Tele2 proprietary The Power of the Index

Tele2 proprietary 2 The Compelling Business Reason Why did we have to work on ES?  >32% Turnover in 2007 and 23% in % tenure of <1 year  Turnover is averagely estimated at € 30,000- a head  So when 1/3 of 1000 employees leave a year costs are approaching € 10 Mio !  An attainable 30% improvement yields > € 3 Mio cost savings.

Tele2 proprietary 3 Reasons for High Turnover  Analysis (exit interviews and retention workshops) showed Three reasons why people left the company only 2 years ago  Number 1: LACK OF ATTENTION BY MY MANAGER  Number 2 & 3 respectively: Perspective & Salary  Number 2 & 3 are issues that many companies deal with Salary is easy to copy In terms of importance the survey group weighted the number 1 reason with 60% and 2&3 respectively with 20% and 20%.

Tele2 proprietary 4 Quick Question:  Can you have high employee satisfaction and a high employee turnover at the same time?  Can you have high employee satisfaction and very few ambassadors in your company?  Can you have a low score on leadership and low employee turnover?  Do we agree that high employee turnover and very few ambassadors in your company hurt the business?

Tele2 proprietary 5 What is remarkable about these numbers?  5.3  >32%  -18

Tele2 proprietary 6 Recap of our results  Initially the Employee Satisfaction was expressed in a number on a scale of 7 > 5.3 for 2008  Last survey yielded a so called ESI > 79%  -18 = Nett Promotor Score 2008  LSI of 56 in 2008 (as of 63 it starts turning green)

Tele2 proprietary 7 A Closer Look at the Indexes  Leadership Index (LSI) is designed to put a numerical value on the leadership in a work group. The LSI value lies between 0 and 100. The weighted average value of the answers from the employee survey creates the index. The highest level is attainable only through a high number of ‘Unconditional Yes Excellent’ scores.  Nett Promotor Score (NPS) Obtained by 1 (one) question only: Would you recommend Tele2 as an employer with your family & friends?  Employee Satisfaction Index (ESI) 11 Questions of which the Index is found to be linked with profitability if one scores on or above the benchmark (>4.5+)

Tele2 proprietary 8 LSI Questions & Development Paths Development path 1 Communicate goals & Performance Development path 2 Coaching & Feedback Development path 1 Communicate goals & Performance Development path 3 Handling Conflicts Development path 4 Building Trust Development path 5 Team Communication Development path 2 Coaching & Feedback  Has your immediate manager clearly communicated the goals for your work group?  Do you regularly get to know how you are doing in your work?  Do you think your performance review talks are productive?  Do you think your immediate manager can handle conflicts?  Does your immediate manager show you respect?  Do you get sufficient information from your immediate manager?  Do you think your work group is managed in a satisfactory way?

Tele2 proprietary 9 Low Performance on LeaderShipIndex (LSI) & Nett Promotor Score (NPS)  In addition to high employee turnover and its indicators  Low Performance on LSI: Overall 56 (/100) 50% of managers (70) <green treshold score of 63  NPS of -18  Overall a lot of ‘yellow’

Tele2 proprietary 10 LSI is ‘King’ We decided to embark on a mission  (1) Increasing overall LSI  (2) Increasing individual LSI  (3) Positive NPS

Tele2 proprietary 11 The Measures Taken  All managers to go through Situational Leadership Training  All managers to organize ESS workshops  All managers to have an individual LSI target (part of bonus: 20%)  An intensive Corporate Communications campaign on ‘Ambassadors’  In interim Barometer survey yielding interim LSI / NPS scores  CEO organizing ‘All Mgrs’ meeting with LSI themes  New Initiative: Tele2 Learning Center launching ‘LSI development paths’

Tele2 proprietary 12 What is remarkable about these numbers?  <13%  +18  69

Tele2 proprietary 13 Question  What do you think ‘leavers’ indicate now as the number one reason for their exit?

Tele2 proprietary 14 Question  What do you think ‘leavers’ indicate now as the number one reason for their exit? “Perspective”

Tele2 proprietary 15 Recap of our Goals for 2010  ESI to 100%  LSI to >69  All Managers to improve on individual LSI > 20% of bonus  Employee Turnover < 13%  Positive NPS >benchmark

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