Development and management

Terna’s system of developing and managing human resources is based on performance as an indicator to guide growth. The essential elements of the system consist in establishing the expected goals and behaviour, assessing the results, giving feedback, and implementing development and training actions. The system makes use of numerous instruments that have been available for some time at the Company, such as Balanced Scorecards and Management By Objectives (MBO) but its core is constituted by the Global Performance System (GPS), which was designed in 2008 and went 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 containing two aspects. The first is the actual achievement of the pre-established objectives, while the second regards the organisational skills employed in achieving them. A specially developed IT system, which the employees involved can access individually, contains the objectives to achieve and the behaviour expected. This instrument stores the results of assessments and ensures that they can be traced over time. Assessment is carried out by the employee’s direct supervisor and is validated by the latter’s superior. It includes feedback, which is essential for orienting behaviour, highlighting strong points and areas that need improvement, and implementing development actions, such as training. The repetition in annual cycles of performance assessment enables the Company to monitor and assist the growth of its employees. The application of the GPS currently involves employees with managerial and professional responsibilities: all senior and junior executives (except shift foremen assigned to real-time grid control), as well as some white-collar workers.   

Overall, 651 employees, amounting to 19% of all personnel, were involved in the assessment cycle started in 2009. Less structured forms of assessment are applied to blue-collar workers and other employees not included in the GPS, among other things because the requirements of their positions and the paths of professional growth are most closely determined by provisions of the collective bargaining agreement. 

Performance assessment is also entrusted to another instrument. Terna has had for some time a strategic control system based on the Balanced Scorecard model, through which the Company monitors its progress in achieving its strategic objectives in economic and managerial terms, including the main objectives regarding environmental and social performance. 

Performance assessment is also linked to the payment of the variable parts of remuneration. In particular, Terna’s top management participates in a Stock Option Plan adopted in December 2005, which was to end in 2010 and was then extended to 2013. Among other things, the adoption of this plan equipped the Company with an effective instrument for ensuring the loyalty of senior executives who hold the most important positions with regard to the achievement of strategic results. The long-term incentive (LTI) plans serve the same purpose. 

Performance objectives with annual horizons are the parameters for other variable-pay schemes. Management By Objectives (MBO) is reserved for corporate management and links the sum of individual bonuses to the extent to which objectives – both corporate and individual – have been achieved. The Company’s objectives, including those regarding environmental and social performance – are established in connection with the Balanced Scorecard model.