Although not all Flowserve associates are part of the Annual Pay Review (APR) process, the following information is important to all associates as it relates to strategic decisions regarding the company’s 2016 cost structure.
As 2016 begins, we continue to see the need to make adjustments to our business processes in order to ensure our products are competitive in the global markets we serve. Over the past year, we have implemented these efforts in many forms, but a few include cost control initiatives, manufacturing footprint optimization, realignment and organizational structure changes.
While we know these changes have been ongoing and difficult, they have helped us to stay focused on delivering the best possible results while in this challenging market environment.
Based on that reality, and as part of our company’s continued effort to lower our cost structure for 2016, we have decided to make two key changes to this year’s Annual Pay Review (APR) process. These changes include:
• A reduction of the 2016 APR merit budget
• A focus on the allocation of available budget to our top performers
Despite the difficult environment, we are committed to rewarding our top performers. This is consistent with and supports our Flowserve Performance Culture. This means that only associates who receive a “Partially Exceeds Expectations” or “Exceeds Expectations” rating on their 2015 year-end performance assessment will be eligible for a merit increase.
We know that this approach is another change that has a direct impact on a majority of our associates, but we must continue to adjust business-as-usual practices in order to adapt to the ever-changing and challenging markets we serve.
We want you to know that this was not a decision that was made quickly or easily. It was a decision that was made as one component of the many efforts we are making to sustain us through the challenging market conditions we will continue to face in 2016. Thank you for your continued efforts and understanding during this time.
If you have any questions regarding this change, please feel free to contact your manager.