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Employee Engagement and Wellbeing Coca-Cola HBC Issue Brief #9 November 2017

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Employee Engagement and Wellbeing

Coca-Cola HBC Issue Brief #9November 2017

1Employee Engagement and Wellbeing

Employee Engagement and WellbeingFocusing on the total employee experience

thrEE arEas oF EngagEmEnt

Attachment to the company and willingness to give discretionary effort.

A local work environment that supports productivity and performance.

Individual, physical, interpersonal and emotional well-being at work.

Engaged

Enabled

Energized

Employees are really motivated and willing to invest discretionary effort in helping the organization succeed, going above and beyond.

Employees tell with pride, that they work for their company and recommend the company as a good place to work.

Employees have rational understanding of organization’s strategic goals and values and share these beliefs.

ThinkRational Engagement

FeelEmotional Engagement

ActMotivational Engagement

PACKAGING

TWIST bottles are

22% lighter than previous containers

Fully recyclable PLANTBottles® contain

plant-based material - available in 10 of our markets

30%

#1

WATER USAGEreduced by

In the past 2 years

~~

In the past 6 years

CARBON FOOTPRINTreduced by

billion litres

glass of water

foreveryone on Earth

In 2016

spent on

COMMUNITIES to support wellbeing, environmental and water stewardship, youth development

¤7.3 million

1.15215,000

annual emissions of over

passenger cars

1.74

1

RECYCLING

26%

increase in the use of recycled PET versus 2010.

milliontonnes

Ranked #1 by Dow Jones Sustainability Indices (DSJI)We are the first company to achieve four consecutive wins in the world’s most prestigious business sustainability rankings and now we also lead the Food, Beverage & Tobacco Industry Group as a whole.

In 2017 we were one among only 25 companies from all industries to be recognized as a global leader in corporate sustainability areas for climate and water by the Carbon Disclosure Project (CDP).

For more information please visit our website:

Our 2020 commitments highlight

our determination to grow our

business responsibly, profitably

and sustainably. They are part of

our long-term strategy that has

enabled us to become leaders in

sustainability among beverage

companies.

SUPER SECTOR LEADER IN DOW JONES SUSTAINABILITY INDICES FOR THE FIRST TIME & BEVERAGE INDUSTRY LEADER FOR THE FOURTH CONSECUTIVE YEAR IN 2017

*Water consumption and direct carbon emissions per litre of beverage produced, versus 2010

We will recover for

recycling an average

of 40% of the total

packaging we introduce

to our markets

We will invest 2% of our

annual pre-tax profit in

communities and double the

number of employees taking

part in volunteering initiatives

during work time to 10% of

our people

We will take 40%

of the total energy

we use from

renewable and clean

energy sources

We will source 20% of the total

PET we use from

recycled PET and/or

PET from renewable

material

We will reduce

primary packaging

by 25% per litre

of beverage produced

We will certify over

95%

of our key agricultural

ingredients against the

Coca-Cola system’s

Sustainable Agriculture

Guiding Principles

We will reduce

direct carbon

emissions intensity

by 50%*

We will reduce

water use

intensity

by 30%*

We will reduce

carbon emissions

intensity in the

value chain by

25%

We will certify all of our

plants in European

Water Stewardship or

Alliance for Water

Stewardship standard.

THE ISSUE

The success of any business depends on its ability

to attract and retain talented, healthy, happy and

engaged people, working in an inclusive environment.

Improvement in well-being results in better

workplace performance, including enhanced financial

performance, labour productivity and output quality.

WHAT ENGAGEMENT AND WELLBEING MEAN AT CCHBC

At the core of achieving our business strategy is the

engagement of our employees. We recognise, though,

that engagement alone is not enough. We need

our people to be sustainably engaged. This is why

CCHBC is committed to continuing its focus on the

model of sustainable engagement developed by our

independent partners, Willis Towers Watson (WTW),

as below.

Employees can sustain their engagement if they encounter an enabling and socially supportive work environment (energized).

What makes Engagement sustainable?

Our 2020 commitments highlight

our determination to grow our

business responsibly, profitably

and sustainably. They are part of

our long-term strategy that has

enabled us to become leaders in

sustainability among beverage

companies.

Our

2 3Employee Engagement and Wellbeing Employee Engagement and Wellbeing

We’re inviting our people to Be Balanced and

introduce new habits and routines into their lives so

they can overcome any obstacle.

Social well-being is about being together

with family and friends, feeling connected to your

colleagues and giving back to the community.

Emotional well-being is about feeling happy and relaxed, being equipped to deal with anything life

throws your way.

Financial well-being is about security for

the future and making sure that each of us is prepared for what lies

ahead.

Physical:

Be BalancedSocial:

Be TogetherEmotional:

Be HappyFinancial:

Be Prosperous

We’re inviting our people to Be Balanced and

introduce new habits and routines into their lives so

they can overcome any obstacle.

We want to Be Together as one Hellenic family and develop a greater understanding of the

people and communities with whom we work.

We want everyone to Be Happy and approach

all situations with an optimistic attitude.

We want everyone to Be Prosperous and achieve their goals

within life.

OUR APPROACH AND PROGRESS SO FAR

For the past four years, we have conducted a

comprehensive annual survey of our employees,

working with WTW. By listening to their views on a

range of aspects of their jobs and our company, we

have improved our engagement levels, year on year,

for the past four consecutive years. In 2016, we

exceeded the High Performing Norm (those companies

with high engagement scores and positive financial

results for three consecutive years) by two percentage

points and we led the Coke System in employee

engagement as well as significantly exceeded the

industry and FTSE100 norms.

To guide our business units and functions, each year,

we set strategic priorities that target focus areas

identified by our survey. Aligned with those strategic

priorities and targeting areas for improvement in each

group, action plans are developed at business unit,

country and functional level. As well as geography and

function, these plans are segmented by key employee

groups, including key people, Management Trainees

and our Field Sales staff to ensure we meet the different

needs of our employees.

Our Sustainable Engagement Index score increased

to 88% in 2016 from 87% in the prior year, with the

participation of 96% of our people. At the same time,

our score was:

• 7 percentage points above the FTSE 100 Index,

• 7 percentage points above the Fast Moving

Consumer Goods industry norm,

• 4 percentage points above the Coke System Index

and

• 3 percentage points above the Coke bottlers’ Index.

THE ROLE OF EMPLOYEE WELLBEING

CCHBC’s strategy is to create a culture of wellbeing that

exemplifies our Values, and enhances engagement and

productivity, and our reputation. At CCHBC, wellbeing

is about feeling good and living safely and healthily, and

our commitment is to have 100% of our employees

have access to a health and wellbeing programme.

Our programs come under our ‘Be Well’ umbrella.

The purpose of Be Well is to raise awareness and give

a consistent strong identity to what we are doing within

this important framework.

In 2016, we continued to build on our Employee

Wellbeing Framework – adopted in 2014 – which

focuses on four main elements of wellbeing: Physical,

Emotional, Financial and Social (below).

GROUP-LEvEL INITIATIvES

As well as a host of country-level initiatives, we have

taken action at a Group level to enhance wellbeing

across CCHBC. In 2016, we created a Wellbeing toolkit

for countries. The toolkit shares our holistic Wellbeing

strategy and framework and provides support for

creating and communicating employee well-being

programmes.

thE EnErgy ProjEct

In June 2017, we launched a pilot in Region 1 (Austria,

Czech and Slovakia, Hungary, Italy and Switzerland

Business Units) to help leaders understand the

behaviours that affect their, and their team’s, energy.

The aim was for leaders to value their energy and to

role model behaviours for their teams that helped their

team members stay energized.

We partnered with The Energy Project to share simple

but effective strategies to renew and improve energy

levels. The working session in June highlighted the

importance of ‘micro experiments’ to help test ways

that teams can become more energized, positive

and focused. To build on the workshop, the Regional

leadership team and each country’s leadership

team started to define their personal and team

commitments throughout July and August. Monthly

follow-up calls with the leadership teams ensure

continued focus on those commitments and a one-day

Energy Renewal session is planned for Q4 2017.

The energy initiative covered more than one pillar of

our wellbeing framework. Group and country-level

Initiatives focused on specific pillars are outlined below.

Emotional WEllbEing

Stress management: research suggests managers

have a critical role to play in managing work-related

stress. We, therefore, developed a guide to help

managers recognize, prevent and manage stress in

themselves and their teams. To support roll out and

use of the guide, training is being provided to HRBPs

in a ‘train the trainer’ approach on helping managers

manage stress.

Our Global Employee Recognition Platform will be

relaunched with the intention to address our retention

strategy for individuals and teams by recognizing

behaviours that reinforce our values, driving results

through a high-performance mindset, which is an

integral part of CCHBC’s DNA, and supporting growth

through entrepreneurship and innovation.

social WEllbEing

To maximize the impact of Family Days on engagement,

we created a toolkit with a common CCHBC visual

identity, messaging and the theme of charitable

contributions to our communities. In addition, we

developed a CCHBC intranet platform to share the

Family Days across our countries.

To reinforce the social wellbeing of our employees,

CCHBC provides dependents’ support through an

umbrella approach for dependent care benefits

targeting child and elderly care for all countries that

thE coca-cola hbc WEll-bEing FramEWork

4 Employee Engagement and Wellbeing

includes three strategic pillars, each with a number of

initiatives: time off for child or other dependent care,

subsidies for school supplies or after-school activities,

or nursing care. Countries provide one or more benefits

under the pillars that best fit their local employees’

needs and cultural differences.

Physical WEllbEing

To drive focus on health and preventative care, we

have also established an umbrella approach for health

care benefits for all countries covering three strategic

pillars, each with a number of initiatives: private medical

insurance and health checks, targeted health programs

and paid sick leave. Options include free or subsidized

private medical insurance, health checks, vaccinations,

or on-site doctor visits. As with dependent care,

countries provide one or more benefits under the pillars

that best fit their local employees’ needs and cultural

differences.

COUNTRY-LEvEL INITIATIvES

Our countries have undertaken a wide range of

initiatives around wellbeing. Regarding physical

wellbeing, these include employee medical and health

insurance benefits; vaccination programmes, cancer

screening and other preventative health measures;

on-site sports and gym facilities, as well as subsidized

gym memberships, and nutrition information. To

help employees financially, as well as benefits such

as pensions and savings scheme and life insurance,

measures have included financial planning and literacy

and a variety of partner discount programmes.

Countries have also covered emotional wellbeing

through onsite counselling, relaxation techniques,

and energy balance programs; and social wellbeing

with Family Days, Christmas events, employee bonding

days and team building events.

My daughter is getting transformed into a butterfly at the face painting for kids. It is Family Day in the production plant Edelstal and, as each year, we are part of it. Weeks before, my children get super excited and look forward to this special day. My husband loves to join us as well and so it became a mandatory date for all of us. It is a lovely sunny day with plenty activities. One of the highlights is the plant tour, which perfectly shows the changes of Edelstal into a mega plant. Especially the automated warehouse with the laser guided vehicles is outstanding and emphasizes the innovativeness of our production plant… It is nice to get to know my colleague’s families. We have good conversations and a great time.

Julie Wernie, Commercial Trainee, Austria

humanWe work continually to develop the competencies, capabilities and talent of our people, a critically important asset.

naturalWater, energy and other natural resources are important inputs to our value creation processes, and we seek to use them efficiently.

social and relationshipSocial and relationship capital includes our reputation and our ability to earn and maintain the trust of key stakeholders.

FinancialWe seek to use all funds efficiently, whether obtained through financing or generated from operations or investments.

intellectualOur knowledge-based assets include our brands and brands we license, as well as proprietary technology, standards, licences and processes.

manufacturedWe carefully manage our stock of manufactured capital, including equipment and buildings, held to produce and distribute our products.

Serving customers effectivelyWe manage customer relationships as well as promotions and displays at the point of sale. Our customers rely on us to have a full range of quality products on the shelves every day, so that they can satisfy consumers’ refreshment needs. In order to give our customers the best possible service, we segment each market and serve each customer based on size and need, taking into account prevalent market conditions.

serving consumers and communitiesWe offer a range of beverages to satisfy evolving consumer preferences. By providing products that meet consumer needs and operating a responsible, sustainable business, we create value for the communities where we operate.

Working with partnersOur partnership with The Coca-Cola Company gives us exclusive rights to manufacture, sell and distribute their branded products in our territory. They also produce and supply our Company with the concentrate, or syrup, that is the main ingredient for our beverages.

Working with suppliersWe rely on our supply chain for many types of inputs to our business, including equipment and machinery and consultancy services and soft-ware. Partnering with responsible, dependable, efficient suppliers allows our Company to focus on what we do best – producing and distributing beverages that bring smiles to consumers.

Producing cost‑efficientlyUsing concentrate from The Coca-Cola Company, and other ingredients, we produce, package and distribute products. We produce nearly all of the products we sell at our production facilities that also have distribution centres and warehouses. Utilising these facilities wisely helps us produce products responsibly and is key to our profitability.

capitals engaged Value added by Value created

EmployeesDeveloping, recognising and rewarding our people secures a skilled and motivated workforce.

customersOur efforts to produce products efficiently and responsibly build value for our customers’ businesses.

shareholdersThrough the process of managing all inputs to our business well, we create profits which benefit shareholders through dividend payments and share value.

suppliersAs we create value, we support businesses throughout our value chain, and support job creation beyond our business.

communitiesWhen our business is profitable, sustainable and responsible, the communities where we operate benefit through job creation, tax payments to governments, useful products and services, and minimisation of environmental impact. We also have a commitment to invest 2% of our pre-tax profits in programmes to support communities in our territory.

By running a profitable, sustainable, responsible business, we create value which is subsequently both retained by our business, making it stronger, and shared with all of our stakeholders.

Direct employment

31,083Met or exceeded customers’ expectations

94.8%Net profit

€344m

Supplier spend

€3,138m

Total taxes

€281m

our business model is at the heart of everything we do. it supports our growth and defines the activities we engage in, the relationships we depend on and the outputs and outcomes we aim to achieve in order to create value for all of our stakeholders in the short, medium and long term. Leveraging

our growth model

Createdemand

Grow thetop-line

Investin the

business

Expandmargins

marketing

in-market execution

cost efficiencies

Use of cash

Price and mix improvements

Leverage top-line growth

Brand investment – The Coca-Cola Company

Growth in category volume

Investment in production optimisation

Working capital management

In-store activation – Coca-Cola HBC

Share gains

Operatingexpense reduction

Disciplined CapExinvestment

EnhancedEBITDA growth

BUSINESS MODEL

Find all of our locations:www.coca-colahellenic.com/ interactivemap

Our broad geographic footprintWe operate across 28 countries and three continents. Our territories extend from as far west as the Dingle Peninsular in County Kerry, Ireland, to Petropavlovsk, the easternmost point of Russia, and from the Arctic Circle to the tropics of Nigeria. This breadth provides attractive growth opportunities and reduces our dependence on any particular market.

28 countries 136 brands 2,058 million unit cases €518 m EBIT 31,000 employees

3continents

56plants

264warehouses

and distributioncentres

595 millionconsumers

Established markets• Austria• Cyprus• Greece• Italy• Northern Ireland• Republic of Ireland• Switzerland

Developing markets• Croatia• Czech Republic• Estonia• Hungary• Latvia• Lithuania• Poland• Slovakia• Slovenia

Emerging markets• Armenia• Belarus• Bosnia & Herzegovina• Bulgaria• FYROM• Moldova• Montenegro• Nigeria• Romania• Russia• Serbia• Ukraine

OUR MISSIONWe seek to refresh our consumers,

partner with our customers, reward ourstakeholders and enrich the lives of the people

in our local communities.

OUR PUPOSEBring togetherness, spread happinessand inspire a better future motivatesour employees to make a meaningfulcontribution to business and society.

OUR VISIONTo become the undisputed leader

in every market in which we compete.

inFormation aboUt thE comPanyCoca-Cola HBC is ranked food, beverage and tobacco industries’ leader in the Dow Jones Sustainability World and Europe Indices. It is also included in the FTSE4Good Index and has a AAA rating on its ESG performance by MSCI. Coca-Cola HBC has a premium listing on the London Stock Exchange (LSE: CCH) and its shares are listed on the Athens Exchange (ATHEX: EEE).

PlEasE contact Us atPanagiotis vergis Group sustainability policy and reporting manager Coca-Cola HBC AG E: [email protected] T: +30 210 6183146