Performance management

Our Performance Management System (PMS) comprises various elements at group and company levels, all of which focus on ensuring a link between MOL Group objectives, actions, plans and individual performance. The complexity of the system ensures that regular feedback on performance is used to define bonus payouts and salary increases, and also provide input to career-potential evaluations and therefore link current performance to long-term career growth.

The managerial Performance Management System (PMS) comprises various elements at the Group and company level, all of which focus on ensuring a link between MOL Group objectives, actions, plans and individual performance. The complexity of the system ensures that regular feedback on performance defines bonus payouts and salary increases, provides input to career-potential evaluations, and links current performance to long-term career growth.

Targets are based on corporate objectives and are cascaded from the top to bottom. They are grouped into three categories (corporate, divisional and individual), and category-weighting is based on the Drotter Model which takes into consideration the level of individual impact on overall results (i.e.: for the evaluation of MOL’s CEO corporate-level targets are most highly weighted). This way, the system ensures that there are strong individual interests in achieving group and unit-level objectives, whilst rewarding individual performance and delivery.

As sustainable development (SD) is one of our main values, we intend to inspire our executives to also strive for sustainability-related objectives along with business-as-usual financial and operational figures. This is why we set social performance targets (e.g. health-and safety indicators) and other objectives related to SD for most top managers, which later can be delegated to lower managerial and also non-managerial levels.

Organizational Key Performance Indicators (KPI) are cascaded down from managerial PMS targets or defined directly by business units, thereby ensuring a direct link between corporate strategic goals and individual employee performance.

This system is as complex as managerial PMS so can link corporate objectives with individual contributions and individual performance with compensation and long term career growth. It is thus capable of even highlighting the required development of competencies.

MOL’s Employee Performance Management System (EPMS), already operating in TVK Plc., Slovnaft a.s. and MOL Plc. was extended and fine-tuned incorporating the rules and values of the managerial Performance Management System (PMS). In 2010, we implemented the EPMS system at MOL LUB Ltd. (200 employees), Petrolszolg Ltd. (850 employees) with IT support, and extended the EPMS process to other subsidiaries without IT support (880 employees).

From 2009, the pre-condition of payouts has been the fulfilment of specified business results (defined as being a certain level of the targeted MOL Group’s EBIT).

Participants in managerial and employee PMS in MOL Group (in 2010):

Beyond the Group-level PMS system, main Group member companies have developed their own local systems to ensure that employee groups below managerial levels are also provided with clear targets and feedback on performance on an annual basis. From 2010 we are continuously extending the EPMS system to other MOL Group companies to ensure the existence of a unified complex system – instead of local initiatives – in order to achieve the expected benefits in a more integrated manner.