Resource development and manager incentives

Terna's human resource management and development system is based on performance as an indicator for growth. It revolves around the Global Performance System (GPS), based on a definition of performance that includes two aspects: the first is the actual attainment of the set objectives, and the second relates to the organisational conduct implemented to achieve them. Objectives, actions, evaluations and feedback are incorporated into a tool that can be accessed by all personnel, and guarantees traceability over time. The performance appraisal is repeated in an annual cycle, in order to monitor personal growth and provide guidance. Application of the GPS currently involves a section of employees with managerial and professional duties: all the directors, all the managers (except the foremen of the real time shift workers) and part of the production workers.

For the production workers and other employees not included in the GPS, other forms of appraisal are used, such as periodic discussions with managers and HR representatives. This is because the requirements of their positions, and career pathways, are more closely dictated by the provisions of the national labour collective agreement.

The measurement of performance is also correlated to the payment of variable salary components. For managers holding positions which are significant in terms of the achievement of strategic objectives, there is a long-term cash incentive plan (LTI) 2011-2013 linked to multi-year company targets. For managers with key roles in the company, there is a Fidelity Bonus award.

Other forms of variable pay schemes are based on annual performance targets. MBO (Management By Objectives), reserved for Company Management, links the total individual premiums to the reaching of targets at company and individual level. Company activities are also monitored and controlled with the Balanced Scorecard system, which evaluates, at quarterly intervals, the progress of objectives, including sustainability objectives, linked to the Strategic Plan. The Balanced Scorecard system is linked to the MBOs, as the sustainability objectives are linked to the managerial variable pay components.