Human Resources Manager Procter & Gamble HR Systems & Practice July 23, 2003 D.E. Song Human Resources Manager Procter & Gamble Korea

Agenda Procter & Gamble Company HR Systems Overview HR Systems HR Organization HR Capability Q&A / Discussion

Procter & Gamble Company Established in Cincinnati, Ohio, US in 1837 A global leader in consumer goods $40+ billion sales 100,000 employees worldwide Operations in 80+ countries Products sold in 160+ countries

Procter & Gamble Company Procter & Gamble stands for brands marketing innovative products progressive HR practices ethical conduct of business high performance organization and more . . . .

Procter & Gamble in Korea Joint venture (P&G-STC) in 1989 Local manufacturing in 1989 100% ownership in 1992 Chonan plant start-up in 1994 SsangYong Paper Company acquired in 1998

Procter & Gamble in Korea $530 million sales 900 employees General Office in Seoul Plants in Chochiwon, Chonan, and Osan Brands -- Pantene, Vidal Sassoon, Whisper, Cutie, Codi, Izzi, Charmin, Febreze, Pringles, SKII, Ivory, Joy, Crest, etc.

P&G HR Systems Overview A holistic system approach A strong linkage to P&G business model A strong Corporate culture Corporate Purpose, Values, Principles Business Conduct Policy 165+ years of trial and error

Corporate Purpose, Values & Principles Purpose, Values and Principles represent the Corporate Culture. PURPOSE states the most fundamental reason why the organization exists. VALUES are the core concepts that define the character of the Company and its people PRINCIPLES are the guidance by which choices, decisions, and behaviors are determined.

Purpose, Values and Principles We will provide branded products and services of superior quality and value that improve the lives of the world’s consumers Principles We show respect for all individuals The interests of the Company and the individual are inseparable We are strategically focused on the work Innovation is the cornerstone of our success We are externally focused We value personal mastery We seek to be the best Mutual interdependency is a way of life

Purpose, Values and Principles Values: P&G People We attract and recruit the finest people in the world. We build our organization from within, promoting and rewarding people without regard to any difference unrelated to performance. We act on conviction our people will always be the most important asset.

Purpose, Values and Principles We show respect for all individuals The interests of the Company and the individual are inseparable We are strategically focused on the work Innovation is the cornerstone of our success We are externally focused We value personal mastery We seek to be the best Mutual interdependency is a way of life

Purpose, Values and Principles We show respect for all individuals We believe that all individuals can and want to contribute to their fullest potential. We value differences. We inspire and enable people to achieve high expectations, standards, and challenging goals. We are honest with people about their performance.

P&G HR Systems Overview Organization Performance Model "All organizations are perfectly designed to get the results they get." Business Results Business Situation Structure Reward Business Strategy Culture Decision Making Task People Information

P&G HR Systems Overview: Key Features Home-grown management Early responsibility Manager manages employee. Line organization responsible for organization development HR develops and owns the systems. Line organization executes the systems. .

Business Need Analysis Key factors in design and implementation Business success (short term and long term) Balance between business and organization Productivity Company's needs and wants from employees Employee's needs and wants from Company Determine the type of people, skills, and experience we need for the business to be successful Determine the type of organization and its culture we want to build

Recruiting: Selection Criteria Success Actions for Winning (factors of effective performance at P&G) Selection criteria and screening tools are founded upon successful employee profile and verified throughout the world Global Screening Tools PST MAF Interviews

Success Actions for Winning Leadership Capacity Risk-taking Innovation Solutions Collaboration Mastery

Training Onboarding e-Learning Corporate College Functional College On the Job Training

Training: Korea HR Rapid Learn HR Net HR Onboarding HR Team Space Corporate College OJT Job Rotation HR College

Corporate Training Classroom Training: New Hire College, People Development College (1, 2, 3), Time management, Memo writing, People and communication skill, Team effectiveness, Workout, Work process change, Improving your personal leadership, etc., etc. Rapid Learn (on-line computer based training) .

Functional Training Function onboarding 1-1 orientation Qualification project Function College Classroom/on-line training Self study On-the-job training

Functional Training (HR College) Acquisitions & joint ventures Plans and benefits Budget administration & financial responsibility Building services Communication (publications) Compensation Direction setting Diversity Employee data (CHRIS/Other Systems) Employee development Employee relations High performance organization

Functional Training (HR College) Industrial hygiene & safety Labor relations Medical Organization assessment & design Organization staffing Organization transition Policy management Recruiting Relocation Security Training (Formal) Work Process Change

Learning Curve Performance Time on the Job 5 Years 8 Years Group 1

Learning Curve

Development Early responsibility Performance appraisal and feedback Performance management process Assignment planning Overseas assignment Succession planning (key positions only) Talent development process (Fast Track)

Reward Pay competitively in the market Salary Benefits Stock Options STAR bonus Pay for individual performance Relative rating (15-70-15) Pay and promotion

Retention Regretted versus non-regretted Retention (or turnover) analysis Turnover analysis (exit interviews, exit questionnaire) Employee Opinion Trend Survey Organization Culture Survey Organization Health Assessment

Retention Retention tools (Individual) Competitive compensation Personal development opportunities Longer term career growth Coaching & counseling (Manager, sponsor, mentor, Human Resources) Employee Assistance Program Hot Line Retention tools (Organizational) Corporate culture Work environment

Outplacement Needs for outplacement Restructuring (plant closure, consolidation, outsourcing, productivity improvement, etc.) Performance management Outplacement system Career counseling Job search Career Transition Center

Employee Relations & Policy Role of Manager Manager manages employees. HR provides systems and resources. Minimal third party interventions Manage each employee as a respected individual 1-1 relationship between manager and employee Principle based operation Principles versus rules

Recruit the Finest People Work Plan for the year ahead Business Direction Reward & Recognition 1:1 Relationship Coaching Feedback Personal Development Plan Review of Results Career Planning Development Program Business Results Career Interests Performance Management Retain the Finest People

HR Organization Model

HR Organizations Organization Capability Development Recruit, Training, Development, Employee Relations, Policy, Organization Effectiveness Employee Service Compensation, Benefits, Payroll, Relocation, Employee Data Work Place Service Facility, Fixed Assets, Security Plant HR

HR Career Model People Supply & Growth Account Manager People Support Must have worked outside home region; must have worked in at least 2 Bus. Units Must have had T&B assignments in other functions; must have had min. ONE assign- ment outside home country HR Leaders 1 - 2 assignments 10 - 15 years in Co. Levels 4 and 5 BU HR Mgr. Global / BU Specialist 1 - 2 assignments 8 - 10 years in Co. Levels 3 and 4 Site/Plant/ Org. Unit HR/SPOC Specialist for a Business Unit People Supply & Growth 3 - 4 assignments in first 6 - 8 years Levels 1 - 3 Account Manager People Support

Summary All organizations are perfectly designed to get the results they get. The way you design HR systems determines the way you run the business. HR systems build and reinforce the organization’s culture by translating its Values and Principles into action. The culture or the way you operate determines the results. HR builds the business by building organization capability.

Q&A Discussion