2005 SUSTAINABLE DEVELOPMENT REPORT

A REMUNERATION AND
WELFARE POLICY THAT IS
MOTIVATING FOR EVERYONE
For L’Oréal, the individual is at the heart of
the company’s development. Our success
depends on the quality of our employees and
we take steps to enable the individual to share
in the group’s growth.
Applying transparent principles
L’Oréal has implemented a clear remuneration
policy that recognises individual performance,
is transparent for all employees,
and is based on an appraisal system standardised
all over the world.
Recognising individual qualities
L’Oréal offers competitive remuneration
designed to attract and retain talented individuals.
Remuneration is linked to the job yet
also takes into account potential. The careers
and remuneration of all employees are monitored
on an individual basis.
Sustainable Development Report_L’ORÉAL 2005
The individual is at the heart of L’Oréal’s development.
A share in the achievements of all
As well as rewarding individual achievements,
L’Oréal has chosen to have its employees benefit
from the achievements of all.
In France, a profit-sharing scheme was set
up in 1988. The amounts distributed in 2005
represent 18% of total employee remuneration
in France. 66% of this profit-sharing
portion of employees’ remuneration was voluntarily
then invested in L’Oréal shares*.
A scheme called the Worldwide Profit Sharing
Plan (WPS), introduced in 2001, is set to
become a mainstay of the group’s remuneration
policy. Since 2001, we have been rolling
out the scheme in practically all the group’s
subsidiaries (55 countries) with the formation
of Country Steering Committees whose
role is to develop, at the local level, common
principles and define the practicalities of
implementation. With WPS, the group hopes
to strengthen its employees’ sense of belonging
and increase their motivation.
In 2006, L’Oréal plans to pay out a total of
€49 million in bonuses under the WPS
scheme for the 2005 financial year, an
increase of more than 22% at comparable
exchange rates. In 2006, L’Oréal has set the
target for the vast majority of countries to pay
their employees who achieve all their targets
the equivalent of 3.5 weeks’ salary*. We hope
to be able to raise this to 4 weeks in future
years.
Benefit programmes
to protect employees and
their families
L’Oréal aims to offer one of the best benefit
programmes to employees and their families.
This aims to complement local social
security and mandatory programmes to provide
support against the financial risks
related, for example, to retirement, death,
disability and medical expenses. The group
has established an International Benefits
Steering Committee to ensure proper coverage
is offered to all employees.
In 2005, the group undertook an exhaustive
review of the death and disability benefits
offered by its subsidiaries to ensure that all
its employees are covered.
Guaranteeing
minimum salaries
In the vast majority of countries, the minimum
salaries paid are well above the legal
minimum wage (national, regional or linked
to collective agreement).
AN ONGOING DIALOGUE ON
ALL LEVELS
The quality of the “social climate” within the
group is the result of an ongoing dialogue
and the pursuit of a consensus between management,
employees and their representatives.
These exchanges are facilitated by
decentralised structures of representation,
both legal and informal.
In France, there are 91 bodies with 1,038 representatives,
including works councils and
works committees, workers’ representatives,
union representatives, CHSCTs, the group
Committee (France) and RIEDS. The matters
dealt with by these bodies range from local
issues to examination of the consolidated
financial statements by the group Committee*.