Personnel development and management

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Terna’s system for developing and managing human resources is based on performance as an indicator for guiding growth. The essential elements of the model are the definition of the objectives and the conduct that is expected, assessment of results, feedback, and development and training actions. The heart of the system is the Global Performance System (GPS), which entered into operation in 2009 accompanied by a training campaign addressed to all the personnel concerned.

The Global Performance System is based on a definition of performance that has two aspects: the first is the actual achievement of the pre-established objectives, while the second regards the organizational actions carried out to achieve them. A specially developed IT system accessible individually by the employees contains the objectives to be reached and expected performance; the same system records the results of the assessments and ensures that they are available over time. Performed by the person directly responsible and validated by the latter’s manager, the evaluation provides for feedback, which is essential for guiding conduct, highlighting strong points and areas that need to be improved, and activate measures for development, such as training. The repetition of performance assessment in annual cycles allows the growth of individuals to be monitored and guided. The application of the GPS currently involves a segment of employees with managerial and professional responsibilities: all senior executives, all junior executives (except the foremen of the shifts that control the grid in real time), and some white-collar workers.

LA12A total of 651 employees were involved in the first assessment cycle, which started in 2009. In 2011, 763 employees – nearly 22% of the total corporate population – were involved (38% of female personnel and 20% of male personnel). This number will gradually rise as new personnel targets are included with the goal of increasing transparency and communication between managers and employees. Therefore, in 2012 the process of gradually extending the system will continue. For blue-collar workers and other employees not included in the GPS, less structured forms of assessment are used, such as periodical interviews with managers and HR representatives, partly because the requirements of their jobs and the paths of professional growth are more strictly determined by the collective labor agreement.

The measurement of performance is also entrusted to other instruments. Terna has had for some time a strategic control system based on the Balanced Scorecard method, through which it monitors the progress made in attaining strategic economic and managerial objectives, including the main environmental and social performance objectives.

Performance measurement is also connected with the payment of variable parts of compensation. In particular in 2011, Terna has had a Stock Option Plan for its top management, which was resolved upon in December 2005 (scheduled to expire in 2010, but later extended to 2013); among other things, the adoption of this Plan has provided the Company with an important instrument for ensuring the loyalty of the senior executives who hold the most important positions for the achievement of its strategic objectives.

The same purpose also applies to the 2011-2013 cash Long-term Incentive (LTI) Plan for the top management and managers who hold key positions, which is linked to corporate objectives.

Other variable-compensation schemes are based on annual performance objectives.

MBO (Management by Objectives), reserved for corporate Management,links the sums of individual bonuses to the extent to which both corporate and individual objectives are achieved. Monitoring and controlling corporate activities are based on the Balanced Scorecard system which evaluates, on a quarterly basis, the trend of objectives – including sustainability objectives – linked to the Strategic Plan. The Balanced Scorecard system is linked to MBOs, by referring sustainability objectives to the managerial variable remuneration system.

Recognizing the importance of the extensive involvement of employees in the implementation of programs and plans regarding quality and productivity, Terna signed an agreement with the Labor Unions governing a corporate-result bonus to incentivize labor productivity (see also the section on Industrial Relations).

The bonus is a variable element of compensation and consists of two parts:

  • “corporate profitability” linked to the Company’s general performance and paid to most employees generally, with the exception of senior executives;
  • “incentives for productivity/quality” linked to the achievement of specific quality and productivity objectives connected with the employees’ work and paid to blue- and white-collar workers.

As in other large electricity companies, the conditions of Terna’s employees (wages, working hours, annual leave and other aspects of employment) are substantially better than the Italian average.

LA3In particular, the following benefits are provided for most employees:

  • supplementary health care;
  • supplementary pensions (voluntary participation);
  • insurance for non-occupational injuries;
  • recreational associations;
  • more favorable maternity-leave conditions than those provided for by the law;
  • subsidized loans for purchasing a home, as well as for serious family needs;
  • cafeteria service or meal coupons.

The benefits are available to all employees once they have finished their trial period, including part-time employees and those with beginner contracts. Insurance coverage for occupational injuries is regulated by law and applies to all employees. Terna provides better conditions for specific categories.

Furthermore, Terna’s employees (excluding senior executives that can benefit from a different fund) are automatically enrolled in the supplementary healthcare fund FISDE (Supplementary Health-care Fund for Employees of the Enel Group). LA8The FISDE organizes prevention campaigns for its members that include preventive examinations and sessions providing information on the main health risks. The following have been some of the topics of the information and prevention campaigns:

  • smoking;
  • alcohol;
  • tumors;
  • cardiovascular disease;
  • ophthalmological disease;
  • disabilities.

The FISDE partly pays for the medical treatment of disease not only for its employee members, but also for the dependent members of the latter’s families.

BeneficiariesInformation and prevention of risksTreatment
Workersyesyes
Families of workersnoyes