KEY STRATEGIES FOR MANAGING HUMAN CAPITAL RISK

1. KEY STRATEGIES FOR MANAGING HUMAN CAPITAL RISK

2. Harold Morgan • Senior Vice President Human Resources, CHRO White Lodging Services • Former CHRO, CTA (Chicago Transit Authority), IDEX Corporation, Bally Total Fitness Corporation, Bally Manufacturing/Entertainment, Director of Employment and Labor Relations, Hyatt Hotels Corporation. • Jennifer Barton, SPHR • Chief Operating Officer | Willis Human Capital Practice • As COO of the Human Capital Practice for Willis North America, Jennifer has responsibility for 48 offices throughout the U.S. and Canada representing over $330 million in revenue. In this capacity she is responsible for defining, creating and deploying best-in-class client deliverables designed to address human capital risk. Under her leadership, the practice has grown to consult with over 3,000 clients across the U.S. in areas such as Human Resources, Communication, Compliance, Health Outcomes and Reporting and Analytics.

3. What to Expect • Overview of Talent Management/Development • Best Practice Review • Five specific strategies for managing human capital risk within your organization • Key questions for getting started with your strategies

4. Company Overview White lodging overview

5. Introduction to White Lodging • Established in 1985 – Headquarters in Merrillville, Indiana (30 miles from downtown Chicago) • Owner, developer and operator of premium branded hotels • One of the largest independent hotel organizations in the U.S. • 170 branded hotels totaling more than 26,000 guestrooms in 21 states • Deep talent pool: 10,000 Associates – Full and Part Time • Manage leading brands: Marriott, Hilton, Starwood, Hyatt, InterContinental, Preferred, Carlson • Mission: Maximize the value of each and every hotel asset for our owners • The State of the Industry • The Brands • Own very few, if any hotels • Manage less than 50% of the hotels bearing their name • Independent Management Model • Work for the owner instead of the brand • Offer more accountability, flexibility and ROI versus brands

6. Human Capital Risk Practical Implications History

7. Overview • No Chairman of Board / CEO has ever.... • No CHRO has ever …. • CHRO Survey – major issue • Modify Talent Strategy All The Time 3. Talent Changes All The Time Talent changes all the time

9. Source: HR Policy Association

10. General Philosophy-Talent Development • Right people on bus (80%) + robust on-boarding • KISS • 50/50 – no hand holding • Develop those with most impact (more top of house) • 70-20-10 – rule of training

11. Elements of Great Talent Management • Right people on bus • Business needs generate talent plan • Determine how to judge talent • Competencies • Testing • Assess Talent • Produce choices for key roles (outside > 30%) • Conduct STR ‘s of Key Leaders • Decide on development/coaching approach • Move plus manage talent-every move is scrutinized current performance against competencies future potential flight risk

12. Source: HR Policy Association

13. Willis 5 Specific Strategies

14. Specific Human Capital Strategies

15. Specific Human Capital Strategies

16. What is Your Employee Value Proposition?

17. Total Rewards Gap Assessment Evaluate or Create a Total Rewards Strategy • Effectiveness of your rewards elements • Alignment to your business strategy • Competitive position Develop an Action Plan • Resources and recommendations • Prioritization and eligibility

18. Specific Human Capital Strategies

19. Percent Increase Percent of Population High High Low Low Pay for Performance in Theory

20. Percent Increase Percent of Population High High Low Low Pay for Performance in Reality

21. Merit Matrix Modeling Distribution of Employees by BOTH Performance and Within Pay Range Largest increase to those who perform well and paid low in their range

22. Specific Human Capital Strategies

23. New Ways to Define When, Where and How Work Gets Done • Why • 1 out of 5 cares for an elderly parent • Women comprise 60% of workforce • 80% of men would like fewer hours • Priority from Boomers to Millennials • In Practice • High-Performers • Teams establish blueprints • Establish and hit benchmarks**

24. Specific Human Capital Strategies

25. Identify Behaviors and Skills Critical to Success For Illustrative Purposes Only

26. Specific Human Capital Strategies

27. Identify High-Potential and High-Performing

28. Create a Plan to Manage Your Human Capital • Remember 10% | 20%| 70% • Projects • Taskforce • Job Rotations • Temporary Accountability • Stretch Assignments • Fix-it / Turn-around • Development Plans • Cross-Functional moves • Internal and External Leadership Development • 360 Feedback

29. Not Everything at Once • Action Tool • Delivering on this initiative would help achieve business objectives? • Line managers are likely to cooperate, if asked to support this initiative? • We have the capabilities within our HR team to deliver this initiative well? • We have the infrastructure (e.g., technology, tools) to deliver this initiative well? • Results from the initiative can be measured to validate its effectiveness? How? • Leadership buy-in has been obtained or is likely to be obtained? • Who will be accountable for the success / failure of the initiative? • What are the estimated direct and indirect costs associated with this tactic? • Can we secure the budget necessary to deliver this initiative well?

30. Key Take Away Human Capital is an Asset … Manage it. Whether a company competes on the basis of productivity, innovation, customer loyalty, efficiency, speed, or agility, the workforce has a make-or-break impact on those results. It is important to have the right talent, with the right skills, in the right place, at the right time, and at the right cost.

31. Questions, Final Comments and Contact Information Harold Morgan Senior Vice President Human Resources White Lodging Services harold.morgan@whitelodging.com Jennifer Barton Chief Operating Officer Willis Human Capital Practice jennifer.barton@willis.com