Context

Regular performance management review and annual individual development plans are a critical element of our strategy to retain, motivate and develop our staff. Our emphasis on this area provides our employees with opportunities for continuous personal and professional development as well as helping us to recognise and reward talent.

Our approach

Managers in Maisons, Regions and Functions are responsible for managing the performance of individual employees. They are guided by the Group’s Performance Management Process which supports transparent compensation and rewards decision-making using clear job responsibilities, annual strategic individual objectives and development of personal competencies. Virtually all employees at Richemont undergo formal performance management reviews leading to individual development plans.

Values and competencies

Our nine common core Competencies, which are shared Group-wide and are, in turn, based on the Group’s five values, set out the common behavioural standards and skills that will help optimise the success of the individual in the Group.

These core competencies form a central part of the individual development plans for our employees.

The Group has also developed a specific Performance Management learning and development programme specifically for Managers, aiming to support them in implementing the process within their teams. The programme is designed to be an on-going and incremental learning path.

In addition, support toolkits are provided and distributed to Group staff electronically. These toolkits include Manager and Employee Handbooks and a database of key learning solutions. The database provides a source of inspiration and concrete ideas for employees when building their individual development plans, such as tips for on-the-job actions, self-directed learning and external training.

Retaining talent

Alongside our continued investment in learning and development, the Human Resources departments across the Group work with Managers to facilitate opportunities for employees to transfer between Maisons. This internal mobility has mutual benefits – providing greater career development opportunities for employees and helping to retain skills and talent within the Group.

In addition, to ensure equitable treatment across markets, the Group’s corporate Human Resources function performs a number of benchmark studies comparing reward and compensation practices. This information is used in an annual salary review to ensure salaries and benefits remain competitive relative to our peers.

Disclosures concerning executives’ rewards, including basic salary, short-term cash incentives, the Group’s stock option plan and long-term incentive plan are included in Part 5 of the Group’s Corporate Governance Report. That report, which also describes the Compensation Committee’s role, can be found within the Group’s Annual Report.

Key performance data

Employee turnover

Employee turnover and retention data is monitored by country, Maison, functional area and type of employee contract. Richemont’s employee turnover data is not disclosed. However, through Group-wide efforts with respect to new employee induction programmes and on-going performance management, employee turnover rates have improved. Certain areas of the business, such as retail and manufacturing, traditionally experience a high level of employee turnover and these are being closely monitored.

Length of service

The following chart shows a breakdown of the workforce by length of service (seniority). Some 43% of employees have worked for the Group longer than five years and the average length of service for employees is 6.8 years. This reflects the expansion in the underlying businesses over the last decade or so, in particular in terms of geographic coverage and the growth in the Group’s distribution and retail activities. Moreover, the acquisition of the young and fast-growing NET-A-PORTER.COM business during the 2010/11 financial year has reduced the overall average length of service reported by the Group.