Human Resources Policies, Activities and Projects

Compensation and International Mobility

To manage the crucial phases of integration and development of human resources, Pirelli implements an extensive policy system both at Group and Sector/foreign affiliate company level.

Salary Review policies are implemented locally on a country-by-country basis, except for procedures involving Group executives and key resources involved in international mobility schemes, as these categories are centrally coordinated by the parent company in order to ensure uniform application of these policies worldwide.

A new talent management process was introduced in 2008. This process defined a pool of outstanding resources to be dedicated special, centralised attention in terms of growth and development paths and dedicated training plans, and ad hoc compensation programmes in order to promote and retain them.

The full potential of the performance management tool was exploited in 2008. It became the key tool supporting the supervisor-assistant relationship, by clearly defining individual roles and objectives, while encouraging transparent, shared evaluation.

All executives and 60% of managers participate in the Group’s annual inventive scheme (MBO - Management by Objectives). This sets clear Group/business/country and individual economic and financial targets, and pays out bonuses that vary according to assessment and the extent to which these targets are achieved. This process, which is centrally managed in accordance with a common set of rules for the whole Group, is accompanied by other schemes implemented by the principal affiliates.

The “International Mobility Policy”, of considerable strategic value in the development of leadership within he Business, deserves special attention. About half of current Pirelli management and senior management personnel have had one or more significant work experiences in a foreign country, which represents a strategic value for internationalisation in the development of leadership. Over the past decade, an average of about 250 people, including executives, managers and white-collar employees of different nationalities and cultures have exchanged know-how, developed their professional skills and exploited new managerial opportunities, thereby contributing to the creation of a truly international Group.

Distribution of the expatriates / Breakdown of industrial countries

Many aspects of the global labour market have imposed a more flexible approach to the international framework that can readily satisfy organisational and individual requirements. With this aim in mind, a thorough audit was carried out in 2008 on processes and practises adopted for international mobility, leading to a proposal for general revision of Group policy. This revision will be fully implemented beginning in 2009.

The new policy will regulate all possible cases of foreign assignments in view of a uniform approach to all the different possible situations. Its principal drivers will be to develop/grow talent resources and transfer technical know-how in support of the start-ups.

International mobility, which is perceived as a real opportunity for development, is also a tool supporting the “Group Equal Opportunities” project. At the end of 2008, the percentage of women out of the total number of personnel transferred abroad was around 15% (just as in 2007).

Diversity Management

Over the course of 2008, awareness steadily grew in the Pirelli Group of the need to adopt a structured and global approach to equal opportunity, in order to handle it in the broader context of Diversity Management.

Individuals are focusing more and more on the promotion of diversity and spread of an "inclusive" work culture, one that is based on mutual diversity, especially cultural, in order to increase the entire organisation’s possibilities of success and its ability to deal with the challenges arising on the external market.

This inclusive approach has been decisively encouraged by Pirelli’s commitment to spreading an “equal opportunities culture.” Since 2005, this commitment has been fully expressed with the “Group Equal Opportunities Project” and the “Group Equal Opportunities Statement” signed by the Chairman and distributed with the Project objectives to all employees in their local language.

Consequently, Diversity Management takes the form of a business process for progressive change of employees’ “common sense” that values diversity as a source of creativity and innovation, which in turn, if managed appropriately, constitutes a resource that can enhance the effectiveness and efficiency of work.

Focusing on individuals of different nationalities can transform into a competitive advantage for businesses that are constantly seeking ideas and useful skills to create process and product innovations. From this point of view, Pirelli has long supported the growth and development of its own managers through international experiences that are designed to develop the creative and managerial potential inherent in multiculturalism and in the context of different professional environments (please refer to the section on international mobility policies).

Specific actions support the exploitation of diversity.

All the opinion surveys conducted in 2008 (see the specific section for details) included certain questions on the perception of diversity (sex, religion, race…) in the Company. Analysis of these surveys did not reveal particular criticalities. On the contrary, in the survey carried out at the two plants in Romania, which have a large female population, the results were particularly positive.

To monitor compliance with the equal opportunity principles affirmed by the Group from the recruiting stage on, a control mechanism was introduced in Italy in 2008 based on the compilation of an anonymous postcard/questionnaire by every candidate interviewed by the Company.

The feedback received through this new tool has been extremely positive: 98% of the recent university graduate job candidates (data refer to the period February-October 2008) confirmed their adherence with the equal opportunity principles during the hiring process. Positive feedback was also received from the candidates invited to interviews at the Group’s Italian companies. The data that have been examined thus far confirm their full adherence with equal opportunity principles in over 90% of the cases (Tyre 90%, PBS-Labs 100%, Corporate 97%).

Adherence with workplace equal opportunity principles is monitored locally and centrally through the internal Equal Opportunities Complaint Procedure, which is designed to reveal any cases of sexual harassment and/or discrimination that the employee believes he/she has suffered at the Company. This Procedure was never activated in 2008.

The breakdown of the workforce by gender at 31 December 2008 shows that almost 20% of managerial positions were held by women (unchanged from 2007), while they held 38% of white-collar positions (unchanged from 2007) and 5% of blue-collar positions (compared with 4% in 2007). Their number as a percentage of the total workforce is in line with the figure reported for 2007. The substantially equal pay for men and women was confirmed.

Pirelli took action in numerous areas at the institutional level during 2008. In May 2008 the Group participated in the first Italian Career Day dedicated to “Diversity & Work,” which was sponsored by Sodalitas and the Anti-discrimination Office. It offered protected and immigrant job seekers to meet with business offering work.

In 2008, just as in 2007, Pirelli participated in the Laboratorio Armonia (“Harmony Workshop”), which is now called the Diversity Management Observatory, sponsored by the Research Division of the SDA Bocconi business school. It began with the intention to create know-how for the management of diversity in the corporate world and compare relevant operating practices. Its aim is to provide interpretative models and operating tools to confront and manage gender differences.

In particular, Pirelli promoted participation by its own working mothers in the SDA Bocconi research project on The Cost of Maternity, in order to reveal how much motherhood costs the firm and the mother who works there, both in monetary terms and in terms of its impact on the entire life of the firm and individual. This project was carried out by distributing an anonymous questionnaire to be filled out with feedback by female employees on a voluntary basis.

Pirelli has belonged to the European Alliance for CSR since 2007. This initiative is promoted by the European Commission to encourage the spread and exchange of the best sustainability practices amongst businesses.

Thus far, Pirelli has focused its active participation in the Alliance through the European Workshops for the Alliance, coordinated in Italy by the Sodalitas Foundation (Pirelli has a seat on its Executive Committee).

Pirelli’s participation in the Workshop on Equal Opportunities (set up in 2007) contributed to publication of the toolkit “Practising Gender Equality in Careers” which was presented at the CSR Europe General Meeting in Brussels on 19 June 2008.

Since 2008 Pirelli has also participated in the Italian Workshop on “Managing Multiculturalism at Your Company” which will produce a management manual in 2009 based on existing best practises for multicultural management. The aim of this Workshop is to show “how” inclusive management and constant attention on the multicultural dimension can translate into a competitive edge for businesses.