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Guideline Recommended September 2010

Flexible Work Environment at Nestlé

Guideline Recommended September 2010

Issuing Function Corporate Human Resources. Target audience All employees. Repository All Nestlé Principles and Policies, Standards and Guidelines can be found in the Centre online repository at: http://intranet.nestle.com/nestledocs Approver Jean-Marc Duvoisin, Deputy Executive Vice-President Human Resources and Centre Administration. Date of publication September 2010 Copyright and confidentiality The content of this document may not be reproduced, distributed or disclosed to third parties without proper authorization. All rights belong to Nestec Ltd., Vevey, Switzerland. © 2010, Nestec Ltd.

Design Nestec Ltd., Corporate Identity & Design, Vevey, Switzerland

Table of contents
3 4 4 4 4 4 4 6 6 6 6 6 6 6 6 7 7 7 7 8 8 Introduction Flexibility: what, why, who, where? Objective of the document What is flexibility? For whom is it? Where does it apply? Why Nestlé supports it? Manager’s role and responsibilities An opportunity to redesign the workplace Presence doesn’t mean performance Creating a culture of trust Managing remotely Organising differently and planning better One size does not fit all Open dialogue within the team Employee’s role and responsibilities Trust as the foundation Flexible work is a choice that has implications Possible career impacts The role of Human Resources Next steps

Flexible Work Environment at Nestlé

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Flexible Work Environment at Nestlé

Introduction
The challenges and demands of an evolving business environment require new working strategies. In the last few decades new trends are posing unprecedented challenges and opportunities to employers and employees. At Nestlé, we believe the workplace should change to reflect these realities. In the context of an intensifying global competition and growing business demands Nestlé is constantly searching for alternative strategies to attract employees and keep them highly motivated and engaged. Changing demographics Some of the trends which have been gaining importance include the increased participation of women; the arrival of Generation Y (born 1980-2000) and an ageing population with increased life expectancy. These trends bring along a series of challenges such as the rise of new career paths; the increase of dual-career couples and single parent families; the sharing of care-giving responsibilities within couples; the need to keep people in the labour market longer. Different aspirations The needs and expectations of people are changing and our relationship with work is evolving. We are seeking higher job satisfaction and better health and wellbeing, more control and autonomy over how and when we work so that we can fit work into our life rather than having to fit our lives around work. Career paths include winding, horizontal and developmental roles, career breaks and sabbaticals, etc. Flexible work environments One of the levers of improved performance and productivity is more flexibility in how, where and when work is done. In addition, supporting a better balance of private and professional life is one of our company values that aligns with our positioning as a Nutrition, Health and Wellness company. Performance with flexible organizations We need to shift our emphasis from presence to performance. Our focus should be on what and how things get done in the most efficient way, rather than where and when. This requires a culture shift where people are trusted to work with less monitoring and supervision – the end of “command and control” micro management. It is a journey where managers play a key role in supporting change. Nestlé is committed to be a forefront employer. We are convinced that a more flexible workplace will bring benefits for both employees and Nestlé and count on your support.

Jean-Marc Duvoisin

Deputy Executive Vice President Human Resources and Centre Administration

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Flexibility: what, why, who, where?
Objective of the document The objective of the Corporate Guidelines for a Flexible Work Environment at Nestlé is to provide a framework for managers and employees who want to explore working flexibly. What is flexibility? Flexibility in the Workplace, in its broadest sense, is the possibility for employees and managers to make changes to when, where and how work is done in order to better balance personal needs and business requirements. More concretely, they may include variations in terms of: • Time Possibility for the employee to change working time (e.g.: flexitime, part-time, job sharing). • Location Possibility for the employee to work from other locations than the office (e.g. home, another office). • Career pacing Possibility for the employee to have career breaks (e.g. Sabbatical/Educational leave). For whom is it? In the past, work-life balance and Flexible Work Arrangements (FWA) were considered a women’s issue. It is important to understand that in today’s society, men are often as eager as women to have greater flexibility in their working conditions. Flexible Work Arrangements are now recognized as a business imperative for attracting and retaining highly productive employees of both genders and all generations. However, Flexible Work Arrangements are not an entitlement and are also not suitable for all jobs, all individuals or all teams. Different types of work and workplaces present different challenges and the ways of giving flexibility are likely to vary. The applicability of each Flexible Work Arrangement depends on the type of work and business need. In principle, these guidelines are mainly intended for employees in white-collar positions. A case by case evaluation should take place to assess for the possibility of working flexibly. Where does it apply? The socio-economic context in each market sets the frame of what is feasible in terms of Flexible Work Arrangements. Local cultures and contexts need to be taken into consideration when assessing the possibility of working flexibly.
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The element of cost must also be taken into account when considering implementation of Flexible Work Arrangements. The cost impact of implementing a Flexible Work Arrangement needs to be balanced with the advantages that it will bring to the organization and to the employee. Sometimes the long term benefits may not be immediately evident or easily measured, and may be difficult to quantify in financial terms. However, these costs should be looked at as a long term investment that will bring benefits. Why Nestlé supports it? Workplace Flexibility, when properly used, creates benefits for both employees and Nestlé. Some of the proven benefits that are overall benefiting the bottom line are: Talent Attraction and Retention Talent is one of the most important corporate resources and it is also the resource in shortest supply. With the current demographic trends, things are not going to get easier. In the war to attract and retain the best talent, we believe the commitment to facilitating and encouraging flexible working conditions is a key differentiator. Higher employee engagement leading to increased productivity More satisfied employees means more engaged employees. Flexible Work Arrangements can help employees better balance their personal and business commitments creating a higher sense of wellbeing and satisfaction. This, in turn, means higher productivity, reduced absenteeism and lower turnover. Research has proven that all these factors have a positive impact on the bottom line and market share of a company. An evolution of the way of doing business The integration of Flexibility in the way of doing business is a natural evolution of Nestlé’s response to today’s and tomorrow’s business requirements. To continue to stay competitive, Nestlé is striving to become a leaner organization that quickly responds to the demands of the marketplace. Flexibility is an enabler of lean thinking, leading to a flexible and more agile workforce. Moreover, less close supervision also fosters an environment where employees are more empowered to make decisions and take risks. This supports the entrepreneurship and innovation at Nestlé.

Flexible Work Environment at Nestlé

Moving to a flat and flexible organization In the last few years, Nestlé has put in place efforts through the Nestlé on the Move initiative to evolve its structures towards a flat and alert organization. Flat organizations make quicker decisions. Flexibility can support these efforts, by making possible new, pragmatic solutions that serve both the business and the employees: • Used as a management tool, flexibility can help re-design a department/business to enhance the responsiveness. For example, managers can create teams where people work at different working times so that at least one person of the department is available 24 h/7. Or teams can be redesigned to address inconstant work volumes, shifting between periods of longer and shorter work days (e.g. quarter-end financial closings). • Flexibility, when focused on long-term, can be instrumental to improving your team’s performance. It can help your team reduce gaps in competencies and skills. For example, when employees’ reduce their work schedule or take sabbatical leaves to achieve an academic level. • Flexibility in terms of career paths can help managers handle business cycles and fluctuating staffing needs, reduce headcount cost and keep teams streamlined.

Ref: Nestlé on the Move

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Manager’s role and responsibilities
The role of managers and their ability to manage new ways of working effectively is a key success factor. Managers should consider that Flexibility requires a different management style and creates new challenges and opportunities. The key is changing the culture, processes and practices that drive behavior and delivery within businesses on a daily basis. An opportunity to redesign the workplace Flexible Work Arrangements challenge us to think about work in new and different ways. They can be used as a tool to create better ways to achieve business results or identify different ways of meeting business demands in a proactive fashion. Let’s think “outside the box” and think creatively about how jobs can be redesigned to meet and exceed business goals. Presence doesn’t mean performance At the top of the list of management skills is the ability to measure and reward results and performance, not presence in the office. For much of the work we do, physical presence is not necessarily required as long as people are accessible. Moving the focus from time-served and attendance to judgments based on quality of work, results and delivery of agreed objectives is a more effective way to manage the business and a powerful way to motivate people. Creating a culture of trust Trust between the organization and the employee is vital for performance management by results, and is a key requirement for flexible work arrangements. Some managers may find it more difficult to confirm that employees actually are working when the employees are not visible to them. Yet empowering employees and maximizing their engagement is recognized as vital to driving continuous improvements in productivity. That can be difficult where trust is low. But low levels of trust often go with low levels of employee engagement, created because of low motivation. Providing greater flexibility has been shown to generate higher levels of motivation, which in turn builds engagement and creates the environment in which flexibility can thrive. Managing remotely In today’s global environment, many managers need to manage remote teams, which may be dispersed across multiple geographies. With the technology currently available, there are
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innumerable solutions that allow people to stay connected and productive. However, this also presents challenges in terms of successfully motivating virtual teams, fostering team spirit and maintaining organizational culture and engagement. Organising differently and planning better Greater flexibility requires different ways of doing things. Managing a team that is working in different spaces and/or at different periods implies that: • the rules of the game are clearly set • people are given clear direction and have the means to work from wherever they are • people have clear performance objectives by which their performance will be measured • a clear definition of the imperative “physical presence in the office” is established in order to operate efficiently as a team (e.g. all team members should be present on x day). • managers are flexible and respect the employees’ needs. Extra efforts may be needed to schedule meetings, office coverage, or cover peak work periods so as to minimize conflict between the different schedules. • managers sensibly prioritize requests and evaluate their full impact before agreeing to anything. One size does not fit all Managers should review requests with an open mind but also with an awareness that some people and some jobs are not right for certain options. This may require that some job descriptions are redesigned to allow operating effectively under certain flexible working arrangements. Open dialogue within the team Bear in mind some employees may resent colleagues who enjoy flexible work arrangements, or feel they must cover for, or are burdened with the additional work of colleagues using these options. Make sure you encourage an open and trusting environment in your team where people feel safe to address their concerns. Facilitate the discussion of work arrangements that impact the team as a whole.

Employee’s role and responsibilities
Flexibility implies trust and has implications one should evaluate carefully. Trust as the foundation Flexibility is not an inherent employee benefit, but rather an acquired status by means of having a trusting relationship with your manager. Given the nature of the flexible work arrangements, there is much less management control and monitoring then when the employee is physically located in the office. Therefore, it is critical managers trust the employee’s integrity and intentions. Trust is a pre-requisite to work flexibly and is essential to maintaining fully fulfilling flexible work conditions. Building trust is a bilateral process that requires mutual efforts and commitment. Here are some considerations to help you build trust: • Perform continuously at a satisfactory level, which meets or ideally exceeds your manager’s expectations. Show a track record of consistently achieving objectives. Demonstrate you are able to accomplish your work at least as well as you did it while working a “regular” schedule. • The manager’s perception of integrity is reinforced by the extent to which your words match your subsequent actions and you practice what you preach (c.f. Nestlé Leadership Framework). • Work collaboratively with others demonstrating commitment to achieve group objectives, understanding the needs and goals of others and adapting own views and behaviour when appropriate. • Trust others and you will receive trust in return. There are simple and symbolic actions you can take that show trust, such as soliciting input and sharing decision making power with others. • Flexibility is a two-way street. Be flexible to accommodate important meetings, customer or training requirements, and occasionally change your flexible work arrangement. Flexible work is a choice that has implications Flexibility comes with short-term benefits, but also entails implications and potential disadvantages. Weigh the positives and negatives and decide based on your personal situation. If you have friends or colleagues who are currently working flexibly, discuss their experiences with them. In the table below some of the challenges are listed, but this is not an exhaustive list. Possible career impacts Flexible work arrangements are not possible in every job. Different types of work and workplaces present different challenges. When considering a new job opportunity or applying for an opening, you may have to put things into perspective and accept some trade-offs. Discuss openly with your line manager your career options and your current and future desired flexible work arrangements.

Type of FWA Part-time Flexitime Job sharing Sabbatical Educational Leaves Working from home / another location

Challenges for Employees • Implies reduced income • Co-workers or manager may view employee as less committed • May not free as much time as employee needs • May make it more difficult to keep track of hours • Finding a compatible partner or replacing a partner who leaves • Dividing the work equitably • Additional systems for communication with manager, co-workers, clients, etc. • Generally unpaid leaves • Co-workers or manager may view employee as less committed • • • • • Fewer networking opportunities Feeling part of the team Need to organize a work space with access to the technology required High level of organization and auto-discipline Not all jobs are performed easily off-site

Challenges for Managers • Re-assigning the rest of the employee’s job duties. • Extra efforts in scheduling meetings, coordinating projects, office coverage, etc. • Measuring the performance of part-timers • Key people may be unavailable at certain times • May create difficulty in scheduling meetings, coordinating projects, etc. • Added effort to supervise job-sharers as individuals and as a team • Additional work space required if there are overlap days • Tasks and responsibilities need to be reassigned while employee is on leave • • • • Managing remotely Fostering team spirit Extra efforts in communication with employee Extra efforts in scheduling meetings, coordinating projects, office coverage, etc.

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The role of Human Resources
Flexible work solutions vary in each market, depending on local legislation, culture, management, business requirements, type of work, etc. Your HR team will adapt these Corporate Guidelines to local legislation and environment. On an operational level, HR Business Partners are facilitators of the process, being the reference person employees can resort to in order to get guidance or support. This means concretely: • Can advise on best practices and cultural implications for work groups and organizations • Can coach on how to maximize business benefits of Flexibility • Are custodians of the consistent application of Flexibility throughout the company and in line with all labour regulations

Next steps
Employees wanting to explore working flexibly should discuss with their line manager and HR Business Partner and should get informed about which flexible work arrangements are available locally.

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Flexible Work Environment at Nestlé