Aiming at excellence: human resources management and policy

For some time, Terna has adopted a business control systemA group of calculation systems, data transmission lines and apparata which enables the secure and economiccontrol of the entire electricity system. based on the Balanced Scorecard model, through which it monitors the progress of its business plans, both economic and managerial, including also the principal objectives for environmental and social performance.

A second system has also been used for some time, the MBO (Management By Objectives), on the basis of which different individual rewards linked to the objectives reached are granted, both at a company level and of individual nature.
This tool is reserved only to the top-management and led to creating, in 2007, an integrated management and developmentWorks on the electricity grid which lead to the adjustment or upgrading of the transport, transformation,connection and interconnection capacity, or an increase in operating flexibility of the grid, or the removal ofgrid elements. model for human resources, the Global Performance System (GPS), which aims at involving a much broader range of managers and professionals.

The GPS aims at orienting productivity towards reaching corporate goals, by evaluating each individual contribution and development through a growth in functions and duties. In this sense, the GPS intends to represent a tool for establishing a relationship between the business plan and value for human resources; it allows, in fact, communicating, by clearly defining company expectations and transforming business objectives into individual/team objectives; orienting conduct in compliance with business objectives; evaluating performance by focusing on objective results and on actual conduct, sharing the same “rules of the game”; awarding through the recognition of contribution and functions of each person and attributing each one’s value through merit. In support of the GPS, a web function was devised that allows each employee to trace his professional history, feedbacks and all documents supporting his evaluation.

Other incentive systems continued to exist that grant different bonuses on the basis of the results obtained. In particular, Terna’s top management received the Stock Option Plan that was approved in December 2005 (which will expire in 2010); the adoption of this plan allowed the Company, among others, to establish an important tool for creating loyalty among managers holding the most important positions in terms of reaching strategic results.

The other managers not involved in the Stock Option Plan, received a “cash” Long-Term Incentive Plan (LTI), based on corporate performance during the 2005-2007 three-year period.

Recognizing the importance of a broad involvement on the part of the personnel in carrying out productionGeneration of electrical energy, in any way. and quality projects, Terna signed an agreement with the trade unions that established a company objective reward that represents an incentive for productivity.

The award is a variable bonus and is divided into two categories:

  • “corporate productivity” based on the Company’s general performance and granted to the personnel in general, excluding executives and managers;
  • “productivity/quality incentives” based on reaching specific production and quality objectives linked to the performance of employees and granted to workers and office staff.

The amount of the rewards for 2007 was higher than in the past, owing both to the greater amount of funds agreed upon between Terna and the trade unions, and to the excellent Company performance.

The transformation underway in the management system is still developing and is also based on the results obtained from the “People Satisfaction” survey, which occurs annually and involves all of Terna’s staff. In particular, the survey clearly indicated that, while improving compared to the previous edition, the relationship between supervisors and employees and communication based on evaluation criteria and on the implementation of the rewarding system still represent areas requiring improvement. The Company has therefore invested in this area, as indicated in the “Terna People Care” plan, that supplemented the survey with a shared action plan which is circulated throughout the Company so that planned activities can also be monitored. In this sense, compared to 2006, it was clear that investing in internal communication, through the launching of a new Intranet in January 2008, periodic meetings between top-managers and executives, waterfall team briefings within the Departments and the end-of-year convention We:Me have provided effective responses to the need for greater sharing of information and integration.

The Total Reward Statement is part of this context in terms of transparency on remuneration. This is a personal brochure sent to all managers, executives and top-managers that highlights the details of their salaries in terms of compensation and benefits. The policy for “expatriates”, redefined in order to guarantee equal remuneration value and based on the country of destination also in the event of being transferred abroad, is also included in the “Terna People Care” plan.

Lastly, with regard to Terna’s recruiting policies, the Company continues to invest so that its qualified resources continue to work in the Company and to attract others from external companies where necessary. The 1% increase in the number of personnel at the Group level (Italy + Brazil), is an obvious sign. In particular, the Company is involved in increasing its capacity for attracting resources through contacts with universities, participation in job meetings and a dedicated area in its website for entering applications for those who have an interest in working at Terna. Within the transparency of this area, there is also a Question and Answer section devoted specifically to “training and selection” in the Company’s Intranet.

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