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The HR Policy Framework introduced in 2006 describes the key HR policies, values and behaviours and management principles that provide the structure within which the business units plan and deliver successful results.

Smith & Nephew has a policy of non-discrimination and aims to provide an open, environment based on constructive relationships. Smith & Nephew welcomes people with disabilities and makes positive efforts to retain any employee who has a disability. The Group is committed to engaging with employees through the regular and timely dissemination of Group information and encouraging their feedback and ideas.  An employee global opinion survey is used every two years as a catalyst for improvements.

The 2006 Global Opinion Survey was completed towards the end of the year and presentations to employees were completed in early January 2007.  It indicated continued high levels of employee engagement with the values and direction of the Group.  The Group’s employees also told management that it needs to improve ways of working, speed of decision making and strengthen the link between performance and reward.  This survey used improved methodology providing a wider scope of measurements and the facility to be able to analyse down to individual departments provided they are of sufficient size.  For the first time, it was conducted online only and the Group had a high participation rate of 86%.  Details of the results and planned improvement actions will be covered in the 2007 Sustainability Report.

In 2006 a number of measures of employee engagement continued to be collected.  These measurements are a useful monitoring tool and alert mechanism for action as well as giving trend indicators of improved performance.  Three years data is now available and is building into a useful database.

The internal appointments measure is an indicator of how well the Group believes it is developing its employees and the success of the Group’s internal recruitment policy. In 2006 an average of 28.2% (2005 – 23.1%) of vacancies across all parts of the business were filled by internal applicants with over 37% (2005 – 35%) of vacancies filled in each of the Group’s business units. The target for all employees, realistic in a growth environment, is 40%. During 2006 the Group has started to specifically measure the percentage of management positions filled internally: advanced wound management was 80%; endoscopy was 60%; and the Research Centre was 100%. The target for management positions is 70%. In 2007 these figures will be available for the whole of the Group. The Group has a policy of open advertising and providing opportunities for existing employees wherever possible, while recognising the need to bring in new ideas and approaches that external recruitment brings.

For the last three years the Group measured both general voluntary labour turnover and turnover relating specifically to employees who have been with the business less than two years.  The latter measure is an indication of how well the Group recruits and then retains its employees so that they can make a contribution to the business. 

The average turnover for employees leaving the Group within two years of joining was 6.2% (2005 – 4.3%) ranging from 2.1% – 15.2% for the year. The average labour turnover figures are within the expected level for businesses in the Group’s sector. Average labour turnover in the Group’s business units was 2.8%.

The Group is committed to providing training and information so that all employees can make the best contribution possible.  Learning and development programmes are used to attract, retain and develop employees.  These programmes are linked to formal performance appraisal and development planning.  2005 saw the development and implementation of a range of training programmes under the banner of Management Excellence.  These continue to provide the key management skills required to be successful managers and leaders, covering the requirements of both new and experienced individuals.  Further programmes have been added in 2006 and the Group has continued to invest in on-line learning resources to further enable access to training for all employees.

The Group continues to develop its current and future leaders to improve the performance of the business.  The senior management supports a set of group-wide leadership competencies and management development is a regular item on their meeting agenda.  Performance evaluation, coaching and attendance at leadership programmes are utilised.

2005 was the first full year of a Group “leadership excellence programme”, a three-day purpose designed residential course facilitated by a business school coach and has been continued in 2006.  The programme focuses on leadership style and interaction and to date, over 100 senior managers have attended the programme which continues in 2007.

Smith & Nephew provides healthy and safe working conditions for all its employees.  Health and safety is managed as an integral part of the business and employee involvement is recognised as a key part of the process.

The Group does not use any form of forced, compulsory or child labour.  The Group supports the Universal Declaration of Human Rights of the United Nations and respects human rights, the dignity and privacy of the individual, the right of employees to freedom of association, freedom of expression and the right to be heard.

The Group works with national and local government and other organisations to meet its legal and civic obligations, manage its impact on the environment, and contribute to the development of laws and regulations that affect its business.  Smith & Nephew values community involvement and is an active member of its local communities and supports employees who undertake community work.

The Group’s principles for charitable giving are based on criteria relevant to its business, with priority given to medical education.  Individual company sites support their local communities in a range of charitable causes giving donations of money, gifts in kind and employee time. 

The Group realises that its technologies and products do not reach everyone.  Project Apollo is a charitable and humanitarian service programme of the orthopaedics business.  This links up with physicians and non-profit groups engaged in medical philanthropy who receive donations of Smith & Nephew products with, sponsorship and help from the Group’s employees.  Teamed with these individuals and organisations, Smith & Nephew considers that this is a way of increasing the impact of charitable giving and the work it undertakes.

The Smith & Nephew Foundation is an independent charitable trust funded by Smith & Nephew advanced wound management.  It makes awards to individuals in the nursing professions for postgraduate research to improve clinical practice in nursing and midwifery.  The Foundation is the largest single charitable awarding body to the nursing professions in the UK.

More examples of the programmes supported by Smith & Nephew are given in the Sustainability Report.

In 2006, direct donations to charitable and community activities totalled $1,375,000 of which $279,000 was given to the Smith & Nephew Foundation.  Smith & Nephew made no political contributions in 2006.

The Group is committed to providing innovative, cost-effective healthcare solutions benefiting healthcare professionals and their patients through improved treatment, ease and speed of product use and reduced healthcare costs.  It will continue to provide education and training support for healthcare professionals and maintain investment in research and development.

In 2006 Smith & Nephew had one of the strongest new product launch programmes in its history particularly in reconstruction where two new hips and two new knees were launched.  In addition, Smith & Nephew’s BIRMINGHAM HIP Resurfacing product was approved by the FDA in the US bringing the benefits of this product to the American market.

The Group’s products are designed to be safe and reliable for their intended use and comply with or exceed all legal and regulatory requirements, including those concerning packaging, labelling and user instructions.  The aim is to anticipate future standards and requirements promoting health and safety of its customers and patients.

Smith & Nephew is committed to establishing mutually beneficial relationships with its suppliers, customers and business partners.  The Group works only with partners whom it believes adhere to business principles and health, safety, social and environmental standards consistent with its own.  Additional work has been done in 2006 to improve the monitoring of supplier standards for service quality and activities relevant to their corporate responsibility.