Metrics and Balanced Scorecards at Bristol-Myers Squibb

1. Metrics and Balanced Scorecards at Bristol-Myers Squibb Peter M. Fasolo, Ph.D. October, 2003

2. Content • Company Introduction • Metrics at BMS • Examples • Employee Preference Survey • Retention Scorecard • Americas Region Scorecard • Executive Committee Scorecard • What’s Next

3. Bristol-Myers Squibb’s Mission Our company’s mission is to extend and enhance human life by providing the highest-quality pharmaceutical and related health care products.

4. % of 2001Global Sales* Our Businesses • Worldwide Medicines • Prescription Pharmaceuticals • Consumer Medicines • Healthcare Products Mead Johnson Nutritionals ConvaTec (ostomy & modern wound care) Medical Imaging* .....….….. 86% ...……... 10% ……....…...………….. 4% * Excludes DuPont Pharma sales

5. Europe,Mid-East& Africa19% Other Western Hemisphere6% Pacific7% United States68% Sales by Geographic Area % of 2001 Global Sales

6. Bristol-Myers Squibb Organizational Context • New Chairman and CEO with Bold Transformation Plan • Focus on Core Rx Business • Rebuild Executive Team • Divest and Spin-off Businesses • Focus on Core Acquisitions, In-Licensing and Partnerships • Recent Product Launches • Abilify • Reyataz • Pravigard • Promising Late-Stage Pipeline • Erbitux • Entecavir • Factor XA • Dual PPAR • CTLA4Ig

7. Top 500 Companies in Using Technology BMS Employer of Choice Why Bristol-Myers Squibb? - External Confirmations America’s Most Admired Pharmaceutical Company-2001 One Of The Top 10 Best Companies for Working Mothers Hope, Triumph, and the Miracle of Medicine Money Magazine No. 3 in Best Company Benefits Survey 2001 And More >> http://www.bms.com/aboutbms/awards/data/index.html

8. Relentless Focus on Performance at Bristol-Myers Squibb • A Balanced Scorecard Strategy Supports the Enterprise Direction of Objective Performance Assessment, Alignment and Personal Accountability

9. Phases of Metrics Development • Descriptive • Prescriptive • Diagnostic/Strategic/Consultative

10. Metrics Journey Diagnostic/ Strategic/ Consultative Prescriptive Descriptive HR Metrics Laboratory Executive Committee Scorecard Metrics/ Survey COE Americas Region Scorecard Retention Scorecard Exit Survey Turnover Analysis EPS I 2000 2001 2002 2003

11. Example 1: Employee Preference Survey

12. Based on Employment Data from 2001 • 1 of 10 Worldwide Medicines Employees (10%) • 1 of 6 US Medicines Employees* (16%) • 1 of 6 US Sales Employees (16%) • 1 of 4 US Marketing Employees (24%) . . . the following US employees voluntarily departed Worldwide Medicines *HQ, SP&A, Global Marketing, PC, BMSOV

13. Worldwide Medicines US Turnover - 2001(including Puerto Rico) • Population on 1/1/2001: 15,176 • Terminations: 2,624 = 17% • Voluntary: 1,484 = 10% of total population

14. Worldwide Medicines Direct Costs Associated with 2000 Staffing (US 17,800,000)

15. Key Data Points - ExamplesValue Skyline

16. Key Data Points - ExamplesEmployee Retention Index Termination Analysis: 0.00 0.33 0.67 1.00 ERI Index Values In August 2001, survey scores of individuals who voluntarily terminated were compared with employees who remained with the Company. An analysis of ERI scores revealed its predictiveness. Employees with lower ERI scores actually left the company at a much greater rate.

17. Example 2: Retention Scorecard

18. Retention ScorecardGoals and Objectives • Significantly reduce voluntary turnover across the organization • Focus managers on the primary means of retaining talent • Put emphasis on reasonable actions managers can take to broaden the talent mix • Communicate and emphasize organizational priorities

19. Retention ScorecardField Study Design Scorecard and Monetary Reward* Scorecard Only Control Group * $5000 upside kicker

20. Retention Scorecard

21. Retention Scorecard Results • No difference between monetary and “scorecard only” group • Both groups were significantly better at development, management capability and retention than control group • What you measure matters

22. Example 3: Americas Region Scorecard

23. Americas Region Scorecard

24. Example 4: Executive Committee (EC) Scorecard

25. Purpose of the EC Scorecard • Track progress against company priorities • Assess employee perceptions of Bristol-Myers Squibb • Guide action planning • Provide CEO and Board of Directors with year end results

26. Background • Survey • 50 questions assessing EC priorities & BMS as a best place to work • 1 open-ended item: “What is working well at BMS?” • Survey administered April 7 to April 21, 2003 • Stratified random sample of 5400 worldwide employees • (D6+ internationally, excluding hourly employees in manufacturing) • 64.4% response rate (n = 3464) • Salary Grade Distribution • Key Executive: 128 • Key Manager: 1437 • Professional: 1516 • Non-Exempt: 383 • Gender • 47.1% Male • 51.2% Female • 48 countries represented • 21 functions represented

27. The Survey Items Assess: EC Leadership Priorities BMS as a Best Place to Work Criteria of Interest (i.e.Intent to Leave)

28. Leaders Make the Difference • Nine out of the top ten factors which are correlated with an employees intention to stay with the company are strongly influenced by an employee’s manager

29. Leaders Make the Difference • I am confident I can achieve my career goals at BMS 58% • I am treated in a fair and just manner 73% • I am proud to tell others outside of BMS that I work here 73% • My contributions to the company are recognized 56% • We have a culture that encourages high performance with • the highest integrity 62% • It is clear what is expected of me at work 83% • I work in an environment where people support each other 74% • The leaders in my organization listen openly to all points of view 57% • The better my performance, the more I will be rewarded 47% • I am compensated fairly 56% All Employees % Favorable

30. Process and Next Steps • Results presented to Chairman and CEO • Workshop for EC and Top 35 Executives of the Company • Action Planning and Employee Communication Underway • Change in Scores Tied to Variable Pay • Next administration in September/October 2003

31. What’s Next? • Expanded Online Exit Survey • HR Measurement Laboratory • Follow-on Executive Committee Scorecard in September/October • Metrics/Survey Center of Excellence for B-MS