Growing together in a European context
For our employees, the year 2006 was dominated by the integration process in Europe. Together with the UniCredit Group, we have made major progress towards becoming the first truly European bank.
- Great willingness for change
- Cultural identity: Integrity Charter and People Survey
- Designing socially compatible change processes
- Continuity and innovation in professional training and development
- Talent management and “networked” personnel development
- International development
- Socially based HR policies
- Outlook: increasing performance-related pay
Great willingness for change
Our employees faced the challenges with a great willingness for change and made a decisive contribution to HypoVereinsbank’s (HVB) strong operating performance. With organisational structures gradually solidifying, signs are already evident that the cultures are growing together within the pan-European banking group. Our employees are enjoying new prospects for development both in Germany and at the new Group’s other locations.
At year-end, the new HVB Group had 25,738 employees, 20,506 of whom worked for HVB AG. We succeeded in maintaining payroll costs at the new HVB Group at the same level, with the total standing at €2,216 million for 2006 compared to €2,212 million in 2005.
Cultural identity: Integrity Charter and People Survey
The Integrity Charter forms a common set of values for all employees of the UniCredit Group. The key element is integrity as an overriding value which bolsters our standing among customers, employees and shareholders. The Integrity Charter defines our six basic values: fairness, transparency, respect, reciprocity, freedom and trust (see also the Integrity Charter chart following this chapter).
In order to convey the binding character of the values and at the same time to create a forum for an open dialogue, a Group-wide Integrity Charter Day was held on September 20, 2006. On this occasion, employees and their supervisors discussed ways and means of reinforcing their value orientation in future. In the run-up to the event, HVB AG managers reporting directly to the Management Board had joined with members of the Management Board to consider the content of the values in-depth and how they are applied in daily banking operations.
We are drawing up an action plan to permanently establish the Integrity Charter. To this end, the Integrity Charter will become an integral part of our continuous professional development and management training programmes. Since January 2007, HVB has had an ombudsman available as a contact in cases of conflict. Employees who feel that they have been affected by actions in breach of the Integrity Charter can call upon to this person in confidence.
The first People Survey was carried out just a few weeks after the Integrity Charter Day on a Group-wide basis. The aim of the complete staff survey was to discover employees’ opinions on issues like style of leadership, co-operation, working environment and so on, in absolute anonymity for each and every individual. The survey served as both sentiment barometer and appraisal of the current situation. With a participation rate of around 67%, HVB AG exceeded the overall rate achieved in the UniCredit Group. Thus our employees showed their willingness to participate in the process of the strategic development of values at HVB. In particular, the working environment, organisational efficiency and co-operation between managers and their staff were positively assessed. Improvements were requested in areas like the clarity of strategic goals and market positioning. Specific measures will be derived from the results in 2007.
Transparency and trust are two values that are crucial for getting along together successfully in a collegial manner. One example: some of our Management Board meetings are held “locally”, meaning at different HVB locations in Germany. In this way, we have created a forum allowing employees in each region to enter into a dialogue with our senior executives following a Management Board meeting and to discuss current issues concerning the strategy and development of HVB.
Designing socially compatible change processes
A series of staff movements took place in 2006. The adjustment of the previous business segment structure of HVB to the divisional structure of the UniCredit Group led to around 1,400 employees changing within the Bank. They were re-allocated to sales divisions together with their functions. Our goal is to continue to strengthen our customer-tailored approach by defining clear structures and responsibilities.
The change process was accompanied by intensive and generally constructive meetings with the Central Works Council. The employees affected were selected by mutual consent, including all parties concerned, and prepared for their new position in the organisation in the course of some 50 round table discussions. This helped to make the transit as socially compatible as possible, and we received only a few complaints from customers in the process. As a result, the project was successfully completed without any frictional losses.
We likewise designed the Process Redesign and Optimisation project (PRO) in a socially compatible manner. This efficiency enhancement programme launched in 2005 to optimise and streamline processes envisages a reduction of around 2,100 positions by 2007. In addition, synergy effects will be created by 2008 through the shedding of 1,800 jobs in the course of the integration process within the UniCredit Group. We are on schedule in both projects. Natural fluctuation, which increased to 8.6% in the year under review, was beneficial to the reduction in staffing levels. The agreements relating to early and partial retirement also helped to reduce the headcount. Where at all possible, we would like to continue paring back our human resources without having to resort to compulsory redundancies.
Our proven flexible capacity management system helps us to achieve a balance between the Bank’s interests and the priorities of our employees. One of the most important management tools serving this end is part-time work, which currently involves some 21% of the employees at HVB AG. Sabbaticals – unpaid leaves of absence lasting from twelve to twenty-four months – give employees the opportunity to pursue outside interests for a limited period.
Our in-house temporary employment agency, HVB Profil, also made a significant contribution to capacity management in 2006. HVB Profil has access to a number of employees who are assigned flexibly to various areas of HVB. The focus of its work again last year involved supporting various organisational and personnel changes and offering bank apprentices permanent positions.
The socially compatible design of change processes can only be achieved if management and employee representatives work together as partners. In the year under review, our employee representatives, particularly the Central Works Council and the Speaker’s Committee for Senior Executives, also made an important contribution to constructively balancing interests. We would like to expressly thank these people in this regard.
Continuity and innovation in professional training and development
The primary task of our Talent & Development Center is to recruit, integrate and foster talented junior staff. It is responsible for apprentices, students and trainees alike, and caters for our former trainees, or alumni. Moreover, the tasks of the Talent & Development Centre include promoting our credentials as an employer at trade fairs, in advertisements, on the internet and training all our staff in banking methods and management.
We define quality and continuity as the primary goals of our policy with regard to professional development. We invest specifically in the continuing professional development of young specialists and managers. We are planning to once more increase the junior staff quota for apprentices in 2007 from its present level of 6%. The number of apprentices offered permanent positions in the HVB sub-group stood at around 80% in the year under review. HVB Profil takes on some of the young bankers who, after completing their apprenticeships, are not offered permanent positions at HVB AG.
The practical orientation of our apprenticeships is an important concern for us. Our apprentices are fully integrated into daily operations at branches. They come into contact with all the aspects of normal branch operations and work with the permanent staff at the branch in order to become familiar with workflows and processes as well as the requests and needs of customers. Since 2006, HVB AG has been offering a course of studies in financial services in collaboration with the Ingolstadt School of Management. The curriculum is intended for the best apprentices who simultaneously complete the trainee programme during their studies after completing their vocational training. The on-the-job course focuses on methodologies and fosters initiative, creativity and social skills, and leads to a Bachelor’s degree.
Our trainee programme is similarly characterised by continuity; we have agreed a fixed rate of 1% of trainees. The programmes we offer are considered top quality education for high potentials. We already provide a range of special training courses to those graduating from universities with the new Bachelor degree. Hence, we are responding to changes in Germany’s educational landscape at an early stage and are deliberately tying talented and motivated junior staff to our Bank.
In addition, some 450 students gained insight into the requirements and areas of operation of our Bank during placements with us in the year under review. As we view placements as an educational tool running parallel to a course of studies, we make it a rule not to offer any placements to university graduates who have already completed their studies.
Talent management and “networked” personnel development
A crucial element of all continuing professional development measures of HVB is its networking concept. Thus, professional training for all apprentices in a given year (2006: 520) starts with First Steps. This comprises three days of specialist and personal training, and also includes sessions with the Management Board. This serves as a foundation for a personal network of apprentices at the Bank. Thus the introductory programme not only provides an insight into our customers and products, it also helps individuals adapt to the corporate culture at HVB and develop their social skills.
Meetings with senior managers underscore the great importance we attach to our professional training programmes and our junior staff. In 2006, HVB organised a road-show with the CEO of the UniCredit Group, Alessandro Profumo. During a breakfast with junior staff, apprentices, trainees and alumni had the opportunity to discuss key business issues and their personal development potential within the UniCredit Group.
The HVB Alumni Network, which targets former trainees and serves as an instrument to retain them, is also committed to the networking concept. At the annual Trainee Day, trainees and alumni discuss important banking issues in workshops. In 2006, attention focused on the Integrity Charter, although an exchange of ideas with the member of the UniCredit Group’s Management Committee responsible for Human Resources, Rino Piazzolla, was also part of the supporting programme.
The Career Center is another instrument serving development. Above-average alumni are nominated for participation by their supervisor. The Career Center includes two years’ mentoring by an experienced manager and a seminar to evaluate the individual’s current position.
A new mentoring programme has been initiated at HVB AG to promote female specialists and managers. The emphasis here is placed on the development of greater professional and personal skills and the creation of networks. At present, more than half of the staff at HVB AG (55%) are female, yet only about 26% of them hold positions as specialists and managers. The objective of the 12- month mentoring programme is to promote the careers of women by providing personal guidance and holding relevant events, thus significantly raising the number of female managers.
A wide range of continuing professional development programmes is available to all employees. These include courses in methods and seminars to improve communication and leadership skills. To help our people communicate better with people in non-German-speaking countries, we have significantly increased the range of foreign language courses we offer, and concepts catering for individual needs can be designed, implemented and supervised within the scope of personal coaching.
Another example of high quality, networked continuing professional development is our new Master in Corporate Banking programme which was developed in conjunction with leading universities in Italy, Austria and Germany (including the Technical University of Munich). The objective of this in-service course is to teach international advisory and problem-solving skills to participants working in corporate banking and lending operations. In addition, it makes a major contribution to forming Group-wide networks and fostering intercultural co-operation. The Bocconi University in Milan confers a Master in Corporate Banking on students completing this course of study. The first course was taken by 50 people from ten countries, 11 of whom were from HVB. A loyalty declaration will serve to ensure that the expertise cultivated will be used to serve our customers in the long term.
International development
HVB’s staff development tools are already closely intermeshed with the development programmes of the UniCredit Group. Hence, we are pressing ahead with sustainable personnel planning on an international level and offering exciting prospects for our top performers and potential future executives at an early stage.
- UniQuest is a one-year programme for 100 talents from the entire UniCredit Group. In this connection, talented young people with three to six years’ job experience work in international teams on strategic projects. Their customers are top executives of the UniCredit Group. The goal is to build up an international network, expertise and a thorough understanding of correlations in the UniCredit Group outside their own specialist area.
- The next step in executive training is the Talent Pipeline. This is a Group-wide pool of high-performing, internationally mobile junior staff who are suitable for promotion to the next management level in the next five to seven years. Candidates in the talent pipeline are introduced to the top management of the UniCredit Group and discussed by it as part of management and successor planning. Suitable development measures are also defined.
- The Executive Development Programme (EDP) creates the framework for an annual inventory of the senior management in the UniCredit Group. In the process, the performance, potential and expertise of 1,500 senior executives are discussed together with their identification with values. The objective is to define steps in the development of individuals with responsibility against the backdrop of division-specific business scenarios and thus initiate early succession planning.
Socially based HR policies
We promote the well-being and performance of our employees through a large number of facilities and measures. Enabling people to harmonise working life with family life has been one of the strengths of our HR policies for years. In co-operation with the nationwide Family Service, we advise our employees and support them financially if they take leaves of absence for family reasons. This applies particularly to childcare and caring for relatives. In addition, we help mothers and fathers to re-enter the workforce. For this commitment, the charitable Hertie Foundation has certified HVB AG under its Work & Family audit more than once.
Our “Bank of the Generations” project looks at the effects of demographic change. We are looking to bring about a change in the way people think by using tools like an analysis of the age structure, sensitising our people to different work-time models and devising a continuing professional development programme appropriate for the relevant life phase.
The Health Forum creates a platform for the activities of our health management. We run seminars and information events to reinforce health awareness and encourage personal responsibility. The social counselling provided by HVB advises employees in times of need and also supports executives by offering coaching on how to deal with challenges in their working environments. Further information is provided in our 2005 Sustainability Report. Please refer to the Financial Calendar in this report for ordering information.
Outlook: increasing performance-related pay
HVB has operated a variable remuneration structure since 1995. In 2004, we introduced a remuneration structure consisting of 12 monthly salaries and a variable component. The bonus is determined depending on the degree of target achievement within a specific range. For sales divisions, this system is undergoing further development, which will involve the respective targets being specified in even greater detail – depending on target achievement – thus making it easier to understand and to constantly calculate the bonus paid. This means that our employees can benefit even more directly from successful sales efforts in future. The regular measurement of customer satisfaction has an important role to play in this regard.
