. These leaders were tasked to overhaul the company’s competency framework, which resulted in the formalisation of five new ‘attitudes’.

This is a very interesting practice for companies that wish to build leadership teams who are role models for their people. In the example above, the scale of implementation was based on global outreach, but this initiative could also be launched on a smaller scale for an equally strong result.

Having been approved at an executive level, the communication of the new attitudes began in December 2016 with videos, intranet articles, booklets and posters, shared with all employees. The leaders of business clusters, as well as participants in the MD programme, presented at town hall meetings to explain what they expected from employees and gave examples of the application of these attitudes in their employees’ daily work.

Top Employer in the IT Consulting Industry (Global, 160,000 employees) This Top Employer runs a yearly “Leadership Quality” 360 survey as a formal process where leaders can ask for feedback from colleagues, managers, co-workers and customers on how they are driving business strategies and shaping innovation. w HR Best Practices 2018 | © Top Employers Institute | 20

The process is supported by an online tool and mobile application where the employees answering the questionnaire can also share open comments on actions that their leaders should continue to do as well as the things they should work on. More than just a standard 360 survey, this tool is a very useful input for each leader’s development plan, as the survey outcomes are used for the creation of individual development plans as well as the planning of follow-up training and learning actions. The feedback is also connected to the company’s competency framework.

Our Conclusions Unleashing the potential of leaders remains a critical priority for leading organisations worldwide. In fact, ‘Developing leaders for the future’ is the number two priority in the Top Employers’ 2018 talent strategies. In this context, it is good news to see the content of Leadership Development Programmes evolving to incorporate new formats and aiming to reinforce the position of leaders both internally and externally, to accustom them to fresh ideas, to keep abreast of business developments and to build effective leadership teams. £

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BEST PRACTICES IN MENTORING Industry: Various Countries: Europe, APAC, EMEA Timing of Implementation: 2017/ongoing Top Employers are starting to take a more formalised approach to mentoring. Formal mentoring programmes allow organisations to create and nurture relationships by matching experienced managers with promising talents to meet specific individual development objectives.

Top Employer in the Telecoms Industry (Global, 140,000 employees) Many companies see mentoring as an informal method of career development, but this Top Employer in the telecoms industry has created a more structured approach. This company has created a range of communications materials that give guidance to its employees on how they can develop their career plans in a professional way through mentoring. The guide includes a definition of mentoring, the overall objectives, how the programme works, roles and responsibilities and benefits for the mentee. It also includes a guide to having a good mentoring conversation, including setting SMART goals for the mentoring relationship and information on how mentees can monitor and apply what they learn from their mentoring dialogues. Through these actions, this approach means that this mentoring programme receives the focus it needs to broaden its reach and action more successful outcomes for all involved.

This style of approach is well suited to a large organisation where the company can manage positive communication and understanding between all parties involved.

Top Employer in the Electronics Industry (EMEA region, 12,000 employees) This Top Employer sees mentoring as a critical enabler for building a broader, deeper and more prepared talent pool. Through mentoring, this organisation wants to transfer the experience and perspectives their talent needs to excel in their current roles or to prepare for greater levels of leadership responsibility. This is done through a dedicated one-year mentoring programme in the EMEA region focused on talented employees who are in a pipeline of the “Next Generation Leaders.” What makes this programme interesting is that it includes an international aspect; the mentor is always from a different country than the mentee. This boosts cultural awareness, helps to eliminate silos and gives a new sense of perspective to the mentee. w

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The programme is formalised through HR-led training sessions for participants, including quarterly follow-ups on progress. All senior leaders and managers are requested to make themselves available for mentoring, meaning that talented employees have access to some of the best and most experienced minds within the company. Participants can also record their feedback in the HRIS system to aid drive continuous improvement. Since the programme was launched, staff turnover has been lower in the group of employees who deem eligible for mentoring. Anecdotally, mentees say they value the networking, the coaching and the human contact they gain from their mentor relationships. This practice is extremely valuable for multinational companies with operations in numerous countries within a regional area. It also helps develop strong local leaders and grow talent outside of regional headquarter settings. It therefore allows the talent pipeline to be fed by leaders with a better range of experience.

Top Employer in the Technology Industry (Global, 200,000 employees) This Top Employer leverages its global HR Information System to provide a platform for employees to connect with mentors.



however they choose. The limitations of this practice are cost (if new software and hardware need to be purchased), which may be prohibitive for small to medium sized companies, and the fact that each party depends on the company’s HR IT systems to provide a channel of communication. Establishing a rapport in this context may be difficult, particularly if both sides have not met before. If carrying out the relationship virtually, it is more challenging to establish trust without all the non-verbal cues that can be vital in face-to-face meetings. To be successful, all participants must be extra conscious of their communication style. Formal mentoring programmes allow organisations to create and nurture relationships by matching experienced managers with promising talent to meet specific individual development objectives. w

Formal mentoring programmes allow organisations to create and nurture relationships by matching experienced managers with promising talents, to meet specific individual development objectives.

All mid-to-senior level employees can sign up to be a mentor, while all employees can sign up to be a mentee by filling out some personal details via an online form. They can select their (desired) areas of expertise and connect with each other this way. Everything is managed electronically and the mentor can choose to approve or reject the requests they receive. Assuming the mentor accepts the request, the mentee receives an introductory email with helpful tips regarding their first real-life interaction with their new mentor. The mentor is also invited to an E-learning session to learn more about their role as a mentor. Next, it’s up the mentee and mentor to take the relationship further HR Best Practices 2018 | © Top Employers Institute | 23

Our Conclusions When deployed successfully, mentoring can complement a company’s broader leadership/career development framework, in addition to other, more formal learning channels. In some cases, such as smaller sized companies and firms that do not wish to spend a lot of money on formal mentoring programmes, the informal way - while still being sensitive to diversity - can be a suitable approach. When cementing mentor relationships, companies must manage thorough communication and understanding on both sides of the mentoring connection. For example, in some cases, the mentee will have received a sufficient amount of guidance from his mentor, meaning that they will look to ‘fly the nest’ early, but the mentor may not be ready to let go! This is where communication is key. Top Employers driving best practices in this area tend to have a strong HR leader responsible for ensuring that their company’s programme is successful, making sure the benefits of the programme are well communicated and all parties are working towards having mentoring relationships created where they have greatest impact (e.g. for next- generation leaders, women or employees from minority groups). For some employees, mentoring can be a huge accelerator in career and development. But note that this is a long-term investment. The quality of the mentoring relationship is key, and having senior leaders who are willing to make the time investment is needed. It is important to find the right mentor for each individual by letting the relationship grow with someone who the employee naturally looks up to. £

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WORK-LIFE BALANCE AND WELL-BEING Industry: Various Countries: Global; France; Belgium, UK Timing of Implementation: 2017-2020 To boost employee experience and keep motivation levels high, Top Employers are giving their people the freedom and flexibility to balance working time with outside interests, along with the opportunity to live healthier work lives.

Top Employer in the IT Consulting Industry (Europe, 1500 employees) This Top Employer runs a comprehensive programme to promote work-life balance for a population of France-based IT consultants who operate in a stressful environment, juggling multiple projects. Their Well-being Programme incorporates concierge services such as dry cleaning, administrative help and childcare places in nurseries/ external crèches in cases of emergency. The programme also includes health services like on-site osteopath sessions, meditation sessions and cholesterol screening, as well as a telephone line for employees to communicate any issues that they may be having, which is staffed by employee volunteers. For employees with caregiving responsibilities, the company offers advice and information sessions on work-life balance concerns. Lastly, the employer allows people to donate some of their unused holidays to colleagues with hospitalised/ill children or family members. Monitoring of this programme takes place regularly based on employees’ feedback, collected through pulse surveys and workshops with a representative sample of the overall population for managers,

women and for developing talents. This has proven to be a positive way of keeping the offering focused on what employees ideally need. This programme is an excellent example of an initiative designed with the workforce needs in mind.

Top Employer in the Government/Public Services Industry (Global, 2400 employees) This French-based global organisation has made well-being a priority by appointing a well-being director who sits on the executive committee. This is an effective way of making sure that during times of transformation and change, the organisation will continue to take care of its people.

Top Employer in the Food and Beverage Industry (Europe, 800 employees) This Top Employer takes a long-term approach to its well-being activities by integrating the programme within its business priorities, which include promoting happiness, enjoyment and fitness. Happiness can translate into various positive experiences – for example an efficient meeting. It can also be defined as interesting activities like weekly meetups (or Innovation Thursdays as they like to call it). w HR Best Practices 2018 | © Top Employers Institute | 25

The fitness element involves the provision of electric bikes in the office, as well as the encouragement of a healthy lifestyle (an example of this is free fruit provided by the organisation). The impact of these activities is tracked on a dashboard and results have shown that the average engagement rate with these activities are higher. In their customer survey, some comments mention the perceived wellbeing and happiness of the employees in the organisation. We approve of this programme as it is a good culture fit and perfectly aligns with the employer’s consumer brand.

Top Employer in the Automotive Industry (Europe, 400 employees)

The organisation supports employees in this endeavour by ensuring each employee has access to technology for remote working. Employees also know that their managers do not monitor time spent at the office. Since this implementation in early 2017, qualitative and anecdotal feedback shows that team members are happier, have a greater sense of freedom and feel more committed to their roles. Limitations for such an approach would include the type of business and job/role. It may not be applicable to all kinds of employees, but rather senior and flexible roles.

Our Conclusions

This Top Employer encourages a ‘healthy living’ culture in their UK offices through various health and well-being interventions. For example, it has established ‘walking meetings’ as a popular way for teams to step outside the office, to get creative ideas flowing and to enjoy exercise at the same time. The company also offers fresh fruit to all staff and it has recently launched a social club owned by volunteer employees who are responsible for creating and organising various health-related activities such as yoga, Zumba, running and more.

We are pleased to see that Top Employers are coming up with increasingly imaginative ways to keep their employees happy, healthy and productive. This is positive for the general workforce.

Anecdotal feedback suggests the changes have resulted in a better work culture and has broken down some organisational barriers and made communication easier between team members.

Being aware of global trends is important, but ultimately the execution of these initiatives happens at local level. A healthy balance between global approaches and local customisation is key. At the same time, Top Employers will want to benchmark output to be able to track the impact of these initiatives on aspects such as employer branding, employee engagement and ultimately business performance. £

Top Employer in the Business Services Industry (Europe, 200 employees)

Yet, as much as we are pleased with the best practices we have covered, we also recognise that work-life balance initiatives are not a ‘one-size-fits-all’ approach. What works well in one industry or country may not work at all in a different context.

This Top Employer goes a step further than ‘flexible working’ and encourages its employees to manage their time and workload in any way they deem suitable. This means that if an employee finishes their work by 3pm, they are free to go home. Each team member must still deliver their KPIs regardless of how much time they spend in the office. HR Best Practices 2018 | © Top Employers Institute | 26

WORKFORCE PLANNING AND ORGANISATIONAL REDESIGN Industry: Various Countries: Global; France Timing of Implementation: 2017-2020 Top Employers take innovative, proactive approaches to planning their future workforce needs – keeping employees well informed so that they are ready to adapt.

Top Employer in the technology industry (Global, 200,000+ employees) This Top Employer is going through a major change in its industry. In an effort to prepare for its future workforce needs, it conducts a gap analysis every quarter to analyse the supply and demand of critical skills needed within its industry. To conduct this exercise, the company uses a variety of inputs including its own Big Data (employee self-assessments) as well as industry trends and business modelling forecasts. To date, the employer has mapped out an inventory of 2500 skills that currently exist within its organisation worldwide. These include 338 skills that have been classified as ‘niche’, meaning they are in demanded in the current labour market, as well as 25 ‘skills of the future’. So far, an impressive 97.5% of employees have updated their skills data in the system, giving the Top Employer a rich resource and employee understanding. The company has developed training programmes to match the skills gaps. Out of the total of 338 skills identified as ‘niche’, 50% of these now have dedicated training programmes to help upskill employees that have the potential to gain those specific skills. In addition to this, the company is also deve-

loping actions to retain those employees who have are talented in these skills. This is an excellent example of connecting the dots between different HR disciplines (recruitment, training and development) to shape the moulding of valued employees..

Top Employer in the Food Production Industry (Global, 20,000 employees) As this Top Employer is currently going through a period of huge transformation, it has decided to implement a freeze on external hiring. Whenever an existing role becomes vacant, HR requests that the line manager justifies why the role needs replacing, to assess the business impact if the position does go unfilled. If a position urgently needs to be filled, the company then looks to hire internally. While the hiring freeze might feel like stunted growth’ for now, the company is working in parallel on a positive output which focuses on the competencies/role types it needs for its workforce in the future. Related to that, it is offering information and training to its current employees so that they can prepare to step into these roles. w HR Best Practices 2018 | © Top Employers Institute | 27

The employer measures the results of this approach in several ways. Firstly, it measured a large rise in internal mobility as the number of employees making internal career moves has tripled over the past year. Secondly, some employees whose positions were at risk in the interim, have already been moved into new roles that fit future needs. As training for the new position is paid for by the relevant department, this shows that the organisation is taking more risks on moving people outside of their comfort zones. The third effect has been a redesign of the organisation. Some tasks have been externalised, redirecting the role of employees to focus each person on their core activities at a higher responsibility and value-added level.

Top Employer in the Media Industry (Europe, 4000 employees) Operating in a rapidly evolving sector of the media industry, this Top Employer has gone through several reorganisations over recent years with more changes in sight. As a part of planning its future workforce needs, the employer has negotiated an agreement with its trade-union partners to make its future workforce needs fully transparent for employees, including the expected impacts on jobs and competencies.

France - the employer has kicked off a communications campaign to advise its employees about the jobs and skill profiles that will either decrease or increase in demand. For those job profiles that will not be in current high demand, the employer aims to connect people with potential opportunities to retrain or move them to other departments on a voluntary basis. It also runs internal events where employees can find out about the ‘field of opportunities’, with a focus on future competencies, future career paths as well as employability, including opportunities that may be available in the external labour market. The reorganisation will be a multi-year transformation. So far, 150 employees in “low-demand jobs” have met individually with HR, of which 15 have already been repositioned voluntarily. Others have been warned that their current jobs will be in danger if they stay in those roles. While this is a tough message to share, the proactive approach will hopefully minimise the impact of these changes in the workforce and allow their people to ‘own’ the change rather than be ‘prisoners’ of it. This is a good example of proactive workforce planning which puts people at the heart of the transformation. Subject to local labour laws, this is a best practice that could be applied in many countries for companies going through internal reorganisations. w

The agreement means each employee’s professional evolution is placed at the heart of the upcoming changes and the employer offers supporting tools to accompany each person’s career implications (inside or outside the company). Starting at the HQ - and then rolled out to different regional hubs in

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Our Conclusions Top Employers understand that with all of changes happening in the world around us, businesses will have major recruitment, training and development challenges in the upcoming years.

We like this best practice from the technology company because the employer is leveraging its own people data as an ingredient in shaping the HR inventions that arise from the skills-gap analysis. This kind of data-driven approach is particularly well suited to a technology firm, but could just as easily be replicated by employers in other industries. It is important that the employee data used for such an exercise is reliable, to make sure the root causes of the skills gaps are properly addressed. For companies planning reorganisations, we consider the example above to be an interesting template for the future. We believe that transparency is the key ingredient and the sharing of information in a timely fashion will make employees aware of the changes coming their way. Trusted cooperation with trade unions, strong communication and a true commitment to transparency at executive level are key factors in making such an approach successful. £

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COMPENSATION AND BENEFITS Industry: Various Timing of Implementation: 2016-2018

For Top Employers, compensation policies are becoming more formalised, and the principles that underline them are being made more transparent to meet the changing expectations and needs of employees, who often want to be rewarded in different ways than they were in the past.

Top Employer in the Technology Industry (Europe, 300 employees) For more than 15 years, this Top Employer has operated a flexible approach to benefits management but this flexibility was limited and not supported by online tools. The purpose of the company’s new approach (which was introduced in 2016-2017) was to offer more flexibility for employees to adapt and optimise their benefits package to their own needs, while at the same time, cutting down on the administrative burden for HR by providing a self-service solution for employees. To support this aim, the firm implemented a Cloud Solution provided by KPMG and customised the tool to its specific needs. Here, employees can use their “budget”, or additional compensation by making financial decisions like downgrading their car or selling unused holiday days or using ‘flex points’ (part of their compensation package that, if not used, can be paid back as a normal bonus). They can also spend their “budget” and purchase holidays, buy extra-legal child allowance, order a car (using total cost of mobility instead of leasing price), order a bike or scooter and more. They

can also use their ‘flex points’ to pay motorway tolls and fuel during holidays abroad, enrol in education programmes or pay for IT and car repairs. This online tool generates and archives all the contractual documents and insurance for fiscal compliance purposes, and this data is fed into the payroll system. As a result of this online tool, employees appear to value the flexibility offered, even if the tool is not used by more than 30% of the employees (except for some specific benefits like child allowance and motorway toll payment via ‘flex’ points). This flexible approach also seems to be very attractive to job candidates. In 2017, the firm managed to get its full headcount on board before June and it believes the flexible benefits offer had a real impact, even if the firm cannot measure that specific impact. There is no precise constraint/limitation to this practice as the cost of implementation is not high. Companies considering this kind of approach will, however, need to ensure compliance with local tax and labour laws, which requires collaboration with tax experts and lawyers during the implementation phase. w

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Top Employer in the Energy Industry (Europe, 38,000 employees)

Top Employer in the Automotive Industry (Europe, 300 employees)

This energy engineering company has introduced a new way for employees to understand how their compensation package is calculated.

This Top Employer found out via its employee feedback channels that many staff would prefer to receive their annual salaries in 12 equal monthly payments, rather than getting a “13th cheque” in June and December.

In the past, the company found that its people managers lacked the technical knowledge to be able to properly explain the different compensation elements to their team members. So, this responsibility was transferred to the Compensation and Benefits team. Now, employees can call a telephone line if they have any questions about their salary package or regarding their updated salaries after their annual compensation review. Naturally, managers still play an important role in the compensation calculations via their input into the performance management/ potential discussions; however, managers appreciate the fact that they no longer have the “weight on their shoulders” of having to explain the rewards package to their team members. Since the new approach was introduced, confidence in the entire compensation process appears to be higher, as their employees feel confident that their salaries are being managed fairly and consistently by the experts within the company.

Workers reported that it would be easier to pay monthly bills by having a fixed salary payment each month. As a result of this feedback, the company offered all its team members the option to move to a 12-month salary structure or to keep the existing arrangement. The employer has not measured the impact of this change, but anecdotal feedback suggests the workers are very satisfied with the possibility to choose how they prefer to have their salary paid. This is a best practice that can work in many European countries where the “13th cheque” remains prominent. However, changing lifestyles especially among younger workers, mean that the concept of an extra payment in June and December is often seen as outdated. The only barrier to companies considering this change is the additional administrative costs that may be incurred, as well as the need to ensure compliance with local tax and labour laws. w

According to the firm’s employee engagement survey results, scores have risen by 5% regarding where employees are asked to rate how fairly their salary is calculated. This appears to be a good practice for companies willing to make the additional resourcing investment needed to beef up their Compensation and Benefits teams.

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Top Employer in the Consumer Goods Industry (Europe, 600 employees) This UK-based Top Employer offers its employees the ability to buy benefits across a range of different categories using their salary and get a tax benefit. Buying these benefits using salary sacrifice is a simple way for employees to make tax and/or National Insurance savings. Employees can select the flexible benefits they would like to pay for out of their salary – resulting in an increase in their take-home salary amount. The tax-deductible benefits offered to the employees are cover a wide range of options. Travel insurance, critical illness cover, will writing and home emergency cover are among the options. Employees can choose health options including health screening, dental insurance and gym membership, or they can purchase childcare vouchers, restaurant vouchers or even wine.

Our Conclusions For too long, Compensation and Benefit has been the “black box” of HR; using complicated methodologies managers and employees barely understand therefore making it extremely difficult for HR to explain to stakeholders. With the demand for transparency in the current workplace, as well as changing needs and preferences (especially among younger generations), Top Employers are starting to evolve their compensation models. As a result, we are seeing the link between performance and reward become more distinct and we are seeing more differentiation between top performers and low performers, as well as better communication of how salaries and bonuses are calculated. £

The benefits programme has been established for a few years, and results have been encouraging. A key success factor is that the benefits cover many areas of interest, so there is something for everyone. In addition to this, the tax savings for employees can be significant. Under UK tax law, if you are a basic rate taxpayer you can save tax at a rate of 20% on salary sacrificed for some of these benefits. The potential savings for top-rate taxpayers are even higher. For Top Employees considering setting up a similar programme, the only constraints will be local tax laws, which may differ in terms of which taxable benefits can be paid for out of your salary, as well as the (administrative) costs involved in setting up and maintaining such a programme.

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PERFORMANCE MANAGEMENT Industry: Technology Timing of Implementation: 2014-2018

Like many of the HR practices put in place before the digital transformation, the traditional performance evaluation may feel outdated. The current trend is to make the whole process feel ‘lighter’ to focus on continuous feedback throughout the year.

Top Employer in the Technology Industry (Global, 90,000 employees) In 2014 and 2015, this Top Employer carried out an audit of its performance management practice based on internal research and external benchmarking. The company found that its formal performance management process was taking up 210,000 hours of company time on ‘non-value-added’ administrative activities. Meanwhile, engagement survey scores regarding performance management were poor and the user satisfaction survey around the performance management process showed a negative result at -27 NPS. Added to that, the supporting tools did not appear to be user friendly: in 2015, only 25% of interim reviews and 10% of development plans were being documented in the system, meaning that a change was clearly needed. Qualitatively, the employer found that its managers and employees (around 40% of whom are millennials) wanted to move away from annual performance reviews and instead have more regular, informal discussions. Driving the practice of ongoing performance feedback all year around, ‘real conversations in real time’ would be key to a successful performance process.

To revolutionise its performance management process, the company developed a practice of ‘continuous performance management’, shifting its culture towards ongoing performance feedback all year around – “real conversations in real time.” This means dialogues where managers and employees do not have to wait for annual cycles to have these critical discussions. The company believes quality conversations all year around are key to building understanding, alignment and trust. To make the culture shift happen, the Top Employer introduced a set of tangible behaviours that describe ‘how the company gets things done,’ which gives managers and teams guidance for making decisions and driving top quality work. In a bold move, the firm eliminated its annual and mid-year performance review cycle, replacing it with a recommendation for “continuous dialogue” between managers and team members. These dialogues can be weekly, biweekly, monthly and at a minimum quarterly, and focused on professional development, goals, performance feedback and work environment. w

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While goal setting still happens, this has also become a continuous process rather than an annual event. Employees are asked to review and refresh their goals on a regular basis. Eliminating the formal performance reviews meant that the Top Employer needed new criteria to replace performance ratings and bands, to make the link between performance and compensation, as well as training and development. With this in mind, the company introduced a system where management teams identify and nominate top talent once per year (between April and July), supported by an online tool and management team discussions. HR partners facilitate this process, playing a coaching role to make sure the discussions are fair and objective. These roundtable discussions focus on development opportunities for standout employees, as well as for those colleagues selected for succession plans. Standout employees are deemed to be those who demonstrate high performance, solve problems and are ready to assume more responsibilities. Once identified, these top performers are invited into an exclusive, one-year development programme.

quarterly basis to help identify trends and potential improvements. Given the scale of the programme and the recent deployment, the project is too new to be able to judge the impact. Nevertheless, the company believes the results are positive so far, and it intends to use this flexible process as a part of its employer branding activities. In terms of lessons learned, the company believes communication is crucial. It recommends starting communication and change management well in advance (at least six months before going live) and striving for ‘organic change’, avoiding theoretical information and preferring real-life testimonials and examples of the benefits of the new approach. Even if leaders are already well prepared for this type of dialogue with their employees, the employer also recommends giving local HR teams the option of retraining leaders from scratch, such as providing workshops to better understand the expectations of the employees coming out of the quarterly survey. w

To improve the supporting tooling for a continuous performance management practice, the Top Employer revamped its information systems. It created a custom-built mobile app that allows managers and employees to summarise the outcomes of their continuous dialogues focusing on three dimensions: Goals, Development and Working Conditions. The same solution is available on the company’s HR portal with enhanced features and options. The new approach was piloted globally in 2016 and was fully deployed in 2017. To measure success, the Top Employer introduced a quarterly survey to assess the effectiveness of the culture it intends to drive as an opportunity for employees to provide anonymous and confidential feedback on their experiences. The survey also helps managers gauge the effectiveness of their dialogue skills. Everyone is invited to participate in the survey on a HR Best Practices 2018 | © Top Employers Institute | 34

Our Conclusion For Top Employers, the need to evolve performance management is extremely clear. We are happy to see Top Employers start to reduce the administrative burden, make their performance processes feel more flexible and communicate a positive message that “everyone has talent,” which serves to make the formal moments in the talent and performance cycle feel less intimidating for employees. We consider our Top Employer example above to be a best practice because the firm has thoroughly adapted its performance management practice based on clear data, considering internal as well as external dynamics. This type of transformation is technically possible in any large company, but the challenge is to retain the link between performance, talent management and compensation, which requires a certain degree of formalisation. The right solution, therefore, cannot be bought off the shelf. It is a long-term effort that requires customisation to the reality of each organisation, which cannot be done overnight. Given that performance management tends to be a globally standard process in large companies, the cost for implementation at local level is not large. It is mainly a question of time investment to train people on the new way of managing performance. Aside from the cost and time, the ultimate challenge is to build a culture of open communication between managers and their team members, which is a complex, longstanding transformation effort. £

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Meet the Top Employers HR Insights Lab Team: Benoit Montet, Eric Morello, Laia Canales, Laura de Mori, Chloé Gesret, Ammara Naeem Copyright : Top Employers Institute * Graphic design: Esther Vinke Editor: Fourth Printing * All rights reserved. No part of this publication may be reproduced, distributed, or transmitted in any form or by any means, including photocopying, recording, or other electronic or mechanical methods, without the prior written permission of the publisher, except in the case of brief quotations embodied in critical reviews and certain other non-commercial uses permitted by copyright law. For permission requests, write to the publisher, addressed “Attention: Permissions Coordinator,” at the address below.

Head Office address : Top Employers Institute Headquarters Mondriaan Tower, 17th floor | Amstelplein 36 │ 1096 BC Amsterdam | The Netherlands www.top-employers.com [email protected] Release: May 8th, 2018 Edition : 1st

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