Pfizer Performance Management Process...Pfizer Performance Management Process Confidential and Internal to Pfizer - subject to works c ouncil and/or union consultations and other legal

PfizerPerformance Management

ProcessProcess

1Confidential and Internal to Pfizer - subject to works council and/or union consultations and other legal requirements.

REV011510

Performance Management Process

• Roles of the Manager & Colleague

• The Global Performance Management (GPM) P d T l(GPM) Process and Tool

• How do I get started & GPM materials


Performance Management at Pfizer

Performance Management Organizational benefits:is a global process:

• Aligns across Pfizer • Helps the organization

• Consistent process in managing performance globally

• Provides accurate, real-time and manage the performance and development of each colleague at every level

historical performance data• Drives standards across the

enterprise• Enabled through technology

Performance Management works in conjunction with other key people g j y p pprocesses such as compensation and talent planning to provide an

integrated approach to managing, measuring, developing and rewarding colleagues for their contributions


Why have Performance Management?

• Colleagues perform best when they feel personally connected to their work and the organization and have a clear vision and understanding of what needs to beclear vision and understanding of what needs to be achieved

• Managers can most effectively drive performance by providing colleagues with informed, positive, fair, accurate and detailed feedback both formally andaccurate and detailed feedback both formally and informally

• Performance discussions should focus on achieving objectives and long term career goals with emphasis on

f fthe skills and competencies for the future

Only Positive Results from Increasing Employee Understanding:Only Positive Results from Increasing Employee Understanding:Clarifying employee performance standards not only positively impacts individual performance, but also drives several important employee attitudes. Employees who fully understand the standards on which they are evaluated try 19 percent harder, are 34 percent more committed to the organization, and are 36 percent more likely to feel “matched” to their job. These substantial changes in employee

ttit d l th b i di t i t f f 31 t lt i b t ti l t t l


attitudes, plus the obvious direct impact on performance of 31 percent, result in a substantial total impact on performance of 36 percent. Corporate Leadership Council report 2002

Performance Management and the bottom line• Managers must recognize the financial opportunity that managing performance presents. Research shows that focusing on

Development (a performance management component) can increase colleague performance by 25%, which translates to $12.5 billion in annual revenue

Employees Reportingto Manager A

Employees Reportingto Manager B

25%P f

125

gManager A is very

ineffective at developingemployees

gManager B is very

effective at developingemployees

PerformanceImprovement

directly attributable toManager B’s effectivenessat employee development

100

Performance of EmployeesReporting to Manager A

Performance of EmployeesReporting to Manager B

Source: Learning and Development Roundtable 2003 Employee Development Survey.


• In addition, execution of globally aligned, integrated and differentiated HR programs would further increase the market value by another $20,000 to $40,000 per colleague (based on research by Huselid)

A Pfizer Manager Core Competency: Grows Others

Engage Today’s Talent & Build the Next Generation

“Grows Others” is one of the 9 Manager core Competencies:•Provides challenging and stretching tasks and assignments•Holds frequent development discussions• Is aware of each direct report's career goalsGrows p g•Constructs compelling development plans and executes them•Pushes people to accept development moves•Will take on those who need help and development•Cooperates with the developmental system in the organization

GrowsOthers

Cooperates with the developmental system in the organization• Is a people builder


Draft & Confidential; Preliminary plans only; implementation of intentions expressed in this document may be subject to employee consultation in certain countries

Pfizer Core Competencies

Colleague Manager Senior Leader

Functional/Technical Skills Demonstrates Business AcumenAnticipates Customer & Market NeedsStrategic & Innovative ThinkingStrategic & Innovative Thinking

Acts Decisively Acts decisively Acts DecisivelySeizes Accountability Seizes Accountability Seizes Accountability

Holds people Accountable Holds People AccountableGrows Self Grows Others Grows LeadersChange Agile Leads Change Builds change-Agile Organizations

Self Awareness Self AwarenessSelf AwarenessInsight, Influence & Inclusion

Commits to “One Pfizer” Commits to “One Pfizer” Commits to “One Pfizer”P R l ti hi B ild Eff ti TPeer Relationships Build Effective Teams


My Objectives

Objective SettingPurpose• Colleague and manager plan to achieve results by:

– Defining contributions relative to colleague’s role, manager’s objectives, team and Pfizer business – Creating agreement on performance objectives and determining how to demonstrate Pfizer Values

and Core Competencies to drive optimal results

Key Steps1. Colleague drafts individual performance objectives that align with

organizational goals and are written in SMART formatg g• Specific, Measurable, Actionable, Realistic, Time-bound

2. Colleague submits request for manager approval of Objectives3. Manager approves objectives and colleague is committed to objectives4. If manager approves objectives and modification is later required, colleague

may modify objectives and resubmit or manager may return objectives to colleague for modification


My Development

Development PlanningPurpose• Opportunity for colleagues and managers to:

– Assess strengths and development needs– Focus on building strengths– Discuss and agree on aspirational outcomes– Agree on development outcomes that focus on short-term achievement of current

performance objectives and long-term achievement of professional aspirations– Create an action plan with a variety of development actions to achieve these outcomes– Identify time frames and tracking methods to ensure outcomes are achieved

Key Steps1. Based on self-assessment and other feedback, colleague drafts professional

aspirations, strengths, development needs and development outcomes and actions2 Colleague submits request for manager approval of and commitment to2. Colleague submits request for manager approval of and commitment to

Development Plan3. Manager approves the Development Plan and colleague is committed to the plan,

which can be modified as needed


My Performance

Progress Reviews (mid-year)

PurposePurpose• Opportunity for reviews between annual reviews (typically at mid-year, and as often

as needed), to document progress toward: – Performance objectives– Demonstration of Pfizer Values and Core Competenciesp– Overall performance to date

Key Steps1. Colleague prepares self-review by documenting achievement of performance

bj ti d d t ti f Pfi V l d C C t i llobjectives and demonstration of Pfizer Values and Core Competencies; colleague submits to manager

2. Manager and colleague can work independently on their particular version3. If the manager has not reviewed yet, colleague can recall the request and continue

editing Progress Reviewediting Progress Review4. Manager writes and updates the Progress Review, which serves as official

documentation5. Manager and colleague meet to discuss their review, as well as share information

and perspectives


My Performance

Annual ReviewPurposePurpose• Opportunity for a formal annual review, to document year-end achievement of:

Performance objectives, Demonstration of Pfizer Values and Core Competencies, and Overall performance

Key Steps1. Colleague prepares self-assessment by documenting achievement of performance

objectives and demonstration of Pfizer Values and Core Competencies; colleagueobjectives and demonstration of Pfizer Values and Core Competencies; colleague submits to manager

2. Manager writes and updates the Annual Review, which serves as official documentation and determines colleagues rating; manager submits to next-level manager who approves the manager’s ratingmanager who approves the manager s rating

3. Colleague acknowledges rating and may add final comments 4. Year-end ratings affect merit increase, and bonus and long-term incentives if elegible

(This may not always apply to non-US, non-GPP colleagues)


Pfizer Global Performance Rating ScalePerformance Categories

(Recommended distribution guidelines)

Description- Performance with Integrity and consistent demonstration of the Pfizer Values is foundational to the way we work, must be considered in assessing results, and will directly impact the final rating. Full demonstration is required for a rating of “Consistently Met” or higher.

Exceptional Results Expectations were surpassedE ll t lt d i bl d t ti f I t it i hi i f t– Excellent results and recognizable demonstration of Integrity in achieving performance outcomes

– “Top Quality” products and services– Accomplishments far in advance of agreed-upon time frames and/or financial criteria (i.e., budget, plan, allocated resources)

Significantly Exceeded Expectations were exceeded or significantly exceeded– Superior Results and operates with integrity in daily exchanges, actions and in achieving performance outcomes– Products and services of superior quality– Accomplishments in advance of agreed-upon time frames and/or financial criteria

Exceeded Expectations were exceeded in some areas and definitely met in all others– Significant Results and upholds integrity in achieving performance outcomes– Products and services are of high quality– Some accomplishments in advance of, some aligned with, agreed-upon time frames and/or financial criteria– Drives business results with Integrity

Consistently Met Expectations were metConsistently Met Expectations were met– Fully satisfactory performance, solid results, fulfilled job requirements and integrity demonstrated in achieving performance outcomes– Good quality products and services– Accomplishments aligned with agreed-upon time frames and/or financial criteria– Delivers business results with Integrity

Partially Met Expectations were partially met, improvement required in some areas– Results partially fulfilled requirements and expectations– Products and services of acceptable quality– Accomplishments not consistently aligned with agreed-upon time frames and/or financial criteria

Deficient Results Expectations were not fulfilled, performance unsatisfactory, significant improvement required– Results substantially below job requirements and expectations– Products and services of deficient quality– Accomplishments not regularly aligned with agreed-upon time frames and/or financial criteria


Significantly Deficient Results Expectations were not met, unacceptable performance, immediate improvement required– Results consistently poor and significantly below job requirements and expectations– Products and services of notably deficient quality– Accomplishments not aligned with agreed-upon time frames and/or financial criteria

My Compensation

Compensation Dialogue• The Compensation dialogue is the final part

of the performance management cycle• Opportunity to connect on how

performance influences:performance influences: – Merit increase (annual salary review)– Global Performance Plan (bonus/incentive plan) – Long term incentives, i.e., allocation of stock g , ,

options– Talent assessment


Rating Link with Compensation and TalentThe GPM process supports a clear link between performance and compensation. The individual performance rating contributes to a colleague’s merit increase determination and, if eligible, their Global Performance Plan (GPP) and Long TermIncentive (LTI) award determinations (including stock options and other equity-based awards e.g. RSU).

The Individual performance rating is an input to Compensation and Talent Management Ratings are completed prior toThe Individual performance rating is an input to Compensation and Talent Management. Ratings are completed prior to Compensation application.

Individual Performance

Rating


Rating

Merit (Annual Salary increase)

Position in Range/ Compa Ratio

+ Merit Budget

Position in Range/ Compa Ratio

+ Merit Budget

Global Performance Plan (GPP) Bonus


Rating


Rating

Company Performance/

Funding

Company Performance/

Funding

Potential + Budget

Potential + Budget

Stock Options//Restricted Stock Units

(RSUs)


Rating


Rating

TalentM t

( )

PotentialPotential

at gat g



Also, it is important to note that individual performance ratings together with potential are key to identifying talent within Pfizer.


ManagementPotentialPotentialPerformanceRating

PerformanceRating

Ongoing Coaching and Feedback

Before During After

• Decide what to accomplish and • Use positive or constructive • Follow up on any commitments think through some questions to promote self-discovery

• Decide if it is formal or informal, and what method of communication is most

i t i

feedback• Actively listen to the colleague• Take notes

or action items• Document feedback – whether

it is positive or constructive• Keep an open dialogue and be

available for follow-upager

appropriate: in person, over the phone, email, etc.

• Prepare specific, objective examples

• Anticipate how the colleague ill d h d

• Check to see how the colleague is doing and if he/she has questionsM

ana

will react and how to respond• Plan for ample time

• Plan for ample time • Actively listen to the manager• Take notes• Understand your objectives and

• Follow up on any commitments or action items

• Document feedbackgue

• Understand your objectives and discuss your skills, abilities and areas for improvement with your coach

• Document feedback• Keep an open dialogue and be

available for follow-up• Continuously ask for feedback

and discuss your performanceSeek feedback from others

Col

leag


• Seek feedback from others.

Talent Planning• End of June – Talent Assessments Complete

– 6 Box Grid*– Retention Risk*– Next potential positionp p– Next potential roles

• End of July – Succession Plans Complete• Mid of August – Mid September – individual reviews with Division head and direct reports• Mid September -- LT talent review• End of September -- CEO led talent reviewEnd of September CEO led talent review

• Levels covered in Talent Reviews– LT Review

• Division head minus 2• Key Talenty

– Business Unit or Functional Group• VP Business Unit minus 2• Key Talent

*Ok if done sooner


Accessing GPM (Colleague Section) Choose one of the following methods to enter GPM Home from the hrSource colleague desktop*:1. Scroll through the available Quick Links list and click to highlight GPM Home, then click Go.2. In My Menu section, click My Career link to expand the list. Then, click the Global Performance Management link, followed by clicking GPM Home.3. In desktop section titled “Tell Me About ….” click My Career link. Click GPM Home in drop-down list under My Performance, then click the Go button.

*The enhanced GPM system is scheduled for launch in mid-scheduled for launch in midFebruary, 2010. However, all colleagues are encouraged to set their objectives using the offline Microsoft Word template that can be accessed from the 2010 Performance Management Process


Resource webpage, where you will also find tips for setting SMART objectives.

Colleague Home PageHighlights1. Colleague Desktop: to

access the colleague section of GPM

1 2

of GPM2. Manager Desktop: to access

the GPM documents of colleagues reporting to you

3. Click year in upper right h d t

3

hand corner to access performance documents from previous years

4. ‘Learn More’ links provide fast access to help and

45

plearning resources

5. Action buttons provide quick access to available documents

6 Quick access to 6. Quick access to Create/Modify Attachment and Notes

7. Color-coded status icons

76


Create Objectives

F f t tJohn Colleague - 0000000

Free-form text field to enter Objectives*

Jane Manager


*Mock-up, subject to change

GPM Home for Managers (Manager Desktop)

Highlights:

1. Quick snapshots of all 2008 2007

You are working with 2009 documents

5

colleague GPM documents

2. Color-coded statuses show you where you are in the process1

4

2 in the process

3. Next steps marked with a yellow triangle

4. Easy access to help and learning resources

3

learning resources

5. Access to documents from prior years


Tip SheetsHelpful tip sheets are available on line within the GPM system by clicking the “Learn More” links

• Numbered steps walk colleagues through the system

• Screenshots and detailed instructions make it easy to follow the steps infollow the steps in GPM


Colleague GPM Help- Tip Sheets & Learning Materials


Global Talent Planning

The Global Talent Planning system can be accessed from thebe accessed from the Manager Desktop


Global Talent Planning- Landing Page

Colleague, Jane


Help

Who do I contact for help with GPM?– If you have any questions about the GPM system or about the year-endIf you have any questions about the GPM system or about the year end

process, please contact the hrSource Center at 1-866-4 SOURCE (1-866-476-8723). If you are outside the U.S., please contact your local HR support.

– For more information on Core Competencies, please visit: http://cwprod.pfizer.com/LEAD/WTOC/default.html


Performance Management Planning Calendar

Colleagues create P f G l

Performance ManagementGPM available

Managers and Manager approves

JAN FEB MAR APR MAY JUN JULY AUG SEP OCT NOV DEC

Performance Goals

Manager conducts Annual Review

Goals Approved

Managers

Managers collect

feedback

Colleague Self Assessment due

Colleagues work on progress

reviews

Mid-Year Performance

Discussion are

goals

Mid-years created

Managers create colleague performance reviews

Calibration

Managers release Annual ReviewsDiscussion are

held

GPM releases Annual Reviews

Talent Planning

------------------------ Ongoing -------------------------Review and update IDP as appropriate.

At minimum, update IDP annually. Development Planning

Review and finalize merit, GPP and LTI

recommendations

Mgrs conduct comp discussions

Compensation Planning Tool closes


Compensation

Documents

Pfizer Performance Management Process...Pfizer Performance Management Process Confidential and Internal to Pfizer - subject to works c ouncil and/or union consultations and other legal