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Ways to Improve Effi ciency of CSR Programs: HR Role, Guide for socially responsible companies. - K.: Farbovany Lyst publishing house, 2011. – 40 pages.

Th e fi rst guide titled Ways to Improve Effi ciency of CSR Programs: HR Role has been developed by the Centre of CSR Development (hereinaft er referred to as the Centre) supported by JTI with an active participation of Ukraine’s leading companies (Vanco Prykerchenska, DTEK, Ernst&Young, Platinum Bank, Astelit, Kraft Foods, and Menedzer po Personalu (Human Resources Manager) magazine) as part of the innovative format of the Centre’s working group called Laboratory.

Th is publication is designed for HR and CSR directors and specialists of companies for which social responsibility is included in their business strategy.

© Centre for CSR Development, 2011

This guide was developed within the HR Role in the Company’s Sustainable Development Laboratory, which functioned between September 2010 and February 2011. Within the framework of the Laboratory, four meetings of HR directors and social responsibility managers of companies were held.

Laboratory is an innovative format of the working group developed by the Centre for CSR Development.

Th e Laboratory is a permanent working group which develops innovative products and solutions based on experience of Ukraine’s leading companies (manuals, recommendations for government authorities, training courses).

Th e following events were held within the framework of the Laboratory during 2010 - 2011:

February 24, 2010: the Laboratory project was presented to HR directors and CSR managers of Ukraine’s leading companies;

March – May 2010: the HR Role in the Company’s Sustainable Development research was conducted resulting in the development of a unique questionnaire, survey of 18 companies, and preparation of the questionnaire analysis;

June 2010: analysis of international trends (for the fi rst time in the world) was conducted; the Social Responsibility: People Decide Everything publication was prepared;

June 30, 2010: a presentation of the results of the Social Responsibility: People Decide Everything publication and research was held;

July – August 2010: the Social Responsibility: People Decide Everything publication was translated into English;

August 2010: the Laboratory page was created on the Centre’s website www.csr-ukraine.org;

September 02, 2010: a presentation of the results of the research in the AmCham was held; the fi rst joint meeting of the two committ ees, HR and CSR, was organized;

September 22, 2010: the Laboratory working meeting was held jointly with the representatives of Ukraine’s leading companies;

October 2010: the international community was informed about the initiative refl ected in the blog of Elane Cohen, an international HR and CSR expert;

November 15, 2010: presentation of the initiative, the results of the Social Responsibility: People Decide Everything publication and research at the CSR Integration in Business Activities international conference in Moldova;

December 17, 2010: the Laboratory meeting with the representatives of Ukraine’s leading companies was held;

February 24, 2011: the Laboratory fi nal meeting was held;

April 28, 2011: presentation of the Ways to Improve Effi ciency of CSR Programs: HR Role guide.

To fi nd out more about launching new working groups (Laboratories) in the CSR area, please contact the Centre for CSR Development: (044) 280 11 47, [email protected]

ABOUT THE GUIDE

Th is guide is a product of joint eff orts made by the leading companies such as Japan Tobacco International Ukraine ( JTI Ukraine), Vanco Prykerchenska, DTEK, Platinum Bank, life:), Kraft Foods Ukraine, Ernst & Young, and Menedzer po Personalu (Human Resources Manager) magazine. MTS Ukraine, Microsoft , and NIKO contributed to the guide at the various stages of its development as well.

Th e target audience of this publication includes managers and specialists at HR and CSR departments of companies declaring that social responsibility is included in their business strategy.

We are confi dent that these organizations contribute a lot to the corporate social responsibility development, but research conducted by the Centre for CSR Development shows that a lot can still be improved. Th e fi rst thing that needs to be improved is development of partnership relations between HR and CSR departments.

Cooperation between these two departments may pertain to various issues; for this reason it is up to you to decide which issues are to be solved at fi rst. And the questionnaire in the beginning of the guide will help you with this task. By answering its questions, you will be able to assess the level of development and needs of your company. Aft erwards, we recommend you to select the chapter suiting your needs and set up cooperation between the two departments relying on recommendations of Ukraine’s leading companies and global experience.

For convenience of use, the guide presents companies’ practices illustrating the theoretical part. Accordingly, your steps will be based on the experience of Ukraine’s leading companies which achieved success.

Th is initiative is unique in Ukraine so your opinion is of utmost importance for us. You are welcome to send us your comments at [email protected].

We hope you will succeed in implementing your plans with the help of this guide.

Sincerely,

Oleksandr Rudnytsky, Maryna Saprykina,HR Director, Chairman of the Board,Japan Tobacco International Ukraine Centre for CSR Development( JTI Ukraine)

Introduction

2

Opinions about the guide

Th is guide will be useful to managers building up the future of their companies based on long-term development strategies and best experience accumulated in the CSR area. Some people may fi nd ready answers in the guide while others may identify suggestions for coming up with their own approach to the development and implementation of the CSR policy inside the company. Anyway, I am confi dent that results will be positive.

Ruslan Skyba,Corporate Relations Department Manager

For us, CSR is not just a complicated abbreviation; this is a style of conduct and lifestyle. We would like people to perceive us not just as a stable fi nancial institution off ering quality products, but as a bank constituting an integral part of society. Th is is a bank that will actively support positive changes in society and will improve the life of all those around it. We actively promote and support various undertakings being in harmony with our CSR strategy. For this reason, we were glad to support the initiative of the Centre for CSR Development aimed at creating a guide titled Ways to Improve Effi ciency of CSR Programs: HR Role. Th is guide is unique and it will help identify the principal stages and specifi cs of HR involvement in the development of corporate responsibility of a company. Th erefore, CSR and HR should go hand in hand as together we are responsible for the most important values of both the company and society!

Denys Brodsky,HR Director

Th e concept of corporate social responsibility (CSR) has been developing in Ukraine since 2005. During this period of time, companies, representatives of society and the expert community have discussed a large number of complicated and controversial issues. Th e principal value of these discussions is that they make it possible to identify a common understanding of this phenomenon and the national specifi cs having an impact on the practical forms of its implementation.

We believe that a system approach is of utmost importance in the CSR development. Th erefore, we have tried to combine our experience and knowledge in order to help you improve effi ciency of CSR programs. We believe that by making joint eff orts we will achieve prosperity of our society.

Viktoria Gryb,Sustainable Development Advisor

We consider this guide to be a platform for communication between HR managers of leading Ukrainian and international companies, an opportunity to share successful projects and learn new effi cient ideas for their practices. We fr ankly hope that the project will be successful and the guide will become one of the favourite books of HR managers.

Maryna Zakharyina,Human Resources Department Manager

3

Th e CSR function in a company is quite oft en the responsibility of the PR Department concentrating all the social programs on the outside target audiences and leaving out of account the main target group consisting of employees which are not only the company’s ambassadors but can also considerably contribute to the development and promotion of social responsibility programs. For a long time, the HR did not consider itself as a function which can implement CSR initiatives in a company and use them for its own purposes. For this reason, this guide is a good means that will help combine and structure eff orts of public relation and HR departments and use CSR both as a technique of outside communication and a strong motivational tool permitt ing to improve the loyalty of employees, reduce the turn-over and the cost of search and training of new personnel.

Oksana Rudiuk,Public Relations Department Manager

Publication of this guide is a remarkable event. I hope it will help many HR managers go fr om words to work. All agree that business should have a human face, but not all know what concrete steps should be done in a company.

I think that CSR projects are to be successful fr om the very beginning, fr om the fi rst step. Success inspires and helps to go on. Th erefore, it is bett er to start with small foreseeable, concrete, and feasible things. Common achievements motivate, help overcome diffi culties and believe in one’s success. All important changes start fr om this. Without sincere involvement and acceptance of social responsibility by people at the personal level, there will be another formal event just for the sake of appearance. Success is achieved only by companies helping their staff realize that CSR is not what I have to do, but something that we want to do!

Nina Lazareva,Magazine’s Chief Editor

Corporate social responsibility is a business tool and an important component of the company’s strategy. Th is guide will be helpful in making this tool more effi cient and powerful both in the hands of top managers and ordinary employees.

Systematized practices, advices and ideas formed by the leading companies will be implemented in new projects and ensure Ukraine’s sustainable development.

Olga Panivnyk,Manager for Compensation and Benefi ts

Opinions about the guide

5

Structure

1. Company’s basic documents:values, mission, vision, code of conduct. How to engage employees in developing and revising the company’s basic documents; forms of monitoring performance of declared obligations.

2. Corporate social responsibility policy. Structure of CSR organization; how to engage various groups of employees in developing and implementing the unique CSR strategy diff ering form the strategy of another company and being memorable for stakeholders.

3. Monitoring CSR activities of a company. Role of the HR department in monitoring and assessing implementation of the CSR strategy and preparing a non-fi nancial report; CSR indicators and bonuses.

4. HR practices within the CSR aspect.Building an employer’s brand based on CSR values; recruitment programs, CSR targets and policy; assessing employees according to the results of the probation period. CSR issues to be included in trainings, offi cial instructions, team targets and exit interviews; forms of CSR impact on the formal and informal system of awards; personal growth of the staff . How to engage employees and their families; corporate volunteering; benefi ts from the social dialogue in a company.

5. Internal communication.Presenting CSR objectives and plans to employees; Communication channels; CSR assessment in annual surveys of personnel.

31

37

25

19

9

6

Th e results of multiple research show that employees are oft en unaware of how their daily work in a company helps achieve the corporate objectives and, accordingly, the invested resources fail to be paid off . You had bett er see what the situation in your company is.

QUESTIONNAIRE

for assessing the CSR development level in a company and the HR role

# Questions Yes No Steps to be followed if the answer is negative1. Vision of the organization

1 We have a vision of the organization in our company.

Develop the vision, p. 12

2 Just as any employee, I can describe the vision right now.

Pay attention to communication relating to the company’s vision, p. 12

3 The company’s vision: explains the target and the area of the organization’s activities; is comprehensive and focused on more than one aspect of the company’s activities; is written in the present and not in the future (“we do now” and not “we will do”); can be easily read, is understandable and can be easily remembered (consists of 25 words or less).

If the vision of your company includes less than three stated characteristics, perhaps it should be revised, p. 12

4 The company’s vision is oriented toward the future: it describes how we want the company to be in 3-5 years; it describes where the company wants to go (and not the process: how); it describes positively the company’s future.

If the vision of your company includes less than two stated characteristics, perhaps it should be revised, p. 12

5 The company’s vision refl ects our company: it emphasizes its uniqueness, refl ects its values; it can be applicable to all the subdivisions and business units.

If the vision of your company includes less than two stated characteristics, perhaps it should be revised, p. 12

6 The Company vision inspires: it motivates employees, helps them feel part of the team; it attracts the people’s attention; it explains objectives and directions, underlies the decision making process; it describes how the company will look like in the future.

If the vision of your company includes less than three stated characteristics, perhaps it should be revised, p. 12

2. Organization’s mission1 Our company has a mission. Develop the mission, p. 132 Just as any employee, I can describe the mission

right now.Pay attention to communication, p. 13

3 The company’s mission contains information about the business type, the company’s uniqueness, the organization’s basic objective, philosophy, and values which determine the future actions, markets in which the company operates, the company’s image, the present and future products, ensures a direction for the business, the company’s responsibility in respect to its stakeholders.

If the mission of your company includes less than fi ve stated characteristics, perhaps it should be revised, p. 13

3. Values1 We have values. Develop the values, p. 162 Just as any employee of the company, I can easily

describe them. Pay attention to communication, p. 16

3 Our stakeholders know and support our values. Seek help from the PR department to develop the communication program, p. 17

4 Our communication sites (website, bulletins, and journals) refl ect our values.

Develop specifi c pages on the website, in the journals, provide a site for a forum, set up an award, p. 17

5 The employee recruiting process includes elements of our values.

To be included, p. 33

6 Values have an impact on the decision making process in our company.

Improve internal communication, p. 17

7 Our values do describe what is important for our company.

Values should be revised, p. 16

7

8 The declared values do not contradict the company’s daily practices.

Important: you need to urgently remove the risks you are facing, p. 17

9 The company’s values are clear for employees. Explain the values to employees, p. 174. Corporate social responsibility policy

1 Has the company set up a Social Responsibility Committee at the level of top managers and department managers?

To be set up, p. 20

2 Is the HR Director included in the committee? To be included, p. 213 Is there any corporate explanation of social

responsibility?To be developed, p. 21

4 The corporate CSR declaration is clear and I can cite it, just like the CSR priorities the company follows.

Revise the CSR policy and communication, p. 21

5 My company’s CSR is close to me and I share it. Revise the CSR policy and communication, p. 216 Relations with personnel are a separate priority in

the CSR policy.Combine this priority with the social responsibility policy, p. 22

7 The company’s policy in the area where it operates, including charitable assistance and other social investments, has been agreed upon with personnel.

Have the development priorities and social group support approved by your employees, p. 21

8 An active group of employees has been established in the company with which, in particular, CSR issues are discussed.

Establish such a group, p. 21

9 Corporate volunteering has been developed in the company.

Develop such a program, p. 21

5. Monitoring the company’s CSR activities1 The company’s CSR-related questions (at least

7 questions) are included in the annual loyalty surveys.

Include the CSR-related questions in the personnel loyalty surveys, p. 27

2 CSR-related questions are included in the list of questions when new employees are recruited.

Include questions about the company’s CSR and values in the recruitment interview, p. 27

3 CSR-related questions are included in exit interviews

Include questions about the company’s CSR and values in the recruitment interview, p. 27

4 CSR indicators are included in the KPIs of the company and personnel.

Develop these KPIs and set up a balanced system of indicators, p. 28

6. HR practices within the CSR aspect1 The company assesses its employees according

to the probation period results, including their participation in the company’s social and environmental life.

Include these indicators in the personnel assessment, p. 33

2 CSR issues are integrated in most of the company’s training courses.

Include CSR issues in the company’s seminars, p. 34

3 Job descriptions include regulations on the company‘s social and environmental life.

To be included, p. 35

4 The company has employees’ personal and professional growth programs

Develop such programs, p. 34

5 Both employees and their families participate in the social and environmental events of the company.

Provide conditions for family involvement, p. 34

6 The company has a trade union and signs a collective agreement.

Try to pay attention to the social dialogue in the company, p. 35

7. Internal communication1 Employees know how to express their innovative

ideas (communication channels, feedback).Provide conditions for democracy and transparence of this process, p. 39

2 There is a system of presenting CSR-related objectives and plans to employees.

To be developed, p. 40

3 Employees read and comment on the company’snon-fi nancial reports.

Create a communication site to engage employees in discussing the non-fi nancial report, p. 40

4 The company conducts surveys dedicated to CSR policies.

Conduct surveys. This will contribute to involvement, p. 40

11

Company’s basic documents: values, mission, vision, and code of conduct

1. COMPANY’S BASIC

DOCUMENTS: VALUES,

MISSION, VISION,

AND CODE OF CONDUCT.

Companies having and implementing their mission, vision, and values have undeniable advantages.

We recommend starting with development of the basic documents because this is the

step which should be strategic for your entire company. Th is will help:

1) survive economic crises as the company’s general line and intentions are clear;

2) have a competitive advantage: profi ts of companies whose employees are united by a common goal and are proud of their work are 29% higher; investors and customers trust them;

3) reduce the cost of removing mistakes of communication and undesired behavior in the company, the cost of new personnel training (Novo Nordisk succeeded in decreasing the personnel turnover by 5% upon launching the Values in Action program).

Every local offi ce of J. T. International (JTI), depending on its objectives and priorities, can develop its own mission and vision, which are based on the existing corporate strategy.

12

Ways to improve efficiency of CSR programs: HR role

1.1 VISION

A vision is an organization’s statement describing what it wishes to become, its answer to the question why do we exist? Vision has the following characteristics:

• It describes how the ideal future appears to the company and what impact it wishes to have on society;• A vision cannot be measured, it has no details and time;• Th is concept is closely related to the corporate values and mission;• Th e company’s vision remains unchanged when the market or business climate change.

If employees participate in the vision development, they bett er realize its essence and relate their offi cial obligations to the vision.

Th e fact that employees start to view themselves as the vision builders and not as stone layers is

important as well.

Personnel involvement stages

Top managers develop a draft version following which employees may be asked to:

1) highlight words they like or dislike, or unclear words;

2) assess the vision in terms of points ranging from 1 to 10 based on importance and feasibility;

3) describe their role in implementing the vision;4) provide examples of how the company

implements the vision (these stories can be later used by the PR department to communicate the vision to

personnel).

Microsoft : a computer in every home, on every desk,

plus fi rst class soft ware

Walt Disney: Making people happy

Vision without action is a dream. Action without vision is a nightmare.

Japanese proverb

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1.2. MISSION

A mission is a brief writt en statement about the company’s objectives and philosophy. A mission has the following characteristics:

1) it identifi es the company’s key clients, products and services, area of operations;2) it is based on the governing values and principles.

Developing the mission:1. Ask the management to write one sentence about the business goals.2. Ask an infl uential group of 5-7 employees (the so called group you would not hesitate

to travel to space with) nominated by other employees (or a team of employees from all the functional departments, opinion leaders) to do the same, and then chose jointly the important goals upon writing the company’s mission.

3. Have the two sentences agreed upon and present the mission to all of the company’s employees.

However, it is important to take into account that the mission should be regularly revised because it must accurately refl ect the company’s goals within the economic climate context.

At the new stage of development of Kraft Foods, it was decided to update its values and ultimate goal. A group of people consisting of the company’s representatives fr om various regions worked to identify the value milestones. Th is work resulted in the statement of the company’s ultimate goal: Let’s make the day tastier, seven values, and positioning. Th e Team managed to come up with an exact expression for the company’s ultimate goal, whose activities are not restricted to fabricating tasty products. Th e ultimate goal determines the company’s bright spirit, combines 140 thousand employees and inspires them to make the company, communities, and countries where Kraft Foods’ plants operate tastier, and, fi nally, make the entire world tastier as well.

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We can use similar words, resemble in some way, but every company tries to have a competitive advantage in the market, including in terms

of values forming a part of the corporate culture.For example, a risk may be a value for one company but not a value for another company.

Olga Panivnyk, Kraft Foods Ukraine

64% of fi nancial and HR managers around the world emphasize that approximately half of applicants ask questions about the company’s values before starting to work.

JTI’s corporate values have been formed by a project group in the company’s headquarters and sent to the offi ces around the globe. Th ese values formed the basis for

corporate competences on which the process of recruitment and annual assessment of personnel is built. Th erefore, they are the basis of the corporate culture.

JTI’s system of values is presented to a new employee fr om the very beginning and this is a considerable part of the introductory program. In the future,

effi ciency of their work will be assessed on the basis of this system. Employees are aware of and share the company’s values and this is proved by the

personnel involvement research.

1.3. VALUES

Corporate values are the organization’s features, merits, and highest priorities which are a kind of a driving force.

Th e corporate statement of values is a statement breaking down its values which disclose the ways the organization will treat its stakeholders and action to be taken.

Th e following rules should be kept in mind when developing values:• avoid imposing your ideas;

• relate the specifi ed values to the real problems and encourage people to provide examples of the company’s activities failing to follow its values;

• avoid changing the individual values of employees: explaining the corporate values to employees is an att empt to share one’s values with others and not to change them;

• develop an abbreviation that will be helpful in remembering the values; for example, MTS created the following values constituting

the abbreviation word PROSTO (simple): Partnership, Effi ciency, Responsibility, Courage, Creativity, and Openness.

A person’s values

cannot be changed; it is possible to just select employees sharing the values.

15


In June 2010, MTS started to introduce new common corporate values based on the task as follows: upon completing several stages, adopt these changes by the end of the year:

1) identify the values;2) understand;3) adopt the values;4) share them.

Stage one: the company organized day X when personnel came to work and saw posters presenting the company’s new values. On the same day, every employee received an e-mail from the company’s President. Th e message contained a story about the new values emphasizing importance of participation of each employee in the process of the company’s progress and a present in the form of free content from the portal illustrating the values.

Stage two: a special issue of the Simply about PROSTO corporate paper appeared in the company’s offi ces around the country; it contained an interview with the company’s management, an explanation and examples of new corporate values, real cases of MTS employees describing cases when subscribers were provided with the best client experience in the most extraordinary and complicated situations.

Stage three: new posters appeared in offi ces: they showed people shaping the PROSTO abbreviation lett ers by using their fi ngers; posters had a subscription explaining the meaning of each value; screensavers depicting the PROSTO image were installed on the employees’ computers.

Stage four: prosto.mts.ru internal promotion site was launched playing the role of the central media for communicating with employees. Th e website became a place where experience and ideas relating to the company’s new values and mission could be exchanged. Employees could watch videos featuring the company’s management with top managers explaining the new values; a game was introduced: an employee could post his/her cell phone number and was later contacted by the Marketing Vice President explaining the new values to him/her; a corporate event was held on the basis of these values; employees fi lmed their videos about the values and ways of their implementation. Th irty such videos were collected from employees from the diff erent regions of Ukraine.

Results1) 80% of employees found out about the internal changes at MTS and were able to state the company’s

mission and corporate values with no help;2) about 70% of employees positively described the special issue of the paper and confi rmed to bett er

understand changes inside the company;3) 95% of surveyed employees liked prosto.mts.ru website and emphasized its signifi cance and

importance.

MTS case: corporate culture changes «from top»

16


IMPORTANT

1. Train in-house instructors for holding sessions and engage an independent consultant.

2. Sessions permit to understand what is important for an employee and the organization. Hold a number of sessions (their number depends on the company’s size and they can last for 2-3 hours) involving all the employees or the most important ones on whom the company’s future depends (as Platinum Bank did).

3. Selecting values. Every employee may propose his/her list of 5-10 values or select values from among those shown below, and then propose the agreed list of values to vote on.

4. Values of companies participating in developing the guide:People – Client orientation – Loyalty – Reliability – Innovation –

Effi ciency – Result – Honesty – Communicability – Quality – Synergy – Obligations – Responsibility – Integrity – Openness – Desire to improve – Positive criticism - Mutual respect – Consistency – Corporativity – Cohesion – Professionalism - Wellbeing – Leadership.

Employees are the company’s most important value. Companies owe their success to their employees’ professionalism. All of Ernst &

Young’s three principal values pertain to its personnel.

Companies highly appreciate innovations trying to be open for new ideas and permanently improve themselves both in terms of personnel and development of their products.

Reliability and transparence in relations with partners, shareholders, clients, and other external stakeholders are an important value.

Clients are several times included in the values as well because companies are oriented toward the interests of their clients.

Aft erwards, it is necessary, by counting, to select from among the proposed values the common ones distributed among employees, comment and vote on them.

Microsoft ’s mission consists in helping people and society realize their potential

through innovations. Taking into account the fact that a new team of

managers has been formed in the Ukrainian subdivision for

the last two years, it was necessary to identify their personal missions and

values, the way they are integrated in the corporation’s mission. A visiting

session of top managers was organized at which they discussed the values of

each of them and comparability of these values within the team.

Most personal values were the same.

STEPS TO DEVELOP VALUES:

CORPORATE CULTURE CHANGES

«FROM BOTTOM»

17


Examples

5. Communicating valuesValues are to be converted into goals, expectations, priorities, and behavior of the company:1) include the question about values and their implementation in the recruiting process and exit interviews;2) organize a group of active employees that would regularly meet to discuss the company’s life on the basis

of the developed values;3) introduce fi nes and incentives for following the values in everyday work;4) conduct surveys to fi nd out the extent to which the company follows the values, implements its vision

and mission;5) include theses about the mission, vision, and values in speeches delivered by top managers, publications,

bulletins, and materials for the corporate publication;6) demonstrate examples of behavior, decision making, and communication;7) on the website, create a page of questions and answers relating to integration of the values in the everyday

decisions including the best practices in the company;8) set up an award in the company for an employee whose activities and work refl ect the company’s values

to the full extent.

RISK: if the company’s activities fail to follow the declared valuesYou should always survey both all the employees (randomly, groups of 3-6 people) and the most active

employees by asking questions about everyday work aspects failing to be in line with the organization’s principal values. Ask the group to think of three most important problems pertaining to each declared value. Th is will make it possible to defi ne 4-5 most important problems to be removed.

Value: encouraging employees’ participation and creativity. Th e Company creates «a box of proposals». At the same time, this value requires a consistent approach: place the «box of proposals» everywhere where people can easily exchange their ideas, create a special e-mail.

Promise that each idea (both an anonymous and signed one) will be publicly considered within 48 hours. If an idea is accepted, a responsible winner is to be identifi ed and given, for example, monthly awards or rewarded with small statutes as gratitude for his/her contribution regardless of the idea’s value.

PracticeAt rebranding, the Ukrainian company took two new values: openness and client orientation. At the same time,

based on the results of in-house research, employees complained of remoteness and close nature of top managers. Four chats with the company’s president were organized to change the situation; during the lunchtime break, three thousand employees from all over Ukraine could ask any question. Result: 35% of personnel confi rmed that top management became closer to them.

Aft er or in the process of selecting values, employees discuss how these values are applied at work, on what basis the statement of values (explanation) is developed. Honesty: honest information about activities and problems. Care about employees: regular training, payment of bonuses, etc. Equality: lack of discrimination, unclear privileges, etc.

Every year, Ernst & Young gives awards to its employees for complying with the corporate culture principles: Chairman’s values award. Th is tradition permits employees to fi nd out about achievements of their colleagues implementing the company’s values in everyday life. Every year, the Chairman of the Board of Directors and the Chief Executive Offi cer of Ernst & Young give awards to winners fr om 12 countries of the world.

FROM THE ABSTRACT TO THE CONCRETE

20


2. CORPORATE SOCIAL

RESPONSIBILITY POLICY

Involving the HR department in the development and implementation of the CSR strategy is important for all the subsequent steps to set up and improve a company’s organizational activities because this is the department which may bring the “outlook for people” in all of the company’s decisions since the key

functions are performed by personnel.Company’s strategy of corporate social responsibility Th e CSR strategy development is a long and complex process that needs to take into account the following factors:

Top management responsibility

CSR Department responsibility

HR Department responsibility

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External and internal stakeholders have been identifi ed;

their interests, the company’s needs and actions to establish a dialogue with them have been

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Internal stakeholders and groups among employees have been identifi ed;

their interests, needs and ways of communication with them to fi nd out their needs have been

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The corporate CSR defi nition and its priorities have been developed;

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the CSR practical implementation steps have been determined by personnel

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Elaborated communication of the strategy to various stakeholder groups

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Microsoft : the objective of the policy of corporate citizenship consists in determining the company’s responses to the most urgent

economic, social, and environmental problems.

Novo Nordisk: we build up our business based on the principle of the Triple Bott om Line, taking into account economic,

environmental, and social indicators.

21

Corporate social responsibility policy

As the table shows, employees are present at every stage of development and implementation of the social responsibility policy. Th is is because they play a key role in forming the corporate CSR culture and in the processes of management changes since CSR drives changes. Accordingly, the CSR

strategy effi ciency is measured by how actively employees are engaged in its development and implementation.

1. IMPORTANT: A company’s CSR needs a bright slogan which could be remembered by both its developers and the organization’s personnel. Give up your corporate CSR defi nition consisting of 5 - 6 sentences.

2. IMPORTANT: Include the HR department in the organization’s working group in charge of CSR. It can develop and implement policies directly relating to the area of its infl uence:

- healthcare (including stress resistance) of personnel;- balance between family and work;- personnel development;- corporate volunteering;- eco-purchases.Th ese policies improve the CSR program effi ciency.

3. IMPORTANT: the HR department can engage employees in the development of the basic social responsibility policy and the policy of social investments in the area where the company operates through:

- distribution of the policy developed by the working group consisting of the representatives of various departments for discussion and proposals;

- discussion of the policy with associations of employees (a group of the most active employees, the trade union, etc);

- questionnaire survey of employees.

Personnel are capable of playing an important role both in the development of CSR programs and in monitoring and assessing them. Th e following can be used for this purpose:

- questions in annual surveys about loyalty to the company, company’s CSR indicators, and involvement of employees;

- in-house website and distributions where employees may give their opinion about any questions;- quantity indicators of the personnel turnover, healthcare and safety indicators, employee development

and diversity indicators.

All of the aforesaid data may be used in non-fi nancial reports of companies where there are separate HR indicators.

During the Vancouver Winter Olympics and Paralympics, the CSR sustainable development was one of the HR functions. Th ese examples prove again that HR professional should be included in the cross-functional structure of the company that is responsible for CSR strategy development and implementation.

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INDICATORS OF THE GLOBAL

REPORTING INITIATIVE WITHIN

THE LABOUR RELATION ASPECT

• Total personnel headcount (occupation type, employment agreement, regions).• Total personnel headcount and personnel turnover (age groups, sex, regions, and payments).• Company’s pension obligations.• Payments and benefi ts provided to full-time employees, which are not off ered to temporary or part-

time employees (with breakdown into the key activities).• Percentage of employees covered by collective agreements.• Minimum period(s) of notifi cation of changes in the organization’s activities, including whether it

(they) is (are) determined in collective agreements.• Procedures for recruiting local people and the share of the top managers recruited from among local

people.• Objectives and effi ciency, personnel training mechanism.• Personnel loyalty: percentage of employees in respect to which effi ciency is regularly assessed and

career opportunities are considered.• Healthcare and safety programs, including the number and scope of these issues in labour agreements.• Skill development and training programs in the lifetime helping employees with employment and

support upon the career completion.• Percentage of the total labour force represented in offi cial personnel labour and healthcare protection

committ ees, which help track enforcement of personnel labour and healthcare protection laws and corporate policies and give recommendations in respect to labour and healthcare protection programs.

• Level of injuries, professional diseases, ratio of sick leave days and ratio of absence, and the total number of death cases at work (with breakdown into regions).

• Programs of education, training, consulting, prevention, and control of the risk of severe diseases, prepared for employees, their family members, and persons other than employees.

• Average number of training hours per one employee annually (with breakdown into employee categories).

• Composition of the governing bodies and personnel in terms of sex, age, membership in minority groups, and other diversity indicators.

• Ratio of the basic rates of men and women by employee categories.• Total number of discrimination cases and action taken in their connection.• Activities which may violate the right of freedom of associations and collective negotiations, and

measures taken to protect such rights.• Activities related to a considerable risk of using enforced or mandatory labour, and measures taken to

eradicate them.• Percentage of the security service employees that completed training dedicated to the company’s policy

and procedures pertaining to human rights in respect to the company’s activities.

3. Мониторинг КСО-активности

компании.

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Monitoring CSR activities of a company

3. MONITORING CSR ACTIVITIES

OF A COMPANY

The HR department role in monitoring and assessing the strategy implementation is very important. One of the most important tools here is annual research of the personnel satisfaction level.

Sometimes, such research includes a question about the extent to which employees are satisfi ed with the company’s CSR. However, in our opinion, this question fails to fully disclose the level of awareness, understanding, and participation in the company’s CSR implementation. We suggest asking the questions below:

• How well are you aware of the company’s CSR policy?

• How well do you understand the company’s CSR policy?

• What does the company’s corporate social responsibility mean for you?

• To what extent do the company’s activities correspond to the declared values and principles?

• Do you know about the company’s CSR strategy?

• To what extent does the company progress in implementing its CSR strategy?

• To what extent does the company’s CSR contribute to your being proud of your job?

• To what extent does the company encourage and help you implement CSR in the offi ce, at the plant, at meetings?

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Table 3.1. KPIs Examples

Another aspect of CSR effi ciency consists in including CSR KPIs in personnel’s activities.

KPIs (Key Performance Indicators) are a system of indicators employers use to assess their employees. In this system of indicators, performance of every specifi c employee is added to the company’s total KPI, for example, to the profi tability, commercial viability, or capitalization indicators.

Th e leading companies included CSR KPIs in the assessment of employees’ performance at several levels. Th ey include:

1) top managers;2) chief executive offi cers of companies (bonuses are calculated based on this level data);3) managers of subdivisions in countries responsible for KPIs distribution;4) managers of departments;5) employees.

Th e KPIs availability depends on business objectives and the selected strategy.

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HR practices within the CSR aspect

HR planning consists in such factors as analysis of the workforce competences; revelation of knowledge necessary in the future; comparison of skills of the currently employed personnel, with needs that will arise in the future and highlighting the aspect on which it is necessary to focus. For

CSR-oriented companies, this process also includes assessment of the professional skills necessary to work in a sustainable economy. In particular, they take into account specifi cs of work with shortages of economic and natural resources, the growing att ention to environmental and social risks, political instability, and, accordingly, obtaining a «license» to perform activities.

During the trial period, the HR department presents to personnel the vision, mission, key values, and explains interrelation between CSR and the company’s targets and policy. Th is practice improves personnel loyalty and gets them involved in the company’s social projects.

During the trial period and introductory training courses, employees are provided with leafl ets about the corporate values as well as the following information:

- CSR policy and obligations;- key priorities of the CSR strategy;- the company’s key stakeholders;- the way the company measures its CSR results;- non-fi nancial reports;- where employees can fi nd further information about the company’s CSR and how they can participate

in social projects.

Th e company’s orientation introductory training courses include information about the Code of Conduct, values, charity, and «green» initiatives.

4. HR PRACTICES WITHIN THE CSR ASPECT

During lessons at the Professional Orientation University of Ernst & Young, which started to operate in October 2010, 120 students fr om Kyiv’s diff erent high schools learned useful information about professions of auditor, tax consultant, IT-risk and information security consultant, and found out about the corporate culture and career opportunities for the company’s specialists.

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At Ernst & Young, female employees having children under 14 may, at their own discretion, use one of the working hours per day (fi ve hours per week). Th is initiative aims at giving more fr eedom and opportunity

to raise children to young mothers. At the same time, we try to make Ernst & Young a company where female employees having children could

successfully combine motherhood and career growth.

The key component of similar training courses consists in demonstrating clear interrelation between employees’ participation in the company’s CSR projects and advancement in the organization. Accordingly, one of the employee assessment criteria can be his/her activity/passivity/initiatives

in the company’s CSR projects.

Th e most important tool of the HR policy is remuneration and incentive programs. Naturally, these factors depend on the company’s fi nancial indicators, but for the leading companies the CSR indicators have also an impact on the remuneration level. Furthermore, award and acknowledgement programs (employee of the month, career growth, etc) based on the fi nancial and non-fi nancial indicators should be related to the company’s values and CSR strategy. If this is not done, the company is unlikely to achieve its CSR goals.

Employee categories Issues to be included in the training program

Employees whose duties include CSR issues, for example, those responsible for healthcare and safety in the company

Training courses within their competence, for example, under the OHSAS system

Employees with direct CSR duties: CSR ambassador, «water sheriff s»

Specialized training courses

Top managers, Board members Training courses dedicated to strategic sustainability issues

Employees with indirect CSR duties, for example, those participating in social projects

General CSR issues

All employees Company’s values, CSR policy, forms and methods of employees’ participation in the company’s CSR implementation

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HR practices within the CSR aspect

The job descriptions are rarely revised; for this reason, the possibility to include CSR issues in there is limited and takes much time, unless a new department or a new company is created. It is important to include concrete CSR indicators and duties instead of the general CSR description.

Th e fi nal inspection of the company implementing its CSR programs may include exit interviews where CSR and business ethics questions are asked. Interviews help fi nd out the extent to which the company performs its CSR obligations and whether they correspond to the employee’s expectations.

Employees are one of the key stakeholders of the company and their involvement in the CSR program implementation is of utmost importance. Th e basic forms of involving employees in CSR programs are as follows:

• presenting ideas;• voting for the best variants of ideas;• discussing ideas;• implementation of CSR programs by employees/volunteering.

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Internal communication

5. INTERNAL COMMUNICATION

CSR objectives and plans may be communicated to personnel in various forms. Th ey may include:

• corporate publications;• raising funds among employees;• in-house corporate website;• handouts for employees;• training courses;• surveys;• mentorship programs;• social media and other communication tools and channels.

In order to improve CSR awareness on a regular basis and track employee perception throughout the year, companies hold «fast voting». Personnel’s answers may help an organization fi nd out whether there is misunderstanding and whether communication needs to be adjusted. Such CSR research may become an active tool for forming and integrating CSR messages.

Assessment of companies’ CSR during the annual personnel surveys is one of the indicators of effi ciency of both the CSR policy and its communication.

Personnel awareness of the company’s CSR, their involvement directly depend on how efficiently the internal communication system and its specific tools work: personal meetings with managers, social network, intranet, corporate television, and printed publications. Following earthquake in Japan in March 2011, JTI used all these tools to organize a fund of assistance to suffering Japanese colleagues; as a result, the company’s employees from 120 countries were involved within a week.

An appropriate internal communication strategy to promote CSR policies inside the company is often more important than correct words stated in the policy. If the three basic components of trust fail to be complied with, including trust in CSR: declaration, action, result, then the adopted policy will be perceived as another declarative document imposing no obligations. A comprehensive long-term strategy in internal communication to promote the CSR policy must be prepared, appealing to the emotional perception of employees. Cooperation between the HR and PR departments is important here, as well as understanding that information broadcast to internal and external audiences should be identical.

Ruslan Skyba, Vanco Prykerchenska Ltd

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It is important to avoid situations when employees discover inconsistency between the declared values, policy, and the real situation. Motivation and involvement of employees in the CSR policy implementation, effi ciency of their performance, their permanent interest are all parameters depending

on how effi ciently the company communicates its intentions in the CSR area, the extent to which they are supported by concrete actions and how impressive the results are.

Th e manager’s role consists in communicating the CSR policy and helping employees feel that these are their values and policy. Communication forms: personal meetings, round table meetings, general meetings, meetings of departments, conference calls, Skype conferences, video addresses, publications, and bulletins.

Employees should understand that when implementing any project, it is necessary to ask oneself a question: «Does this project make us closer to the planned future?» If not, this project should be abandoned.

Th e CSR policy should be communicated to external stakeholders as well: Board members, suppliers, clients, investors and the media, the government.

When communicating the CSR policy, it is necessary to take into account the following rules:

- it is important to state the reasons why the CSR policy should be implemented;- both the top manager and managers of departments, sections, etc should clearly communicate the CSR

provisions to their personnel: the so called integrated vertical;- orientation toward the action and result: what actions will be taken within the CSR policy and to what

concrete result it will lead;- communicate the achieved results of the CSR policy implementation; - use various communication forms: e-mails, bulletins, presentations;- appeal to emotions: communicate the CSR policy through emotional perception;- provide opportunities to employees: they can participate in the corporate vision implementation as well.

JTI Ukraine believes that one of the most promising internal communication channels is MyJTI corporate social network. The network includes personal pages of employees, discussion forums, communities by interest, personal blogs, voting and surveys, new idea promotion system, program for implementing joint projects. These tools are irreplaceable in the CSR communication strategy; they guarantee fast feedback and allow people to show their personal initiatives.

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