COMPANY VISION AND THE CRUCIAL NATURE OF HUMAN RESOURCES

The asset represented by our employees, their skills, their abilities and their potential plays a central role in our business vision, in our strategic direction and in our competitive positioning within our markets.  Together with the capacity of our employees to learn continuously and to remain up to date with changing technologies and market needs, their professional competencies and their knowledge of our products and what constitutes satisfaction for our clients, are the only real guarantee that Piaggio can keep producing consistently high quality results.  The concepts of “skill” and “being skilled” are inextricably linked with having understood how to achieve a truly outstanding result.  This is what we mean when we refer to “Skills as company assets” to be documented, protected, communicated and further developed.

OBJECTIVES OF THE HUMAN RESOURCE MANAGEMENT POLICIES

The primary objective of Piaggio’s human resource management policies is to create a blueprint for the enactment of the company business vision and its requirement for a “virtuous circle” linking company results, customer satisfaction, customer value, and the value created by and for employees.
The polices are therefore born out of the business vision and their common goal is to define how the company can create a significant exchange of value which is motivating for all the people who work in the company.
As such, the policies as a whole and individually have a dual function as regards this “value exchange”:
1) To increase employee value: staff are the first and the most important of the company’s “intangible assets”.  The policies guide management in “extracting value” from employees while “investing” in their growth, the optimization of their skills and the protection of the wealth of know-how which they represent.
2) Increasing value for employees: in this sense employees are recipients of a “value proposal” intended to inspire and motivate them to do their best because they see their contributions suitably rewarded and their expectations and aspirations met.  Creating value for employees means providing guidance and, where necessary, redirecting motivation in line with the business focus.
The policies which Piaggio intends to introduce, communicate and make operative relate to the key aspects of human resources management and development.  Inherent in the policies is the idea of “aiming for excellence”, in the sense that they are meant to create and establish within the organisation a “better way” of guiding staff towards excellence; this implies a conscious willingness and capacity on the part of management to apply them efficaciously and a readiness by staff to take joint responsibility and to get actively involved.
In combination, these states of mind impel the trajectory of the organisation as whole towards constant improvement, and, ultimately, excellence.  The policies are thus intended a “guide” and as a common reference point for the orientation and “transformation” of individual and collective behaviors in line with the evolution of the company and of the factors which govern its success.

POLICY DEPLOYMENT AND ITS OBJECTIVES

Recruitment and internal enlistment policy.
The objective is to attract and keep the people and skills which are the “best for the business” and to use internal mobility and experiential development in diversified roles, contexts and functions as a fundamental tool to optimize individual skills and accelerate the development of individual capacities and potential.

Communication and awareness policy.
The objective is to create a “two-way channel” between the company and its employees which simultaneously transmits fundamental information for employees’ understanding of where the company is going in order that they might channel their individual motivation and actions, and at the same time, provides a means of listening to employees and evaluating their satisfaction levels and the organizational climate – all with a view in the longer term - to increase individual commitment to company goals.

Employee appraisal policy.
The objective is to give all Piaggio employees a full understanding of the aspects on which they are evaluated.  Transparency as regards the how and why of the various methods used to evaluate their own performance, skill and ability is fundamental in enabling employees to make sense of the company’s assessment criteria and adjust their behavior accordingly.

Distinctive skills development policy.
This supports the fundamental role of being “competent” both for personal performance and for the achievement of company goals.  The development of the distinctive competencies, required by business and market evolution, is an absolute priority and for this reason competencies become the pivot around which the Human Resources process revolves, from recruiting to training, career development, and the compensation policy itself, which will focus increasingly on rewarding and retaining employees with strategic business know-how. 

Professional development and career policy.
The objective is to pursue the development of key resources in line with organisational growth and competitive strategy and to create a “portfolio” of employees prepared to fill pivotal roles.  In this context, the Management Review offers a vitally important inventory of the pool of available managerial and professional skills and an analysis of the development progress of specific individuals and the status of key roles.  In order to fully utilize available skills and expertise, the Professional development and career policy also allows for management and professional training.

Training Policy.
This recognizes the importance of continuously updating employee skills and aligning them with organizational needs as the business evolves.  The offer of training opportunities is available for every role and level of responsibility, for professional groups and for individuals, in short for whoever has the motivation to increase their value as employees in line with business requirements.  The main objective is thus to increase the value of the organization’s human capital both on an individual level and overall.

Rewards policy.
The objective is to reward employee contributions according to clearly understood, competitive, fair and merit-based criteria so as to motivate and retain the best employees i.e. those who  contribute the most to the business and to company results.    Annual remuneration is composed of a fixed portion linked to a specific role and to an employee’s level of individual skill, and a variable portion established in terms of the corresponding increase in company value and the results achieved whether individually or as part of a team.  Besides encouraging a results-oriented culture, the MBO, incentivisation and performance evaluation systems are intended to link the variable portion of the remuneration overtly with individual results, and most importantly, to allow for differentiated levels of recognition, offering the most significant rewards to those whose performance contributes the most to success and to company results.

Strategic employees’ policy.
This has the fundamental objective of increasing the company’s ability to attract, motivate and develop the best resources for its business.  As such, the policy takes its direction from business decisions and the success factors which become critical as a result.  Hence it could be applied to entire groups or to individuals whose personal and professional value is of particular relevance to the company, and involves a higher “value exchange” via individually tailored management, development and recognition practices.

Trade Union relationships policy.
To ensure a sustained increase in company value for all stakeholders, the Piaggio “Trade Union relationships” policy  aims to promote the involvement of workers and their “Union” in the process of achieving company objectives and promoting the values which guide the company and its competitive success.  Such involvement is also meant to develop employees’ motivation and their sense of responsibility for company growth.  To this end, the company’s success must always be the prime goal when defining and managing key themes (flexibility, operational organisation and plant use, productivity, working periods etc.)  Whilst the agreements and behaviors adopted in the various countries in which the Group operates will be in line with local social and institutional norms, they will always be coherent with the basic principles and overall requirements of the Group.

Competitive organisational policy.
The continued success of the Piaggio Group is also dependent on continuous improvement in the overall efficiency and effectiveness with which it is able to respond to changes in the market place and to produce value for the customer along the entire value chain.  As such, the Group sees the innovation of organisational structure as a key issue to create competitive advantage; through the Organisational policy it aims to create a lean, customer-oriented, value generating structure which is process based and has an integrated partner network of suppliers and dealers who cooperate in the company’s value chain.  With this in mind, the Piaggio Group is committed to reducing hierarchical levels, as a means of leveling its business “playing fields” and to encouraging self management driven by the search for customer value.  Equally it is committed to delegating authority as a factor to instill a sense of responsibility in employees and to speed up decision making.  Customer orientation will be emphasised via continuous improvement in the key business processes, ongoing role development and an across-the-board approach.
In their entirety, these principles express the importance of respect for the person, ensure management fairness and exclude any type of discrimination, particularly on the grounds of sex, age, nationality, ethnic origin, ideology and religious belief.