IMPLEMENTING THE NEW ORGANIZATION IN CEMEX UK Process Overview

HUMAN RESOURCES Planning & Development Platforms University of Ulster – Jordanstown November 7, 2006 -0- CEMEX – WHO WE ARE Building Materials: Cement, Concrete, Aggregates Sales US$ 15.3 B and EBITDA US$ 4.0 B Operations in 50 countries 1985-2005 average growth 22% p.a. 1985-2005 average Shareholder Return: 26% p.a. Listed on NYSE and Mexican Bolsa Opportunities for further profitable growth -1- FOR 20 YEARS CEMEX HAS ACHIEVED NEARLY CONTINUOUS 20% SALES AND EBITDA GROWTH Sales and EBITDA US$ B 18 16 14 12 10 8 6 4 2 0 85 86 87 88 89 Sales 1985-2005: % EBITDA 1985-2005: % Headcount % 22 CAGR 21 11 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 -2- AGENDA OVERVIEW OF TALENT ASSESSMENT SUCCESSION MANAGEMENT P&PA MY INFO CEMEX LEARNING HIGH POTENTIALS PROGRAMS -3- WHY DO WE NEED TO MEASURE TALENT? 1. To better predict future performance based on the underlying elements responsible for employee’s behaviors: A. B. Drivers (Values) Enablers (Competencies, Knowledge and Skills) 2. To increase the value generated by OHR Processes (Workforce Planning, Succession Management, Talent Acquisition, Recruitment, Development, etc.). Examples: A. Global level search according to the match between the position required profile and the collaborator’s profile Design development programs focused on closing the gap between the individual’s profile and the required profile as determined by the company’s strategy B. 3. Move towards a model to segment effectively and reward based on equity and not equality ONE CAN ONLY IMPROVE WHAT ONE CAN MEASURE -4- PERFORMANCE MANAGEMENT IS THE FOUNDATION OF CEMEX’S TALENT MANAGEMENT MODEL • Business Strategy translates into Talent requirements that need to be compared with Talent capacities • The strategy translates into business objectives to be met by our talent • Talent has a diverse composition measurement to predict success effectively: - Experience and Education - Thinking Style - Leadership Style - Emotions - Values - Drive to meet objectives -5- WHAT IS SUCCESSION MANAGEMENT? Succession management is a series of related processes by which organizations anticipate and secure an adequate supply of talent for future business needs. Development Talent Identification Deployment & Balance Linking Strategy Components of Succession Management Process Retention Organizational Foundations Process Measurement Recruitment -6- SUCCESSION MANAGEMENT PREMISES • Succession Management responds to CEMEX’s Strategy • Strategic requirements are translated into criteria for yearly process • Based on competency model and position profiles • Ownership of the process and related development lies on functional area management • Management is always on the “look out” for talent, identifying possible successors • Management “pushes” promotion of approved replacement charts and fosters their development plans • HR provides value added contribution and facilitation • Helps management identify candidates that match profiles • Acts as facilitator and consultant to ensure process quality • Succession Management Process supports both corporate and local requirements • Process and tool are scaleable according to local needs • Succession Management is integrated with other HR processes • P&PA, MyInfo and Discovery results help identify best candidates • Succession Management and organization must evolve together • This first year, the approved Succession Plans will be communicated down to Business Units Vicepresidents and third level Corporate Directors (Level to CEO 3) -7- P&PA PLATFORM SERVES SEVERAL HR PROCESSES P&PA • 360° (multi-rater) assessment of key competencies • Performance Evaluation • Performance Evolution • Potential Assessment DEVELOPMENT TALENT MANAGEMENT COMPENSATION • The yearly assessment of CEMEX competencies is the basis for the Individual Development Plan of the employee • Consistent performance across years, as well as, the potential evaluation of a supervisor are key inputs to determine readiness to move to a new position • Yearly performance evaluation determines a fixed percentage of variable compensation (for executives only), and can give supervisors a guideline to determine salary raises -8- CEMEX PERFORMANCE MANAGEMENT PROCESS 1 OBJECTIVE AND 3RD PARTY EVALUATOR DEFINITION February – March (6 w) 1. Define objectives & competency evaluators at the beginning 2. Objectives definition after budget is approved 3. Objective cascading & consulting 2 MID-TERM OBJECTIVE & 3RD PARTY EVALUATORS REVISION June – August ( 6 w) 3 OBJECTIVES, COMPETENCI ES AND POTENTIAL EVALUATION November – January (8 w) 1. Extend time allotted to revision to avoid time conflicts 2. Ensure objectives & evaluators are still relevant given business conditions MAIN ACTIVITIES 1. Evaluate objectives & perform multi-rater competency evaluations 2. Redefined potential assessment (initial pilot) 3. Capture feedback on the process and its drivers 4. Comply with deadlines (e.g. self-assessment is not mandatory) 1 2 Promotes strategic alignment & responds to business needs Cascading objectives Consulting objectives Clear goal setting 5-point scale gives more room for recognition Conversation to set objectives Allows adjustments to reflect situation Objective proposal modifiable for a longer period Comments on each evaluation People management training Potential assessment Opportunity for timely feedback Individual formal feedback End of the process survey Link to compensation (variable bonus) + salary rises -9- Facilitates clear communication & understanding of standards Ensures objective grading and differentiation of highpotentials Promotes continuous feedback & development Reinforces highperformance attitudes 3 4 5 MY INFO WHAT IS MY INFO? My Info is an automated and standardized system in which CEMEX personnel can post their resume. My Info is a key application for Human Resources planning and management purposes. It supports decision-making processes in related issues such as succession planning, international mobility and learning opportunities. It is the responsibility of every employee to keep his/her information updated in the tool. WHO PARTICIPATES IN MY INFO? The employees who must be participating in My Info are: 1) P&PA participants 2) Discovery participants - 10 - MY INFO WHAT INFORMATION IS INCLUDED? • • • • • • • • • Position and contact information Countries and Cities of Residence Academic History Languages Computer Skills Professional Experience, actual and previous positions DD y PMI, Projects and Special Assignments Professional Goals Mobility - 11 - LEARNING CONTENT ALIGNED TO BUSINESS STRATEGY AND LOCAL CONTEXT CEMEX Strategy Global Strategy Local Context and Strategy CEMEX Learning Institutional Learning • Prescriptive Learning to develop the knowledge and skills needed by: – – Career Level Function / Area Individual Learning • Develop behaviors based on each individual’s P&PA gaps Business Unit Learning • Develop knowledge and skills according to local context and strategy - 12 - INSTITUTIONAL AND BUSINESS UNIT LEARNING According to Career Level and Function Learning Experiences for Individual’s Needs BUs Learning by Career Level Regional President President HIPO Programs* Knowledge & skills GLP CEMEX Competencies Sloan Knowledge & skills Knowledge & skills Knowledge & skills Knowledge & skills VP CEMEX Human Capital Director CIMP EID Manager MBA Top 20 PD Employee Knowledge & skills Knowledge & skills Learning by Functions / Areas in BUs and Central - 13 - INSTITUTIONAL PRESCRIPTIVE LEARNING Knowledge and Skills by Career Level Enterprise Leadership • Leadership + Leadership / Managerial Skills Area Management 1st. 2nd. 3rd. Line / Staff management • • • • • Business Unit/Function Leadership 1st. 2nd. 3rd. • Leadership • • Market Intelligence Skills (Adv) Institutional Relations Leadership - Managing Mgrs Passage Gral Business Management Skills Strategic Thinking (Advanced) Decision Making Understanding Global Business / Cultural Diversity - Employee 1st. 1st. nd. 2nd. 1st. 2nd. 3rd. • • • • • • • • • Leadership - Managing Others Passage • Customer Service (Advanced) • Finance for non-financial managers (Advanced) • Strategic Thinking (Basic) Negotiation • Project Management Language skills Technical Skills 3rd. On boarding Customer Service (Basic) Communication skills Analytical Skills Budgeting Finance for non-financial managers Continuous Improvement Skills Basic Time Mgmt Skills + - 14 - HIGH POTENTIAL PROGRAMS DESCRIPTION Global Leadership Program Goals: • • • • • Accelerate readiness of executives who have the potential to assume top leadership positions Strengthen our culture to become a source of competitive advantage through effective leadership Provide participants with the change management skills to facilitate adaptation to new business context Assure visibility of high potentials Retain and motivate key talent CEMEX International Management Program Goals: • Develop participant’s knowledge and skills on four streams: leadership, strategic thinking, market strategy and general business • Develop participant’s teamwork and execution capabilities • Broaden participant’s network within CEMEX Partners: Stanford, INSEAD and Monterrey TEC 7 classes: 1998-2004 429 graduates 90 graduates from 3 classes (1998, 1999, 2002) 69% of graduates have been promoted after the program Graduate Scholarship Program Goals: • Provide outstanding employees with the financial support necessary to cover their tuition and basic needs during their graduate studies in the areas of: Business Administration – Master in Business Administration (MBA) and Sloan Fellows Program Technical Disciplines – Determined based on the talent needs within each Business Unit and Central Goals: Professionals in Development • Develop a group of professionals in cement, readymix and aggregates with a specialization in key areas to support the future growth of the company: Planned rotations Duration 52 weeks Learning by doing approach Open to employees and new hires Includes international rotation - 131 employees sponsored (1992 – 2005) - 15 - GLOBAL LEADERSHIP PROGRAM FORMAL PROGRAM (18 months) JAN – MAY 2006 Preparation • Selection of participants • EC and participants express preferences for interviews JUNE 2006 Session 1 3 days • Kick-off Meeting with CEO • Establish coaching relationships • Assessment feedback / Insight sessions • Begin creating development plans NOV 2006 Session 2 5 days • University session – Change management – Leadership – Collaboration & coordination JUNE 2007 Session 3 3 days • Projects kick-off • Training: – Globalization – Innovation – Customer focus – Communication & public affairs – Career planning DEC 2007 Session 4 1 day • Project presentations to EC • Program wrap-up • End of the program • Participants fill preassessments Personal Coaching Projects Interviews with CEO & EC - 16 - CEMEX INTERNATIONAL MANAGEMENT PROGRAM DESIGN Leadership stream • Human capital management • Cross-cultural awareness • The value chain • The spectrum of competition • Business strategy around customers • Innovative and customer oriented organizations • Strategies for growth • Globalization and strategy • Pricing strategies • Brand management Strategic thinking stream Market strategy stream General business stream • Finance • Macro-economics • Information technology • Cultural Diversity CIMP Projects e-Learning courses Average participant profile (class of 2004)       2006 Key program features   TOEIC = 912 High performer, high potential Willing to relocate 6 years in CEMEX Level to CEO 4 Master Degree 7 years ago ITESM module extended to 2 weeks On-line module replaced by complementary e-Learning courses  Double size (110 executives – 2 groups)  50% from new operations  Aprox. 18 project teams - 17 - GRADUATE SCHOLARSHIP PROGRAM Top B-Schools in the US & Europe Top- 8 in the US* 1 Programs MBA Sloan Fellows Technical Disciplines Scholarships / Year 16 3 Determined based on needs of each Business Unit / Central 2 Harvard Wharton Top- 4 outside USA* 1 2 3 4 INSEAD (France or Singapore) IMD London Business School ** IESE 3 4 5 6 7 8 Stanford ** University of Chicago Columbia Kellogg Tuck MIT** * Source: Average Ranking (latest) from Business Week, FT, US News and Forbes ** Accredited for Sloan Fellows ASIA SAC 3% 8% 8% 7% 56% 18% Region/Business Unit Central Scholarship Quota 2 4 2 2 2 2 5 1 Scholarships (1992 2004) = 131 Retention Ratio: 73.5% Europe – Africa USA Central NOAM Mexico USA SAC IMEA EUROPE Mexico ASIA TOTAL 16 - 18 -