Pay and benefits
Pay and benefits
O2 aims to offer competitive rewards – and our employee benefits often extend beyond statutory requirements.
For example, in the UK we offer all permanent employees the opportunity to join the O2 pension plan and to benefit from life and personal accident insurance.
In Germany, all permanent employees participate in a Company-funded pension scheme offering a range of benefits including long-term disability pension, a pension for dependants in case of your death, and a retirement pension. A personal accident insurance is also provided for all employees.
Performance-related pay, benefits and bonus schemes are common across Telefónica O2 Europe, and are set in the context of rates in the relevant local market.
It is our practice that managers should complete annual performance reviews and establish development plans. In general, close to 100 per cent of managers across the Group complete annual performance reviews, which are linked to performance-related pay arrangements.
In 2006, we continued to link pay and individual performance more closely.
- In the UK, for our biggest employee group, we continued to develop our performance standards. Beyond their annual pay salary award, employees are now scored against performance targets such as attendance, quantity and quality of customer calls.
- In the UK we give employees access to a confidential website that allows them to view ‘Your Total Reward’, a detailed review of their personal total benefits package, including pension value, holiday entitlement and other rewards.
- In Germany we benchmark rewards for identified high performers every year against the Lurse-Benchmark.
- We additionally reward extraordinary performance through the ‘Recognition awards’, the ‘Excellence awards’ in Germany, and the ‘Can Do’ awards in the UK and Germany.
- In Ireland, we award our employees who excel in their roles with the ‘Extra Mile’ award, ‘Ovation’ award and ‘Superstar of the Month’ award.
All Group employees have access to voluntary benefits offering discounts on a wide range of products and services:
- In the UK we offer an online tool giving access to a range of discounted offers, and also provide voluntary benefits such as childcare vouchers. All managers also have access to our company-car scheme and healthcare plan.
- A new company crèche (Kinderkrippe) is planned to open for our Munich employees in October 2007. We found a suitable site in 2006 and hope to open the crèche in 2007.
- In Ireland we have ‘€URO2’, a flexible benefits scheme designed to give employees the opportunity to select a benefits package tailored to their needs. €URO2 is available to all employees once they have completed six months’ service. A wide range of benefits choices is available, from additional health cover to additional pension contribution to simply taking cash. Recently we added our Charity of Choice, Irish Autism Action, as an option to the scheme.
Benefits across the group extend to many free or subsidised wellbeing initiatives, including stress management, mobile massages, advice on nutrition and diet, advice on parenting, cholesterol testing and stop-smoking campaigns.
Changes in the pensions law
In 2006, O2 UK took the opportunity presented by changes in the UK law that governs retirement and pensions. We improved the retirement rights of employees, strengthened the security of pension arrangements and added more flexibility in pension drawing.
Employees now have the right to work to 65 (previously 60) if they wish. However, they retain the right to take their pension at age 60 without penalty, if they prefer.
Our employees can now draw their pension and continue to work for us if they wish, to allow greater flexibility. We aim to support people who want to work longer with part-time and flexible opportunities so that they can maintain their full pension benefits. Pension members now have more flexibility over the amounts of contribution they can make to the Pension Plan, and more opportunity to join the O2 Pension Plan.
We informed our unions and pensions trustees about the changes in March 2006. We continue to encourage employees to save for their retirement, through education, promotion and the use of the award-winning pension website at www.O2pensions.com.
O2 UK case study
O2’s pension scheme wins awards
O2’s Pension Plan won two prestigious awards in October 2006. The Plan was voted Scheme of the Year (medium sized) at the Professional Pensions Awards and Scheme of the Year (small and medium sized) at the Pension Management Awards. The judges singled out a number of improvements and new features established over the past year. These include the introduction of a Shariah investment fund which is specially designed to offer O2’s Muslim employees an investment option that is consistent with Islamic law. The judges also praised O2’s new flexible retirement option which enables employees over the minimum retirement age to carry on working and to receive their pension in addition to their salary.
Flexible benefits
In the UK we will provide a full Flexible benefits scheme from 1 July 2007, where employees can select from a range of benefits to suit their individual circumstances. Employees will benefit from the terms that O2 can secure and by using a salary-sacrifice method of payment they will be able to take advantage of tax or National Insurance savings (or both) on many of the benefits.
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