Employee engagement Guide Global Human Resources June 2014

On the agenda 2 Why engagement is key and How we measure engagement ? How can we better drive Employee Engagement ?

Why employee engagement is key 3

Engagement and High Performance 4

There is a proven correlation between Engagement and productivity and increased efficiency. Research shows that engaged employees are more profitable, customer-focused, safer and less likely to leave the organisation. Conversely, actively disengaged employees erode the organisation’s bottom line, breaking the spirits of colleagues in the process. Why measuring Engagement ? 5

6 Strong Employee Engagement is good for the employees, customers and the organisation. Highly engaged organisations report Better business results Higher retention Higher levels of customer satisfaction Higher levels of safety

Engagement definition Engagement is the state of emotional and intellectual involvement and commitment that leads people to do their best work. We see engagement when people: Say Say Stay Say Stay Strive Consistently speak positively about the organization to coworkers, potential employees, and customers Have an intense desire to be part of the organization Exert extra effort and engage in behaviors that contribute to business success Strive Stay

The « One Voice » model in details 14 questions for simple and easy to use answers 1. I would not hesitate to recommend Schneider Electric to a friend seeking employment 2. Given the opportunity, I tell others great things about working here 3. I rarely think about leaving Schneider Electric to work somewhere else 4. It would take a lot to get me to leave Schneider Electric 5. Schneider Electric motivates me to contribute more than is normally required to complete my work 6. Schneider Electric inspires me to do my best work every day 7. My manager gives me feedback that helps me improve my performance 8. My coworkers respect my thoughts and feelings 9. I think that the cooperation between inter departments is going well 10. I have appropriate opportunities for personal and professional growth 11. I understand how my work goals relate to Schneider Electric ’s goals 12. The balance between my work and personal commitments is right for me 13. How likely is it that you would recommend Schneider Electric to one of your friends as a good place to work? 14. Are you aware of action plans in your organization, linked to One Voice ? Adhésion Action Employee Engagement Index Aon Hewitt model Engagement drivers Chosen by Schneider Electric Recommendation Chosen by SE / same as customer satisfaction Awareness of action plans

9 OneVoice by numbers 100% of employees surveyed 2x a year. 69 % participation rate overall Year 2013 (W1&W2) managers reports* each wave

OneVoice Wave : Main insights > The 3 main indicators are in progress > The focus on the action plans has a very high impact of engagement. By implementing action plan after survey, we are demonstrating that we listen to our employee and this is a strong lever to drive engagement. Managers and HR have done a very good job!! > Efforts should be maintained to achieve our target 63% of Employee Engagement >. > All drivers are in progress as well > highest progress for collaboration, worklife balance development

Global results Entity results For Managers Global Results – 2014 Wave 1 & Kiosk Respondents Wave Target 2014 Comments Employee Engagement Index61% 63%On course to meet target Recommendation score (ENPS)29 26 Exceeded target if we maintain this level next wave Action Plan Awareness77% 80% On course to meet Connect objective of 80% for end of 2014 A great result! A strong effort from entities and managers to achieve this! 11

Inclusion : 72% of employees feel their opinion is taken into account (74% in 2013) Vision: 70% of employees say they have a clear vision of the link between what is expected from them and the company’s strategy (70% in 2013) Empowerment: 64% of employees feel that their manager give them enough feedback to improve their performance (62% in 2013) Worklife balance: 62% of employees think that the balance between work and personal commitment is right (56% in 2013) Development : 55% of employees perceive that they have enough support for their development (53% in 2013) Collaboration : 47% of employees feel that collaboration is going well between teams and entities (37% in 2013) Engagement One Voice Wave by drivers Important drivers in progress: worklife balance, collaboration and developpement ! Let’s maintain and improve !

How can we better drive engagement ? 13

14 People Engagement, a key factor of success for our Business challenges The main objective is to engage leaders, managers, human resources to discuss OneVoice survey results with teams, set-up action plans, and follow up the progress.

15 As managers, How can you leverage your OneVoice results? Use the One Voice Results as a key opportunity to listen your team. Organise a dedicated session, at least once a year, to take time to open discussion with team and get qualitative feedback to build relevant action plan.  Assuming what engaged or disengaged people is a common “error”.  One Voice feedback session is for teams, what the individual annuel interview is is for individuals: opportunity to dialogue and share actions to improve.

Jean Pascal Tricoire Chairman & CEO What key findings* for PEOPLE Engagement ? * based on external researches 16 CONNEXION ˃ Employees want to have a personal connection to leaders and co-workers. ˃ Through visibility of Leaders & dialogue ˃ Transparency in what is changing. CAREER ˃ Consistent need for a clear career path for the company to keep key talents. CAPABILITY and DEVELOPMENT ˃ Increase of Employees’ need for skill building and development CONTROL in a period of changes ˃ Employees almost always have some loss of control with change events. ˃ Need for employees to feel involved and part of the process.

By giving the opportunity to all employees to give feedbacks through Employee survey to their Company and managers, we have a key responsibility: Taking into account employees feedbacks

Moving from data to action WHAT Survey results indicate WHAT employees are thinking WHY Feedback meetings clarify WHY they feel the way they do HOW Both are necessary to determine HOW an organisation should respond Survey feedback, dialogue with the teams Action planning

Appendix 19

Employee Engagement Index is the percentage of people for which the average on the 6 questions is equal or higher than 4.5 Strongly disagree Disagree Slightly disagree Slightly agree Agree Strongly agree Engagement is determined by averaging an individual’s response to each of the six Engagement questions (around ‘Say’, ‘Stay’ and ‘Strive’) based on a six–point scale with no ‘neutral’ option, as below How do we calculate Employee Engagement Index? 20

What is ENPS and how is it calculated? >It is the ‘Employee Net Promoter Score (ENPS) >ENPS is a standard metric used by many companies all around the world. >It is a % based on employees responses to just this question >How likely is it that you would recommend Schneider Electric to one of your friends as a good place to work? (Scale from 0 to 10) >If an employee answers between 0-6 – they are a detractor. If they answer between 7-8 – they are passive. If they answer between 9-10 – they are a Promoter! >At the end of the survey we count the total % of Promoters and we subtract the total % of Detractors. The number left is the ENPS. (Note: Passive employees are not counted at all in the calculation)

Schneider Electric selected definition of employee engagement: “Engagement is the of emotional and intellectual feeling that a group or organization have.” Say Consistently speak positively about the organization to coworkers, potential employees, and customers Have an intense desire to be part of the organization Exert extra effort and engage in behaviors that contribute to business success StayStrive Definition of Employee Engagement Organisations with a high level of engagement do report 22% higher productivity Source: new meta- analysis of 1.4 million employees conducted by the Gallup Organizationnew meta- analysis Organisations with a high level of engagement do report 22% higher productivity Source: new meta- analysis of 1.4 million employees conducted by the Gallup Organizationnew meta- analysis 22