Employees

a world class Business
needs Skilled and
Talented staff

International Power operates in a highly complex business environment and an increasingly competitive international market for key skills and talent. We recognise that the capability and endeavour of our employees makes us competitive, most critically in the areas of greenfield development and construction management, acquisitions, managing existing assets, project finance, plant operations, trading the output from our assets and relationship management with key industry stakeholders.

Consequently, we place the highest priority on the selection and retention, engagement, training and development of staff at all levels, whether employed by us directly or, as is often the case, by our subsidiaries, joint ventures or associates.

In light of our strategy to balance risk through operating a broad portfolio of technologies in a range of markets, our asset ownership structures often lead to the sharing of influence over people issues. Our senior management team establishes the important principles, guidelines and standards of good governance by which employees at our assets are employed. This ensures an appropriate measure of consistency, whilst affording the flexibility to plant managers to respect national cultures and comply with local employment regimes.

International Power and its subsidiaries employs approximately 3,700 people in 20 countries.

Our global expatriate and regional senior management teams are responsible for managing our power plants to ensure we embed our values, operate effectively, monitor investments and drive growth in the business. It is for this reason that we continue to invest heavily in the development of this group and have in place a balanced, yet highly leveraged, incentive structure focused on performance at plant, regional and Group level.

We continue to operate a number of share-based long-term incentive plans and see these as an integral part of our strategy to align the interests of managers and many employees with the Group’s performance.

As a consequence of rapid growth through acquisition, in recent years we have acquired new groups of skilled people, from whom we can learn and with whom we can share best practice.

We value our reputation as a caring employer, rooted in the communities in which we operate. We seek to attract and retain high calibre employees locally, where possible, including those with often scarce qualifications, skills and experience.

In line with our FIRST core values, we endeavour also to ensure that all of our staff conduct themselves in a manner of the highest integrity at all times. A Code of Conduct is used by employees and their managers to provide guidance on the standards of conduct that the Group requires from its staff.

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Communications

Clear communication links are critical to enhance business and commercial awareness throughout our business.

Corporate publications, the International Power website, employee awareness briefings from executive management and team briefings are all used to promote communications and an understanding of the development and application of policies and strategy.

We continue to invest in the latest technology to aid rapid communication with all staff around the world.

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Learning and development

We continue to focus on the development of our employees to ensure the business continues to be well placed for the future. 2007 saw an increasing focus on developing high performing and high potential international managers.

Global leadership programmes for high potential managers, which began in 2006, continued as a partnership between International Power and Ashridge Business School, with two additional groups successfully completing programmes in May and October 2007. The participants were drawn from every region and represented the diverse skill sets present within the Group, providing an excellent opportunity for knowledge sharing.

Given our rapid growth over recent years, in 2007 we also reviewed the behavioural competencies that will be critical to the Group in future. These will increasingly provide a platform for monitoring and guiding leadership behaviours across our key international and corporate management population.

By way of illustration of some of the training activities at our plants, we continue to operate a behaviour-based safety initiative as a way to improve power station health and safety management. This programme, ‘Fresh Eyes’, focuses on people rather than plant or procedures. It involves a colleague observing their peers and giving feedback on safe behaviour and unsafe behaviour. This has helped us maintain the highest levels of health, safety and environmental standards.

Recruitment activity from within the Group has continued to grow successfully in 2007, with an increase in global and domestic relocations. Systematic advertising and the broad internal communication of vacancies have allowed employees to seek out opportunities within the Group. Labour turnover remains low. The launch of our 2008 graduate development programme should support the further strengthening of our people development from within the Group.

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Equal opportunities and diversity in the workplace

In line with our core cultural values and in recognition of the very wide diversity of our employees and business partners across the globe, International Power remains fully committed to the provision of equal opportunities and the elimination of discrimination of any type in our Group. This approach extends itself to the fair treatment of people with disabilities in relation to recruitment, training and development.

Further, we believe wholeheartedly that it makes sound business sense to benefit from the wide ranging knowledge and experience of individuals in all sectors of the societies in which we have a presence.

In recognition of this, cultural awareness and diversity training is provided to our employees prior to undertaking international assignments.

A number of our plants are active participants in diversity organisations. For example, in the UK, Rugeley power station is accredited with the ‘Positive about Disability’ standard. All businesses are encouraged to seek ‘Investors in People’ status.

International Power uses a variety of techniques for assessing job applications as part of its selection process. Where external selection techniques are implemented, management work hard to ensure that the providers are able to demonstrate that their methodologies are free of bias. Internal selection processes revolve around objective assessment of the candidates.

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Rewarding employees

In summary, our approach to rewarding employees is to provide:

  • an interesting and challenging job which suits the skills of the employee;
  • appropriate learning and development opportunities;
  • opportunities for personal progression;
  • competitive pay and benefits;
  • an emphasis on long-term incentive and short-term bonus plans, as well as a broad commitment to employees owning shares in International Power plc;
  • an emphasis on the communication of total rewards, which seeks to place a positive value on many of the intangibles of the employment relationship.

The Group operates a range of pension plans internationally, with defined benefit arrangements in the UK and Australia. In 2007, a strategic review of our UK pension arrangements was initiated and we continue to consult with employees and their representatives to ensure the most appropriate solution is achieved for the Group and our employees. No changes are being considered which effect existing employees.

International Power has in place a number of share-based incentive plans under which employees of the Company and its subsidiary companies may acquire shares in International Power plc. These plans form an integral part of the Group’s strategy to provide appropriate reward and retention strategies for employees and to align employee and shareholder interests through incentive targets based on clear financial criteria.

Executive Share Options are granted to employees in 13 countries. The Global Sharesave Plan is in operation in five countries, whereby employees save for three or five-year periods to purchase International Power shares at a discounted price. We are restricted from offering these plans more widely because of legislation relating to securities.

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