netrashetty
Netra Shetty
Human Resource Management of AES Corporation : AES Corporation (NYSE: AES) is a Fortune 500 company that generates and distributes electrical power. It was founded on January 28, 1981 as Applied Energy Services[3] by Roger Sant from the US Federal Energy Administration and Dennis Bakke from the Office of Management and Budget. It is headquartered in Arlington, Virginia. AES Corporation is one of the world's leading power companies, generating and distributing electric power in 31 countries and employing 27,000 people worldwide.
In 2008, AES Corporation's total revenue was 16.1 Billion, of which $9.11B came from the company's Power Generation division,and $6.99B from Utilities.[4]
In April 2010, AES Wind Generation, a wholly-owned subsidiary of AES, acquired UK-based wind developer Your Energy (YEL) and has also signed an agreement to buy a 51% stake in a wind portfolio from 3E, a Polish wind developer. This move will add more than 700MW to AES Wind Generation’s European pipeline.
The company does not have a legal, human resources, or any other department. Decisions in
such matters are made by teams at the plant level, which oftentimes have little or no experience
in those decision areas. A few years ago, CFO Barry Sharp estimated that the company had
raised $3.5 billion to finance ten new power plants. But, he added, he was personally
responsible for raising only $300 million of that sum. The rest was secured by decentralized,
empowered teams. When AES raised 200 million pounds sterling (about $350 million) to
finance a joint venture in Northern Ireland, two control room operators led the team that raised
the funds.13 The same goes for other areas of financial management. Treasury operations are
decentralized to the individual plant level, where they are performed by teams of non-specialists:
His hands still blackened from coal he has just unloaded from a barge, Jeff Hatch picks up the phone
and calls his favorite broker. “What kind of rate can you give me for $10 million at 30 days?” he
asks the agent, who handles Treasury bills. “Only 6.09? But I just got a 6.13 quote from Chase.”
In another room, Joe Oddo is working on J.P. Morgan & Co. “6.15 at 30 days?” confirms Oddo,
a maintenance technician at AES Corp.’s power plant here. “I’ll get right back to you.”
Members of an ad hoc team that manage a $33 million plant investment fund, Messrs. Oddo and
Hatch quickly confer with their associates, then close the deal. “It’s like playing Monopoly,” Mr.
Oddo says as he heads off to fix a leaky valve in the boiler room, “Only the money’s real.”14
Similarly, there is no human resources department. At the corporate level there are no staff
specialists dealing with salary ranges, or annual review procedures, or personnel policies, or
contract negotiations with unions. There is a person whose responsibility is to track 401k
retirement plan benefits and send out the necessary reports, but that’s about it at the corporate
level. Everything else is devolved to the individual divisions, and within these it is the teams
within each plant that handle almost all the human resource functions.
The company operates without any written policies or procedures. Issues such as hiring
practices, leave periods, and promotion criteria, which in more conventional companies would
be spelled out in a “Policies and Procedures” handbook, are left at the employees’ discretion.
When trying to find out how much time she could take off after the birth of her daughter, a
Project Director for AES Puerto Rico discovered that the company did not have a policy about
maternity leave. After investigating what other “AES people” had done, she decided to do what
made sense for both herself and the business requirements of the project. In the end she decided
to take three months, but she made herself available at critical points in the project’s
execution.15
Virtually all human resource decisions are made at plant level, and within the plant,
decisional-making authority is among the different teams. For example:
• Recruiting. The recruiting process is done at the plant level, without any support or
guidelines from corporate headquarters. AES people at all levels are committed to the
hiring process, and everyone can participate in it. The process generally involves an
initial résumé review, and a phone interview followed by a group interview. Interviews
usually do not include technical questions. Instead, they focus on characteristics that
help determine how the candidate will fit with the company’s culture and values. There
is little importance given to the candidates’ educational background or experience, as
greater emphasis is placed on the candidates’ desire to learn, contribute, and grow, as
well as their personal values and self-motivation.
• Training and development. In line with corporate values, AES employees are
empowered to make decisions about their own development. Training is mostly done
on-the-job, through open communication channels and embedded advice-seeking
practices. However, AES people are free to take outside classes and they are
reimbursed for them, as long as the courses are work-related.
• Career paths. Regarding development, there are no established career paths. Rather, the
company encourages flexibility, which is a necessary requirement in such a dynamic
industry. Because one of the company’s shared values is to “have fun,” employees are
encouraged to move within the company if they feel their current assignment is
“boring.” Job vacancies are always posted and promotion decisions are made at an area
superintendent’s meeting.
• Compensation and benefits. AES does not have a set salary schedule for any given job,
and salaries are determined based on what others are being paid inside and outside the
company. Raises are given every year and superintendents usually determine them in
including financing and capital expenditures. Criteria for hiring new AES people include a person’s
willingness to accept responsibility and AES’s principles as well as a person’s experience and
expertise. Every AES person has been encouraged to participate in strategic planning and new plant
design for the Company. The Company has generally organized itself into multi-skilled teams to
develop projects, rather than forming “staff” groups (such as a human resources department or an
engineering staff) to carry out specialized functions.
Many people have asked us about our team structure and how it works. To begin with, there is no
one person in charge of teams and there is no Human Resources department. Teams are the basis of
our structure, and they encompass the four values of our company. They are fluid; many people are
members of more than one team at one time. A team is somewhat autonomous; all decisions about a
project are made within that team, with final say granted to that team. Decisions are made not from
the top-down, but from the bottom-up. Furthermore, responsibility is pushed to the lowest level
possible, encouraging everyone to be part of a decision. As a result, each team member views the
project in terms of a whole. Colleagues and team members must trust each other to follow through to
the best of their ability.
Because people are what make up AES, we have decided not to resort to an organizational
model. Instead, we give you the following comments from AES people regarding teamwork. In
general, AES teams work extremely well in both achieving a common goal and having fun while
doing so. The following ideas provide insight on what makes teams work well and what can
stimulate true and productive teamwork.
“Teams imply friendship; not only the ability but the desire to work together. Starting with the
wonderful example set by the original AES team, Roger and Dennis, working together in small
groups has been a natural way to get big things done while preserving the dignity of each person.”
Tom Tribone
In 2008, AES Corporation's total revenue was 16.1 Billion, of which $9.11B came from the company's Power Generation division,and $6.99B from Utilities.[4]
In April 2010, AES Wind Generation, a wholly-owned subsidiary of AES, acquired UK-based wind developer Your Energy (YEL) and has also signed an agreement to buy a 51% stake in a wind portfolio from 3E, a Polish wind developer. This move will add more than 700MW to AES Wind Generation’s European pipeline.
The company does not have a legal, human resources, or any other department. Decisions in
such matters are made by teams at the plant level, which oftentimes have little or no experience
in those decision areas. A few years ago, CFO Barry Sharp estimated that the company had
raised $3.5 billion to finance ten new power plants. But, he added, he was personally
responsible for raising only $300 million of that sum. The rest was secured by decentralized,
empowered teams. When AES raised 200 million pounds sterling (about $350 million) to
finance a joint venture in Northern Ireland, two control room operators led the team that raised
the funds.13 The same goes for other areas of financial management. Treasury operations are
decentralized to the individual plant level, where they are performed by teams of non-specialists:
His hands still blackened from coal he has just unloaded from a barge, Jeff Hatch picks up the phone
and calls his favorite broker. “What kind of rate can you give me for $10 million at 30 days?” he
asks the agent, who handles Treasury bills. “Only 6.09? But I just got a 6.13 quote from Chase.”
In another room, Joe Oddo is working on J.P. Morgan & Co. “6.15 at 30 days?” confirms Oddo,
a maintenance technician at AES Corp.’s power plant here. “I’ll get right back to you.”
Members of an ad hoc team that manage a $33 million plant investment fund, Messrs. Oddo and
Hatch quickly confer with their associates, then close the deal. “It’s like playing Monopoly,” Mr.
Oddo says as he heads off to fix a leaky valve in the boiler room, “Only the money’s real.”14
Similarly, there is no human resources department. At the corporate level there are no staff
specialists dealing with salary ranges, or annual review procedures, or personnel policies, or
contract negotiations with unions. There is a person whose responsibility is to track 401k
retirement plan benefits and send out the necessary reports, but that’s about it at the corporate
level. Everything else is devolved to the individual divisions, and within these it is the teams
within each plant that handle almost all the human resource functions.
The company operates without any written policies or procedures. Issues such as hiring
practices, leave periods, and promotion criteria, which in more conventional companies would
be spelled out in a “Policies and Procedures” handbook, are left at the employees’ discretion.
When trying to find out how much time she could take off after the birth of her daughter, a
Project Director for AES Puerto Rico discovered that the company did not have a policy about
maternity leave. After investigating what other “AES people” had done, she decided to do what
made sense for both herself and the business requirements of the project. In the end she decided
to take three months, but she made herself available at critical points in the project’s
execution.15
Virtually all human resource decisions are made at plant level, and within the plant,
decisional-making authority is among the different teams. For example:
• Recruiting. The recruiting process is done at the plant level, without any support or
guidelines from corporate headquarters. AES people at all levels are committed to the
hiring process, and everyone can participate in it. The process generally involves an
initial résumé review, and a phone interview followed by a group interview. Interviews
usually do not include technical questions. Instead, they focus on characteristics that
help determine how the candidate will fit with the company’s culture and values. There
is little importance given to the candidates’ educational background or experience, as
greater emphasis is placed on the candidates’ desire to learn, contribute, and grow, as
well as their personal values and self-motivation.
• Training and development. In line with corporate values, AES employees are
empowered to make decisions about their own development. Training is mostly done
on-the-job, through open communication channels and embedded advice-seeking
practices. However, AES people are free to take outside classes and they are
reimbursed for them, as long as the courses are work-related.
• Career paths. Regarding development, there are no established career paths. Rather, the
company encourages flexibility, which is a necessary requirement in such a dynamic
industry. Because one of the company’s shared values is to “have fun,” employees are
encouraged to move within the company if they feel their current assignment is
“boring.” Job vacancies are always posted and promotion decisions are made at an area
superintendent’s meeting.
• Compensation and benefits. AES does not have a set salary schedule for any given job,
and salaries are determined based on what others are being paid inside and outside the
company. Raises are given every year and superintendents usually determine them in
including financing and capital expenditures. Criteria for hiring new AES people include a person’s
willingness to accept responsibility and AES’s principles as well as a person’s experience and
expertise. Every AES person has been encouraged to participate in strategic planning and new plant
design for the Company. The Company has generally organized itself into multi-skilled teams to
develop projects, rather than forming “staff” groups (such as a human resources department or an
engineering staff) to carry out specialized functions.
Many people have asked us about our team structure and how it works. To begin with, there is no
one person in charge of teams and there is no Human Resources department. Teams are the basis of
our structure, and they encompass the four values of our company. They are fluid; many people are
members of more than one team at one time. A team is somewhat autonomous; all decisions about a
project are made within that team, with final say granted to that team. Decisions are made not from
the top-down, but from the bottom-up. Furthermore, responsibility is pushed to the lowest level
possible, encouraging everyone to be part of a decision. As a result, each team member views the
project in terms of a whole. Colleagues and team members must trust each other to follow through to
the best of their ability.
Because people are what make up AES, we have decided not to resort to an organizational
model. Instead, we give you the following comments from AES people regarding teamwork. In
general, AES teams work extremely well in both achieving a common goal and having fun while
doing so. The following ideas provide insight on what makes teams work well and what can
stimulate true and productive teamwork.
“Teams imply friendship; not only the ability but the desire to work together. Starting with the
wonderful example set by the original AES team, Roger and Dennis, working together in small
groups has been a natural way to get big things done while preserving the dignity of each person.”
Tom Tribone
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