To be a leading pharmaceutical company, it is critical that our workforce operates at the best of its abilities. Recognizing this, we are striving to become a high-performance organization. Our efforts to build a positive working environment that promotes high performance are based upon the following principles:

1.	We are a unified Company, with all employees sharing in the mission of improving global health.
2.	We share a strong core of ethics and integrity.
3.	We put patients and customers first.
4.	We value diversity and inclusion as essential, integrated elements of our culture and leadership.
5.	We demonstrate scientific, business and operational excellence.
6.	We are results-driven and highly competitive.
7.	We are empowered to make decisions and hold ourselves accountable for the outcomes.
8.	We innovate and take appropriate risks.
9.	We value feedback and learn from our successes and our mistakes.
10.	We encourage debate and communicate candidly and respectfully.
11.	We are efficient and agile, and responsive to change.

Leadership Standards, Employee Development and Professional Growth

In 2007, Merck introduced new employee behavior standards closely aligned with the Company's business strategy and our Code of Conduct. These Leadership Standards build on prior guidelines and are focused on four themes — innovation, inspiration, impact and integration with Merck's values — describing the behaviors expected of both employees and managers.

Merck conducts a rigorous and transparent annual performance review of all employees at all levels globally to guide Company decisions relating to compensation and rewards. Employee performance is measured, in part, by how well employees demonstrate Merck's Leadership Standards. In this way, we seek to emphasize not just what an employee achieves, but also how he or she achieves it. This is so critical to the Company that, beginning in 2007, the annual incentive bonus of management-level employees is determined, in part, by the leadership that each demonstrates in terms of collaboration and teamwork, questioning the status quo, delivering value to our customers and fostering new ways of working.  This approach was introduced so that managers throughout the Company will model expected values and behaviors and more quickly embed them across Merck.

In addition, we conduct an annual employee development planning process in which managers discuss with each of their employees employee strengths and development needs and jointly create an action plan to strengthen development areas and build new leadership skills. 

Training

To create a high-performance organization and stimulate individuals to achieve their full potential, we offer a wide range of training and educational programs and resources. Each of Merck's three main divisions — research and development, sales and marketing and manufacturing — as well as major support functions, such as finance and global services — have established training organizations to build the required functional, technical and scientific skills.

To support these organizations, Merck sponsors a skills development curriculum to build leadership and management skills for all levels of employees globally.  This includes:

• iLead - Where leaders come to learn: The iLead site houses approximately 5,000 - 6,000 learning resources that employees can use to develop their leadership skills at all levels. Resources are available in the following formats: "on demand" web-based modules, classroom programs, on-the-job development suggestions, articles, tools and video podcasts.
• Managing @ Merck: This course builds the people management and team leadership skills required to align and optimize employee performance and to collaborate effectively across organizational boundaries.
• Team Development: There is a suite of programs for team development and team building which range from formal learning experiences to "action learning"- based interventions that help teams develop skills and competencies as they pursue real business goals.
• You & Your Success program: For those earlier in their career, this course aims to help employees manage their careers and align personal and professional objectives with practical strategies for achieving both.
• Merck Sigma: Based on the six-sigma approach, this course is designed to maximize efficiency, reduce errors and minimize risks. Merck conducts regular Lean Six Sigma training for employees, which leads to "Green Belt," "Black Belt" and "Executive Belt" certification in Merck Sigma tools and methods. In three years, Merck has trained more than 2,600 employees in Merck Six Sigma. Merck is deploying Merck Sigma across the Company to help drive business results and support the critical work under way throughout the Company.

Advancing Employee Education

Merck's U.S. tuition reimbursement policy through the Company's Educational Assistance program encourages employees to further their self-development for their current assignments and/or help them prepare for new assignments. The program includes financial assistance for undergraduate and graduate education.

Compensation

In 2008, Merck paid a total of $5.03 billion in payroll expenses, excluding benefits.  Merck's global compensation and reward program also includes an incentive plan of cash awards based on performance.

Overall compensation at Merck is directly dependent on our corporate performance, as well as on specific internal metrics related to the performance of an individual employee and their functional group. Employees at all levels have objectives against which they are assessed by their supervisor. Information on Merck's global compensation and rewards program is available to all employees on the Company's Intranet site.

Benefits

In many countries, we offer health insurance, life and injury insurance, disability insurance, retirement income benefits and insurance for business travel. In the United States, employees also can opt for tax-free Flexible Spending Accounts for health spending and/or dependent care costs. In addition, in the United States we extend health care and various insurance benefits to employees' same-sex domestic partners and their partners' eligible dependent children.

Worldwide, Merck offers retirement benefits that are competitive with our peers and general industry. In the United States, for example, the Merck 401(k) Plan allows employees to contribute up to 25 percent (with an IRS pre-tax cap currently of $16,500), and Merck will match up to 75 percent of the first 6 percent. To assist investment decision-making, all employees can use the Financial Engines^® service at no cost to receive personalized investment advice. In addition, employees with at least 10 years of service are eligible for health care benefits at retirement.

Other Benefits and Services

At certain Merck sites, including the headquarters in Whitehouse Station, New Jersey, employees can see a health care professional on-site, usually on the day they need to, for such services as immunizations and health screenings. In addition, at many of our sites we provide on-site services such as subsidized cafeterias, oil change, dry cleaning, gyms and fitness classes.  In the United States, our employees can also bank through the Merck Employees Federal Credit Union, which offers competitive interest rates on savings accounts and lending. Merck established the Credit Union in 1936 to help employees during the Depression in the United States.

Diversity and Inclusion

We believe that our human and organizational differences, when managed successfully, will make us a more innovative, agile and profitable company. By leveraging our differences, we can build and sustain a workforce and culture in which people are engaged and motivated to work at the highest level of their individual and team capabilities. In 2007, Merck initiated a new global diversity strategy, under which the performance and compensation of our managers and leaders now is linked to measures related to fostering diversity and inclusion. As part of this strategy, in 2007, Merck also established 10 Global Constituency Groups representing the diversity of people across Merck. For more details, go to Promoting Diversity and Inclusion.

Work-life Effectiveness, Support and Flexibility

Flexibility is important to employee productivity and retention.  In fact, in a recent global survey, 85 percent of employees reported that flexibility is important to their retention, and even more important to women.  We offer employees, depending on local considerations, a number of options to help them effectively manage all aspects of their lives:

• Merck implemented flexible work arrangements in the United States more than 10 years ago with the intention that they be used as a business tool and strategy to create a work environment in which employees could simultaneously achieve business objectives and maintain work-life effectiveness. In 2008, we implemented a global flexible work arrangement policy and launched tools to increase access to such arrangements worldwide. As awareness and familiarity with flexible work arrangements increases, flexible hours and job shares are becoming more common-place. For more details on Merck's approach to flexible work arrangements, click here.
• In the United States we have four onsite childcare centers.  We also provide back-up care when schools are closed. Our centers offer high-quality, developmentally appropriate curricula with low teacher/child ratios that meet local accreditation standards.
• Mothers with infants can access lactation programs and in some cases, dedicated facilities.
• In the United States, we provide unpaid childcare leave for birth or adoptive parents for up to 18 months. Since 2003, Merck has provided a maximum reimbursement of $5,000 per child, per family, for eligible, adoption-related expenses through its Adoption Assistance Program.
• The James J. Kerrigan Memorial Scholarship Program, named after Merck's President from 1950 - 1955, provides financial assistance to children of Merck employees through scholarships for undergraduate study at accredited colleges or universities in the United States.  Scholarship opportunities for employee's children are made available to all employees. Since the Program's establishment in 1956, Merck has provided more than $13 million in scholarship aid through the program.
  
  
• Merck also recognizes the complexity of college selection and application processes, and that parents can be overwhelmed in trying to help their children choose. Through our College Coach program in the United States, Merck provides live webinars, virtual learning center and personalized coaching to teenagers of employees and their parents to guide them through important education challenges, including selecting, applying to and financing college.

Health and Safety

A healthy and safe workforce is a more productive workforce. Merck provides employees with a wide variety of health programs in alignment with the highest standards of medical care and regulatory requirements to enhance their health and well-being. Through our Health Matters initiatives, we offer a range of confidential personal tools, programs and activities to support individual's health choices and to build a work culture that reinforces healthy, safe behaviors. U.S.-based employees can also access our Employee Assistance Program, which provides free short-term counseling on health matters, legal consultations and financial counseling. Worldwide, we make special disability accommodations available to all our employees with special needs. In addition, we are committed to providing a safe working environment through taking preventative actions as well as closely tracking accidents, injuries or illnesses, so that we can address problems promptly and work toward eliminating occupational injuries and illness. For more information, click here.

Employee Giving

Our employees want to contribute to their communities and we encourage that as a way for Merck to be an integral part of communities worldwide.

• Partnership for Giving: The Merck Company Foundation matches U.S. and Puerto Rico-based employee and retiree contributions to eligible U.S. non-profit organizations up to $30,000 per donor per year. Our support for employee contributions to worthy causes not only assists thousands of organizations but also expresses Merck's engagement and support of our communities.
• Employee Volunteering: In January 2009, a new Global Employee Volunteerism Policy was introduced to expand Merck's culture of volunteerism and to encourage employees worldwide to volunteer. Merck considers enhanced employee volunteering as a way to engage with individuals and groups in our communities and hopes to expand opportunities for employee involvement in local communities.
  
  Merck also has numerous local volunteer programs in place around the world addressing a variety of societal challenges, from HIV education in Brazil, "Roll Up Your Sleeves" in the Netherlands, "Lend a Hand" in Malaysia and "Clean Up Australia Day," to an award-winning pro-bono legal assistance program in the United States and "Community Days" in the Philippines. To read about local programs, click here.
• Merck Blood Drives: To enable employees who wish to give blood, Merck runs regular blood drives at many of our sites, in partnership with the Red Cross or Red Crescent and other volunteer organizations.

For more information on these and other programs, click here.

Employee Communication and Engagement

Our employees use numerous mechanisms for commenting on Merck's business strategy, performance and work environment. An annual culture assessment provides ongoing, global feedback that we rigorously analyze to inform our decisions. In addition, at quarterly Employee Business Briefings that are available live via webcast throughout the year, employees can question Merck's senior management team about business decisions and practices. Merck Chairman, President and CEO Richard T. Clark also meets regularly with smaller groups of employees for informal breakfast and town hall discussions. In 2007 and 2008, he held 25 such sessions with employees worldwide.

The Company has a daily online newsletter and an employee Intranet portal to communicate more broadly with employees worldwide. In 2008, we transitioned our print publications online to support our "Go-Green" strategy.

If our employees have any concerns or wish to report behaviors that seem at odds with Merck’s Code of Conduct (PDF*), they can contact the Merck Ombudsman and/or the Merck AdviceLine.

For more information on how we communicate and engage with our employees, click here.