UPM Annual Report 2017

Stakeholders

In brief

Strategy

Businesses

Governance

Accounts

favourable responses to Employee Engagement Survey’s diversity and inclusion question

67%

89%

of permanent employees had goal setting and annual discussion completed

TARGETS 2030

TARGETS 2030

UPM’s personnel by business area 2017

Aiming higher is an aspirational call-to-action for all UPM employees to further develop and improve every aspect of performance – both as individuals and as a company.

Other operations 3%

UPM Biorefining 14%

UPM Plywood 13%

UPM Energy 0%

UPM Raflatac 17%

UPM Paper ENA 43%

UPM Specialty

Papers 10%

Promoting a culture of aiming higher Based on internal surveys and discussions in management teams, UPM defined aspirational mindsets, encouraging a culture of aiming higher and supporting each other in doing so. UPM employees have clear goal setting. UPMhas a systematic process for goal setting and manager-employee dialogue on performance. The UPMEmployee Engagement Survey (EES) results on enablement, 73% favourable, are well above the external high performing norm. Enablement refers to employee skills and abilities being fully utilised in their roles. In 2017, UPM reviewed its performance management and created new ways of leading and enabling performance. To aim higher, the change focuses mainly on active manager-employee relationships and will include more regular, forward- looking manager-employee discussions, agile goal-setting and more regular feedback. Engaging employees to develop the workplace The UPMEmployee Engagement Survey invites all employees across the company to evaluate different aspects of their working environment every year. In 2017, 85% of UPM employees responded to the survey, which shows a high level of willingness to participate in developing the workplace. UPM renewed the survey in 2017. The new survey measures the development of both engagement and enablement. In addition, factors that are important to UPM such as safety, teamwork and diversity and inclusion are also measured. The engagement index at UPMhas shown consistent improvement. From 2016, the engagement index rose by 2 percentage points to 71% in 2017. Team effectiveness at UPM scored 5 percentage points higher than the global norm, and when employees were asked what is best about working at UPM, the number one theme was teamwork. The EES provides an opportunity to monitor long-term trends and the progress of agreed development activities annually. This progress is followed up and evaluated to enable continuous development of the workplace at both organisational and team levels. The three global focus areas for development at UPM are: encouraging sharing of ideas and resources; respect and recognition; and valuing diversity. Encouraging learning Ensuring high performance for business success, and continuous professional development of employees are UPM’s long-term targets. UPM aims for all employees to have an individual development plan. In 2017, 62% of employees had such a plan. UPM applies the learning and development framework 70-20-10, where of 70% of the learning takes place on the job, 20% comes from learning from others and 10% comes from off-the-job training. While most of learning happens outside the class­ room, UPM tracks the training hours. To support learning from others and real-life experiences, UPM invested in a new learning platform, OurWorkday, in 2017. UPM employees can now create digital learning content and share and consume it flexibly. In the changing and complex business environment, ensuring employees’

Employee Engagement Survey results, Trend 2008–2017

100

80

Our people

60

40

20

0

08

11 10 09

12 13 14 15 16 17

■ Response rate (%) Employee Engagement Index (EEI)

PERSONNEL BY COUNTRY 31 Dec.

2017 2016 2015 7,376 7,347 7,464 4,146 4,262 4,591

Finland

Germany

Russia

771

793 752 608 505 483 250 105

798 763 535 585 518 217 109

United Kingdom 734

Poland France Austria Estonia

665 500 390 263 104

Spain

Italy

51 44 35 22 15 83

52 42 34 26 27 80

55 42 31 27 26 79

Turkey

Belgium Ukraine Sweden

SIGNIFICANCE • The capabilities, integrity and drive of our people make us unique

OUR WAY • Encourage learning and promoting a culture of aiming higher • Engage with clear goal setting and individual development plans • Engage employees to develop the workplace • Emphasise value-based, inspiring and responsible leadership and integrity • Develop an inclusive and diverse working environment that empowers people to perform • Reward and recognise good performance for business success • Focus on 2030 targets on diversity and inclusion, working conditions, learning and development and responsible leadership

Other Europe

China 1)

1,769 1,790 1,546

United States 2)

950 574 146

970 1,070

TARGETS • Aim higher in business performance

Uruguay Malaysia

580 140

573 122

• Advocate value-based and inspiring leadership • Continuously challenge the status quo to develop the company • Ensure safe and healthy working environment and wellbeing of employees and contractors

South Africa

96 91 55 51 47

94 92 56 50 40

78 81 58 50 42

Mexico

Brazil

Australia

India

Rest of the world 133

120

118

Total

19,111 19,310 19,578

Shop-floor 61%

Salaried 39%

Permanent 88%

Fixed term 12%

1) Incl. Hong Kong 2) Incl. Madison 50%

CONTENTS

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45

UPM Annual Report 2017

UPM Annual Report 2017