Workforce structure

The slight increase in the number of employees in 2014 is largely attributable to the integration of AZ Electronic Materials.

Average Head Count (HC) is calculated based on the End HC of the last 5 quarters.

In 2013 and 2014, we assigned all positions to a standardized job profile, thereby substantially increasing transparency. In this way, positions previously not assigned to specific functional areas were classified according to function.

Supervised workers such as temps are currently not logged in our employee data system. We are investigating possibilities to record information on supervised workers throughout the company.

In 2014, women accounted for 39% of employees working full-time (2013: 39%), with women representing 90% of employees working part-time (2013: 92%). In 2014, 10% of our part-time employees were men (8% in 2013).

The table contains unadjusted turnover rates, calculated as follows: number of separations*100/number of employees as of Dec. 31.

The unadjusted turnover rate excludes employees who leave due to parental leave or a long-term illness, as well as employees who are transitioning to the non-working phase of partial retirement.

We record the new employee turnover rate over the course of 18 months because 12 months is too short a time to become truly familiar with a new position, especially when it comes to management positions.

The turnover rate is calculated as follows: (Number of new hires within the preceding 18 months who left the company within this period)/(average number of employees in the preceding 18 months)*100.

The figures exclude employees who leave due to parental leave or a long-term illness, as well as employees who are transitioning to the non-working phase of partial retirement.

The Global Rewards Policy applies to all our subsidiaries worldwide and guarantees a systematic compensation structure. Base pay is oriented to the median base pay, and short-term variable compensation is based on the third quartile of the relevant reference market. The overall compensation package thus exceeds the market median.

Occupational health and safety

Our employees have been included in the calculation of the indicators as well as supervised employees of external companies. Independent contractors have not been taken into account.

Using the LTIR, we record work-related accidents of our employees that involve at least one day of missed work. A work-related accident is an injury that results from the type of work, in the course of doing said work, and that has no internal cause (cumulative trauma). Work-related accidents are considered relevant if they occur on the premises, on business trips, during a transport accident, in the course of external influences (e.g. natural disasters), or due to criminal acts involving personal injury. Commuting accidents and accidents during company sporting activities are not included. First-aid incidents are generally not included in the LTIR since these usually do not result in more than one day of missed work.

We have set ourselves the goal of reducing the LTIR to 2.5 by 2015. In 2014, by means of targeted accident prevention measures we again outperformed this goal as we did in the previous three years, achieving an LTIR of 1.8.

For our German sites Darmstadt, Grafing, and Gernsheim (24% of the employees of the company) we report work-related illnesses if these have been diagnosed and verified by a physician. In the reporting period, one case of work-induced illness was recorded. We do not keep track of the number of work-related illnesses throughout the entire company.

We have defined the LTIR as the key indicator for the company. Therefore, we do not publish any other indicators such as workplace accidents, lost days or days of absence. The LTIR is not broken down by gender as this differentiation is not relevant to our strategic planning.

Continuing education and training

We record and report the costs of vocational training and continuing education for our employees. We are not currently tracking the average number of continuing education hours consolidated at Group level, but we are working on a technical solution to track all training hours globally.

Regular feedback and employee performance evaluations are essential to a systematic development process. Our globally uniform Performance and Talent Management Process requires annual feedback meetings and performance assessments for all employees rated Global Grade 10 and up in our position grading system. Apart from evaluating employee performance, this helps us to identify individual development opportunities.

When it comes to applying this process, our individual subsidiaries can decide for themselves whether to include employees rated below Global Grade 10. In Germany, all permanent employees have been participating in the Performance and Talent Management Process since 2013. In 2014, around 31,395 employees worldwide (including non-exempt employees in Germany) were involved in the process (2013: approx. 27,600 employees). The Performance and Talent Management Process is coordinated via the HR Suite IT system.

As of 2013, we changed the table to reflect only the performance evaluations that are documented in the HR Suite IT system. For these evaluations, we can provide details on the Global Grade as well as gender of the participating employees.

For all other employees not participating electronically in this globally uniform process, other methods of performance assessment are available. In 2014, 97% of our employees took part in a performance and development evaluation, the same percentage as in 2013.

Diversity and inclusion

Insurance and retirement benefits for employees

We offer a company pension in numerous countries along with various programs for supplemental company pensions and survivor's benefits. Around two-thirds of our employees are enrolled in such a program.

Depending on the legal, economic and fiscal circumstances prevailing in each country, different retirement benefit systems are provided for the employees of the Merck KGaA, Darmstadt, Germany. Generally these systems are based on the years of service and salaries of the employees. Pension obligations of the company include both defined benefit and defined contribution plans and comprise both obligations from current pensions and accrued benefits for pensions payable in the future. Defined benefit plans are funded and unfunded. Provisions also contain other post-employment benefits, such as accrued future health care costs for retirees in the United States (see our Annual Report 2014, Note on Provisions for pensions and other post-employment benefits).

Reconciling the demands of a career and family