Employee safety is of paramount importance at APS. We develop safety practices and programs that ensure all 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 at 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 63 percent. Accomplishments for 2018 included the following:

• Ended the year 2018 with 36 OSHA recordable injuries
• Achieved a 42-percent reduction in avoidable motor vehicle events over 2017.
• Minor injuries were down 39%.

New strategies are driving continued improvements in our safety performance. APS installed Remote Vehicle Telematics (RVT) on over 1,100 of our vehicles in 2018. The installation of this technology inside vehicles allows us to monitor safety information such as harsh acceleration and braking, excessive speed by street and sharp cornering. Providing us the opportunity to improve vehicle driver performance and promote safe driving. In 2019, we will be able to leverage this technology in other areas such as vehicle diagnostics for maintenance optimization and vehicle location monitoring for improved emergency dispatch.

An initiative was launched in 2018 to develop a safety data visualization tool. 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 2019, we are working to improve use of leading safety indicators such as actionable close calls, observation and inspection results, and reported good catches to reduce the frequency and severity of events that do occur.

As we continue to improve our safety performance, our ultimate goal remains significant injury reduction. 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.

We place significant focus on attracting and developing a skilled workforce. To attract and retain top talent, we provide formal professional development programs through online education and leadership training.

Formal development opportunities for APS employees include a variety of programs and training courses aimed at improving knowledge as well as building skills and business acumen. In 2018, we developed more than 125 leaders and hundreds of individual contributors across a broad spectrum of subjects.

In the leadership arena, our three-tiered leadership training program prepares emerging, current and experienced leaders to advance within the company. Each program emphasizes a blended learning approach, encompassing a mix of instructor-led sessions, on-demand self-paced learning, mentoring and project assignments and/or assessments. For high- potential individual contributors, our Foundational Leadership Academy develops those possessing the desire, commitment and capability to move into a leadership role. Our new leaders and managers attend the Leadership Academy, which focuses on developing the competencies and business acumen to be successful in their new roles. For high-potential frontline leaders, we offer the Advancing Leadership Academy, which develops them for roles of greater scope and responsibility.

Mentoring programs facilitate the transfer of knowledge from experienced employees to potential successors. A mentoring component was added to the Foundational Leadership Academy, using graduates of the Advancing Leadership Academy as additional resources for program participants. They help participants by reinforcing the concepts learned in the Foundational curriculum. Based on the success and positive feedback of that addition, we have embedded the same concept into the Leadership Academy for 2019. A program at Palo Verde Generating Station pairs mentors with employees seeking a higher level of responsibility. The mentoring program in the Finance and Accounting departments supplements a series of career-development classes offered to employees in those departments. 

Our Open Enrollment courses allow all employees an opportunity to select courses focused on a number of competencies and skills. In 2018, we offered 39 Open Enrollment courses, which more than 500 employees attended. Some of our most popular courses for the year were Strategies for Influencing Others, Strengthening Your Partnerships, and Conflict Management.

New for 2019 is the introduction of Pathways. A pathway is a short series of courses and activities that provide deeper development in a particular focus area. The first pathway to be introduced is the Productivity Pathway, which aims to increase productivity through prioritizing work, leveraging existing tools, avoiding distractions, communicating effectively and ultimately restoring balance.

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 2018, APS employed 45 interns, many of whom will return to the company as full-time employees. We achieved an acceptance rate of more than 88% on offers made to eligible interns in 2018.

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 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.

In addition to our Talent Strategy, we place significant focus on our Total Rewards Strategy for attracting, developing and rewarding our highly skilled workforce. The robust Total Rewards package includes competitive base pay compensation, short-term incentives (for all employees), affordable medical and drug plans and health savings accounts, income protection plans (in the form of paid sick time, short-term and long-term disability coverage), vision and dental plans, a wellness program, a generous paid time-off plan (and we offer paid holidays as well), and retirement plans (in the form of a 401(k) plan, a pension plan, and retiree medical in the form of a health reimbursement account) for all employees. We offer a full suite of company subsidized benefits to assure our employees and their families have appropriate benefits for all their needs. We also offer a tuition reimbursement program for all of our employees so they can continue their educations as they see necessary. We also reward 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 12.5 years. However, 24 percent of our workforce is currently retirement-eligible, and an additional 12 percent will become eligible in the next five years. We have prepared for future retirements with our workforce-planning processes to assure each business unit will successfully meet its human capital needs to successfully execute our business plans and strategies.

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. Last year, we saw some of those succession plans implemented. The Board of Directors promoted Jeff Guldner to President of APS and Daniel Froetscher to Executive Vice President, Operations. We have strategically selected successors for our management team who we are confident will lead our company successfully into the future with continued strong and sustainable performance. In addition, we assure that each business unit has talent management strategies and development plans to meet its future leadership needs. At the end of 2018, we refreshed our Competency Framework to better align with the needs of our future leaders at each level.

Effective succession planning helps us identify employees with leadership potential and also allows us to evaluate any gaps in education, skills and experience that need to be addressed to prepare those employees to move into leadership roles. At monthly 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 Generating Station has received worldwide recognition as an industry leader.

Learn more about Pinnacle West Board Succession Planning Practices.

A quarterly employee engagement survey administered by a third party and focused pulse-surveys enable 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 cross-functional Employee Engagement Council focuses on improving employee recognition across the organization.

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 2019, we are integrating our employee engagement surveys with onboarding surveys and exit interviews. Bringing together these elements will allow us to get a more complete picture of the experience of an APS employee, from the time they join the company until they decide to depart.

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 2018, more than 45 percent of our workforce was diverse and nearly 20 percent 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.

Learn more about employee options for reporting grievances.

Maintaining strong, long-term relationships with APS union members is important to our success. Approximately 21% of APS employees are covered by a collective bargaining agreement with 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. We expect to continue to have a positive, collaborative working relationship with 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 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.