Total Rewards at Eaton

Transcription

1 Total Rewards at Eaton You give us your best. We ll reward you well. This brochure provides an introduction to Eaton s Total Rewards Philosophy and explains the following aspects: Your Total Rewards: Pay, Benefits and More Competitive Compensation Salary Bands Merit Increases & Promotions Pay for Performance & Resources for You Competitive pay and benefits. Work that challenges and inspires you. Opportunities to grow in your career. At Eaton, we understand how important these are to you. This brochure explains our Total Rewards philosophy for technical, professional and salaried employees, how we reward our people, and how performance can lead to even bigger rewards and opportunities for you. Eaton s Total Rewards Values and Philosophy We provide competitive, total rewards that include pay and benefits consistent with the varied practices in different regions of the world. An array of programs and tools are utilized to recognize individual and group achievements and to enable us to reward performance consistent with our contributions. 1

2 Your Total Rewards at Eaton: Pay, Benefits, and More Powering you to live well Eaton supports your well-being with the strategy of global wellness designed to create an overall culture of health and well-being. Eaton wants you to be healthy, not just for Eaton, but for yourself and your family. The focus on wellness not only keeps our employees at their peak, it helps make Eaton an employer of choice, reduces medical costs for both you and Eaton, and will help Eaton to grow. What do we mean by total rewards? Basically, it s all the ways you can be rewarded for your work at Eaton. The elements of total rewards that apply to you are based on business needs and the competitive market where you work. BASE PAY Base pay is the foundation of your compensation at Eaton. It s the amount you see in your paycheck or pay advice statement expressed as an hourly, monthly, or annual amount. Your base pay is determined by your job knowledge, experience and performance, as well as what companies similar to Eaton are paying for jobs like yours. VARIABLE PAY Variable pay includes bonuses, sales incentives, and variable pay plans offered at the plant, group or division level. Not all jobs at Eaton have variable pay. Your manager will be able to tell you whether you are eligible for a variable pay plan. Either way, your total compensation at Eaton is competitive. CASH ALLOWANCES In certain countries, compensation might include cash allowances for things such as transportation or housing expenses. Regional market practices and/or government policies determine whether cash allowances are part of your total compensation at Eaton. EATON S CONTRIBUTION TO YOUR BENEFITS Your total rewards typically include the cost that Eaton pays toward certain social, health and unemployment benefits that protect you and your family. The benefits and the amount that Eaton contributes to them vary by market. To learn more about these benefits in your region, talk with your local Human Resources staff. its compensation programs, and benefit plans and programs at any time for any reason. 2

3 Competitive Compensation: How We Attract, Retain, and Motivate Our People Key terms Market data: Survey information used to compare Eaton s pay levels with those offered at similar companies, for similar jobs drawing from the same pool of available talent. Salary range: The range of pay available for a job, based on market data. Competitive pay for a job falls anywhere within the salary range. We know you have choices of where you work both when you first join a company and throughout your career. To attract talented employees like you, and motivate you to stay and perform at a high level, we must continue to offer you competitive compensation. To ensure that our compensation is competitive, we focus on three areas: The external job market, Job alignment within Eaton, and the Sustained performance of our employees. The External Job Market Each year we participate in surveys of the external job market to compare Eaton s compensation to that of employers who compete with us for talent. We compare what our competitors pay employees who are doing the same type of work as our own employees in the markets where we do business. We make these comparisons both at the national and local level. Nationally, we look at large, industrial companies that are similar in size to Eaton in terms of revenue and employees. These national job market studies are managed by third party vendors who help Eaton determine the competitiveness of compensation, primarily for professional and executive talent. For clerical, administrative, or manufacturing workers, we generally compete for talent with local companies, so we study their compensation practices as well. Eaton compensation practices are typically standard within a country. Variations do occur, however, in keeping with local job market practices, to comply with local regulations or for other business reasons. What we learn from our studies of the external job market provides the market data we need to determine Eaton s salary ranges. You will read more about salary ranges on page 5. 3

4 Key terms Salary band structure: A format for placing each job at Eaton into one of 14 bands based on the results of the Eaton Job Evaluation System. Standard job titles: Terms that provide a consistent way of identifying the roles and responsibilities of jobs across Eaton. Pay for performance: Eaton s philosophy that total compensation will increase with sustained high performance. Competitive Compensation: How We Attract, Retain, and Motivate Our People (continued) Internal Job Alignment Eaton is a global company with hundreds of types of professional jobs. The Eaton Job Evaluation System helps us group these jobs into categories and assess the value of the job to the company. Using this tool, we measure the value and level of each salaried position through three factors: Know-how the knowledge required to do the job (or job input ) Problem-solving thinking, processing and analyzing (or job throughput ) Accountability the results expected (or job output ) We use these measurements to group salaried jobs into salary bands, which reflect the jobs relative value within the company. We also use them to assign standardized job titles, which gives us a consistent way to match our jobs to jobs in the external market and to monitor our pay practices across the company. Sustained Performance of Our People The third area of emphasis in compensation at Eaton is motivating and measuring individual performance. We don t view performance as a onetime event. If our company is to achieve superior results, year after year, we must have sustained superior performance from our people. We achieve this through pay for performance. Eaton has a strong commitment to pay for performance at all levels. This commitment is embodied in our performance management and merit increase programs and our variable pay plans. 4

5 Salary bands focus on the jobs themselves and not the employee doing the job and his or her personal performance. Salary Bands and Base Pay: The Foundation of Your Compensation Your job has been carefully assigned to one of our 14 salary bands (SB). Salary bands provide a way of aligning the many jobs at Eaton according to their level within the company. The structure also helps us organize our standardized job titles in a way that reflects their role within the company. Your job s salary band is the starting point of determining your base pay. All jobs within a given salary band will have similar levels of know-how, problem-solving, accountability and working conditions and therefore, similar levels of base pay. Not all jobs within a salary band have exactly the same base pay. Your salary band has a salary range with a minimum, a midpoint and a maximum that is determined in large part by the prevailing pay for similar jobs in the external job market. Thus, salary bands not only align the value of jobs within Eaton; they also reflect of the competitive pay for your job outside of Eaton, in markets where we compete for talent. Where you fall within a salary range depends on several factors: where you started in the range; your skills and experience; the opportunity for merit increases; and most important, your sustained performance. Ultimately, your position in a salary range depends on how well you apply your skills and continually add value to the organization. This is the essence of pay for performance in a high-performance work culture. This brochure is not a promise of employment or compensation from Eaton;Eaton reserves the right to change 5

6 What is APEX? APEX (Achieving Performance Excellence) is a tool Eaton uses to bring a single, consistent approach to managing performance. Your APEX rating is one component used to determine the amount of your merit increase. Each year you will have an opportunity to meet with your manager to discuss your job performance and your APEX rating. Merit Increases and Promotions: How Your Base Pay Can Increase When you succeed at Eaton through sustained high performance, you have opportunities to increase your base pay: MERIT INCREASES Merit increases adjust your base pay upward in line with your job performance. Each year, you will receive an APEX rating (see sidebar) from your manager that reflects your performance for the past year. Your APEX rating determines whether you are eligible for a merit increase. If you are eligible, your merit increase will be calculated based on: Your overall performance or contribution How your pay relates to the salary range for your job, and Local job market practices Merit increases are not guaranteed. Your manager will use merit guidelines to calculate your merit increase according to how well you perform and where your salary falls along the salary range for your job. In general, employees with higher APEX ratings but salaries low in their salary range will be eligible for larger merit increases than employees with lower APEX ratings and salaries higher in the salary range. The size of your merit increase also will be influenced by the merit increase budget. Eaton sets the budget each year based on a competitive market analysis by country. Eligibility for a merit increase, and merit budgets, can vary from country to country because of local regulations, local economies or local market conditions. 6

7 Key terms Merit budget: The pool of money available for merit increases. The merit budget is typically expressed as a percentage and is developed each year based on external market practices, and can vary by country. Merit guidelines: Help your manager decide your annual merit increases based on our APEX rating and other factors, such as where your salary falls within your salary range. In-band promotion: A promotion that does not result in an increase in salary band level. Merit Increases and Promotions: How Your Base Pay Can Increase (continued) Promotion Promotions recognize an employee s advancement due to an increasing level of responsibility and performance. A promotion makes you eligible for a salary increase in recognition of your increasing level of performance, and may make you eligible for a move to a higher salary band. The increase amount of which depends on: Your position in your old range versus your new salary range The length of time since your last merit increase, and The pay of other employees in a similar job On occasion, strong performers may receive an in-band promotion, which results in a move to a job within the same salary band rather than the next higher band. In-band promotions usually come with an increase in salary. A lateral move is a move to a new position with similar levels of responsibility within the same salary band. Lateral moves often occur in support of Eaton s development philosophy. They are encouraged to help you develop additional skills and expand the breadth of your experience. Managers may recommend a salary adjustment, depending on the circumstances. Lateral moves are a great way to gain new skills and experiences, and the value they bring to Eaton can determine whether someone is a candidate for promotion. 7

8 Eaton s Pay for Performance Philosophy and Your Resources Every salaried employee at Eaton no matter where in the world he or she is based takes part in APEX, our performance management process that takes its name from its focus: Achieving Performance Excellence. We grow when you grow, so we also reward your performance through chances to develop professionally. To help you take the lead in expanding your pay opportunities, Eaton is committed to providing you with career development tools and resources that will help you plan your growth. Take advantage of the career development tools and resources we provide, including: Your Manager Your manager is one of the best resources to help you understand your pay and career development opportunities at Eaton. Together, you and your manager create a performance plan with short- and long-term goals for your current job and your career. Your manager can help you understand why you are paid what you re paid and what opportunities are available to you at Eaton. JOE Eaton s employee portal gives you access to a wide range of career development tools and information, including: Eatonjobs: Search and apply online for future career opportunities with Eaton. Visit to explore career areas and learn whether you might be interested in another job function such as accounting, marketing, or human resources. Eaton University: Use this learning portal to strengthen your core competencies, develop functional skills, and advance your career. You can access development and training courses or learn more about working with professional organizations. APEX Online Performance Management tool: Work with your manager to develop your performance plan, review your progress, and assess your performance. Recognition Programs Eaton s E-STAR program helps accelerate, support and sustain a highperformance culture. You can use E-STAR to recognize your co-workers who exceed expectations as they contribute to Eaton s success. its compensation programs and benefit plans or programs at any time for any reason. 8

9 9