Labour practices

Management approach

Vattenfall’s employees are the backbone of its business success. Their talent is a precious resource comprising individual knowledge, skills and qualifications. In the future, the most significant success factor for Vattenfall will be having people with the right competence. Therefore, one of Vattenfall strategic ambitions is to be an Employer of Choice. This means that Vattenfall strives to create a work environment that enables the company to attract, develop and retain people with leading competence and promotes top performance.

Vattenfall’s Human Resources (HR) Policy states: “Work at Vattenfall shall provide opportunities for development in a safe, healthy and stimulating environment.” The policy also describes the role that corporate culture plays in the company’s business approach: “Vattenfall’s company philosophy and steering model are characterised by our three core values: openness, accountability and effectiveness. These values form the basis of our corporate culture and are the foundation from which we work towards our overall vision.” The purpose of the corporate culture is to encourage strong employee commitment and enhance Vattenfall’s attractiveness among potential employees.

Vattenfall’s Human Resources Policy, Code of Conduct and other instructions are part of the Vattenfall Management System (VMS) and form a platform for the management of responsible labour practices within Vattenfall.

Employment

During the coming decade, demographic changes will lead to increased competition for potential employees as a significant number of the company’s employees are approaching retirement. In combination with plans for growth and large investments, this leads to significant recruitment needs and makes the ability to attract, retain and develop the right competence a critical business success factor.

Market oriented salaries and benefits – including performance-based compensation – are a prerequisite for being able to recruit and retain competent employees. Vattenfall offers competitive salaries and benefits and strives to be an employer that rewards strong performance, identifies potential and applies flexible solutions to facilitate employees’ work. Accordingly, Vattenfall offers individual and differentiated salaries with focus on performance and potential.

Vattenfall has an international assignment process, and the number of employees stationed abroad is steadily increasing. In view of the company’s international operations, mobility across national borders is highly important.

Labour/management relations

The annually recurring My Opinion employee survey covers a wide range of issues and aspects. Through My Opinion, employees have an opportunity to express their opinions about everyday work, managers and the company. The tool is used throughout the organisation as a basis for action plans to improve the work environment. Best practices derived from the action plans are shared and become a useful tool for management.

In addition, local actions are taken in all countries and include open-door initiatives in which employees can meet with management, team meetings, and forum/chats on the intranet regarding current issues of employee interest.

The overall participation rate in the MyOpinion survey was 69% in 2008.

Occupational health and safety

The Human Resources Policy states that that Vattenfall shall provide “a safe, healthy and stimulating environment”. This is further elaborated upon in Vattenfall’s Health and Safety Policy, which states the objective that no employee shall be injured or fall ill due to his or her work situation.

Top management is involved in health and safety work by setting and monitoring safety goals. Vattenfall’s managers also serve as role models by promoting health and safety-oriented behaviour. To promote high levels of health and safety, Vattenfall maintains a continuous improvement process.

Vattenfall works actively to improve employees’ health by offering regular health check-ups and taking preventive measures according to national legislation. The company is active in supporting employees with prolonged illnesses so they can return to work.

Employee well-being and safety is measured by health and safety indicators and by reviewing health and safety-related questions in the My Opinion employee survey.

Vattenfall treats contractors’ employees in the same way as its own employees regarding health and safety issues. Contractors are expected to follow Vattenfall’s health and safety standards and this is followed up on regular basis.

Training and education

Vattenfall provides opportunities for all employees to develop as professionals and individuals. Vattenfall’s Human Resources Policy emphasises the importance of competence development, and states: “It is important that our managers possess business and professional skills as well as social and leadership competence. Our competence development supports the business operations and emphasises learning as a continuous process. To reach our goals we freely share our skills, knowledge, resources and opportunities.”

Learning is regarded as a continuous process. The approach to competence development is that skills are developed primarily in daily work and through participation in different projects. There is no Group-wide policy regarding training and education; instead, local country-specific regulations apply.

Vattenfall has two internal institutions for competence development, Vattenfall Management Institute (VMI) and Vattenfall Business Institute (VBI). VMI is designed for management development and offers both general management training as well as advanced programmes at the strategic level for senior managers. Development programmes for functional specialists such as financial control, HR, procurement and communications are offered by VBI.

The Talent Management process is a holistic process designed to define, attract, develop and retain the talent Vattenfall needs to meet future challenges. The process includes Management Planning and Competence Planning. Project managers and key players will be added to the Talent Management process as of 2009 and a succession planning process for these positions will be developed.

Management planning

Excellent leaders are key drivers of the company. Vattenfall has developed a Group-wide leadership model to evaluate and assess managers and young potentials. The annual management planning process provides an overview of management capacity in the Group as well as information to support succession planning. To ensure a high rate of internal succession, Vattenfall focuses on early development of its leaders. International leadership training programmes are conducted in order to help leaders develop their ability to work under rapidly changing conditions and in different cultures.

Competence planning

The annual competence planning process analyses the organisation’s current competence status and future competence needs on the basis of business plans, and identifies competence gaps. The purpose of the process is to ensure that the organisation has the proper skill sets from both the short-term and a long-term perspectives. All units shall prepare action plans to ensure sufficient competence in the future. The action plans cover areas such as efficiency improvements, implementation of new technology, skills development, recruitment, job rotation, trainee programmes and the use of consultants.

Examples of training programmes within Vattenfall:

• In Sweden the Vattenfall Professional Training Programme provides concentrated training programmes, courses and seminars in areas such as health and safety, electrical/mechanical safety, project and process management, personal development and languages. In 2008 Vattenfall’s “Young Graduate Programme” was held for the third time in Sweden. It offers young academics an opportunity to gain practical experience in limited-time projects.
• In Finland Vattenfall conducts a local management and leadership programme called “Vesimies Programme”. This is an ongoing programme that is revised annually to reflect the needs of the target group and the business objectives. Customer service training is offered, and SAP-related training programmes have been launched for large groups in the Finnish organisation.
• In Denmark a competence model has been developed for each unit, competence evaluations have been performed, and gaps have been identified. Based on the gap analysis, a strategic competence development programme will be created every year. Training and development related to operational excellence has been in focus.
• In Germany the new development programme for young potentials – “Career start-up” – got off to a successful start in 2008. It aims to identify potential business leaders, develop and prepare them for future management responsibilities, and ensure the availability of successors for executives. This is a particularly important aspect in view of the current age structure of executive staff. The programme will also help keep performers loyal to the company. Furthermore, vocational training programmes for young people are offered on an ongoing basis to some 1,600 apprentices. Additionally, the 2008 training catalogue describes over 300 courses, workshops and seminars.
• In Poland, a review of strategic competence planning resulted in three main activities from 2007 to 2009: proactive employer branding, knowledge- and competence-sharing, and being the “employer of choice for employees of choice”. An employer branding audit, participation in local job fairs, the organisation of apprentice programmes and active recruitment processes are examples of actions that have already been taken.

Diversity and equal opportunity

Vattenfall’s Human Resources Policy states the company’s view of diversity and equal opportunity as well as its importance (extract):

“We strive for diversity in teams and units in regards to gender, age, background and experience, enabling employees from different units and of different nationalities to work together”.

The policy relates to Vattenfall’s ambition that the workforce should reflect the societies in which the company operates. Vattenfall is set to create the same possibilities and rights for all employees, and establish diversity as a natural part of operations.

A prerequisite for achieving the same rights and possibilities is to strictly condemn every act of discrimination in all work-related situations. Consequently, Vattenfall’s Code of Conduct clearly states that no employee shall be discriminated against or harassed as regards employment or occupation due to his or her ethnic background, gender, religion, political opinions, social background or for any other reason.

For additional activities and initiatives to improve diversity, see “ A diverse Vattenfall performs better ”.

Human Resources Policy

The Human Resources (HR) Policy is a part of the Vattenfall Management System and applies throughout the Group. It states (extract): “Vattenfall strives to create a work environment that attracts and develops people with leading competence and encourages top performance. By continuously developing and improving our human resource work, we are recognised – externally as well as internally – as a highly attractive employer. This human resource work contributes to our business operations and to greater competitiveness. We address all issues according to local practice, and our actions are always accountable and socially responsible. We facilitate change and are constructive and open to new possibilities and models.”

The HR Policy describes Vattenfall’s approach to five areas: culture and organisation, leadership, competence development, work environment, and compensation and rewards. Relevant extracts of the policy are provided in the sections above.

Regarding implementation, the HR Policy states: “Implementation of the Human Resources Policy is the responsibility of everyone within Vattenfall, but managers play a key role. Our managers should, in their daily work and through projects and activities, ensure compliance with the Human Resources Policy. We also co-operate with and consult the employee representatives. The co-operation should be straightforward and based on accountability.”

Compliance with codes, agreements and frameworks

Vattenfall is a signatory of the UN’s Global Compact. By complying with the Global Compact’s principles regarding responsible labour practices, Vattenfall adheres to international frameworks such as the core conventions of the ILO and the OECD development guidelines for multinational companies.

Organisational responsibility

Group Function Human Resources (Group HR) supports and assists management teams at the Group and Business Group level in the management of Vattenfall. Group HR has functional responsibility for human resource issues at Vattenfall and provides expert advice on matters of importance to the company. The head of Group Function Human Resources is also a Senior Vice President and member of EGM.

Group HR issues directions and objectives for different areas and provides models and tools for the local units when appropriate. The work of Group HR is mainly performed in various national and international projects. Most HR-related activities, however, take place locally in the different units.

Group HR focuses on continuous improvement and value creation by developing and providing high-performance programmes and tools, including Talent Management, Organisational Development and Compensation & Benefits.

Training and awareness of labour/human resource issues

Responsibility to business partners and suppliers means working on the basis of high standards of business ethics and integrity and supporting national and international organisations’ work to establish and maintain strict ethical standards for companies.

Goals, performance and risks pertaining to human resources

Vattenfall’s human resource performance is defined in terms of employee commitment, excellent leaders and the right competence. The annual My Opinion employee survey is designed to measure this. The survey covers a broad range of aspects that reflect Vattenfall’s company culture and that have an impact on employee commitment.

One of the categories measured in My Opinion is job satisfaction. In 2008 a score of 80% was recorded for this category. Job satisfaction is defined as one of three Commitment Drivers in the Vattenfall Group (together with Company Management and Environment & Society). In 2008 the commitment score was 70% , which is a small increase from 2007. Commitment targets are part of every business unit’s business plan for the coming three years.

Vattenfall’s long-term target is the commitment level of High Performance companies, which is 81%.