Hydro had 18,894 employees at the end of 2010, a decrease from 19,249 in 2009. Following the Vale transaction, we are now almost 23,000 employees. The reduction during 2010 was primarily a result of restructuring processes initiated in 2008 and 2009, including the program in our primary metal business to reduce aluminium production costs by NOK 300 per metric ton.
Restructuring and continuous improvement are essential elements of our business operations, and many employees were affected by restructuring processes in 2010. Our aim is to involve employees in such processes at an early stage to have the best results for the individual and for the company.
Attract, develop and retain innovative and competent employees
Even in the difficult market situation, we have seen the importance of maintaining our position as an attractive employer. In 2010, we introduced a new program for graduate recruits. The aim is to combine business and individual needs, ensuring that graduate recruits go through a structured and individual process that maximizes their potential in their new job and for the longer term. The program has a length of 12 months.
Competence development is an important part of our defined production and business systems, which are established for all parts of the value chain.
We offer new employees training related to the organization and their individual work tasks. This includes required competence within health, security, safety and environment. A special training course welcomes the employees, giving them insight into Hydro's history, values, competitive landscape and businesses. An interactive e-learning program - "You and Hydro" - deals with Hydro's policies and the rights and obligations of its employees, and is mandatory for all employees. The program discusses some of the dilemmas employees may meet in their daily work and presents a spectrum of work situations relevant to employees everywhere. It also raises issues like safety, security, work environment, human rights, combating corruption and reporting. See also www.hydro.com/youandhydro
The most important development takes place locally, primarily with on-the-job training, but also through locally organized training.
Our aim is that every employee should have an annual appraisal dialog and participate in an organizational survey at least once every two years. Several processes are initiated to form the basis of organizational development in Hydro. Hydro Monitor is an employee survey that gauges the climate in the organization at regular intervals. The Hydro Leadership Development Process (HLDP) is our common tool for employee appraisal dialog, individual development and follow-up. HLDP is mandatory for leaders.
Almost all employees were invited to participate in Hydro Monitor in 2010, and the response rate was 92 percent. Our target was 86 percent. In 2007, when more than 10,000 employees had the opportunity to take part, the response rate was 85 percent. Our ambition is to use the survey as an organizational tool to drive employee engagement and improve effectiveness and performance. Employees throughout the company are involved in organized discussions and workshops to identify improvement actions. Implementation of these actions is followed up. In 2010, 72 percent of the participants gave positive responses on our measure of satisfaction and commitment, compared with 71 percent in 2007 and 70 percent in 2006. The next survey for all employees will be in 2012.
Developing managers able to deliver on Hydro's strategy and ambitions is key to our leadership planning process and leadership training programs. In 2010, we further developed our leadership expectations based on Hydro's values and embedded these expectations into our 360-degree feedback tool. The leadership expectations define the behavior expected of leaders at all levels, and they will guide leadership assessment, reward and development activities. The 360-degree tool is developed to support individual leaders in their development. Level 1 and 2 leaders were assessed in 2010, and further implementation is planned for all participants in leadership training programs. Feedback from use of the tool is also included as an input to HLDP.
In order to have a healthy pipeline of senior leaders with the required breadth of experience, we emphasize rotating employees early in their careers so that they gain skills from different parts of the organization. Performance indicators are developed in the business areas to measure rotation.
Welcoming new colleagues
On March 1 we welcomed almost 4,000 employees from Vale's aluminium business. Everyone received an introduction package with information about Hydroand the company's ambitions and values. They have also been given access to an intranet-based onboarding program specially designed for the Brazilian employees. All new employees will go through the mandatory "You and Hydro" e-learning to learn about their rights and obligations as a Hydro employee. In addition, we will offer leaders and managers at different levels a Hydro Fundamentals course that provides information about Hydro's history, values, strategy and other important topics. Separate HSE training for all employees will familiarize them with specific Hydro requirements.
People matters in Poland
Our extrusion plant in Poland is nearly finished with a 15-month program that has been designed to raise the professional skills of each of the 162 employees at the plant. The Chrzanów-based site, near Krakow, has had two main goals with the program, one to improve the soft skills of managers and to lift their overall qualification level. The other has been to engage employees while encouraging innovation and continuous improvement. This includes showing the value that each employee creates in his or her work, thus providing a more clear sense of purpose. In addition, employees are being given a deeper understanding of the business and the value they bring. The European Union has financed approximately 60 percent of the organizational development program.
Diversity
We emphasize diversity with regard to nationality, culture, gender and educational background when recruiting, and when forming management teams and other working groups. Women are represented in most business area and sector management teams, and we are aiming at further diversity at all levels. Most female executives hired in recent years have been recruited internally.
We are continually adjusting working conditions so that all employees, regardless of their operability, have the same opportunities in their places of work. The principle of equal terms is prioritized in recruitment, job promotions or individual development. An example is our rolling mill in Grevenbroich, Germany. Some positions are reserved for disabled emloyees, and accessible workplaces are adapted for both employees and apprentices.
In 2010, about 100 new employees were recruited to the Norwegian part of the organization, compared with about 70 in 2009 and 450 in 2008. Twenty percent of the new employees in 2010 were women, compared with 21 percent in 2009. Fifteen percent of Hydro's employees in total, excluding the United States, are women, compared to 19 percent in the Norwegian part of the organization.
Diverse management
Top management in our extruded products business, which has 9,500 employees, consists of 54 leaders. This includes all members of sector management teams as well as the managing directors of strategic units. These 54 leaders represent 16 nationalities. Nine of them - or, 17 percent - are women. Women make up half of the management team of the Eurasia sector and 33 percent of the management team of the North America sector. It is our ambition to increase the proportion of female leaders across our extrusion business further.
Respect and cooperation in Malaysia
Malaysia is a truly multicultural country. This is reflected in Hydro's Malaysian rolling mill, which has about 250 employees. Some 60 percent of them are Malay, one third are Indian, and most of the remaining employees are of Chinese origin. Each ethnic group celebrates their festivals, which are declared public holidays. When the Malays celebrate their new year - Hari Raya Aidil Fitri - the Indians will be working. And during the Deepavali new year celebration for the Indians, their Malay colleagues will be working. There is a common understanding that annual leave priority will be given to those who are celebrating their festivals or events. The ethnic diversity of race and religion is teaching employees the values of respect and tolerance for each other, and has brought these values into the workplace.
Compensation
All employees shall receive a total salary that is fair, competitive, and in accordance with the local industry standard. Only relevant qualifications such as performance, education, experience and other professional criteria shall be taken into account when making appointments, or when providing training, settling remuneration and awarding promotion. There are no significant gender-pay differentials for employees earning collectively negotiated wages in Norway. Salary conditions in the Norwegian business are reviewed on a regular basis. No significant gender-related differences have been found.
Executive variable compensation takes into consideration performance on individual as well as corporate KPIs and includes non-financial indicators. The President & CEO's bonus scheme includes KPIs on safety and a discretionary element on corporate social responsibility. His safety targets are identical to our corporate targets. See Note 11 in Hydro's consolidated financial statements for further information on our compensation system.
