Pfizer Performance Management Process REV 011510 Confidential and

Pfizer Performance Management Process REV 011510 Confidential and Internal to Pfizer - subject to works council and/or union consultations and other legal requirements. 1

Performance Management Process • Roles of the Manager & Colleague • The Global Performance Management (GPM) Process and Tool • How do I get started & GPM materials Confidential and Internal to Pfizer - subject to works council and/or union consultations and other legal requirements. 2

Performance Management at Pfizer Performance Management is a global process: • Aligns across Pfizer • Helps the organization manage the performance and development of each colleague at every level • Enabled through technology Organizational benefits: • Consistent process in managing performance globally • Provides accurate, real-time and historical performance data • Drives standards across the enterprise Performance Management works in conjunction with other key people processes such as compensation and talent planning to provide an integrated approach to managing, measuring, developing and rewarding colleagues for their contributions Confidential and Internal to Pfizer - subject to works council and/or union consultations and other legal requirements. 3

Why have Performance Management? • Colleagues perform best when they feel personally connected to their work and the organization and have a clear vision and understanding of what needs to be achieved • Managers can most effectively drive performance by providing colleagues with informed, positive, fair, accurate and detailed feedback both formally and informally • Performance discussions should focus on achieving objectives and long term career goals with emphasis on the skills and competencies for the future Only Positive Results from Increasing Employee Understanding: Clarifying employee performance standards not only positively impacts individual performance, but also drives several important employee attitudes. Employees who fully understand the standards on which they are evaluated try 19 percent harder, are 34 percent more committed to the organization, and are 36 percent more likely to feel “matched” to their job. These substantial changes in employee attitudes, plus the obvious direct impact on performance of 31 percent, result in a substantial total impact on performance of 36 percent. Corporate Leadership Council report 2002 Confidential and Internal to Pfizer - subject to works council and/or union consultations and other legal requirements. 4

Performance Management and the bottom line • Managers must recognize the financial opportunity that managing performance presents. Research shows that focusing on Development (a performance management component) can increase colleague performance by 25%, which translates to $12. 5 billion in annual revenue Employees Reporting to Manager A Employees Reporting to Manager B Manager A is very ineffective at developing employees Manager B is very effective at developing employees 125 100 25% Performance Improvement directly attributable to Manager B’s effectiveness at employee development Source: Learning and Development Roundtable 2003 Employee Development Survey. • In addition, execution of globally aligned, integrated and differentiated HR programs would further increase the market value by another $20, 000 to $40, 000 per colleague (based on research by Huselid) Confidential and Internal to Pfizer - subject to works council and/or union consultations and other legal requirements. 5

A Pfizer Manager Core Competency: Grows Others Engage Today’s Talent & Build the Next Generation Grows Others “Grows Others” is one of the 9 Manager core Competencies: • Provides challenging and stretching tasks and assignments • Holds frequent development discussions • Is aware of each direct report's career goals • Constructs compelling development plans and executes them • Pushes people to accept development moves • Will take on those who need help and development • Cooperates with the developmental system in the organization • Is a people builder Draft & Confidential; Preliminary plans only; implementation of intentions expressed in this document may be subject to employee consultation in certain countries Confidential and Internal to Pfizer - subject to works council and/or union consultations and other legal requirements. 6

Pfizer Core Competencies Colleague Manager Functional/Technical Skills Demonstrates Business Acumen Acts Decisively Seizes Accountability Grows Self Change Agile Acts decisively Seizes Accountability Holds people Accountable Grows Others Leads Change Self Awareness Commits to “One Pfizer” Peer Relationships Commits to “One Pfizer” Build Effective Teams Confidential and Internal to Pfizer - subject to works council and/or union consultations and other legal requirements. Senior Leader Anticipates Customer & Market Needs Strategic & Innovative Thinking Acts Decisively Seizes Accountability Holds People Accountable Grows Leaders Builds change-Agile Organizations Self Awareness Insight, Influence & Inclusion Commits to “One Pfizer” 7

My Objectives Objective Setting Purpose • Colleague and manager plan to achieve results by: – – Defining contributions relative to colleague’s role, manager’s objectives, team and Pfizer business Creating agreement on performance objectives and determining how to demonstrate Pfizer Values and Core Competencies to drive optimal results Key Steps 1. Colleague drafts individual performance objectives that align with organizational goals and are written in SMART format • Specific, Measurable, Actionable, Realistic, Time-bound 2. Colleague submits request for manager approval of Objectives 3. Manager approves objectives and colleague is committed to objectives 4. If manager approves objectives and modification is later required, colleague may modify objectives and resubmit or manager may return objectives to colleague for modification Confidential and Internal to Pfizer - subject to works council and/or union consultations and other legal requirements. 8

My Development Planning Purpose • Opportunity for colleagues and managers to: – – – Assess strengths and development needs Focus on building strengths Discuss and agree on aspirational outcomes Agree on development outcomes that focus on short-term achievement of current performance objectives and long-term achievement of professional aspirations Create an action plan with a variety of development actions to achieve these outcomes Identify time frames and tracking methods to ensure outcomes are achieved Key Steps 1. Based on self-assessment and other feedback, colleague drafts professional aspirations, strengths, development needs and development outcomes and actions 2. Colleague submits request for manager approval of and commitment to Development Plan 3. Manager approves the Development Plan and colleague is committed to the plan, which can be modified as needed Confidential and Internal to Pfizer - subject to works council and/or union consultations and other legal requirements. 9

My Performance Progress Reviews (mid-year) Purpose • Opportunity for reviews between annual reviews (typically at mid-year, and as often as needed), to document progress toward: – – – Performance objectives Demonstration of Pfizer Values and Core Competencies Overall performance to date Key Steps 1. Colleague prepares self-review by documenting achievement of performance objectives and demonstration of Pfizer Values and Core Competencies; colleague submits to manager 2. Manager and colleague can work independently on their particular version 3. If the manager has not reviewed yet, colleague can recall the request and continue editing Progress Review 4. Manager writes and updates the Progress Review, which serves as official documentation 5. Manager and colleague meet to discuss their review, as well as share information and perspectives Confidential and Internal to Pfizer - subject to works council and/or union consultations and other legal requirements. 10

My Performance Annual Review Purpose • Opportunity for a formal annual review, to document year-end achievement of: Performance objectives, Demonstration of Pfizer Values and Core Competencies, and Overall performance Key Steps 1. Colleague prepares self-assessment by documenting achievement of performance objectives and demonstration of Pfizer Values and Core Competencies; colleague submits to manager 2. Manager writes and updates the Annual Review, which serves as official documentation and determines colleagues rating; manager submits to next-level manager who approves the manager’s rating 3. Colleague acknowledges rating and may add final comments 4. Year-end ratings affect merit increase, and bonus and long-term incentives if elegible (This may not always apply to non-US, non-GPP colleagues) Confidential and Internal to Pfizer - subject to works council and/or union consultations and other legal requirements. 11

Pfizer Global Performance Rating Scale Performance Categories (Recommended distribution guidelines) Exceptional Results Description- Performance with Integrity and consistent demonstration of the Pfizer Values is foundational to the way we work, must be considered in assessing results, and will directly impact the final rating. Full demonstration is required for a rating of “Consistently Met” or higher. Expectations were surpassed – Excellent results and recognizable demonstration of Integrity in achieving performance outcomes – “Top Quality” products and services – Accomplishments far in advance of agreed-upon time frames and/or financial criteria (i. e. , budget, plan, allocated resources) Significantly Exceeded Expectations were exceeded or significantly exceeded – Superior Results and operates with integrity in daily exchanges, actions and in achieving performance outcomes – Products and services of superior quality – Accomplishments in advance of agreed-upon time frames and/or financial criteria Exceeded Expectations were exceeded in some areas and definitely met in all others – – Consistently Met Expectations were met – – Partially Met Significant Results and upholds integrity in achieving performance outcomes Products and services are of high quality Some accomplishments in advance of, some aligned with, agreed-upon time frames and/or financial criteria Drives business results with Integrity Fully satisfactory performance, solid results, fulfilled job requirements and integrity demonstrated in achieving performance outcomes Good quality products and services Accomplishments aligned with agreed-upon time frames and/or financial criteria Delivers business results with Integrity Expectations were partially met, improvement required in some areas – Results partially fulfilled requirements and expectations – Products and services of acceptable quality – Accomplishments not consistently aligned with agreed-upon time frames and/or financial criteria Deficient Results Expectations were not fulfilled, performance unsatisfactory, significant improvement required – Results substantially below job requirements and expectations – Products and services of deficient quality – Accomplishments not regularly aligned with agreed-upon time frames and/or financial criteria Significantly Deficient Results Expectations were not met, unacceptable performance, immediate improvement required – Results consistently poor and significantly below job requirements and expectations – Products and services of notably deficient quality – Accomplishments not aligned with agreed-upon time frames and/or financial criteria Confidential and Internal to Pfizer - subject to works council and/or union consultations and other legal requirements. 12

My Compensation Dialogue • The Compensation dialogue is the final part of the performance management cycle • Opportunity to connect on how performance influences: – Merit increase (annual salary review) – Global Performance Plan (bonus/incentive plan) – Long term incentives, i. e. , allocation of stock options – Talent assessment Confidential and Internal to Pfizer - subject to works council and/or union consultations and other legal requirements. 13

Rating Link with Compensation and Talent The GPM process supports a clear link between performance and compensation. The individual performance rating contributes to a colleague’s merit increase determination and, if eligible, their Global Performance Plan (GPP) and Long Term Incentive (LTI) award determinations (including stock options and other equity-based awards e. g. RSU). The Individual performance rating is an input to Compensation and Talent Management. Ratings are completed prior to Compensation application. Individual Performance Rating Position in Range/ Compa Ratio + Merit Budget Individual Performance Rating Company Performance/ Funding Global Performance Plan (GPP) Bonus Individual Performance Rating Potential + Budget Stock Options / Restricted Stock Units (RSUs) Merit (Annual Salary increase) Also, it is important to note that individual performance ratings together with potential are key to identifying talent within Pfizer. Individual Performance Rating Potential Confidential and Internal to Pfizer - subject to works council and/or union consultations and other legal requirements. Talent Management 14

Ongoing Coaching and Feedback Colleague Manager Before During After • Decide what to accomplish and think through some questions to promote self-discovery • Decide if it is formal or informal, and what method of communication is most appropriate: in person, over the phone, email, etc. • Prepare specific, objective examples • Anticipate how the colleague will react and how to respond • Plan for ample time • Use positive or constructive feedback • Actively listen to the colleague • Take notes • Follow up on any commitments or action items • Document feedback – whether it is positive or constructive • Keep an open dialogue and be available for follow-up • Check to see how the colleague is doing and if he/she has questions • Plan for ample time • Actively listen to the manager • Take notes • Understand your objectives and discuss your skills, abilities and areas for improvement with your coach • Follow up on any commitments or action items • Document feedback • Keep an open dialogue and be available for follow-up • Continuously ask for feedback and discuss your performance • Seek feedback from others. Confidential and Internal to Pfizer - subject to works council and/or union consultations and other legal requirements. 15

Talent Planning • End of June – Talent Assessments Complete – – 6 Box Grid* Retention Risk* Next potential position Next potential roles • • End of July – Succession Plans Complete Mid of August – Mid September – individual reviews with Division head and direct reports Mid September -- LT talent review End of September -- CEO led talent review • Levels covered in Talent Reviews – LT Review • • – Division head minus 2 Key Talent Business Unit or Functional Group • • VP Business Unit minus 2 Key Talent *Ok if done sooner Confidential and Internal to Pfizer - subject to works council and/or union consultations and other legal requirements. 16

Accessing GPM (Colleague Section) Choose one of the following methods to enter GPM Home from the hr. Source colleague desktop*: 1. Scroll through the available Quick Links list and click to highlight GPM Home, then click Go. 2. In My Menu section, click My Career link to expand the list. Then, click the Global Performance Management link, followed by clicking GPM Home. 3. In desktop section titled “Tell Me About …. ” click My Career link. Click GPM Home in drop-down list under My Performance, then click the Go button. *The enhanced GPM system is scheduled for launch in mid. February, 2010. However, all colleagues are encouraged to set their objectives using the offline Microsoft Word template that can be accessed from the 2010 Performance Management Process Resource webpage, where you will also find tips for setting SMART objectives. Confidential and Internal to Pfizer - subject to works council and/or union consultations and other legal requirements. 17

Colleague Home Page 1 Highlights 1. Colleague Desktop: to access the colleague section of GPM 2 3 5 4 6 7 Confidential and Internal to Pfizer - subject to works council and/or union consultations and other legal requirements. 2. Manager Desktop: to access the GPM documents of colleagues reporting to you 3. Click year in upper right hand corner to access performance documents from previous years 4. ‘Learn More’ links provide fast access to help and learning resources 5. Action buttons provide quick access to available documents 6. Quick access to Create/Modify Attachment and Notes 7. Color-coded status icons 18

Create Objectives John Colleague - 0000000 Free-form text field to enter Objectives* Jane Manager *Mock-up, subject to change Confidential and Internal to Pfizer - subject to works council and/or union consultations and other legal requirements. 19

GPM Home for Managers (Manager Desktop) Highlights: 5 2008 2007 You are working with 2009 documents 4 1 1. Quick snapshots of all colleague GPM documents 2. Color-coded statuses show you where you are in the process 2 3 3. Next steps marked with a yellow triangle 4. Easy access to help and learning resources 5. Access to documents from prior years Confidential and Internal to Pfizer - subject to works council and/or union consultations and other legal requirements. 20

Tip Sheets Helpful tip sheets are available on line within the GPM system by clicking the “Learn More” links • Numbered steps walk colleagues through the system • Screenshots and detailed instructions make it easy to follow the steps in GPM Confidential and Internal to Pfizer - subject to works council and/or union consultations and other legal requirements. 21

Colleague GPM Help- Tip Sheets & Learning Materials Confidential and Internal to Pfizer - subject to works council and/or union consultations and other legal requirements. 22

Global Talent Planning The Global Talent Planning system can be accessed from the Manager Desktop Confidential and Internal to Pfizer - subject to works council and/or union consultations and other legal requirements. 23

Global Talent Planning- Landing Page Colleague, Jane Confidential and Internal to Pfizer - subject to works council and/or union consultations and other legal requirements. 24

Help Who do I contact for help with GPM? – If you have any questions about the GPM system or about the year-end process, please contact the hr. Source Center at 1 -866 -4 SOURCE (1866 -476 -8723). If you are outside the U. S. , please contact your local HR support. – For more information on Core Competencies, please visit: http: //cwprod. pfizer. com/LEAD/WTOC/default. html Confidential and Internal to Pfizer - subject to works council and/or union consultations and other legal requirements. 25

Performance Management Planning Calendar JAN FEB MAR Performance Colleagues create Management APR MAY JUN JULY AUG SEP OCT NOV DEC GPM available Manager approves goals Performance Goals Approved Managers and Colleagues work on progress reviews Mid-years created Manager conducts Annual Review Managers release Annual Reviews Mid-Year Performance Discussion are held GPM releases Annual Reviews Talent Planning Colleague Self Assessment due Managers collect feedback Managers create colleague performance reviews Calibration Development Planning Review and finalize merit, GPP and LTI recommendations ------------ Ongoing ------------- Review and update IDP as appropriate. At minimum, update IDP annually. Mgrs conduct comp discussions Compensation Planning Tool closes Compensation Confidential and Internal to Pfizer - subject to works council and/or union consultations and other legal requirements. 26