Employees’ opinions are important and valuable to us. How committed are our employees to the company? How strong is their motivation? How satisfied are they with their work situation and with the leadership provided by their supervisors? We get answers to such questions through our worldwide employee survey. The feedback provided by our employees helps us to advance our organization and leadership culture on a continuous basis. If the results of the survey indicate a need for improvement, we address the need in the follow-up process of the survey.
With the group employee survey in 2014, we again achieved a high participation rate of 70 percent — which shows that our employee survey is accepted as a feedback instrument. The good rate also shows that our employees have an interest in getting involved and in further developing the company.
The results of the employee survey flow into our Employee Commitment Index (ECI), which in 2014 remained at the same level of the last full survey conducted in 2011. In the international benchmark comparison we thus continue to be above the worldwide average, and are even significantly above that level in individual regions. However, we did not score well in all areas. That is why in 2015 the main focus will be on determining needs for action and initiating required measures in areas where we did not scored well. We will then measure our success in implementing the measures at our next employee survey in 2016.
Attractive and fair: compensation at Daimler. Daimler relies on the abilities and efforts of its employees. We remunerate the work they perform in accordance with the same principles at all affiliates around the world. Our Corporate Compensation Policy establishes the framework conditions and minimum requirements for this. In our desire to offer attractive salaries and other benefits we also give consideration to local market conditions within the specified framework. We audit the local compensation systems on a regular basis through sampling procedures.
Corporate Compensation Policy
The global compensation policy establishes the framework conditions and minimum requirements for employee remuneration. It applies to all employee groups. Our remuneration standards and components take into account the legal and collective bargaining provisions concerning minimum wages or compensation and union agreements, as well as established benchmarks.
The fixed remuneration is determined in line with the requirements established for the respective function. Variable remuneration components – such as bonuses or performance-based payments – serve to award individual performance as well as the collective performance result. In this way, we allow employees to participate in the success of their business unit and the entire company.
We determine the variable remuneration in accordance with transparent criteria that are comprehensible to employees. In addition to the results of individual performance, the evaluation also includes an evaluation of the work conduct. We determine fringe benefits, bonuses, and other benefits on a partially uniform basis for all employees, with in part special provisions for individual employee groups or functions. Some fringe benefits protect the employees against health and accident risks or support them with preventive health care services.
Salaries and minimum wage. The salaries are determined on the basis of the employees’ tasks and performance, as well as in line with their qualifications and experience. We pay salaries customary for the market and the industry, which are significantly above the legal minimum wages that apply for many locations. In addition to the statutory minimum wages, salaries and wages are often determined by collective bargaining agreements. In the event of union affiliations, our affiliates generally offer additional voluntary benefits. For example, the employees of Daimler AG in Germany currently receive compensation that is significantly above the pay specified in collective bargaining agreements.
Equal pay. In setting the base remuneration we are not guided by gender or origin, but exclusively by the employee’s job and responsibility, and thus eliminate any form of discrimination. Salary decisions are made on the basis of the multiple-eye principle. Transparency is ensured by regular income reviews. In addition, the principle of “equal pay” also applies for temporary employees, who are paid in accordance with the collective bargaining agreements for the metal and electrical industries during their assignments in the commercial sector.
Compensation of managers. The more responsible the position, the higher the variable remuneration component. On the one hand, the variable component takes into consideration the company’s performance. On the other, it is based on the extent to which the manager has achieved the individually agreed targets, which are discussed between managers and their superiors as part of a worldwide uniform process. Sustainability criteria also play a role in this context. For example, we also agree on diversity and compliance targets with our managers — depending on their respective function and level.
Performance assessment and target-oriented leadership
For the measurement and controlling of individual performance, we use standardized management processes such as the LEAD leadership process for managers or the NAVI process for the employees of Daimler AG. At the beginning of each year, the respective supervisors agree on quantitative and qualitative targets with their employees. In most cases a personal development target is also set. Depending on the function and management level, the target agreement also includes diversity and compliance targets.
Over the course of the year, employees and their supervisors meet repeatedly and if required agree on measures for improvement. At the end of the year, the supervisor assesses whether or not these targets have been achieved and also evaluates the leadership skills of the employee.
Subsequently, the target achievement, leadership and work conduct and development potential of the employees are discussed in company-wide management conferences. The superiors discuss the results personally with the employees and address possible measures for professional development. In addition to the LEAD process, we also use feedback instruments such as the employee survey.
Company pension plans. Upon retirement, our employees can generally expect to receive attractive company pensions — in addition to the statutory and privately financed benefits. This applies to both full-time and part-time employees. Depending on the country and company, we offer defined benefit or defined contribution pension plans. In addition, employees can also make additional provisions for retirement by converting parts of their earnings into pension contributions. We cover our pension obligations predominantly with suitable pension assets and protect them against insolvency.
Company pension plans at Daimler
Pension plans in the Daimler Group
The general requirements for the pension models are detailed in our Group-wide General Pension Policy. This policy states that the payable benefits should contribute toward sufficient security in retirement, or in case of death or invalidity. At the same time, these benefits should be structured to be predictable, achievable, and low-risk. Throughout the Group, we implement company pension plans via external partners and as part of direct employer commitments. Daimler makes regular and special contributions to the pension assets.
General information on contribution amounts as a percentage of salary are not possible since the form and scope of pensions vary significantly in the worldwide market.
Employer-financed pension plans at Daimler AG
All permanent employees at Daimler AG are eligible to receive a company pension. They are thus well provided for not only in old age, but also in the case of granting of premature benefits due to invalidity or death. In the event of the insolvency of our company, employees’ pension benefits are protected by the Pensions-Sicherungs-Verein (PSVaG) of the German industry and additionally by the Daimler Pension Trust e.V. association.
While we offer performance- or contribution-based pension plans in the whole Group, the employees of Daimler AG receive contribution-based guaranteed pension benefits for which we provide an annual pension contribution, which is credited to the employee’s pension account. We invest the pension contributions in funds in order to increase their value. This takes place in the framework of a special life cycle model, which takes into account the employee’s age. For employees who joined Daimler before March 1, 2011, the pension contributions are converted into a pension benefit using fixed factors. Employees have the option to choose between lifelong pension, twelve yearly installments or a single lump sum at a later date.
For employees covered by collective bargaining, we already converted the capital contributions into contributions to pension plans in 2006. This enables investing the employer contributions for retirement without deductions for taxes or social security contributions. Since employees do not have to do anything actively to take part in the program, the contributions to pension plans are very popular.
Salary conversion models
Along with the commitments financed by the company, we also offer employees various models for using parts of their salaries for their company pensions. This additionally enables employees to take advantage of the available tax breaks. In Germany, our employees have the opportunity to redirect remuneration from their gross income into a pension fund without paying tax or social security on that amount. They can decide whether to use a pension plan directly via the employer, via a direct insurance policy with special terms and conditions, or via an industry solution.
Employee-financed company pension plans and the contributions to pension plans are usually also available for temporary employees. The commitments apply equally to full-time and part-time employees.
|Expenditure on pension provisions at the Daimler Group|
|in billions of €|
|Cash values of pension liabilities on Dec. 31, 20131||23.9||23.2||30.1|
|Payments to retirees||0.8||0.8||0.8|
|Expenditure on state and third-party pension plans||1.4||1.3||1.4|
|1 This cash value is heavily dependent on the balance sheet assessment parameters defined each year, in particular the discount rate.|