HSBC 2010 Annual Report Download - page 209

207
Overview Operating & Financial Review Governance Financial Statements Shareholder Information
Our Group Values comprise being: open to
different ideas and cultures; connected with our
customers, community and each other; dependable
and doing the right thing. We have strengthened our
values-led culture by embedding our Group Values
into the Group’s operating standards, training,
development and employee induction, and through
the personal sponsorship of senior executives. These
initiatives will continue in 2011.
The development of talented employees in both
developed and emerging markets is essential to the
future strength of our business. We have therefore
implemented a systematic approach to identifying
and deploying talented people across the
organisation in order to ensure an appropriate supply
of high calibre individuals with the necessary skills,
diversity and experience for current and future senior
management positions.
In 2010, we improved both the quality of
training and the access that all employees have to
relevant programmes through globally consistent
technology. Specific areas covered were risk,
compliance, customer orientation and performance
management.
Employment of disabled persons
We believe in providing equal opportunities for all
employees. The employment of disabled persons is
included in this commitment and the recruitment,
training, career development and promotion of
disabled persons is based on the aptitudes and
abilities of the individual. Should employees
become disabled during their employment with us,
efforts are made to continue their employment and,
if necessary, appropriate training is provided.
Remuneration policy
As the quality and commitment of its human capital
is deemed fundamental to our success, the Board’s
stated strategy is to attract, retain and motivate the
very best people. This strategy is referenced to the
overall business strategy and the commercial
environment.
In a business that is based on trust and
relationships, our broad policy is to recruit those
who are committed to making a long-term career
with the organisation since trust and relationships are
built over time.
Remuneration is an important component in an
individual’s decision about which organisation to
join and to stay with but, in our experience, it is not
the overriding one. We seek to attract people who
wish to work for an organisation with strong and
sound values, one which is meritocratic and
competitive, and which offers challenging career
development. In line with the overall principles
applied to executive Directors by the Remuneration
Committee described on page 222:
• employees’ salaries are reviewed annually in
the context of business performance, market
practice and internal relativities. Allowances and
benefits are largely determined by local market
practice;
• employees participate in various variable pay
arrangements. Discretionary variable pay is
dependent on the achievement of objectives
which derive from those determined at Group
level. Since 2008, these objectives have
typically been categorised in four segments –
financial, customer, process and people.
Financial and non-financial metrics are used to
measure performance against the objectives,
which include profitability, expense control,
customer recommendation, employee
engagement, adherence to our ethical standards,
lending guidelines and internal controls and
procedures. From 2010, we have used a risk
appetite framework which describes the
quantum and types of risks that we are prepared
to take in executing our strategy. The risk
appetite framework is approved by the Board of
HSBC Holdings and helps to ensure effective
risk management is emphasised to maintain a
strong and secure operating platform, and that
influences employee remuneration. Actual levels
of variable pay depend on the performance of
the Group, its constituent businesses and the
individual, taking into account competitive
market practice and relevant regulator
requirements; and
• to ensure that our interests and those of our
employees are aligned with those of our
shareholders, that our approach to risk
management supports the interests of all
stakeholders and that remuneration is consistent
with effective risk management, we require
a proportion of variable pay awards above
certain thresholds to be deferred into awards
of Restricted Shares. In addition, employees are
encouraged to participate in our savings-related
share option plans and local share ownership
arrangements.
Employee share plans
To help align the interests of employees with those
of shareholders, share options are granted under all-
employee share plans and discretionary awards of