1. Page 1 of 17 Integrated Approach to Talent Management Moderator: Kerry Overton Deputy General Manager, Shared Services Austin Energy Outlook Conference October 8, 2009

2. Page 2 of 17 Sourcing Staffing & Assessment Workforce Planning Workforce Design Employee Development Workforce Management An Integrated Approach to Talent Management

3. Page 3 of 17 Anthony Bretzke, Director Organizational Excellence CPS Energy (San Antonio) Edward Belmares, Senior Director Human Resources CPS Energy (San Antonio) Pat Alba, Chief Administrative Officer Austin Energy Calvin Zanders, Senior Process Consultant Austin Energy Panelists

4. Page 4 of 17 Human Capital Strategy Succession Planning Leadership Development Workforce Planning Electric and gas municipally- owned utility 3,659 employees Average age: 42.3 Average length of service: 13.8 635 employees (17.4%) are currently eligible for retirement. Over 50% of our core business executives will be eligible for retirement within the next 5 years. CPS Energy Representatives: Ed Belmares, Tony Bretzke, Patti Benitez, Chris Knox, Yvonne Pelayo Human Capital Strategy CPS Energy

5. Page 5 of 17 Branding Preferred Employer Sourcing Strategy Career Web Site Alternate Work Arrangements AttractRecruitInvestRetainRetire Projected Key Talent Needs Growth Geography Labor Forecasts Staffing Levels Demographics New Graduates Gap Analysis HC Strategies Employee Satisfaction Employee Demographics Talent Sourcing HR Programs Target Recruiting Applicant Tracking Selection Process Compensation Benefits New Hire Orientation Learning & Development Mentor Programs Talent Management Performance Evaluation Employee Satisfaction Work-Life Balance Total Compensation Phased Retirement Work Environment Exit Interviews Succession Planning Phased Retirement Retiree Medical Mentoring Knowledge Transfer Reference: Watson Wyatt Business Strategy & Human Capital Implications Workload Changes Diversity Staffing Patterns Industry Influences Workforce Skills Competition Human Capital Strategy Demand AnalysisSupply Analysis

6. Page 6 of 17 Talent Pool Talking Talent Coaching Career Conversation Assessments (Gap Analysis) 1 2 3 4 Human Capital Strategy

7. Page 7 of 17 Managerial Judgment & Talking Talent Sessions Talent Manager Data How the Process Works: Fitting Together the Pieces of the Puzzle Managerial Judgment – the review of the performance history and demonstrated potential for potential candidates occurs over a series of Talking Talent Sessions. Talent Manager Data – a comparison of each candidate’s competencies, experiences and technical skills to those required for the role.

8. Page 8 of 17 Learning and Development –Supervisory Development Program (SDP) Based on competencies, experiences and technical skills for the role Blended learning –Stakeholder involvement in development of SDP –Increased use of assessments to determine gap analysis for career development Succession Planning –Individual Development Plans –Coaching (supported by an e-coaching tool) –Participation in external leadership development programs –Job rotations, job shadowing or developmental assignments –Succession planning development is facilitated and monitored throughout the year by Organizational Excellence. Leadership Development

9. Page 9 of 17 1,634 employees Average age: 44 years Average tenure: 10 years Retirement eligibility w/in 5 years –35% of total workforce –61% of management team Austin Energy’s Business Environment Austin Energy Travis County AE Service Area 437 sq. mi. service territory City of Austin

10. Page 10 of 17 Demographics Critical Positions Green Jobs CHALLENGES Austin Energy’s Business Environment Employee Development Other challenges

11. Page 11 of 17 Need for flexible work arrangements Increased training need Multi-generational workforce Increased regulatory certification requirements DEMANDS Austin Energy’s Business Environment

12. Page 12 of 17 Integrated Workforce Strategy Workforce Planning Succession Management Employee Development Talent Acquisition Integrated Workforce Strategy w/ reporting capability Total Rewards How will Austin Energy meet the customer and business demands of the future?

13. Page 13 of 17 Integrated Workforce Strategy  City of Austin – “Best Managed City”  Austin Energy Strategic Plan  Staffing Levels (current)  Retirement  Percent of Growth  Attrition  Headcount Projections (future)  Critical Positions  City of Austin – “Best Managed City”  Austin Energy Strategic Plan  Staffing Levels (current)  Retirement  Percent of Growth  Attrition  Headcount Projections (future)  Critical Positions  Branding / Recruitment  Role Profile Development  Universities/ Colleges  Community Colleges/ Tech Schools  Alumni & Retirees  On-boarding/ New Hire Orientation  Talent Searches  Development Opportunities  Performance Evaluation  Skill Development (technical)  Career Management Program  Management Development  Employee & Team Development  Job Rotations  ISO  Mentoring Workforce Planning Succession Management Employee Development Talent Acquisition Integrated Workforce Strategy w/ reporting capability Total Rewards

14. Page 14 of 17 Workforce Planning Succession Management Employee Development Talent Acquisition Integrated Workforce Strategy w/ reporting capability Total Rewards  9-Box (Performance/Potential)  Talking Talent Sessions  External Recruitment  Alumni Outreach  Bench Strength Development  Retirement Benefits  Recognition  Compensation  Benefits  Intangibles Integrated Workforce Strategy

15. Page 15 of 17 Why Implement Performance and Talent Management? Success Factors adapted by AE

16. Page 16 of 17 Today’s Perception Tomorrow’s Reality Hard to link corporate strategy to what I do each day. Our corporate goals are clear to me; I know how my daily work impacts the overall strategy. Corporate-wide Goal Alignment Not enough meaningful, fact-based discussions with my manager; not sure that it’s fair. Reviews are fair, based on my goals; consistent feedback lets me know where I stand. Performance Management I am rewarded for measurable results; there is a link between my actions and my pay. I put in the hours, I get paid; no benefit for extra effort. Career DevelopmentLimited options for promotion; no guidance for my development. Several opportunities exist for me to take a leadership role at the company; clear requirements for getting there. Managers & Leadership Created from within Our managers/ leaders are weak, either promoted based on favoritism from within or recruited from the outside. 360-Degree Feedback The company develops strong leaders. Managers at the company are both well trained and caring. Single rater feedback.Provides opportunity for multi-rater feedback. AE’s Talent Management Success Factors adapted by AE

17. Page 17 of 17 Integrated Approach to Talent Management Open Discussion & Dialogue Austin EnergyCPS Energy