Annual report 2017

We want to shape a responsible energy industry of tomorrow in our country.

Employees

Employees are PGE Group's most important asset. Thanks to their experience and involvement, we are building a values-based organisation in which social responsibility is combined with business goals.

PGE Group is the third largest employer in Poland, providing stable employment to more than 41,000 people throughout the country. In 2017, PGE Group's staff increased by 3,000 as a result of the acquisition by PGE Polska Grupa Energetyczna S.A. of EDF's Polish assets, which was completed in November 2017.

We strive to ensure that our employees have optimal conditions for career development. PGE Group invests in their development not only through a wide array of training and courses, financing for higher studies, but most importantly by giving them opportunities to take on interesting professional challenges. Our approach to employee matters is presented in PGE Group's Code of Ethics, adopted in 2016, in the chapter "People at our company". The standards and rules presented therein address friendly working conditions, self-improvement and development, promoting safety and health amongst employees. Development of employee competences, including through the implementation of a talent management system, is also an element of PGE Group's updated strategy for 2016-2020, adopted in September 2016.

Since 2015, PGE Group has a Human Capital Management Strategy ("HCM Strategy”). Its objective is to support the business strategy in effectively achieving its objectives by ensuring strategic and operative management of human resources as well as the optimisation and standardisation of HR processes. In September 2017 the HCM Strategy was updated and by the end of 2017, we carried out the first two groups of strategic initiatives, the effect of which were regulations in the HR area at the Business Lines and at the following companies: PGE S.A., PGE Systemy, PGE OKK and PGE Dom Maklerski. Moreover, Corporate Rules for Human Capital Management and new HR tools were introduced.  Changes in the HCM area will make it possible to make costs and resources more flexible and increase the use of scale effects, i.e. PGE Group's in-house competences.

Generational gap threat

Given the generational gap problem, some of the aspects in our Human Capital Management Strategy are becoming exceptionally important for the Group's further operational effectiveness. We estimate that in the next 8 years about 13,000 employees will leave and at the same time will need to be hired. In the coming years, the Group plans to undertake initiatives intended to reduce its generational gap. One example of such activities is an educational programme designed by PGE Dystrybucja in connection with forecasts for a generational gap among electric technicians. Cooperation was established with first- and second-level vocational schools and universities concerning internships, provision of specialist equipment to school workshops and organisation of teaching sessions.

In 2017, PGE Group continued to support vocational schools and technical secondary schools in professional education so that the qualifications of graduates would be aligned with the energy industry's needs. New cooperation agreements and memorandums were signed with vocational schools, technical secondary schools and universities.

In 2018, we undertook additional activities aimed at providing a future workforce in the power industry:

  • In January and February 2018, agreements were signed with secondary schools from the Zgorzelec and Bełchatów districts to establish patronage classes that will be focused on educating students in accordance with the future labour needs of PGE Górnictwo i Energetyka Konwencjonalna. These agreements are for a 10-year period. As part of this cooperation, secondary school students will participate in vocational visits to the mines and power plants in Bełchatów or Turów and practical training and internships will be organised, as well as additional training. The Ministry of National Education is the honorary patron for this programme.
  • In April 2018 PGE signed a letter of intent with the Ministry of National Education, the main aim of which is to raise the quality and effectiveness of vocational education in the power industry and to adapt it to development challenges and the changing needs of the labour market.  In accordance with the agreement, PGE Group committed to undertake a range of activities together with the Ministry of National Education to facilitate the adaptation of vocational education to the changing needs of the power industry. This will concern support for the process of creating modern curricula in vocational and technical education, support for the students of industry and technical schools in additional internships, as well as in acquiring specialist skills, organising industry internships for vocational education teachers and support for the process of conducting vocational exams in the power industry.
  • In May 2018, an agreement was signed with Electric Industry Schools in Gorzów Wielkopolski. As part of this agreement, classes will be established under PGE's patronage in which students will be educated to become electric technicians and automatics specialists. This programme will start in school year 2018/2019 and will last 10 years. The agreement involves the organisation of practical training and vocational internships at the CHP plant in Gorzów and scholarships for distinguished students.

Employment structure by age (as at December 31, 2017)

Diversity

In hiring new and current employees, we follow rules such as fairness and equality but we also emphasise diversity. PGE Group has an Age Management Procedure, which sets out conditions for hiring people of different ages. At the same time, in our every-day work we make sure that our employees constitute a diverse group, learning from one another. Younger employees are introduced to their profession and responsibilities by older, experienced staff, which not only allows them to quickly take over responsibilities but also helps in building interpersonal relations.

Employment structure by gender - PGE Group (as at December 31, 2017)

Employment structure by gender - PGE S.A. management (as at December 31, 2017)

Employment structure by gender - PGE Group companies' management (as at December 31, 2017)

Employee on-boarding

From day one on the job, PGE wants to create an atmosphere of being part of the Group. Newly-hired employees from key PGE Group companies undergo an adaptation programme that is in place not just at the company where they work but at the entire Group. In 2017, four editions of the "Włącz Prąd" (“”Switch the power on”) programme were conducted, with 700 participants. These workshops let them meet people from different business lines and encourage experience sharing and quicker adaptation. This is invaluable experience for employees who are just joining the group, often at the start of their professional careers.

Selected indicators in the labour area at PGE Group

Number of employees by type of employment and type of employment contract, by gender (number persons)

As at: 31.12.2017 PGE Group PGE S.A.
  Female Male Female Male
Total number of employees 41,629 536
Total number of employees by gender 8,445 33,184 261 275
Employment contracts, full-time 8,358 33,092 249 268
Employment contracts, part-time 87 92 12 7
Employment contracts, indefinite term 7,510 30,899 248 261
Employment contracts, definite term 936 2,285 13 14
Contracts of services 340 466 4 1
Contracts for tasks 4 9 0 0
Number of self-employed staff 8 17 0 0
Ratio of self-employed staff to all employees 0.10% 0.05% 0% 0%

Number of employees covered by collective agreement

As at: 31.12.2017 PGE Group PGE S.A.
Percentage of total employees covered by collective bargaining agreements    
Number of staff 41,629 536
Percentage of total employees covered by collective bargaining agreements 32,137 508
% of employees covered by collective agreement (in relation to all employees) 77.2% 95%

STABLE AND SAFE WORKPLACE

At PGE Group, we employ over 41,000 people across more than 200 locations throughout Poland.  This is a stable and safe workplace. Because of this, we are one of the most desired employers in Poland. This is confirmed by various independent market studies.

In the latest ranking from Randstad Employer Brand Research from April 2018, PGE Polska Grupa Energetyczna placed in the top 10 of the best employers in Poland as the only power sector company. Randstad Employer Brand Research is the most comprehensive analysis of employer brands and factors that affect their attractiveness. This strong result strengthens our position as a stable and desired workplace.

We are also placing high in other prestigious rankings. Last year, PGE Group placed 1st in a ranking by Universum Global, in which it was named the most attractive workplace in the "power sector" category. In a study conducted by Antal, PGE placed 3rd in 2016 in the category: power sector, fuels, mining, chemicals.

We are certain that these results are the effect of our long-term human resource management policy, especially our care for employee safety. Given the specific nature of the industry in which PGE Group companies operate, safety is one of the most important factors taken into account in our actions - our employees include open-pit miners, power plant staff, electric technicians, so people who work in especially difficult conditions that warrant exceptional safety.

Employee safety

Promoting a safe work culture amongst employees is a constant objective for the Group. Such initiatives are primarily based on preventive activities as well as the exchange of know-how and experience. Each Group company has its own workplace health and safety regulations - this mainly results from the specific nature of our business lines. Promoting safety amongst employees is also ascribed as an objective in managing corporate social responsibility and sustainable development, which is part of PGE Group's updated strategy. Developing a safe and healthy work environment is also included in our Code of Ethics.

All of these activities - resulting from the company's responsible approach and a high level of awareness amongst employees - reduce accident rates. A vast majority (96%) of recorded accidents at work, although they are infrequent, are light accidents that do not cause major injuries or health problems.

Accident frequency and severity indicators for PGE Group companies in 2017

Accident frequency rate* 3.87
Accident seriousness rate* 28.64

*number of accidents in 2017 / number of employees (as at 31.12.2017)* 1000
**total number of absent days of people injured at work / number of people injured at work (excluding victims of fatal accidents)

Caring about safety

Employees of PGE GiEK, PGE Dystrybucja, PGE EC and PGE EO are exposed to the highest risk.

PGE Group strives to limit all risk related to safety by continuously operating on the basis of a safety culture model. This involves:

  • Implementing corrective and preventive measures based on multi-dimensional identification and assessment of threats.
  • Drawing conclusions from incidents.
  • Searching for the best practices within a given business line and beyond.

Our care for employee safety is acknowledged by the market. For example, our CHP plant in Gorzów, a branch of PGE GiEK, won the regional edition of the competition Employer - organiser of safe work in the category of large businesses employing more than 250 people in the Lubuskie voivodship. The CHP plant in Gorzów was also one of the winners at the national level. The plants in Bełchatów and Dolna Odra received a Golden Card for Leadership in Safe Work from the Safe Work Leaders Forum for years 2018-2019.

Additional benefits

PGE Group offers its employees not just interesting professional challenges and an extensive training package but also a high level of social benefits. Given the specific nature of each business line, each of the companies determines what additional benefits it offers to its employees. These benefits include: additional pay for holidays, additional healthcare, additional pension benefits, subsidies for electricity or additional life insurance.

PGE - an element of local community

Our companies and branches have been operating in their locations for decades and will certainly continue working there for years to come - with time, these companies naturally become part of local communities, which results in PGE Group being seen as a stable workplace. This is understandable - employees are people who come from those communities. Sometimes several family members are employed at PGE Group. We also work with local suppliers and businesses thus exerting considerable influence on regional development.

PERSONAL DEVELOPMENT

We aim to appropriately use our employees' competences and effectively manage the transfer of their knowledge and skills. Continuous development and competence improvement are important. This is why we are making every effort to provide our employees with opportunities to raise their qualifications by participating in specialist training, workshops in soft, management and IT competences, post-graduate studies and foreign language courses.

We invest in the development of our employees

The total number of training days at PGE Group companies reached 55,000, which means an average of 1.3 training days per employee, and training was provided to employees of all levels.

PGE Group is placing strong emphasis on special Central Training and Development Programmes, which are the best investment in our employees.

  • In 2017, we ran the programme PGE Group Internal Audit Academy. These were the objectives: understand the internal audit function, rules for its performance and using its results, improving knowledge and skills related to managing an internal audit unit and developing skills in performing audit tasks in accordance with the international standards IIA.
  • The programme Procurement Categories Managers Academy was intended for the employees of purchasing areas who took on the role of purchasing category managers. The Academy's objective was: development of procurement competences, construction of a strategic role for the procurement area at: PGE SA, PGE GiEK, PGE Dystrybucja, PGE Obrót, PGE EO, enhancement of cooperation between procurement area staff and increase in involvement and care for business results. The programme's effects include the development of a strategy for the selected procurement categories and, in the next stage, their implementation at PGE Group. The programme was completed by 60 employees, who received a certificate from the procurement institution CIPS.
  • In April 2017, the Technology Commercialisation Academy programme was completed at: PGE S.A., PGE GiEK, PGE Dystrybucja, PGE Obrót, PGE EO, which was dedicated to the development of competences of employees involved in research, development and innovation, alongside presentation of a way to build the technology value of innovative and implementation projects. Participants were able to learn about business practices in technology commercialisation projects that are applied around the world and to create a platform for communicating in a team of employees dealing with research, development and innovations. The Academy was completed by 21 employees.

Management development programmes

We create comfortable conditions for the Group's employees to develop competences and raise qualifications. Employees are encouraged to undertake self-improvement and knowledge-sharing initiatives, which is how a learning organisation culture is built. Its aim is to build awareness of the role of manager in shaping the involvement of the manager's employees and developing leadership competences.

Other management development programmes: Development Academy - leadership training for all managers. This is a programme for the key people managing facilities at the operational level, who during two-day sessions share their local best practices, and Learning Expedition - a programme mainly for managers, covering visits to other plants and getting to know management practices focused on continuous improvement.

Employee competence diagnosis

In the coming years, the Group will be launching a process for diagnosing employee competences at PGE Group companies. An IT tool (SAP HRM) will be used for that, supporting employee competence assessment processes across all business lines. This will let us better plan training processes that are intended to raise the level of knowledge of our employees and allow them to acquire new competences. A competence assessment pilot programme has already been implemented at PGE Polska Grupa Energetyczna S.A. and the experience gained from this will be used in implementing the programme at other Group companies.

Internship programmes

As PGE Group, we are actively involved in internship programmes for students and graduates. With these activities, PGE Group strives to reduce a generational and competence gap and continuously build its organisational culture that promotes involvement, professionalism and innovativeness.

Programmes completed in 2017:

  • PGE in cooperation with PKN Orlen S.A. and PGNiG S.A. launched the second edition of the #Energia dla Przyszłości (“Energy for the future”) internship programme. The programme is conducted under the aegis of the Ministry of Energy. Participants include graduates and students who gain experience over the course of a one-year internship in their areas of interest and learn about work in the energy industry.
  • In 2017, PGE Group also continued to work with the Lesław A. Paga Foundation in the 6th edition of the Energy Academy for people who are passionate about energy and want to work in this industry in the future. The Academy's participants were offered paid internships at PGE Group.

Selected indicators in the labour area

Average number of training days per year per employee, by gender and employment structure (no. of persons).

As at: 31.12.2017 PGE Group PGE S.A.
Total number of training days per year 55,630.75 1,011.75
Average number of training days during reporting period per employee 1.3 1.89
Average number of training days during reporting period per employee, by: 2.57 1.86
Female 1.56 2.30
Male 1.44 2.46
Upper management (Management Board, Directors) 5.56 4.53
Management positions 3.55 3.55
Other employees 1.29 2.13

Percentage of employees receiving regular performance and career development reviews, by gender and by employee category

As at: 31.12.2017 PGE Group PGE S.A.
% of employees subject to regular evaluation of quality of work, by gender 28.8% 100%
Number of employees regularly receiving work evaluations 11,991 536
Number of women regularly receiving work evaluations 2,989 261
Number of men regularly receiving work evaluations 9,002 275
Number of directors (management posts, names can differ depending on the company) 1,185 117
% of employees regularly receiving work evaluations (total women and men - % of total number of all employees)    
Women (% of women out of all women) 35.4% 100%
Men (% of men out of all men) 27.1% 100%
Directors 41.3% 100%
     

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