EMPLOYEE PERFORMANCE APPRAISAL Guidelines for Employees and Appraisers

BEFORE FILLING OUT THE FORM...

Why have a performance appraisal system? KCA DEUTAG employees are our key assets. It is our employees who will drive our performance and deliver our strategic growth. It is also our employees who will: Achieve our vision to be the preferred drilling contractor through measurable performance improvement, and S.E.T. our vision through safe, eective and trouble-free operations. The management of employee performance and development is therefore critical to our continued worldwide success. The most important aspect of KCA DEUTAGs performance appraisal system is to ensure that supervisors and employees are having regular discussions about the employees performance, progress and development needs. To improve KCA DEUTAG performance To formally measure and feedback on individual employee performance To manage career development, succession and resource planning, and identify future talent To develop all employees Support an open and honest culture where feedback and communication is encouraged Align performance criteria to KCA DEUTAGs vision, values and key leadership behaviours Ensure S.M.A.R.T. personal targets are agreed and aligned to both employee development and corporate targets Provide opportunity for identifying training & development needs Improve employee motivation and morale All KCA DEUTAG employees must receive, as a minimum: A probationary performance appraisal which should be conducted between 3 and 6 months after joining KCA DEUTAG as a new employee and between 3 and 6 months of being promoted or transferred into a new position; An annual performance appraisal which should be conducted in January/February each year. This can be supplemented with interim performance appraisals at the discretion of the employee and/or their immediate supervisor. Appraisals should be conducted by the employees immediate supervisor the person they report directly to on a day-to-day basis and therefore the person most capable of reviewing the employees performance, progress and development needs. Where the employee reports to more than one person, e.g. functionally as well as operationally, the appraiser should consult with all other relevant personnel to obtain their input. 1. Notication a mutually agreeable time should be determined at least 10 days in advance of the appraisal meeting. 2. Preparation both the employee and appraiser should complete a blank copy of the appraisal form in advance of the appraisal meeting to facilitate the discussion. This should be done independently and not discussed or forwarded to either party before the appraisal meeting. 3. Copy paperwork both the employee and appraiser should have copies of the employees most recent performance appraisal (probationary, annual or interim). Copies of the employees current job description could also be available and referenced when discussing the requirements of the job and how well the employee is performing. 4. Time & location sucient time should be allowed to hold a full, open and honest discussion, in relative privacy and without interruption wherever possible. All sections of the form should be fully completed to provide a clear and accurate summary of the appraisal discussion and to ensure eective management of the information contained in the appraisal.

What are the objectives of KCA DEUTAGs performance appraisal system? What is the purpose of KCA DEUTAGs performance appraisal system? Which employees should receive a performance appraisal?

Who should conduct appraisals?

Tips and hints for a successful appraisal meeting

Completing a KCA DEUTAG appraisal form

Guidelines for Employees and Appraisers

CW-ALL00-HR-PM-GU-001 Version 2.01

Safe, effective, trouble-free operations

FILLING OUT THE FORM...

Review of KCA DEUTAG perforrmance criteria For each of KCA DEUTAGs listed performance criteria, the employee and supervisor should discuss and agree on the rating which best ts the employees behaviour and performance for the period being discussed. A generic explanation of each rating can be found detailed below and, once agreed, the appropriate rating should then be circled on the form. Individual, specic examples of the employees behaviour against the performance criteria should then be noted to supplement the chosen rating. Areas identied as requiring further action should be clearly noted along with details of the agreed actions.

Appraisal Ratings

Excels Exceeds Achieves Development Required Needs Improvement

Leads the way proactively and delivers exceptional results/output at all times; behaviour to be maintained and used as an example (role model). Consistently delivers a high level of performance with very good results/output which are regularly above the required standard. Meets the required level of performance with acceptable results/output; consistently meets normal requirements. New to the position, or still requires some development to be fully competent. Has diculty with, or fails to deliver, required performance; immediate action required.

* See back page for detailed Performance Criteria descriptions

Review of Previous Personal Targets

Personal Targets should be recorded on Page 2 of the appraisal form. Where previous targets have been set for an employee, they should be summarised under Review of previous Personal Targets and corresponding comments noted. Where a target has not been fully achieved, details of the action(s) agreed to complete the target should also be noted alongside the comments. Each target should be broken down into measurable sections and a weighting percentage value attributed to the level of completion. At the end of each calendar year, the Groups corporate targets for the following year will be communicated by the Board to all General Managers and Function Heads who will then set their own area, country and department targets and communicate them to Country Managers, Operations Managers, Function Heads, Focal Points and Supervisors. Before conducting an appraisal and agreeing new targets with employees, appraisers must be aware of their respective area, country or department targets for the coming year. Personal Targets for all employees should be in support of the employees continued development and aligned to the Companys corporate targets. As a guide, a minimum of 3/ maximum of 5 Personal Targets should be set for all employees. They should be numbered for future reference and should be a combination of development and business-linked. All Personal Targets should be S.M.A.R.T. Specic, Measurable, Attainable, Relevant and with a clear Timeframe for completion. Guidelines on how to set S.M.A.R.T. targets are available on the BMS. A percentage weighting should be applied to all Personal Targets to show the employee how much each target is worth of their overall total Personal Target achievement. If no weighting has been noted on the appraisal form, the HR Representative reviewing the appraisal will assume that all Personal Targets set carry equal weighting. Personal Targets should be regularly reviewed and a mid-year review is recommended which can be driven by the appraiser and/or the employee.

New Personal Targets

Guidelines for Employees and Appraisers

CW-ALL00-HR-PM-GU-001 Version 2.01

Safe, effective, trouble-free operations

FILLING OUT THE FORM...(continued)

Career Develoment Aspirations & Future Potential The appraisal meeting is an ideal opportunity to discuss the employees aspirations and goals regarding further career development and/or promotion opportunities. This discussion should be summarised and noted in the space provided. Agreement should also be reached on whether or not the employee is ready to be promoted and indicated as either Now, Not Yet, or N/A. If Not Yet ready for promotion, an estimated timescale should be indicated on the appraisal form using the options of within 1 year, 1-3 years, more than 3 years. A suggestion of the type of role that the employee would like to be considered for should also be noted. Employees should also be considered for a lateral move to broaden and develop their skills and knowledge and to provide them with a new challenge. Information regarding career aspirations & future potential is used by the Company for succession planning and career management purposes. In order to manage business requirements and career expectations in terms of location and exibility, employees should complete the Career Opportunities Preference section on Page 4 of the appraisal form where applicable. For evaluation purposes it is important to review any previous training which has been conducted since the employees last appraisal and identify how performance has changed as a result. Details should be entered in the space provided. By this stage of the appraisal meeting, training and development needs may have already been identied during the discussion for example when reviewing the employees performance against previous Personal Targets or the KCA DEUTAG Performance Criteria, or when discussing the employees career and/or promotion aspirations. Details of any required training and/or development should then be entered in the appropriate boxes. Where a specic training course or event is identied as necessary, a Training Request Form (CW-ALL00-TD-IR-FO-0006) must be completed at the same time as the appraisal form and submitted for budget approval to the relevant area, country or department manager and then forwarded to the respective Training & Development Department focal point for action Note: The Groups Training & Development departments are only responsible for recommending, arranging and co-ordinating specic training or development events. Any coaching, on-the-job training, secondment or study/research, etc. should be arranged by the employee and/or the appraiser. The appraisal forms are not forwarded to the Training & Development departments and therefore any specic training or development needs must be detailed on a Training Request Form (CW-ALL00-TD-IR-FO-0006) in order to be appropriately actioned. The employees personal details on Page 1 of the appraisal form should be completed immediately. This should then be supplemented with the additional information on Page 3 once the appraisal meeting has taken place. Both the employee and appraiser should sign and date the relevant section and add any additional comments if necessary. Once the appraisal form has been signed o by both the employee and the appraiser, the appraiser should give a copy to the employee and then forward it to their own manager for review and comment. A copy of the completed appraisal form will also later be sent directly to the employee once it has been reviewed and processed. However, the appraiser must still give the employee a copy of the form before it is forwarded to the reviewing manager so that the employee has a record of their agreed Personal Targets and any development areas which need immediate action. Once the appraisers manager has reviewed the appraisal and signed, commented and dated in the appropriate place, the form should be forwarded directly to the respective HR team for processing and retaining in the employees personnel le.

Training & Development Needs

Administrative Information Employee and Appraiser Review Process - Reviewing Manager and HR Representative

Guidelines for Employees and Appraisers

CW-ALL00-HR-PM-GU-001 Version 2.01

Safe, effective, trouble-free operations

PERFORMANCE CRITERIA Safety:

Demonstrates understanding and commitment to best practice HS&E Demonstrates understanding of KCA DEUTAG, and client, HS&E policies and procedures; Encourages, supports and promotes safe behaviours and best practice HS&E at all times; Demonstrates visible and credible safety leadership and commitment; Participates in, and contributes to, dept/site/rig safety meetings and audits; Considers HS&E factors as priority when planning work tasks; Makes eective use of KCA DEUTAG, and client, HS&E tools and initiatives including, where relevant, TRIC/toolbox talks, risk assessment, STOP, pre-shift briefs, handovers, time out for safety sessions, risk/hazard control, environmental issues, and waste segregation protocol.

Communication:
Communicates clearly and listens to others

Gives and receives open, honest and timely feedback; Demonstrably acts on feedback to improve self awareness and performance; Encourages face-to-face (or verbal) interaction and/or chooses communication channel carefully; Shares knowledge and information clearly and timely; Listens to the viewpoint and opinion of others and requests feedback; Challenges people in an open, respectful and professional manner; Contributes eectively in meetings or discussions; Conrms understanding and receipt of information; Maintains open and eective lines of communication with clients/customers. Demonstrates cultural awareness and diplomacy; Participates in team activities; Develops eective working relationships with other team members; Recognises and resolves conict; Alters own work schedule and tasks to support team needs; Recognises strengths and weaknesses of self and others; Provides guidance and encouragement to team and colleagues; Shares knowledge and experience with others; Contributes positively to team spirit and morale; Takes responsibility for team performance.

Teamwork:
Supports team diversity and contributes to team eectiveness

Delivery:
Understands requirements of position and delivers objectives and results

Achieves objectives and makes things happen - safely, on time, on budget and to the satisfaction of all stakeholders; Balances long and short term activities and priorities; Dierentiates between important and urgent; Concentrates on key issues without losing focus on other priorities; Considers client/customer priorities; Plans and prioritises eectively to meet deadlines; Agrees expectations, objectives and deadlines; Delegates appropriately and eectively; Follows up on objectives and delegated tasks; Completes tasks when there are conicting demands. Makes suggestions and promotes new ideas and improvements; Demonstrates a proactive and forward-thinking approach to change; Looks to continually improve individual and team performance and eciency; Displays creativity which adds value; Identies nancial, operational and client/customer risks and opportunities and takes appropriate action; Champions new ideas and improvements, and successfully implements them; Embraces problem-solving and puts forward solutions. Leads team and/or colleagues by example; Balances individual and team needs; Acts as coach or mentor; Willingly participates in performance review; Encourages individual growth and development; Motivates others to improve performance and deliver results; Recognises good performance and provides challenge where improvement is required; Delegates successfully to allow opportunities for development; Commands respect and builds trust; Demonstrates understanding of, and commitment to, corporate vision and strategy.

Initiative:
Adopts forward thinking, creative approach and accepts change

Leadership:
Motivates people performance and encourages personal development

KCA DEUTAG, Minto Drive Altens Industrial Estate Aberdeeen AB12 3LW
CW-ALL00-HR-PM-GU-001 Version 2.01

Tel: +44 (0) 1224 299600 Fax: +44 (0) 1224 230403 www.kcadeutag.com

Safe, effective, trouble-free operations

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