Employee engagement

At Cairn, we want to create a great place to work and a sense of commitment to our vision and values, such that employees are willing and able to give sustained discretionary effort to help the Company succeed. It is important to build a healthy and motivating environment that promotes work/life balance, cross-functional communication and staff wellbeing at work. High levels of employee engagement can help Cairn to attract and retain staff in an industry where there is a high demand for skilled labour, a lack of new entrants and an ageing population.

We engage with our staff through a variety of means and recognise the importance of regular communication, employee involvement and participation in organisational change. At Cairn, we communicate with our staff via regular staff meetings, 'lunch and learns', formal consultations for major initiatives and regular email updates on Company news and activities. We also support an open-door policy to encourage regular, informal communication at all levels of the business.

Employee Engagement Survey and Action Plan

To help us to continually improve our performance, we conduct Employee Engagement Surveys. Following the 2008 engagement survey, a cross-functional team called Project Rebuzz was formed to consider the feedback from staff. The team was tasked with putting together and delivering a comprehensive engagement action plan in 2009.

A number of initiatives took place in 2009, which are covered below. Focus groups were held in August 2009 to determine what was working well, revealing that staff placed most value on:

• the lunch and learn sessions;
• extended flexi-time core hours; and
• the new volunteering scheme.

A short engagement survey was carried out in January 2010 in Edinburgh, to gauge engagement levels following the original survey in 2008; this will form the basis for the 2010 Action Plan. It is encouraging that the results demonstrate that our engagement results have increased.

Communicating our HR Policies

We revised our existing HR policies and developed additional policies in 2009 to ensure they are fit for purpose for an operational organisation and to further support the attraction, recruitment and retention of staff. The key changes were communicated through a lunch and learn session and a manual was issued to all managers. A staff handbook is also being produced to summarise the policies and this will be issued to all employees.

Lunch and Learn

Regular lunch and learn sessions were introduced in 2009, in which staff are invited to network over a free lunch and learn about different areas of the business. The diverse range of topics covered in 2009 included: How the Company Manages Risk; Tunisia Field Trip; Geology of Greenland; Development Geology and the Field Life Cycle; How to Conduct a Commercial Evaluation of Prospects; Health and Wellbeing; and Positive Psychology. The lunch and learns have been very popular and well received by both staff and management.

Employee Wellness

There has been increased emphasis on employee wellbeing at both work and at home. A number of initiatives took place including a wellbeing and work/life balance course; free fruit Friday; flu jabs; on-site massage; massage chair; blood pressure checks; lunch and learns to raise awareness and promote health and fitness; and a new suite of work/life balance policies.

We continue to support the needs of our staff including working parents, and have made improvements to our flexible working policy so that they can balance work and family commitments or complete a smooth return to work following the birth of a child. Other polices and initiatives introduced to improve work/life balance included an occasional home working policy, leave to move house, enhanced Company maternity pay and a childcare vouchers policy.

Effective Leadership

Effective leadership is key in terms of engaging staff and enhancing performance. In 2009, as part of the engagement action plan, all staff were asked to complete an anonymous, confidential 180-degree feedback questionnaire on their line manager. The HR team then provided constructive feedback to the managers. In 2010, further leadership development will be provided to existing and future leaders in the Company.

Engaging New Employees

We recognise that an employee's first few days, weeks and months with a new Company are some of the most important and can have a direct impact on how engaged a new employee feels. A formal buddy system was implemented to assist new employees to settle into life at Cairn.

In 2009, we rolled out a new HR Induction programme called 'The Cairn Way', which gives all staff the opportunity to:

• understand the Company vision, mission, values and culture, and how they fit in it;
• learn more about the policies and practices we have in place; and
• discover some of the social, charitable and community-related initiatives we support and how they can get involved.

As part of our ongoing efforts to communicate and engage with staff, the HR team introduced six-month joiner surveys in Edinburgh and Bangladesh. The survey is designed to assess how well the employee has settled into their new role, whether their expectations have been met, relationships with their colleagues and manager, and other areas such as training and communication. Staff complete the survey, and then have a confidential meeting with an HR representative to discuss the survey in more depth and draw up an action plan for any development areas. The feedback from the surveys is also considered and forms part of our ongoing employee engagement initiatives.

Office Refurbishment

There were a number of office moves in 2009 to help to improve the environment and the flow of communication in the organisation. Further office moves are planned for 2010 to account for the growing population in a move to a more operationally focused organisation in Edinburgh. Throughout the process, we have encouraged staff to share their views and these have been taken into consideration when planning the refurbishment.

Developing an Asset-Led Organisation

Cairn has an asset-led operating structure in Edinburgh, whereby three heads of assets manage our business activities in Greenland, the Mediterranean and South Asia (excluding Cairn India), supported by functional departments providing technical expertise. Beyond that, cross-functional teams are established for more significant projects.

The move to an asset-led structure was initiated in 2008, but some challenges regarding roles and responsibilities, teamwork and communication remain. To assess the progress made in embedding the behaviours and processes necessary to make this structure successful, an offsite workshop was held in August 2009 in Dalmahoy, Edinburgh.

The workshop, attended by several Executive Directors, all Asset Managers and Heads of Department, and a cross-section of other staff, re-affirmed how the Edinburgh organisation works and identified specific initiatives to enhance performance in areas such as project management, clarity on roles and responsibilities, business processes and corporate stewardship.

Good progress has since been made during the fourth Quarter of 2009:

• the Cairn Project Management process has been rolled out to staff in Edinburgh and Bangladesh by way of a half-day workshop;
• several task forces have been established to review and enhance certain business processes; and
• a new Group HSE, Risk and Compliance Department has been established to provide independent oversight and challenge to the Cairn Business Management System and its implementation.