One of CNH Industrial’s key challenges is growing and adapting to a constantly changing environment. The Company understands that the nature of today’s socio-economic context calls for leaders able to evolve. A solid people management process is the key to success because it includes employees in the Company’s business goals, makes the most of employee talent, and fuels workforce motivation. CNH Industrial is committed to supporting its employees through training initiatives, and by recognizing and rewarding their achievements and contributions to business results. In this manner, the Company not only measures itself against today’s expected levels of global competitiveness, but also gains insight into potential improvements and succession plans that are essential for building the Company’s future.
The Leadership Development function comes under the Human Resources Department, directly reporting to the Chief Human Resources Officer (CHRO), and is committed to developing human capital within the Company.
This corporate team has dedicated resources in all Regions that directly support the Chief Operating Officer’s Human Resource Business Partners (HRBP). The main responsibilities of the function are to oversee and deploy the Performance and Leadership Management (PLM) process throughout the organization, to define and implement the Succession Planning and Talent Review process, as well as more broadly to oversee talent management. As part of the latter process, Leadership Development partners with internal stakeholders (senior business leaders and the HRBPs) and with external institutions to identify the most critical business needs, and develop the best leadership development solutions specifically to answer those needs. The goal is to help the organization develop an internal pipeline to fill critical leadership roles in the future, thus contributing to the long-term success of the Company.
The conviction that people are the Company’s greatest asset is the baseline principle of the Human Capital Management Guidelines, which aim to increase organizational effectiveness. These guidelines provide indications for all HR functions and managers worldwide on supporting and promoting the development of employees.
PERFORMANCE AND LEADERSHIP MANAGEMENT
Five key principles, set out in the CNH Industrial Human Capital Management Guidelines (publicly available on the Corporate website), underpin the Company’s approach to the management and development of human capital:
- meritocracy – rewarding excellence
- leadership – a key driver in managing change and people
- competition – a factor to be embraced and encouraged
- best-in-class performance – a core benchmark
- accountability – delivering on promises.
These principles are embodied in the Performance and Leadership Management (PLM) appraisal system, adopted worldwide to assess employees (managers, professionals, and salaried). It is one of the key processes used by CNH Industrial in the management and development of human resources. Through the PLM process, specific targets are set to help guide and assess employees based on their results, attitude, and behavior.
The CNH Industrial Leadership Development function implements the five key principles according to the following pillars, which are also defined in the guidelines:
- skills are an asset to be developed and shared. CNH Industrial is committed to helping people adapt in real-time to change in an increasingly complex world. As employee development and the continuous improvement of Corporate performance are closely interrelated, the Company’s main objective is to increase the value of human resources through targeted programs. Indeed, training and knowledge management contribute to continuous improvement by developing cultural skills, reinforcing the Company’s identity, and spreading its values
- leaders are the best guarantee for the future. To promote the value of leadership, CNH Industrial leverages a specific model based on two main dimensions - leading the change process and leading people. This is achieved by encouraging cultural change and enhancing leadership values to achieve outstanding results
- Talent Management and Succession Planning are central. Talent Management is a key lever in achieving the Company’s talent development goals and releasing the potential of its people. Attracting, retaining, and developing leaders that can face future challenges, prioritizing the development of internal resources, is crucial to effective succession planning. A consistent, global approach that encourages cross-functional and crosssegment mobility across Regions allows Company-wide capitalization of the talent management process, and constitutes an essential competitive advantage. This process ensures that the leadership pipeline is continuously fed at all levels of the organization.
Performance Management System
As part of the performance management system, managers and employees sit down at the beginning of each year and discuss individual targets to be achieved during that year. Then, at year-end, individuals are evaluated on performance (i.e., achievement of business targets) and leadership (i.e., the ability to lead change, work as part of a team, and manage people). These two dimensions – performance and leadership – are plotted on a ninesquare grid, to provide a brief assessment of the employee’s results. Consistency in the evaluation process is achieved by comparison with the ratings of other employees in the same category/role. Calibrations within an expected distribution curve reduce the risk of inequity and align appraisal outcomes through defined criteria. The final results are discussed in an open dialogue between manager and employee on areas identified for improvement, contributing to validating the employee’s performance and strengthening his/her bond with the organization. Upon completion of the process, employees can access their evaluation online, enter details on their professional aspirations, and request specific training to address areas identified for improvement, such as coaching, exposure to top management, etc.
This unique skills-mapping and appraisal process is supported by IT systems that give managers full access to upto- date information on the people within their organizational unit, as well as those only indirectly in their reporting line. In this way, individual employee performances are accessible and can be examined by top management within the organizational structure.
During 2014, performance and leadership mapping was carried out on 23,912 employees (of whom 5,258 were women), including all managers and professionals and 87% of salaried employees. The latter was a significant increase from the 66% mapped in 2013, and comprised more than 1,800 new employees, mainly in France, Germany, Czech Republic, and Spain. Every year, a training program on Performance and Leadership Management (PLM) for managers and employees is rolled out in each Region. In 2014, more than three hundred training sessions were managed worldwide (more than 230 in EMEA) with over 3,400 employees and managers taking part. Additional web-based training was made available to all managers and employees worldwide to support the process, and Leadership and PLM sections are available on the Corporate Intranet.
CNH Industrial’s Chairman and CEO firmly believe that an organization’s success is based on its personnel and, for this reason, they directly involve themselves in the PLM process. In 2014 they spent a day analyzing the results of the PLM process, focusing on top managers. In addition, the CEO spent more than two full days with the Regional and business Chief Operating Officers, focusing on their leadership teams. This process serves as the basis for all employee-related management decisions, and is a fundamental element in Talent Management and Succession Planning.
In addition to the PLM evaluation process, other individual performance appraisal processes are in place around the world. In 2014, such systems were applied to 4,338 men and 567 women, for a total of 4,905 employees (of which 87% were hourly).
In line with CNH Industrial’s Achieve and Earn philosophy, designed to promote a high-performance culture and reward those who achieve results based on performance and leadership, the results of PLM assessments are used as the basis for the individual contribution component of eligible employees’ variable compensation. This demonstrates the extent to which the Company values a high-performance culture focused on results, and rewards achievements (performance) and the means to achieve those results (leadership).
TALENT MANAGEMENT AND SUCCESSION PLANNING
CNH Industrial operates in dynamic, highly competitive industries where success is achieved through the presence of talented individuals within the organization, and by appointing the right people to key positions. These objectives form the basis of the Talent Management process, which identifies the most talented employees and fast tracks their development. The selected individuals are offered professional opportunities that allow them to gain experience in other geographic areas or segments, enabling the Company to develop effective succession plans that give priority to candidates from within the Company.
The process is conducted in a uniform manner across countries, functions, segments, and levels of the organization.
Key individuals, selected on the basis of their professional profile (in terms of performance and leadership) and potential for growth in positions of greater responsibility, are evaluated through a process that directly involves management, from the immediate supervisor to top management.
In June 2014, the CEO held the first CNH Industrial Talent Review together with top management. The Group Executive Council (GEC) dedicated one full day to review 160 key leadership positions and 332 successors for first line positions, including the assignment of key roles, the assessment of 274 talents along with initiatives to support their development, and international/cross-functional career plans.This was the final step in a comprehensive company-wide process led by each GEC member within their individual functions.
The program focused on ensuring that all key leaders were developing both a short-term and long-term succession plan. Through this process, attention was focused on talented individuals with less experience, not yet widely known within the organization but meriting investment as potential leaders for the future.
Top Management Seniority
The importance that CNH Industrial gives to the development of its internal human resources is demonstrated by an average length of service within the Company of 19 years for the members of the GEC, ranging from 6 to 44 years. The 184 Business Leaders that report directly to GEC members have an average length of service of 15 years, ranging from less than 1 to 44 years.
In 2014, 211 managers were promoted internally, while 33 were hired from outside the Company.
TRAINING AND DEVELOPMENT
CNH Industrial believes that employee training is key to skill management and development. Training allows sharing operational and business know-how, as well as the Company’s strategy and values.
CNH Industrial applies a Training Management Model to enable a more effective and flexible response to evolving training needs arising from changes within the Company and in the economic environment.
The Company manages training through a four-step process: training needs identification, content development, program delivery, and reporting. Ownership of each lies with different corporate functions, depending on the areas of content or expertise to be enhanced.
CNH INDUSTRIAL TRAINING MANAGEMENT MODEL
The Training Management Model is business-oriented; business functions are therefore deeply involved in the four steps of the training process for content areas such as:
- management, leadership, and development
- business and job-related skills
- shared tools, languages, soft skills, legal aspects and compliance, ethics, etc.
The Leadership Development function of Human Resources facilitates the overall training process by providing both functional and regional support.
CNH Industrial manages the overall training process through a global Learning Management System, an Internet-based corporate tool available to employees via Corporate Intranet. The Learning Management System allows defining and managing a comprehensive learning process for each employee based on business, location, and/or specific individual needs.
The Leadership Development team serves as the Training Committee, specifically monitoring the implementation of CNH Industrial’s Training Management Model. It comprises representatives of HR Leadership Development EMEA, NAFTA, LATAM, and APAC, HR Training EMEA, and HR Leadership Development FPT Industrial.
The head of Leadership Development, reporting to the Chief Human Resources Officer, serves as the Chairman of the Training Committee.
CNH Industrial builds upon segment-specific training programs, deeming that the most effective solutions are specifically tailored to individual needs.
Training effectiveness and efficiency is monitored and measured on an ongoing basis using KPIs such as the Kirkpatrick scale1. Training effectiveness is evaluated on the basis of: participant satisfaction with the initiative (reaction) improvement in individual knowledge/skills (learning) applicability of concepts learned to work processes (behavior).
To verify whether the desired outcomes have been achieved, the Leadership Development team centrally monitors: number of participants involved in training initiatives hours of training direct cost of training.
Each function is then responsible for providing and for locally following up on the above information.
Training in Numbers
In 2014, CNH Industrial invested $6.2 million in training. The training strategy relies on the use of inhouse experts in the teaching process, reducing the total investment. A total of 803 thousand training hours were provided to approximately 42 thousand individuals, of whom 84% were men and 16% were women. Of the total employees participating in training, 49% were hourly, 49% salaried and professionals, and 2% managers.
Each employee received an average of approximately 19.1 hours of training (hourly employees averaged 18.0 hours, professionals and salaried employees 20.7 hours, and managers 11.9 hours) compared with the average of 13.9 hours in 2013. Female employees received an average of 17.9 training hours each, male employees an average of 19.3 each.
In addition, around 253 thousand hours of training on occupational health and safety topics were delivered to about 32 thousand employees (of whom 24 thousand were hourly), and approximately 42 thousand hours of training on environmental issues delivered to around 24 thousand employees (see also pages 90; 170).
Investments in classroom, online, and on-the-job training focused primarily on the development of jobspecific expertise (81%), language and other programs (5%), and management skills (14%).
Most corporate learning campaigns are delivered online, which allows individuals to pursue training when most convenient and minimizes work disruption by allowing them to remain in their place of work.
The Company disseminates the principles of the Code of Conduct and the values of good Corporate Governance to all employees, irrespective of level or role, through specific periodic training and other information channels.
In 2014, approximately 18 thousand hours of training on human rights and other Code of Conduct aspects, along with anti-corruption training, were given to approximately 18 thousand employees (see also pages 59; 77).
(1) The Kirkpatrick scale is a methodology for evaluating the effectiveness of training courses; it involves different levels of measurement, and is applicable to any organization.
EMPLOYEE DEVELOPMENT PROGRAMS
CNH Industrial firmly believes that a more skilled and knowledgeable workforce enhances the value of human capital and contributes to employee satisfaction, which correlates strongly with improved performance. Key to individual development is the relationship with the manager, who regularly guides and coaches employees. In addition, and to complement and further support development, the HR Department proposes specific programs, for the most part customized according to people’s individual needs.
Specifically, the Lead to Win development program was launched for selected, talented non-managerial employees with the aim of involving them in an Action Learning Project. In NAFTA, 2014 marked the second year of this initiative, and CNH Industrial is working to bring the program to other Regions in the coming years.
The Lead to Win program was created to accomplish several key objectives:
- assess the leadership capabilities of emerging talent and create an individual development plan to help prepare for success in a CNH Industrial leadership role
- help employees grow in their understanding of the business, beyond their normal day-to-day experience, working on projects that offer real solutions to business problems
- provide participants with an opportunity to collaborate and build relationships with talented peers from across the organization
- allow participants significant exposure to senior leadership in the organization.
In 2014, the Working as One Company campaign, promoted by the Internal Communications Department, was rolled out globally with the aim of actively building a culture to support and drive behaviors aligned with business strategy. The campaign was deployed through specific communications and training initiatives, such as town hall meetings, and staff and team meetings.
CNH Industrial continually works on enhancing the employability of its personnel. The Job Posting program is active in the majority of the countries in which CNH Industrial operates, with the aim to promote internal mobility.
Job Posting works as an internal marketplace where supply and demand for professional opportunities come together in a transparent and efficient manner, following some key principles:
- giving visibility and priority to internal candidates
- encouraging a self-driven and proactive approach from employees
- developing a new relationship at various levels of the organization between the individual and his/her manager
- fostering transparent relations with the employee (giving clear feedback to all candidates during the selection process).
Each Region posts open positions, making them visible to all employees within the Region. In some cases, employees are also allowed to apply for positions outside of their Region.
Over the course of 2014, the program advertised 1,220 positions, and more than three thousand internal candidacies were received from all over the world. The majority of the positions were posted in NAFTA and EMEA.
The Company also develops specific programs to manage career endings, helping employees transition to new jobs and re-orient themselves in the job market. An internal analysis revealed that outplacement services, outsourced to external partners, are available in 21 countries. Based on specific needs, and at the Company’s discretion, CNH Industrial offers outplacement services to managers, provided by carefully selected external partners. In 2014, the service was utilized by approximately thirty people, mainly in Italy and the USA.
PEOPLE SATISFACTION SURVEYS
CNH Industrial recognizes that people satisfaction surveys are a useful tool not only for measuring the level of employee satisfaction, but also for identifying improvement opportunities that meet the needs and expectations of the entire organization.
In 2014, across Regions, CNH Industrial started to gather information provided by departing employees during their exit interviews/surveys. The goal was to help organizations understand what employees look for in a new organization, to determine how actively they had been seeking new employment (or were recruited by other organizations), and to design action plans addressing any potential areas of dissatisfaction.
In NAFTA and LATAM, for example, departing employees are asked to complete a questionnaire about management, career development, Company culture, and the work environment. Human Resources consolidate data on a monthly/quarterly basis and share specific business unit feedback with the relevant managers, in order to address specific concerns within their areas. CNH Industrial’s results and reputation are benchmarked against external competitors, based on comments and feedback from current employees.
Interviews provide the Company with important and useful information that is ultimately an indication of employee satisfaction.
Furthermore, in 2014, 850 employees in Mexico took part in the annual Great Place to Work Institute survey, to assess their level of labor culture improvement since receiving the Institute’s certification.
CNH INDUSTRIAL AMONG BEST COMPANIES TO WORK FOR IN BRAZIL
In 2014, CNH Industrial was classified among the 150 Best Companies to Work For in Brazil, within the scope of the most important organizational climate survey in the country. The survey was conducted by Voce SA Magazine (published by Editora Abril, one of the largest and most influential media and educational groups in Latin America), in partnership with Fundação Instituto de Administração of the University of São Paulo, one of Brazil’s leading higher education institutions, recognized throughout the world in a number of rankings. CNH Industrial successfully completed a series of stages in order to be included on the list. First, a report was drawn up summarizing various human resources policies and practices in the Company, divided into seven categories: strategy and management, leadership, compensation, careers, health, development, and corporate citizenship.
At the same time, nine hundred employees were selected at random by the publisher to answer an online satisfaction questionnaire consisting of 64 questions covering various issues relating to identity, satisfaction and motivation, learning and development, and leadership. In the final stage, a journalist from the magazine visited the Company to meet employees and the heads of Human Resources.
The result reflects the efforts and commitment of all employees to making CNH Industrial one of the most respected and high-profile companies in Brazil.
INTERNAL CULTURE DEVELOPMENT AND COMMUNICATION
In 2014, one of the Company’s primary objectives was to support change management and integration, continuing the process started in 2013.
As part of these efforts, CNH Industrial carried out a series of internal communication initiatives focused on:
- aligning employees with Company goals and results
- spreading and fostering the Company culture through a variety of communication tools and initiatives
- supporting motivation and people engagement.
At CNH Industrial, the Internal Communications function is a center of expertise within Human Resources. The global head of Internal Communications reports directly to the Chief Human Resources Officer and is responsible for a team organized according to Company-wide processes (Corporate Messages and Publications, Intranet and New Media, and Internal Campaigns and Events) and regional activities. The manager of each process reports directly to the head of Internal Communications, as do the four managers responsible for communications activities in the EMEA, NAFTA, LATAM, and APAC Regions. The Regional Internal Communications managers also work in coordination with the Regional heads of Human Resources.
In 2014, CNH Industrial continued to ensure internal alignment and constant information throughout the organization via several communication channels. In particular, its employee magazine LINK, printed quarterly in 14 languages and with a circulation of over seventy thousand, delivered success stories from across the globe to unite the Company and align employees with common goals. The Company also circulated the CNH Industrial Post newsletter, designed to deliver information on the quarterly results to both salaried and hourly employees in local languages and in easy-to-read digital and poster formats.
Moreover, a Company results presentation, designed specifically for internal use, was shared through town hall meetings held across all Regions. Thanks to these events, employees had the opportunity to listen directly to top management on the subject of earnings results, and to ask questions. A survey was carried out following the meetings, and the response in each of the Regions showed that the events were appreciated by over 90% of participants.
During the year, CNH Industrial continued to develop initiatives aimed at spreading and fostering the Company culture. Among these was the Working as One Company campaign, a flash video designed to present figures and specifics on CNH Industrial and its brands, explain the new organizational structure, and illustrate required behaviors and ways of working (see also page 86). Moreover, an Orientation Handbook was created for new employees to present the Company in a consistent way, while providing specific information on local policies and services.
CNH Industrial improved its monitoring and feedback system in 2014, with a focus on enhancing the measurement of the effectiveness and reach of its communication tools. For salaried employees, the Company utilized electronic surveys to solicit feedback on local events in all Regions. Moreover, in the NAFTA Region, a feedback campaign and quiz was carried out locally at three plants to better understand how to improve communication to hourly manufacturing employees.
SUSTAINABLE BEHAVIOR CAMPAIGNS
CNH Industrial launched several campaigns to promote sustainable behaviors and foster education and awareness on key subjects. The Action for Road Safety initiative continued to educate employees on best practices and safe driving etiquette, in particular through a series of communication highlights related to the Ten Golden Rules of Road Safety (see also page 124).
The Traveling to Cost Savings and Smart Traveling campaigns were aimed at informing employees of relevant policy changes through animated infographics, while educating them to take a responsible approach to business travel. The Videomeeting campaign encouraged employees to use telepresence, as a more sustainable option to business meetings, instead of traveling (see also page 101). The A Call for Cost Savings campaign informed employees of ways to reduce spending by adopting the correct use of Company telecommunications devices.
A variety of events were also planned to support motivation and people engagement in 2014. To benefit employees and their families, CNH Industrial continued to organize Family Days.
In EMEA, the Company held events celebrating significant brand and plant anniversaries at Ulm, Germany (150 years), Basildon, UK (fifty years), and Antwerp, Belgium (fifty years).
With a focus on hourly employees, in 2014 the Company launched the Fairs Award initiative in the EMEA Region.
This activity was designed to boost employee motivation and strengthen their commitment and sense of belonging to CNH Industrial. Participants, selected from different plants, were offered the opportunity to see the products they work on every day displayed at trade fairs, along with those of the Company’s main competitors. Similar initiatives were also carried out in the LATAM Region.
As usual, CNH Industrial took advantage of national holidays to organize specific engagement initiatives. In India, employees attended a Company-organized event for the Vishwakarma Pooja festival and, in Italy, more than 7,500 children under ten participated in the Natale Bimbi Christmas celebrations, held yearly for CNH Industrial employees.
In NAFTA, over five hundred people attended the annual family day celebration at the Chicago Children’s Museum, with free food and entrance to the museum thanks to the Company’s corporate membership.
In LATAM, year-end parties were held for around 7,600 employees in Brazil, nearly four hundred employees and family members in Argentina, and seven hundred employees and their families in Venezuela. In addition, in Brazil, more than 1,200 family members were invited to visit employees at their place of work during family days.
In the APAC Region, a special day was arranged for the opening of the new agricultural plant in Harbin, China, involving around four hundred employees and their families. In India, employees took part in a family day held at the Case Construction plant. Moreover, in APAC, the Company dedicated space to different cultures through tailored communications to commemorate locally significant holidays and festivities.
To engage employees in their local working environments and meet specific information needs, CNH Industrial continued to improve and enrich its local publications. In 2014, ten newsletters and seven magazines were available in support of local communication and engagement. An important addition was the Close to You Chinese newsletter, especially created to connect and involve employees at the various sites in the country.
As per previous years, all communication activities carried out in 2014 were supported and enhanced through the Company Intranet, a long-term, large-scale communication tool to inform and unite employees worldwide. During the year, this source of daily information and news was enriched with new features and content, including the promotion of sustainable campaigns, such as the UN World Environment Day, to further reinforce Company values and culture. Furthermore, a news publishing tool was created to enable users in different regions to contribute with local content. These features improved the Company’s capacity to reach employees and deliver information to them in a timely and tailor-made manner.