1. Doc.ID:Revision:Status:© Wärtsilä21 / PERFORMANCE MANAGEMENT AT WÄRTSILÄ 21 MARCH 2016, AALTO UNIVERSITY Saara Eder-Falck 1

2. Doc.ID:Revision:Status:© Wärtsilä Introduction Saara Eder-Falck Manager, Global Resourcing and Employer Branding EXPERIENCE In Wärtsilä since 2011, previous positions: 2014 – 2015 Global HR Concept Owner, HR Systems and Processes 2013 – 2014 Area HR Manager, Systems and Processes, South Europe and Africa 2011 – 2013 Executive Assistant/Global HR Specialist 2009 – 2010 Project Officer at EU-China Information Society Project in Beijing 2004 – 2008 Entrepreneur EDUCATION M.Soc.Sc. majoring in Sociology, (University of Jyväskylä) Minors Chinese language, East and Southeast Asian Studies and Political Science Minor studies in Chinese language from Beijing Language and Culture University

3. Doc.ID:Revision:Status:© Wärtsilä21 / Agenda Introduction Wärtsilä in brief HR Organisation People Processes Overview Performance Management –What is PM? –Process Overview –Development Discussion –Setting SMART targets –Performance Coaching –Line Manager’s responsibilities –Discussion 3

4. Doc.ID:Revision:Status:© Wärtsilä21 / © Wärtsilä ENERGY SOLUTIONS MARINE SOLUTIONS SERVICES THIS IS WA ̈ RTSILA ̈ 2015Corporate presentation 2015 4 THIS IS W Ӓ RTSIL Ӓ

5. Doc.ID:Revision:Status:© Wärtsilä21 / © Wärtsilä VALUES MISSION VISION 2015 Corporate presentation 2015 5 OUR MISSION, VISION AND VALUES 52015Corporate presentation 2015 2015Corporate presentation 2015© Wärtsilä 5 We shape the marine and energy markets with advanced technologies and focus on lifecycle performance, to enhance our customers’ business and benefit the environment. We will be our customers’ most valued business partner. ENERGY Capture opportunities and make things happen. EXCELLENCE Do things better than anyone else in our industry. EXCITEMENT Foster openness, respect and trust to create excitement.

6. Doc.ID:Revision:Status:© Wärtsilä21 / © Wärtsilä PRODUCTION AND SERVICES GLOBALLY SERVICES NETWORK PRODUCTION FACILITIES (FULLY OWNED) PRODUCTION FACILITIES (JOINT VENTURES) 62015Corporate presentation 2015

7. Doc.ID:Revision:Status:© Wärtsilä21 / © Wärtsilä2015 Corporate presentation 2015 7 OUR PERSONNEL 18,800 70 200 PROFESSIONALS COUNTRIES LOCATIONS

8. Doc.ID:Revision:Status:© Wärtsilä21 / Wärtsilä HR Organisation EVP,HR Päivi Castrén EVP,HR Päivi Castrén Executive Assistant HR, WHQ, Corporate Functions HR, Energy Solutions AREA NE HR AREA SEAF HR AREA AMER HR AREA MEA HR HR, Marine Solutions Learning & Development GROUP AREA LOCAL HR, Global Functions (IM) Resource mgmt / Compensations & Benefits / Compliance execution resources at company / country level and report to Areas Resource mgmt / Compensations & Benefits / Compliance execution resources at company / country level and report to Areas HR Systems and Processes HR Support and Training HR Projects & Processes Compensation & Benefits International Mobility HR Projects & Concepts Resourcing & Employer Branding HR, Services

9. Doc.ID:Revision:Status:© Wärtsilä21 / People Processes at Wärtsilä Performance Management Development Discussion Competence Assessment Rewarding Compensation and Benefits Focal Merit Review Annual incentive plan Profit sharing programs Fringe benefits Resourcing and Recruitment Recruitment Process International/Internal Mobility Learning and Development Competence Development L&D Solution creation

10. Doc.ID:Revision:Status:© Wärtsilä21 / What is Performance Management Performance Management is the process of enabling people to perform to the best of their abilities. In practice it is to ensure that employees  know and understand what is expected of them based on their contribution to Wärtsilä’s strategy  have the skills and ability to deliver on these expectations  are supported by the organisation to develop to meet these expectations  are given feedback on their performance  have the opportunity to discuss and contribute to individual and team aims and objectives  Have chance to give feedback

11. Doc.ID:Revision:Status:© Wärtsilä21 / Performance Management Process Overview Development Discussion Setting Performance Targets Continuous Feedback & Coaching Midyear Review Continuous Feedback & Coaching Evaluating Performance Evaluating Performance Target Setting Discussion Personal Development Plan Competence Assessment

12. Doc.ID:Revision:Status:© Wärtsilä21 / Setting SMART Targets "S M A R T" Checklist Specific, Measurable, Action-oriented, Realistic, Time- Based SPECIFIC what will be the outcome or result of what I do? Indicate the MEASURES you will apply to determine whether the targets have been met. ACTION "What is it that I will do - what action or actions will I take this year? Ask yourself whether the objectives/targets are REALISTIC. In what TIMEFRAME I need accomplish this target?

13. Doc.ID:Revision:Status:© Wärtsilä21 / Development Discussion

14. Doc.ID:Revision:Status:© Wärtsilä21 / Overall Performance Evaluation – OPE 1.Individual Job Performance (performance of the individual in the whole job role) 2.Individual Performance against the targets set for the review period (what needed to be achieved) 3.Behaviours (how the expectations have been met) = Overall Performance Evaluation describes the overall performance level of the individual based on the three elements above 0 Too Early to evaluate: the employee is very new and it is too early to evaluate the employee’s performance. 1 Does not meet expectations: The employee performance against the objectives is far from what's required, resulting in unacceptable performance. 2 Partially meets expectations: The employee performance against the objectives partially meets what's required. There is room for improvement. 3 Meets expectations: The employee performance against the objectives meets what's required. 4 Partially exceed expectations: The employee performance against the objectives partially exceeds what's required. 5 Clearly exceed expectations: The employee performance against the objectives clearly exceeds what's required.

15. Doc.ID:Revision:Status:© Wärtsilä21 / Performance coaching occurs when a manager intervenes and provides feedback for the purpose of improving performance is about setting targets, follow-up targets, asking questions and listening, being firm but fair brings you as a manager closer to your people, helps you better to know your people, their performance and potential improves performance, improves job satisfaction and facilitates development What performance coaching is not way to get rid of difficult people and let them know they are not appreciated bossing: it´s rather about fulfilling the responsibility to guarantee the results than using the superior rights over people quick or easy temporary rare completely new idea Performance Coaching – What and Why?

16. Doc.ID:Revision:Status:© Wärtsilä21 / Line Manager Responsibilities Performance management –Continuous feedback –Support and guidance in improving performance –Fairness and consistency in evaluating performance –Rewarding according to performance Ensure all employees in your team –Know what is expected from them –Conduct DDs with team members using the DD tool Development discussion –Ensuring that the discussion takes place –Good quality of the discussion –Cascading business targets into individual targets People Performance = Business Performance

17. Doc.ID:Revision:Status:© Wärtsilä21 / People Processes at Wärtsilä Performance Management Development Discussion Competence Assessment Rewarding Compensation and Benefits Focal Merit Review Annual incentive plan Profit sharing programs Fringe benefits Resourcing and Recruitment Recruitment Process International/Internal Mobility Learning and Development Competence Development L&D Solution creation Development Discussion Merit Planning Leadership Review Personal & career develop- ment

18. Doc.ID:Revision:Status:© Wärtsilä21 / Discuss 1.What can the manager do to increase Development Discussion quality? 2.How about the employee? What can they do? 18

19. Doc.ID:Revision:Status:© Wärtsilä21 / Motivation and Performance Interesting TED talks Dan Ariely: What makes us feel good about our work? Dan Pink: The puzzle of motivation 19

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