ORGANIZATIONAL EFFECTIVENESS AND ENVIRONMENT, HEALTH & SAFETY

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1 EB-00-0 Exhibit F Tab 0 Page of ORGANIZATIONAL EFFECTIVENESS AND ENVIRONMENT, HEALTH & SAFETY INTRODUCTION Organizational Effectiveness and Environment, Health & Safety ( OEEHS ) is responsible for developing, implementing and reporting on strategies, programs and services to attract, select, develop and retain the qualified employees who enable THESL to deliver safe and reliable service to its customers. 0 The existing operations include: Environment, Health and Safety Program Development and Management Training and Skills Development Leadership Development and Succession Planning Performance Management Systems Talent Management Employee/Labour Relations Compensation and Benefits HR Systems 0 Three major factors impact THESL, signaling an unprecedented level of change for THESL s workforce into the foreseeable future. They are: ) An anticipated high rate of retirements with the associated loss of skilled, experienced employees and extensive training requirements of new employees; ) Modernization of the distribution grid, including an accelerated infrastructure renewal plan, that increases labour requirements; ) A new customer service model enabled by technology and skills development of customer service staff.

2 EB-00-0 Exhibit F Tab 0 Page of OEEHS s role is to prepare and support THESL in managing workforce changes, the increased demands of the capital plan and evolving customer expectations while also sustaining productivity. This is carried out through workforce planning, a multi-faceted talent acquisition strategy, performance management, training and development, and priority attention to safety. 0 A skilled and knowledgeable workforce is a crucial asset for THESL. It will enable THESL to undertake the infrastructure renewal plan and distribution grid modernization, while continuing to meet customers expectations for reliable and responsive service. Over the next ten years, more than 0 employees will reach THESL s average retirement age of with eligibility for an unreduced pension, or the OMERS Normal Retirement Age of. This number represents percent of THESL s current workforce. Over 0 percent of the projected retirements are in Supervisory, Trades and Technical positions. 0 Due to this significant rate of retirement and increased labour requirements, there is an extraordinary need to develop excellent leaders and to replenish trades and technical positions. Strong leadership is required to emphasize strategic direction, sustain momentum, and focus on the efficient and safe execution of work programs during this extended period of change. To provide sufficient lead-time for skills development, THESL s 0workforce plan calls for hiring approximately 00 new employees into leadership positions and trades and technical jobs, such as the Line Trade and Designers. However, these challenges will not be met solely by the traditional staffing model of hiring and promoting. A multi-faceted approach, including hiring full-time staff, ramping up apprenticeship programs, and outsourcing, will be required. With that approach come risks for worker safety that must be carefully managed through education, training, increased vigilance and inspection.

3 EB-00-0 Exhibit F Tab 0 Page of 0 Labour relations will also be greatly impacted given the unparalleled rate and extent of the changes to come. THESL s inside and outside employees are represented by the Canadian Union of Public Employees ( CUPE ) Local No., which was the successor union following amalgamation in. Although created in, CUPE s roots reach back to, with a long tradition of strong worker representation. At the conclusion of the last round of bargaining, CUPE and THESL reached a five-year agreement, which is in force until January, 0. Included in this agreement is a unique Gain Sharing Program which links achievement of specific performance targets to a shared incentive for key front line workers Certified Crew Leaders and System Response Representatives. THESL s Engineers are represented by the Society of Engineers. Negotiations will be undertaken in the fall of 0 prior to December, 0 when the current. years collective agreement expires. 0 To sustain and improve organizational performance during this time of change, sound governance and management systems are necessary to ensure that the right rules, measures and controls are in place and adhered to. OEEHS s expertise in building and facilitating the execution of these management processes will enable THESL s executives and management to meet and exceed performance requirements. Given the unprecedented level of recruitment and an increased level of labour relations activity, it was decided in late 00 to separate staffing and labour relations, thereby ensuring talent acquisition was not overshadowed by urgent labour needs. The HR Services Department which formerly provided a broad spectrum of HR services including staffing and labour relations became the Employee/Labour Relations Department with a singular focus. At the same time, all staffing related activity from workforce planning to hiring was transferred and consolidated in a new Talent Management Department.

4 EB-00-0 Exhibit F Tab 0 Page of Additional departmental design changes were made to enable an increased focus on training and development, safety and health management. Table : OEEHS Division Costs ($ millions) Line of Business 00 Historical 00 Historical 00 Bridge 0 Test OE Administration HR Planning, Benefits and Compensation HR Services.. Organizational Development & Performance (includes Trades Training Staff) Environment, Health & Safety Project Support Office Talent Management Employee/Labour Relations Compensation, Benefits & HRIS OEEHS Total.... In 00, the costs of OE Administration were transferred from Toronto Hydro Corporation to THESL. In 00, Project Support Office responsibilities were re-distributed to Organizational Development and Performance, HR Planning, Benefits and Compensation within OEEHS and to Strategic Management (another business unit within THESL).

5 EB-00-0 Exhibit F Tab 0 Page of ORGANIZATIONAL EFFECTIVENESS ADMININISTRATION Organizational Effectiveness Administration is the office of the Vice-President of OE and EHS. The Vice-President ensures that THESL has the highly skilled and qualified employees needed to provide safe and reliable service to THESL customers. Specific responsibilities include providing strategic direction and oversight for labour relations and workforce issues, policies and programs for THESL. 0 ENVIRONMENT HEALTH AND SAFETY Environment, Health and Safety ( EHS ) is responsible for ensuring THESL complies with all relevant environmental, health and safety legislation and meets its commitment to provide a safe and healthy workplace for employees. EHS carries out continuous monitoring, analysis and reporting of performance in environment, health and safety to identify areas of progress and where greater effort is required. 0 Risk management, root cause analysis, best practices and accountability through a system of internal leader and worker responsibility are core to creating and sustaining a workplace culture where safety is front and centre and in sync, not conflict, with productivity. To further safeguard employees and the workplace, EHS works directly with Operations. Audits confirm compliance with safety systems and identify opportunities to mitigate risks and continuously improve safety performance. Inspections by Operations front-line leaders and EHS will become increasingly more rigorous, detailed and frequent as staffing levels grow and capital work increases. The infrastructure plan will result in unprecedented numbers of contractors working on THESL s equipment and facilities. Many of them will be unfamiliar with the system s unique risks and therefore, will place additional pressures on the requirements to manage safety. A priority is to reinforce existing EHS Programs and work procedures and ensure this workforce is properly trained to work safely and efficiently on THESL s distribution

6 EB-00-0 Exhibit F Tab 0 Page of system. 0 New apprentices and aging workers may face increased risk of injury. Safe work practices and an emphasis on health and wellness will help mitigate the risk of injury, however, some level of illness and injury can be expected. The principles of early intervention and safe return to work are key to preventing the exacerbation of illness or injury that can ensue from a prolonged absence. In 0, EHS will consolidate all environment, health and safety data, safe work procedures, rules and associated documentation in a central repository to support knowledge transfer and accessibility to information. EHS will also initiate a plan to implement ISO 00 (Environmental Management Systems) and assess OHSAS 00 (Occupational Health and Safety Assessment Series) for possible future implementation. Integration of environmental management systems with occupational safety management systems will also commence in 0 and will result in greater efficiencies by eliminating duplication and leveraging synergies, and in enhanced legislative compliance. EHS COSTS Table : EHS Costs ($ millions) 00 Historical 00 Historical 00 Bridge 0 Test Costs Activities Undertaken Environment, Health and Safety Management Systems, Program Development and Administration Hazard Risk Analysis and Control; Incident Investigations Environment, Health and Safety Performance, Legislative Tracking and Reporting Disability Management, Early Intervention, Return to Work & Accommodation

7 EB-00-0 Exhibit F Tab 0 Page of Proactive Wellness Programs Environment, Employee and Workplace Assessments Stewardship of Environment, Health and Safety Policies, Programs and Procedures Custodianship of Environment, Health and Safety Data Table : Variance Explanation From To Comments includes costs attributed to pandemic planning. Historical Historical Environmental cleanup costs for Toronto Hydro location (Sterling Road) incurred in Three percent increase in payroll costs from previous year due Historical Bridge to general inflation offset by reduced costs due to completion of pandemic planning and environmental cleanup (Sterling Road) in Test Assuming three percent increase in payroll costs from previous Bridge year due to general inflation. Increase in FTE to execute on the EHS Strategy and the greater volume of health and safety issues with the increased workforce. 0 ORGANIZATIONAL DEVELOPMENT & PERFORMANCE Summary Organizational Development and Performance ( ODP ) is responsible for ensuring THESL sustains a qualified and competent workforce whose training and skill sets fulfil THESL s operational needs. High attrition and the growing infrastructure renewal plan will significantly increase demand for trades and technical resources. Successful integration of new employees depends upon the timely delivery of specific training and development initiatives. Other training initiatives address the need to upgrade the skills of customer service employees;

8 EB-00-0 Exhibit F Tab 0 Page of 0 comply with increased training mandated by the provincial government (e.g., Bill by Ministry of Labour, Transportation of Dangerous Goods by Ministry of Transportation); ensure compliance with THESL safety rules and procedures; and deliver preventative safety training. Through the negotiations process with CUPE Local No. in 00, agreement was reached to consolidate individual trades and technical jobs into harmonized jobs for productivity improvement and job enhancement. Extensive training is required to make sure employees in these newly harmonized jobs are competent to perform all tasks and responsibilities of the broader roles. Leadership development is another critical element to equip supervisors to manage resources and work programs in an environment of considerable change. THESL is the only recognized Ontario municipal utility to receive Training Delivery Agent ( TDA ) status for its Power-line Technician curriculum program from the Ministry of Training Colleges and Universities. This status enables THESL to integrate its apprenticeship program in a safe and efficient manner with Operations and according to its own timetable. ODP ensures apprentices become fully competent and capable of safely and efficiently performing all components of their job within THESL s complex distribution system. 0 A record rate of retirement, modernization of the distribution grid and an accelerated capital plan along with an enhanced customer service model create a convergence of staffing demands and staffing change. To navigate through this extraordinary period, ODP will facilitate a heightened attention to Employee and Leader engagement and communication. Table : Organizational Development & Performance Costs ($ millions) 00 Historical 00 Historical 00 Bridge 0 Test Costs....

9 EB-00-0 Exhibit F Tab 0 Page of Activities Undertaken Training & Development (including apprentice and trades training, licensing, compliance legislative training, technical, cross-training) Skills and Competency Development for harmonized and core jobs Performance Management Systems Integration of new employees Leadership Development Change Management Organization Employee & Leadership Engagement & Communication 0 Table : Variance Explanation From To Comments Three percent increase in costs from previous year due to Historical Historical general inflation. Increase in costs of training and leadership programs based on ramp up of leadership and trades hires Three percent increase in payroll costs from previous year due Historical Bridge to general inflation. Increase in FTEs to support ramp up in trades training school Test Assuming three percent increase in payroll costs from previous Bridge year due to general inflation. New Ministry of Transportation training programs and leadership development programs to be launched in addition to current curriculum. Partnership with educational institutions for curriculum and training program development and delivery. TALENT MANAGEMENT Summary Talent Management ( TM ) is primarily responsible for attracting, selecting and retaining employees who have the technical know how, core competencies and capability to meet THESL s operational requirements now and for the future.

10 EB-00-0 Exhibit F Tab 0 Page 0 of Increasing retirement and labour demand, and changing skills requirements, combine to increase TM s focus on acquiring and retaining talent to meet immediate and future needs. In coming years, recruitment activity is anticipated to grow by up to 00 percent. In 0, more than 00 leadership, trades, technical and professional positions are scheduled to be filled. 0 To meet this new level of hiring, TM will continue to expand talent attraction and acquisition initiatives. Attraction initiatives will include job fairs, partnerships with educational institutions and community organizations, career websites, print media, and various other publications to increase the outreach. However, traditional hiring models alone will not meet the level and timing of resource requirements. 0 Moreover, even if the required number of new recruits could be sourced, the organization could not effectively and safely absorb them while at the same time meeting its responsibility for maintaining reliable service and executing the capital plan. Alternative sourcing of skilled workers will be required, including the use of contractors. This multifaceted approach, combined with the coordination effort needed to manage the hiring of numerous and diverse resources, will present challenges. Governance of the recruitment and selection process ensures that the right resources are chosen through a comprehensive and consistently applied methodology. Costs Table : Talent Management Costs ($ millions) 00 Historical 00 Historical 00 Bridge 0 Test Costs.. Activities Undertaken Demographic Analysis/Retirement Projections Annual Staff Planning

11 EB-00-0 Exhibit F Tab 0 Page of Internal Controls to Manage Budget approved FTEs Organizational and Job Design Talent Attraction Strategies & Initiatives Recruitment and Selection Methodologies and Systems Succession Planning Workforce analysis and reporting for Financial and Regulatory purposes Table : Variance Explanation From To Comments Creation of a new department, Increase in FTE headcount due Historical Bridge to accelerated hiring. Increase in costs for attraction and recruitment of hires into trades, technical and leadership positions Test Assuming three percent increase in payroll costs from previous Bridge year due to general inflation. Continuation of hiring plan and additional costs associated with recruitment 0 EMPLOYEE/LABOUR RELATIONS (FORMERLY HR SERVICES) Summary Employee/Labour Relations ( ELR ) is primarily responsible for managing employee and labour relations matters, ensuring that THESL complies with all relevant employment and labour legislation and THESL s business operations are supported by a productive work environment. ELR provides subject matter expertise, advice, counsel and education/training to front-line supervisors and senior management on matters related to contract negotiations; collective agreement interpretation and administration; disciplinary action, grievance and arbitration processes; employee performance and attendance management; and compliance with employee/labour relations legislation. 0 The Labour Relations environment is greatly impacted when the composition of the workforce undergoes significant change and managing performance becomes even more

12 EB-00-0 Exhibit F Tab 0 Page of critical to productivity and a safe workforce. A heightened labour relations focus is necessary to deal with the multitude of complex workplace and employee issues and labour relations challenges. The expertise of the ELR will enable the executive and management to navigate through issues while applying due effort to operational performance requirements and customer expectations. EMPLOYEE/LABOUR RELATIONS COSTS Table : Employee/Labour Relations Costs ($ millions) 00 Historical 00 Historical 00 Bridge 0 Test Costs Activities Undertaken ELR Management and Investigations Employee Performance and Attendance Management Grievance and Complaints Processes Contract Negotiations ELR-related Policies and Standards Development and Governance ELR-related education and training to leaders and employees

13 EB-00-0 Exhibit F Tab 0 Page of Table : Variance Explanation From To Comments Three percent increase in costs from previous year due to Historical Historical general inflation. Increase in costs for attraction and recruiting of hires into trades, technical and leadership positions Three percent increase in payroll costs from previous year due Historical Bridge to general inflation. Increase in FTE headcount to handle increased labour issues. Increase in legal costs related to labour issues. Labour Relations department was separated from the former HR Services department resulting in a lower budget Test Assuming three percent increase in payroll costs from previous Bridge year due to general inflation Similar increase in legal costs for labour issues incurred in 00 expected to carry through in COMPENSATION, BENEFITS & HUMAN RESOURCES INFORMATION SYSTEMS ( HRIS ) FORMERLY HR PLANNING, BENEFITS & COMPENSATION Compensation, Benefits & HRIS ( CBH ) is primarily responsible for developing and executing effective and cost-competitive total rewards strategies to attract and retain highly qualified and motivated employees for THESL. CBH is also responsible for managing the HRIS and liaising with the Information Technology and Services Division on technology initiatives to support THESL leaders and OEEHS functions. CBH ensures that THESL has competitive totals rewards programs that achieve the objectives of its attraction and retention strategies. These programs, designed to engage and sustain a skilled, motivated workforce, should encompass both monetary and nonmonetary awards and reflect the needs of THESL s changing demographics.

14 EB-00-0 Exhibit F Tab 0 Page of To support front-line supervisors in managing performance, employee data is a critical component. CBH is responsible for designing and managing HR technology systems to ensure timely, accurate and complete employee information is available to leaders. Costs Table 0: Compensation, Benefits and HRIS ($ millions) 00 Historical 00 Historical 00 Bridge 0 Test Costs Activities Undertaken Total Rewards Program Design, Administration and Governance HR Policy Development Development of THESL s budget for Salary, Incentive & Benefits Programs Retirement Process Active Employee and Retiree Benefits Plans Management HRIS and Employee Data Management Total Compensation analysis and reporting for Financial and Regulatory purposes

15 EB-00-0 Exhibit F Tab 0 Page of Table : Variance Explanation From To Comments Three percent increase in costs from previous year due to Historical Historical general inflation. Staff member was on leave in 00, returned in 00 at full compensation; benefits claims administration assessment Three percent increase in payroll costs from previous year due Historical Bridge to general inflation. Twenty percent increase due to fitness program budget transfer from Finance to OEEHS Test Assuming three percent increase in payroll costs from previous Bridge year due to general inflation. One additional FTE to support HR Technology and reporting requirements.

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