10.1. Main principles and objectives of personnel policy

Personnel policy is a system of techniques and principles of HR management used for the creation, development, and stimulation of high-potential team to achieve the Company’s strategic goals.

TGC-1 mission in personnel management
Efficiency improvement and development of the Company through realization of each employee’s potential. It’s conveyed in the motto: Power of our Company’s success is in fulfilling potential of all of us.

Main principles of TGC-1 personnel policy
Team work and commitment. Our Company’s personnel is geared towards common objectives. Work of each employee is appreciated, since we are a team of professionals, who wish and are able to contribute to a common end. We aspire to have all employees sharing the Company’s success, realizing their commitment to corporate values and proud of being members of TGC-1 team.

Responsibility. Responsibility does not depend on the position, since working in our Company means bearing responsibility.

Continuous development. The Company’s management realizes and appreciates achievements of each employee, stimulating the initiatives and creative research. The Company is interested in development of each employee and is ready to provide any opportunities for fulfilling employee’s potential. We aspire to continuity of expertise and knowledge shared by senior generations. In case of a vacant position, internal candidates have priority.

Tough rules of today's market set high requirements to the Company and its personnel. Therefore, all TGC-1 employees should show
the required level of the following competencies:

Objectives of TGC-1 personnel policy:

1.  Creating a team of professionals sharing the same goals.
2.  Becoming the most attractive employer providing the best conditions in the industry for intellectual career advancement
     and professional skills development.
3.  Attracting and maintaining the best professionals and high-potential young specialists.
4.  Bringing out potential of each employee.
5.  Introducing a fair and decent personnel incentive system.
6.  Improving employees’ welfare.
7.  Building an open communication system.
8.  Creating a favourable climate for bringing up leaders, who may take responsibility for the Company's performance during
     changes period.
9.  Ensuring the employees readiness to changes and flexibility in creating an efficient structure.

The Company has paid much attention to the personnel management along with other aspects of the Company’s activity. In 2009, it became one of the major areas of the Company’s development. In the first quarter of 2009, the management structure changed, a new position of the Deputy General Director for HR was created with further amendments to the membership of the Management Board. Throughout the year TGC-1 management made required provisions for development an up-to-date HR management service, establishing common HR policies and procedures, and creating optimum management structure and system in line with the best international practices.


10.2. Personnel number and structure


Changes in number of employees that occurred during the year are due to:

1.  Optimization of the Company’s head office, eliminating the Administrative and Service Enterprise and Administration
     of Nevsky Branch from the organizational structure with transfer of the corresponding functions to the head office.
2.  Reducing number of employees of Kolsky Branch as a result of staff optimization.
3.  Displacement of Pravoberezhnaya CHPP personnel following shutting down the equipment of the boiler and turbine unit no. 1.
4.  Eliminating several positions from the organization chart of the motor transport unit as a result of organizational activities aimed
     at efficient and sustainable resources usage.
5.  Increasing the number of employees of Centralized control and process management enterprise and IT facilities of TGC-1
     due to the necessity to support the automated operator and dispatch control system and adding a new telephony service to
     the organizational structure.
6.  Hiring new employees for operating the equipment of 180MW CCGT-units (to be put into operation in 2010) at Pervomayskaya




10.3. Remuneration, social benefits and social protection

The average wages of production and industrial sector employee in 2009 equalled RUR 35,151. Average wages of TGC-1 employees increased by 6.9% compared to 2008.


Social and labour relations within the Company are regulated by the Collective Agreement of TGC-1. The Collective Agreement sets forth major liabilities of the employees and the employer, as well as provisions improving the Company's employees working conditions compared to the Labour Code of the Russian Federation.

The Collective Agreement effective in 2009 was concluded for 2008-2009 and comprises of the General Provisions and the Appendices applied for the employees of TGC-1 Management, Administrative & Service Enterprise, Nevsky, Karelsky and Kolsky branches.

During 2009, the Company two times carried out employees’ wage and salary indexation in accordance with the growth of consumer prices in the regions of TGC-1 operations. As of June 1, 2009 the tariff rates and official salaries of the employees of Nevsky Branch, TGC-1 Management, Administrative and service enterprise of TGC-1 and Centralized control and process management enterprise as well as IT facilities specialists were raised by 9.8%, of Kolsky Branch by 10.34% and Karelsky Branch – by 10.37%; as of December 1, 2009 – employees of Nevsky Branch, TGC-1 Management, Administrative and service enterprise of TGC-1 and Centralized control and process management enterprise and IT-facilities got a raise by 1.9%, Kolsky Branch – by 4.65% and Karelsky Branch by 3.11%.

In 2009, no cases of delay in payroll payments were reported.

The amount of welfare payments to the employees and retirees of TGC-1, expenses for cultural and sports events, provisions for trade-union for social needs and bonus payments to retired chairmen of Union committees in 2009 totalled RUR 190,739.8 thousand.

One of the benefits, provided to the employees and retirees, consists of compensation for the payments of electric and heat power, consumed in the households. In 2009, compensation on electric and heat power provided to employees totalled RUR 40,202.200, to retirees – RUR 8,848,600.

Apart from that, the employees of TGC-1 receive a non-recurring stimulating payment in addition to average salary in the amount of the official salary, established as of the day of vacation leave. In 2009, such payments amounted to RUR 111,100.

TGC-1 provides payments of material aid to the employees in case of a child birth, marriage registration, funeral of close relatives. In 2009, the material aid as to aforementioned areas comprised RUR 4,502,100.

TGC-1 grants benefits to the families with children: the Company provides the payment for the pre-school facilities and recreation camps for the families reporting their revenue per member less than a tariff rate of the TGC-1 first class worker; a monthly bonus is paid to the employees on child-care leave, child age up to 1.5 years and 1.5–3 years. Such payments comprised RUR 2,454,100 in 2009.

TGC-1 employees, who retired after working for at least 20 years, get material aid. The Company takes care of 2,408 retired veterans, all of them receive material aid and holiday payments in accordance with the Provisions on material aid payment. The amount of payments is defined by joint decision of TGC-1 administration of the committee of primary trade unions chairmen.

Taking care of physical health of employees is one of major objectives of the Company. This goal is implemented by means of conclusion of contracts on compulsory and voluntary medical insurance of employees.

In 2009, TGC-1 executed medical programs of compulsory and voluntary insurance of its employees by signing contracts with SOGAZ insurance company. The amount of medical services, provided under voluntary medical insurance program in Nevsky Branch totalled RUR 51,468,000, Kolsky Branch – RUR 21,803,000, Karelsky Branch – RUR 10,720,000.

In 2009, 15,775 requests for medical aid were reported under the voluntary medical insurance program, emergency aid was provided to 180 persons, 364 employees got hospital treatment, and 2,661 employees received dental services. Expensive materials were purchased for surgical treatment of 30 employees, 22 of them got complicated heart and vessels surgeries, and a replacement arthroplasty surgery. Within the framework of the voluntary medical insurance, the employees passed treatment in the rehabilitation centre, and 56 employees were granted with vouchers for resort treatment.

Another priority for the social program is the organization of summer vacations for the employees and their families. In May-October 2009, TGC-1 employees got 1,055 vouchers for health-improving recreation in the recreation centres at the Black Sea (cities of Sochi, Anapa, Pyatigorsk, etc.) and recreation centres “Staraya Russa,” “Khilovo”, “Martsyalnye Vody”. TGC-1 pays big attention to the matters of summer health-improving recreation programs for the children of its employees. Children are provided an opportunity to spend summer holidays in the health-improving camps in their region or in the Southern recreation centres.

The Company pays special attention to corporate culture development and team building, organizing sport and cultural events: annual football and volleyball competitions, winter and summer sport festivals, games of the Club of cheerful and quick-witted, the Power Engineer Day, etc.

TGC-1 approved the program on private occupational pension, comprising of two pension schemes: Corporate and Parity.

TGC-1, being one of the largest taxpayers, abides the laws of the Russian Federation, and builds its labour relations based on social partnership principles stipulated by the Labour Code of the Russian Federation.


10.4. Staff training and development

TGC-1 supports and stimulates employees’ aspiration to professional development and considers staff training and development a guarantee of business goals achievement.


Staff training and certification is one of the primary directions in the personnel development system. In 2009, 3,627 employees passed training, i.e. over 35% of average staff of TGC-1, including 2,336 employees who improved their professional skills and passed pre-certification training at the TGC-1 Training Centre.

TGC-1 contributes to training of its employees in the higher educational facilities and technical schools. In 2009, TGC-1 trained 75 persons in higher education institutions and technical schools for the total amount of RUR 1,367,000.

To define the skills level and improve professional skills of the personnel of TGC-1 power plants, professional skills competitions are held on the annual basis in the Training Centre of TGC-1. The team of Pervomayskaya CHPP who won in internal competitions among operating personnel of the thermal power plants with cross connections in 2008, represented the Company in regional competitions in the city of Essentuki in autumn 2009. Furthermore, in 2009 the competitions between HPPs teams were held, Vygskie HPPs Cascade of Karelsky Branch won in these competitions.

In 2009, internal training programs were widely implemented. Such questions as matters of financial, economic and industrial operations of the Company, most vital for the structural divisions of TGC-1, were considered during the seminars. In particular, staff training for operating the new equipment of 180MW CCGT-unit based on gas turbine plant of type V64.3A of Pervomayskaya CHPP was provided with participation of specialists of Power machines, GEA-EGI Co.Ltd, Ansaldo Energia, Kazan Compressor Plant, etc.

Regular strategic sessions for senior management were held. Moreover, an annual conference on staff management for divisional employees took place in 2009.

The work with young specialists is one of the key functions of the staff management, which includes attracting and securing young specialists in the Company. TGC-1 approved the schedule of events on interaction with the Higher education institutions for 2009. In accordance with this plan, internships were organized, along with the visits from the students of St. Petersburg State Polytechnic University, St. Petersburg State Technological University of Vegetative Polymers, St. Petersburg State Electrotechnical University (LETI), Energy Technical School (St. Petersburg branch of the State Enterprise Higher School of Economics) and other Higher education institutions and technical schools.

Internships are organized in every structural subdivision of TGC-1 in order to ensure professional insight for students, as well as to select and attract the most prospective young specialists to TGC-1.

Overall, 755 students spent their industrial, pre-degree, technological, instructional and study internship in TGC-1 in 2009 including:

In order to attract the most prospective students, annual graduation thesis competition is held. In July 2009, the 6th annual contest for the best graduation project among the students of St. Petersburg, Petrozavodsk and Murmansk was held in seven nominations. Special S. A. Kazarov scholarship program is deployed with grants paid to students and teachers of profile educational institutions.