2007 Sustainability Report - Baxter Sustainability Report

Also in 2007, Baxter introduced Management Essentials, a leadership-training curriculumthat provides managers and supervisors with the tools and techniques to be effectiveleaders. The curriculum helps develop and refine skills related to accountability, career anddevelopment planning, change management, coaching and feedback, communication,critical thinking and problem solving, facilitation, interviewing, and managing conflict andperformance. A total of 1,872 manager- and supervisor-level employees with direct reportstook at least one Management Essentials course in 2007, representing approximately39 percent of such employees in the company.Compensation and BenefitsBaxter provides its employees with competitive compensation and benefits. The company'sglobal total compensation philosophy is to provide market-based pay while rewardingemployees for individual and business performance.Baxter's total compensation package includes base salary and may include variable pay,such as cash bonuses and stock-based compensation. It also includes market-competitivebenefits that vary by country, region and/or role to help employees meet their healthcare,income-protection, financial, retirement and time-off needs. In 2007, Baxter announced anenhanced employee stock purchase plan that offers employees a 15 percent discountbelow fair market value (compared to the previous 5 percent discount) on the purchase ofBaxter stock.Also, as part of Baxter’s commitment to employee health and well-being both on the joband at home, Baxter offers many programs and resources to help employees meet theirpersonal goals and family needs. See Case Study: BeWell@Baxter in the full report online.Executive Pay—The Compensation Committee of Baxter's board of directors, whichconsists solely of independent, non-employee directors, determines executive officercompensation each year based on an assessment of competitive compensation market data,business conditions and company and individual performance. See Baxter's 2008 ProxyStatement for more details.Measuring Employee EngagementBaxter regularly conducts companywide surveys to gather feedback from employees aboutwhat is going well and where Baxter needs to make improvements to be a high-performingorganization. Baxter conducted the most recent survey in early 2007. Previous surveys wereconducted in 1999, 2003 and 2005.Baxter administered the 2007 survey in 16 languages in online and paper formats. Morethan 38,000 employees completed the survey, representing 85 percent of the organization,compared to 55 percent in 2005.Overall feedback was positive. The areas of career development and cooperation across Baxterwere targeted for improvement. A brief follow-up questionnaire was conducted in late 2007to gain greater understanding of how to improve in these areas. Additionally, Baxter conductedemployee focus groups to develop specific recommendations.above Christian Quiroga (left) and JuanPablo Ambar work for Baxter in Argentina.The Baxter team in Argentina won thecompany’s 2007 Chairman’s Award inthe small-country category for its 2007financial performance.After analyzing thousands of recommendations, Baxter identified several next steps.To improve career development, Baxter is rolling out training programs for managers oncareer coaching and employee development, online career planning resources for allemployees and enhanced internal job-posting and candidate-feedback processes. Toenhance cooperation across the company, Baxter is focusing on initiatives related to goalalignment, team building and clarifying Baxter’s expectations of all employees. Theseprograms will be implemented in 2008. See Category Results for 2007 Employee OpinionSurvey in the full report online.11 sustainability.baxter.com/employees