Significant risks related to the employee area

[GRI 102-15] A significant risk factor is the employee turnover ratio and the prospective loss of competences of importance to the Bank’s development. Shortages of employees having specific competences in the labour market and competition for acquiring specialized employees may cause a periodic risk of making decisions to recruit employees and compensate them at higher rates than those prevailing in the organization. As a result, there may appear compensation disparities between similar positions. The Bank takes actions to prevent that undesirable phenomenon, especially by setting recommended recruitment compensation levels and performing periodic compensation reviews.

Another risk associated with the compensation policy may be the applied motivation mechanisms inclining employees to work in a task-based manner which may potentially cause a conflict of interest. The risk of employees acting too one-sidedly as a result of incentive mechanisms aimed at achieving higher sales, and therefore bonuses, is mitigated by taking into account quality criteria when evaluating work.

In addition, the consistent implementation of the adopted Compensation Policy allows for minimizing risks by, among others, maintenance of the right ratio of fixed to variable compensation, application of a formal assessment system including criteria adjusted to the nature and special character of work and a long-term perspective for assessing business results, the mechanism of managing the variable compensation pool dependent on the Bank’s financial standing.