Associate Retention

1. Associate Retention Shearer’s - North Coast ’99 winners, 9 years in a row!

2. Introduction – The Shearer’s Story External challenges – demographics Retention as a fully integrated process Strategy > Recruiting & Selection > On-Boarding, Training, and Development > Compensation & Benefits > Communication cycle Today’s Agenda

3. The Shearer’s Story“The growth of a quality-oriented and values centric organization through a traditional, entrepreneurial spirit”

4. History of growth, culture of success, identification with a fun brand! Flexible work force - people are somewhat accustomed to change Senior leadership has a reputation of caring about people Current Situation – Best of Shearer’s Culture

5. Shearer’s is the #1 Regional Potato Chip Brand in Northeast Ohio • Shearer’s remains the #1 regional brand in NE Ohio with a 10% market share (#2 Overall) • Shearer’s is 3.7% ahead of the next regional competitor (Snyder’s of Berlin). • Shearer's 11.5 oz Classic Home-style is the #1 regional potato chip product and ranks #3 of all potato chips. • Shearer’s average unit sales price is $2.17 a premium of $.31/lb over Lays.

6. Shearer’s is the #1 Kettle Cooked PotatoChip in Northeast Ohio! • Shearer’s Kettle Cooked Potato Chips command the market! • Five flavors hold the individual product rankings of 1,2,4,5 & 6! • 3rd place is Private Label.

7. Shearer’s is the #1 Regional Tortilla Chip Brand in Northeast Ohio • Shearer’s is the #1 regional brand in NE Ohio with a 6.3% market share. • Shearer’s holds the top 5 sales spots among all regional brands!

8. New Products / Great Flavors

9. Marketing, Growth, and Values “Shearer's supports a healthy, active lifestyle for our consumers. Healthy lifestyles begin with healthy choices, and eating in moderation is the key to smart snacking. Staying energetic and active completes the recipe for a happy, healthy lifestyle. Fuel your celebrations with the great taste of Shearer's Snack Foods! We want to be a part of your family's fun, and our tasty snacks are a perfect companion to bring to a picnic or get-together. When the snack is over...Let the games begin!”

10. Shearer’s People

11. Shearer's Announces Plans to Build New Manufacturing Plant in Massillon On April 8, 2008, Shearer’s Foods, Inc. officially announced their plans to build the first LEED (Leadership in Energy and Environment Design) Gold Certified food manufacturing plant in the State of Ohio. Chief Executive Officer Bob Shearer and the Shearer’s Management Team were joined by local, state and national officials including Lt. Governor Lee Fisher and Congressman Ralph Regula, when making the announcement at the Shearer’s corporate headquarters in Brewster, Ohio.

12. Retention is an integrated process that encompasses every facet of the organizations “human capital” plan, from recruiting, selection, on-boarding, compensation, development, and culture. There is no single, magic solution Retention Is an Integrated Process

13. At Shearer’s we manage three very distinct groups of associates: Traditional salaried professionals Manufacturing and distribution hourly Commissioned, field sales So, as we go through specific action items, keep in mind that the action or strategy may not apply to all three Disclaimer…….

14. Many of these are related to the demands of a 24 / 7 operations schedule, including child care dilemmas, lack of public transportation, single parenthood, and “generational issues” Low cost manufacturing – high volume, fast-paced jobs - “learning curve” and assimilation issues Social, demographic, and job-related challenges

15. Retention Needs to be a fully integrated process On Boarding Employment Experience Selection & Hiring • Match People / Jobs • Formal “assessment” tools • Job “try-outs” • Customized orientation • Training & development • Policy and communication • Work life balance • Comp and Benefits

16. Recruiting and Selection “Find the best, keep the best”

17. Match the person with the job Recruiting and Selection • Tactical Aspects • Essential duties • Physical demands • “can they do the job?” • Behavioral-based Interview and selection • Employment background • Education • Specific skills • Underlying Success • Profile • Demands and • “stressors” • “do they have the • desire to do the job?” • Personality & Work Style Preferences • Motivational attributes • Interpersonal style

18. Many traditional approaches to interviewing and selection focus on behavior-based techniques that emphasize the candidate’s overall fit with the tactical dimensions of the position – do they have the ability to do the job? Understanding some underlying motivational and interpersonal attributes will help to predict if the candidate will be successful in the long run – do they have a desire to do the job? Recruiting and Selection

19. In 2007 we partnered with Scitrain to develop an automated selection tool that would assess how the candidate matches with both the tactical and underlying job demands. Elements included: A validation study with current Shearer’s associates Development of a “critical success” profile Development of a continuously improving “self-learning” tool Electronic link and record-keeping Shearer’s Advanced Hiring System

20. 100 Shearer’s associates participated Accumulated historical and behavioral data from each associate (they completed their own assessment) Cross-referenced with supervisor evaluations of each associate Developed a profile of the ideal candidate Validation and Study

21. Validation Process Current associates take assessment test. Cross-referenced against supervisor appraisal. “stratifies” or rates the current population First draft stratification is developed which reflects the assessment of applicants Scored from 0 - 145

22. Self-Learning Functionality First draft stratification is developed which reflects the assessment of applicants Scored from 0 - 145 Candidate performance data collected at interview and post-hire compared to first draft stratification

23. Self-Learning Functionality Interview Results New Hire Performance Candidate Assessment & Ranking Profile (updated)

24. Job Try-Outs After a candidate is identified using the pre-selection assessment tool, they are invited to the facility to observe and perform some aspect of the job. This gives the interviewer an opportunity to observe the applicant in the real work situation. More importantly, it gives the applicant a chance to experience what the job is really like. Shearer’s Advanced Hiring System Part 2

25. On-Boarding, Training, & Development “Give new and current associates the tools they need to be successful, and facilitate their ongoing growth and development

26. Formal, 1-day Orientation Session Small group, “bonding” with other new hires cross-functionally (ALL new associates participate) Cover benefits, policy, safety….. Training Formal / classroom setting – basic production detail (“code dates,” systems, packaging configurations, quality and safety parameters) that they will need when they go on the floor On-the-job experience – try their new skills On-Boarding

27. A culture that fosters associates to develop to their full potential….. Open job-posting system Merit and performance-based selection criteria Specific, skill-based wage progressions (hourly associates) Tuition reimbursement Appropriate mix of technology Training and Development

28. Compensation and Benefits “Provide our associates with a total rewards package that is attractive, competitive, balanced, and is performance / merit oriented”

29. Offer compensation programs that are competitive in the market and reward associates for performance and results. Provide associates and their families with affordable, comprehensive healthcare. Provide associates and their families with a wide range of optional benefits to support their specific needs. Help associates to plan for the future through retirement planning. Achieve a culture of health and wellness. Support and foster work-life balance and personal development. Enhance retention, performance, and associate relations. Support a culture of continuous improvement. Comp & Benefits - Objectives

30. All Shearer’s associates participate in a performance-based bonus program that aligns achievement of critical business factors with financial reward. Associates are divided into bonus groups, so that the their individual bonus is based upon the critical business factor over which they have the most control. We have identified seven critical business factors that are used in the bonus plan. Compensation

31. Bonus Program

32. Basic health, dental, vision, 401k, life, and other optional benefits Wellness Work life balance Comprehensive Benefits -

33. Healthcare, dental, vision, 401k, & optional benefits What do we do differently? - Affordability Compared to benchmark averages at the family-level of coverage: A Shearer’s associate contributes about 22% of the total cost of their healthcare, compared to a benchmark average of 31% A Shearer’s associate contributes about $130 less per monthfor this level of coverage Basic Benefits

34. Through a partnership with Nationwide Better Health / Wellcorp, we offer a formal wellness program including: On-site Health Risk Assessment Biometric data (cholesterol, blood sugar, etc) + lifestyle data (exercise, smoking, weight) Customized and detailed individual health status report Lifestyle Health Coaching Up to 15 individual sessions with experts in a particular field (exercise, diet, general health) A Culture of Wellness

35. In addition to these formal programs, we have created a daily culture of wellness. Examples: A message of moderation and balance in our own product marketing Healthy snacks served at Company functions Programs such as weight loss challenge, sponsorship of a local 5k run, baseball and basketball leagues A Culture of Wellness

36. Work Life Balance Through an integration of policy, culture, and senior management reinforcement, foster an environment that values the individual, supports their development, and respects their needs.

37. Short term wage continuation Maternity / Paternity leave Adoption benefits “Caring and Sharing” Volunteer day / community service Work Life Balance

38. Birth of a Child Mothers –Continue the normal salary of a new mother during the period of time that their physician has disabled them due to their own medical condition, before and after the birth of the child Fathers –one week off with pay immediately following the birth of a child Maternity / Paternity

39. Up to four weeks off with pay for associates who are in the process of adopting a child, for the following reasons: Travel to and from the location in which the adoption is occurring. Requirements to attend hearings, or other legal and / or administrative proceedings related to the adoption. Time to care for the child following the adoption taking place. Reimbursement of up to $5,000 to defer medical, legal, and travel expenses related to the adoption. Adoption Benefits

40. Our award-winning, associate-managed program to help those in our own community of associates. Fundraising accomplished via “fun” events A steering committee considers applications from current associates who are in financial hardship, makes grants based on their need “Caring and Sharing”

41. Associates begin their eligibility for vacation as early as ninety days after hire, and total vacation allowance goes up to four weeks for more senior associates. Associates are eligible for from one to six paid person days, based upon their years of service. To enhance their flexibility with regard to associates, the Company allows its associates to take vacation time in single day increments. And, an associate is permitted to use 2 vacation day per year on an emergency (unscheduled) basis. Vacation and other paid time off

42. Communications “Drive a consistent message across all groups in the organization that reinforces corporate culture, values, and alignment between individual performance and key business measures”

43. Daily pre-shift “huddles” Monthly shift meetings Monthly birthday lunches Monthly management meetings Associate of the month Quarterly “state of the company” meetings Annual associate recognition dinner Communication Cycle

44. Prior to the start of each shift, the shift supervisor meets with the group on the factory floor, reviewing: Objectives and priorities for the day Transition issues from the previous shift Special quality or safety issues End with motivational quote and team cheer! “Huddles”

45. On a monthly basis, the manufacturing and distribution associates are presented with the following topics in an hour-long meeting: Business performance, emphasizing the tie-in to their bonus metrics Overall business update – sales, new customers, consumer issues Quality update Safety update Policy update / HR issues Monthly Shift Meetings

46. Hosted by the President of the Company and VP of HR, all associates who have a birthday occurring that month attend a luncheon celebration. These are done on shift Associates from all positions, levels in the organization are included Informal – chance for two-way communication regarding the business, and an opportunity to voice questions and concerns And we serve healthy snacks! Monthly Birthday Lunches

47. “Scorecard” Recap – critical business measures Consumer / customer updates Current challenges Bonus outlook Monthly Manager Meetings

48. Facilitated by the Company President, this is a review of the business for the most recent quarter, including: Sales, customer, and product recaps Operational issues – quality, efficiency, safety Human capital issues Community update Every associate attends or has virtual access to this meeting State of the Company Meetings

49. Questions?