Human resources and organization

People

Staffing levels

At December 31, 2013, the total workforce of the Enel Group numbered 71,394 employees, of whom 52% were employed by Group companies abroad.

During the year, the number of employees fell by 2,308, mostly reflecting the net negative balance between new hires and terminations.

Of the total new hires, 85% concerned companies abroad, while 44% of the terminations took place in Italy, mainly through application, beginning in September, of the legal mechanism established by Article 4 of Law 92/2012 concerning early retirement.

Organization

Functions and divisions

In 2013, the Group’s model of operations was consolidated with the goal of achieving the following benefits:

  • more effective, streamlined decision-making processes;
  • economies of scale through a more integrated, efficient management of services;
  • more rigorous management and allocation of financial resources among the various businesses and geographic areas in order maximize the creation of value for the Group;
  • greater opportunities to develop the Group’s human resources and talent.

The Group is structured as follows:

  • Parent Company functions, which are responsible for the guidance, coordination and strategic control of the activities of the Enel Group;
  • global service functions, which are responsible for the integrated management of services for the entire Group (i.e. Global ICT, Global Procurement and Global Business Services);
  • operating divisions/functions, which are responsible for managing operations within the scope of their respective areas.

During the year:

  • with regard to the Iberia and Latin America Division:
    • the organizational structure for the two distinct sub-areas, i.e. Spain & Portugal and Latin America, was implemented, thereby establishing the roles and responsibilities of the business and staff functions for each country and for overall coordination of the Division;
    • the organizational structure for Brazil was rationalized, shifting towards a single line of business of distribution and sales, although with various legal entities;
  • within the Generation, Energy Management and Sales Italy Division:
    • the Energy Management areas of Product Optimization and Back Office were reorganized in order to take advantage of better operational synergies and to rationalize the workforce;
    • two organizational structures dedicated to defining and developing energy efficiency services for corporate and retail customers were created in line with the positioning goals of Enel in Italy in this new area of business. These two structures received the resources of Enel.si, which was previously a part of the Renewable Energy Division;
  • within the Renewable Energy Division, work continued on aligning the organization of the various structures of business development, operations and related support services within the scope of the plan for growth in Latin America and in the emerging markets;
  • within the International Division:
    • in Russia, the Operations unit was created within OGK-5, which was given the activities of engineering, production, and employee health and safety;
    • in Slovakia, the Generation and Energy Management units were integrated based on a model found in other areas of the Group.

Integration efforts

In 2013, work was completed on process redesign and the definition of new operating models for the Group related to the primary functions of guidance, coordination and control, in line with the goals of the One Company project.

These efforts made it possible to conduct a detailed analysis of the optimal size of the various organizational structures of the Group.

It has also been possible to further increase the integration of the business units involved in the handling of:

  • power plant engineering, construction and maintenance;
  • distribution;
  • marketing, sales and customer operations;

thereby promoting both the creation of global models of coordination and the sharing of best practices between the various geographic areas.

Finally, in support of this integration, work was completed in 2013 on the mapping of the management and technical positions that are seen as being of key importance to the Group.

Hiring, training and development

Hiring

The channels most used for recruiting are the organization’s database (containing all applications submitted, divided by country), external databases, and the lists of graduates provided by schools and universities. In 2013, with a view towards enhancing the recruiting channels and achieving global synergies in our employer branding efforts, we signed an agreement with a global provider for the use of an online platform that will enable those responsible for hiring in all of the various countries to publish job offers and search for interesting candidates.

Based on the guidelines of the Group, the employee hiring process calls for an initial search within the company and, should no suitable candidates be found within the company, then beginning an external search. This external search can be conducted in multiple stages and in various ways depending on the target profile and local practice in the country concerned, such as:

  • an assessment center for junior positions, which includes group testing and interviews;
  • behavioral interviews, particularly for senior positions, which focus on past experience, skills and motivation;
  • technical/professional interviews.

The hiring programs vary according to the type of recruit. In particular, projects for the integration of university graduates include on-the-job training and structured training courses that, in addition to providing the tools necessary for them to perform their work, contribute to their personal and professional development. In-house mobility programs include both progressive specialization within one’s assigned area and efforts to develop cross-functional skills.

The job-posting system enables people to apply for available positions, both domestically or internationally.

The internationalization of the organization is promoted both by way of cross-country mobility, which facilitates the sharing of experience and best practice, and through international working groups for projects of global scope.

Development

The overall performance review process which has been revised as part of the One Company project is now, and for the first time, managed globally by way of a single model and single system for all of the countries in which the Group operates.

Conduct assessment within the organization is done in one of two ways, depending on the target concerned: the 360° Evaluation (for executive vice presidents, senior vice presidents, vice presidents, and other key positions) and the Behavior Performance Review.

Results-oriented tools, on the other hand, include:

  • the Objectives Performance Review (OPR);
  • Task Management.

Compared with the previous year, the most important change is the fact that all employees involved in the behavior assessment process who do not receive any variable remuneration are to be assigned measurable tasks on which they will be evaluated.

Within the scope of the Objective Performance Review, the assignment of objectives is based on input coming directly from the business plan and involves the definition and preassignment of closed-ended targets. This is followed by the definition of open-ended objectives, which calls for a preparatory meeting between the reviewer and each person to be reviewed in order to discuss strategies and priorities for the current year.

In turn, the purpose of the review process is to measure the actual contribution made during one’s day-to-day activities by assessing the targets and objectives assigned the previous year. The entire assessment process will involve a total of some 8,000 people throughout the Enel Group. During this phase, both closed and open-ended objectives will be assessed. While the closed-ended objectives are to be reviewed by the Planning & Control unit, the open-ended ones, which are defined by each person to be reviewed, are to be assessed and validated by each reviewer.

This year, the entire management population, the key layers and another significant portion of the employee population with variable remuneration will be involved in the next assignment phase.

At the same time as the assessment of supervisors, there will also be a phase of self-assessment by their staffs. The reviewers will discuss and validate the evaluations of their teams during the Calibration phase in order to improve review quality by comparing and discussing the criteria used. Finally, there is a feedback interview in order to discuss the results of the review and establish a targeted development plan for the coming year.

The Talent Management system seeks to identify people with excellent performance, high potential, interdisciplinary and international experience, who are necessary for a Group such as Enel that depends on the high quality of its staff and needs managers capable of navigating their way through a global environment. To that end, three “pools” have been defined:

  • Pool 1, consisting of managers with high responsibility and complex posts whose work demands that they engage with internal and external interlocutors and who will therefore have the opportunity to prepare themselves for one of the top 100 posts in the Group (at the level of senior vice president or executive vicepresident);
  • Pool 2, consisting of people who have a solid professional background, currently hold pre-managerial coordinating roles, and are focused on attaining managerial posts of increasing complexity in the medium term;
  • Pool 3, consisting of young employees with high growth potential who aspire to enhance their careers through interdisciplinary and/or international experience.

In March 2013, the first edition of Pool 3 was launched with the goal of creating a “Potentials Observatory” whereby, over a period of two years, the Company will invest in and involve these young people in an integrated program of training and development in order to enhance their skills. The starting point is an interview in which an individual development plan is established. Over the course of the two years, this plan will be supported and monitored by the various people responsible for the employee’s development. In any event, responsibility for implementing the development plan has been assigned directly to the members of Pool 3; therefore, the commitment that each member applies to his or her development will play a crucial role.

The training program has been designed so as to instill an ongoing rapport among the members of Pool 3 and to promote networking. In 2013, for example, training was provided in Rome on topics such as change management or innovation, and a virtual platform was created which members can use to discuss the various topics until the next in-person training session, which is to be held in 2014. At the same time, these young talents have been invited to participate in a variety of projects and other activities of international/global scope, and, in the same way, they have been made candidates for various job postings in order to give them opportunities to develop their careers within the Group.

In addition to the questions typically included in the survey, the 2012 Climate and Safety Survey had the dual objective of assessing the level of engagement, motivation and investment in their jobs and determining what their perception was with regard to the culture of safety, the various health and safety processes, and the impact of the action taken. An analysis of the results and the information provided by the employees led to the creation of plans for improvement at various levels of the organization and of local action plans. The actions implement in 2013 include: the redesign of the leadership model with the goal of translating the Group’s values into actual behaviors; the new cascade model in order to establish both a more fluid process of communication and greater alignment and consensus; a project focusing on the topic of innovation; the identification of internal and external best practices, and other initiatives aimed at attracting, motivating and developing young talent.

A specific project has been set up for each of these priorities, with each project being sponsored by both divisional and country managers along with international teams, so that the initiatives will be more effective for all of the various cultures found within the Enel Group.

Training

In 2013, Enel University consolidated its efforts to internationalize training.

Within the scope of the Leadership Curriculum, the Group’s system for developing cross-functional skills from new hires on up to the highest levels of management, training related to performance reviews involved more than 6,000 people around the world in a broad, diversified training program.

The Pool 3 project has led to the involvement of over 170 young people showing great potential in the various countries in which Enel operates and has also made it possible to involve their direct supervisors and middle management – the targets of the Pool 2 program – in their development while also working on their skills in coaching and mentoring. In 2013, the Global One ALigned (GOAL) managerial training campaign came to a close. This campaign involved all management within the Group with the goal of making them more aware of company strategies and objectives and of the conduct expected within the new One Company organization.

Safety-related training also continued in 2013 in the form of the Leadership for Safety campaign, which seeks to strengthen the culture of prevention, wellness and the sharing of best practices and which has involved about 1,000 people around the world over a period of three years. Efforts of a more technical/specialist nature also continued with the goal of promoting greater awareness of procedures, tools, laws and regulations related to prevention and safety in the workplace.

A number of training courses for the technical and functional schools (i.e. purchasing, AFC, legal affairs, engineering, and energy management) were also started in 2013.

Compensation and incentive systems

When defining the remuneration policy for 2013, we took account of the challenges being posed by the current state of the economy. To that end, we have implemented a number of measures in order to control the cost of labor in a manner that best serves us all. Given the lack of economic growth and the limited competitiveness of the job market, the main measures adopted concern the suspension of the discretionary compensation policy for all employees and a reduction in the short-term variable portion of compensation tied to 2013 objectives for management.

Nonetheless, as we do every year, we have assessed the related market benchmarks in order to determine the proper positioning of salaries in order to ensure that our compensation package as a whole remains competitive.

In terms of short-term incentives, we are continuing MBO as the primary means of guiding the performance of management. This program involves practically all upper management and about 60% of middle management. The commercial staff also has specific short-term incentives aimed at promoting the achievement of sales and customer-management targets.

Workplace health and safety

Workplace accident statistics

The downward trend in accident rates continued in 2013. The frequency rate fell by approximately 60% from 2009 to 2013, reaching 1.42, while the severity rate fell by 50%, to stand at 0.07. This downward trend was also confirmed by the operational accident frequency rate, which focuses on certain types of especially serious accidents that are the most related to the Company’s core business (e.g. electrocutions, falling from heights, blows-crushing-cuts, exposure to hazardous agents, and explosions) and which has fallen by 41% since 2009.

Serious and fatal accidents fell by 68% from 2009 for those involving Enel personnel and by 81% for those involving the employees of contractors. In 2013, there were six fatal accidents involving Enel personnel, and there were 10 fatal accidents involving employees of contractors.

This year, the efforts of the working group set up to investigate the causes of certain injury case studies continued. The working group also circulates the lessons learned and identifies global improvements that can be made, with particular regard to electrical accidents. Three best practices have been defined with regard to lifting loads by mechanical means, grounding during electrical works, and preventive measures to take to avoid falls when working on power lines.

In 2013, Enel and Endesa were also deemed to be best in class in occupational health and safety within electrical utilities segment of the Dow Jones Sustainability Index.

The One Safety project

In 2013, work continued on implementation of the One Safety project, a global initiative focused on the behavior of all Enel employees as well as contractors, the aim of which is to promote a coordinated and synergistic effort by the entire Group to achieving the goal of zero injuries. The project pursues two main lines of action: the strengthening of safety leadership (Leadership) and the promotion of safe and responsible conduct (Conduct).

Leadership

In 2013, on the back of the GOAL managerial training program, a cascade-training program focused on an analysis of the Enel film “Safety: the Heart of the Matter“ was launched.

In addition, 10 editions were initiated to train 200 internal trainers, as were 130 cascade editions involving some 2,000 people. This training program is scheduled to continue in 2014 and involve over 5,000 people in all of the Group’s countries and divisions.

Conduct

In 2013, work was completed on the implementation, throughout the Group, of the project aimed at promoting safe conduct by way of a systematic process of observing behavior, providing immediate feedback, and establishing steps for improvement. The project has been implemented in 927 Enel locations, and some 260,000 observations have been made throughout the world. It has also been implemented in 30 shared civil sites in a manner specific to office spaces.

Beginning in 2014, the project will become a systematic process of behavior observation. To that end, four workshops have been conducted in Italy, Spain, Slovakia and Colombia aimed at defining steps for improvement to be implemented based on past experience.

The “5+1” program

In 2013, the efforts of the six permanent working groups of the “5+1” program continued and focused on the following key areas for improvement in health and safety processes:

  • development of a culture of safety and training;
  • safety in tender processes;
  • communicating about safety;
  • structural safety and technological innovation;
  • major works;
  • health.

Chaired by executive sponsors, each area developed a program of activities during the year aimed at strengthening the culture of health and safety within the Enel Group and at promoting the sharing of best practices and starting bottom-up initiatives by adopting an approach that is both global and adapted to the various contexts within the Group.

Development of a culture of safety and training

The 2012 Climate and Security Survey, which included a section specifically dedicated to safety for the first time, has demonstrated that safety is seen as a key value for the Company, while also underscoring the widespread commitment of both Enel employees and of our various contractors. Based on the results of the survey, a global improvement plan has been established that focuses on safety leadership, employee conduct, wellbeing and the prevention of stress, and safety in the office.

Within this context, work has also begun on a revision of the leadership model in order to enhance the allocation of safetyrelated responsibilities at all levels of the organization, and the process for conducting safety walks by management has also been enhanced by integrating it with the periodic organization of health and safety meetings. A process of assessing health and safety attitudes has also been added to the hiring process, and the Six Months of Safety project is currently being extended to the various staff functions.

Safety in tender processes

In 2013, the One Safety - Contractors project began. This project seeks to promote the adoption of conduct self-monitoring by our contractors in order to limit unsafe conduct by their employees. In order to promote the involvement of contractors in this project, we have established a system of rewards, such as reductions in security deposits, increases in safety scores for the vendor-rating system, and the ability to use the Enel logo designed for the project.

In 2013, work also continued on consolidating the vendorrating and contractor-qualification system, which establishes specific, stringent health and safety requirements. These efforts focused in particular on the foreign countries in which the Group operates.

As part of the process of aligning the general contract conditions for the Enel Group, we have revised the clauses related to health and safety, which are broken down into general obligations applicable throughout Enel and local requirements, which vary in accordance with the laws and regulations for the given country.

Throughout the Group, we have also enhanced the safety controls for contractors, and around 300 meetings have been held as part of Contractors Safety Day in order to analyze the injuries that have occurred together with the contractors, as well as to promote their involvement in the ongoing health and safety projects and to share experiences and best practice.

Communicating about safety

We have also launched the Safety in the Office campaign aimed at increasing awareness of the importance of safety even in areas that are traditionally seen as presenting little or no risk, and we have created a newsletter about the various health and safety initiatives and other related topics.

The sixth edition of International Health & Safety Week was held in November, with all areas of the Enel Group being involved in order to promote proactive commitment to safety.

Nearly 2,000 initiatives involving over 97,000 participants in 18 countries were organized during the week.

Structural safety and technological innovation

A health and safety catalog has been published. This work is a collection of the technologies and structural solutions that have been implemented by the various divisions in order to increase safety standards and is to be sent to the lines of business in order to promote the sharing of experience and best practice.

A number of safety-innovation projects have also been developed, such as: the Zero Accidents Project (ZAP), which seeks to improve safety management at large-scale work sites; the Active Safety at Work project, the goal of which is to promote the use and control of personal protection devices when conducting distribution activities; and the BOA project, aimed at supporting the management of interference during power-plant maintenance.

Major works

A peer-review plan has been implemented in four of the Group’s leading work sites on the Iberian peninsula and in Colombia, Slovakia and Italy in order to enhance work-site safety management by setting common standards and identifying best practices to be shared.

Health

Work has begun on implementing the Global Health Plan, which includes initiatives of both prevention and increasing awareness in the three areas of health defined by the World Health Organization (WHO), i.e. physical, mental and social wellbeing. Group policies have been defined concerning prevention and other health-related issues, and we have developed a plan for the installation and use of defibrillators. In Italy, we have launched a pilot campaign for voluntary cardiovascular screening and courses to help quit smoking. The Enel Group has participated in the project Safe Work Without Alcohol and Drugs, promoted by the International Labour Organization (ILO) in order to promote the prevention of alcohol consumption and drug use, and we have launched informational campaigns on other health-related topics.

Particular attention was given to the prevention of stress and the promotion of health and organizational wellbeing, for which a specific action plan has been prepared. This plan calls for the definition of a global stress-prevention policy and the launch of a training program that focuses on three targets: upper management, personnel managers, and employees. We have also activated a psychological-support service for employees.

Plan of controls

In 2013, a plan of health and safety controls was created in order to verify compliance with procedures and other company guidelines within the Group’s various businesses. This plan focused on the Group sites with the most critical issues based on accidents recorded over the last three years. Specifically, 13 areas were analyzed in Latin America, Europe and Italy, and action plans were defined for each site visited. Implementation of these action plans is to be monitored and subject to a follow-up process. A distribution peer-review plan has also begun in order to promote the sharing of experience and to identify any best practices that can be shared throughout the Group. This process is scheduled to continue in 2014 with a particular focus on Latin America.

Labor relations

In June 2013, in line with the principles of the One Company project, Enel and the Italian and international trade unions signed a global framework agreement (GFA), which consolidates the three levels of the Group’s industrial relations, i.e. national/divisional, European and global. This agreement is based on the principles of individual and workers’ rights and on the most modern systems of transnational industrial relations and those of leading international organizations such as the International Labour Organization (ILO). It establishes the guidelines for industrial relations, such as the approach to handling matters of interest to the Company and its employees, and includes the creation of an informational body, the Global Works Council, to represent the employees of the Enel Group and three multilateral committees dedicated to significant transnational issues in the areas of Health and Safety, Training, and Equal Opportunities/ Diversity, respectively.

In 2013, the multilateral committees were established and worked to define a joint document of group-level recommendations for each of the three areas of interest. Each document was then approved by the Global Works Council at its first meeting held in October before being formally presented to the Company’s management.

Many of the Group’s national collective bargaining agreements were also renewed during the year.

Of particular note were the renewal of the industry’s collective bargaining agreement in Italy, which was renewed for 2013-2015 on February 18, 2013, and the signing of the 4th Convenio Marco (framework agreement) of Endesa in Spain in December for the period 2013-2017.

A number of company contracts were also finalized in Latin America (particularly in Chile, Peru and Brazil), Russia and Slovakia in 2013.

Activities of note in Italy, due in part to their innovative nature, were the two trade-union agreements of May 9, 2013, i.e. the framework agreement under Article 4 of Law 92/2012 and the agreement for geographic, functional and intragroup mobility.

The former is the first of its kind in Italy for the handling of “redundancies” without the need for social safety nets and calls for the voluntary early retirement of up to 3,500 employees over the period 2013-2014, thereby allowing for a generational change through a plan to hire up to 1,500 young people on apprentice contracts.

On September 6, 2013, in application of this agreement and following completion of the established procedures, the main Italian companies of the Group signed an agreement with the trade unions FILCTEM, FLAEI and UILTEC in implementation of the framework agreement of May 9, 2013. The implementing company agreements establish the number of employees for each company to be included in forecasted retirements, subject to the successful outcome of further verifications aimed at confirming these candidates meet the established requirements. As at December 31, 2013, this plan has resulted in 1,911 employees leaving the Company.

The agreement for geographic, functional and intragroup mobility is closely correlated with the agreement above as a mechanism that supplements and harmonizes its effects. This agreement establishes the possibility for groups of workers to be transferred, in the event of redundancies, to one or more other production units, while also seeking to promote better alignment in supply and demand on the inhouse job market by making use of people outside of their specific company/division of origin.

In terms of the talks concerning changes in the organization, the structure of the global functions and the operating divisions has been consolidated in all countries in which the Group operates.