Performance Management at GE ……..Global and Local

Niamh Hegarty, Chief HR Officer

GE Money, Czech & Slovak Republics

22nd October 2007, Prague

Agenda

Brief overview of GE & GE MoneyGE Operating MechanismLeadership DevelopmentSession C – the annual people reviewEmployee Differentiation ProcessValues, Performance & PromotabilityQ&A

• 310,000+ employees worldwide

• Six main business units – Industrial, Infrastructure, Healthcare, Commercial Finance, NBC Universal & GE Money

• Operations in 100+ countries

GE …..Global Reach & Impact

GE Money• ~50,000 employees worldwide

• Truly global … 75% of revenue comes from outside U.S.

• Operations in 55 countries

GE Money Czech Republic & Slovakia

• Active in retail and SME banking, retail sales finance and auto leasing

• 3,700+ employees across both countries

• 2007 - celebrating 10 years in Czech Republic

The GE Operating Mechanism

GE operating systemAnnual integrated business and leadership processes

FebruaryJanuary May

JuneMarch

April AugustNovember

SeptemberJulyOctober December

Global leadership

meeting (GLM)

Corporate officersmeeting

Corporate executive council (CEC)

Opinion survey

Session D compliance

Session Corg/staffing/succession

SI strategy

Session C follow up

SII operating plan

C-II follow-up

CEC

Leadership meetings

Core business processes

CEC CEC

We are a company built on values, powered by a culture of

performing with integrity.

Values and Performance

Reward/promoteReward/promoteBest leadersBest leadersGreat GE futuresGreat GE futures

RemoveRemoveRemovals reinforceRemovals reinforceimportance of valuesimportance of valuesdimensiondimension

RestartRestartSecond opportunitySecond opportunityto deliver resultsto deliver results

RemoveRemoveEasy call removalsEasy call removals

Performance

Valu

es

How We Develop Leaders

Leadership Development

LeadershipTraining

Talent Assessment

Session C

EMS Process

Performance Management

Career Opportunity

System

Skill/CompetencyDevelopment

Ongoing Career Coaching,

Mentoring, and Development

Planning

e360

Leadership Development … The Building Blocks

Attract Develop Manage Retain

• Attract: Hire outstanding talent

• Develop: Provide opportunities for people to excel, to develop their skills, and to achieve their dreams

• Manage: Create and rigorously manage a performance-driven culture

• Retain: Keep employees with high performance and values

Session C

Everyday is a Session C … it’s not a one-time event, it’s

a continual process

CEO commitment

Jeff Immeltspends twenty full dayson people and successionplanning within athree-month period …every year

Key Development Process … Session C

Focuses both on the individual + the company

IndividualIndividual

–– FeedbackFeedback–– DevelopmentDevelopment–– CareerCareer

CompanyCompany

–– OrganizationOrganization–– LeadershipLeadership–– InitiativesInitiatives

Session CWhat

• Review organizations ... any plans to change• Feedback on performance, promotability, and development needs • Succession plans for key leadership positions• Key corporate initiatives

When1Q 4Q2Q 3Q

• CEO Visits

• LeadershipReviews/ Plans

• C Wrap Up

• CEC Debrief

• Bottom Up

• EMS Review

• Org. Reviews

• C-II Prior to S-II

• December Full BOD

• Follow UpVideoconferences

How• Company wide digitized process• Leaders committed to developing themselves and others

Employee and Session C

OngoingMonitoring

Review GoalsCoachingFeedback

Session C

Personal Development

Plans

Personal Development Plans

Goal Setting

–Performance Review–Development Needs–Career Discussion

Annual Review(EMS)

Salary PlanningIncentive Planning

Stock OptionsCareer Development Programs

Session-C Objectives> Establish a framework for a formal performance discussion

> Improve business performance – link and align individual objectives with business strategy

> Set clear expectations and stretch targets for performance

> Develop leadership and technical skills

> Identify strengths and development needs

> Highlight career/job interests

> Differentiate based on overall rating: top talent, highly valuedand less effective employees

> Reward based on contributions and skills

Session C Helps Create Our Culture

• There are multiple “formal” appraisals ... Session C, EMS, Salary Planning, Option Planning, etc. But there are “informal” appraisals ... every meeting and every interaction!

• The leader sets the tone … listening and feedback is the essence of building individual capability and the company culture.

EmployeeDifferentiation

Process - EDP

EDP – Basics

> Adopt consistent framework across GE

> Convey open and honest feedback to employees in a straightforward manner

> Maintain the GE principles of “differentiation” and “meritocracy”

Employee differentiation

• Differentiate between our top, highly valued and less effective employees• Overall rating based upon 3 factors … performance, values, unique skills

Values– Outstanding strength– Solid values– Development needed

Performance– Exceptional– Consistently meets expectations– Needs improvement

Unique skills– Yes– No

• Guidelines vs. fixed allocation … no forced ranking• Promotability separate assessment in 9 block• Overall rating is driver for compensation, bonus and options

Values

Actions and Values – How we work

imagineWe put imagination to work for ourcustomers, people, and communities

solveWe help solve some of the world’stoughest problems

buildWe are a performance culture that buildsmarkets, people, and shareholder value

leadWe are a meritocracy that leads throughlearning, inclusiveness, and change

Always with unyielding integrity

Actions Values

CURIOUSPASSIONATE

RESOURCEFULACCOUNTABLE

TEAMWORKCOMMITTED

OPENENERGIZING

Performance

Performance – Operational DefinitionWhat has been achieved and how

Observable results and behaviors over the past year

Exceptional: Consistently performing and contributing at a level that outpaces changing expectations.

Consistently Meets Expectations: Consistently performing and contributing at a level that keeps pace with changing expectations.

Needs Improvement: Not always able to perform and contribute at a level that keeps pace with changing expectations.

Promotability

Promotability – Operational DefinitionAn individual’s capacity based on performance, aptitude and demonstrated ability and interest to take on broader responsibilitiesDemonstrates attributes that could be applied to bigger rolesDemonstrates leadership capabilitiesCommunication and influence skillsPromotabiltiy can be constrained by a recent promotion or organization structural design

High: Continually expands personal capabilities and independently takes on greater responsibility. Medium: Continually expands personal capabilities and demonstrates willingness to take on greater responsibility. Limited: An individual who is performing as a professional/expert, likely to remain in position or move laterally within the same band with similar responsibilities/depth. Is positioned at the appropriate level to maximize effectiveness.

The System @ GE

EMS

Goal Setting

360°Feedback

The The Performance Performance Management Management

System System

Mid Year Session

C

Session C

EDP

Competency Model

Assessment

Summing it up ….

GE has a culture of meritocracy, based on Performance and Values, supported by core processes and tools of performance management ……and we use them!

Q & A