Commentary-interview of the Deputy Director General for HR and Administrative Matters O. P. Chaus
One of the key objectives of the Company in terms of HR policy implementation in 2015 was improvement of transparency and efficiency of management system in the Company. To achieve this objective, the function of financial and fiscal accounting and reports was centralized; Moscow HV Networks branch was established through the merger of two Company branches — Central Electric Networks and HV Cable Networks.
Additionally, in order to ensure availability of qualified personnel for management positions, the Company continued its efforts on development and training of candidates’ pool. It should be mentioned that in 2015 approximately 80% of nominations to the management positions were made out of internal candidates, including the employees from the Company’s candidates’ pool.
The Company managed to achieve considerable results in personnel motivation: the average remuneration was maintained at the competitive level in order to retain experienced and qualified specialists who contribute to fulfillment of PJSC MOESK tasks, i.e., high quality and reliable power supply to consumers in Moscow and Moscow region.
In 2015, 15 process charts were prepared as a standard for mobile work teams in order to optimize processes and implement uniform typical labor costs for technological connection using the Company’s own resources in the course of construction and revamp of electrical facilities.
In order to improve the efficiency of HR management, the Company developed and implemented methods for 360 degrees appraisal of management and candidates to the management positions competences (107 employees were appraised in 2015).
Main Areas, Objectives, and Tasks of the Company’s HR Policy
The HR and social policy of PJSC MOESK approved by the Board of Directors of OJSC MOESK (minutes No. 249 dated December 31, 2014) shall establish an efficient HR management system which contributes to improvement of work efficiency and sharpening of the Company’s competitive edge.
The objectives of the Company’s HR Policy implemented to achieve the target benchmarks according to the Strategy for Electric Grids Complex Development in Russia are as follows:
- planning HR requirements — ensure availability of accurate information on the current and forecast headcount and quality requirements to human resources as required and sufficient for achievement of the Company goals;
- timely fulfillment of the Company’s HR requirements with consideration of necessary qualification level;
- ensuring efficiency of personnel work, improvement of workforce productivity in the Company.
Main HR Management Activities in 2015
Improvement of management system transparency and efficiency:
- centralization of financial and fiscal accounting unit;
- approval of new organization structure for the Company’s executive body and organization structures for the management bodies in the Company branches;
- establishment of Moscow HV Grids branch through the merger of two Company branches — Central Electric Networks and HV Cable Networks;
- implementation of program for optimization of administrative and management personnel (reducing the headcount of administrative and management personnel by 281 positions).
Improvement of personnel incentives scheme:
- average remuneration growth by 4.4% in the Company in general; adoption of uniform minimum monthly remuneration rate for all categories of workers in the branches;
- development and implementation of revised structure of key performance indicators and monetary incentives for the employees of branches for a month, quarter, and year.
- organization of professional skills contests for the personnel;
- horizontal and vertical rotation of personnel: 377 employees, with 12% — gemba management29 (including top management of the Company), 88% — rotation of employees from the candidates’ pool to the target and associated jobs;
- development and implementation of procedure for establishment of the candidates’ pool in the Company; composition of the candidates’ pool was updated, external candidates’ pool was prepared for the candidates to the key positions — 85 positions, including graduates of the higher education institutions preparing specialist for the power sector; internal candidates in the Company — 631 people, including 299 young (aged up to 35) specialists (including 40% — tactic candidates’ pool);
- automation and implementation of process for management competence assessment by 360 degrees method;
- assessment of management competences of the candidates to the Company’s management positions using the 360 degrees method (107 employees were appraised in 2015);
- psychophysiological check — 4,075 people;
- performance of corrective actions in the framework of the program for reduction of risk of erroneous actions by operating personnel due to psychophysiological causes — 466 people classified as the risk group; following the completion of such actions 10% of examined people (45 people) were found to have increased competence indicators which ensure work safety;
- implementation of program for operating personnel in the pension age in order to ensure efficient sharing of experience by qualified personnel, timely replacement and reduction of the average age of Company personnel;
- implementation of youth movement “Tomorrow is me”;
- development of plan for increasing the education level of managers and dispatchers;
- fulfillment of the main requirements in terms of production personnel training due to implementation of internal teaching programs which were developed and organized by the Training Center;
- the license for performance of educational activities by the Training Center was renewed; a permit for professional training was obtained; certification for delivery of occupational safety training services was obtained.
Improvement of workforce productivity
- 15 technological charts were developed as a work standard for mobile work teams (plan until December 31, 2016 — development of 133 technological charts); daily work time records for the mobile work teams were prepared;
- work time tracking, including daily time records for technical unit employees; issue of recommendations on work efficiency improvement and optimization of load on the personnel.
The decrease in the average personnel headcount in 2013-2015 is attributable to optimization of administrative and management human resources with simultaneous engagement of additional operation personnel by the branches.
To maintain the high staffing level and reduce the level of active staff turnover in the Company, activities aimed at qualified personnel retention are performed on a regular basis. In order to ensure timely filling of positions, which require highly qualified personnel, and to provide development opportunities for the personnel, the Company cooperates and interacts with the specialized higher education institutions and secondary specialized education institutions. Carrier planning for Company employees is arranged. The main mechanisms for carrier planning are the candidates’ pool and personnel rotation.
Personnel Turnover with Breakdown to Age Groups, Gender, and Region
|Branch||Average headcount in 2015, people||Number of dismissed employees for active turnover calculation in 2015, people||Active personnel turnover rate in 2015,%||Including|
|Male||Female||Aged up to 30||Aged 30+|
|Northern Electric Networks||1,823||59||3.2%||49||10||19||40|
|Moscow Cable Networks||4,186||98||2.3%||71||27||32||66|
|HV Cable Networks||523||12||2.3%||9||3||9||3|
|Southern Electric Networks||1,527||42||2.8%||28||14||5||37|
|Central Electric Networks||1,209||67||5.5%||60||7||30||37|
|Eastern Electric Network||1,742||61||3.5%||47||14||28||33|
|Western Electric Networks||1,798||47||2.6%||40||7||16||31|
Analysis of personnel with breakdown to age groups relative to the year 2013 in the Company in general shows gradual increase in the share of employees in the most economically and socially active age, i.e., from 25 to 50 years (+4 pp). The share of working pensioners in 2015 decreased by 2 pp in line with implementation of the action plan for pension aged and pre-pension aged employee in the Company. The share of young specialists (aged up to 25) also reduced (by 1 pp). Thus, the Company is achieving the optimum combination of young employees with high level of initiative and experienced employees who can share their professional knowledge and skills.
Personnel Structure with Breakdown to Education Level
|Headcount, people (total), including:||15,606||15,575||15,479||-0.6%|
|Basic/secondary general education||3,816||3,331||3,132||-6.0%|
|Initial vocation education||1,495||1,772||1,758||-0.8%|
|Secondary vocation education||3,211||3,068||2,945||-4.0%|
|Incomplete higher education||0||66||59||-10.6%|
|Higher education with 2 or more degrees||436||1,659||1,523||-8.2%|
|Candidate of Science||28||47||48||2.1%|
Personnel Education and Development
PJSC MOESK continued its activities on professional training, refreshment training, and qualification improvement in 2015 in the framework of the Company HR Management Program.
In 2015, 20,620 employees participated in professional training, refreshment training, and qualification improvement, including training in external educational institutions for 6,083 employees or 40.4% of the total personnel headcount.
A significant share of qualification improvement programs was implemented by the Training Center of PJSC MOESK, which organized training for 14,537 employees, with 4,584 people being trained directly at the Training Center and 9,953 people being trained according to the typical and local internal training programs in the field and at the training sites of the Training Center and Company branches.
Information on Personnel Training, Refreshment Training, and Qualification Improvement
|Number of trained employees, people (total), including:||10,900||10,062||10,667||6.0|
|specialists and office personnel||2,339||2,236||2,134||-4.6|
|Number of trained employees, people (total), including:||10,900||10,062||10,667||157.0|
|number of employees trained at external training centers||8,569||8,278||6,083||73|
|number of employees trained at the Company’s own training centers||2,331||1,784||4,584||257|
|Training costs to payroll fund ratio,%||0.62||0.78||0.70||-0.08 pp|
|Total number of training hours, h||306,099||302,567||315,743||4.4|
|Average number of training hours per one employee, h||28.1||30.1||29.6||-1.7|
The Company’s remuneration system corresponds to the main remuneration trends in the labor market. The remuneration system was developed in compliance with the labor law and RF Electric Power Sector Remuneration Tariff Agreement (uniform remuneration rate, system of bonuses, benefits, and compensations) and based on the principles of equal payment for work with equal value depending on the complexity, volumes, and quality of work.
The existing remuneration system also provides for the following payments:
- additional compensation payments in compliance with the work hours and conditions;
- incentives depending on the
personal work results of the
The increase in the average remuneration amount in 2015 by 4.4% is attributable to the following factors:
Indexation of remuneration:
- from July 1, 2014 — by 2.0% for branch employees classified as “worker” and “foreman, senior foreman”;
- from January 1, 2015 — by 2.8% for branch employees classified as “worker” and “foreman, senior foreman” and by 4.8% for other employee categories;
- from December 1, 2015 — by 3.7% for branch employees classified as “worker” and “foreman, senior foreman”;
- Increase in the amount of employee remuneration in connection with development of additional services with the objective to expand the Company’s share of the service market, development of the Company’s engineering competences and enhancement of client-friendly approach;
- Maintaining the average remuneration level for the employees with professions in high demand.
KPI System (Employee’s KPIs)
The Company’s KPI System is governed by the Regulations on the Management System in Compliance with the Objectives of the Company. The Management System in Compliance with the Objectives includes a number of key performance indicator charts (KPI charts) for various Company management levels. The KPI chart includes four projections (prospects) which are associated with the strategic aspects of the Company business, including:
- Financial prospects (What financial results does the Company need to achieve to meet the shareholders’ expectations?);
- Prospects of consumer satisfaction (How should the Company be perceived by the consumers?);
- Internal prospects (How should the internal Company processes be organized?);
- Personnel prospects (How will the Company develop its personnel?).
Assessment of KPI achievement is performed on a quarterly basis. The personnel incentive scheme directly depends on achievement of KPIs in the reporting period (quarter/year) set for the structural division.
Key Plans in HR Management for 2016:
For improvement of management system transparency and efficiency:
- Bring the organizational and functional structure of the Company in compliance with the typical structure approved by PJSC «Rosseti»;
- Gradually reduce the number of administrative and management employees of the Company due to optimization of the management system, improvement of organizational structures and business processes of the Company;
- Prevent reduction of operational personnel headcount;
- Assess and analyze the level of personnel satisfaction, develop and implement the corrective action plan to increase the level of Company personnel satisfaction.
1 Gemba management: Resolution of issue, which occurs in the course of the Company’s business activities at a specific workplace. In the course of personnel rotation, an employee shall be assigned to a specific workplace in accordance with the gemba management principle, i.e., to the place where value is created, in order to resolve/understand the issue which occurs in the course of operation.
- Indexation of remuneration: