Performance Management and Leadership Development at Avery Dennison

Why focus on people development?

Profitable, sustainable top-line growth

Growth

Productivity
Disciplined, cost-cutting, margin expansion and productivity improvements

System and tools to: Identify opportunities Satisfy unmet needs Develop people Talent, ideas, expertise and commitment

System and tools to: Continuously improve processes Design products right the first time Develop and train people Talent, ideas, expertise and commitment

Key source of competitive advantage

People
Purpose. Passion. Potential. Pride. Our people make a world of difference.

Values
Integrity Service Teamwork Innovation Excellence Community

People are the foundation for growth and productivity of the organization

Avery Dennison has several programs devoted to building a strong workforce and work environment

GPS

LDR

People Leadership Expectations

These programs create an environment that focuses on employee opinion, development, and contributions to the organization

People Leadership Expectations

People Leadership Expectations

Avery Dennison supervisors are evaluated on, and held accountable for, achieving a set of People Leadership Expectations. Employees, in turn, are expected to give their supervisors honest and fair feedback to help them meet these expectations. Working together, we produce great results and make Avery Dennison a great place to work. Our people are our most important source of sustainable competitive advantage. Their talent, creativity, energy, teamwork and commitment drive our growth, productivity and profitability.

People Leadership Expectations

Employee Treatment

1. Treat all employees with respect, recognizing the

importance and value each brings to the organization.

2. Treat employees fairly and administer policies

consistently.

3. Be flexible in allowing employees to attend to personal

needs in the context of getting the work done.

People Leadership Expectations

Performance Management

4. Establish and communicate clear, high performance

standards and hold employees accountable for achieving them.

5. Provide employees with regular feedback and coaching

to help them develop skills and achieve their career goals.

6. Recognize good performance and contributions.

People Leadership Expectations

Performance Management (cont.)

7. Pay and promote employees based on job performance. 8. Deal fairly and effectively with poor performing
employees, giving them specific, constructive feedback and taking appropriate action.

9. Develop capable, internal successors for all key roles.

People Leadership Expectations

Work Environment

10. Be visible and available to your staff to answer

questions, remove obstacles and provide needed support.

11. Actively solicit and, where appropriate, act on

employees ideas.

12. Communicate important business information to your

staff regularly.

People Leadership Expectations

Work Environment (cont.)

13. Support all Company values, strategies, goals, policies

and programs.

14. Build strong and effective teams and promote teamwork

between departments and businesses.

15. Create a working environment in which diversity of

background, styles and skills is valued and leveraged.

Global Performance System (GPS)

What is performance management?

An ongoing communication process that involves both the manager and the employee in: identifying and describing essential job functions and relating them to the business / group goals setting realistic and appropriate performance goals and expectations giving and receiving feedback about performance writing and communicating constructive performance appraisals using consistent standards planning education and development opportunities to sustain, improve or build on employee work performance.

GPS is the system used to support the performance management process

Performance Management at Avery Dennison

Avery Dennison Supervisors 1 GPS Online 3 Upward Supervisor Feedback (USF) 2 GPS Hourly

Professional/Technical/ Administrative Employees

Manufacturing/ Distribution Hourly Employees

GPS = Global Performance System

GPS has three components globally:

1)

GPS Online to capture performance of professional/technical/administrative employees GPS Hourly to capture performance of manufacturing and distribution shop-floor employees Upward Supervisor Feedback (USF) to capture performance of supervisors on measures tied to the People Leadership Expectations

2)

3)

Process Overview

ONGOING COACHING & FEEDBACK

Performance Planning

To establish performance expectations for the upcoming year, and to set individual Key Responsibilities and Major Objectives that link to the goals of the department, function, business unit, and/or organization. To review progress against Key Responsibilities and Major Objectives, to ensure that the performance plan remains aligned with the needs of the business. To ensure that every employee is following a comprehensive development plan. To ensure every employee receives detailed feedback regarding his/her performance and developmental progress during the review period, against the agreed performance expectations.

Mid-Year Review & Development Planning

Year End Review

Leadership Development Review (LDR)

What is LDR?

The Leadership Development Review (LDR) process is a

systematic approach to talent management within Avery Dennison to: Know the employees in terms of strengths, developmental needs, career aspirations, and action items to increase readiness for their next role; Apply a systematic way to identify key positions and the availability of prepared individuals to occupy these key positions; Focus managers to think through development plans of employees; Review organizational needs against current bench strength.

Businesses and functions are reviewed every two years

LDR Process

1. Leadership reviews business strategy and implications

related to people

2. Organizational view
To create action plans around succession gaps and people development To achieve talent review metrics

3. Individual view
To accelerate readiness for all talent To upgrade talent bench strength Business & Functional Reviews Site Division Group Corporate

LDR Grid Basic foundation of LDR is to examine both performance and potential

Promotability / Capability

Performance / Contribution

Leadership and Organization Development

GPS, LDR, and the People Leadership Expectations are some of the global initiatives / programs to develop Avery Dennisons human capital, while creating a supportive culture that values the employees contributions to the organization. These programs are also aligned with other efforts such as strategic staffing, standardized onboarding, developmental forums, and career maps to strengthen Avery Dennisons ability to hire and develop strong talent in the organization.