INDEX

Sr.N o. Particulars Pg. No.

1 What is Performance Appraisal 2 Adidass Approach Towards P.A. 3 Engagement Drives Performance 4 Enabling Employees To Reach Their Personal Best 5 Performance Driven Remuneration System 6 Internal Communications 7 Creating An Active Work Environment 8 Being An Employer Of Choice

Performance Appraisal
What is Performance Appraisal?
People differ in their abilities and their aptitudes. There is always some difference between the quality and quantity of the same work on the same job being done by two different people. Performance appraisals of Employees are necessary to understand each employees abilities, competencies and relative merit and worth for the organization.Performance appraisal rates the employees in terms of their performance. Performance appraisals are widely used in the society. The history can be dated back to the 20th century and then to the second world war when the merit rating was used for the first time. An employer evaluating their employees is a very old concept.It is an indispensable part of performance measurement. Performance appraisal is necessary to measure the performance of the employees and the organization to check the progress towards the desired goals and aims. The latest mantra being followed by organizations across the world being "get paid according to what you contribute" the focus of the organizations is turning to performance management and specifically to individual performance. Performance appraisal helps to rate the performance of the employees and evaluate their contribution towards the organizational goals. If the process of performance appraisals is formal and properly structured, it helps the employees to clearly understand their roles and responsibilities and give direction to the individuals performance. It helps to align the individual performances with the organizational goals and also review their performance. Performance appraisal takes into account the past performance of the employees and focuses on the improvement of the future performance of the employees. Here at naukrihub, we attempt to provide an insight into the concept of performance appraisal, the methods and approaches of performance appraisal, sample performance appraisal forms and the appraisal softwares available etc. An attempt has been made to study the current global trends in performance appraisal

Adidass Approach Towards Performance Appraisal

Becoming the global leader in the sporting goods industry depends upon the potential, dedication, knowledge and performance of our employees and the excellence of our leaders. Therefore, Adidas fosters a corporate culture of performance, passion, integrity and diversity, as they are convinced this is crucial to stimulate innovation, team spirit and engagement.

Engagement drives performance

Adidas believes that employee satisfaction drives commitment, commitment drives engagement, and engagement drives business performance. Consequently, Adidas has defined engagement as one of our Groups key performance indicators for measuring our efforts to sustain a performance culture. To capture employee perceptions, Adidas carries out formal engagement surveys to evaluate our position as the employer of choice for our employees and to provide a framework for benchmarking. In 2010, Adidas conducted the first Group-wide employee engagement survey. They achieved an outstanding participation rate of 90% and an engagement score which places us close to the top-performing organisations within the consumer goods industry. This score was underpinned by our employees high level of confidence in our senior leaders, their perception of clarity concerning the Groups strategic direction, as well as an open and constructive work climate. Areas for further improvement identified by employees included career development and transparency, availability of IT tools, and performance recognition. Adidass senior leaders are responsible for, and committed to, increasing the engagement scores. As in previous years, based upon the feedback received, Results-to-Action teams were established to drive initiatives to enhance the Groups performance. In 2011, the focus of their Results-to-Action initiative was to maintain our top-scoring areas and improve upon areas of weakness. Since implementing the Results-to-Action teams, they have action plans in over 83% of the organisation. This means in more than four out of five adidas Group teams, managers are evaluating their engagement scores and working with their employees to improve the engagement within their teams. The adidas Group also took action at a global and strategic level, focusing on areas such as workspace, collaboration and knowledge management, employee careers, work-life integration and more. Results-to-Action is becoming a way of working for the adidas Group. In 2012, some functions of the adidas Group will conduct a pulse check survey to review the impacts of their actions. In 2013, they will conduct our next global employee engagement survey across the adidas Group.

Enabling employees to reach their personal best

To reach their personal best, The Adidas Group employees are offered a wide variety of training and development opportunities, building on their strengths, improving their skills and overcoming their own challenges. The highest priority is to match individual employee aspirations with Adidass organisational needs. The framework for all development activities is set by the adidas Group Competency Model. Detailed out for all hierarchy levels, it ensures consistent and transparent performance, talent and career/succession management. Performance management: Adidass global Performance Evaluation and Planning tool (PEP) is the cornerstone of performance management at the adidas Group. Based on business targets as well as job tasks and competencies, each employee is evaluated and receives feedback at least once a year. Building on defined development goals, Adidas offers and supports their employees with targeted development activities both on- and off-the-job. Today, PEP is consistently used in all business units of the adidas Group. The online version has a coverage of 76% Group-wide. The target for 2012 is to reach an online coverage of 96%. Talent management: The quality of current and future leadership within the adidas Group is key to their success. With specifically designed talent management tools, Adidas identifies employees at all management levels of our Group who have the potential to become future leaders within the organisation. In order to prepare them for more complex future roles, they participate in targeted development programmes : Executive Development Programme (EDP): A global programme (cross-brand and cross-functional) for employees who show potential for the executive level. The programme is centrally managed and executed. Management Development Programme (MDP): A global programme which is executed regionally. This programme is tailored to employees from different functional areas and brands that show potential for director positions. People Manager Development Programme (PDP): A global programme which is executed locally. The programme targets employees at team leader level who show potential to become senior leaders. In addition, Adidas offers tailored graduate programmes. The Business Management Programme (BMP), a 24-month international, cross-functional and cross-brand programme, is aimed at attracting professionals with MBA degrees and three to five years of work experience. The goal of this programme is to prepare them for future management positions within the Group. At year-end 2011, 10 employees were participating in the BMP globally. The Functional Trainee Programme (FTP) is an 18-month programme providing graduates with an international background and excellent educational credentials the opportunity to start a functional career within the adidas Group. The programme comprises six three-month assignments in various departments. At least one of these assignments takes place abroad. At year-end 2011, Adidas employed 47 participants in our global FTP. The development programmes are complemented by apprenticeship and internship programmes. The adidas Group apprenticeship offers young people who want to join the Group directly out of school the opportunity to gain business experience in a three-year rotation programme. The programme includes vocational training in retail, industrial management and IT, as well as integrated study programmes. At the end of 2011, Adidas employed 76 apprentices in Germany , including 30 integrated study programme students .

Success drivers for performance

Development and training framework

Adidass global internship programme offers students three to six months of work experience within the adidas Group. It plays a key role in our recruiting strategy. At the end of 2011, they employed 330 interns in Germany . Succession management: The adidas Group succession management approach aims to ensure business continuity. Adidas achieves this through a globally consistent succession plan which covers successors for director level positions and above. These positions and the respective successors are regularly discussed by senior management. The succession management information shows a clear picture of the successor readiness and development needs. Based upon this information, they draft individual development plans to prepare the successor for their potential next tasks. In addition, they use the successor information to create dynamic talent pools which provide us with further flexibility in our succession management process. All information is consolidated in a succession management risk analysis. The succession management process is supported by a system solution which hosts position and employee data related to performance, potential, career aspirations, mobility, etc. The system solution is applied in 91% of the adidas Group business units. The target for 2012 is to reach a full Group-wide online coverage.

Performance-driven remuneration system

Adidas is committed to rewarding their employees with compensation and benefit programmes that are competitive in the marketplace. Remuneration throughout the Group comprises fixed and variable monetary compensation, non-monetary rewards, as well as other intangible benefits. The cornerstone of our rewards programme is the Global Salary Management System which is used as a basis for establishing and evaluating the value of employees positions and salaries in a market-driven and performance-oriented way. In addition to a fixed base salary, Adidas offers our employees various variable compensation components. Bonus programme: In order to allow the employees to participate in the Groups success, and to reward them for their target achievement, Adidas have implemented a Global Bonus Programme. This programme combines individual performance (measured in the PEP process) and corporate performance (actual financial results measured against Group, brand, channel, division and/or business unit targets). Profit participation programme: For employees at Group headquarters and our other locations in Germany who do not participate in the bonus programme, Adidas has introduced a profit participation programme called the Champions Bonus. Additional compensation components: For senior management and Executive Board members, Adidas offers Long-Term Incentive Programmes (LTIP). Other benefits include their 401-K pension plans in the USA and the adidas Group pension plan for employees in Germany. In 2011, 2,220 employees participated in the latter, which represents about 51% of all eligible employees. Adidass Group subsidiaries also grant a variety of benefits to employees depending upon locally defined practices and country-specific regulation and norms.

Internal communication activities to drive employee engagement

Adidas believes that a robust internal communication platform is essential for driving employee engagement and fostering open collaboration within our organisation. For example, the Group Intranet has been transformed over the past few years into blogs, allowing departments and teams to quickly build and edit their own internal communication platforms. It also enables employees to comment on news, share knowledge, collaborate and discuss current topics. Since 2010, a Group-wide idea forum allows the employees to receive recognition for their ideas and participate in the implementation process. For 2011, the focus was on knowledge management and collaboration. Adidas started to implement a Microsoft SharePoint platform, which will enable them to have one global, integrated tool for knowledge management. This is part of a longer-term project to create a modern and continual learning organisation.

Creating an attractive work environment

Adidas aims to harmonise the commercial interests of the adidas Group with the private and family needs of our employees. Our Work-Life Integration Programme includes family-oriented services, flexible work time and place, people development and leadership competence related to work-life integration. Diverse workforce to achieve global goals: As a global company, Adidas understands that it takes people with different ideas, strengths, interests and cultural backgrounds to ensure they achieve their goals. A high degree of diversity is already represented within the workforce. At Adidass Groups global headquarters, for example, they have employees from more than 60 nations. They act to assure an environment that embraces diversity through various initiatives, such as networking events, intercultural training and the activities of work-life integration department. Increasing proportion of women in management positions: The adidas Group has set specific goals which are in line with their corporate culture as well as our employee structure. Adidas plans to increase the proportion of women in management to between 32% and 35% by 2015 (currently: 27% worldwide). To reach this goal, they are increasing the proportion of women in their leadership development programmes to 35% in order to support their female employees to take leadership positions in all areas of the company. At the beginning of the year, the Supervisory Board of adidas AG already committed to increase the degree of female representation to at least three female members at the next election in 2014, with at least one to be on the shareholders side. In addition, the adidas Group is focusing on programmes which give employees with children the option to combine their careers with family life, regardless of gender. For example, since 2002, more than 70 children have been able to attend a child-care facility at the company premises in Canton, USA, and a day-care centre for 100 children is scheduled to open in 2013 at the Groups global headquarters in Herzogenaurach, Germany. Diverse sports activities for employees: In addition, Adidas offers their employees a wide range of sports activities at their major sites, in which partly also their partners and family members can participate. Employees in Herzogenaurach, Portland, Canton and at other subsidiaries have access to a company gym and numerous other sports facilities. Adidass Company Sports department in Herzogenaurach also organises various team and individual

sports activities such as Nordic walking, mountain biking, kayaking, yoga or ski tours. Special events such as a one-week sports camp for employees children, trans-alpine mountain bike tours and the annual Berlin Marathon weekend (with a suitable training programme prior to the event) are also available. Even current trends such as CrossFit, zumba and sling training as well as special workshops like photography courses and nutrition seminars are included in the programme. In 2011, the Company Sports department in Germany offered 226 courses and 34 events, which were attended by more than 3,900 participants . Key employee statistics
Total number of employees Total employees (in %) Male Female Management positions (in %) Male Female Average age of employees (in years)1) Average length of service (in years) Annual training hours by employee (in hours)
1) At year-end.

2011
46,824 50% 50% 73% 27% 30 3.5 17.0

Global employee base continues to grow

On December 31, 2011, the Group had 46,824 employees, which represents an increase of 10% versus 42,541 in the previous year. This development is primarily related to the expansion of the Groups own-retail activities in emerging markets. An increase in the sales force as well as additional hirings within our Global Operations function, in order to support the Groups sales growth, also contributed to the overall increase in the number of employees. Furthermore, a change in the internal definition of full-time equivalents also impacted this development. On a full-time equivalent basis, the Group had 40,637 employees on December 31, 2011 . Due to the high share of employees working on a part-time basis in the Retail segment, this figure is lower than the figure reported on a headcount basis. Personnel expenses increased 8% to 1.646 billion in 2011 from 1.521 billion in 2010, representing 12% of Group sales . At the end of 2011, 23% of our Groups staff were employed in Western Europe (2010: 23%), 33% in European Emerging Markets (2010: 34%), 25% in North America (2010: 24%), 4% in Greater China (2010: 4%), 9% in Other Asian Markets (2010: 9%) and 6% in Latin America (2010: 6%). As a global company with less than 10% of our employees located in Germany, Adidas actively encourages global mobility and offer our employees the opportunity to go on international assignments. To support relocating professionals and their families in new living and working environments, they provide, for example, relevant language and cultural training.

Adidas Group number of employees

Employees by function

06

Employees by region1)

Being an employer of choice

The so-called war for talent continues to be a forefront issue. Top-calibre talent is a premium around the world. More than ever, Adidas challenge themselves to do what it takes to be and remain the employer of choice. During 2011, they again received some highly rated rankings as an employer of choice, proving that the adidas Group is one of the leading employers for school leavers and students/graduates. In order to further strengthen this position, Adidas continued to push their activities at schools and universities throughout 2011, to foster their strong employer image through direct contact with top graduates and students. Members of the Executive Board and other senior executives of the Group shared their business insights at selected top universities and business schools such as the London Business School, the IESE in Barcelona and universities in Germany such as in Mannheim and Nuremberg. When it comes to highly qualified personnel, the adidas Group continues to face increasing competition in the international labour market. Adidas will continue to give priority attention to this challenge with innovative programmes, such as the Employee Referral Programme which was introduced in 2010 and will be further expanded in 2012. Looking further to the future, as part of our Group-wide strategic business plan Route 2015, Human Resources will also further build upon existing programmes and concepts, adding new capabilities to enhance our performance, learning and leadership culture. Through specific initiatives and workstreams, they are looking at new and innovative ways to incentivise and reward our employees, based upon performance criteria. In addition, they are looking at ways to ensure that they begin training, developing and building the skills and competencies that will be necessary for the future, whilst also developing a better understanding of the company, the employee and the consumer of the future. All these will combine to form the backbone of a progressive and pro-active Human Resources programme that will play a strong contributing role to the ongoing success of the adidas Group.

Number of employees

2011

2010

Employees

Fulltime equival ent

Employees

Fulltime equival ent

Own retail Sales Logistics Marketing Central administration Production Research & development IT Total
1) 2) 3) At year-end. Number of employees on a headcount basis.

24,649 5,067 5,334 3,847 3,923 1,969 1,029 1,006 46,824

19,454 4,697 5,167 3,716 3,703 1,931 990 979 40,637

22,884 4,191 4,672 3,573 3,370 1,901 1,002 948 42,541

17,560 4,046 4,542 3,460 3,165 1,776 961 934 36,444

Number of employees on a full-time equivalent basis. Due to the high share of part-time employees in our Retail segment, this figure is lower than the number of employees counted on a headcount basis.