October 30, 2007 SKF Group Slide 0

India Salary Revision 2013

April 2013

Topics

1. 2. 3. 4. 5.

Factors Considered for Salary Review Performance Evaluation Guidelines Salary Increment Salary Correction linked to Industry benchmarks Process Timeline and Communication

October 30, 2007 SKF Group Slide 2

Factors Considered for Salary Review

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Factors Considered for Salary Review

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GDP & Inflation

Parameters 2012

GDP

4.9%

Wholesale Price Index %

6.9%

Source : HSBC, CSO, Labour Bureau

October 30, 2007 SKF Group Slide 5

Performance Evaluation Guidelines

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Performance Evaluation Rating Scale

SKF India followed a 5- point Rating Scale for performance ratings with Group PMP process

1. 2. 3. 4. 5.

Top Achievement Higher Achievement Full Achievement Partial Achievement Unsatisfactory Achievement

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SKF in India Status April 2013

SK F in India 2013
80% 60% 40% 20% 0%
Current Ideal Top 4% 5% Higher 18% 10% Full 70% 70% Partial 7% 10% Unsatisfactory 1% 5%

Note : 22% Employees were rated as Top / Higher Achievement Vs. the Ideal rating percentage guideline of 15% The above curve is an outcome of the ratings given by managers

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Salary Increment

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Compensation Philosophy

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Key elements Salary Review 2013

Move away from flat increment based approach to a differential range based
increments.

Enhanced and more accurate alignment between compensation and performance in the
role. Performance level based increments.

Line functions to play key role in compensation decisions, thereby taking Line manager
as People Manager initiative to next level.

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Increment Percentages 2013

Performance Ratings 2012 Top Achievement Higher Achievement Full Achievement Partial Achievement Unsatisfactory Achievement % Salary Increment 17% - 14% 14% - 11% 11% - 7% 5% 0%

October 30, 2007 SKF Group Slide 12

PMS Rating and Increment Dateline

PMP

PMS Rating
Date of Joining

PMS Rating

PMS Rating

New in Position

Increments prorated based on tenure

No increment
( 15 months next Year )

Increment
Employees who joined in Q1, 2 & 3 of 2012 were evaluated as a part of the PMP process Those Joining in Q4 -2012 ( less than 3 months service ) were given a New in position rating Those with a joining date in Q-4, 2011 have been given a prorated increase for their tenures in last quarter of 2011 Increments prorated based on tenure ( for those joining during the year ) Q4 2012 joiners will get 15 months (or prorated from DOJ increment in April 2014
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Correction linked to Industry Benchmarks

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Market Equity Corrections

1. Eligibility
If salary is below market benchmark Completed minimum 2 full PMP cycles in SKF with consistency in good
performance levels

2. Effective- 01 April 2013 3. Comparative Data Mercer Salary Survey

Covers leading Auto, Auto Components and Engineering Companies
across India

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Process Timeline & Communication

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Summary
Effective 01 April 2013

Increments

In Grade & Cross Grade Promotions

Effective 01 April 2013

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Communication of Salary Review

All Employees will receive an E-letter It will be

uploaded into their payroll account

Any clarifications may be sought from the Manager &

Business HR Leader

In case of additional clarifications the respective BU

CMT member, BU HR or Director HR may be contacted.

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