remuneration as lever for cultural change conf presentation · page 15 remuneration as a lever for...
TRANSCRIPT
Remuneration as a lever for cultural change27–30 October 2013
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Presenter
► Christiano Moreno► Vale S/A► [email protected]► (55 21) 38146603
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Session overview
► Total Rewards Concept ► Differences between LATAM Employees and Global
Employees with respect of Total Rewards► Case Study: Vale S/A
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Who are we?
► Christiano Moreno► Vale:
► A global mining company headquartered in Brazil
► The global leader in iron ore and pellet production and the second largest nickel producer
► We also produce copper, metallurgical coal, fertilizers, manganese, ferroalloys, cobalt and platinum group metals
► We invest in logistics and energy
Vale
em
ploy
ees
in M
inas
Ger
ais
Ren
ato
Stoc
kler
das
Nev
esFi
lho
/ Agê
ncia
Vale
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2013Headquartered in Rio de Janeiro, we have operations, research laboratories, projects and offices on five continents.
A Multicultural Company headquartered in Rio de Janeiro, we have operations, research laboratories, projects and offices on five continents.
Where are we?
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Total Rewards concept
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An efficient Total Rewards Strategy optimizes all the elements of the model in order to reach the business goals as well as the employees goals
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Differences between LATAM employees and global employees with respect of Total Rewards
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Different perspective from global and Latam employees about attraction drivers ...
Attraction DriversGLOBAL Employee
View*
LATAMEmployee
View*
Base Salary 1 1
Job Security 2 4
Career Opportunities 3 2
Appropriate Work Environment 4 6
Learning & Development Opportunities 5 3
Challenging Work 6 7
Good Reputation as Employer 7 5
Mission, vision and values of the organization 12 10
Health & Welfare Benefits 9 8
Short Term Incentives 22 17
Source: Towers Watson 2012 Global Workforce Study, 2012 Global Talent Management and Rewards Study
* Ranking of reasons for an employee to feel attracted by an organization (from a list of 27 reasons)
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Retention DriversGLOBAL Employee
View*
LATAMEmployee
View*
Base Salary 1 1
Career Opportunities 2 2
Relationship with Leadership 3 9
Trust in Senior Leadership 4 8
Manage stress at Work 5 3
Job Security 6 12
Appropriate Work Environment 7 6
Learning & Development Opportunities 8 5
Challenging Work 9 10
Short Term Incentives 15 7
Long Term Incentives 12 4
And different perspective regarding retention drivers as well
Source: Towers Watson 2012 Global Workforce Study, 2012 Global Talent Management and Rewards Study
* Ranking of reasons for an employee to be retained by an organization (from a list of 27 reasons)
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Case study: Vale S/A
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v
New Business Environment for Mining Industry
Past & Present Future
2000 a 2010: Supercycle
Growth & Diversification
Less focus on Costs
2011 a 2021: Austerity
Capital Discipline & Strategic Focus
CEO Changes in Top Mining Companies
Reactions to new scenario starts to happen. However structural changes not yet identified in the compensation philosophy.
We are proposing adjustments in our compensation & performance management systems
Adjustments in our job grading system
Adjustments in our compensation & performance management systems
More focus in meritocracy and change management
Business background
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Work levels (“L”) creation and drivers forchange
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Vale is a company in constant evolution. Because of this, we arebecoming a simpler organization, more decentralized, with greaterautonomy for our businesses. A project was created to support thisevolution - Project DNA.
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The Change Management strategy for DNA was designed based on the following assumptions
►Change Management1 5
2 6
3 7
Avoid mass communicationYou should prioritize direct communication undertaken by manager
CEOs are the sponsors of changeFor cultural change, and organizational structure, the most senior leaders of the organization are the most effective messengers
Active participation of sponsors and other leaders of the organization
4 8 The ownership of the culture belongs to managers
“What’s in it for me?”Change management acts on the individual
Ensure proper understanding and share within in your area
Do not judge "values " - map and treat reactions
Transparency in communicationWe should treat sensitive matters with care, respecting the values and reactions of each individual
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GlobalDirector
Depart.Director
General Manager
Manager
Manager
Director
Impacts: Job Grades andManagement Levels
Mix of remuneration is set so that it is
perceived as promotion and
career development, to
occupy a position of greater complexity, without necessarily having to change
management level.
To
L5 A1
L3C2
L3C1
L4B2
L4B1
L5A2
1V
2V
3V
4V
5V
6V
8V
7V
L2D1
L2D0
9V
L5 A1
12V
L2D2
From
10V
11V
13V14V
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Key take aways
► Remuneration in one of the main tools to leverage Culture but...► Never underestimate the efforts needed in change
management
► It takes time ...
► It is perceived in distinct perspectives depending on where you are
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Questions