SIGNATURE OF AN AGREEMENT ON RETAINING AND MOTIVATING SENIORS

SIGNATURE OF AN AGREEMENT ON RETAINING AND MOTIVATING SENIORS

On 12 January 2010, PSA Peugeot Citroën senior management and five French unions signed an agreement on retaining and motivating "seniors“, defined as employees with at least 30 years of professional experience.

The agreement is designed to ensure that employees and job seekers at both ends of the age spectrum are included in the workplace. The signatories agree that the issue of retaining seniors is related to that of age diversity within the Group’s teams. This entails bringing in young people, even during a recession, and taking a comprehensive approach to job and skills management, without according special treatment to any one category.

With this agreement, PSA Peugeot Citroën is also anticipating demographic trends, as employees over 50 now account for 30% of its workforce.

The agreement addresses seven major challenges:

• Preparing for generational renewal and fostering the transfer of knowledge and skills.

Despite the recession, an ambitious work-study programme has been launched through which some 7,300 young people will be brought into the Group by the summer of 2010, representing a wide range of skill-sets and qualification levels. To achieve this goal, the Group will use apprenticeship programmes, skills-acquisition contracts, internship agreements, VIE co-op placements and other types of arrangements.

Senior employees will be particularly involved in mentoring and sponsoring the students and interns, to foster the transmission of skills and facilitate orientation. Specific measures will be taken to encourage mentoring, including a day of specific training each year, the inclusion of mentoring as a criterion in skills assessment and the development of internal consulting and training functions.

• Helping retain seniors in the workforce by anticipating career changes.

To remain employable, team members need to constantly anticipate and cultivate their ability to change and move forward professionally. These attitudes can be nurtured all along a career path by accepting regular mobility assignments, changing positions and skill-sets and undergoing training.

For this reason, the agreement calls for career orientation reviews at least every ten years as part of the annual appraisal process. By 2012, all employees age 50 and older will have had a career orientation review.

Other measures are planned to promote access for seniors to job training (with a goal of 50% of senior employees receiving training each year), certification in metalworking and training leave (with a target of 10% of employees age 55 and over).

• Fostering age diversity within teams. PSA Peugeot Citroën will continue to recruit qualified individuals of all ages.

The Group’s hiring and mobility management processes are designed to guarantee equal opportunity and to consider only criteria based on the aptitudes and skills required by the position. At the same time, campaigns to inform and raise awareness among management will be developed in-house to help change mentalities and attitudes towards older employees and challenge preconceived ideas.

• Maintaining motivating salary packages and career advancement opportunities.

A regular analysis of compensation across the Group has shown that there are no significant changes in salary packages or career advancement opportunities in the last years of employment. The agreement calls for maintaining the ratios for individual salary increases and promotions by ten- year age group.

• Adapting working conditions to a larger number of older employees.

In the Group’s production facilities, the percentage of workstations rated "light“ by ergonomists in terms of physical requirements will rise to 60% by 2012. A similar process to scale back the cognitive and mental load will also be initiated.

As part of the Lean Manufacturing approach, older employees will be involved in projects to align workstations and their environment to age-related changes in capabilities. A collective study of the related data will be produced and shared with the unions.

• Developing an active occupational health policy.

The occupational health departments will enhance their monitoring of seniors and the Group will distribute a brochure of health tips. The Group also commits to extending good practices for maintaining cognitive and physical abilities, including training on safe movement and posture, preventive physical therapy and exercise at the workplace.

• Managing end-of-career schedules and the transition to retirement.

Although early retirement schemes are no longer under consideration, flexible end-of-career schedules or voluntary part-time work in the last five years of employment may respond to certain seniors’ expectations. The agreement calls for the possibility of using the time savings account in these cases, as well as for long-term training leave.

With its numerous measures backed by quantitative targets, this three-year agreement adds a new chapter to the Group’s overall jobs and skills management policy, which covers all job categories and age groups.

It also fits in with the Group’s socially responsible commitments and ambition to promote responsible growth.