Ongoing Commitments.

Partnership Agreement with Unite

Our working Partnership with our union Unite remains solid.

A critical review of our existing arrangements for collective consultation was carried out in 2010, to ensure it continues to fit the needs of the business going forward. It was agreed that the current structure works.

A Partnership Consultation Committee is held monthly for the purpose of informing and consulting with Unite on high level issues. We continue to consult regularly with Unite on all employee matters, including reward and benefits, equalities, health and safety, CSR and the environment and Unite sit on the relevant committees.

In particular, areas of collaboration have included:

• Successful events were held at our main sites to help Unite recruit good quality representatives.
• In October 2010, we completed the TUPE transfer of 215 employees to IBM and Manpower. Collective consultation with Unite and our Management Consultative Forum on the TUPE transfer and the business case for the retained organisation was successfully completed and the transition went smoothly.

Management Consultative Forum (MCF)

The Management Consultative Forum (MCF) collectively represents Senior and Middle management across the business and continues to be a key way in which to check and balance major decisions across the Group.

Employee Learning and Development

In 2010 all managers with people management responsibilities had a mandatory weighting of 30% added to their objectives, focusing on improving people and customer service. This has increased the focus on managers' responsibility for people development across the business.

Our Management Development function was outsourced during 2010 as part of our review of infrastructure services. Each business now has Learning and Development Consultants who contract in required services from preferred providers.

Providing a safe working environment

We continue to operate a business where no one has died as a result of operating our business.

Our People – Health and Safety Statistics

*As defined by RIDDOR Regulations 1995.

**Reportable incident rate per 100,000 employees.

Legal & General continues to monitor health and safety performance via local committees, which report into the Group Health and Safety Committee. The local Health and Safety Committees meet regularly and represent a cross section of departments and also encourage staff to participate and raise awareness across the business. The Health and Safety committees also include representation from Unite.

Well-being Agenda

As an office based business, mental rather than physically based reasons for absenteeism form a large part of our agenda.

In locations with the highest record of stress (Cardiff and Hove where we have a high percentage of call centre staff) we are piloting a well-being programme in partnership with an occupational health service provider. The objectives are to develop proactive and preventative initiatives to drive down both absenteeism and presenteeism and associated costs, with the aim of creating a healthier workforce.

This pilot has delivered access to online support to help manage stress with referral to a Cognitive Behavioural Therapy Tool for those with mild depression, manager training to help managers identify early signs of stress in employees and to act accordingly as well as self-diagnosis health assessment tools. The business and Group Health and Safety Committee are monitoring results from the pilot.

A number of initiatives have been organised across the business by the local Health and Safety Committees in 2010, promoting healthy and attractive lifestyles. Examples include NHS PCT support for employees to quit smoking, Live Less Stressfully handouts, dietary advice and information on local fitness centres.

We continue to work with the British Heart Foundation on the issue of workplace health including information packs being issued to employers promoting the benefits of healthy exercise, healthy eating and mental health, along with road shows at our offices.

During 2010 a new process for identifying and recording discomfort associated with use of display screen equipment (DSE) has been launched along with aligning ergonomic support and recommendations. Legal & General has also continued to support employees at work with a number of different external agencies including Access to Work and the Royal National Institute for the Deaf (RNID).

A robust auditing programme continues at all our office locations. Our externally verified OHSAS 18001:2007 safety management system was audited and re-certified for its scope at Legal & General’s Kingswood and Cardiff locations.

Health and safety information, which is available to employees on the intranet, has been reviewed and presented in a new format, which will be launched in 2011. The content of our health and training programme has also been reviewed, and revised training modules are to be rolled out in 2011.

Pay for Performance

In response to the employee survey where employees told us we failed to manage poor performers properly, in early 2010 we launched a Performance Improvement Plan. Under the plan it is clearer for employees to understand what is required to improve performance.

Socially Motivated Objectives

We have introduced non-financial objectives to reinforce some of the positive impacts that our business has on society as a result of running our business, aside from delivering financial results.

Our products and services are there to add value to people’s lives, but often we lose sight of this when it comes to individuals' objectives. In addition to our commercial considerations and targets, we need to ensure that we set objectives that seek to drive and deliver our social responsibility in the products we design and sell the ongoing product management and the services we deliver to our customers.

As we move down the levels of the organisation, this translates into what we deliver for our customers, both externally and internally. This is relevant for all areas of the business, whether it be product design, sales, service or support areas. Some examples include:

• Remuneration contracts are not built solely on volume but also on negative indicators such as persistency and the cost of complaints.
• Positive audits of advice standards, robust sales documentation, mystery shopping.
• Number of pensions that we have paid into.
• Number of customers that were paid critical illness benefits.

Leadership at Legal & General

In 2010 we have invested further in building a Talent Management programme for our Leadership Group to identify high-potential people across the business. Those in the top 49 roles has seen significant progress including active career planning and development of middle and junior managers will be supported via the delivery of a leadership ′core curriculum.

Performance Management Structure

To make it easier for employees to understand how their contribution fits into the strategic objectives and also to set expectations on performance we have changed our Performance Management Framework in 2010:

• A performance improvement plan was introduced in February 2010 to provide employees with a low performance rating with the means to improve.
• For the first time performance ratings have been awarded to all employees as part of the formal performance review framework. We have emphasised the relationship between performance and pay and established greater bonus differential for good performance.
• Alignment of pay and performance cycles (previously staff grades and management grade performance and pay reviews took place at different times of year) so that the link between companies performance and bonus structure is clearer.

Leadership Behaviours

We’ve developed six behaviours that will help us focus our efforts and build on the good progress we′re making in terms of financial performance. These behaviours will form a key part of the performance management review for all managers at the end of 2011. This review will focus on ‘what’ has been achieved in terms of performance against objectives and ‘how’ this has been delivered.

The behaviours are:

• Set higher expectations.
• Take a wider interest.
• Lead like you mean it.
• Connect with your customers.
• Take informed risks. Analyse. Decide. Act.
• Take ownership.

Leadership behaviours were launched to the management population across the business in January 2011. They will form part of the annual performance management process in 2011 for the first time. We are currently refining our performance management process to integrate these behaviours.

Equality and Diversity

We want to understand whether our employee profile mirrors the customers we are responsible for and the medical conditions that they claim for in our health related products such as life insurance but also whether we reflect the communities in which we trade.

Our Equalities Committee has driven some important changes in 2010 on the Diversity Agenda:

• The employee survey results were analysed by age, ethnicity and gender. In general there was a marked improvement compared to previous years. The equalities questions were analysed and there has been a positive movement in responses to these questions, we have also seen improvements to the responses to questions about bullying and harassment. Unite reps have an active role on the Equalities Committee and survey results are shared with them.
• Members of the Equalities Committee (including Unite reps) have been made champions of a ‘protected characteristic’. We have champions for Disability, Age, Gender, Ethnicity, Religion and Belief, Gay, Lesbian and Bi-sexual.
• To benchmark our performance we have recently entered the Opportunity Now (BITC) diversity benchmarking survey and look forward to receiving the results for 2011.
• We launched a Reasonable Adjustment policy in summer of 2010, not only aimed at employees with a disability, but so that employees with any health/medical condition feel comfortable making a request for a reasonable adjustment. At the same time as the policy was launched, our Group Health and Safety Department issued a revised process for DSE and workstation assessments.
• For the first time in our employee survey we asked a question about disability and asked employees with a disability whether they were aware of the Reasonable Adjustment policy.
• We have made the Employers Forum on Disability Communication Guide available to all employees. The guide covers communicating with and meeting a person with a disability in the workplace.

Family-Friendly Workplace Agenda

A large proportion of our workforces are working families. We realise that as an employer we are asking people to work harder and that in exchange we need to put something back in terms of flexibility.

We participated in the Top Employers for Working Families benchmarking survey, supported by the Institute of Employment Studies, and were short-listed for an award in the Financial Services category. We were awarded a place in the Top 30 Employers for working families/Top 25 Employers for Working Families in the Finance sector. We have identified some family-friendly objectives for 2011.

We recommunicated our flexible working policy to highlight its availability.

Improved Financial Awareness for Employees

Recent analysis of our Employee Assistance helpline shows that employees have concerns over finances. We realise that during times of recession our employees are under the same financial pressures as our customers and as society at large. In response we have:

• Developed education modules for employees accessible by our e-learning system. There are interactive modules giving basic financial awareness based upon the Cash Family work we have done for our clients.
• Delivered pensions surgeries in our main locations to give both defined benefits and define contribution members the opportunity to have one to one sessions. We are targeting employees not in any pension arrangement (approximately 180) to join the pension scheme.
• Given employees the chance to improve the next generation’s attitudes to money through our ‘Money Money Money’ programme in schools.