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17四月2024激励机制2BESTPRACTICES

MOTIVATIONANDPEOPLEPERFORMANCEMANAGEMENT * 1988-98 Source: PerformanceEthicFingerprints,BloombergPrimarymotivationleverMOTIVATIONLEVERSOFHIGH-PERFORMINGCOMPANIES

percent,10-yearTRS * 1988-98 Source: PerformanceEthicFingerprints,BloombergPrimarymotivationleverMOTIVATIONLEVERSOFHOWHIGH-PERFORMINGCOMPANIES(CONTINUED)

Percent,10-yearTRS * 1988-98 Source: PerformanceEthicFingerprints,BloombergMOTIVATIONLEVERSOFHIGH-PERFORMINGCOMPANIES(CONTINUED)

Percent,10-yearTRSPrimarymotivationlever * 1988-98 Source: PerformanceEthicFingerprints,BloombergMOTIVATIONLEVERSOFHOWHIGH-PERFORMINGCOMPANIES(CONTINUED)

Percent,10-yearTRSPrimarymotivationlever * 1988-98 Source: PerformanceEthicFingerprints,Bloomberg

MOTIVATIONLEVERSOFHIGH-PERFORMINGCOMPANIES(CONTINUED)

Percent,10-yearTRSPrimarymotivationleverBESTPRACTICESANDCASEEXAMPLESBESTPRACTICESANDCASEEXAMPLES“SessionC”–Reviewtop200peopleineachbusinessunitandcorporatecenter“SessionCII”–Follow-uponactionitemsReviewofmanagementpotentialfortop500DETAILONGE’SPEOPLEREVIEW–“SESSIONC”JanuaryMarch/AprilOngoingIdentifyhigh-potentialemployeesearlyintheircareerandgivethemopportunitiestogrowMonitorprogress,clearroad-blocksGainin-depthknowledgeoftopmanagementskillsandpotential,integrateperspectivesacrossbusinessesPurposeJ.Welch,BUleaders,BUHRManagerJ.Welch,SessionCdirector,BUleadersWelch,BUleadersParticipantsGrademanagersonacurveona1-5scale1s(top10%)and2s(next15%)getstockoptions,5s(bottom10%)getfiredFocusonthetop10-15%highpotentialemployeesandproblemcasesFollowupontheactionitemsagreedtoduringthefirstSessionCDiscusseachofthetop500indetailwithrespectiveBUleadersanddecideoncompensationTrackprogressofactivitiesoutlinedfortop500acrosstheBUsKeyactivitiesFulldaymeetingatBUOne-on-onediscussions,mostlyviavideoconferencingInformalprocessofreviewandcommunicationbetweenCEOgroupsandBUsFormat3-4summaryofactionitemsPeopleflowsummaryforofficersandseniorexecutivesDevelopmentgridfortop200ineachBUAssessmentofthecurrentstatusofactionitemsOutlineofnextstepsCompensationdecisionsfortop500OutputsOrganizeSessionCmeetingsSynthesizethesummaries,meetingreportsandlistsofactionitemsforeachBUSummarizeresultsforallbusinessesandsendtotheboard(SessionCwrap)Preparethelistoftop500includingitemssuchassalary,bonus,stockoptions,moves,etc.Revisecompensationpackagesfortop500StaffworkDayatBUincludesluncheswithdiversitycandidates,specialsessionsaroundfunctional,andspecialprojectareas(6Sigma,Bl

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