Update on PRC Process

Please read the attached memo from Sally. We will discuss this in our staff
meeting this afternoon.
---------------------- Forwarded by Brenda F Herod/HOU/ECT on 07/11/2000
11:17 AM ---------------------------

Enron North America Corp.

From: Sally Beck 07/07/2000 08:23 PM

To: Kristin Albrecht/HOU/ECT@ECT, Scott Earnest/HOU/ECT@ECT, Sheila
Glover/HOU/ECT@ECT, D Todd Hall/HOU/ECT@ECT, Peggy Hedstrom/CAL/ECT@ECT,
Brenda F Herod/HOU/ECT@ECT, Brent A Price/HOU/ECT@ECT, Leslie
Reeves/HOU/ECT@ECT, Stephen P Schwarz/HOU/ECT@ECT, James
Scribner/Corp/Enron@Enron, Mary Solmonson/HOU/ECT@ECT, Sheri
Thomas/HOU/ECT@ECT, Shona Wilson/NA/Enron@Enron, Eugenio Perez/HOU/ECT@ECT,
Steve Jackson/HOU/ECT@ECT, Susan Harrison/HOU/ECT@ECT, Robert
Superty/HOU/ECT@ECT, Michael E Moscoso/HOU/ECT@ECT, Steve
Venturatos/HOU/ECT@ECT, Scott Mills/HOU/ECT@ECT, Joel Henenberg/NA/Enron@Enron
cc: Sheila Walton/HOU/ECT@ECT, Norma Villarreal/HOU/ECT@ECT, Hector
McLoughlin/Corp/Enron@Enron
Subject: Update on PRC Process

Today was the final ENA PRC. Relative ranking results up through the Senior
Director level are final. You and your management team can begin the process
of giving performance reviews to your employees. I spoke with Sheila Walton
today to inquire about an expected time frame for completing and conducting
the employee reviews. She indicated that the target completion date should
be the end of July.

Promotions will be effective August 1st. It is Dave Delainey's intent to
announce ENA promotions sometime after he returns from vacation on July 24.
This drives the end of July target completion date for reviews. I do not
yet know if Delainey wants all ENA promotions to be announced in a single
memo, or if each group within ENA will prepare such a memo. I will keep you
updated on this as I get direction from him.

Please note the following change since our Energy Operations PRC in June. In
order to place focus on the qualitative feedback during this mid-year review
process, we will not share performance clusters with employees when
conducting their reviews. It is very important for all of us to be
consistent in this process, so please communicate this to all in your groups
who will be giving performance reviews. It is important to note, however,
that the content of an employee's review should be consistent with our view
of that employee's relative ranking. In other words, an employee in the
Satisfactory category should not be given a review that simply states that
the employee is doing a great job. Clearly, a large number of employees
performed at a higher level than those employees in the Satisfactory
category, so the feedback to that employee should include some specific areas
of improvement needed in order for the employee to make a stronger impact in
the organization, help you achieve the groups goals, etc.

Also please note the following:

Performance reviews for anyone in the Satisfactory, Needs Improvement or
Issues categories must be reviewed by HR prior to these reviews being given
to the employees. This will ensure that our feedback is commensurate with
the relative performance of that employee. (This has been the stated process
for the bottom two categories, and we are adding Satisfactory to this process
as well.)
Please remember to include a more experienced member of your management team,
yourself, or an HR professional in reviews being conducted by inexperienced
members of your management team, or those management team members where you
have a concern over their ability or willingness to deliver candid and
perhaps tough performance feedback. I believe that we have spent some time
in identifying these situations. I ask your help to ensure that we follow
through on this commitment.

Thanks for all of your efforts in making this mid-year PRC process a
meaningful one.

It is Dave Delainey's intent to announce It if 0