Recruitment

Our staff recruiters target college campuses with degree programs training sought-after talent such as engineering, geology, and geophysics. The recruiting environment on these campuses has become increasingly competitive as the job market has remained strong. In the fall of 2007, our recruiters made 75 visits to 15 campuses. Our summer intern program is another avenue for identifying entry-level candidates and exposing them to employment opportunities at El Paso. In 2007, we placed 58 interns throughout the company for our summer internship program.

We also appreciate the rich pool of knowledge possessed by career professionals, and we’re reaching out to this demographic through professional organizations, targeted advertising, and job fairs. We believe El Paso’s reputation in the industry is an asset in recruitment, based on the more than 22,000 job applications received in 2007 from external candidates.

Our employee referral program is another effective way to identify and recruit experienced professionals. We offer a cash referral bonus to all employees, excluding managers and officers, who make successful referrals. Every position filled by referral carries at least a $1,000 bonus. We filled more than 850 positions in 2007 and 19 percent were the result of employee referrals.

Learning & Development

We realize employee interests and needs for career development vary greatly by vocation and personal goals. That’s why our Learning and Development program offers many options.

In 2004, El Paso introduced the Performance Management Program (PMP)—a comprehensive performance review process to give employees clear and attainable performance goals, regular and specific feedback around their progress, and opportunities to receive and provide feedback to their peers as well as management. The process begins early in the year with goal setting sessions, and continues throughout the year with mid-year reviews between employees and managers, and concludes with formal written evaluations toward year end. In the spring of the following year there may be payout of bonuses and base salary adjustments based on key company, business unit and individual performance factors. The program is flexible, designed to reward high performers and provide all employees with development paths to excel in their careers.

We recognize the advantages of a robust continuing education program to develop employees, address current staffing needs, and adapt to changing business needs. In 2007, we dedicated $1.4 million for training to help employees develop skills to advance El Paso’s operations and their careers. Our Learning and Development program provided approximately 1,650 hours of training, not including Ethics and Compliance training or regulatory training. Additionally, we offered more than 325 hours of computer-based training (CBT)—accessible to employees through El Paso’s internal network.

The drop in the number of classroom hours in 2007 is attributed to a new system implemented by Learning and Development to improve the program’s use of resources. The system tracks registration and reschedules courses that do not reach 80 percent capacity 30 days prior to beginning. Classes are rescheduled and offered again when registration reaches 80 percent.

Employee Tuition Assistance Program

All employees can tap into tuition assistance up to $5,250 each year for a degree or certification program related to their work responsibilities. In 2007, we provided employees more than $490,000 in tuition assistance.

Employees in technical disciplines can increase their skills through our field rotation programs involving a variety of jobs for formal and hands-on training in areas such as welding, controls and maintenance, and measurement. These rotations give them a path for career development through formal certification in each skill set and allow them to increase their flexibility and value to the field organization as cross-functional technicians.

Other programs are focused on developing future leaders within the company. The High Impact Rotation Program (HIRP) is a two-year program designed to expose high-performing employees to intensive on-the-job development and to different business units within El Paso. The program consists of three eight-month rotational assignments in the areas of finance, commercial experience, and accounting. These assignments are in-depth, hands-on leadership experiences that allow employees to sharpen their skills, understand the different aspects of our business, and demonstrate their abilities to a broad range of co-workers and others, including senior leadership.

Another leadership developmental tool is the ASPIRE program, which provides high-potential employees considering management as a possible career track with an opportunity to engage in activities that will prepare them for successful leadership. Up to 50 participants are selected annually from a pool of candidates nominated by their mangers or directors. Over the course of the year-long program, participants are assigned to groups and work on developing solutions to issues identified by senior leadership.

The program supports El Paso’s overall leadership development strategy of nurturing emerging leaders for future assignments, and giving participants a clear, unbiased understanding of the role leaders play at El Paso—allowing them to make more informed career choices.

Empowerment & Rewards

Employees are also empowered and encouraged through incentive programs to initiate changes that make their work places and the company as a whole more efficient. Producing Results In Daily Enhancements (PRIDE) in our E&P company and Value Creation in our pipeline group are examples of programs that promote sound and innovative decision making at all levels of the organization to increase efficiencies and create value for shareholders.

As a part of El Paso’s pay-for-performance culture, we offer a variety of monetary awards to recognize employees for exceptional work. These programs are in addition to our annual performance rewards. In 2007, more than 2,000 individual awards were made, totaling more than $1.7 million in spot bonuses or awards to employees. We also established in 2007 a program for employees to recognize their peers for outstanding performance. Through Peer Power, nearly 800 El Paso employees awarded more than $60,000 to fellow employees.