Motivation

Material

One of the top targets of the Zarubezhneft JSC Personnel Policy is the creation of an efficient personnel remuneration system that allows to attract, retain and motivate employees with the necessary competencies and level of performance to successfully accomplish the business goals of Zarubezhneft Group of Companies at a minimum expense.

The Group of Companies implements programs of financial and non-material incentives for the employees.

The material incentives include: :

  • fixed part (official salary, allowances and bonuses);
  • variable part (monthly and annual bonus payments);
  • social payments (mandatory and corporate).

The non-material incentives include:

  • state, departmental and corporate awards;
  • awarding honorary ranks and winning places at competitions.

The size of the fixed and variable part of employees remuneration depends on the following factors:

  • position level expressed by the corresponding labor remuneration grade;
  • level of professional competence and labor productivity implemented through the assignment of a certain professional status to an employee;
  • work performance and achievement of the set goals for the reporting period, reflected to the extent of the variable remuneration part for the period;
  • level of remuneration of comparable positions in the labor market at competing companies and the target position of Zarubezhneft Group of Companies on the labor market for this position level.

When determining the target position of the Group of Companies in the labor market, the following approaches are applied:

  • selection of the appropriate labor market for various categories of personnel (Moscow, regional, international);
  • singling out key groups of employees and positions for which the Group of Companies is ready to provide above-average salary level in the relevant labor market;
  • for the rest of the employees, the Group of Companies is ready to provide salary at the average level in the relevant labor market.

In this regard, Zarubezhneft JSC consistently undertakes work in the following areas:

  • improving the staff remuneration scheme;
  • improvement and development of the integrated staff planning system.

Since 2013, the Group of Companies has been implementing the Unified Labor Remuneration Scheme (ULRS).

The ULRS defines a unified procedure for setting employees’ salaries based on a single grade line, reflects Company’s business interests and priorities, ensures the alignment of the size of the annual staff remuneration with the achievement of key performance indicators (KPIs), and is one of the Company’s main tools for managing employees’ performance.

To attract and retain key managers, Zarubezhneft JSC has built a comprehensive motivation system that includes the following elements:

  • fixed remuneration (official salary, allowances and surcharges as per the legislation);
  • year-end bonuses based on the results of achieving KPIs;
  • bonuses for achieving strategic goals (Challenge corporate BI).

The Group of Companies conducts a regular analysis of the inflation level and the consumer price index, based on which it adopts decisions on the revision (indexation) of its staff salary level.

The minimum salary is established at a level not lower than the subsistence rate in the region of activities.

Personnel costs structure by country of presenceSalary fund (SF) and social payments (SP) comprise the personnel costs. The SP include: financial support, pension payments, welfare for the single parents, pregnancy and birth allowance from the enterprise, hotel vouchers compensation etc, %
Country of presence Actual
2015 2016 2017 2018
SF SP SF SP SF SP SF SP
Total for the Group of Companies 90 10 89 11 88 12 88 12
Russia 92 8 94 6 92 8 89 11
Republic of Srpska (Bosnia and Herzegovina) 81 19 84 16 89 11 91 9
Republic of Cuba 94 6 94 6 93 7 95 5
Socialist Republic of Vietnam 93 7 82 18 77 23 88 12

An integral part of the Group of Companies’ remuneration system is a program for the social support of employees and their families, which is taken into consideration when assessing the overall attractiveness and competitiveness of the proposed remuneration.

Zarubezhneft JSC Group of Companies has approved the Unified Concept of one-time payments and social policy, aiming at a decent standard of medical care, aid to employees in the event of the occurrence of various circumstances, reimbursement of lost earnings upon retirement, as well supporting the retirees of the Group of Companies.

To carry out activities to maintain the health and well-being of its staff, the Company is working to organize recreation at health resort institutions of the Republic of Crimea. Employees are given the opportunity to purchase vouchers for themselves and their family members, partially covered by Zarubezhneft JSC, and large families and families with children under 14 years old take precedence.

The Company continues to operate a parity corporate program for the provision of non-state pensions to employees. As per this program, every employee of Zarubezhneft JSC can make an individual pension contract with NPF GAZFOND and contribute a certain percentage of his / her salary to the fund on a monthly basis, while the Company contributes the same percentage, but not more than 10%.

Social payments by countries of presence
Country of presence Actual
2015 2016 2017 2018
RussiaWith account of the Corporate center, Thousand RUB 501,061 592,934 880,210 1,007,159
Socialist Republic of Vietnam, Thousand USD 11,755 23,646 28,782 13,338
Republic of Srpska (Bosnia and Herzegovina), Thousand EUR 3,292 2,474 1,526 1,387
Republic of Cuba, Thousand EUR 74 66 87 57

Non-financial

Non-financial motivation also occupies an important part in our personnel motivation system. To reward our employees and work teams for their significant contribution to the development of Zarubezhneft JSC, their achievements of high production, high financial and economic performance, as well as to improve the corporate culture, the Company has established the following awards and ranks: “Honorary Worker of Zarubezhneft JSC”, “Veteran of Zarubezhneft JSC”, a Zarubezhneft Diploma, as well as a Certificate of Appreciation by Zarubezhneft.

Over the past year, 302 employees of the Zarubezhneft Group of Companies were handed state and corporate awards.

Employees awarded in 2018
Award type Number of awarded persons
Total Including Foreign citizen
National 4
Industrial 48 1
Corporate 250
Nature