and career aspirations with their supervisors. Our performance-based pay practices consider the Group's KPI, individual performance, internal equity and industry practices. We conduct an annual performance management process involving goal-setting, continuous performance reviews and full-year assessments against targets. We recognise outstanding employees with enhanced career opportunities and rewards. During their annual performance review, all employees with direct reports are evaluated on their people management skills and outcomes. These include line managers in each business, those leading horizontal functions, as well as those with supervisory responsibilities in ad hoc teams. Rewards The Group’s compensation and benefits framework is reported to the Board’s Executive Resource and Compensation Committee. The Executive Resource and Compensation Committee has access to consultants to advise on market trends and compensation and benefits matters. We also work closely with our employee unions on compensation and benefits issues. Since 2019, ST Engineering has established a stronger link between employee remuneration and our ESG performance. ESG performance indicators have been incorporated into the Group’s KPI, which all employees, including ST Engineering’s senior management are assessed upon. The Group’s approach towards compensation includes near-term, mid-term and longer-term financial and non-financial performance targets to motivate and reward employees for creating sustainable stakeholder value. Among others, our variable bonus pool to reward employees is determined by the achievement of our ESG key performance indicators. Since 2020, a specific section on sustainability has been incorporated into the scorecards to reflect the Group’s emphasis on ESG. Share plans are also available to incentivise eligible employees. The Group’s compensation and benefits programmes are reviewed regularly and benchmarked against its respective markets using data from global market surveys and consultancy firms to ensure that we are internally equitable and market competitive. The Group’s benefits are provided in accordance with local regulations and aligned to local employment practices. For example, in Singapore, benefit provisions include (but are not limited to) annual leave, marriage leave, compassionate leave and medical leave, as well as insurance for medical, life, personal accident, work injury compensation and business travel. Retirement provisions accordingly follow local legislated requirements. The Group also rewards creative solutions and contributions through various business and employee recognition awards to celebrate role models and our employees’ innovative spirit. 7. Labour Relations We recognise that harmonious labour management relations are built on trust and fairness. We respect all employees’ fundamental rights to freedom of association, including the right to be members of trade unions. We do the following: • Take guidance from national or local industrial relations laws and regulations • Maintain strong relationships with the unions through frequent activities and dialogues to discuss, clarify and resolve issues, and seek buy-in on new initiatives • Ensure our unions, where applicable, are represented in key committees such as safety, welfare and training so that concerns can be promptly surfaced and addressed The Group may embark on organisational or operational changes in response to external and internal factors. In consultation with our union (where applicable), such changes are communicated in a timely way to the affected employees. This will help them understand and prepare for the upcoming changes. In Singapore, the Group recognises the STESU as the collective negotiating body in respect of all terms and conditions of service of the employees covered under the scope of the collective agreement. 29% of employees in our Singapore operations are covered. The union actively supports the Group’s effort to introduce multi-skilling and re-skilling of our workforce to increase the productivity of the workforce for the benefit of the Group and its employees. The Group will continue to provide the necessary training to ensure employees can perform the new tasks required. SOCIAL → People Excellence 34 ST ENGINEERING SUSTAINABILITY REPORT 2021 OVERVIEW OUR SUSTAINABILITY APPROACH ENVIRONMENTAL SOCIAL GOVERNANCE AWARDS INDEX
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