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2019 | Sustainability Report
Caterpillar's Environmental,
Social and Governance Approach

People
Talent
Development

At Caterpillar, we are committed to attracting, hiring, developing, engaging and retaining talented employees. Our people are the foundation for high-performing teams required to deliver our enterprise strategy. Our recruiting, learning and performance management programs are designed to ensure productive, highly engaged employees focused on both individual and organizational performance. Growing employee capabilities is central to the company’s ability to deliver results and engage employees. According to our annual employee insights survey, Caterpillar employees rate “Challenging Work and Impact” as our greatest strength and most important driver of their engagement. We provide a variety of opportunities for employees to grow their capabilities while doing meaningful work.

Recruitment

We are continuing to grow our capability to attract top talent. We are doing this by moving our recruiting teams closer to the business and communities we serve. In 2019, Caterpillar, through relationships with global partners, actively engaged in events that targeted a broad scope of diverse talent to drive awareness. We continued our commitment to workforce development programs such as hackathons, robotics competitions, skilled-trades funding, and military and diversity hiring engagements. This enables us to prepare our workforce to do work that matters and meets the needs of our current business and the future demands of the market.

Professional Development

Caterpillar’s talent development strategy helps our employees grow their careers by providing a toolbox of diverse experiences that allow them to forge unique paths. In 2019, we created success profiles, which allow managers to help employees consider work experiences needed to prepare them for roles critical to the success of the strategy. This approach aligns with the feedback we receive from employees about how they want to grow their careers.

Our newest suite of leadership development programs, launched in 2019, is designed to build competencies supporting our leadership attributes within a five-level framework. The framework requires greater capability as leaders progress in their careers. Leadership levels include initial training focused on emerging and future leaders, progressing to first-line, mid-level, department and, ultimately, executive leaders.

At Caterpillar, we are focused on driving a culture of continuous improvement through Lean. It is important that all employees have a deep understanding of Lean — what it is, how to apply it and how it ultimately impacts our success. Our Lean Center of Excellence focuses on integrated and continuous learning for both leaders and employees, so that everyone grows in their ability to support the Operational Excellence pillar of our enterprise strategy.

Caterpillar provides technical and market leadership development programs that enhance capabilities and performance in specific functions or countries. For example, the Engineering Rotational Development Program provides onboarding support for new college graduate hires into engineering functions. The program includes orientation, tours, learning, networking, product experiences, mentoring/coaching, leadership opportunities on program committees, and rotational development experiences provided in an employee’s first one to three years at Caterpillar.

Finally, we offer informal learning experiences for all employees through learning and technology-enabled systems for ease of access and enterprise collaboration. Coaching and feedback reinforce this experiential learning. Across all of these professional development programs, we realize business benefits, including higher-performing individuals and teams, lower employee turnover, better decision-making, decreased corporate risk and more effective resource allocation.

Performance and Rewards

In recent years, we have updated our performance management process to make it more meaningful and better aligned with our Operating & Execution (O&E) Model.

We are committed to a strong pay-for-performance philosophy that aligns individual performance, behaviors and business results with individual rewards. Differentiating performance and rewards helps us achieve the critical elements of our enterprise strategy, including profitable growth, and strengthens our high-performing Caterpillar team. Key to our performance and reward strategy are: setting ambitious, yet achievable individual and team goals; ongoing coaching conversations between leaders and employees about progress toward those goals and how they were achieved; increased differentiation of rewards; and a meaningful year-end discussion regarding contributions made and value created.

To further encourage adoption of these practices, we have introduced new training and resources for managers about how to conduct reviews and provide constructive feedback to employees.