6.2.4 Communication and engagement

Communication and engagement was one of the areas rated belowpar by employees in a 2014 internal climate survey. Employees highlighted the need for communication that created a clearer link between Group and regional strategy, and the role of each employee. As a result, the internal and external communications functions were split and internal communications was moved from corporate affairs to human resources, where an in-depth understanding of the employee audience is housed.

Communication focus during 2015

Communicating strategy and purpose
During 2015, a new Group internal communications strategy was approved. It drives consistent, improved communication – informed by business strategy and goals – from the Group to employees, and seeks to develop effective, cascading two-way engagement platforms so that employees can communicate with the Group.

One of the key focus areas during the year was the standardised communication of the Group-wide strategy, key strategic objectives for the year, and how the Group is performing against these objectives on a quarterly basis. A variety of communication channels were used, including video, poster campaigns and on-site presentations at a regional and operational level. Our new interactive communication system, housed in the SuccessFactors platform, also facilitates improved two-way communication between the Group and employees.

In many operations line management engages with the workforce on a regular basis, but this is often driven by the communication skills and aptitude of individual managers. There is a clear need to build standardised structures that ensure that line management have the tools, training, platforms and material to engage with their teams.

During the year, Peru developed and rolled out a structured communication model that provides line managers with an easy-to-use toolkit to systematically cascade important messages to their teams. This tool will be adapted for other regions and operations during 2016.

Group leadership continued to drive the communication agenda during the year. In Peru, Australia and Ghana, regional Executive Vice- Presidents or mine General Managers held formal communication sessions with employees at least on a quarterly basis. The new management team at South Deep will adopt similar practices in the year ahead.

Understanding what employees think and feel
Comprehensive employee surveys provide a holistic view of employee concerns, and Gold Fields will continue to run them every second year with shorter surveys taken annually.

A user-friendly digital survey software package was purchased during the year to facilitate the roll-out of shorter, more frequent ‘pulse surveys’. It was used to great effect in rolling out a follow-up survey to the 2014 climate survey, which focused on the four lowest-scoring areas: performance management, recognition, training and development; and communication and engagement.

Wage gap
Executive remuneration remains a sensitive issue, globally. However, companies in development countries, like South Africa, face an added complexity. Scarce skills and talent retention remain a challenge but this has to be countered by the need to remain globally competitive against countries with cheaper labour rates.

Balancing these challenges places wide-ranging responsibilities on executives. Furthermore, heightened disclosure of executive pay has required remuneration committees to ensure that their executives’ wage packages are not out of line with those in their peer group.

The wage gap – broadly defined as the difference between executive pay and earnings of those working at the lowest levels of a company – has become a controversial issue in South Africa. Socio-economic tensions and widespread labour unrest are partially attributable to perceived pay disparities and disclosures of executive pay levels.

For most of the past decade executive pay hikes have exceeded those of lower level employees. However, despite the global upward pressure on executive pay levels, the wage differential has narrowed in recent years amid higher annual increases awarded to employees represented by organised labour.

This has certainly been the case at our South Deep mine in South Africa where we struck an agreement in April 2015 with workers in the bargaining units that will result in an average salary increase of over 10% in each of the next three years. At entry levels the annual increase was as high as 20.9%.

This has and will continue to contribute to significantly closing the wage gap between our CEO and workers at entry level.

Union engagement
In South Africa and Ghana, unions are a vital stakeholder at our operations with 93% and 96% of employees respectively holding union membership in those countries. In Peru 10% of our workforce are represented by a trade union, but this is exclusively at one of our major contractors. While we value and will continue to drive direct engagement with employees, we recognise the important role that unions play in representing the interests of the workforce

Ghana
Over the past three years Ghana has made considerable progress in strengthening the relationship with unions. This has been helped by a salary benchmarking and adjustment exercise that now places Gold Fields Ghana’s salaries among the most competitive in the industry.

During the year, declining production at our Damang operation necessitated a review of employee numbers. Constructive engagement with the unions resulted in a Memorandum of Understanding being signed for Damang to retrench 401 employees by the end of March 2016, the majority of whom will be employed by the contractor.

In early 2016, we also completed wage negotiations with the Ghana Mineworkers Union for 2015. Wage negotiations for 2016 could take place through centralised bargaining via the Ghana Chamber of Mines.

Details are discussed in the Remunerations section on page 132.

South Africa
In South Africa, the relationship with the unions has historically been a difficult one, and in the context of repeated changes in South Deep management it has been a challenge to cement a sustained positive relationship. However, a great deal of work has been done engaging with the unions over the past year, and the relationship has improved considerably. This is evidenced by South Deep’s signing a ground-breaking three-year wage deal with unions that allowed it to avoid industrial action seen at other mining companies during the year. The details of the agreement, which seeks to accommodate the different skills set required at South Deep compared with other gold mines in South Africa, are discussed in detail under Remuneration on page 132.

In 2016, the internal communications strategy will be augmented with policies and structures that include the introduction of a standardised, Group-wide cascading model. Line managers will receive targeted communication training, and a central automated communication platform will be rolled out across the Group as the central communication hub.