DENEL GROUP
DENEL PRESENTATION TO PARLIAMENT
Presented by: Patience Mushungwa
Group Executive: HR & Transformation
Date:
19 March 2010
DENEL GROUP
1
DENEL GROUP STRUCTURE
Personnel employed by Denel
Group:
Denel:
5 117
Ass. Companies:
2 204
TOTAL:
7 321
DENEL GROUP
2
REWARD STRATEGY
Denel’s remuneration strategy is aimed at the following:
– Align managers and employees behaviour with Denel strategic intent
and objectives.
– Implementation of a remuneration strategy that will assist in turning
Denel around.
– Enabling attraction and retention of competent, performance driven
employees.
– Creating a performance driven culture and reward performance.
– Inculcating a commercial mindset and improve Human Capital returns.
– Implementing market related remuneration, incentive and reward
principles.
DENEL GROUP
3
PERFORMANCE MEASURES, AND HIGH LEVEL
OBJECTIVES
OVERALL GROUP
TARGETS 2009/10
100%
FINANCE - 60%
• Net Profit/Loss – 25%
• Cash flow before Financing – 20%
• Clean External Audit 9%
• Resolution of Internal Audit
Findings – 6%
PEOPLE & TRANSFORMATION – 20%
•B-BBEE – 12%
• Improvement of Organisational
Climate – 5%
•Performance Management – 3%
OTHER – 20%
•e.g. Strategy,
Multi-year order book
DENEL GROUP
4
PERFORMANCE MANAGEMENT PROCESS & PROCEDURE
Pre-Planning
Performance
and
Development
Plan
Variable Pay
Determination
(if applicable)
Last Formal
Review
March
Planning
Review
Self
Evaluation
February
Informal
Interim
Review
June
Coaching
1st Formal
Review
Sept/ Oct
Coaching
Informal
Interim
Review
December
DENEL GROUP
5
TALENT MANAGEMENT MODEL
Business Strategy
Strategic HR/Talent Plan
Available Skills
Pools
HR Policy
& Processes
Talent
Acquisition
Educational
Health
War for Talent
Labour and EE
Legislation
Talent
Retention
Talent
Organisation
Development
Culture
• Performance
Management
• Remuneration
• Promotion
• Transformation
• Diversity
• Empowerment
Talent
Deployment
Talent Management System, Process, Tools & Metrics
DENEL GROUP
6
IMPLEMENTATION PROCESS
Individuals complete
Information on eTalent:
• Biographics
• Qualifications
• Experience
• Interests
• Job Motivation
• Retention Factors (22)
Managers review individuals
and capture assessment
information on eTalent:
• Performance
• Potential
• Next Career Moves
• Competencies
• Replaceability
Information is analysed and reviewed in Talent
Management workshop where Collective Retention Risks
are indentified and Corrective Actions decided on.
Individual dialogue sessions on
personal retention risks and
career development
DENEL GROUP
Line management Coaching on
how to conduct Individual
Dialogue Sessions
Talent Management Workshop with Senior Management
to review outcome of Individual Discussions and to agree
and update Career Development and Deployment Actions
7
LEADERSHIP COMPETENCY FRAMEWORK
•
Strategic Focus
Leading Business
• Group Visioning and Strategy
• Global Trends
• Growing the Enterprise
• Corporate Diplomacy
• Strategic Stakeholder Management and
Communication
• Networking and lobbying
• High Performing organisation
Executive
Leadership
•
•
•
•
•
•
Senior
Management
•
•
•
•
First
Line
Operational Focus
DENEL GROUP
•
Leading Business
Strategic Alignment / Operationalsing Strategy
Business Process Analysis,and Optimisation
Balanced Scorecard, Tracking Business
Performance
Communication (Internal and External)
Advanced Customer Relationship Management/
Collaborative Strategies
Analytical skills/, Simulation and Business
Modelling
Advanced Negotiation
Entrapreneurial Skills and Deal Making
Leading Business
• Leadership Essentials (Planning, Organising
Leading and Control)
• Understanding Business Objectives
• Quality Management
• Execution
• Basic Diagnostic Skills
• Customer Relationship
Leading Change
• Change Orientation
•
Leading Change
• Organisational Sustainability and
Resilience (Learning Organisation)
• Leading Self
• Personal Branding
• Personal Modeling
 Leading People
• Executive Succession and Coaching
• Inspirational Leadership
• Leading Change
• Change Management Tools and
Techniques
• Leading self
• Personal Mastery and Authenticity
• Team Mastery
• Leading People
• Talent Management
• Capacity Building ,Skills transfer and
Empowering Teams
• Team Dynamics, Team Mastery,
Collaboration and Resilience
• Leadership Approaches
• Cultural Mastery
• Transformational Leadership
• Leading Self
• Personal Leadership, Self awareness &
Personal Strengths
• Stress Management
• Creativity
• Leading People
• Human Resource Management
• Coaching for Performance and
Development
• Conflict Management
• Interpersonal Communication
• Relationship Building
• Delegation
8
DENEL LEADERSHIP DEVELOPMENT PROGRAMME
DENEL GROUP
9
STATUS AND FILLING OF VACANCIES FOR EXCO & ENTITY
CEO’s
Status on vacancies as at 15 March 2010
0
Filling of vacancies:
•
Denel will follow its recruitment policy and process to fill the
vacant positions, when they do arise.
DENEL GROUP
10
DENEL REMUNERATION PRINCIPLES
Denel’s Remuneration and Reward model is in line with best
practise. It comprises:
– An incentive element incorporating performance based
Variable Pay, aimed at driving required behaviour in
achieving overall financial and key strategic objectives.
– A performance management element aimed at recognising
and addressing individual employee performance.
– A market related Fixed Pay element aimed at addressing
current pay disparities in relation to market remuneration.
DENEL GROUP
11
REMUNERATION - EXECUTIVE TEAM#
Hay Units
Remuneration
Minimum
Average
Maximum
1262
1695
2812
R1,320,000
R2,060,070
R3,570,800
# CEO’s excluded
DENEL GROUP
12
REMUNERATION - EXECUTIVE TEAM (cont)
• Remuneration of Exco members based on market and also DPE’s
Guidelines on Remuneration of Executives (published August 2006).
• Personnel and Remuneration Committee recommends remuneration
of Executives to the Board for approval.
• Denel aims to pay on the 50th percentile of the market but currently
80% of managers’ remuneration is below 25th percentile of the
market.
Patterson
Classical
Grades/
Broad
bands
E upper
F lower
F upper
Sub
grades
Hay Unit
Range
E2
Peromnes
Grades
Castellion
Task
1056-1260
3/2
15
22
1261-1800
2
F1/F2
1801-2550
1
F3
2141-2550
1+
F4/F5
2551-3580
1++
23/24
16
25/26
JE
Manager
Points
Head of Major Functions
200-225
230-245
27/28
Programming Decisions
Top Management
Board Level
26
17
Decision Level
250-275
Policy Making Decisions
DENEL GROUP
13
REMUNERATION PHILOSOPHY – BOARD OF DIRECTORS
 Remuneration philosophy is based on the DPE Publication, “State
Owned Enterprises: Remuneration Guidelines – Part A (Chairpersons
& Non-executive Directors)”; including market benchmarks used to
determine the fees paid to the non-executive directors.
 The Personnel and Remuneration Committee reviews the fees that the
Group pays to the non-executive directors and the recommendations
are presented at the annual general meeting for Shareholder approval.
 Board members are remunerated according to the policy that govern
Remuneration for Board Members:
 On a retainer fee basis for the Chairman;
 On a fixed fee per meeting for:
–Non-Executive Board membership;
–Committee membership; and
–Subsidiary Board, or Committee membership.
DENEL GROUP
14
REMUNERATION TABLES FOR DENEL BOARD
 CHAIRMAN RETAINER PER ANNUM
R 715 000
 Non-Executive directors:
Per meeting
2009/10
Remuneration
1. Denel Board meeting: Non-Executive member
17 910
2. Denel Audit & Risk Committee meeting: Chairman
31 958
3. Denel Audit & Risk Committee meeting: Non-Executive member
15 180
4. Denel P&R Committee meeting: Chairman
21 789
5. Denel P&R Committee meeting: Non-Executive member
14 236
DENEL GROUP
15
REMUNERATION TABLES FOR SUBSIDIARY
BOARDS AND COMMITTEES
 Business Entity per meeting:
1. Business Entity Board meeting: Chairman
10 746
2. Business Entity Board meeting: Non-Executive member
8 955
3. Business Entity Audit & Risk Committee meeting: Chairman
9 108
4. Business Entity Audit & Risk Committee meeting: NonExecutive member
7 590
5. Business Entity P&R Committee meeting: Chairman
8 541
6. Business Entity P&R Committee meeting: Non-Executive
member
7 118
DENEL GROUP
16
DENEL EXCO & ENTITY CEOs TURNOVER (2007 – 2009)
4
Appointment
3
3
Terminations
3
3
2
2
2
2
2
1
1
1
1
1
White Male
White Female
African Male
African Female Coloured Male
Coloured
female
Indian Male
Indian Femal
DENEL GROUP
17
DEMOGRAPHICS OF EXECUTIVE TEAM
White
African
Coloured
Indian
Male
Female
Male
Female
Male
Female
Male
Female
GRAND
TOTAL
3
2
2
1
1
0
1
0
10
30%
20%
20%
10%
10%
0%
10%
0%
100%
3
2
1
1
0
0
1
0
8
37.5%
25%
12.5%
12.5%
0%
0%
12.5%
0%
100%
2
0
2
1
0
0
1
0
6
33.3%
0%
33.3%
16.7%
0%
0%
16.7%
0%
100%
2
0
2
1
0
0
1
0
6
33.3%
0%
33.3%
16.7%
0%
0%
16.7%
0%
100%
31 Mar 2007
31 Mar 2008
31 Mar 2009
31 Mar 2010
DENEL GROUP
18