Our employees are vital to our success. They are the base upon which we build our sense of entrepreneurship, and they represent the best of what we can be as a company. As individuals, they strive to put our corporate values into daily practice, so that, as a global organization, we can be insightful, engaging, inventive, and always deliver with excellence. To ensure that all our employees are treated fairly and with respect, we include specific commitments to employees in our Business Code of Conduct.

Fostering individual growth

We employ more than 37,000 people worldwide. The age range is broad, with two thirds of the staff being between 20 and 40 years of age and almost 10% above the age of 50. From a regional perspective, almost two thirds of our employees are now located in Asia (including China). In the past year, the number of women employed at NXP increased slightly compared with 2005, rising to 44%. In executive management functions, 4.9% were women at the end of 2006.

Additional streamlining of our back-end activities has led to an increased number of employees in Greater China, principally in our MultiMarket Semiconductors and IC Manufacturing Operations business units. BU Home decreased its number of employees mainly due to reduction in contractors and restructuring activities. Our Corporate and Other segment figures for 2006 include around 200 employees for NXP Software.

At our facilities in Stadskanaal (The Netherlands), where we ceased operations in 2006, approximately 80% of all the employees were found alternative employment either inside or outside Philips (NXP). A further 5% are being retrained in a more extensive program. The remaining people have accepted severance deals (such as early retirement). Except for those accepting early retirement, no employees have thus far been forcibly laid off. The social plan will remain valid until at least the end of 2008.

Our Business Renewal strategy may lead to further reorganizations. We will assess these efforts by their social, as well as their economic, impacts.

Opportunities to learn

Our learning programs target every level of the organization and are an important part of our employment proposition. They are aligned with our business requirements and thus provide a way to embed our values in the organization and help drive change.

The NXP Academy is a successful program that aims to create a performance level that is uniformly excellent worldwide. It offers a new, revitalized core curriculum, with courses and classes that benefit employees and, in turn, the company as a whole. Through the classes, employees can develop their work competencies, strengthen their leadership skills, and expand their personal abilities. All the courses are based on NXP values and are regularly updated.

To complement our formal classes and coursework, we use informal methods, including development discussions and coaching, to ensure that employees at all levels are engaged in and support the development of their personal talents and those of their teams.

Career development

We use our global People Performance Management (PPM) process to help employees develop their careers and manage their performance. Through annual performance reviews, PPM helps align our business objectives with the personal objectives of individual employees. The result is continuous improvement, on both a personal and a corporate level, and better business performance.

PPM is aligned with our company's values and encourages better behavior and leadership. It raises each employee's level of engagement and lets us become more of a learning organization. We measure the results of the company's actions across the total workforce, through a user-friendly, online PPM tool that is currently available to 5,049 employees, including all senior managers. In 2006, 99% of the employees with online access to the tool interacted with it. A concise, paper-based version of the tool is available to all remaining employees; the results of the paper version are kept at local sites and not collated centrally.

The Employee Engagement Survey evaluates a broad range of employee-related topics. As part of the survey, we gauge the perception and effectiveness of the tools and programs we use to manage performance.