BMW 2009 Annual Report Download - page 31

29 Group Management Report
with these changes. By taking this approach, employees are
better able to understand, support and proactively facilitate
change.
Our management team is highly professional and focused
on results. Defining targets clearly and taking a process-
based approach are firmly embedded in our management
culture. In these challenging times it is a special respon-
sibility of each manager to provide guidance to, and instil
confidence in, the workforce. Staff will only be open to
change and motivated to work at their best, if management
can generate a sense of passion and enthusiasm for the
tasks ahead.
Thus, in addition to traditional managerial qualities, leader-
ship is also called for. The Board of Management has im-
pressed the importance of this understanding of excellent
leadership throughout all levels of management in a “top-
down” process and made it a key element both in the
evaluation process and the set of skills that managers are
expected to have. This process is being continuously im-
proved. We are convinced that we are in an optimal posi-
tion with our management team to accomplish the targets
laid down in the Strategy Number ONE.
Remuneration systems
We also wish to see sustainability reflected in our remuner-
ation systems. The BMW Group depends on the perform-
ance of highly motivated employees for whom hard work
and commitment are the norm. Based on this understand-
ing, annual pay not only serves as an incentive, it is also
our way of showing our appreciation for the work performed
by each and every employee.
The remuneration system practiced at the BMW Group is
based on the following underlying principles:
– Fairness, transparency and understandability.
– Continuity through all levels of corporate hierarchy, re-
flected in a well-balanced salary progression.
– Encouraging a performance-oriented corporate culture
by a targeted combination of fixed and variable remuner-
ation components.
– Key performers can be retained and potential employ-
ees attracted to the BMW Group.
The remuneration system is based on a number of com-
ponents.
Each BMW Group employee receives a fixed
salary consisting of 12 monthly payments, complemented
by additional components according to local conditions.
This fixed salary is reviewed once a year and adjusted as
appropriate.
In addition, staff and managers receive variable salary com-
ponents designed to encourage them to participate in the
Group’s success and reward personal performance.
Corporate success is the reflection of the Group’s perform-
ance as a whole. This, in turn, is rewarded by participating
staff and managers in the Group’s success through the
payment of variable components. The level of these com-
ponents does not depend on individual performance but
solely on the results achieved by the Group as a whole.
Working in close cooperation with the General Works
Council, it is now ensured that this remuneration com-
ponent is measured using a standardised methodology
across all hierarchies within
BMW AG . For this reason
the system previously used to calculate the remuneration
of Board of Management members as well as middle and
senior management will also be applied from 1 January
2010 onwards to tariff employees. The key indicators used
to determine variable remuneration components, which
are dependent on the Group’s success, are the Group’s
post-tax return on sales, Group net profit and the dividend
paid on common stock.
The recognition of personal commitment is also taken
into account by means of appropriate components in the
remuneration of employees, managers and Board of
Manage ment members. This is taken into account in tariff-
based remuneration in the form of performance bonuses.
From the middle management level upwards, this part of
the remuneration depends on the extent to which targets,
individually agreed upon with each manager, are achieved.
As well as key business performance indicators, the
suc-
cessful involvement in areas aimed at securing the Group’s
future also play an important role. Examples of this are
achievements made in the area of personnel development
and behavioural aspects in the implementation of corporate
strategies: importance is attached not only on achieving
Accident frequency at BMW Group
per one million hours worked
4.5
4.0
3.5
3.0
2.5
2.0
1.5
05 06 07 08 09
3.3 3.3 3.1 2.7 3.1