Operational Review

Review of the year

We believe that great things begin with great people and owing to the economic climate and the changes to the business, 2009 was a year of unrelenting focus on our employees, their development, retention, and the culture and climate in which they operate.

The challenges for 2009 were much the same as for 2008 in addressing the shortage of key skills, attracting and retaining great people, ensuring effective tools to enable high performance, and making progress with transformation, with the addition of major changes to the leadership team and business, as well as the global economy. Based on the composition of the 2010 Executive Committee (Exco), Nedbank will have 44% black representation, the second highest among the top four banks, with the highest African (38%) representation compared with our peers.

The HR 2010 programme commenced in 2008 and continued to gain momentum in 2009. Improving efficiencies and effectiveness are the two main thrusts of the HR 2010 programme, undertaken in conjunction with Deloitte and designed to run until December 2012.

In November 2008 the Nedbank Group Exco approved the HR Service Delivery Model, which acts as a blueprint for HR to provide end-to-end HR services to the organisation. With this model in place a top level of HR reporting was developed and approved.

The HR 2010 programme progressed through two phases that encompassed a 12-week design period. The result delivered the following:

• Developing a business case for implementation.
  
• Revising the high-level design.
  
• Defining a functional organisational structure for the selected Centres of Excellence Model.

• Defining the decision framework.
  
• Revising the costing based on three-year efficiencies.
  
• Developing role profiles, including behavioural and technical competencies.
  
• Developing a workforce transition plan.
  
• Mapping HR processes.
  
• Developing a Responsible/ Accountable/Consulted/Informed (RACI) process matrix.
  

The approach has been consultative and has included input from HR executives, HR subject matter experts and line HR. Implementation (phase 3) commenced in July 2009 and progress against the project plan has been satisfactory. Savings have been identified and applied to the three-year business planning process. In addition the journey to upskill the HR community will commence in earnest in 2010, together with exploring other enterprisewide HR efficiencies.

One of the key pillars of the optimisation of HR was to review the delivery of HR services. Subsequently, HR embarked on a restructuring process that supports the Centres of Excellence Model. This restructure resulted in HR adopting a new operating model consisting of centres of excellence and line HR. The centres of excellence consist of the following centres:

• Organisational Development
  
• Industrial Relations, Organisational Transformation and HR Compliance
  
• Rewards Management
  
• Talent Management
  
• People Development
  
• Office of the HR Group Executive
  

Focus areas for 2010

Unique culture, values and behaviours

• A differentiated corporate culture can build sustainable long-term competitive advantage and will help to attract and retain talented staff. The various management and leadership development programmes are key enablers. Nedbank Group seeks to become the employer of choice, recognising that market competition for talent continues to increase. Continued focus remains on making Nedbank Group a great place to work, and able to attract, develop and retain the best people.
• Part of this differentiated corporate culture is the acceleration of transformation and embracing diversity. Key focus areas of transformation are meeting the Department of Trade and Industry (dti) Codes of Good Practice and the Department of Labour’s employment equity (EE) targets, as well as ensuring the relevant and necessary changes in behaviour and culture. Transformation is more than just making the numbers
  –we embrace diversity.

Accelerating transformation

• We are proud to say that Nedbank Group has achieved a level-two contributor status to black economic empowerment (BEE) according to the dti Codes of Good Practice on BEE.
  
• In 2009 Nedbank Group was named as the first Empowered Bank/ Insurance Company in South Africa, and the third overall Most Empowered Company in South Africa in the Financial Mail Empowerdex Survey. This is confirmation of the efforts that we have embarked on over the years truly to transform as a company.
  
• Transformation remains a business imperative for sustainability in the SA context, will provide business benefit in years to come and is a core part of our strategy. We need to deliver on our dti targets, as we move from having caught up to our peers to leading in transformation.

 

Objectives for 2010 and beyond

Staff: A great place to work, creating a community of leaders, and living our values.

• Accelerate transformation to meet EE targets (keep our status of being the most transformed bank).
  
• Embed talent management, thereby enhancing the employee value proposition (EVP) and raising the‘stay factor’ in engagement.
  
• Implement the‘learn and grow’ employee initiative to enable superior delivery to clients and create opportunities for career advancement.
  
• Reduce group entropy further (towards below 10%) and increase additional matches between current and ideal culture values (currently there are six matches).
  
• Expand, develop and attain an integrated culture.
  
• Review group values and associated behaviour to build a high-performing culture and support enablement of our strategy.
  
• Ensure further alignment of the total reward strategy with Nedbank Group people practices.
  
• Enable HR capability and excellence (and deliver on the HR 2010 programme).
  

A rigourous bankwide participative process was undertaken to appoint executives to head each of the centres of excellence to ensure that the overall organisation supports the services to be provided by Group HR.

Organisational development

Organisational Development fulfils a new function and will be responsible for ensuring that Nedbank Group is a great place to work, and will concentrate on the focus area of building a unique culture for competitive advantage. In addition to this, OD will be responsible for employee wellbeing, diversity management, change management, employee engagement and HR communication.

Industrial Relations, Organisational Transformation and HR Compliance

This centre of excellence will be responsible for industrial relations, transformation, HR compliance and advisory services and will primarily focus on accelerating transformation.

For more details on the Nedbank Group transformation progress please see the EE section.

Rewards management

Rewards Management will ensure that the group’s performance management, total remuneration, recognition and funds management are relevant and competitive and make a significant contribution to the group as being a great place to work. The main focus area of this centre of excellence is to ensure further alignment of the total reward strategy with Nedbank Group people practices.

For more information please read the Remuneration Report in this annual report.

Talent management

We firmly believe that great things begin with great people and that it is through our people that we are able to deliver on our brand promise to Make Things Happen. Our talent attraction and retention efforts for 2009 were therefore focused on attracting and retaining best-fit talent – high performers who subscribe to the Nedbank Group values and have the drive and the passion to Make Things Happen for themselves, the bank, the communities within which we operate and the country at large.

The Talent Management centre of excellence includes organisational design, attraction and recruitment, assessments and retention and succession planning, all with the main aim of embedding talent management.

For more information please see the section on retaining our talent in this annual report.

People development

Nedbank Group as an organisation focuses learning on achieving an optimum value for the employee and the organisation. Learning is ultimately about development of the employee, resulting in portable skills and sustainability for the organisation. The intersection of value is created when both the employee and the organisation experience a positive shift in performance.

More information on Nedbank Group development efforts can be found in the section on learning and growth.

Office of the HR Group Executive

This centre of excellence is primarily responsible for HR strategic planning and enabling HR capability, and for ensuring the seamless delivery of value-added HR services to the organisation and enhancing service excellence and quality while managing costs effectively. The year 2009 has seen many changes and challenges. However, we believe that the restructuring has resulted in a firm foundation on which to continue building our capability to attract, retain and develop our people, to create a unique culture in order to develop a competitive advantage and to ensure that Nedbank Group is a great place to work.

Employment equity

Employment Equity Plan
Nedbank Group continues to measure the implementation of its EE Plan that was submitted to the Department of Labour early last year. In this plan provision was made for the revision of targets on an annual basis to ensure that the group reaches the targets it set for itself for 2016. At the beginning of 2009 the targets were revised based on the December 2008 performance. Good progress has been made in transforming the management profile of the group, with the junior-management target being exceeded and a small shortfall on our senior- and middle-management targets that were made more challenging by the lower recessionary attrition and recruitment ratios. However, Nedbank Group remains committed to creating an environment that promotes meaningful and sustainable transformation. EE remains a major component of effecting transformation in the group.

2009 (Black and African target shortfalls)

Level	African	Black (incl African)
Senior Management	2.7%	2,3%
Middle Management	1,7%	0,1%
Junior Management	0,1%	+1% (exceeded target)

Compared with 2008 all focus areas in the Nedbank Group workforce profile showed an improvement in 2009.

Nedbank employment equity forums
The Nedbank Employment Equity Forum (NEEF), which was created as part of existing governance processes and structures, in accordance with the requirements of the EE Act, continues to function well. At the beginning of this year NEEF successfully completed a process of appointing and inaugurating a new chairperson, Graham Dempster, the current Chief Operating Officer of Nedbank Group. Graham has been re-elected as Chairperson for 2010.

NEEF serves to monitor and consult with staff across the group on EE and skills development matters. To facilitate this consultative process NEEF is constituted of trade union representatives, chairpersons of the various EE forums, cluster EE managers, as well as the Nedbank Group EE manager. The People with Disabilities (PWD) and Women’s Forums are also represented at NEEF. This year most cluster EE forums were reconstituted and new chairpersons elected in compliance with the cluster EE forum charters and governance structures.

NEEF has also signed off the 2009/2010 Workplace Skills Plan (WSP) and Implementation Report that was submitted to BANKSETA at the end of June. This process ensures that there are synergies and links between the skills development of staff and the group’s EE initiatives.

During the year NEEF was also involved in the preparation and signoff of the 2009 Employment Equity Report that was submitted to the Department of Labour on 1 October 2009.

To ensure proper governance structures for effective implementation of EE in the group NEEF developed and signed off a governance framework document highlighting the various governance structures, such as the Transformation and Human Resources Committee, that are involved in the implementation of transformation.