6. COMPANY MANAGEMENT

6.4.6 Human Resource Management

Personnel training and staff optimization are the key priorities in HR management for RAO "UES of Russia" in 2003

During the year, the main objectives of human resource management at RAO "UES of Russia" were:

• optimizing the number of employees at the Company and its SDCs, and improving personnel efficiency at energy and management companies;
• further training and development of personnel;
• enhancement of the employee compensation and incentive systems.
  

Staff Optimization

As a result of efforts to optimize the energy companies' workforce taken in 2003, the average number of staff employed by the Holding Company decreased by 577,600 thousand people, or 8.6%. The number technical and operational staff was reduced by 6.5% to 556,300 people.
The average number of the Company's employees in 2003 was 3,200 people, which represents a decrease by 10,000 people from 2002 due to the transfer of personnel to the subsidiaries, OAO "UES SO-CDA" and OAO "UES FGC", established in the fourth quarter of 2002.

Personnel Development

In the sphere of personnel training and improvement of professional skills, the key priorities for RAO "UES of Russia" during the reporting period were:

• creation of a personnel development system,
• organization of managerial training;
  
• increasing reliability of professional activity of technical and operational staff;
  
• personnel training in occupational safety and prevention of industrial injuries.

As a measure to implement the Program for reforming the system of professional education and further training of personnel of the Holding Company approved in 2002, 28 educational and training institutions were spun off from regional energos. These institutions gained corporate accreditation and are now successfully working on the education services market. 198,300 people have been trained in the corporate personnel training system, including 129,900 workers, 45,100 engineers, and 23,300 managers.
The Corporate Educational and Research Center of the Unified Energy System established by the decision of the Board of Directors of RAO "UES of Russia" started its operation in 2003.
Within the framework of agreements on cooperation among RAO "UES of Russia", the Ministry of Education of the Russian Federation, the Academy of National Economy under the Government of the Russian Federation, the State University of Management, the Moscow Energy Institute, the Ivanovo State Energy University, and some other educational institutions, special-purpose training programs for the electricity industry have been developed. These programs are used in further training of all categories of executives, including 26 CEOs of energy companies.

Creation of Pools of Potential Skilled Staff and Managerial Teams

In order to ensure the availability of human capital capable of implementing reforms in the Company, work has been done to expand the human capital pool, including the creation of a pool of external candidates for management positions in the newly established companies.
In 2001-2003, RAO "UES of Russia" held its Awards for the Best Managerial Team of a SDC. In 2003, the aspects subject to evaluation were corporate governance and HR management at SDCs, results of energy sales, accumulation of the required fuel inventories and maintenance of fuel reserves, implementation of the SDCs' restructuring plan according to the schedule, and relations of the SDCs with social organizations, government authorities, and mass media. Besides, account was taken of the SDCs' investment management, and the reflection of financial results in accounting records. In 2003, the following companies were named winners of the Award: OAO "Bryanskenergo", OAO "Tverenergo", OAO "Belgorodenergo", OAO "Far Eastern Management Company", OAO "Permskaya TPP", and OAO "Zeyskaya HPP".