High Performance Culture Driving Performance & Growth

Ann SherryGroup Executive People & Performance

1 August 2002

12

Westpac Investor U

pdate 2002Superior Returns

Our People as our Competitive Advantage

Customer Experience & Satisfaction

High Performance Culture

Consistent People Practices

High Employee Commitment

Performance & Reward linkages

Staff Development & Training

Two Way Communication &

Feedback

Talent Management &Career Planning

Leadership Development

Right People, Right Roles

13

Westpac Investor U

pdate 2002Why a High Performance Culture?

Where the value is generated

Kaplan, S. & Norton, D.‘The Strategy-Focused Organisation’Harvard Business School Press, 2001

0%

10%

20%

30%

40%

50%

60%

70%

80%

0%

10%

20%

30%

40%

50%

60%

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10%

20%

30%

40%50%

60%

70%80%

90%

1962 1992 2000

32%

85-90%

38%

10-15%

62%68%

Tangible Assets

Intangible Assets

Tangible Assets

Intangible Assets

Tangible Assets

Intangible Assets

14

Westpac Investor U

pdate 2002

Service

Helpfulness

Linking Staff, Customer & Business Performance

Compelling place to work

Compelling place for financial services

Compelling place to invest

Attitude about

the job

Attitude about the company

Employee behaviour

Employee retention

Return on assets

Operating margin

Revenue growth

Products Value

Customer recommendations

Customer impression

Customerretention

5 unit increase in employee attitude

1.3 unit increase in customer impression

0.5% increase in revenue growth

drives drives

15

Westpac Investor U

pdate 2002Our high performance culture and customer experience will be determined by our staff

• Their motivation and competence

• How well they are led and managed

• How good they feel about themselves and the company

• How they are supported through products and processes

• How they are rewarded for value creation

16

Westpac Investor U

pdate 2002This will lead to

• Quality people operating at the edge of their potential;

• A superior customer experience; and

• Westpac differentiating itself from the competition

17

Westpac Investor U

pdate 2002The key levers to deliver are:

• Leadership

• Reward

• Building our workforce for the future

18

Westpac Investor U

pdate 2002Leadership

Copyright 1987 Human Synergistics, Inc.

In association with:

10

Passive Defensive Styles

Constructive Styles

Aggressive Defensive Styles

High Performance CultureWestpac Executive Team

19

Westpac Investor U

pdate 2002Reward

Value Focus

Strategy

Resource /CapitalAllocation

PerformanceMeasurement

Compensation

InvestorCommunications

Value management is a disciplined, coherent approach to creating sustainable long-term shareholder value

Strategic & financial assessment linked

Key Drivers of Value identified

Setting targets aligned to Strategy and Business Plans

Communicating performance and plans to investors with a focus on Key Value Drivers

Allocation to highest value creating strategies/initiatives

Capital management

Rewarding management on the basis of value creation

20

Westpac Investor U

pdate 2002

• Value Management Framework is the link between performance and remuneration at senior levels

• Performance Pays! is the link between performance and remuneration at lower levels

• Performance linked to remuneration outcomes for most of the organisation - the % varies by level

• All is supported by share ownership - 80% of staff

Reward

21

Westpac Investor U

pdate 2002Building our workforce for the future

05

101520253035404550

< 25 26-35 36-45 46-55 56+

Aus' labour force

Westpac

Our workforce is younger than the Australian labour force

22

Westpac Investor U

pdate 2002

14.4

22.725.5

32.136.0

0

5

10

15

20

25

30

35

40

1994 1996 1998 2000 2002

%

Women In Management

23

Westpac Investor U

pdate 2002Building understanding through Learning Maps

24

Westpac Investor U

pdate 2002Rigorous people tools and processes

Aspiration

Targets

Performance Feedback

HIGH PERFORMANCE

CULTURE

Consequence Management

Accountability

Annual planning process

Objective Setting

Performance Contracts

Executive Resource Review

Succession Planning

360° Feedback

Performance Review

ForcedRanking

Poor PerformanceManagement

RemunerationReview

People ManagerAudit

Staff PerspectiveSurvey

BSR - BoardStrategy Review

WorkforcePlanning

DevelopmentPlanning

25

Westpac Investor U

pdate 2002External recognition of our efforts

• 2002 United Nations Triple Bottom Line award -winner

• No 1. listed company on Good Reputation in 2001

• EOWA Citation - top 50 organisations in Australia for advancing women

• Corporate Work and Family Awards - silver medal

• Prime Ministers Award 2001 - nomination for disability initiatives

26

Westpac Investor U

pdate 2002What our results are showing - staff

5.0

5.5

6.0

6.5

7.0

7.5

8.0

8.5

9.0

Feb

-01

Mar

-01

Apr -

01M

ay-0

1Ju

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1Ju

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Aug

-01

Sep

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Jan

-02

Feb

-02

Mar

-02

Apr -

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ay-0

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n-0

2

Staff Morale

Industry Norms

75th Percentile

50th Percentile

Morale above the 75th percentile

27

Westpac Investor U

pdate 2002Our people strategies are creating a sustainable competitive advantage

• A determined and focussed people strategy

• Our leadership is well positioned

• Our reward strategies are changing behaviours

Staff à Customer à Business Results

28

Westpac Investor U

pdate 2002