Message-ID: <29110352.1075863665676.JavaMail.evans@thyme>
Date: Tue, 23 Nov 1999 09:28:00 -0800 (PST)
From: enron.announcements@enron.com
To: gas.group@enron.com
Subject: Performance Management Process
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This year has been a year of change for Enron and GPG: Enron=01,s stock spl=
it,=20
we implemented a Continuous Improvement program, and we underwent a major=
=20
reorganization.  These changes have all had a positive impact on our compan=
y,=20
increasing our competitive advantage in the marketplace and challenging a=
=20
well performing organization to perform at an even higher level.  All of th=
is=20
translates to raising the bar for increased performance. =20

As GPG begins its annual year-end process of appraising performance and=20
allocating variable pay and merit increases, there are a number of changes =
to=20
the process I would like to communicate.  These changes will impact all GPG=
=20
employees, except those of you receiving Skill Based Pay.  These changes wi=
ll=20
help us take a more focused look at individual and overall company=20
performance and are intended to ensure consistency and equity in the proces=
s=20
across GPG.  The following details these changes:

Vice Presidents and Higher
All employees with the title of vice president or higher will be reviewed=
=20
Enron-wide, using common performance criteria and performance ratings.  The=
=20
officers will be reviewed and ranked within peer groups.  These groups are=
=20
Commercial, Commercial Support, Commercial Support Specialist and Technical=
.=20

All Other Non-Skill Based Pay Employees
All other non-Skill Based Pay employees will be evaluated using the current=
=20
GPG performance criteria and performance levels within their respective=20
company or business unit.  This will not be an Enron-wide activity.   =20

For directors or director-equivalent employees there will be an additional=
=20
step, which will be a GPG-wide cross-calibration by the GPG Management=20
Committee in early December.=20

We are taking a more focused look at performance.  In our efforts to=20
challenge a well-performing organization to achieve an even higher level of=
=20
performance, we are establishing the following distribution as a guideline:

Level 1 - Consistently Exceeds Expectations  10%
Level 2 - Often Exceeds Expectations  30%
Level 3 - Meets Expectations   50%
Level 4 - Needs Improvement and
Level 5 - Seldom Meets Expectations  10%=20

In the case of non-Skill Based Pay team employees in Operations, this proce=
ss=20
will lead to two ratings: a team rating, which will determine the level of=
=20
variable pay, and an individual rating that will be used to determine merit=
=20
increases.

This represents a change in our performance management process.  GPG is the=
=20
premier natural gas transmission company because of our ability to accept a=
nd=20
demand change.  We were one of the first companies to implement a Skill Bas=
ed=20
Pay Program and self-directed work teams.  We implemented Best Practices an=
d=20
Continuous Improvement.   This new approach to performance management is an=
=20
effort to strive for the top level of performance in our industry.   I want=
=20
to be clear that we have raised our performance expectations for the compan=
y=20
as well as for individuals.=20

Variable pay and merit increases will be impacted by these changes as well.=
 =20
GPG will use market data, job grade and individual and company performance =
to=20
set target bonus payout levels.  Payouts will reflect performance.  Divisio=
n=20
heads will no longer receive a pool of dollars to allocate to their=20
employees.  This method will eliminate significant differences in variable=
=20
pay for similar positions, job levels and performance levels across the=20
organization. =20

Merit increases will continue to be determined as they were in the past. =
=20
Each business unit will have a pool of dollars, which is funded as a percen=
t=20
of payroll.  Merit increases will be based on a variety of factors includin=
g=20
individual performance. =20

Variable pay will be distributed in early February and merit increases are=
=20
effective Feb. 1, 2000.

To continue to be a leading energy transportation company in a highly=20
competitive market, it is imperative that we continue to strive for=20
excellence in all we do.  I appreciate your continued support as we go=20
through this change, as you have accepted and supported other changes we ha=
ve=20
undergone.  Please do not hesitate to call your supervisor or your Human=20
Resources Representative if you have any questions.