Sberbank - Annual Report 2010 - Motivation for Success

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# Motivation for Success

Motivating our employees is a critical factor in achieving our shared corporate goals. The Bank pays significant attention to the development of corporate motivation programmes involving both tangible and intangible rewards and to the creation of incentives for effective work. Sberbank’s main remuneration principle is pay for results, not procedures.

In seeking to attract and retain highly-skilled staff, we strive to offer our employees a competitive level of remuneration. We rely on specialised and general sector surveys to benchmark the salaries we offer against the employment market. We use a system of salary grades and determine base salary brackets for each grade taking into account salaries for similar jobs offered on the employment market. In 2010, the average monthly salary for Sberbank employees (including all payments in the reporting year such as annual performance bonuses and rewards for the length of service) increased by 28.4% compared to 2009, reaching RUB 44,000.

It is our belief that employees should have the opportunity to influence the size of their remuneration and in 2010 we began a reform of our corporate employee motivation programme. A new system based on modern approaches towards the evaluation of staff performance is already in place at the Central Head Office, and we are working towards introducing it at our regional banks. The personnel evaluation tools used in the system (evaluation centres, business games, conferences and guided interviews) rely on a model of key competencies.

The performance of managers from department heads to senior management is evaluated according to the Priority Projects system. This includes setting objectives for managers, monitoring their progress and evaluating their performance on completion. One of the key principles in this system is the notion of ‘cascading objectives’. This implies that objectives aligned with the Bank’s strategy are first established for senior management. These objectives are then cascaded down through the organisational hierarchy, determining objectives for numerous local sub-projects. In the future, the Bank plans to develop professional tests to assess managers, the results of which may be used when making appointment and rotation decisions. We also plan to undertake an assessment of division teams and to prepare recommendations on the optimisation of their performance.

The evaluation of non-management staff is based on the 5+ personal efficiency evaluation system. Through this system, staff are assessed against five criteria: personal performance; improvement in professional knowledge and skills; innovation and process optimisation; team work; and customer orientation. The evaluation results are used for distributing among individual employees a bonus fund allocated to a particular division — while the overall size of the bonus depends on the overall performance of the division.

In order to replicate this approach at our regional banks, we are actively working to form regional personal evaluation centres, develop distance evaluation methods and roll out staff training and assessment programmes. The Bank also has specific motivation systems tailored for certain categories of staff, such as front-office workers. The system launched in 2010 directly links additional rewards and bonuses to sales of specific products. Our corporate programme to create a staff evaluation and career management system has been classified as a strategic programme and is overseen by Sberbank’s senior management.

We strive to provide our top employees with the best possible opportunities for career growth and to realise their potential. The Bank already had in place a system to create a succession pool, but in 2010 we started a radical reform of the existing format. The new version of the corporate regulations on the succession pool will incorporate international and proprietary best practices with regards to forming and maintaining a succession pool. Our succession pool programme, like the staff evaluation system, is based on the development of key competencies. Career development experts are tasked with preparing personalised development plans for promising employees, helping them to fully realise their potential and to find positions best suited to their personal strengths and interests.

## League of Talent and Galaxy

Succession pool projects are a key component of the Bank’s personnel development system. The promotion of promising employees not only helps the Bank meet its need for a highly skilled workforce by using internal resources, but vividly demonstrates to other staff members the opportunities available for career and professional growth.

The League of Talent corporate project allows the best young employees to join teams working on priority business projects. The Galaxy and Galaxy-2 projects exist to select and train successors for positions on the Management Board or as heads of branches at our regional banks. The State programme prepares candidates to be heads of customer service outlets.

All employees selected for the project receive a comprehensive assessment. Based on the results of this assessment, we develop personalised competency development programmes, which include mentoring and relevant training courses. All employees are given specific recommendations on how they can improve their work, taking into account their strengths and weaknesses. High-potential employees are offered development plans on an individual basis.

In 2010, following the launch of these projects, we formed succession plans for key positions at the Central Head Office and identified operating and strategic succession pools.

In addition to salaries and bonuses, the Bank offers its employees a package of social benefits, such as a financial allowance for significant events and special circumstances, additional payments for non-working pensioners and various extra allowances for those working in the Far North of the country. Important additions to the corporate social package include a special voluntary medical insurance programme which is jointly funded by the Bank and its employees, an injury and serious illness insurance programme fully funded by the Bank3 and subsidised loans for employees. Certain regional banks provide additional benefits such as meal allowances.

We consider it important to help our employees maintain their financial stability after retirement. In order to improve the level of its employees’ social protection, the Bank is developing a Corporate Pension Programme which is to be launched in 2011. The Bank will make annual contributions to programme participants’ personal accounts in Sberbank’s occupational pension fund; the size of this contribution will depend on the length of service with the Bank. After retirement, programme participants, in addition to regular state pensions, will be paid occupational pensions, the value of which will depend on previous payments made into their personal pension accounts.

We encourage our employees to strive for professional growth and excellence in their work. In addition to financial rewards, we pay significant attention to public recognition of their achievements. The Bank has in place a system for rewarding individual employees and teams for outstanding performance. Each year we conduct a traditional competition based on performance among our regional banks and also a Best in the Profession competition for a number of employee categories. Competition winners are offered various professional development opportunities, including work placements at the best divisions of regional banks and the Central Head Office, participation in experience sharing conferences and opportunities for additional professional education and training.

The corporate award system is another component of the Bank’s approach towards intangible rewards. These awards include: acknowledgment by the CEO of the Bank, badges of honour, corporate medals, certificates of merit and inclusion in the corporate Book of Merit. For the most outstanding achievements, the Bank nominates its employees for government awards and recognition.

## Best in Profession

In 2010, the Best in Profession competition was held for the second time. Representatives from the most common lines of work in the banking sector took part in the competition, as it is their efforts that make the largest contribution to the overall quality of our work. Contest categories included such positions as head of customer service outlet, corporate customer service specialist, retail customer service specialist and cash collection specialist. According to our corporate tradition, winners and runners-up were awarded diplomas, ribbons and financial rewards from our CEO.

## Best Corporate Customer Service Specialist

Evgenia Gudayeva,
a corporate customer service specialist at the Irkutsk branch of the Baikalsky Regional Bank.

Has worked at Sberbank since 2006. Actively participates in corporate events and training sessions. Served as a mentor in the Alternative Channels and Active Sales corporate processes.

By taking part in the competition Evgenia wanted to test herself and assess her skills and professional level. Evgenia’s co-workers were eager to support her.

Evgenia sets herself ambitious goals, strives for career growth and is not afraid to face challenges. She is interested in trying other areas of work in the banking industry.

Hobbies: Swimming and piano.

## Best Microbusiness Specialist

Natalia Samoylova,
leading inspector in the corporate loan department at the Sormovo branch of the Volgo-Vyatsky Regional Bank.

Has worked at the Bank since 2007. A natural leader, Natalia looks for every opportunity to participate in federal and regional small business support programmes and invariably stands out as one of the best.

It was active support from her coworkers and husband that helped Natalia win the competition. During the competition she was able to demonstrate her organisation skills, as well as her ability to negotiate, manage a resource portfolio and achieve defined objectives in the most efficient manner.

Natalia strives for professional growth and development. She is convinced that she is ready to take on a position that would allow her to use her organisation and leadership skills as much as possible, while sharing her extensive experience.

Hobbies: Russian billiards and archaeology.

## Best Retail Customer Service Specialist

Tatyana Rykova,
senior teller controller in the operations department of the Tsentralno-Chernozemny Regional Bank.

Has worked at Sberbank since 2006. Participates in corporate events and SPS roll-out, serves as a mentor and has delivered a number of training courses.

Tatyana saw the competition as an opportunity to test herself and to use her knowledge, skills and experience while competing with peers from other regional banks. The support of her co-workers, friends and relatives helped her fully realise her potential and emerge victorious in the competition.

But Tatyana is not going to rest on her laurels. She now works in the corporate loan segment and is committed to achieving significant success in this new field.

Hobbies: Travel and reading biographies and books on history.

## Best Cash Collection Specialist

Igor Osokin,
senior cash collection specialist in the cash collection and valuables transportation department of the Central Head Office.

Has worked at Sberbank since 1999. Fulfills his duties conscientiously. Ably uses knowledge and skills acquired for securing transportation of cash and valuables as well as handling the service weapon.

In 2010, Igor won a professional skill competition and became the best cash collection specialist of the Central Head Office. Therefore, he was put forward to participation in the Best in Profession competition.

Igor is an open and sociable person. He steps up as a leader and takes the responsibility to supervise a team. Igor is committed to his job, he is goal-oriented and a real team player. This is what brought him the victory.

Hobbies: sports, namely gymnastics, mountain skiing and kick-boxing (candidate master). Currently finalising his studies in Moscow State Open University.

3 For more details see "Working Conditions and Promoting a Healthy Lifestyle."

## History

- Realising Employee Potential
- A New Work Philosophy
- Financial Literacy
- Security as a Priority
- Good Business Conduct

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