GSK Annual Report 2002

Compensation philosophy and programme development
underscore GlaxoSmithKline’s commitment to a performance
culture. Performance based pay, both base and variable, share
awards, share options, performance and development planning
and evaluation contribute to retention of key talent, superior
performance and accomplishment of business targets.
A commitment to flexible working through flexi-time,
teleconferencing, remote working and flexible work schedules,
recognises that employees work best in an environment that helps
them integrate their work and personal lives.
Communication and involvement
An extensive programme of open, two-way communications
stimulates employee engagement in GlaxoSmithKline’s strategy and
day-to-day operations. This includes the publication of regular
summary reports from Corporate Executive Team meetings, a
Chief Executive Officer’s home page featuring presentations and a
Q&A area, a Group-wide magazine, town hall meetings and video
conferences. In 2002, there was a satellite broadcast involving
60 sites in 31 countries, and watched by an employee audience of
around 30,000. Live video streaming and video on demand options
are being developed as additional means of ensuring employees
have access to the most senior levels of management, and as
powerful tools for building culture and driving alignment across
common goals.
Share ownership schemes encourage participation as owners of the
business, increasing awareness of short and long term business
objectives. Global and local employee opinion surveys allow
employees the opportunity to express their views and perspectives
on important Group issues.
Diversity
The GlaxoSmithKline Diversity Strategy focuses on creating an
inclusive work environment. The approach aims to enhance
employee innovation and productivity by valuing and drawing on
the differing knowledge, perspectives, experiences and styles
resident in the global community. The Corporate Executive Team
leads the Diversity Initiative with its key objective: to create and
implement diversity strategies that measurably improve employee
attraction, development and retention. Tailored initiatives are in
progress to embed inclusive behaviours into GlaxoSmithKline’s
culture and practices.
GlaxoSmithKline is committed to employment policies free from
discrimination against potential or existing staff on the grounds of
age, race, ethnic and national origin, gender, sexual orientation,
faith or disability.
In particular GlaxoSmithKline is committed to offering people with
disabilities access to the full range of recruitment and career
opportunities. Every effort is made to retain and support staff who
become disabled while working for the Group.
Talent management and leadership development
Development planning is a key element in performance planning
for all employees each year. Reviews are conducted in each
business and function to ensure that a diverse talent pool is fully
developed to meet future business needs, and that successors are
identified for key positions.
Description of business GlaxoSmithKline 25
Comprehensive leadership development opportunities are available
to managers at all levels. These opportunities are targeted to help
leaders to meet the challenges they face in a global organisation.
They ensure leadership motivates and enables teams and
individuals to do their best work. Development opportunities are
innovative, based on peer interaction and idea exchange, and
contribute to strategy deployment.
Human Resources services and information systems
GlaxoSmithKline’s human resource delivery strategy is designed to
make the most of technology. Human Resources services and
information are delivered through low cost, highly effective
channels that make it easy for job candidates, employees, and
retirees to access information about employment, compensation
and benefits, policies and programmes. These include intuitive
personalised web-based tools, available to employees in many
locations.
Property, plant and equipment
GlaxoSmithKline has operating establishments in some 102
countries. The geographical spread of the Group‘s activities is
indicated in Note 38 to the Financial statements, ‘Principal Group
companies’. GlaxoSmithKline conducts research and development
at more than 20 sites and manufactures product at more than
95 sites in 38 countries. Refer to ‘Research and development –
Pharmaceuticals’ (page 14) and ‘Manufacture and supply’
(page 13).
GlaxoSmithKline has invested over £4 billion in its property, with
a carrying value in the Financial statements of almost £3 billion,
with a further £3.6 billion, at carrying value, invested in plant and
equipment and assets in construction. In 2002, GlaxoSmithKline
invested £1 billion in new and renewal property, plant and
equipment. This is mainly related to a large number of projects for
the improvement and expansion of facilities at various worldwide
sites. Property is mainly held freehold. New investment is financed
from Group liquid resources. At 31st December 2002, the Group
had capital contractual commitments for future expenditure of
some £382 million and in 2003 operating lease commitments of
£168 million.
GlaxoSmithKline’s business is science-based, technology-intensive
and highly regulated by governmental authorities. It allocates
significant financial resources to the renewal and maintenance of
its property, plant and equipment to minimise risks of interruption
of production and to achieve compliance with regulatory
standards. The research and development and manufacture of
active pharmaceutical ingredients require the use of chemicals and
hazardous materials. GlaxoSmithKline observes stringent
procedures and uses specialist skills to manage environmental risks
from these activities. Environmental issues, sometimes dating from
operations now modified or discontinued, are referenced under
‘Responsibility for Environment, Health and Safety’ (page 26) and
in Note 30 to the Financial statements, ‘Legal proceedings’.
GlaxoSmithKline believes that its facilities are adequate for its
current needs. The integration of Glaxo Wellcome and SmithKline
Beecham operations has involved a series of announcements of
rationalisation and potential disposal of a number of sites and
properties. It is considered that there will be further changes.