Employees

Impacts

Agrium has a significant impact on our employees by supporting their career development and financial goals.
Our programs and policies directly impact workplace safety and create a work environment free from
harassment and violence. We strive to create an environment where all employees feel valued and are
engaged in the implementation of company strategies.

Issues

• Employee Attraction and Retention - Changing demographics and strong economic growth in some communities are affecting our short-term and long-term ability to attract and retain employees with the right skills.
• Employee Engagement - It is important to engage employees, at all levels, in the implementation of company strategies to achieve our goals. Employees need to feel valued and know that the work they do contributes to business and personal success.
• Employee Safety - As we acquire and develop new operations, we must ensure that our commitment to safety is fully understood by all stakeholders. This requires that our employees, and those of acquired companies, embrace a culture of high standards and continuous improvement.
• Globalizing Our Systems and Policies - As we become a global company, our focus on cultural diversity is increasing. We recognize that employees of different ages, genders and cultures have unique needs. We need to ensure our policies and practices travel well, that we are flexible in meeting employee needs and that we benefit from the strength of diversity.

Involvement

We engage with employees in a variety of ways.

• We encourage employees to identify what the company is doing well and how we can improve. This is done through the Voice of the Employee survey on a biennial basis.
• Employees may use 360° feedback tools to help identify their strengths, weaknesses and development opportunities.
• We discuss company activities through numerous avenues, including Coffee with the Executives sessions, our Intranet, an Ask the Executive e-mail address and an internal bimonthly newsletter called Food for Thought. We spend considerable time at our locations in dialogue with employees.
• We encourage and support our employees to get involved in their communities through company organized volunteer and donation opportunities.
• Our safety management requires the active participation of all employees through a variety of inspection, training and communication tools.

Implementation

The following strategies, systems, policies and activities are used to achieve our goals and continually improve workplace practices.

Employee Attraction and Retention

Agrium's true competitive advantage is our ability to attract and retain the right people. Our programs are designed to ensure employee well-being.

• We conduct surveys to ensure that our total compensation offering is competitive. Our total compensation package consists of a base salary, benefits and incentive programs designed to reward individual, business unit, and company-wide performance. Our benefits programs include health and dental care, parental leave, flexible work schedules, life insurance, and other financial benefits.
• We support employee development through mentoring; cross-business unit transfers; an annual leadership forum; and by investing in educational courses, conferences, professional memberships and educational rebates. In 2007, we invested approximately $2 million in employee development for an average of $300 per employee.
• We maintain defined benefit and defined contribution pension plans in Canada and in the United States. The majority of employees are members of defined contribution pension plans. Our defined benefit pension plans are 99 percent funded. We also maintain health care plans and life insurance benefits for retired employees.

Employee Engagement

We believe that each employee can contribute to our company's success if he or she understands Agrium's strategy and how each business unit and team contribute. We engage employees in the company strategy through our performance management system, which aligns individual and team efforts with company strategies and measures. Leaders meet with employees regularly to discuss our company strategy, review our progress toward individual goals, identify areas for improvement and recognize our successes. In our 2006 employee survey, 79 percent of our employees indicated that they had formal performance reviews within the past 12 months. Our goal is to have all employees participate in a performance review each year.

Employee Safety

During the past two years, Agrium reorganized into three distinct business units. This reorganization resulted in shifting from a corporate safety management model to one that placed the primary ownership and accountability for safety performance at the business unit level. We established EH&S organizations in each business unit to directly support business unit operations, allowing the corporate EH&S group to focus on oversight and governance. The result has increased management's involvement and ownership of safety activities. In addition to achieving improvements in injury rates (see graph below), the restructuring has allowed our corporate EH&S group to concentrate on instilling a company-wide safety-first attitude. We have moved from a traditional safety management culture focused on compliance and accident reduction to a systems management approach focused on continuous improvement and risk management.

On top of our restructuring we have significantly increased the number of our retail and distribution operations in the past two years. This dramatic increase in the number of new facilities and employees posed a significant challenge for us to transition the safety culture of our acquisitions to Agrium's high expectations. The first step was to compare the existing practices of our acquisitions to Agrium's. Where the practice was superior, Agrium adopted it. Where the practice was lacking, an improvement plan was established to ensure that the acquired operations were in conformance with Agrium's expectations.

Globalizing Our Systems and Policies

As we expand in new countries around the world, we work closely with government and local communities to address their specific concerns and needs. We believe in hiring locally and maintaining our strong company-wide EH&S standards and business ethics. For example, in Argentina, we currently have only one expatriate employee at our production facility. We also ensure that our policies are relevant locally as we grow globally.

Our Management Approach to Labor Practices

Major Labor Practice Risks and Opportunities	See Issues
Policy Commitments	Company-wide policies guide our behavior. They address: harassment and workplace violence; diversity; privacy; and safety. Our Code of Business Conduct & Ethics addresses: conflicts of interest; fair dealing; corruption; and other ethical issues.
Operational Responsibility	Agrium's Senior Vice President, Human Resources (HR), oversees the HR function across the entire organization. The corporate HR group is responsible for the governance and oversight of programs and services. Each business unit has a head of HR who is responsible for employee program implementation. Agrium's Senior Director, EH&S is responsible for providing corporate guidance and governance with respect to safety and health; however, management at all levels is explicitly responsible and accountable for safety management and performance. Agrium's Senior Vice President, Legal, is responsible for the Code of Business Conduct & Ethics and related investigations.
Key Strategies and Procedures for Implementation	Talent management is our overarching strategy that encompasses workforce planning, attraction and retention, development and diversity. Targeted recruitment campaigns with universities align with our long-term strategic workforce needs. Each business unit is responsible for developing integrated EH&S management systems which fulfill corporate expectations. A three-year People Strategy was recently developed to address the following: diversity, global workforce planning, leadership, retention and metrics. Employees can use a confidential and anonymous hotline to report suspected breaches of regulations of our Code of Conduct.
Major Changes to Systems or Structures to Improve Performance	We implemented a new HR Service Delivery Enhancement model in 2007 to improve our overall HR service to employees and leaders. This included a review of key roles and systems to ensure business needs were being met; resulting in the creation of a Centre of Excellence for Strategic Staffing, including an applicant tracking system. This streamlined and improved recruiting practices to better position us for meeting global staffing requirements. We reorganized our EH&S management structure to establish business unit-specific groups.
Training and Awareness	Each year, employees and contractors are required to acknowledge their compliance with our business conduct policies. We conduct safety training at various levels: business unit leaders; facility-level leaders; site-specific; job-specific; and new employee orientation. HR Connections is our Intranet site for all employee human resources information. Leadership training is overseen by the corporate group, and business units develop specific skills training for their employees.
Monitoring and Follow-up	We conduct a survey of all employees every two years. The Legal department investigates any reported breaches of our Code of Business Conduct & Ethics and reports quarterly on all investigations to the Audit Committee of the Board. There were no substantiated claims of discrimination made through our compliance hotline in 2007. We audit each business unit on safety management and performance on an annual basis. We base our facility-level audit frequency on risk analysis. Improvement plans are developed to address gaps. Company-wide key performance indicators that are factored into employee incentives include safety and people measures.
Goals and Performance	Agrium strives to maintain our best employer status. We plan to achieve improvements for each business unit in areas identified in the employee survey. See performance data below and in our Performance Summary section.
Key Successes and Shortcomings	Agrium was named a Top Place to Work in Calgary in 2007 (Calgary Inc. magazine). We have not kept pace with the overall investment in our employee's development and learning. Regretfully, we experienced an employee fatality in our Retail division and a serious injury of an employee at our Vanscoy, Saskatchewan potash facility in 2006.

Illustration

Luchemos Por La Vida Award

Our South American Retail division, Agroservicios Pampeanos, was recognized at the 2007 Luchemos por la Vida (Let's Fight for Life) ceremony for their efforts in raising awareness of road safety in Argentina. The number of deaths as a result of traffic accidents in Argentina has increased during the past decade. Agroservicios Pampeanos delivered an eight-hour driver training session, which will benefit employees and help save lives in Argentina.

Conda's Participation in OSHA's Voluntary Protection Program

Our Conda Phosphate Operation in Idaho is a participant in the Occupational Safety and Health Administration (OSHA) Voluntary Protection Program. This facility has achieved OSHA's highest level of recognition and has been designated as an OSHA Star Site. The OSHA Star program recognizes exemplary worksites with comprehensive, successful safety and health management systems. Conda has achieved injury and illness rates at or below the national average of its peer industries. As an OSHA Star Site, Conda's safety program is reevaluated for continuous improvement on an annual basis. Conda has participated in the Voluntary Protection Program since 1993 and has worked extremely hard to earn the recognition of an OSHA Star Site. Although Conda's outstanding record of safe operation is commendable, this strong safety performance is an explicit expectation of all Agrium operations.

For additional employee stories, please see our website: www.agrium.com/in_the_community

Indicators

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