August 2022 HR Lineup

— HR Lineup

August 2022

— Table of contents

Changes to performance rating descriptions

004 –007

Introducing short descriptions to drive differentiation and fairness

Closing the Circle Engagement Survey action plans

008 –010

Should I stay, or should I go? Insights about employee retention

011 –013

Core HR policies, procedures and CAT HR Annual update

014 –015

— HR Lineup

Bi-monthly publication for ABB line managers

Welcome to the August 2022 issue of the HR Lineup , a tool created in response to your requests for Human Resources information and updates regarding annual processes, special projects, initiatives, and other items of interest. We need your help and partnership to ensure the content we include is meaningful and of use to you! Please share your feedback and questions, as well as suggestions for content to include in the future, by sending an email to HRLineup@abb.com.

Thanks, and enjoy!

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— Changes to performance rating descriptions Introducing short descriptions to drive differentiation and fairness

People Performance Management (PPM) matters, and how we evaluate employees’ performance significantly impacts the perception of fairness and performance differentiation among our employees. A four-point performance rating scale is used across ABB to indicate an employee’s level of performance or achievement and to

measure results (the ‘what’) and behaviors (the ‘how’). The current 9-box matrix provides a mechanism for a numeric rating allocation; however, not the guidance to drive differentiation or support performance conversations. The current 9-box performance rating grid is shown in the diagram on the next page.

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Results

Superior results, behavior needs improvement

Performed successfully with superior results

Performed exceptionally in results & behavior

Exceeds expectations

Good results behavior needs improvement

Performed successfully with superior behavior

Fully meets expectations

Performed successfully

Superior behavior,

Partly or does not meets expectations

Good behavior, results need improvement

Unsatisfactory performance

results need improvement

Needs improvement

Good

Superior

Behavior

For the 2022 Performance and Develop ment Appraisal (PDA) process, perfor mance rating descriptors with more detailed descriptions will be introduced and will replace the allocation of a number rat-ing from the current 9-box grid. This ad-justment aims to: • Evaluate employee performance more fairly • Provide a tool that offers insight into rating outcomes and desired standards of performance

• Enhance the distribution of ratings, which is essential to recognize and reward performance • Ensure the recommendations are appropriate, consistent, and within the guideline distribution provided; and • Address below standard performance through appropriate means. The new performance rating descriptors (left column) and descriptions (right col umn) are presented in the table on the next page.

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— Outstanding contribution (behavior and performance)

Showing all of the following qualifies for this rating: • Consistently exceeds the key requirements of the role and delivers high quality work on a day-to-day basis in such a way that significantly contributes to the company’s success through their function/department (the ‘what’); • Delivery and outcomes against all agreed performance goals exceed expectations (the ‘what’); • Role models the expected level of ABB Values (the ‘how’); • Actively requests feedback from managers and colleagues throughout the year and acts upon it to improve and self-develop. Showing all of the following qualifies for this rating: • Meets all key requirements of the role and delivers day-to-day duties to a high standard, is knowledgeable, and demonstrates capability in their work (the ‘what’); • Delivery and outcomes against performance goals meet and may have surpassed some expectations (the ‘what’); • Demonstrates the expected level of ABB Values (the ‘how’); • Actively requests feedback from managers or colleagues throughout the year and acts upon it to improve and self-develop. Showing at least one of the following qualifies for this rating: • Meets a number of the key requirements/ assigned duties of the role with further development required for the full achievement of requirements (the ‘what’); • Delivery and outcomes against performance or behavior goals are at or slightly below expectations (the ‘what’); • Demonstrates the expected level of ABB Values (the ‘how’) most of the time with some inconsistencies. • Seldom requests feedback frommanager or colleagues throughout the year. The employee may demonstrate excellence in one area yet need improvement in other areas. This rating may be considered for someone new to the role, who is performing and delivering well and still deve- loping and growing in the role . Showing at least one of the following qualifies for this rating: • Failed to meet a majority of the key requirements of the role or does not demonstrate knowledge or ability to perform the majority of assigned duties (the ‘what’); • Delivery and outcomes against performance goals are overall below expectations for the position (the ‘what’); • Does not or rarely demonstrates the expected level of ABB Values (the ‘how’); • Does not seek any feedback from manager or colleagues. • Employee is not eligible for a performance rating due to country legislation/process or is unable to participate in the current year process (e.g. employees new to ABB or those on extended leave). Consult with your HR Business Partner if you require assistance on when NA can be used.

— Meets all expectations

— Meets some or most expectations

— Does not meet expectations

— Not applicable

Important note: The employee should be rated in almost all instances, and NA should be only used in exceptional circumstances.

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People managers retain discretion to ap ply fair judgment for determining the ap propriate rating descriptor. The manager will share the descriptor (rather than a number) when confirming the performance rating, for example, “You have met all ex pectations during the performance year.” The updated performance rating descrip tors provide an opportunity to back up and justify performance assessment with concrete examples. They can offer insights for employees to direct and own their per- formance, seek opportunities for growth

and development and get clarity on how to excel in their performance.

Further communication on the changes to performance ratings and the descriptors will continue to occur over coming months. Additional resources and information are available on the People Performance Man agement Inside+ page, including the Tool kit for Managers, and a link to the Learning Ecosystem Performance Micro Series.

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— Closing the Circle Engagement Survey action plans

Glint’s People Success Framework

Over the past year, as a line manager you should have been having regular conver- sations with your team about the results from the last engagement survey and the actions you collectively committed to. You should also take time to celebrate some of the successes achieved. The engagement survey results provide you with a lot of feedback and insights, which are the catalyst to set Glint’s People Success Framework in motion.

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The survey data should prompt conversations with your team, resulting in team members working collaboratively towards goals associ ated with the survey results. These conversations and actions provide key learning opportunities for teams to grow and continue having discussions to improve the ABB culture and work environment.

Examples of success

Here are a few examples of the great work happening across ABB.

By paying attention to employees’ concerns and actioning some of their suggestions, employees’ self-empow erment, ownership, and involvement rapidly increased. They are more aware of their role in the organization, the meaning of their work, and their contri bution to ABB.

GBS Xiamen hub

Despite a healthy employee engagement score of 82, managers in the GBS Xiamen hub wanted to stretch further to inspire employees to explore their potential and create a high-performing unit. As a result, line managers and their teams focused on the topics of Authenticity and Work Life Balance and have made the following improvements: • Upgrading the physical work environ ment included setting up a recreation area and introducing high desks for er gonomic purposes. • Organizing mini competitions and ac tivities in the office, drawing employ ees’ attention to a healthy lifestyle of exercise, whole foods, relaxation, and enjoying beauty in nature. • Promoting the importance of mental health by hosting a mental health week, introducing stress management tech niques, and focusing on creating a psychologically safe environment.

Robotics and Discrete Automation | Sweden

In RA Sweden, various teams’ actions following last year’s Engagement Sur vey are showcased on screens around the factory in Västerås. The visuals identify which area from the survey is being addressed and describe what action is being taken. For example, to tackle the area of “Growth,” the Product Quality team pro vided employees with opportunities for competence development and variation in their work. To ensure flexibility in case of sick leave and holiday periods, they started an initiative to cover for each other on different materials categories. To better assist with “role clarity,” they have updated their role descriptions.

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Communicating the actions taken as a result of the feedback received helps to improve employee engagement and increases participation rates in future surveys. The feedback is an invaluable tool to hear direct insight into what our employees love about ABB and areas for growth and improvement.

2022 ABB Engagement Survey is coming soon

The 2022 ABB Engagement Survey will launch on October 20th. Now is an ideal time to check back on the action points you and your team committed to following last year’s survey. Remind yourselves of all you have achieved , and prepare to see the changes (hopefully) reflected in your results for this year.

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— Should I stay, or should I go? Insights about employee retention

— Luc-Olivier Laleve, Global People Analytics lead

their next career move is an excellent action to perform and will create a win win situation. 2. Employees bring all their work experi ence to the table, which is a good thing. However, every experience and work re lationship is unique and requires an intentional and consistent effort to strengthen and nurture your particular connection with your team members. One way to feed this connection is to set a consistent schedule to meet with them. Regular 1:1 development meet ings and informal conversations are essential, even more so in this new hy brid environment. *Note that the next optional perfor mance review window opens for em ployees on August 22nd. 3. Professional development, whatever the chosen path is or pace of change, is part of employees’ DNA. The real questions are: will you help them solve the “next career move” equation, or not? Will you add value to this deci sion-making process?

“Should I stay, or should I go?”, the famous song from The Clash, released in 1982, is a reflection of how employees may feel when they think about their next career move. This question could refer to how closely you feel connected to ABB, its culture, its values, and its purpose. This connection is a relationship built over the years, but the longer you stay, the stronger it becomes. This connection is directly influenced by the employee-manager relationship, which is why managers play such a critical role in employee retention. Let’s examine some realities of the em ployee and manager relationship and ways through which strengthening that relation ship can help employee retention during this challenging employment landscape. 1. An employee leaving their current job at some point is inevitable. That means, regardless of how long they have been in the role, at the end of the day this re lationship is temporary. To that end, making the work experience valuable for you and your team members truly matters. Having conversations about

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Two ABB data trends illustrate the points discussed on the previous page.

ABB Headcount vs Voluntary leavers in 2021 by tenure

Source: People Analytics Dashboard – Headcount/ FTE extract. Regular em ployees only, between 0 and 20 years of tenure with ABB

The first career move within ABB is particularly critical as more than 67% of the voluntary leavers do not stay more than five years within ABB.

ABB Headcount vs Vol untary leavers in 2021 by age group Source: People Analyt ics Dashboard – Head count/FTE extract. Regular employees only between 21 and 60 years old

More than 50% of ABB’s voluntary leavers are under 35 years old. This is when employees usually perceive the next career move as an active priority.

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Coming back to the golden question of this article, “Should I stay, or should I go?” No one can predict when an employee will conclude on their answer to this ques- tion, so the best approach is to have open discussions with your teammembers reg ularly about their intentions to continue in their current role, allow them to express their views on challenges they may be fac ing, and celebrate their successes. It usu ally takes several months for an employee to decide, which means there is time to manage a smooth transition, and challenge and identify how best to approach it. Professional development is not the only reason an employee will stay or leave. Other variables of the “next career move” equation include contentment, recogni tion, work-life balance, and work environ ment. This is particularly relevant for the first career move at ABB and when em ployees below 35 years old are actively developing their careers. Again, managers play a critical role in em ployee retention, and your HRBP can help. You can help to spot when an employee may be considering their next career move and work together to identify the best way to support their decision, whatever the outcome. If you would like to go the extra mile and read more about employee retention and employee engagement, feel free to review Heartbeat by Peakon. In addition, keep the Open Job Market article from June 2022 HR Lineup handy. It offers several tips for supporting your employees as they manage and drive their own career development.

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— Core HR policies, procedures and CAT HR Annual update

Core HR policies

With the introduction of the ABB Way in 2020, all Functions have set a core set of policies and procedures to align with the new operating model. Both the policies and procedures are mandatory for Corporate and all Business Areas, Divisions, and GBS. Every year, a maintenance process takes place to ensure clarity, simplicity, and con sistency. During this process, the core HR policies, supporting procedures, and the linked Corporate Authorization Table (e.g., HR section) must be checked and reviewed by the respective owners.

There are no changes to be implemented for the four core HR policies (Hire-to-Retire, Labor Relations, People Development, Per formance & Reward) this year. This means that the documents are still up-to-date with the ABB Way model.

Corporate Authorization Table (CAT)

The annual update also involves a review of the Corporate Authorization Table (CAT). The revisions to the HR section (chapter 7) mostly involved changes to the Benefits

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section. These were reviewed and approved by the HR Leadership Team (HRLT) and Group Risk Committee, published on the ABB governance portal, and became effec tive July 1.

Core HR procedures supporting the policies

The core HR policies and CAT are support- ed by a set of core HR procedures. These are also subject to ongoing monitoring and review – the current versions can be found on the ABB governance portal. Note that the HR Processes and People Analytics procedures (both under the Hire- to-Retire Policy) remain on hold due to the Workday extension period, and the Employee Business Travel (under P&R Policy) has re placed the Global Travel & Expense Policy.

If you have questions, please contact your HR Business Partner.

Helpful Links

• Global Onboarding Portal

• Single Cycle

• FusionOne

• Recruiting toolbox for managers

• Leadership Learning

• AskHR

— GBS HR Your People Partners Trista Schlick, Global HR Communications & Experience Lead trista.schlick@ch.abb.com

https://go.insideplus.abb.com/about-abb/global-business-services/gbs-human-resources

© Copyright 2022 ABB. All rights reserved. Specifications subject to change without notice.