Human

Resources

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 Human Resources
Overview
PepsiCo has a long history of innovative human resource processes and systems, and we are viewed as
an “academy company” when it comes to developing leaders. We put a tremendous focus on selecting
and hiring the best people, preparing them to be able to succeed and “make a difference,” and
providing them with a highly positive working environment. To those ends, PepsiCo has created an
integrated system of HR processes that are used to help guide and manage employees once they are
hired. Two key Models are central to our HR processes; both models are fully explained in the bro-
chure titled: “Building a Career at PepsiCo” and are summarized below.
At PepsiCo, we view careers as an accumulation of challenging experiences over the course of many
years, with each experience contributing to the growth of the individual and PepsiCo. Our Career
Growth Model (below) shows each major aspect of what we look for when considering people for new
opportunities.

Of course, consistent business and people results are the foundations on which any career is built.
However, a number of other factors are considered as part of any important career decision. We have
learned that Leadership Competencies are essential to success as our employees rise to increasingly
senior levels in the organization. Our Leadership Competency Model provides a clear description of
the behaviors that are important at PepsiCo.
They were developed using multiple inputs, including
business strategy interviews with members of the
senior teams in each division, to establish a clear
line of sight between specific leadership behaviors
and emerging business trends and challenges. In
addition, focus groups and surveys were conducted
with a broad sample of managers to pinpoint the
behaviors that most tightly link to job performance
and success at different levels. And finally, focus
groups and surveys were conducted with a sample of
front-line and hourly employees to get a comprehen-
sive answer to the question, “What kind of manager
brings out the best in you?” Each of these perspec-
tives was used to identify, and weight, the final
components of the model. The PepsiCo Leadership
Competency Model is shown on the right:
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 Human Resources
Overview

PepsiCo’s People Processes are closely integrated with the Career Growth Model and support career
building by providing the foundational tools needed by employees and managers to work together in
an effective partnership. The Performance Management Process (PMP) ensures that employees’
Business and People Objectives for the year are well aligned with the larger business priorities (i.e.,
the Annual Operating Plan or AOP), and are revised, if required, at the Mid-Year Review. Our various
feedback tools (e.g., Organizational Health Survey, 360 Feedback, Individual Development Plans)
support workplace improvement efforts and the continued growth and development of our employ-
ees and managers. Our People Planning and Gameplanning Processes help us match employees with
new opportunities.

September-November November-January

AOP Objective Setting

Employees set Business
and People performance
objectives for the year;
Development action plans
drafted
Org. Health Results
360 Admin & Results
Org. Health Results

July-August February-March

Mid-Year Review PepsiCo Performance &

Development Review
Discussion with manager Career Model
regarding progress on Leadership Competencies Formalmeeting
Formal meetingtoto(a)
(a)
objectives, development Functional Competencies review performance against
plans, career interests, Critical Experiences prior year's Business and
and other related topics Knowing the Business People Results; and (b)
Proven Results finalize current objectives

360 Admin & Results (off-cycle)

Functional Gameplans Development
DevelopmentAction
ActionPlan
Plan
Functional Gameplans April-June
People Planning
Organization and individual talent
review – assess bench strength,
potential moves, diversity
scorecard, career interests,
leadership and functional
excellence, key experiences

PepsiCo is committed to being a great place to work. For this reason, we conduct a bi-annual Organi-
zation Health Survey, and do more frequent “pulse” surveys to keep track of our employees’ levels of
Satisfaction and Commitment to working here.
One major corporate priority for making PepsiCo a great place to work is to ensure that we are an
inclusive employer. We seek diversity among our employees, not only in terms of race, gender, and
ethnicity, but also in terms of thought and approach. In short, we strive to create an environment of
inclusion to ensure that everyone has an opportunity to have his or her input heard and to “make a
difference.” That desire is a big part of what every employee at PepsiCo shares in common.

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 Human Resources
Key Questions
• How does the relative importance of specific competencies change as one moves up through the
management ranks?
• The importance of some competencies changes across cultures. Can you identify three dimen-
sions that are universally viewed as critically important, from the Americas to Europe to Asia and
beyond?
• What leadership behaviors does your manager demonstrate that bring out the best in you? Are
those behaviors reflected in our Leadership Competency Model?
• Why is every senior leader across all of PepsiCo, including Steve Reinemund, required to partici-
pate in the 360 Feedback process every other year?
• On a personal basis, think about all of your past work experiences and what you’ve learned from
each. Which experiences have you found to be most valuable? Why?
• How do you think the PepsiCo Career Growth Model can help guide your development?
• How might an integrated set of HR processes and tools benefit an employee? The company?

For More Information

• Review the various toolkits and FAQs for the different HR processes available on the OMD website
(www.omd.pepsico.pvt)
• Read the “2001 PepsiCo Leadership Competencies” Brochure to gain a deeper understanding of
the key success factors for leaders.
– See also the more detailed companion Brochure titled: “2001 PepsiCo Development Resources
Guide” for tips and suggestions on how to improve your understanding and skills in each of
the competency areas.
• Read the 2002 PepsiCo Annual Report, especially the Letter to Shareholders section on People.
• Study the 2003 Brochure on “Building a Career at PepsiCo.” This brochure explains PepsiCo’s
Career Growth Model and provides guidance on making career decisions.
• Check with your division HR representative to learn about the curriculum of training programs
available for your development. In particular, plan to attend any programs available to help you
better understand and complete the Performance Management Process and improve your coach-
ing skills.

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