ESG Report 2023

9.1.2 Talent Retention In order to retain professional personnel, the Group has established a dual - channel promotion management system. Under the two-way management system, employees can select management or professional function channels based on their career development direction, which helps to improve the matching of employees' positions and give full play to employees' values. The main consideration for promotion via the management channel is the ability of the management personnel, including team management, judgment and decision-making, as well as communication and coordination. Promotion via professional function channel focuses on seniority, professional knowledge and experience, including job performance, level of professional knowledge, experience and seniority. Upon application for promotion, employees will undergo relevant promotion assessments such as job qualification review, comprehensive evaluation of professional and technical skills or interviews according to his/her grade and promotion channel. Employees will be promoted after he/she passes the promotion assessment and his/her application is approved. In 2023, the Group's employee turnover rate is 18%, a 5-percentage-point increase from the 13% in 2022. The average length of employment of male employees in the Group in 2023 was 7.1 years, while the average length of employment female employees in the Group was 6.8 years. Both of these figures demonstrate the effectiveness of the Company's talent retention plan. For our research and technology teams, we have developed a special talent sequence and talent mobility system. The design of the talent sequence follows the requirements of the organisational development rules and is divided into research and development sequence, technical sequence, operation sequence, sales sequence, functional sequence, and management sequence, laying the foundation for cross-position mobility and upward and downward mobility of talents. Cross-position mobility is an important strategy for the company to cultivate comprehensive talents and to lay the foundation for the company to better realise its future commercial value. We encourage our employees to propose requirements for horizontal development in the direction of their strengths and to develop their multiple skills. 62 9.1.3 Employee Incentive In order to boost employees' motivation at work and facilitate employees' career development, the Group has established a comprehensive performance appraisal and promotion system. Under the performance appraisal system, the Group will regularly conduct comprehensive evaluations on employees' work performance, training records, personal qualities, etc. based on the nine principles of fairness, consistency and objectivity etc. The performance appraisal leading group is responsible for formulating performance management policies, handling related disputes and appeals, and monitoring the effectiveness of performance appraisals in accordance with the principles of performance appraisal. Employees' performance appraisal results will be used as the main reference basis for evaluating the employee's ability to take up the post, personal salary adjustment and job promotion, so as to offer employees rewards and promotion opportunities that they deserve. We also provide bonus to employees with outstanding performance or employees who have made special contributions to the Group to strengthen their enthusiasm for work. Principle of objectivity Principle of consistency Principle of development Principle of fairness Principle of open communication Principle of openness Principle of timeliness Principle of regularity Principle of impartiality Principles of Performance Appraisal Environmental, Social and Governance Report 2023 The United Laboratories International Holdings Limited The Group is also pushing an employee share award scheme, providing the employees that have demonstrated excellent performance with benefits such as ownership in the company, financial rewards, retirement benefits, and tax incentives to motivate and reward employees for their contributions to the Group. During the Year, the Group's shareholders' meeting approved the incentive plan: On 13 November 2023 (“Date of Grant”), the Board resolved to grant a total of 12,096,900 unvested Shares (the “Award Shares”) to Selected Participants (the “Grantees”) in accordance with the terms of the 2023 Share Award Scheme. The shares granted to the Directors amounted to 1,805,700 unvested shares, while the remaining 10,291,200 unvested shares were allocated to other grantees of the Group.