PPG people do better today than yesterday

Simply put, PPG people make it happen. We do better today than yesterday. We run it like we own it. The guiding principles of The PPG Way have allowed us to further our engagement journey and create a company where everyone can learn and grow, while making us more innovative, productive and competitive.

Despite the ongoing challenges of the pandemic, we have continued to prioritize our commitment to engagement and measuring our performance.

In 2021, we led several initiatives to further our culture through The PPG Way, driving significant gains in employee engagement. We addressed the critical role of leaders and people managers to ensure they are able to foster engagement and model our culture. We also focused on recognizing and connecting with employees at all levels to understand what they need in order to do their best work while balancing their personal commitments.

Culture: The PPG Way

The PPG Way aims to enable, empower and encourage each employee to embrace the tenets of our company culture. It serves as a cultural roadmap for all employees as we strive to achieve our purpose of protecting and beautifying the world.

In 2021, we continued highlighting The PPG Way with manager-led sessions that helped teams find meaningful ways to embed our culture in their everyday work. The outcomes of these efforts are visible in our annual employee engagement survey results, which showed marked improvement on all items tied to fundamental tenets of The PPG Way.

Beginning in late 2020 and continuing throughout 2021, we invited managers looking to increase engagement and drive performance in alignment with our culture to participate in The PPG Way Sprint. This seven-week program, which included a daily microchallenge to build new habits aligned to The PPG Way, engaged about 3,000 employees in 2021, and has reached nearly 5,000 since its inception.

Employee Engagement

Employee engagement is a measure of how authentically we are living our culture.

One way we measure engagement is through our annual Gallup Employee Voice surveys. Following several years of increased participation, in 2021 we had our highest ever participation rate at 85%. According to the engagement survey, our employees were more engaged than ever, and we continued to make meaningful progress amid a challenging year.

Key results and outcomes of the survey include:

• Improvement in our engagement scores on all measured core engagement and The PPG Way items compared to 2020;
• Substantial improvement in our leader accountability index, reinforcing the importance of quality engagement conversations and action planning by leaders with their teams;
• An increase in our percentile ranking as we delivered greater progress than most industry peers; and
• Noteworthy progress in our inclusion index.

We know that a leader influences a team's engagement. Given the critical role of leadership, we continue to find new ways to build leadership capabilities to engage employees. For example, in 2021, leaders at all levels held a series of sessions with their teams, looking to uncover and commit to adopting specific behaviors that strengthen everyday engagement.

We also invited regional leaders to participate in our annual Inspire U meeting series, which is aimed at aligning and inspiring employees with a consistent message across the organization. The meetings feature conversations about PPG's strategies, priorities and the role our leaders play in addressing engagement challenges. In 2021, the focus remained on building understanding and connections between leaders and their teams.

We believe that a highly engaged environment is best created and sustained through candid and continuous dialogue. As part of our listening strategy, we gathered company-wide feedback on several occasions to understand the prolonged pandemic impact, concerns and uncertainty our employees were feeling in 2021.

We also learned that employees' expectations for where and how work is done have evolved as a result of remote work throughout the pandemic. Through employee surveys, we validated that employees desire flexible work arrangements to manage professional and personal commitments, such as childcare, eldercare and their own health and wellbeing. In response, we continued to evolve the global flexible work arrangement program that we launched in 2020.

Our new global guidelines for hybrid work, grounded in The PPG Way, enable our people to balance on-site and remote work and determine where and how work is best done. The flexibility to address business and team needs enables our employees to 'run it like they own it' and develop a way of working that best fits their unique situation, while meeting the needs of all PPG stakeholders. Our flexible work arrangements also provide opportunities for compressed work weeks, job sharing and other solutions for employees to balance their personal and professional lives.

Recognition

To recognize employees for the impact of their contributions, we have a range of formal award programs focused on excellence in sales, sustainability, health, wellness and other core areas.

In 2021, we continued our formal employee recognition program, the One PPG Recognition & Rewards Program. This global program allows employees to recognize their colleagues with a simple thank you or rewards points that employees can redeem for gift cards or other items. Recognition continues to rank highly among engagement factors and showed a meaningful increase in 2021, with total points awarded increasing by 29%, and unique awardees increasing by 26%. Since the program was relaunched in July 2020, we've seen a 325% increase in use.

In addition to the results of our engagement surveys and ongoing focus on recognition, another measure of our engagement is our turnover rate. While engagement is improving across the enterprise, the biggest opportunity is among frontline employees in retail and manufacturing environments who have been most impacted by the pandemic. In 2021, our voluntary turnover rate increased 29% over the prior year. The circumstances of the pandemic drove a higher level of voluntary turnover, with the most significant turnover in our frontline retail and manufacturing workers. This group of PPG employees may be required to work shifts other than normal daylight business hours, making personal and home care responsibilities more challenging to manage, especially throughout the pandemic.

Voluntary turnover for this employee population was much higher than pre-pandemic levels and finding replacement employees remains difficult. PPG continues to leverage agencies and all forms of recruitment to attract replacements, offering competitive and attractive salaries and wages. It's also important to note that we take a holistic view of retention, with engagement being one driver, in addition to benefits, compensation, working environment, growth opportunities and more.