Competitive remuneration
We at Daimler believe in offering competitive remuneration that is both profitable and attractive in a system that is in tune with the times but doesn’t blindly follow short-term trends. Our general remuneration concept utilizes the same system worldwide. The compensation package for our employees and managers consists of various short and longterm components and benefits.
Daimler Group companies pay wages and salaries in accordance with the relevant legal stipulations and any applicable collective bargaining agreements. Remuneration is basically in line with market levels, i.e. wages and salaries are comparable to those at other companies. The market-level wages at Group companies (vehicle manufacturing and vehicle import and sales) are higher than local minimum wages. Any assessment of wage levels has to take into account the fact that most Group companies also grant benefits which, taken together, far exceed the legal requirements. These benefits include voluntary insurance services and other supplementary retirement provisions.
Our performance and success-based remuneration system is founded upon a consistent management process that we use to coordinate, monitor, and evaluate performance requirements. For management Levels 1–4, we execute this process under globally standardized conditions within the framework of our goal agreement system. Sustainability criteria are taken into account not only in our evaluation instruments for managers but also in those for employees. These criteria fall under the headings of “Leadership” and “Behavior at Work.” The performance assessment results obtained through our annual management process serve not only as the basis for remuneration but also as the point of departure for measures related to personnel development and the management of potential.
To enable us to measure individual success, staff members at management levels 1 to 4 and senior clerical employees agree on objectives each year with their supervisors. At the beginning of each year, the employees and their supervisors agree on quantitative and qualitative objectives. In general, a personal development goal is set at this time as well. For top managers, this always includes diversity targets. During the year, the employee and his or her supervisor regularly discuss to what extent the objectives have been reached and agree on additional measures if necessary. At the end of the year, the supervisors assess the extent to which the employees have achieved their objectives and evaluate their leadership performance. In company-wide management conferences, the participants then discuss individual goal attainment, leadership performance, work behavior, and each person’s development potential. The supervisor subsequently meets with the employee to discuss the results of the annual assessment and measures for professional development.
We supplement these discussions with feedback methods, including employee feedback at the team level and employee surveys at the organizational level.
All managers and some administrative staff from around the world undergo annual performance evaluations, assessments of their potential, and career development planning reviews as part of the LEAD management process.
Non-exempt employees in technical and administrative functions (a category covering around 50 percent of Daimler’s non-exempt workforce) receive performance-based remuneration in addition to their basic salary. On average, this performance-based remuneration amounts to 15 percent of the basic salary per company as determined by collective bargaining agreements. The exact amount of the performance-based remuneration is determined each year for each employee as part of the NAVI management process. As part of NAVI, the participants also agree on and implement measures that improve employee qualifications and promote career development.
In Daimler’s production and production-related areas, which cover the remaining 50 percent of the non-exempt workforce in Germany, a company agreement stipulates that performance-based remuneration will be paid out as a fixed amount until the end of 2011.
Because the variable component is linked to economic developments, the success of the year 2010 will be clearly reflected in the size of the variable remuneration component
We also employ temporary workers in an effort to become more flexible and safeguard the jobs of our core workforce. The salary of such temporary employees in commercial positions corresponds to the entry-level pay for our normal workforce.
We use temporary workers to increase our flexibility and safeguard the jobs of our permanent workforce. In doing so, we cooperate exclusively with temporary employment agencies that are approved by Germany’s Federal Employment Agency and are subject to collective bargaining agreements. Our temporary workers receive fair remuneration which for commercial positions corresponds to the entry-level wage/salary of our other employees in the corresponding areas. This level of remuneration is derived from the framework agreement on pay and conditions for workers in the metal industry in the German state of Baden-Württemberg. In our framework agreements with the temporary employment agencies we supplement the gross wages the employees receive as a result of the agencies’ collective bargaining agreements, so that the temporary workers receive the same wages that our collective bargaining agreements stipulate for entry-level positions at Daimler.
