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Reward and recognition

Part of valuing each other is recognising and celebrating the success of our people, and ensuring they remain motivated and satisfied.

We aim to recognise the contribution of every employee to the success of Diageo, and to reward that contribution in a fair, competitive, and sustainable way. Rewards play an important part in attracting, retaining and motivating employees, and we link them to performance that helps us achieve our business goals. Rewards are also linked to an employee’s professional development, through the performance management process.

We have a strong commitment to industrial dialogue, and in 2012, more than 45% of our employees were covered by collective bargaining agreements worldwide. We aim to maintain regular, open dialogue with unions over issues of common interest. For example, this year we welcomed a ground-breaking new pay and conditions deal with GMB, our biggest union in our Scottish manufacturing operations. The agreement replaces traditional wage negotiations with a rolling deal which offers job security, annual inflation-linked pay increases and quarterly bonuses. It also commits both Diageo and GMB to continue to increase focus on capability development and sets a clearly defined disputes resolution process to enable disagreements and issues to be raised, discussed and resolved quickly.

Pay and benefits

Our pay and benefit packages are designed to attract and retain the best talent in the market. Salaries are competitive, and pay rises or annual bonuses are based on the achievement of individual and business objectives.

Benefit packages are designed according to the needs and customs in each region, and may include:

  • Retirement benefits
  • Long-term incentive plans
  • Healthcare benefits
  • Parental leave.

Executive pay - linked to sustainability

Like those of all our employees, executive directors’ rewards are linked to performance. Their performance is measured against individual business objectives (IBOs) which are specifically set for each executive director’s area of accountability. These IBOs are set in the context of Diageo’s overall business priorities, which include non-financial measures like conformity with our Code of Business Conduct, and sustainability and responsibility policies relevant to an executive director’s particular role.

Read more about executive pay in the directors’ remuneration report in our annual report.

Share ownership

We believe that employees and the business as a whole all benefit when the people who work for Diageo are also shareholders, and we encourage employee share plans in our operations across the world. In 2012, 31 countries operated an all-employee share plan. Two additional countries will be invited to participate in Diageo’s International Sharematch Plan later in 2012. As of 30 June 2012, 16,531 past and present employees held 1.16% (2011 – 1.17%) of Diageo’s ordinary share capital.

Employee share schemes by year (2010 – 2012)
2010 2011 2012
Countries operating schemes 25 31 31
Employees1 holding shares 15,785 16,057 16,531
Employees1 holding more than 1,000 shares 48% 48.9% 45.1%
Shares held by employees1 33m 32m 32m
  1. Past and present

Recognition

In every market, we recognise the achievements of our employees through a variety of schemes which both celebrate good work in its own right, and help to inspire and motivate us to ‘be the best’.

Each market develops its own recognition schemes, highlighting examples of living our values, innovation, excellence in customer service, and ideas or activities which encourage profitable growth. For example, in North America employees can nominate colleagues who have performed outstandingly for the ‘Celebrating You’ awards. The awards are linked to our business objectives and this year were delivered in a series of ‘ambush’ awards ceremonies, where recipients were surprised by colleagues and managers.

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