Incentive system in PKO Bank Polski SA

PKO Bank Polski SA has a remuneration and incentive system, in which the level of variable component of the salary is determined by the degree of achievement of the targets set. The procedure for target setting and performance measures used depends on the type of position and classification to one of the three employee groups: management, widely understood sales and processing-support. The system is based mainly on the Management by Objectives (MbO) model. As the individual remuneration is linked with the level and quality of performance of the tasks specified, the variable component of the remuneration is strengthened and represents an additional salary incentive. The system focuses on setting objectives which are aligned with the direction of development of the entire organisation; these tasks are then cascaded to particular organisational units and individual employees.

Four pillars of the remuneration and incentive system:

I Pillar, the so-called Management by Objectives (MbO) covers managers for which specific individual objectives may be assigned. The MbO consists of granting bonus which depends on the quality and degree of completion of the tasks assigned and is the system which focuses on: determining performance indicators, assessing performance against the targets assigned, granting bonuses depending on performance.

II Pillar, the so-called Individual Bonus System (IBS), is the system of bonuses which depends on the degree of completion of specific tasks in the areas of sales and effectiveness. The system covers those employees who are completing business tasks, mainly in retail branches and corporate centres, where individual or team, measurable targets can be defined or where there is a strong causal link between activities undertaken by individual employees and the level of achievement of the economic and financial results of the Bank.

III Pillar, the so-called Sales Bonus System, is aimed to positions in retail branches, which sell the banking products.

IV Pillar, the so-called Support Bonus System (SBS), includes other employees not covered by the system MbO, IBS and Sales Bonus System. In the SBS pillar there is a possibility to define targets for the whole unit or for the separate team (for an internal organisational unit).

Regardless of the bonus system there is a system of rewarding employees, under which the Bank creates a prize fund for the purpose of:

• individual discretionary awards to employees of the Bank, deriving outstanding results in their work or for achievements, which led to results important for the Bank, and 
• awards in competitions relating to performance and other competitions organised by the Bank.

The PKO Bank Polski SA Group entities have incentive and remuneration systems in which the degree of achievement of the individual targets set is determined by the level of variable component of the salary. The procedure for target setting and belonging to the particular system depends on performed tasks including sales tasks and the size of the company. Managers of the most Group entities and senior executive of the selected Group entities is covered by the MbOsystem..