Talent Management

To ensure the sustainability of its workforce and to drive a high-performing culture, Baxter focuses on the following areas:

• Leadership Expectations
• Individual and Corporate Goal Alignment
• Succession Planning
• Talent Assessment and Development

Leadership Expectations

The Baxter Leadership Expectations (see graphic), which provide the foundation for the company's culture, clarify what the company expects of all employees. This framework includes the following:

• Shared Values - the beliefs and standards employees bring to their work;
• Competencies - the skills and knowledge necessary to achieve goals; and
• Personal Attributes - the characteristics and behaviors that enable employees to succeed at Baxter.

The company integrates these expectations into recruiting, hiring, orientation, performance management, development, assessment and training. They provide clarity about leadership at Baxter, which is expected of all employees regardless of role or level in the organization.

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Individual and Corporate Goal Alignment

At Baxter, employees and teams align individual and organizational objectives to ensure that everyone is working to achieve company goals. Individuals and teams companywide establish work plans and set specific, measurable targets to help Baxter achieve its goals.

Baxter's global goals focus on six categories:

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Succession Planning

To ensure organizational effectiveness, required workforce capabilities and a robust leadership pipeline, Baxter continually assesses its current and future talent needs. At least annually, the chairman/chief executive officer reviews management development and succession planning with the company's Board of Directors. The Board oversees the senior management development and succession planning process to ensure it is rigorous and effective.

The Corporate Governance Committee of the Board focuses on succession planning for the CEO and the CEO conducts a review of the Operations Committee (i.e. senior management) annually with the Board.

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Talent Assessment and Development

Baxter's development philosophy emphasizes a combination of work experiences, feedback, relationships and training, with an emphasis on work experiences as illustrated in the graphic below.

Baxter believes that development should be:

• A shared responsibility, owned by each employee, his or her manager and Baxter;
• A process and not an event;
• Focused on goals important to both the employee and Baxter;
• Focused on short-term actions as well as long-term career goals; and
• Achieved through work experiences, learning from feedback and relationships, and training.

To assist employees, Baxter provides a practical guide called "Your Career Development at Baxter." Managers are trained to use this guide - available in 15 languages - for career planning conversations with their employees.

Baxter's learning management system and Performance and Career Intranet site provide comprehensive information about performance expectations and goals, development, training and jobs at Baxter. Online learning is available to all employees, with courses offered in up to 20 languages. More than 650 e-Learning programs cover topics such as Baxter processes, systems and products, quality, leadership and career development, PC skills, environment, health and safety, pharmacovigilance, project management and communication. As part of their professional development and to meet regulatory requirements, employees completed more than 105,000 e-Learning courses in 2010. Baxter's Global Inclusion Council also introduced a mandatory inclusion awareness course in 2010 to help employees better understand their role in building an inclusive culture.

Also see Ethics and Compliance for information on legal and regulatory compliance training.

In addition to offering talent development training, Baxter is continually enhancing its employee performance assessment process. Managers review employee performance annually against their established goals as well as the Baxter Leadership Expectations, and individual performance contributes to differentiated rewards (see Compensation and Benefits). Mid-year reviews also are encouraged. In addition to these formal reviews, the company encourages managers to provide employees with ongoing coaching and feedback. As part of the annual performance review process, both employee and manager identify strengths and development areas and conduct ongoing discussions throughout the year.

Baxter also provides managers and supervisors with the tools and techniques to be effective leaders. The company's Management Essentials training curriculum helps managers and supervisors develop and refine skills related to accountability, career and development planning, change management, coaching and feedback, communication, critical thinking and problem solving, facilitation, interviewing, and managing conflict and performance. During 2010, 2,822 managers completed at least one Management Essentials course.

As managers progress from supervising individuals to leading teams, they face new challenges and demands. In 2010, Baxter held 22 sessions of Leading for Results, a program for experienced managers and directors introduced in 2009. It consists of live workshops, online courses and webinars to address aspects of the Baxter Leadership Expectations, including business acumen, motivating and developing others, critical thinking and problem solving, and communication. During 2010, 321 employees completed at least one Leading for Results course.

To help employees develop mentoring relationships, share experiences and transfer career-related knowledge, in 2009, Baxter introduced a global online employee mentoring program, which helps connect mentors and mentees based on their customized profiles. Participants also receive extra resources, tools and guidance to support the mentoring relationships. As of year-end 2010, over 1,000 employees have enrolled.