Nestle Hr Policies

The Nestlé Human Resources Policy

© October 2002, Nestec Ltd., Human Resources Department

Concept and design: Nestec Ltd., B-COM, Corporate Identity and Design, Vevey, Switzerland

Printed by Neidhart + Schön AG, Zurich, Switzerland

2 The Nestlé human Resources Policy4 A shared Responsibility5 Dealing with People6 Joining Nestlé8 Employment at Nestlé9 Work/Life Balance

10 Remuneration11 Professional Development14 Industrial Relations15 HR Organisation


Table of Contents

The NestléHuman Resources Policy

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This policy encompasses those guidelineswhich constitute a sound basis for efficientand effective HR Management in the NestléGroup around the world.

They are in essence flexible and dynamicand may require adjustment to a variety ofcircumstances. Therefore its implementationwill be inspired by sound judgement,compliance with local market laws andcommon sense, taking into account thespecific context. Its spirit should berespected under all circumstances.

As Nestlé is operating on a worldwide basis, it is essential that local legislation and practices be respected everywhere.Also to be considered is the degree of development of each market and itscapacity to advance in the management of their human resources.

Should any HR policy conflict with locallegislation, local legislation will prevail.

These policies are addressed to all thosewho have a responsibility in managingpeople as well as to HR professionals. The Nestlé Management and LeadershipPrinciples include the guidelines inspiring all the Nestlé employees in their action and in their dealings with others. TheCorporate Business Principles refer to all the basic principles which Nestlé endorsesand subscribes to on a worldwide basis.Both these documents are the pillars onwhich the present policy has been built.

P. Brabeck-LetmatheChief Executive Officer

Each employee has a distinct

responsibility in dealing

with people be it as a leader

of a team or as a peer.

HR managers and their staff are there to provide professional support in handlingpeople matters but should not substitutethemselves to the responsible manager.Their prime responsibility is to contributeactively to the quality of HR managementthroughout the organisation by proposingadequate policies, ensuring their consistentapplication and coherent implementationwith fairness.

Acting as business partners, the HR manager advises and offers solutions which results in positive impact on theorganisation’s effectiveness.

Furthermore, she/he proposes bestpractices and provides state-of-the-artsupport and counselling to her/hiscolleagues. Together they act as co-responsible partners for all HR matters.

This partnership is the key for

efficiency in people management.

The communication skills of the HR staffmust be appropriate to deal with all delicatematters as they occur frequently in humanrelations issues. They gain their credibilitynot only from their professional contributionbut also through the care and the excellenceof their communication skills.

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A shared Responsibility

The Nestlé Management and LeadershipPrinciples describe the management style and the corporate values of the Nestlé Group, specifically in the area ofinterpersonal relations. Their respect calls for specific attitudes which deserve to be outlined in the present policy:

_ A prerequisite for dealing with people isrespect and trust. There can be no room forintolerance, harassment or discrimination of any kind as they are the expression of anelementary lack of respect. This principlesuffers no exception and is to be applied atall levels and under all circumstances.

_ Transparency and honesty in dealing withpeople are a sine qua non for efficientcommunication. Based on facts and on asincere dialogue, such transparency is theonly solid basis for boosting continuousimprovement.

_ This is to be complemented by opencommunication with the purpose of sharingcompetencies and boosting creativity. It isparticularly relevant in a flat organisation toconvey systematically all information tothose who need it to do their work properly.Otherwise no effective delegation orknowledge improvement are possible.

_ To communicate is not only to inform. It is also to listen and to engage in dialogue.Every employee has the right to an openconversation with superiors or colleagues.

_ The willingness to cooperate and to helpothers is a required basis for assessingpotential candidates in view of a promotion.

_ In case of discord between an employeeand her/his superior or another employee,the possibility must be offered for a fairhearing. The HR staff will provide assistanceto ensure that the disharmony is dealt with impartially and that each party has theopportunity to explain her/his viewpointregardless of hierarchical position.

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Dealing with People

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The long-term success of the Companydepends on its capacity to attract, retainand develop employees able to ensure its growth on a continuing basis. This is a primary responsibility for all managers.

The Nestlé policy is to hire staff withpersonal attitudes and professional skillsenabling them to develop a long-termrelationship with the Company.

Therefore the potential

for professional development

is an essential standard

for recruitment.

Each new member joining Nestlé is tobecome a participant in developing asustainable quality culture which implies a commitment to the organisation, a sensefor continuous improvement and leaves noplace for complacency.

Therefore, and in view of the importance ofthese Nestlé values, special attention will bepaid to the matching between a candidate’svalues and the Company culture.

Hence, a clear communication of theseprinciples and values from the very beginningof the recruitment process is required.

Those who are not willing to adhere to the Corporate Business Principles and/or tothe Nestlé Management and LeadershipPrinciples cannot be part of the Company, as both these documents express the basicvalues and principles of the Organisation.

Moreover, for managerial positions specificleadership qualities and business acumenwill be required.

Nestlé wishes to maintain and develop its reputation as an employer of high repute.Contacts with universities, attendance atrecruitment events and other contacts are to be undertaken so as to ensure goodvisibility of the Company vis-à-vis relevantrecruitment sources. Particular care will be given to the treatment of eachcandidacy regardless of the outcome of the selection process.

Even when promoting employees intensivelyfrom within the organisation, it is the role of management and HR to keep an eye onvaluable candidates from outside and tobenchmark internal skills with external offers.

Joining Nestlé

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Whilst adequate recruitment tools mayimprove the hiring process, it is understoodthat the decision to hire a candidate remainsin the hands of the responsible managersupported by the HR staff. Under nocircumstances should the decision to hire or not to hire be left in the hands of anoutside consultant or expert.

As mentioned in the Nestlé Management and Leadership Principles, only relevant skills and experience and the adherence tothe above principles will be considered in employing a person. No consideration willbe given to a candidate’s origin, nationality,religion, race, gender or age.

It is as important to hire the right person as it is to integrate newcomers in theorganisation so that their skills andbehaviour can merge smoothly with thecompany culture. Whereas from newemployees it is expected to respect ourcompany’s culture, it is accordingly requiredfrom all employees to show an open mindtowards new ideas and proposals comingfrom outside.

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The Corporate Business Principles outline the Company’s commitment to fully endorseand to respect a series of principles andinternational conventions concerningemployee’s rights, the protection of childrenagainst child labour and other importantissues. These principles are to be respectedeverywhere and under all circumstances.The management will implement thenecessary processes to ensure that theseprinciples are enforced at all levels.

Employees who are not abiding with the Corporate Business Principles and the Nestlé Management and LeadershipPrinciples cannot be maintained inemployment and will be requested to leave the organisation.

Also our main suppliers and providers of outsourced services should be informedof the Corporate Business Principlesand should comply with those.

Nestlé provides a working environmentwhich protects the health and welfare of the employees according to the highestaffordable standards of safety, hygiene andsecurity. Each employee should not onlycare for her/his own safety but also that ofher/his colleagues. Therefore, suggestionsfor improvement are welcome and will be given prime consideration.

In the same way that no discrimination forreason of origin, nationality, religion, race,gender or age will be tolerated when joining Nestlé, no such discrimination willbe tolerated towards Nestlé’s employees.

Furthermore, any form of harassment, moralor sexual, will not only be prohibited butactively tracked and eliminated. Internalrules and regulations will explicitly deal withdiscrimination and harassment issues so as to obtain the best possible prevention.

Nestlé considers that it is not enough toavoid discrimination or harassment. It is essential to build a relationship basedon trust and respect of employees at alllevels. Therefore, it is indispensable for eachmanager to know how her/his employeesfeel in their work. In larger units it may be necessary to organise such feedback on a regular basis, using internal surveys or other valuable approaches.

Nestlé favours a policy of long-termemployment. Whenever, an operation/activity cannot be maintained within theNestlé sphere, reasonable steps will be undertaken to avoid overall loss ofemployment by identifying an externalbusiness willing to take over activity from Nestlé, whenever this is possible.

If this is not possible, a closing down maybe unavoidable. It will be handled in full respect of local legislation and of theCorporate Business Principles. A social planwill be elaborated taking into account thelegitimate interests of the concerned staff.Reasonable efforts will be deployed toreduce, as much as possible, the negativesocial impact of such a situation.

Employment at Nestlé

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Work/Life Balance

At Nestlé we believe that

the employee’s private

and professional life should

have a good balance.

Not only because it reinforces employee’ssatisfaction, loyalty and enhancesproductivity but also because it positivelyreflects on the Company’s reputation. It helps attracting and retaining people and reconciles economical imperatives withwell being.

Nestlé is willing to support employees whowish to take an active part in the life of thecommunity or by assuming responsibilitiesin professional, civic, cultural, religious orvoluntary organisations it being understoodthat any activity during working hours be first approved by the Company.

In the same spirit, Nestlé

encourages flexible working

conditions whenever possible and

encourages its employees

to have interests and motivations

outside work.


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Nestlé favours competitive, stimulating and fair remuneration structures offering an overall competitive and attractivecompensation package. Remunerationincludes salary, any variable part ofremuneration as well as social, pension and other benefits.

Each operating company will establish a compensation practice taking into accountrelevant external compensation levels aswell as the requirement of internal fairness.It is recommended to undertake regularsurveys so as to gather relevant informationon the remuneration levels practised at a local or national level.

Nestlé’s policy is to strive to position itselfas an employer offering remuneration levels above the average of the relevantbenchmark. Nestlé reviews regularly itscompetitive position with other companiesso as to keep in line with the market trends.However, the evolution of remuneration is inthe first instance determined by the capacity of the Company to improve its productivity.

Wage and salary structures should be keptsimple and avoid unnecessary complexity so as to provide effective compensation and reward.

Remuneration structures should specificallyfacilitate the implementation of flatorganisational structures and be flexible so as to be able to adapt to the evolution of the market conditions. This means broad spans allowing sufficient flexibility to effectively reward high professionalinsight and performances as well asindividual potential.

It is the responsibility of each manager topropose, within the framework of thecompany policy, the remuneration of her/hisemployees, taking into account the localmarket, individual performance, skills andpotential for development.

It is also the responsibility of each manager, if needed with the support of HR management, to communicateproperly, clearly and with sufficienttransparency, the individual remuneration of each staff member taking into accounther/his professional performance and her/his specific responsibilities.

The quality of communication in thesematters is an essential part of the dialoguethat each manager will have with her/hisemployees on remuneration matters.

Specifically at management level, thevariable part of the remuneration may besubstantial. This part will be linked to acombination of group, business andindividual or team target achievements. The higher the remuneration level, the moreimportant will become the variable part.

It should be realised that, howeverimportant remuneration is for eachemployee, it is not remuneration alone thatwill stimulate the motivation of the staff.

The HR management sees to it that theimplementation of the remuneration policyis fair throughout the organisation and that its spirit is duly reflected.

Remuneration

LearningLearning is part of the Company culture.Each employee, at all levels, is conscious ofthe need to upgrade continuously her/hisknowledge and skills.

The willingness to learn is therefore a non-negotiable condition to be employed by Nestlé.

First and foremost, training is done on-the-job. Guiding and coaching is part of the responsibility of each manager and it is crucial to make each one progress in her/his position.

When formal training programs areorganised they should be purpose orientedand designed to improve relevant skills andcompetencies. Therefore they are proposedin the framework of individual developmentprograms. As a consequence, attending a program should never be considered as a reward.

Adequate training programs

are developed at the level of each

operating company capitalising

on the availability of local, regional

or global resources of the Group.

It is the responsibility of HR staff to

assist the management in the

elaboration of training programs.

Great importance will be attached toprograms enhancing the language skills of the employees.

Training programs organised at theInternational Training Centre Rive-Reine aim at developing and sharing bestpractices of the various managementdisciplines practised in the Group. They also strive to strengthen corporate cohesion as well as to promote networkingthroughout the Group.

Training programs should, as much aspossible, be based on action learning and reduce ex-cathedra teaching to thestrict minimum.

It is necessary to make optimal use of e-learning programs as a complement to or a substitute for formal training programs.According to needs they should be madeavailable at shop floor level and enlarge the access to training.

It is the role of each manager to assessprogress achieved as a result of trainingprograms.

Assessing and DevelopingEach employee is in charge of her/his own professional development. However,the Company endeavours to offer theopportunity to progress for those having the determination and the potential todevelop their capabilities.

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Professional Development



Such opportunities should take into accountthe potential of each employee and bediscussed with transparency. They will bebased on defined possibilities, concentrateon the next career step and not on vaguepromises or remote hypotheses. TheCompany encourages its employees toexpress their objectives and expectations in an open dialogue.

The objective is to retain and motivateemployees by offering attractive but realisticcareer moves allowing them to develop their skills over a long-term period within the framework of economic realityand a changing environment.

Whereas succession plans forecast theCompany needs, they will be reconciled,inasmuch as possible, with individualdevelopment plans.

HR management provides the support forimplementing the necessary planning tools,having in mind the necessary flexibility to cope with unforeseen situations.However, it is understood that eachmanager is co-responsible for preparing the resources necessary to the developmentof the Company as this is also part of his accountability.

Regular counselling and guidance are the best tools for improving performance and for helping people develop their skills. It also allows to correct errors swiftlyand to transform them into a positivelearning experience. In an organisation with flat structures this supports betterdelegation. Direct personal contact shouldalways been given preference over writtencommunication whenever possible.

Each manager has the duty to act

as a mentor for his employees.

Formal assessment should take place on a regular basis, preferably once a year. Itspurpose is to provide feedback on pastperformance and future potential as well ason other relevant aspects concerning a staffmember’s work including the developmentof his skills and competencies. Both thepositive and negative aspects of individualperformance should be frankly addressed.Assessment of performance should bebased on facts rather than opinions. For managerial positions, assessment willbe based essentially on agreed objectivesand their level of achievement.

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Efficient performance managementemphasising the achievement of agreedobjectives is a prime responsibility for each manager. The necessary time shouldbe dedicated to the monitoring and thefollow-up of the progressive achievement of objectives during the year.

This feedback is meant to stimulateperformance and should take place throughan open dialogue based on mutual trust and willingness to progress. It is requestedto provide written evidence of suchmeetings. Focus should be essentially oncontinuous improvement, appropriatetraining measures but also on shaping astimulating working environment.

In case of serious underperformance, a termination of employment should beenvisaged. Such termination should be handled with due respect of the personand should include, where appropriate,separation terms that take into account the employee’s personal situation.

When assessing potential it should be kept in mind that the best indicator of talent is achievement. Therefore responsibilityshould be given as early as reasonable to allow people to prove themselves.Candidates for managerial positions shouldclearly have demonstrated their willingnessand ability to apply the Nestlé Managementand Leadership Principles.

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Promotions will exclusively

be based on competence, insight,

performance and potential with

the exclusion of any consideration

for origin, race, nationality, gender,

religion or age.

Flexibility is a requirement for ensuring a positive professional evolution. Staff maybe requested to move to other positions.Managers, especially international staff, maybe asked to move to other locations.

International experience and participation in group development initiatives such asGLOBE, SMPT and others can be acquiredin all countries of the Group and are arequirement for holding high-level positions.

The development of expertise in specificareas of competence is determinant for theCompany’s success. Therefore job rotationshould be practised with caution. Whilst job rotation might be useful under certaincircumstances, it should not result in weakening our expertise in key areas.


Nestlé upholds the freedom of associationof its employees and the effectiverecognition of the right to collectivebargaining.

Nestlé wishes, also through its relationshipwith unions and other representativeassociations, to sustain the long-termdevelopment of the Company, both to thebenefit of the employees and of theCompany, by maintaining a level ofcompetitiveness adapted to its economicenvironment.

Industrial relations are a clear responsibilityof local management and will be handled at the appropriate level: first at site level (factories, warehouse) subsequently at regional or national level, according to local law and practices.

Nestlé will ensure that direct and frequentcommunication is established with itsemployees, both union members and non-members, as mentioned in the NestléManagement and Leadership Principles.

Relations with unions will be establishedunder strict observation of national law,local practices as well as those internationalrecommendations to which Nestlé hasadhered to on a voluntary basis as stated in the Corporate Business Principles.

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Contacts with union delegates should createa further opportunity to provide informationallowing their members and otherrepresentative associations to acquire a fullunderstanding of the business activities and the goals of Nestlé.

In accordance with local legislation, Nestléwill refrain from any action restricting theemployee’s right to be or not to be affiliatedto a union.

Nestlé will not engage with any union orother representative association in activitiesor discussions other than those relating to employment and working conditions aswell as issues relating to the workplace.

Whenever negotiations take place, they willbe duly prepared with the full involvementof line management and take into accountboth the Company’s and the employees’legitimate interest. In dealings with unions, it will be ensured that managementprerogatives be properly maintained.

Industrial Relations

The fact that Nestlé is more

people and product than systems

oriented is reflected in the way HR

is functioning and is organised.

Processes and systems as well asprofessional HR tools are there to supportHR management but never to the detrimentof the human dimension. The humanperspective should be present at all timesand under all circumstances.

The HR function should report to themanager responsible for a defined operation(Region, Market, Country, Factory) with afunctional relation to the market HRaccording to the size of that operation.

The HR manager should not only have theskills and competencies from a purelyprofessional standpoint but also have thecharisma and the credibility to be atrustworthy partner to her/his colleagues.

Whereas the HR function should indeedprovide flawless administrative support, itsmain role is to add value to the businessand to play a proactive role in everysituation where HR action is required.

Specific HR KPI’s are useful in assessing the performance of an HR unit. However, it should be kept in mind that the HR contribution aims in the first place atoptimising the overall company performancethrough improving people performance.

With the evidence that the human capital is of increasing importance, HR playsindeed a pivotal role in the conception and implementation of the people strategies that impact financial results and the organisation’s overall reputation and effectiveness.

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HR Organisation


© October 2002, Nestec Ltd., Human Resources Department

Concept and design: Nestec Ltd., B-COM, Corporate Identity and Design, Vevey, Switzerland

Printed by Neidhart + Schön AG, Zurich, Switzerland

Documents

Nestle Hr Policies