Description of Business

Employees

The average employee* headcount**

	2005	2004	2003
Americas Beverages	6,605	6,774	7,020
Americas Confectionery	14,175	14,002	13,672
EMEA	21,660	21,549	22,611
Asia Pacific	12,624	12,436	12,480
Central	769	662	612
Sub Total	55,833	55,423	56,395
Europe Beverages	2,748	3,019	3,139
Total	58,581	58,442	59,534

The average employee headcount* in the UK in 2005 was 7,460, (2004: 7,468 2003: 7,409).

*For the purposes of this table, an employee is defined as a single individual (not a full time equivalent) in the business employed by us on a full time or part time basis or as a contractor to the business.

** In 2004 we commenced the Fuel for Growth headcount reduction programme, which targeted a 10% reduction over the period 2004-2007. In 2004 we changed our measurement of headcount to include contractors. We track the Fuel for Growth headcount reduction by the number of employed individuals who leave the business. In 2004 this stood at 1,100, and by 2005 at 1,900.

People strategy

We publish a people strategy in support of our business strategy and our annual five goals and 10 priorities. Our people strategy aims to link our organisational capabilities with the value we seek to create for our shareowners. It embraces four areas:

• getting the right people and putting in place the right organisation designs
• attracting, retaining and developing the right range of talent
• building stimulating and attractive workplaces and atmospheres
• rewarding the right performance outcomes and behaviours

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Performance measurement and management

We measure the impact of our people strategy and the contribution employees make to our business through a twopart performance measurement system.

Individual performance is reviewed by an employee's line manager at the half year and year-end and measured against the attainment of clearly specified objectives. These objectives are set at the start of the year through a formal meeting with the line manager and are documented and signed. Managers are also reviewed against the behaviours we describe in our global leadership imperatives: Accountable, Adaptable, Aggressive, Forward Thinking, Motivating, Collaborative, Growing People and Living our Values. The individual is rated on performance and rewarded accordingly. We operate this performance management process globally. We also have a separate process to identify the potential of our managers to grow into new roles and this is conducted on an annual basis.

Our ability to gain the engagement and earn the commitment of our people is also measured. We use a climate survey tool which has proved a direct correlation between the performance of a business and the level of engagement of its employees (the discretionary effort an employee will give). The climate survey was undertaken with the most senior 10,000 managers globally in 2004 and then rolled out to all employees in 2005.

In 2005, we had an excellent 81% response rate and strong results. Nearly 90% of respondents around the world are proud to work for Cadbury Schweppes, know what is expected of them and constantly try to find ways of working better. The areas where we can improve are particularly related to enabling people to achieve more: for the business, themselves and for their communities. Our new Passion for People programme described below will help train our managers in the required skills, and help the business reinforce its distinctive workplace environment.