Performance appraisal and reward systems

Christine Kroner, PhD

Expertise Group Leader Vascular FunctionNutrition department

Unilever Food and Health Research InstituteVlaardingen, the Netherlands

Unilever Research & Development

“Discover”: Research CentresFoods: Vlaardingen (NL)HPC: Port Sunlight (UK)Corporate: Colworth (UK)

Mumbai/Bangalore (India)Shanghai (China)

“Design”:Global Technology Centres

“Deploy”:Regional Innovation Centres

Home & Personal Care - Unilever Foods - Corporate Research

Operating Framework: Interdependency of R&D and Marketing

World ofMarkets

Customers

Consumers

World ofScience

&Technology

R&D

MARKETING

INTERACTION

BENEFITS

NEw

BRANDS

Joint Defining Business Opportunities

Grow Unilever Business

Challenges within our organisation…

• Short product cycles

• More competitors on market

• Develop, improve & introduce new, consumer relevant healthy food products at an increasing pace- for globalconsumers

• Cope with failures celebrate successes and continue quickly (motivation boost!)

• Global science driven projects

For R&D this means…

Increasing pressure to boost business results by:• Long-term innovations in already existing product areas

• Exploring new benefit areas

• Initiating new businesses (internal and external)-Open innovations

Balance between high quality science, high speed of delivery, short term vs long term delivery

More work in shorter time underincreasing pressure, in a global environment

Key to success

Employees Manager,Team Leader,Supervisor

Excellent functioning R&D departments: driven, innovative, creative, successful, focussed & quick in delivery

Individuals

Role of research manager…

• Open, stable and interactive environment where knowledgeand information are readily available and people can grow.

- vision: (what is our aim/what do we need to achieve)- recognition- feedback- trust and comfort- continuous development and learning

• Go the extra mile!!

• Quality of research (methods, practices, reporting, documentation)

Reward & award is key for securing employers motivation.

Understanding the scientists

• Special conceptual frameworks, vocabularies, discipline culture which is different from e.g. support stuff

What do they need?• A work environment with fulfillment- A great place to work

• Reaching his full potential – Development & career options

• Inspiring environment: attract best people…the best peoplesecure continuous success, success attracts best people

What a scientist wants…

A great place…

Emotional Social…to interact

(solo vs team; own vocabular)

Intellectualto think…

(great brains)Physical…to do (excellent,

Safe workplace)Spiritual…to aspire

(culture, vibrant)Vitality

Think tanksForums

Away daysMT-Updates

SHEQ

Deliver…on time

in full(framwork)

Tools within Unilever …

Promote and reward positive behaviourReduce and neutralise negative behaviour

1. Performance appraisal

2. Reward systems

Make Unilever a great place to work

Attract best people, develop and keep them

GPS

PR

One common vision and mission

Common values

MIS

CoB principles

The Global People Survey

Understanding, belief, executionQuarterly tracking (former “Unilever Pulse” questions)

• Strategy, SIA, Must Win Battles• Operating Framework• Vitality• Pace of change• Keeping informed

Leadership, commitmentAnnual tracking(GPS questions)

• Confidence, trust• Direction, vision• Leading by example• Morale• Pride

Worldwide questionnaire,all Unilever employees, all worklevels

UNILEVER

Our mission is to add vitality to lifeWe meet everyday needs for nutrition, hygiene, and personal care with brands that help people feel good, look good and get more out of life

Performance Appraisal

Elements of a performance appraisal

• One common mission, vision and (long-term) strategy• Clear roles and responsibiltities

– Job profile, role description aligned with Worklevel

• Clarity on what is expected & measure it!– Strategy into action plan (linking to business targets) quarterly

update– Individual workplan (reviewed quarterly)

• Set achievable goals– Personal development plan (PDP reviewed quarterly)– Improvement, career development

• Performance against peers– Differentiation matrix

• Develop skills and competencies- Training on the job, secondments, external courses, R&D academy

Director ofLaboratory Chief S/T/E VP R&D

ResourcesVP R&D Programme

DeploymentDirector

Programme Director

Scientist/Technologist

SVP Research & Development

Principal S / T / E

Research S / T / E

S / T / E = Scientist / Technologist / Engineer

Project manager

Lead S / T / E

DepartmentDirector

Project leader

Senior S / T / E

WL5

WL4

WL3

WL2

WL1

Roles and responsibilities-Alchemist Tool-

Strategy Into Action - Individual Workplan 2007 Name : Jobtitle: Period covered if pro-rata: Department: Worklevel: Important: This work plan will be executed in the framework of the Unilever Code of Business principles and Foods Q&SHE policies and guidelines.

Objectives Activity KPI Timings Individual performance

against workplan

Sign for agreement Linemanager signature: Employee signature: Date: Date:

Reward systems

Unilevers’ reward policy

• To attract, motivate and retain high performingindividuals.

• It does this by reference to:– Pay for responsibility– Pay in line with market value– Pay for performance– Pay for potential (High potentials)– Pay for results

Basics of a reward system

• Open and transparent system with a peer review mechanism (DIF)

• Accepted by the R&D community (fit withculture)

• Fair (measurable)

• Warrants differentiation

Differentiation Matrix- a performance tool L ea dership Differentia tion Too l W L 4

C o n t in u o u sly R a isin g t h e b a r !

C o n siste n t ly Ex ce e d in g

Ex p e ct a t io n s

H O W

In co n sist e n t inm e e t in g

e x p e ct a t io n s

In co n sis t e n t in C o n sist e n t lym e e t in g W HA T e x ce e d in ga g r e e d in d iv id u a l a g r e e d in d iv id u a lb u sin e ss t a r g e t s b u sin e ss t a r g e t s

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& V

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Standards of leadershipCommon values

1. Global mindset2. Real accountability3. External orientation4. Action not debate5. Team alignment6. Build superior talent

HOW

WHAT

Framework of a reward system

Non-material Material

- Research price (yearly)- Publication price (yearly)- Patents (yearly)- Quarterly reward- Best grant (yearly)- Best project delivery (yearly)- Training/congresses

-Salary increases-Variable salary increase- Stock options- Variable Payments(business & own achievements)- Promotion- Career options

etc….

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