Number of employees 
Number of employees

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Labor Costs
Labor Costs

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People Are the Foundation of Our Success

 

 

Our people are the foundation of our success throughout the world, and we foster a high-performance culture that develops talent and promotes teamwork.

 

We continue to create a work environment where:

  • We attract, develop, engage, and retain a diverse workforce;
  • We prepare leaders for our future growth both at work and in the communities where we operate;
  • We drive high performance by clearly differentiating top talent for both ratings and rewards;
  • We treat all people with dignity and encourage diversity and inclusion;
  • Work is done in an environment where we are open in our communications and honest in our feedback;
  • We take ownership for our actions and deliver on our promises; and
  • The Alcoa Values and employee pride inside and outside of the workplace are evident across the organization.

 

Our vision—Alcoa. Advancing each generation.—acknowledges and credits the people and innovations that define our legacy and aligns all stakeholders to what we want to accomplish as a company. At the core of our vision is our Values—integrity, respect, innovation, excellence, and environment, health, and safety—which guide our behavior and shape our culture.

 

To achieve our vision, our human resources function is partnering with our business units to set specific actions, timetables, and metrics that provide direction and measurement against progress. There are challenges that must be overcome, including the global nature of the company, differing cultural issues and governmental regulations, and our decentralized structure.

 

Number of Employees
2013 Employees by Region
  Asia Australia Europe North America South America
Male Not Available 4,400 14,100 23,200 4,800
Female Not Available    600   2,900   6,800 1,200
Total 2,000 5,000 17,000 30,000 6,000
2013 Employee Breakdown
  Employee Contract Employment Type Total Workforce
Permanent Temporary Full-Time Part-Time Employees Supervised Workers
Male 45,400 1,100 46,300 200 46,500 Not available
Female 11,200    300 11,000 500 11,500 Not available
Total 56,600 1,400 57,300 700 58,000 Not available

 

Inclusion

Our strength as a company is based on our ability to engage and leverage the differences and many perspectives that our people bring to the workplace. This is how we define inclusion.

 

The global nature of Alcoa allows people from all backgrounds to excel in their own country or internationally. No matter what language they speak, where they are from, or what they look like, employees will be welcomed and treated with respect.

 

Our approach is to focus on ways to build on our similarities while valuing and leveraging our differences to achieve high performance. We support an inclusive work environment where all employees are valued equally, encouraged to express their ideas and opinions, and challenged to reach their full potential.
 

All qualified individuals and contractors seeking job opportunities with us will receive consideration for employment without regard to race, color, religion, national origin, disability, sexual orientation, gender identity/expression, veteran status, genetic information, sex, or age (within statutory limits). (See Alcoa’s Equal Employment Opportunity Statement and Human Rights Policy.)

 

In early 2013, Alcoa received the prestigious Catalyst Award, which honors innovative organizational approaches that address the recruitment, development, and advancement of women in the workplace. The foundation upon which we received the award—Building Opportunities for Women in a Hard Hat Company—showcases how we broke down barriers in a male-dominated industry and achieved greater gender representation through an aggressive diversity agenda.

 

Executive Accountability

Our chief executive officer and executive team hold all Alcoa leaders accountable for inclusion.

 

Our inclusion initiatives are integrated into the overall business strategy, and the results are tied to incentive compensation. Each business unit also has developed specific plans and initiatives aligned with the corporate inclusion strategy.

 

As part of our annual cash incentive compensation plan, we have a diversity goal that represents 10% of the total payment opportunity. The goal is to increase global female employment and U.S. minority employment in the professional and executive ranks.

 

Each year since 2011, we have defined the strategic sustainability targets for these two employee groups to achieve the following representation at Alcoa’s senior management level by 2013:

  • Global women: 19%
  • U.S. minority: 16%

 

At the end of 2013, women comprised 20.8% of our global leadership, and U.S. minorities accounted for 15.6% of our U.S. leadership positions. For 2014, we have set targets of 21.3% of women in global leadership roles and 16.1% of U.S. minorities in leadership roles.

Global Women in Professional and Senior Manager Positions
  Professional Senior Manager
2009 22.8% 16.8%
2010 23.8% 16.9%
2011 25.0% 17.6%
2012 25.3% 19.0%
2013 26.2% 20.8%
U.S. Minorities in Professional and Senior Manager Positions
  Professional Senior Manager
2009 14.6% 13.3%
2010 15.2% 12.9%
2011 15.4% 13.2%
2012 17.1% 16.0%
2013 18.0% 15.6%
 
Domestic Partner Benefits

We provide coverage for domestic partners of either gender and their children under the U.S. health and welfare plans. We also provide domestic partners with pension benefits in the non-bargained defined benefit pension plans and retiree medical plans.

 

Corporate-Wide Employee Networks

 

Alcoa Women’s Network

Since its founding in 2003, the Alcoa Women’s Network (AWN) has served as a catalyst for the recruitment, development, advancement, and retention of women at Alcoa. At the end of 2013, there were 35 local networks globally with more than 1,300 members.

 

In 2013, AWN strengthened its chapters and partnered with internal business leaders and resource groups to engage in the following activities:

  • Actively support Alcoa’s recruiting process;
  • Lift visibility and contribute to the overall development of Alcoa women;
  • Increase engagement among Alcoa women;
  • Extend the influence of Alcoa women in achieving positive business results;
  • Extend the influence of Alcoa women leaders to the community; and
  • Raise the profile of Alcoa as a compelling place to work for women.

 

AWN local chapters actively supported the network’s mission by hosting location-specific symposiums, offering professional coaching, and sponsoring community projects. 
 

Alcoa African Heritage Network

The mission of the Alcoa African Heritage Network (AAHN), which was established in 2004, is to be a valued resource to Alcoa and for Alcoans of African heritage. The focus is to be a catalyst for the recruitment, development, advancement, and retention of African-heritage employees and represent Alcoa in our communities. The group is focused on networking, career development, retention, mentoring, and community activities.

 

Major AAHN activities in 2013 included the following:

  • Partnered with Alcoa’s business units and recruiting team at events targeting minority students, including colleges and career fairs;
  • Partnered with the National Society of Black Engineers to promote science, technology, engineering, and math (STEM) education at summer enrichment programs for grade school students;
  • Hosted approximately 20 community service activities through the location chapters, with US$12,000 in grants awarded to local nonprofit organizations to support employee volunteers; and
  • Re-launched the AAHN Mentoring Program, with two corporate-wide workshops.

 

The Executive Leadership Council, a workplace inclusion organization, honored Alcoa with its Corporate Partner Award in 2013 for our efforts to make the company more inclusive, equitable, and successful. 
 

Employees at Alcoa for Gay and Lesbian Equality (EAGLE)

Launched in 2007, EAGLE is an active network of gay, lesbian, bisexual, and transgendered (LGBT) employees, as well as other Alcoa employees—known as EAGLE Allies—who support their concerns. The group’s goal is to create a safe and affirming work environment where all employees are empowered to reach their full human and career potential. EAGLE has successfully affected policy, engaged employees, and mobilized the support of allies over the years.

 

Overall EAGLE membership in 2013 was 44% male and 56% female, with members in 17 U.S. states and 14 countries. Through programming geared toward allies, EAGLE has increased membership by more than 50% since 2010. 
 

EAGLE continued focusing on three key priorities in 2013: recruit, engage, and develop.
Activities for the year included the following:

  • Sponsored and hosted panels at Out for Work and Out in Science, Technology, Engineering, and Mathematics (oSTEM) conferences to recruit LGBT undergraduate and graduate students;
  • Enhanced cultural awareness through the addition of LGBT-specific content to Alcoa Supervisory Excellence training;
  • Partnered with Alcoa’s business units to develop strategies for improving LGBT engagement results; and
  • Continued to advance LGBT-friendly company policies by aligning corporate and Alcoa Foundation giving with Alcoa’s non-discrimination policies.

 

In our fifth year of participation in the Human Rights Campaign Corporate Equality Index, we received another perfect score of 100 and ranked as one of the best places to work for LGBT equality for the fourth consecutive year. We continue to lead the mining and metals industry on this index.

 

In early 2014, the Human Rights Campaign presented Alcoa with its 2014 Corporate Equality Award to recognize our commitment to equality for the lesbian, gay, bisexual, and transgender community.
 

Site-Based Networks

Supporting our corporate-wide networks are the following networks based at specific U.S. locations:

  • African American Committee, New Professionals Network, Hispanics Actively Building Levels of Opportunity, and Military Affinity Group—Davenport Works Iowa;
  • East Asian Alcoan Association—Alcoa Technical Center, Pennsylvania; and
  • Support & Development Association—Warrick Operations, Indiana.

 

Case Studies

Building Opportunities for Women in a Hard Hat Company

 

Compensation

Our compensation programs are designed to support our business strategy by rewarding behaviors that deliver results against business goals. The programs drive performance to meet the expectations of our internal and external stakeholders.

 

We use a total compensation approach in each of our respective global markets by incorporating base and variable pay—both annual and long-term—along with appropriate benefits. We ensure that our compensation meets or exceeds legal minimums and is in full compliance with all applicable laws in all jurisdictions in which we operate.

 

To attract, retain, and motivate our employees, we reward them at a level that is competitive within the relevant labor market. We target our total compensation at the median of competitive industry standards and conduct annual compensation and benefits benchmarking in each of our labor markets to ensure we remain competitive. Through strong individual, team, or company performance, employees have the opportunity to earn above-target compensation.

 

We face several challenges in designing and executing our compensation approach:

  • We constantly monitor and make adjustments where necessary to our executive compensation arrangements to ensure alignment with our shareholders;
  • The competition for leadership talent remains high and has resulted in more pressure to attract new talent and retain our existing leaders; and
  • Some markets, such as Russia, China, and Saudi Arabia, have unique compensation environments and require a more flexible approach to attract and retain top employees.

 

We made a few significant changes to our compensation plans over the last several years to address the challenges mentioned above. Changes at our top management level included increasing the stock ownership guidelines and modifying long-term incentive awards to include a three-year performance condition relating to profit margin and revenue growth. We did not make any significant structural changes to our executive compensation arrangements in 2013.

 

In 2013, up to 20% of our variable compensation plan was tied to achieving significant aspects of our sustainability targets. These targets included safety, diversity representation in our workforce, and reductions in carbon dioxide (CO2) emissions due to process improvements and improved energy efficiency.
 

Specifically, these sustainability targets and their share of the variable compensation plan at the corporate level were:

  • CO2: 5%
  • Safety: 5%
  • Diversity: 10%

 

Our 2013 achievement payouts at the corporate level were 2.8%, 7.4%, and 11.5% for CO2, safety, and diversity targets, respectively.

 

Labor Costs
Billions of U.S. dollars
Data include salaries plus employee expenses for external training, transfer and relocation, expatriate costs, workers’ compensation, travel, recognition and rewards, medical expenses, meals, recruitment, transportation, education, work clothes, retiree medical, and other employee-related expenses. Data exclude contract and temporary labor and computer- and communications-related expenses.

 

Executive Compensation

We compensate executives based on the market and performance. We target each compensation element at median market rates based on an annual analysis of companies in a wide variety of industries that are of similar size and scope to Alcoa. In addition, the Compensation and Benefits Committee of our Board of Directors retains its own independent consultant to analyze market data and provide general compensation advice, particularly on CEO compensation.

 

Our compensation programs are designed to motivate our executives to take actions that are best for the long-term performance of the company while delivering positive annual results. We place a heavy emphasis on performance-based incentive and equity compensation. This compensation mix offers an opportunity for above-average compensation for above-average performance balanced by the risk of below-average compensation when our performance does not meet our goals.

 

As executives move to greater levels of responsibility, the percentage of their pay based on performance is increased. Furthermore, the percentage of total compensation paid in the form of equity also increases as executives have increasing responsibility for business unit, group, or corporate performance, thereby more completely aligning their interests directly with those of our shareholders.

 

Our annual cash incentive compensation plan has two components: a formula based on company performance (at the business unit, group, and corporate levels) and a qualitative evaluation of individual performance. The company performance is based on a combination of financial and non-financial goals.

 

The non-financial goals are sustainability-related parameters that include safety, a reduction in energy intensity, and diversity goals. They also covered production-related parameters and other metrics specific to a particular business.

 

Our equity awards are a combination of stock options and restricted stock units. In 2013, performance-based restricted stock units were awarded at the top management level. The final number of stock units will be determined based upon company performance against targets set for profit margin and revenue growth over three one-year performance periods beginning in 2013 and will vest in 2016. Our plan prohibits re-pricing stock options, and we have not granted options with a reload feature since 2003.

 

For a more thorough overview of the our executive compensation programs and practices, including a complete explanation of compensation decisions for our five most highly compensated employees, please see the Compensation Discussion and Analysis in our annual proxy statement.
 

General Compensation

Our general compensation programs are designed for simple and flexible delivery based upon the financial and operating metrics of the company and the relevant business unit.

 

The structure is designed to deliver median compensation within a specific labor market when median performance is achieved at the individual, business unit, group, or corporate level. When superior individual or team performance is achieved, compensation may be higher than the median.

 

We openly communicate the total compensation program to employees and link it to ongoing performance feedback.
 

Recognition

In today’s challenging market, we take the initiative to reward and recognize employees.

 

To give corporate-wide recognition, we showcase employees who received an award on our intranet. It is one of the intranet’s most popular features, indicating that employees want to see more recognition of their peers. Examples include the You Make a Difference Award Program and the Global Impact Award Program.

 

The You Make a Difference Award Program provides our Executive Council and senior regional leaders a significant way to instantly recognize and reward individual employees who achieve exceptional results that go beyond normal job expectations.

 

The Global Impact Award Program recognizes teams of employees for exceptional business impact and creative ways to solve business problems effectively. The award categories are growth, productivity, asset management, Alcoa Advantage, community engagement, and environment, health, and safety.

 

Another corporate recognition program is awarding special quarterly stock grants to employees who make outstanding long-term contributions to the company. These grants are intended for professional employees who are not eligible for annual equity grants. A total of 614 employees received an award under this program in 2013.

 

Benefits

Our benefit packages vary by country due to statutory requirements and priorities established by management. Examples of benefits include health insurance, disability insurance, life insurance, and pension benefits.

 

We have developed a global database that houses statutory and non-statutory benefits by country where we have a significant presence. This information is used for a variety of purposes, including governance, mergers and acquisitions, and facilitation in moving employees.

 

In the United States, we provide pension and health and welfare benefits (but not disability or life insurance benefits) to part-time employees, which we define as active employees who work at least 50% but less than 100% of the regular work schedule for a location. We do not provide these benefits to temporary employees. Part-time and temporary employees make up less than 1% of the U.S. workforce. Outside of the United States, our benefit practices for these two categories of employees vary by location.

 

Labor Relations

Whatever the position—from chief executive officer to supervisors to operators on the shop floor—our belief is that we are employees of Alcoa first and, for some of our workforce, members of trade and labor associations as well.

 

Labor Agreements

No matter where we operate around the globe, we believe in freedom of association.

 

Each year, we negotiate numerous labor agreements throughout the world. In total, we have more than 90 such agreements. Approximately two-thirds of our global workforce is covered by a collective bargaining agreement.

 

Asia

The collective bargaining agreement covering 121 hourly employees at our South Korean plant is up for renewal in 2014, and we expect to engage the union in discussions on a variety of economic issues.

 

Covering 340 employees, the 2013 annual collective agreement at our Alcoa Kunshan plant in China was renewed through Dec 31, 2014. In addition, we have 485 bargaining unit employees at Qinhuangdao.

 

Australia

In Australia, 68% of our Alcoa of Australia employees are covered by enterprise bargaining agreements (EBAs). All EBAs are, or will be, certified by Fair Work Australia.

 

In 2013, we completed negotiations with the Australian Manufacturing Workers Union (AMWU), which covers 580 employees, and the Communications Electrical and Plumbing Union (CEPU), which covers 200 employees, for new EBAs that remain in place until 2016.

 

We are continuing negotiations in Western Australia for EBAs with the Australian Workers Union (AWU) covering 1,750 workers and the Construction Forestry Mining Energy Union (CFMEU) covering 90 workers.

 

Europe

Around 90% of our hourly workforce in Europe is covered by a collective bargaining agreement. In 2013, we successfully negotiated standalone labor agreements at the San Ciprián plant in Spain.

 

North America

In the United States, approximately 57% of the hourly workforce is covered by a collective bargaining agreement, including a master labor agreement with the United Steelworkers (USW) that covers 6,100 employees at 10 locations. In addition, we have 16 standalone labor agreements covering 3,400 U.S. employees. There were no work stoppages in the facilities covered by these U.S. agreements in 2013.

 

In 2013, we successfully negotiated a new four-year labor agreement with the USW at our Global Rolled Products plant in Danville, Illinois.

 

In Canada, approximately 2,200 of our 3,250 hourly employees at nine plants are covered by nine standalone collective agreements. Global Primary Products employees are represented by the Canadian steelworkers union Metallos and the Confederation of National Syndicates. Building and Construction Systems (BCS) employees are represented by the Canadian Auto Workers, United Food and Commercial Workers, and Structural, Ornamental, and Reinforcing Iron Workers.

 

The Becancour Rod Plant agreement was renewed for a three-year period in February 2013, while the Baie-Comeau agreement was renewed for an eight-year period in May 2011. All three Aluminerie de Bécancour Inc. agreements expired on November 22, 2012, and a new five-year agreement was reached in February 2013.

 

For BCS-Kawneer, we will be negotiating new labor agreements in 2014 at our Lethbridge, Alberta, plant (expired on February 28, 2014) and our Toronto, Ontario, service center (expiring on August 15, 2014).

 

South America

In Brazil, we have seven standalone labor agreements that are typically renegotiated on an annual basis. We completed renegotiations for the 2014 agreements in the third quarter of 2013.

 

Our approach to labor relations in this region is based on fostering social dialogue with union leadership, employees, and, in some cases, the local community to discuss and educate all stakeholders in our business. Despite a challenging economic environment in 2013, all seven agreements were settled without a work stoppage or production loss.
 
At our Jamalco refinery in Jamaica, negotiations continued in the first quarter of 2014 for a new three-year contract covering approximately 300 hourly employees represented by the Union of Technical, Administrative, and Supervisory Personnel (UTASP). In Suriname, discussions for a new agreement at the Suralco refinery began in September 2013. The current contracts at both Jamalco and Suralco expired December 31, 2013.

 

Talent Management

Our people are our sustainable advantage, and we recruit, develop, and retain the best talent and leverage them across our company. We also provide them with ample career opportunities across businesses and functions, with approximately one-third of manager-level career moves in 2013 being cross-business. A talent pool with diverse experience also gives us a distinct advantage in succession planning.

 

The Alcoa Talent Advantage ensures we leverage the full potential of our people across our businesses. This is realized by using common processes and tools to:

  • Source talent to ensure a high-performing diverse workforce;
  • Engage and align all employees in contributing to their full potential;
  • Develop high-performing employees to drive competitive advantage; and
  • Advance talented employees to strengthen our succession pipeline.

 

Research and our experience tell us that employers like Alcoa face the following major issues in the global labor market:

  • Lack of qualified, experienced workers in the highly skilled labor market to fill operational positions;
  • Intense competition for top talent makes retention, engagement, and employment branding top priorities;
  • Despite continued high unemployment in many developed countries, we face a shortage of critical technical and leadership skills;
  • Emerging markets (e.g., Brazil and China) are rapidly growing into mature markets with higher levels of skills, driving a focus on hiring and developing local talent;
  • Technology has provided a world of knowledge to job seekers, creating an open environment for benchmarking, networking, and gaining knowledge of companies—all combined with low candidate loyalty; and
  • Economic and political volatility issues may generate new issues in the workplace.
     
Source

Our processes to source talent ensure a high-performing diverse workforce by identifying and recruiting employees at all levels in their career. We have established a broad approach that includes campus, military, and diversity recruiting efforts. We also operate internship programs, selectively recruit key experienced hires, and partner with technical institutions. Additionally, we post most of our open positions up to a senior leadership level on the Alcoa intranet so employees can apply for positions directly.

 

Local Hiring

One of the many ways Alcoa contributes to the sustainability of the communities in which we operate is by providing local job opportunities at competitive wages. Many Alcoa leaders began their careers in operational roles at one of our manufacturing facilities.

 

With plants often located in remote areas, we recognize the importance of employing local talent and strive to do so whenever possible. We advertise our job opportunities to the local community in a variety of ways, including bulletin boards, career websites, state employment agencies, and local newspapers. We also attend career fairs that support the local community.

 

Workforce Development

Alcoa and the Alcoa Foundation have been actively involved in national efforts to develop a workforce capable in science, technology, engineering, and math.

 

In September 2013, Alcoa was invited by the White House to join the newly formed Advanced Manufacturing Partnership 2.0 initiative. We will be working to help develop actionable policy to support the further development of the National Network for Manufacturing Innovation (NNMI) initiative and create new programs driving investments in science, technology, engineering, and math.

 

We are also engaged in efforts with local and national programs to rebrand manufacturing by showing the opportunities in advanced manufacturing with a global company. Two such examples are Junior Achievement for STEM Capable Careers and Hope Street, which work to increase the number of 16- to 24-year-old Americans with the skills, experiences, and education to be workforce ready for careers in advanced manufacturing.

 

As part of our 125th anniversary celebration in 2013, Alcoa Foundation launched the Internships for Unemployed Youth Initiative. The program will support internships for 500 youth (18 to 24 years of age) with small- and medium-sized manufacturers in 10 communities in which we operate in eight countries (Australia, Brazil, Canada, France, Jamaica, Spain, the United Kingdom, and the United States).

 

In addition, we engage with community colleges and vocational schools to promote careers in advanced manufacturing and to support certificate programs for high-demand skilled trades, such as technicians and operator positions.

 

We are also reaching out to untapped pools of talent, such as veterans making the transition from the military to the civilian workforce, through organizations like American Corporate Partners. In this program, Alcoans mentor and provide online advice to veterans utilizing the Manufacturing Institute, which looks to place veterans in positions with small- and medium-sized manufacturers.

 

Alcoa Campus Partnership Program

The Alcoa Campus Partnership Program in the United States relies upon a cooperative and coordinated effort by our business and resource units to recruit new talent from a group of 19 partner universities.

 

The universities are selected based on the quality and breadth of their academic programs, the diversity of their student populations, and their historical relationship with Alcoa.
 
Each year in the United States, we hire approximately 200 interns and an additional 100 recent college graduates. The most highly sought graduates are those with degrees in engineering, business administration, accounting/finance, human resources, procurement/supply chain, and environment, health, and safety. We rely on the Alcoa Campus Partnership Program to help uncover top talent in these areas.


Engage and Align

Our processes to engage and align all employees in contributing to their full potential ensure that there is alignment between our people and our business needs. We use a performance management process and a people review process to ensure that we are driving the appropriate employee development actions for the company’s long-term sustainability and establishing a match between Alcoa’s needs and employee aspirations and talents.

 

Our annual Global Voices Survey measures the engagement of our employees and helps us identify favorable areas, as well as priority areas to address.

 

Employee Engagement

Each year, the entire Alcoa workforce is invited to participate in our Global Voices Survey. This web-based tool is produced in 15 languages and contains 50 questions that measure 11 dimensions of the employee experience. In addition to employee engagement, the survey gauges supervisor effectiveness; leadership/vision; community commitment; diversity/inclusion; environment, health, and safety commitment; perceptions of ethics and compliance; valued employee; quality; values; and survey follow-up.

 

From 2010 to 2013, our employee engagement score increased from 60% to 74% despite little overall engagement improvement in manufacturing’s best-in-class companies. We have seen year-over-year incremental improvement since starting the survey in 2006.

 

The overall response rate to the survey was 92% in 2013. Although this is two percentage points lower than 2012, our rate has been consistent over the last three years and is higher than most external benchmarks that we follow.

 

Our score improvements have been driven by targeted action planning in our businesses based on leveraging statistical analysis of key engagement drivers. In addition to the traditional correlation analysis that most companies perform, we conduct partitioning analysis, which is a form of statistical regression, on the employee engagement survey data. This analysis is deployed at the plant level to provide every plant with its top drivers of engagement to bring focus to its action planning.

 

Partitioning analysis provides the answer to a critical question: From all of the explanatory factors, is there a particular factor that most differentiates the highly engaged employees from those with the lowest engagement? Partitioning can be applied on groups and subgroups, so it also finds combinations of factors and thresholds that optimally separate the high- and low-engaged employees.

 

In addition to partitioning analysis, our Decision Analytics Center of Excellence piloted in 2013 a new method of further assisting our business leaders in determining which factors of engagement to focus on to improve their employees’ work experience. Using a straight-forward data modeling technique, we were able to rank each group’s handful of identified engagement factors by its projected impact on overall engagement, where employee perceptions of the factor could potentially improve by 10% year-on-year. We feel this data-driven addition to engagement action planning will result in managers at all levels moving forward with more confidence as they strive to better engage and value their employees.

 

In 2014, we began taking a more proactive role in the generation and sharing of employee engagement ideas among our businesses through an engagement idea-sharing communications program. The program incorporates newsletters articles from the field, bullet-point recommendations, scholarly research, and periodical interactive sessions to further advance the concept of employee engagement as a priority and one of Alcoa’s top strategic priorities.

 

As always, we continue to identify action items based on survey feedback, and we work to improve the year-over-year results. Increasing employee engagement will result in improvement in critical performance areas, such as retention, absenteeism, productivity, and overall business results.

2013 U.S. Employee Voluntary Turnover Rate
Percent
  Men Women Total
  4.7 5.0 4.7
 
Performance Management Process

Our performance management process is the foundation of our talent assessment. It is based on the following principles:

  • Individual roles and objectives directly support organizational business objectives;
  • Evaluations are based on achievement of results and competencies that support achieving those results;
  • Employees are accountable for their performance, while managers provide support;
  • Employees receive rounded feedback on their performance;
  • Rewards are based on demonstrated results;
  • There are linkages with employee development and succession planning; and
  • The process supports continuing performance improvement.

 

Performance management is designed to focus on achievement of goals, improvement, and continuous elevation of standards for both individual and organizational performance. It is linked with our overall people development and succession planning processes and completely integrated with our compensation system. The overall performance rating is the main driver for an employee’s total compensation. In 2013, we had 98% of salaried employees participating in the performance management process.

 

This process considers employees the owners of their performance plan, with supervisors and colleagues contributing to their performance and development process. Employees regularly receive constructive and appreciative feedback from colleagues, supervisors, and internal customers, and evaluations are based on the achievement of individual and team results in a manner consistent with our Values.

 

The process also consists of a formal development plan, whereby a manager and an employee establish the employee’s career goals and a formal individualized plan to achieve those goals. This plan may be a combination of e-learning, formalized courses, books, mentoring, and on-the-job experiences.

 

The performance management process is a continuous loop of planning, monitoring, executing, coaching performance, and assessing results. This is supported by a foundation of continuous feedback, growth, and development. Positive efforts should result in rewards, both in the form of compensation and career advancement.


Develop

Our processes to develop high-performing employees drive our competitive advantage. We have created a variety of initiatives to help our employees develop throughout the various stages of their careers with us.

 

Leadership Development

Our leadership development programs ensure that our leaders have the capabilities needed to drive high performance on an ongoing basis and accelerate change. In addition, an internal/external job posting process helps employees identify potential career moves.

 

The content for each program is designed to address the needs of the leaders at that level.   There are four centrally designed and managed programs: Advancing Supervisory Excellence (ASE), Leadership Fundamentals Program (LFP), Advanced Leadership Program (ALP), and Executive Development Program (EDP).

 

The ASE program is delivered at more than 100 operating locations and focuses on the development of our almost 6,000 front-line operations leaders. The leadership skills of these employees are critical to our ability to successfully motivate and engage our workforce and execute our aggressive business programs.

 

ASE comprises phases that build upon each other over the course of three years. During the first phase, supervisors focus on the basic leadership skills of providing feedback, building trust, coaching, and resolving conflict. The second phase enhances these skills as the supervisors learn more about communications, leading change, building inclusive work teams, and operational finance. The third phase requires supervisors to use the skills that they’ve learned within case-based activities highlighting Alcoa’s Values.

 

The EDP, ALP, and LFP programs are global resident programs taught by our current leaders for our future leaders at the department, function, and business levels. During these multi-day programs, participants are immersed in learning within the leadership framework themes and are provided with both group and one-on-one coaching. Ongoing coaching and follow-up on learning outcomes continue after the program for each participant.

 

Participants in these programs must be identified as top talent, nominated by their business leaders, and approved by our executive leadership. Women and U.S. minority nominees who meet selection criteria are prioritized for the programs to support the development of a more diverse leadership pipeline.

 

Our CEO and his leadership team continued their monthly virtual sessions with the company’s top global leaders in 2013, again expanding participation to include the top leadership of every location and business. Called Leadership Dialogue On-Line, these sessions foster increased understanding of the business, its priorities, and key topics in leadership. There is also an open forum for questions and answers, and participants are responsible for cascading the information from the session further into the organization.

 

Our technical group conducts an annual program that caters specifically to developing leadership skills in emerging leaders in technical functions. Three weeks of training are spread across nine months, culminating with an action learning project using the tools and knowledge learned. There were 29 participants in this elite program in 2013.

 

Alcoa Mentoring Program

We launched the Alcoa Mentoring Program in 2009 as a development tool for top talent in our senior manager ranks. The program maximizes potential and leverages the Alcoa Talent Advantage by promoting knowledge sharing, bridging skill gaps, and encouraging growth through professional relationships.

 

Benefits of a Mentoring Culture
Our People
Our Business
  • Increase employee engagement.
  • Connect employees across
    businesses, functions, and geographies.
  • Foster Alcoa Values.
  • Provide development opportunities.
  • Attract and retain employees.
  • Bridge employee skill and knowledge gaps.
  • Provide access to, and retention of, knowledge and expertise.
  • Strengthen our leadership succession plans.
  • Offer a low-cost, effective development tool.

 

The mentoring steering committee facilitates pairings based on input from the mentees regarding their mentoring needs and preferences, as well as input from managers and mentors. A mentoring website provides access to a mentoring library and references to support the relationships.

 

In 2013, we had 498 mentoring relationships supported by 219 mentors. This was an increase in both relationships and mentors from the prior year.

 

Alcoa Senior Manager Mentoring Relationships

 

We are expanding mentoring as a development tool to a broader audience of employees at all levels, including participants in the ASE program.

 

In August 2013, we introduced a reverse mentoring program, where early career talent serves as the mentors to senior leaders. The first round of mentors were chosen based on their past performance and trained on social media best practices. After completing our six-month pilot program with 39 mentoring pairs, we began developing the next phase of this program that will focus on other relevant topics for this audience.

 

Alcoa: Our Story

We offer Alcoa: Our Story to new employees and their managers through an interactive virtual session format. This program enables these employees to experience what it means to be an Alcoan and to understand our vision, Values, key strategic initiatives, and business strategy directly from our business leaders. It is about transforming employees into Alcoans.

 

AlcoaLearn
AlcoaLearn

AlcoaLearn, our corporate-sponsored learning management system, enables employees to find resources that will help them learn on demand and in their own style. It also assists in maintaining their training records by tracking both online training and instructor-led offerings globally.

 

AlcoaLearn supports key company initiatives, such as business continuity planning, data privacy, and environment, health, and safety. It also offers a wide variety of business and soft-skills training that is available to all employees.

 

In 2013, AlcoaLearn housed 5,477 online courses and supported the administration of 6,777 instructor-led courses. The latter represents 377,326 global training hours during the year.
 
Available in 22 languages, AlcoaLearn allows employees to see upcoming and completed training. Managers are also able to view the status of the critical, assigned training of their direct reports. 

 

Sustainability Training

From intranet sites to workshops, classes, and instructor-led training sessions targeted to specific functions, we use a variety of methods to educate our employees on sustainability.

 

We developed and deployed sustainability training to employees of our global commercial function beginning in 2010 to ensure they could interact effectively with our customers on our sustainability advantages and challenges. We expanded the training during 2013 to deepen their knowledge and understanding and further ensure they could link up effectively with our customers to align sustainability strategies across the value chain.

 

In Brazil, we have implemented online sustainability training called ABC da Sustentabilidade (Sustainability ABC) that is available to all employees. Its goal is to have all employees understand sustainability and put it into practice on a daily basis.

 

We also sponsor the Sustainable Enterprise Academy, which conducts sustainability training. Each year, various employees—including functional managers and plant managers—participate in the academy’s twice-a-year courses. Our employees also attend other sustainability-oriented programs and courses conducted by independent organizations, such as the University of Cambridge.

 
Advance

Our process to advance talented employees focuses on strengthening our succession pipeline. We define succession planning targets for key positions to ensure business continuity and smooth transitions as talent moves within or out of the organization.

 

Talent Review Process

Our business groups and resource units conduct an annual talent review to determine successors for each key position. This process rolls up from our locations across the globe to the CEO and his lead team.

 

Successors are classified as ready now, ready in one to three years, or ready in three to six years. The CEO then reviews the successors for each key position with the group presidents and resource unit heads. They also discuss opportunities for cross-business unit transfers, accelerated development, and external targeted hires to fill vacant ready-now slots. In November of each year, succession plans for key positions and top talent are discussed by the Executive Council to ensure succession plans are robust, gaps are filled, and development opportunities are identified for top talent.

 

The disciplined execution of this process enabled identification of successors ready now and/or ready in one to three years for 97% of our 387 most critical roles. The process also provides visibility and opens developmental opportunities for emerging talent across the company.

 

In 2013, we continued to emphasize cross-business succession planning with a focus on reaching deeper into the organization to identify our future leaders. Our activities included confirming these leaders have a robust development plan and that they are considered for new assignments regardless of their business unit or function. The Alcoa Executive Council incorporates monthly talent updates as a part of its regular meetings to facilitate cross-group movement, close succession gaps on critical positions, and create talent visibility among the organization’s leadership.

 

The talent review process ensures there are highly qualified individuals in key positions today and into the future. We reviewed more than 1,000 leaders in 2013 to inventory and assess the depth of our talent, as well as to plan development opportunities to meet the needs of the individual and organization. We also focused on individuals who could be shared across business units to drive development of broader competencies and expanded career opportunities.
 

Case Studies
Clearing the Career Path for Women in Brazil

Training Brings Employment Opportunities to Disadvantaged in Brazil

Helping Military Veterans Transition to the Civilian Workforce

Workforce Development Projects Bring Employment Opportunities to Juruti

Focused Training Advances Supervisory Excellence 

Mentoring Program Builds Management Strength in Russia

Unique Alcoa Retraining Center Helps Former Employees Gain Employment

 

Related Links
Alcoa Careers