Human capital

People

The Group owes its success to the calibre, commitment and contribution of its people. Their passion and resilience have enabled the Group to build strong and trusted brands over the years.

People draw inspiration from the Pioneer Foods Way which is an embodiment of the Group values, acceptable behaviours and its multi-stakeholder approach and engagement. The Pioneer Foods Way is the bedrock of the inclusive, values-based and performance-driven organisational culture which the Group seeks to nurture and sustain.

People engagement

Various forums and communication channels are used to connect and engage with employees, as key organisational stakeholders. These channels include: one-on-one discussions, team meetings, departmental meetings, site meetings, business unit and group forums, electronic platforms (internet, intranet, SMS, e-mail), focus groups, management roadshows, leadership forums, company publications and newsletters, e.g. Flag Post, Newsflash, retirement newsletters, vacancy bulletins and business unit newsletters.

At two-yearly intervals, the Group conducts a climate survey to gauge people’s feelings and perceptions about the Group and people practices. This year, a climate survey was conducted with a resounding response rate of over 86% from the entire workforce population. The survey has been followed by focus groups to gain more qualitative insight of the employee views. Once the survey feedback data has been analysed, improvement plans will be formulated per business unit and/or operating point to address the pertinent employee issues.

Employment creation

During 2009, the Group has directly created 203 new employment opportunities, bringing the total permanent employment to 11,086 at year-end within the Group’s wholly owned South African operations.

The defensive nature of the food sector has helped the Group in weathering the storm of the global economic downturn without having to resort to employee retrenchment.

The salaried staff turnover rate of 11% is a significant improvement from the staff attrition rate of 13.8% for the same period last year.

High-calibre employee attraction, engagement and retention continue to be the main focal point of the Group’s people management agenda.

People development

People development is both a value and the cornerstone for the Group’s human capital philosophy of “Growing our own timber”.

Uppermost in the Group’s people development strategy is to grow the Group skills base, build a scarce skills pipeline and leadership bench strength.

The Group has invested approximately R23 million which is about 2% of payroll in various skills development initiatives and interventions.

Employment equity

The Group continues to make steady progress year on year on employment equity in general, albeit at a slower pace than originally anticipated. Various business units in the Group are busy carving out strategies and implementation plans to accelerate employment equity at managerial level, which is the focal point of the Group’s employment equity drive going forward.

Employment relations

Business units within the Group have effective participative forums with labour representatives and representative unions to promote dialogue and engagement on matters of mutual interest. The Group upholds the right to freedom of association and human dignity in the workplace.

There are 17 trade unions in the Group’s various business operations with a collective membership of 5,693 employees.

Remuneration benefits

The human capital committee of the board ensures the evaluation and approval of a remuneration strategy, including market-related incentive schemes for executive and senior management.

These incentive schemes include the following:
Performance-linked short-term incentives
Annual performance bonuses are payable and are based on a combination of performance achieved in terms of profit growth and return on average net assets. Depending on seniority, this bonus is limited to an amount that varies between 15% and 75% of a year’s remuneration package. An additional bonus, limited to one month’s remuneration package is payable to executive management if predetermined broad-based black economic empowerment goals are achieved.

Performance bonuses are also payable to other members of management, based on the achievement of personal goals, as well as Group, divisional or unit profit performance.

Long-term share incentive scheme
A share incentive scheme exists and the human resources committee annually determines the allocation to management. The last offer in terms of a share option scheme was in February 2007 at R31.42, the market price at the time. New allocations in terms of the share option scheme was discontinued in 2008 and replaced with a share appreciation rights plan. Subject to the terms and conditions of the share appreciation rights plan, selected employees will be granted the opportunity to acquire ordinary shares in future, with the quantum of their awards. This is based on the future increase in the value of the Pioneer Foods share price from date of allocation of such specific share appreciation rights. The number of share appreciation rights offered is based on exactly the same principles as applied in determining the number of share options offered in the discontinued scheme. It is based on a multiple of the total remuneration package per year that varies from half a year’s package up to three years’ package. The total value of share appreciation rights offered takes into account the value of share options and share appreciation rights offered in any past five years. The last offer under this scheme was made in January 2009 at R24.20. Share options and share appreciation rights that have been accepted may be traded at 20% per year within a maximum period of 10 years.

The total number of ordinary shares that may be transferred to employees under the share appreciation rights plan is limited to 14.5 million shares and represented approximately 7.5% of the issued ordinary shares at the date of approval of the plan by shareholders.