Human Capital Conference

Balanced Scorecard Collaborative, Inc. 55 Old Bedford Road Lincoln, MA 01773 Tel: 781.259.3737 Fax: 781.259.3389 bscol.com

Creating an Integrated Human Capital Strategy

Beth HummelsVice President, Human ResourcesWells Fargo Home and Consumer Finance Group

1Discussion Topics

Business and Human Resources/Communications Overview Balancing Business and Human Capital Needs Overview of the Human Capital Strategy Alignment Defining Moments Key Roles Next Steps

2Wells Fargo & Company

Data as of February 2005

Community Banking

Total TMs in org = 63,981

Wholesale Banking

Total TMs in org = 14,872

Home & Consumer Finance Group

Total TMs in org = 54,430

Other Businesses

Total TMs in org = 20,925

3Home and Consumer Finance Group

Wells Fargo Home

Mortgage

Wells Fargo Home

MortgageWells Fargo Consumer

Credit Group

Wells Fargo Consumer

Credit GroupWells Fargo

Financial Wells Fargo

Financial Group

& WFSC

-Origination:-First Mortgages-Home Equity Lines -Home Equity

Loans-Servicing-ARM Loan Portfolio-Captive Reinsurance-Ancillary Products

-Home Equity Lines-Home Equity Loans-First Mortgages-Personal Loans-Personal Lines

-Trustee Services:-Mortgages-ABS-CDO-Municipals

-Servicing-Master Servicing

-Consumer Products:-First Mortgages-Home Equity Loans-Home Equity Lines-Automobile Loans-Personal Loans -Revolving Credit Lines-Credit Cards

-Retail / Commercial:-Retail Private Label -Auto Dealer Credit-Lease Financing-Receivables Lending

Group&

WFSC

-Human Resources / Communications

-Strategic Development-Government Relations -Technology

4Group Net Income Trend

2000 2001 2002 2003

32% CA

GR

CAGR = Constant Annual Growth Rate

2004

5Delivery Model

6Balancing Business Line Needs with Group Needs

7Common Where Possible, Custom Where it Counts

8Balancing Business Line Specific Needs with Group Needs An Example

9Objectives for Creating the HCFG Human Capital Strategy

To focus on human capital needs for future success To provide a framework for designing and implementing solutions To create capacity to extend quality and reach of HR/C services

10

How the HCFG Human Capital Strategy was Developed

Purposefully determined time to kick-off strategy work to ensure effective timing for our team and in context of business needs

Interviewed HCFG Business Leaders and HR/C Leadership Team to discuss business needs, priorities and expectations of HR/C

Validated Group EVPs expectations to leverage an enterprise-wide approach for HR/C services

11

12

Evolution of the Human Capital Strategy

13

Alignment To the Business Strategy

HCFG Global Programs a collaborative effort in eight areas of commonality Real Estate Secured Lending Value Chain Drive Customer Value Common where Possible, Custom where it Counts Capture $1.8 trillion opportunity

HR/C as a Strategic Business Partner Leading Change through the Human Capital Strategy Leadership Communication Tool

14

Alignment Whats Expected from HR/C

Creation of Service Level AgreementsSLA Strategy three levels Includes 9 HR/C Core ServicesConsistent template

Measure performance through Client AssessmentMeasures 9 HR/C Core ServicesAdministered to Group EVPs direct reports and two-downsBaseline assessment completed in December 2004On-going performance measured on annual basis

Shared ServiceSLA

Business Line SLA

HCFG HR/C Master Core Services

15

Alignment Understanding Where Were At HR/C Human Capital Strategy Survey

All HR/C Team MembersAdministered May 04, November 04 and May 05A way to understand HR/C climate, the status of the strategy

implementation process and effectiveness of learning tools Identify levers, strengths and opportunities

ResultsMovement from awareness and understanding to utilization and

applicationPerformance of survey results used for Learning & Growth

Perspective measures

16

Alignment HR/C Team Member Goals

Integration of Human Capital Strategy into HR/Cs Performance Management (MPP) and Incentive Compensation (ICP)

HR/C Leadership Team and their direct reports completed 2005 MPP/ICP goals by the end of 2004 linkages made to Human Capital Strategy

Cascading of MPP/ICP goals to all HR/C team members will be completed by 1Q2005 HR/C EVP

HR/C Leadership Team

All Others TMs

HR/C Leadership Team Direct Reports

17

Defining Moments

Change in leadership behavior HR/C MPP/ICP generic Human Capital Strategy goal in mid 2004 Completion of measures in August 2004 September 2004 off-site meeting with HR/C Leadership teams direct

reports new organizational structure Town Hall meetings Perception of the Strategy moved from being extra work to the work Completing 2005 HR/C MPP/ICP goal planning early

18

Defining Moments cont.

Group EVP including Human Capital objectives in HCFG ExecutivesICP Goals

Quarterly Human Capital Strategy review meetings more strategy focused and performance driven

Openness for feedback and dedication to taking action HR/C EVP and HR/C Leadership Team Assessment All HR/C Human Capital Strategy Survey (May and Nov. 2004) HR/C Human Capital Strategy and Voice of the Team focus groups

19

Key Role Business Partners

Provide feedback Convey business direction Support the design for the enterprise and deliver to the business

approach Approve shared resources to implement initiatives Move beyond awareness of Human Capital Strategy to execution

20

Key Roles - HR/C Team

HR/C EVP and Leadership TeamOwnership Accountability Results Driven Consulting

HR/C Leadership Team Direct ReportsAccountability Leadership Empowerment Consulting

Measure LeadersHuman Capital Data Experts Influence Strategy Advocates

Consulting All HR/C Team Members

Collaboration Alignment Execution Consulting Share Successes

21

Next Steps

Continuous alignment with business strategies Development and execution of Service Level Agreements Continued strategic consulting with business partners Continued development of governance systems (link to risk

management, budget development/management and project management)

Continued delivery of HR/C consulting and core services Continued evolution of the Human Capital Strategy

22

Questions

Creating an Integrated Human Capital StrategyDiscussion TopicsWells Fargo & CompanyHome and Consumer Finance Group Common Where Possible, Custom Where it CountsBalancing Business Line Specific Needs with Group Needs An ExampleObjectives for Creating the HCFG Human Capital StrategyHow the HCFG Human Capital Strategy was DevelopedEvolution of the Human Capital StrategyAlignment To the Business StrategyAlignment Whats Expected from HR/CAlignment Understanding Where Were AtAlignment HR/C Team Member GoalsDefining MomentsDefining Moments cont.Key Role Business PartnersKey Roles - HR/C TeamNext Steps