Remuneration, incentives, assessment

The Group's remuneration strategy is inextricably linked to its mission, values, governance and sustainability strategy, which prioritises the pursuit of sustainable growth over time and the growth of the workforce. In turn, this entails acknowledging individual contributions to the Group's success, also through appropriate remuneration. At the same time, this remuneration policy supports the Group's mission, values, governance and sustainability, resulting in an inextricable relationship that constantly improves the remuneration practices adopted whilst consolidating the aforementioned issues.

The Group's remuneration policy aims to reward sustainable performances with appropriate remuneration. To this end, it is based on the following key principles: internal equality, competitiveness, consistency and meritocracy.
The application of these principles also makes it possible to strengthen the motivation and loyalty of the workforce, particularly those in strategic roles or those regarded as having strong potential, so Generali can continue to consolidate its reputation as a best employer capable of attracting the brightest talent, both in Italy and abroad.

As regards the CEO and the Group management, the tools currently in use are the Balanced Scorecard for short-term variable remuneration and the Long-Term Incentive Plan for long-term variable remuneration.

The allocation of a score to managers and some middle managers, based on the Hay method, enables the Group to define remuneration policies that take account of the need for internal equality and competitiveness. Incentive systems award results achieved in the short- and mid-long term. Performances are evaluated through a multitemporal and multidimensional approach that takes account - in accordance with the category of the population and the timeframe under consideration - of the results achieved by individuals, the departments in which they operate and, as regards the Top Management, the overall results of the company/Group as well as those of competitors, who constitute the peer panel of reference. More specifically, the systems are based on the attainment of annual goals (attributed through the Balanced Scorecard) and threeyear goals (attributed through the Long Term Incentive Plan).

The basic salary of most employees in non-managerial positions is linked to National Collective Bargaining Agreements and complementary agreements in force in the individual countries, where applicable.

The remuneration package consists of a fixed sum, a variable sum and a series of benefits, which include a supplementary pension scheme, a welfare package and other benefits for employees and their families, although there are differences from company to company.

Generally speaking, as part of the workforce assessment systems in the various countries managers periodically evaluate the results attained by employees according to the following parameters: working performance (in terms of quality and quantity of work, commitment, punctuality and conduct); development of knowledge and skills; professional development, also collecting comments and suggestions with a view to defining professional goals and future training plans.

In 2012, in the area considered by the Sustainability Report, an average of 83.5% of Group employees were subject to performance and career-development assessments. This percentage is close to 100% in the Czech Republic, Switzerland, Germany and Austria, but is below average in France (73.4%) and Italy (60.5%).
More specifically, 94.6% of managers, 82% of middle managers, 75.8% of office workers and 99.9% of the sales force on the payroll in the Group were subject to performance and career-development assessments.
There was no discrimination against the female workforce in the assessments: this is demonstrated by the fact that, on average, 82.2% of women underwent performance and career development assessment.

Below we outline the individual performance assessment systems and relative performance indicators used for each category of worker at the Generali Group in Italy, although the same approach is adopted in all of the main countries under consideration:

  • Managers: in terms of the management of resources the focus for the Group is a system of values and skills that places the emphasis on generating value for stakeholders (shareholders and the market, clients, employees and the local community). This comprises of 4 values (Reliability, Pride of belonging, Commitment to constant improvement, Professional responsibility) and 5 managerial competencies (Strategy execution, Change management, Decisionmaking responsibility, Organisational integration, People development). The system outlines a straightforward and consistent series of successful behavioural approaches that must be adopted by Group managers according to a logic of integration and common goals, and which seek to consolidate a distinctive Generali Style.
    Therefore, as part of the annual Balanced Scorecard systems there is also a managerial performance indicator which, through the analysis of behavioural indicators, evaluates the adherence to, dissemination and enhancement of Group values and skills.
    The Group values make explicit reference to the issue of sustainability, particularly in terms of the concept of Reliability. In addition, the slogan of the overarching system is "Values and competencies generating sustainable value" for stakeholders.
    Managers and middle managers are also periodically involved in assessment and managerial skill development processes.
  • Middle managers: the Performance and Development Dialogue is a performance management system based on the assessment of qualitative/quantitative results and compliance with the company's values which, in turn, are linked to Group managerial competencies. It is an annual process with 3 instances of dialogue between managers and employees: definition and setting of targets, interim review and goals assessment.
    In order to boost performances there is an annual development plan that is updated when the goals are set and which seeks to consolidate technical knowledge and managerial skills and encourage the adoption of conduct that is consistent with the Group's social and environmental commitment.
    The development plan aims to consolidate the results and does not contribute to the overall assessment of the performance indicator. This process involves the creation of a calibration committee in both the objective identification and results assessment phases. In 2012, around 700 middle managers from companies in the Italian insurance sector and Head Office were involved and the system is expected to be extended further in 2013.
  • Office workers: a qualitative system that involves the annual assessment of basic behavioural skills with regard to performance and compliance with the Group's values is active in some Group companies and will be extended to other companies in the next few years. The system also involves the updating of the annual development plan designed to boost performances.
  • Sales force on payroll: a series of qualitative and quantitative checks is envisioned for the purpose of assessing results and skills, recognising merit and determining avenues of professional growth. For the annual assessments, a system is used that takes account of the ability to meet production goals and evaluates performances on the basis of commercial business indicators (life and non-life), technical knowhow (knowledge of products and standards, work organisation) and behavioural skills (fundamental group skills defined according to clients, sales planning, focus on results, customer orientation and problem-solving skills).

In Italy, both the Balanced Scorecard system and the Performance and development dialogue (for the part relating to the development plan) involve the attainment of a social/environmental goal. In Germany, incentives connected with the attainment of environmental targets were introduced for managers in 2011.