Employee safety is of paramount importance at APS. We develop safety practices and programs that ensure all APS employees have safe and secure workplaces that allow them to perform at the highest levels. Our comprehensive safety programs and our focus on human performance and injury case management contribute significantly to our strong safety performance.

Our industrial safety performance consistently ranks in the top decile of investor-owned electric utilities, according to the most recent Edison Electric Institute (EEI) survey. Over the past 10 years, the number of APS employees seriously injured on the job has declined by more than 70 percent. Accomplishments for 2017 included the following:

• Reduced the number of Occupational Safety and Health Administration (OSHA) recordable injuries by 8 percent over the past five years
• Ended the year 2017 with 33 OSHA recordable injuries
• Achieved a 60 percent reduction year-over-year in days lost due to employee injuries
• No electrical contact events in 2017

New strategies are driving continued improvements in our safety performance. An initiative was launched in 2017 to develop predictive analytics for safety. We continue our emphasis on improving the reporting and tracking of injuries and other safety events. By being more rigorous in our reporting and tracking, we are increasing our understanding of the circumstances and behaviors that lead to these events and how to prevent them. During 2018, we are working to improve data collection, increase accuracy and determine how best to use these analytics.

As we continue to improve our safety performance, our ultimate goal remains zero injuries. Central to this objective is empowering our employees to take ownership of our safety culture. Safety committees operate in organizations throughout the company, providing opportunities for frontline employees to positively impact their local safety cultures and performance.

APS places significant focus on attracting, developing and rewarding a skilled workforce. To attract and retain top talent, we provide a robust total rewards program that includes competitive compensation and retirement plans, health plans and accounts, income protection plans, a wellness program and a generous paid time-off plan. A formal professional development program helps to retain talent by offering tuition reimbursement, online education and leadership training. APS also rewards employees through a pay-for-performance incentive plan.

Learn more about employee benefits.

For these and other reasons, APS employees have an average tenure of 13 years. However, 25 percent of our workforce is currently retirement-eligible, and an additional 13 percent will become eligible in the next five years. We have prepared for future retirements with a workforce-planning initiative to assist each business unit in meeting its human capital needs.

Formal development opportunities for APS employees include a variety of programs and training courses aimed at improving knowledge, skills and business acumen. A three-tiered leadership training program prepares emerging, current and experienced leaders to advance within the company. In 2017, this tiered approach developed over 150 leaders for roles of greater scope and responsibility. High-performing individual contributors possessing the desire, commitment and capability to move into a leadership role are developed through our Foundational Leadership Academy. Successful, effective leaders ready to stretch into more advanced roles are prepared through our Advancing Leader Academy. In 2017, a two-day leadership program trained 140 crew foremen and their leaders to more effectively lead crews in the field. A companywide Career Visioning workshop introduced in 2017 promotes career development, employee retention and succession planning.

Mentoring programs facilitate the transfer of knowledge from experienced employees to potential successors. A program at Palo Verde Nuclear Generating Station pairs mentors with employees seeking a higher level of responsibility. The three-tiered leadership training program is launching a mentoring component pairing advancing leaders with emerging leaders. A new mentoring program in the Finance and Accounting departments supplements a series of career-development classes offered to employees in those departments. In addition, a companywide mentoring program based on the Palo Verde program is under consideration.

Talent pipelines also help sustain our skilled workforce needs. These pipelines encompass several apprentice programs and rotational programs, including our pre-apprentice and engineering rotational programs. Our recruiters target specific colleges and programs of study that we have identified as talent pipelines. Our intern program is another source of top talent. In 2017, APS employed 72 interns, many of whom will return to the company as full-time employees. We achieved an acceptance rate of more than 76 percent on offers made to eligible interns in 2017.

Learn more about internships and rotational programs.

Our talent pipeline program includes the Western Maricopa Education Center (West-MEC), established in partnership with the City of Buckeye, Estrella Mountain Community College and the Palo Verde Nuclear Generating Station. APS and other industry partners are involved in curriculum development and provide equipment for simulations and training at the West-MEC Southwest Campus. The West-MEC curriculum includes programs in Energy and Industrial Technology, Information Technology & Cyber Security.

Through a strong focus on succession planning, we ensure that APS is prepared to fill executive and other key leadership roles with capable, experienced employees. We continually fine-tune succession plans to make certain that qualified individuals are in place to move into critical positions. In addition, we assure that each business unit has talent management strategies and development plans to meet its future leadership needs.

Effective succession planning not only helps us identify employees with leadership potential but also allows us to evaluate any gaps in education, training and experience that need to be addressed to prepare those employees to move into leadership roles. At bi-annual management review meetings, executives and directors review how business units are addressing succession planning, leadership opportunities and retirement projections. A succession-planning structure at Palo Verde Nuclear Generating Station has received worldwide recognition as an industry leader.

Learn more about Pinnacle West Board Succession Planning Practices.

A biannual employee engagement survey administered by a third party allows us to gather employee feedback, identify opportunities for improvement and compare our performance to other companies.

Based on survey results, business units and individual managers are encouraged to take meaningful actions to improve employee engagement. In response to past surveys, we have launched enterprise-wide initiatives focused on improving communication between employees and management as well as removing obstacles that prevent job success. Other initiatives driven by the survey have given employees more access to leadership and improved meeting efficiency. Our Employee Engagement Council focuses on employee recognition and career development.

We work to ensure that a positive work environment is maintained for all employees. Through an outreach initiative, we obtain feedback from new hires at various stages regarding their employee experience. In 2018, we are exploring a system of quarterly “pulse checks” with randomly sampled groups of employees, as well as the introduction of onboarding and exit surveys.

Employee Network Groups at APS promote engagement, inclusion and leadership opportunities. These self-organized, voluntary groups are formed around the basis of a common attribute, such as experience in the utility industry, gender, ethnicity or race, but each group is open to all employees.

Learn more about Employee Network Groups

We continue to focus on hiring diverse employees as well as hiring employees from our veteran community, at the end of the 2017 over 44% of our workforce was diverse and over 20% of our employees were veterans. APS is committed to diversity and inclusion, and we recognize that diversity of demographics, background and cultural perspective are key drivers for the success of our workforce. Our Executive Diversity Council drives this commitment with an emphasis on diversity among employees, in the workplace and through our community involvement, as well as an increased focus on attracting diverse talent. This focus extends to individual business units, which report on the diversity of their team during management review meetings to build awareness and address gaps of workforce diversity.

Learn more about APS Veteran Programs

Multiple avenues for resolving grievances are available to employees, including pursuing resolution through the chain of leadership, the Employee Relations department or the Ethics department. All employees receive annual training on processes and channels available for filing grievances. In addition, the Ethics department provides a third-party administered website for anonymous reporting of concerns. For union employees, a three-step process to file and resolve grievances is outlined in the collective bargaining agreement.

Maintaining strong, long-term relationships with APS union members is important to our success. Approximately 21% percent of APS employees are covered by a collective bargaining agreement with the labor union the International Brotherhood of Electrical Workers (IBEW) Local 387. In January 2018, members of the IBEW Local 387 voted to ratify a two-year extension of a collective bargaining agreement through April 1, 2020. APS expects to continue to have a positive, collaborative working relationship with its union members in pursuit of our common goal of delivering safe, efficient and reliable energy to our customers.

In September 2017, security officers at Palo Verde Nuclear Generating Station decertified their union affiliation with the United Security Professionals of America (USPA) International Union Local No. 08 following the expiration of a three-year collective bargaining agreement.