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Attracting and retaining the right people for our business, and developing our people’s skills and talents, depends on us being creative and innovative in how we recruit, and providing workplace conditions and benefits which engage our employees.
During the reporting period, the position of Head of Organisational Development and Diversity was created to provide a strategic focus for diversity. This role has accountability aligning AGL’s policies, programs and practices in support of equal employment opportunity, flexible work practices and other legislative requirements. In addition, this role is responsible for refreshing our diversity strategy, and for delivering programs to further enhance AGL as an inclusive workplace, with a culture that embraces diversity.
AGL’s commitment to diversity is supported by a number of company policies, processes and programs that are summarised below:
AGL complies with legislation regarding human rights in areas including diversity, discrimination, freedom of association, child labour, layoffs and health, safety and environment. We support, in principle, the United Nations Global Compact on human rights for businesses.
AGL continues to support employees who raise concerns about their treatment at AGL. The Diversity Support Line is available to all employees who believe they have experienced bullying, harassment, victimisation or discrimination in the workplace. It also operates as an advice line for leaders and AGL’s People and Culture business unit for managing such issues, and as a way of capturing suggestions for enhancing AGL’s commitment to diversity and inclusion.
During 2008/09 the number of calls to the diversity support line decreased, with issues being raised through other channels. In light of this, we will be reviewing the way in which we provide channels for employees to raise issues. Every complaint is taken seriously and all investigations undertaken are dealt with through the AGL Grievance Procedure. In 2008/09 there were seven complaints raised, five of which have been resolved, with the remaining two being managed through AGL’s Grievance Procedure.
AGL’s zero tolerance approach to sex based harassment is included in AGL’s Fair Treatment Policy. The policy articulates AGL’s commitment to conducting its internal business relationships in a manner consistent with our values. We expect our employees to:
Our values and the Fair Treatment Policy enable us to implement fair and appropriate standards, and guide the conduct of AGL towards all its employees, contractors, suppliers, joint venture partners, customers and the communities in which it operates.
During 2008/09, AGL continued to deliver Fair Treatment training sessions. Facilitated by an external expert in this field, 136 leaders attended the training this year (39% of leaders).
AGL continued to provide Emotional Wellbeing Training to leaders this year. Designed to raise awareness of wellbeing issues in the workplace, 115 leaders attended this training during 2008/09. Together with the 174 leaders that attended this training in 2007/08, around 84% of our leaders have now completed this training.
In 2009/10 we will review how we can better engage with indigenous communities in the locations in which we do business, as well as how AGL can be an inclusive workplace that attracts and supports employees from diverse backgrounds. Specific initiatives to support indigenous communities will be planned as part of implementing the AGL Diversity Strategy in 2009/10.
AGL continues to provide carers rooms in our offices and have maintained breastfeeding accreditation at existing sites. We have added a number of new sites through acquisition and relocation, which are now in the process of obtaining breastfeeding accreditation.
31.5% (FTE basis) of leaders at AGL are women, which is lower than the overall proportion of women in AGL’s workforce (47%).
During 2008/09 conducted a pilot program to evaluate the effectiveness of a leading development program for women in senior leadership roles. The XPlore Senior Career Resiliency Program is a combination of four group sessions and four one-to-one coaching sessions conducted over a five month period, specifically focusing on issues relevant to women wanting to further their career development. During the reporting period, three women commenced this program with one completed and two still participating in the program. An interim evaluation has been conducted as an input to AGL’s diversity strategy development process. During 2009/10, AGL will complete the evaluation and determine whether this program will be adopted for women in leadership positions in AGL.
AGL provides one-to-one executive support to address senior women’s individual issues on a needs basis throughout the year.
As well as supporting women in leadership positions, we have continued to support women in the workforce. During 2008/09, 51 female employees accessed maternity leave with 23 of 25 employees returning to work after taking maternity leave during the same period. We have continued to support women returning to AGL after maternity leave by making flexible work arrangements available when requested. Of the 23 employees who returned to work, 13 returned on a part-time basis, nine returned to full-time hours, and one employee returned on a fixed term basis.
Further research on how we accommodate flexible work arrangements for all employees will be conducted in 2009/10 as part of our increased focus on diversity, so that we can offer a range of flexible working options which align to the requirements of the new ‘right to request’ legislation for employees with child care responsibilities.
AGL complies with obligations under the Equal Employment Opportunities for Women in the Workplace legislation.
The AGL Code of Conduct provides the foundation for expectations of behaviour by all AGL employees - from AGL Directors to newest employee. The Code is available on-line and is included as part of the induction process for new employees.
Administering AGL’s Code of Conduct is the AGL Ethics Panel, which comprises senior AGL representatives. Duties of this panel include providing guidance on interpreting the Code and investigating reported breaches. Where necessary, the panel may seek external input from appropriately qualified external advisors.
The Code underwent a major review and revision in 2008/09 to streamline and provide further clarity on AGL’s expectations of all employees. In 2009/10 the new Code of Conduct will be delivered to the business. All employees will be required to complete an on-line training module via AGL’s new On-line Learning System. Employees will be asked to complete a quiz and to make a declaration about whether they are aware of any breaches of the Code of Conduct or any conflict of interest. AGL’s on-line learning system will be able to provide accurate reporting of compliance.
Particular skills and capabilities are required for leadership positions. During the reporting period, a Leadership Capabilities Framework was created to define leadership success at AGL for four levels of leadership. Employees are required to include objectives relating to leadership capabilities within their annual Career Development Plans.
AGL has been rebuilding career management and leadership development programs in response to feedback received from our employees through engagement surveys.
Under a new leadership training framework, Leadership in Action, a number of programs were piloted and are now being deployed across the organisation. These include:
We will continue to offer these courses across the business in 2009/10.
We have introduced a 360 degree feedback program which is used for individual development planning, coaching, talent management and feedback. The tool provides direct feedback on how leaders are perceived by all their key stakeholders against the AGL Leadership Capability framework. It enables individuals to identify what actions they need to include in their Career Development Plan, as well as how to leverage their strengths to support them in their development areas.
Recognising and rewarding performance and contribution is motivating for employees and critical to achieving the goals and targets we set.
Employees at all levels want clarity on exactly what is expected of them, and how their performance will be measured. They want targets that excite and stretch them, and they want their contributions to be recognised through remuneration and other rewards.
Remuneration is a core driver for employees. We regularly survey the market, benchmark key roles and use independent market advice to check that our remuneration policies are effective in attracting and retaining the right people.
To assist in embedding the transparency and visibility of AGL’s approach to remuneration, in 2008/09 we again held a number of information workshops to educate leaders on AGL’s remuneration strategy. We also introduced a new Performance Development and Review process that links performance outcomes to remuneration (both fixed and variable) for all our salaried employees.
This year we continued to document the position descriptions for each job at AGL, so that the descriptions accurately reflect each employee’s accountabilities.
AGL’s Performance Development and Review (PDR) process is used to measure and manage employee performance. The PDR process is a streamlined system with easy to use tools that has been implemented across the business.
The PDR process incorporates measurable objectives, regular (at least monthly) one-to-one conversations between leaders and employees, mid and full year reviews, career development planning and stakeholder feedback. The PDR process was launched in July 2008, and now forms the basis for all performance management activities. The introduction of a company-wide calibration process means that every employee receives a PDR and that the rating scale used to measure performance is applied consistently.
The PDR delivers on AGL’s commitment to provide all employees with clarity about what is expected of them, and links reward and recognition of employees performance and contribution to the business in a transparent and equitable manner.
This year we continued to conduct workshops to increase leaders’ skills in assessing employee performance against agreed objectives and having constructive conversations with employees about their performance.
An intrinsic part of the PDR process is career development planning. The Career Development Plan (CDP) supports leaders and employees in identifying and planning for short and long-term career goals. AGL supports career development by requiring that one career development objective is included in the PDR plan for all employees. Short term career development objectives focus on building on the skills, knowledge and experiences required for employees to achieve their goals for that financial year. Career development goals identified through the refreshed talent management process are also included in the CDP and can focus on improving performance in an employee’s current position or preparing for the next career step.
Career development was identified as a key driver of engagement in the 2007/08 AGL Engagement Survey. As a result the Career Management @ AGL program conducted by an external and independent company, Right Management, was launched across the business for all employees with implementation continuing into 2009/10. This program enables employees to develop a sense of career ownership and understand how to leverage their strengths in their current roles and future assignments with AGL. The outcomes of the program include a realistic Career Management Action Plan and preparation for a structured career discussion with their direct leader. Career Management @ AGL is offered in both employee (half day) and leader (full day) formats. During the reporting period 561 employees and leaders (accounting for 26% of our workforce) participated in the program.
AGL continues to support employees completing formal qualifications at secondary and tertiary level, through our Assisted Education program. This program supports employees financially and by allowing time off work to study. This year, AGL provided $228,793 in financial support to 33 employees across the business, a significant increase in assistance from last year ($156,000 to 20 people).
Our remuneration system includes a short and long-term incentive program for our senior leaders and a short term incentive for our middle and emerging leaders, with payment of the incentive based on achieving a combination of company and individual targets. Currently, 40% of AGL’s employees are eligible to participate in our short term incentive programs.
AGL has two short term incentive programs – a General Incentive Plan and a Management Incentive Plan. The Management Incentive Plan applies to the AGL senior leadership group, with the General Incentive Plan applying to all other employees under individual employment arrangements.
During the year we reviewed both these plans. For our General Incentive Plan, we increased the maximum percentage amount payable, subject achievement of performance objectives, from 9% to 10% of the employee’s Total Fixed Remuneration (TFR). In addition to our short and long-term incentive plans, incentive arrangements are also included in certain Enterprise Bargaining Agreements including the Agreement for employees at the Torrens Island Power Station.
All employees (with the exception of defined senior executives) are eligible to participate in the Share Reward Plan, under which employees are invited to take up ownership of $1,000 of AGL shares at no personal cost, subject to AGL achieving specific business outcomes. 1,215 people were invited to participate in the Share Reward Plan in 2008/09.
Australian law requires 9% of salary to be contributed by employers to complying superannuation funds on behalf of their employees. AGL makes superannuation contributions for all employees and complies with the statutory requirement to contribute a minimum of 9% of salary.
Employees are provided with full details of the AGL superannuation plan applicable to the individual. Before making a decision on where AGL will make superannuation contributions, we encourage all employees to gather as much information as possible on their chosen fund or the AGL nominated superannuation fund, including each fund’s facts, fees, features and benefits. Employees can gather more information by contacting the plan administrator and/or by reading the product disclosure statement.
AGL offers all employees the opportunity to make additional voluntary superannuation contributions.
AGL’s superannuation funds provide death or total and permanent disability insurance cover. AGL pays the administration fee and there are no termination fees. The plans also offer investment choice and on-going superannuation education. This is not available to employees choosing their own fund.
Employees on individual employment arrangements have the option to choose their own fund. They also have the flexibility to change superannuation funds once in any 12 month period.
AGL’s obligations to pay pensions under the plan are met directly through the fund, and maintained separately from the resources of the organisation. Of our employees, 90.4% are in defined contribution funds, and 9.6% in a defined benefit fund.
In 2008/09, AGL continued to provide a wide range of employee benefits, including:
The attraction of key talent over the next two to five years is potentially one of the most critical challenges and opportunities AGL will face in meeting its strategic objectives. Regardless of the short-term economic downturn and rising unemployment, the ‘war for talent’ in the energy sector will continue to present a strategic opportunity and threat for AGL. The energy industry is radically changing due to government deregulation, climate change policies, privatisation of electricity assets in New South Wales and the development of renewable energy technology.
Being able to attract the best talent requires robust and transparent recruitment and selection strategies, and a clearly articulated employee value proposition.
During 2008/09, a full-time dedicated resource was appointed to analyse AGL’s recruitment and retention process and procedures. Key components of this project include: reviewing recruitment agency agreements, ensuring the agencies we work with have aligned diversity policies, and reviewing recruitment practices. This project will continue over the next 12 months.
We have also made progress in developing an Employee Value Proposition. The Employment Value Proposition initiative aims to articulate and deliver a compelling employment value proposition for AGL internally and through external recruitment partners.
The Talent Acquisition Project will enable AGL to better target appropriate groups of the labour market to meet our business needs. The project is being led by our new Recruitment Strategy Manager, and supported by a steering committee comprised of business leaders and human resource experts at AGL. The project plan has been developed and data collection will continue through 2009/10.
Further enhancements to AGL’s recruitment strategy are being developed in 2009/10 (incorporating the Talent Acquisition Project), and will deliver:
A new induction process, including a Welcome Day, was established during this year. The Welcome Day for new employees is a one-day, interactive face-to-face experience where the new employee learns about the AGL business, our strategic direction, vision, goals and values, and is a key part of our engagement strategy. The day aims to make new employees feel valued and provide them with a better understanding of AGL and where their position fits within our organisation. Guest presenters from AGL’s senior leadership group are invited to the day to share their personal experience and career history, which provides a reference point and vision for all employees with aspirations to further their careers at AGL.
New employees receive a Welcome Pack in a satchel produced by re-using AGL billboard advertisements, which prevents the material from going into landfill. The Welcome Pack contains useful information for all employees about AGL, including the benefits of working at AGL, HSE information and an overview of the energy industry. New employees can access a link to a website containing a welcome message from the Managing Director.
Total voluntary and involuntary employee turnover for 2008/09 was 25.9%, a slight increase over the result for the previous year of 24%.
With the enhancement of our People Metrics this year, we are able to more clearly identify areas where turnover is higher than average and may be affecting our business.
Higher than average turnover has been experienced in the group of employees who are over 65 years of age (194%). This is consistent with the demographic profile of a number of our power stations, where a large number of employees are reaching retirement age: 2.6% of our employees will reach retirement age in the next five years, and a further 5.6% within 10 years.
Higher than average voluntary and involuntary turnover is also present in the following employee categories:
The demographic profile of this turnover is consistent with two of our customer contact centres. Turnover for females under 30 years of age in Canberra and Adelaide was 61.4%, more than 2.3 times the company-wide average.
The introduction of the new SAP billing system and the resultant changes to a number of business processes are likely to have contributed to higher employee turnover this year. We made a significant investment in training our customer service teams in the new billing environment to minimise disruption to business and to our customers. The transition to the new system will ultimately deliver benefits to both customers and our employees, by reducing the complexity of working with multiple billing systems as well as providing better access to customer information.
We have continued to support our employees in our customer contact centres through this significant change process. For example, pilots for the Values Workshops were conducted in Adelaide and Melbourne customer contact centres, so that they were able to provide input into the program relevant to activities at their site.
We facilitate the rights of employees to bargain collectively. 58% of our employees are employed under collective bargaining employment agreements. Collective agreements are in place for site specific workforces at Torrens Island Power Station, AGL Hydro and our customer contact centres in Melbourne, Canberra and Adelaide. AGL continues to have constructive, positive relationships with the eight employee unions who are parties to our respective workplace agreements. In 2008/09, there was no lost-time as a result of industrial disputes.
In 2008/09, we refreshed the AGL Redundancy and Retrenchment Policy. This policy is applicable to employees with individual contractual arrangements. The policy encourages redeployment of employees in the event that their current position is no longer required by the business. Retrenchment is used after opportunities for redeployment have been exhausted.
As outlined in the Redundancy and Retrenchment Policy, in the event of retrenchment, AGL will provide appropriate support to employees, such as outplacement support and time off to attend interviews.
During the implementation of our new billing system, we increased our resourcing requirement beyond business as usual levels so that employees were able to attend training in the new system with minimal disruption to customer service, and to handle back logs that had occurred during this time. In 2009/10, we will be completing the reorganisation of our Retail business to realise the benefits of the new billing system. We anticipate that this will result in a number of employee retrenchments.
