The number of employees in the EXPRESS Corporate Division increased substantially by 126.7% to 107,587; without DHL, the number of employees would have increased by 3.3% to 49,004 full-time employees. At 45,250, the workforce in the LOGISTICS Corporate Division remained almost constant; however, the number of employees in the MAIL and FINANCIAL SERVICES Corporate Divisions fell by 4.8% to 130,546 and by 4.6% to 34,082 respectively. The workforce reduction was carried out exclusively in a socially responsible manner by not refilling open positions.

1) Calculated as FTEs, excluding trainees, as of Dec. 31
2) Restatement of prior-period amounts due to reallocation of the retail outlets from Other/Consolidation to the FINANCIAL SERVICES Corporate Division
3) Calculated as average FTEs for the year

With 219,067 employees, Germany remained the region with the largest workforce. There were 65,599 employees in the rest of Europe (excluding Germany). The consolidation of DHL resulted in a sharp rise in the workforce in North, Central and South America (the “Americas”) to 23,905. Our heightened involvement in the Asia/Pacific region also led to a substantial increase in the number of employees; our workforce in the region grew to 14,372.

Including trainees, the average workforce for the year amounted to 375,890, representing an increase of 16.3% or 52,592 on the previous year. At 148,714, hourly workers remained the largest category of employees in the Group. The number of civil servants fell to 73,157, while the consolidation of DHL led to a jump in the number of salaried employees to 147,393.

Long-term collective wage agreement concluded
On June 11, 2002, Deutsche Post AG concluded a new collective wage agreement for its employees. As a result, wages, salaries and the remuneration of trainees increased by 3.5% from June 1, 2002, and will rise a further 3.2% as of June 1, 2003. We also increased the Christmas bonus in eastern Germany to the same level as that paid in western Germany for the first time in 2002. The collective wage agreement is valid until April 30, 2004. It will ensure our long-term planning reliability, which will benefit us greatly in the difficult market environment.

On January 1, 2002, Deutsche Post AG transferred its IT production activities to its wholly-owned subsidiary Deutsche Post ITSolutions GmbH (DP ITS GmbH). At the same time, we hived off our sales and marketing activities in the Express Germany Business Division to Deutsche Post Euro Express Deutschland GmbH & Co. OHG (DPEED). Collective wage agreements on standard market conditions of work and payment were concluded with the unions for the employees of both companies; these agreements came into force at the time of formation. This allows us to meet the demands made of modern IT and sales companies, particularly by enabling us to offer performance-related pay.

Occupational pension provision modified
We restructured our employer-funded occupational pension scheme in the year under review. As part of the reorganization in line with the collective wage agreements, the previous integrated pension scheme based on public sector regulations was replaced by a fixed amount that is not dependent on external reference systems. Obligations arising from occupational pension commitments to employees are primarily funded by provisions.

The supplementary occupational pension scheme allows every Group employee in Germany to establish an additional occupational pension which also receives government subsidies. Employees convert part of their remuneration into pension contributions which are paid into the PB pension fund established by Postbank Versicherung; in return, they will receive a pension for life.

We have introduced a deferred compensation program for executives and non-executive salaried employees who are not subject to collective wage agreements. In this pension benefit model, executives may choose to convert part of their claim to remuneration into occupational pension benefits.

System of fixed and variable remuneration for executives developed
We have begun to define the approximately 850 second- and third-level Group management positions in accordance with a uniform standard (“role profiling”), and to allocate them to salary bands within a Global Job Banding System. This will establish the conditions necessary for implementing uniform remuneration standards throughout the Group.

In order to ensure strict implementation of corporate goals, we developed a uniform bonus policy for executives. Starting in 2003, the variable component of the total salaries of all executives at the second and third Group management levels was set at 50% and 40%, respectively.

In line with the conditions of the stock option plan introduced in 2000, we issued the second tranche of options to members of the Board of Management and Group executives in fiscal year 2002. They received a total of 10,306,038 options; executives in the US received 446,934 Stock Appreciation Rights (SAR).

Creative employees improve business processes
Our idea management concept is targeted at encouraging the talent and potential among our employees in Germany. Having provided around 85,000 ideas in the previous year, our employees came up with roughly 92,000 suggestions in the year under review, half of which were implemented. This allowed us to save over €50 million (previous year: €38.6 million). We distributed more than €3 million in bonuses to our employees in 2002. Their constructive criticism of existing workflows helps us to continually improve business processes within the Company.We intend to launch similar initiatives across the Group as a whole.

Aiming to promote equal opportunities
Based on our equal opportunity concept, we further developed measures aimed at creating a better work/ life balance and promoting individual professional development and an attitude of cooperation in the workplace. By offering flexible working time models and part-time work, we are supporting our employees in planning their professional and personal lives, as well as improving the Company’s competitive position. A better child care offering and individual qualifications help to expand parents’ professional opportunities.

Focus on health and safety
Occupational health and safety is a top priority for Deutsche Post World Net. First and foremost, we aim to take preventative action by offering a wide variety of individual measures on-site and providing our executives with training on an ongoing basis. Our new internal health and safety organization was certified in accordance with DIN EN ISO 9001:2000 in December 2002. We are particularly proud of the fact that we significantly reduced our accident rate in 2002 – by around 20%. In addition, the sickness absence rate dropped to 5.9%, the lowest level in the Company’s history.

Training and further education intensified and expanded internationally
By providing training and further education as required, we are creating the foundation upon which our employees will be able to meet the changing requirements in our markets. For this reason, we are currently in the process of restructuring our training and qualification units with a view to becoming a value-oriented, professional and competitive provider of training and human resources development services in Germany.

We are particularly committed to providing vocational training. As of December 31, 2002, the Group employed a total of around 6,000 trainees learning eleven different professions. For the first time, we offered apprenticeships as salespersons and clerks for the retail trade. All trainees who successfully completed their training in the year under review were offered a full-time position. In addition, we are making a contribution to the Alliance for Work, Training and Competitiveness with our third consecutive year of successful participation in the German Federal Government’s immediate action program to reduce youth unemployment, among other things.

Junior executives groomed for advancement; executive development program driven forward
The Group’s international focus is also reflected in its human resources marketing activities. In February 2002, we offered internships lasting several months to MBA students from renowned US business schools for the first time. We selected 15 students from a total of more than 300 applicants; they were then deployed at locations around the world.

The “Deutsche Post World Net University” was formed for the purpose of disseminating current management expertise and enabling strategic discussions with top-level executives. Lecturers and venues are chosen individually depending on the content and objectives of the respective program; our first partner in the US is the Wharton Business School. By the end of 2002, around 250 executives had participated in a variety of one- to two-week programs, forming personal networks transcending sectors, countries and cultures in the process. In this way, we are developing a mutual understanding of what constitutes cooperation, and establishing the basis for working together efficiently.