PPD

The Performance Bonus (PPD) is a variable and periodic remuneration, provided for in article 457 of the CLT and adopted by Copel as a liberality to recognize employees and directors for extraordinary performances, conditioned to the achievement of different levels of goals.

Objective

The purpose of PPD is to recognize employees and directors collectively based on an extraordinary result, at different organizational levels, linked to strategic, technical and operational goals. In other words, it is a practice of management by goals, and the format adopted by Copel allows greater participation of all in the discussion and monitoring of goals that bring results to the Company and all parties involved. Moreover, it also facilitates the prioritization of activities and the definition of work methods, stimulating the employee to plan his or her work to reach the goals of his or her area and to keep informed about the results accumulated in each period.

Elaboration

The PPD project was conducted by Fundação Instituto de Administração (FIA), which evaluated Copel’s practices in relation to the market and, based on this overview, presented a diagnosis and proposal to the Company’s senior management, which was aligned and validated by the Executive Board and the Board of Directors.

Characteristics

Variable – the payment of the bonus depends on the achievement of goals, that is, in addition to values varying from one cycle to another, if goals are not achieved no bonus is paid.

Periodic – the premium is annual (short term), since the goals and the premium amounts are defined in each cycle of 1 year and the payment, if any, occurs only once for each fiscal year.

Conditional – the payment of the bonus is linked to extraordinary performance and conditioned to the verification of a performance superior to that normally expected.

Composition

Good market practices recommend some elements for the definition and determination of a fair and economically viable premium program.

• Trigger: criterion that, if met, enables the payment of the premium by the Company. The trigger aims to ensure the viability of variable compensation programs, conditioning any payment to the achievement of a situation or financial result sufficient for its effectiveness;
• Indicators: described qualitatively as a means of translating strategic planning into the context of each process and area of activity;
• Goals: quantitative definitions established by the company that should represent leverage to the organizational results and should not be based on routine; and
• Achievement levels: each goal must be defined with three levels of achievement: minimum, target, and surpassing.

Indicators and Targets

Aiming at promoting discussions and results with technical, financial and legal consistency, the indicators and goals are defined by managers from all the directorates; validated by a technical committee, coordinated by the Corporate Planning area, with the participation of the management and human resources areas of all the directorates, and approved by Copel’s Board of Executive Officers.

The indicators and targets for each area are available in the internal business management system and the other individual information can be accessed on the internal people management page.

The goals are based on Copel’s strategic objectives. Initially, corporate goals are defined (which demand the joint effort of all the company’s departments). Next, board goals are defined (what each board must deliver for the corporate goals to be achieved), and so on and so forth, possibly reaching the division level.

Each target has a specific weight, considering the power of action of each position on its results and the maturity of the target deployment process.

General Indicators

The indicators are categorized according to their nature and internal alignment, covering the following topics: strategic, financial, environmental, social and governance (ESG), compliance, innovation, technical and operational.

Calculation

The PPD calculation is the multiplication of the percentage of achievement of goals weighted with the defined target, when the Company’s trigger is reached.

Eligibility – All Copel employees and directors who were part of the Company’s staff during the PPD cycle are eligible for the award. Those who were hired or fired during the cycle are eligible with a target proportional to their time in the cycle.

Participation

To contribute to the achievement of the PPD, each employee must know the goals of his or her area that impact the award, define with the manager and team the strategy to achieve the goals and carry out continuous monitoring.

The goals negotiated and included in the PPD are challenging and designed to measure extraordinary results, that is, they are not targets for process compliance or routine effort. They indicate, therefore, the desired result for the company, and each team needs to organize itself on what and how to do to achieve it.

Sometimes this may require working in cooperation with other areas, other times it will require an innovative look to face the challenges posed. In all cases, it will involve a share of risk: it is up to the teams to deal with influences from the external context that are beyond the Company’s direct control.

Payment

Copel’s award program occurs annually: employees have a one-year period to pursue the achievement of the area’s goals. The calculation and payment (when due) will take place in the year following the goal cycle.