Total Reward Statement Evolution

Pam Schmidt, Manager Retirement Plans, TargetTom Staroszczyk, Total Rewards Portal Leader, Aon Hewitt

Agenda Target’s Total Rewards Journey My Pay and Benefits.com The Results The Future

. . . . from Paper to Portal

Target's Total Rewards Journey

Overview of Target’s Journey

Late 1990’sInternally Developed

Paper Statements

2001Outsourced

Paper Statements

2006Shifted

To Online Statement

2010TransitionedTo Pay & Benefits

Portal

2011 and BeyondGlobal

Expansion

Target—Annual Paper Statements Began producing statements internally in late 90’s Transitioned to paper statements with Aon in 2001 Annual total rewards statements served as the singular place to provide the holistic

snapshot of value Ensured that all employees received the total rewards message once a year Served as a record that could be filed and saved with other important documents

Late 1990’sInternally Developed

Paper Statements

2001Outsourced

Paper Statements

2006Shifted

To Online Statement

2010Transitioned

To Pay & Benefits

Portal

2011 and BeyondGlobal

Expansion

Late 1990’sInternally Developed

Paper Statements

2001Outsourced

Paper Statements

2006Shifted

To Online Statement

2010Transitioned

To Pay & Benefits

Portal

2011 and BeyondGlobal

Expansion

Late 1990’sInternally Developed

Paper Statements

2001Outsourced

Paper Statements

2006Shifted

To Online Statement

2010Transitioned

To Pay & Benefits

Portal

2011 and BeyondGlobal

Expansion

Industry—Annual Paper Statements Late 1990s

Strong demand for printed total rewards statements Small few began implementing “Custom” online total rewards solutions Online solutions were very expensive

Early 2000s More cost effective online total rewards platform were created - designed for efficiency, yet highly

customized for each client. Concept intrigued many clients but access to the internet was an important issue

Target—Shift from paper to online In 2006, began providing paper & online statements through local vendor, Universal Data Corporation

(UDC) Available 24/7—current data, seamless action taking, interactive, provides immediate feedback Personalized for each unique audience—execs, salaried, hourly Expansion beyond today’s annual total rewards—Retirement Income, Equity Growth, Wealth

Accumulation, Survivor Income Interactive modeling to help employees maximize value Required constant promotion to maintain consistent good site usage

Late 1990’sInternally Developed

Paper Statements

2001Outsourced

Paper Statements

2006Shifted

To Online Statement

2010Transitioned

To Pay & Benefits

Portal

2011 and BeyondGlobal

Expansion

Industry—Shift from paper to online Mid 2000s

Online access becoming less of an issue Demand for online total rewards solutions growing Clients needs varied requiring different versions of online solutions:

Communicate the value of the hidden paycheck Help employees understand the mechanics of specific rewards programs so they can take full advantage of what is being offered and maximize their

opportunities

Mid to Late 2000s Clients demanded more flexible solutions - more personalization, targeted messaging, and seamless integration with 3rd parties Communicating the total value of the job offer to candidates also became important. Companies wanted to differentiate their job offers to attract the right talent

to meet their business needs.

Target—One Stop Total Rewards Portal In early Jan. 2010, created benefits portal to include transactional and informational data on all pay & benefits Simplify the user experience for team members—one password, one url, SSO to 3rd parties, consistent branding Gain more traction for total rewards

Any time they manage their 401(k) or other benefits Every year during Benefits Open Enrollment

Driving behavior change through targeted messaging Economies when working with one vendor—administration & portal

Late 1990’sInternally Developed

Paper Statements

2001Outsourced

Paper Statements

2006Shifted

To Online Statement

2010Transitioned

To Pay & Benefits

Portal

2011 and BeyondGlobal

Expansion

Industry—Total Rewards Portal Late 2000s – usage for online total rewards solutions varied – despite heavy promotion, many companies

struggled to achieve consistent usage Online access higher than ever, yet employees were easily confused with too many places to find information Generic communications found not as effective as personalized More personalized communications became a critical component to reaching employees Clients wanted a customizable and flexible communication platform, that could simplify the user experience for

employees and drive behavior changes through more targeted messaging By including Total Rewards in this One Stop Shop solution, clients found they could gain more traction for total

rewards

www.targetpayandbenefits.com

Integrated Total

Rewards

PersonalizedAnnouncementsEasy Access to

Key Data

Simpleand

IntuitiveNavigation

Personalized Communication Platform

Take Charge

You Have Options

An Ounce of Prevention

Right Choices

Incentive Plan

Personalized Communication Platform

Take Charge

You Have Options

An Ounce of Prevention

Right Choices

Incentive Plan

Personalized Communication Platform

Take Charge

You Have Options

An Ounce of Prevention

Right Choices

Incentive Plan

Personalized Communication Platform

Take Charge

You Have Options

An Ounce of Prevention

Right Choices

Incentive Plan

Personalized Communication Platform

Take Charge

You Have Options

An Ounce of Prevention

Right Choices

Incentive Plan

My Pay tab:

My Benefits & Retirement tab:

My Discounts, Perks & Time Off tab:

My Stock Grants tab:

Increased Team Member Engagement Annual Best Team Survey feedback improved

2008 favorability 2009 favorability 2010 favorability

Significantly increased usage

Comparing Usage In 2007, 33,000 unique team members visited the old Web site 109,000 unique IDs visited www.tgt401k.com during 2008 Over 200,000 visits in first two months after portal rolled out in January, 2010 Over 2 million hits during all of 2010

Continuous Improvement Living, breathing real-time portal Monthly content & data refreshes Added Quick Links section Global Expansion

Global ExpansionTarget - India Strategy About 6 months post-live date,

made available for ~1,200 Target India team members

Significant customization for different pay, benefits, and currency

Kudos for providing what U.S. based employees can access on the site

Industry - Global Interest Focus on largest employee

concentrations Consider between one or multiple

applications

What’s Next?

As the economy improves, the workforce will be on the move

Differentiating your job offer will be critical to attracting key talent

Candidate solutions must be seamlessly integrated with applicant tracking systems to keep it simple for recruiters

Total Value Of The Job Offer

Changing employee behaviors requires different techniques

Personalization is playing a large role

The Debate: How Personal Do You Get?

Slow growing trend to get more personal – leveraging key personal health information to drive more targeted messaging

The Personalization Spectrum

Impa

ct

Behavior Change

Awareness

Communication Techniques

Changes in behavior can maximize value of reward programs for both company and employee

Get employees to see the value

Get employees to increase the value

Additional Thoughts Leverage Technology — To eliminate redundancy and improve integration. Consume established

modules through portlet technology to eliminate clicks and provide more accurate results More Interactivity—User Defined Regions—Clients and employees can choose, expand, collapse, and

move relevant modules Social Media—Helping gain employee interest and participation in key initiatives—ex: wellness programs Secure Family Member Access—To enable better education and decision making Find Information Easier— Through the use of a personalized and searchable knowledgebase. Allowing

clients to further simplify the user experience and get employees answers to their questions faster