Organisational Change

The company-wide restructure, which started in 2010, was aimed at fundamentally changing the way the company conducts business. The company moved away from a structure of two specific businesses, retail and generation, each with profit and loss responsibility, with a corporate centre providing advice and assistance, to a model of six Performance Units and ten Functional areas, driven to achieving business-specific Key Performance Indicators (KPIs) linked to the company’s overall business objectives.

In 2011, this ‘one company approach' was further embedded. Additional structural changes were implemented within our Commercial Optimisation and Customer Markets Performance Units which, were aimed at providing greater clarity to both employees and the wider business on where accountabilities sit within the organisation.

We continue to monitor the impacts of our one company approach by measuring the results of both the Performance Units and the Functional areas that provide cross business support. Indeed, the performance against KPIs of both the Performance Units and Functional areas has a direct impact on the bonus payments for employees within those respective areas.

The roll-out of the new company strategy, ‘Your Energy, Your Choice’, will enable us to move forward together as a company and drive our performance into 2012 and beyond.

Through our bi-annual employee survey, which was conducted at the end of 2011, we improve our understanding of our employees’ views and opinions and identify actions to provide further support to them in the delivery of our business performance. Our external supplier, Towers Watson, has analysed the results, which are typical of an organisation that has undergone fundamental change. We recognise that we need to take action in some key areas if we are successfully to build a high performing organisation; we have therefore appointed our Chief Commercial Officer as Board sponsor, working with the business to make recommendations on how we can improve in 2012.

Large Combustion Plant Directive impact

We continue to engage with our employees at our four ‘Opted Out’ power station sites, which are due to close by 2015, in response to the European Union’s Large Combustion Plant Directive. The impact of these closures will see the possible loss of about 700 employees over the next three years.

During 2011, we continued to work with those employees affected to help them plan for their future. We have set out in broad terms the financial (severance terms) and non-financial (training and redeployment opportunities) arrangements that will be made available to affected employees.

Employee motivation and retention

The overall economic climate meant that 2011 was a challenging time for our people. Throughout this period we have sought to ensure that we treat our employees with respect and that they have all the information they need to enable them to evaluate options and make the most of opportunities available.

It is critical that we retain the core skills that are required to deliver our objectives and future investment plans. In 2010, we re-evaluated our performance management process to ensure that there is a direct link between the performance of the business and the rewards offered to employees. Our aim is to strike a balance between a fair one company approach to reward, and improving retention rates by offering the appropriate award to those who are highly skilled in this complex industry.