HomeMy WebLinkAboutAgenda - 11-09-1993 ORANGE COUNTY COMMISSIONERS
P.O. Box 8181
HILLSBOROUGH, N.C.
27278
Moses Carey,Jr,
732-8181
Alice M. Gordon 968-4501
Stephen H. Halkiotis 688-7331
Verla C. Insko 227-2031
Don Willhoit 644-3004 (Fax)
ORANGE COUNTY BOARD OF COMMISSIONERS
SPECIAL MEETING NOTICE
FOR
OCTOBER 5, 1993
AND
NOVEMBER 9, 1993
The Orange County Board of Commissioners will hold a work
session on October 5, 1993,.at-7 :30 p.m. in the Emergency Management
Training facility on New : Hope Church: Road in Chapel Hill. The
purpose of this meeting will- be to discuss„school capital issues.
The Orange County Board of Commissioners will hold a work
session on November 9, 1993 , at 7:30 p.m. in the Emergency
Management Training facility on New Hope Church Road in Chapel
Hill. The purpose of this meeting will be (1) to hear a progress
report and discuss the EMS strategic plan, and (2) to discuss the
County pay plan.
The public is invited to attend.
Moses Carey, Jr. , Chai - r
Board of Commissioner'
8/17/93
fib
YOU COUNT IN ORANGE COUNTY !
ORANGE COUNTY COMMISSIONERS
P.O. Box 8181
HILLSBOROUGH, N.C.
27278
Moses Carey, Jr. 732-8181
Alice M. Gordon 968-4501
Stephen H. Halkiotis 688-7331
Verla 1. Insko 227-2031
Don Willhoit 644-3004 (Fax)
M E M O R A N D U M
TO: Board of County Commissioners
FROM: Moses Carey, Jr. , Chair, Board of Commissioners `X.
DATE: November 8 , 1993
RE: Work Session on Salary Plan/Performance Evaluation
Issues
As we prepare for tomorrow evening's work session, I
would recommend that we focus on basic policy issues. The
following are examples
1) Do we want to continue with a Work Planning
Performance Review System?
2) Do we want to continue to tie Performance Evaluation
to Merit Pay?
3 ) What types of salary increases do we continue to
pursue?
4) What consistency should there be between increases
in salary plans and other aspects of the county
budget?
Please call or fax to me other "issue" questions you
would like to address. The staff has provided the attached
packet of information to assist in our discussion.
FN: DSK10BOC31108 . DOC
)1/\
YOU COUNT IN ORANGE COUNTY !
October 28, 1993
Merit Pay Follow-Up
Issues for Board Worksession Consideration*
1. The objectives and merits of a performance evaluation
system and whether the County should continue to have
such a system.
Attachment 1 outlines department head and employee
feedback on the objectives and merits of a performance
evaluation system.
2. The type of performance evaluation system that best meets
the County' s objectives and whether it is the current one
or another type.
Attachment 2 provides background information on the broad
types of performance evaluation systems.
3 . The relationship between performance evaluation and pay.
Attachment 3 provides examples of several types of
relationships.
4 . The objectives of the pay plan.
Attachment 4 is a summary of the State Comprehensive
Compensation System legislation ratified by the NC
General Assembly in July 1993. The "policy" section of
that attachment provides examples of pay plan objectives.
5 . If there is a merit or performance based component to the
pay plan,
-What are the objectives?
-What and whom should it reward?
-What should be the participation level in receiving
awards?
Attachment 5 outlines department head and employee
feedback on merit pay objectives.
*As confirmed by the Board at its August 17 , 1993 meeting
-2-
Attachment 6 outlines the consensus points on merit
directions from department head and Employee Relations
Consortium meetings.
Attachment 7 shows the distribution of merit awards for
past fiscal years.
6 . The level of funding support the Board is willing to
allocate for a merit plan and whether the Board wishes to
fix a percentage of permanent salaries as a benchmark for
use in considering compensation in the budget process.
Attachment 8 shows the Cost of Living increase, Merit and
other pay improvements as a percent of permanent salaries
for the past six years. Attachment 9 is an excerpt from
a Bureau of National Affairs Bulletin to Management
outlining the results of its national survey of salary
budget increases.
Attachment 10 shows the budgeted dollars for cost of
living and merit for the past six years.
As additional background, Attachments 11 and 12 are
copies of the June 1993 survey information on cost of
living and merit plans of nearby public employers .
Attachment 1
Objectives and Merits of a Performance Evaluation System
Department Head and Employee Feedback
1. Is an essential and fundamental management tool.
2 . Assures communication about the employee' s job
performance occurs between the employee and the
supervisor.
3. Establishes expected standards for the work including
those for timeliness, quantity and quality.
4 . Establishes accountability for the work.
5 . Through the work planning process:
-Involves the employee in determining what is
to be done and the priority.
-Establishes an understanding of what is to
be done between the employee and the supervisor.
-Ties the employee' s performance to the goals
of the department and the County.
6. Supports organizational change when needed such as
the customer service initiative or compliance with blood
borne pathogen requirements.
7 . Supports personnel decision making such as for
promotion.
8 . Responds to the employee' s desire to know what is
expected and where his or her performance stands in
relation to the job responsibilities.
( 10-28-93 )
Attachment 2
Types of Performance Evaluation Systems
1. By Evaluation Criteria
a. Trait Rating Systems
-Addresses a pre-defined set of personal traits such
as initiative or enthusiasm.
-Have largely been discontinued because of issues of
job related validity under federal non-
discrimination guidelines.
b. Behaviorally Anchored Rating Systems
-Addresses a pre-defined set of job behaviors
identified as related to successful performance in a
specific job based on job analysis.
-Examples of job behaviors for a specific job might
include: attention to detail, decision-making,
leading, organizing.
-Lends itself to a graphic rating scale.
-By focusing on behaviors, emphasizes processes and
works best in environments where outputs are more
assurable than outcomes .
-Works best with large groups of individuals whose
job descriptions are standardized.
-Most costly system to develop.
c. Work Objective Based Rating Systems
-Addresses specific work objectives identified for
the individual job.
-WPPR is an example of such a system.
-Focuses on the results to be expected from job
performance.
-Provides potentially for more employee involvement
than other systems.
-2-
Tailored to the individual position
-Requires more time to administer.
2 . By Type of Evaluation Instrument
a. Descriptive
Generates an essay-type evaluation of the employee' s
job performance and may include a development plan
for the individual.
b. Comparative
Focuses on ranking or comparing employees to each
other.
c. Criteria-Based
Evaluates the employee' s performance against pre-
defined criteria - either behaviorally based or work
objectives based.
( 10-28-93 )
Attachment 3
Relationship Between Performance and Pav_
Examples of several types of relationships are listed below.
1. Directly-Tied
A given Performance Rating such as Effective results in a
given merit pay amount such as 1.25%.
2 . Performance Rating Establishes Eligibility_
The employee' s performance rating must be a specified
level for the employee to be eligible for merit. The
merit increase itself may be an amount within a specified
range and the final amount may take account of
other factors such as the employee' s salary placement in
the salary range in relation to other employees.
Uniformity across departmental lines is provided by use
of a funding or per capita allocation for merit.
Requires that employees be reviewed at the same time.
3 . Performance Rating Sets Merit Increase Range
The employee ' s performance rating determines the range
within which the merit increase, if any, may fall. For
example, a given rating may result in an increase from
one to three percent and the final amount may take
account of other factors.
Uniformity across departmental lines is provided by use
of a funding or per capita allocation for merit.
Requires that employees be reviewed at the same time.
4 . Salary Position In Salary Range
The merit amount for which an employee is eligible based
on a given performance rating differs depending on
whether the employee is below or above the midpoint of
the salary range. Typically a greater increase is
authorized to an employee below the midpoint of the
salary range. Another variation is to provide a greater
portion of the merit award as bonus rather than salary
increase to employees above the salary range midpoint.
( 10-28-93)
Attachment 4
Summary
State Comprehensive Compensation System*
Policy: "It is the policy of the State to compensate its
employees at a level sufficient to encourage
excellence of performance and to maintain the
labor market competitiveness necessary to recruit
and retain a competent work force. "
. . salary increases to State employees shall be
implemented through the Comprehensive
Compensation System based upon the individual
performance of each State employee. The
. . .system shall combine salary increases and
awards in an interrelated system of compensation
that furthers the recruitment, retention, career
service and outstanding performance of State
employees. "
Funding: "The Governor and the General Assembly, subject to
the availability of funds, shall advance the
State ' s Comprehensive Compensation System by
recommending and making annual appropriations . . .
in the following manner: "
-"The career growth recognition award component
shall be funded each year at the level required
for full implementation. . . "
-"To the extent that expansion funds are
available, the . . .system shall receive an
additional appropriation to fund cost-of-living
adjustments. "
-"Any remaining available funds shall next be
allocated to provide for performance bonuses .
The level of the performance bonus allocation
shall not exceed two percent (2%) of the total
employee payroll. "
*As provided in N.C. State Senate Bill 84 ratified by the
General Assembly effective July 18, 1993
-2-
Career "Career Growth Recognition Award" means an annual
Growth increase awarded to a State employee whose final
Award: annual performance appraisal indicates job
performance that meets or exceeds management' s
expectations and performance requirements.
COLA: "Cost-of-Living Adjustment means a general salary
increase given. . .in response to inflation and
labor market factors. "
Perfor- "Performance Bonus means a salary increase that
mance is awarded in a lump sum to a State employee whose
Bonus: final annual performance appraisal indicates job
performance that exceeds management ' s expectations
and performance requirements. "
Implemen- There is created a Task Force on implementation of
tation: the Comprehensive Compensation System. The Task
Force shall develop a plan for moving State
employees into the system and report on its plan
to the Governor and General Assembly by
March 1, 1994.
Intent: "It is the intent of the General Assembly to use
the Comprehensive Compensation System as a model
for the allocation of funds appropriated for
salary increments for State employees . Provided,
however, current revenue forecasts require that
the General Assembly choose among components of
the system including career growth recognition
awards, cost-of-living adjustments, performance
bonuses, modifications in salary schedules and
placement of employees on the salary schedule when
it allocates funds for salary increments for State
employees. "
( 10-28-93)
Attachment 5
Merit Pay Objectives
Department Head and Employee Feedback
1. Provide a means for deserving employees to advance to
higher salaries in the salary range in relation to new
hires.
2 . Recognize and reward career development; that is,
the employee ' s additional knowledge, skill and
competence in performing the job responsibilities.
3 . Support and reinforce the use of the performance
evaluation program and, through this, realization of the
performance evaluation program objectives .
4 . Recognize and reward specific accomplishments in
support of the County' s goals.
5 . Through the combination of COLA and merit, support the
recruitment and retention of stable, well-qualified,
productive employees.
( 10-28-93)
Attachment 6
Merit Directions
Points from Department Head and
Employee Relations Consortium Meetings
1. The County needs a performance evaluation system for the
reasons noted on the "Objectives and Merits of a
Performance Evaluation System" handout (Attachment 1 ) .
2 . WPPR is the preferred performance evaluation system.
Employees and department heads like the communications
process about objectives and performance structured in
WPPR.
3. It is recognized that further development is needed with
WPPR to support greater uniformity across departmental
lines. Suggested steps include:
-Department Heads assuring each performance
review is completed within 30 days of the
review date.
-Focusing additional effort on definition of
performance standards.
-Comparison of sample performance appraisals for highly
effective focusing on what is provided as
documentation for highly effective.
4 . There should be a relationship between performance
evaluation and pay for the reasons noted on the "Merit
Pay Objectives" handout (Attachment 5 ) . This needs to
be a stable relationship that is consistent from year to
year.
5. As to the merit pay component of the pay plan,
department heads and employees concluded there are two
major elements to be recognized:
-The career development/progression in the salary range
in relation to new hires component and
-The reward for specific and major accomplishments
component.
6 . Beyond merit pay, employees and department heads
expressed considerable support for and interest in the
ideas of team or group rewards and incentives.
( 10-28-93 )
Attachment 7
PERCENTAGE OF EMPLOYEES AWARDED
MERIT INCREASES BY PERFORMANCE LEVEL*
HIGHLY
FISCAL YEAR NONE EFFECTIVE EFFECTIVE OUTSTANDING
1992-93** 19 20 56 5
1991-92 20 26 51 3
1990-91 19 28 49 4
1989-90 16 20 63 Not available
1988-89 12 12 76 Not available
1987-88 22 14 63 Not available
1986-87 14 26 59 Not available
*Data for 1986-87 through 1989-90 is derived from a sample
of 10% of positions because automated data is not
available. The 10 percent sample did not include any
employees awarded a 5 percent plus 2 .5 percent lump sum
amount although such awards were made to some employees.
**Effective 7-1-92 merit amounts for each performance level
reduced. None includes employees not eligible, and
eligible employees not receiving an increase.
:ratecomp.doc ( 10-28-93 )
Estimated Cost of Living Increase ,
Merit and Other Pay Improvements as a
Percent of Permanent Salaries
7.1 %
5.9 /°
0 6.3% 0 COLA ® Merit ® Other
2
3.1 %
.8% 3.4%
MN
1989 1990 1991 1992 1993 1994
Six Year Average: 4.8%
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Year is fiscal year ending. Other for 1989 through 1992 includes classification study rt
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implementation. For 1994, other is Longevity Pay improvement.
Attachment 9
•
•
ungdotollanailment
_ DAA PDllcv AND PRA1%Igf.SM1
Vol, 44, No. 36 September 9, 1993
Salary Increases Continue to Shrink
Employers reduced their budgets for salary increases from an
average of 4.7 percent in 1992 to an average of 4.3 percent in )993.
according to the American Compensation Association's 20th annual
S3iary budget survey, Based on responses from 17): U.S, employers, /
the survey shows continued reversal of the steady growth to salary
budgets that occurred in the late )9S0s.
The decline in salary budgets this year continues a slide that
started in )99) and affects al) employee cateeorieS. lne survey notes.
By, ieve: )99: increases average 4.= percen; for officers and execu-
tives. 4.: percent for exempt employees, and 4.6 percent for non-
exempt employees. Across the board, these increases are lower than
predicted in last year's survey. when respondents projected they
would remain at 1991 ieveis of 4:.9 percent for officers and executives.
4.7 percent for exempt employees. and 4.6 percent for nonexempt
employees. For 1994. meanwhile. employers project that increases
will remain at )99: jevejs.
Salary structures — which set overall ply levels for positions and
grades rather than specific ply levels for individua) employees — rose
percent for omcers and executives. percent for exemp;
employees. and percent for nonexempt employees in 1993. the
survey adds. For 1994. the survey respondents are proiectinc that
salary structures for officers. executives. and exempt employees will
increase 3.0 percent, and salary structures for nonexempt employees
will rise 2.9 percent. ("3993_3994 Salary Budget Survey. ' ACA.
)4040 N. N'orthsicht Blvd.. Scottsdale. Aria. $:260: (602) 9:)-919h
S:., for members. SS0 for nonmembers)
Budget for Cost-of-Living and Merit
FISCAL COLA
YEAR COLA AMT. MERIT TOTAL
1993-94 3323000 2% 185,689 517,689
1992-93 3163000 2% 157,357 473,357
1991 -92 -0- -0- 286,678 286,678
1990-91 4959795 4% 293,000 788,795
1989-90 474,451 4% 221 , 100 695,551
1988-89 491 ,281 5% 210,765 702,046
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Data includes salary and associated benefits cost
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June 30, 1993
PROPOSED 1993-94 COST-OF-LIVING
INCREASE OF NEARBY PUBLIC EMPLOYERS
COST-OF-LIVING
EMPLOYER PERCENT DATE OTHER HIGHLIGHTS
CARRBORO 3.0 7/1/93 Continue 2% of annual salary 401(k) Contribution/Increase
service level pay
CARY 2 .5 7/11/93 Class and Pay Study Impl. /Continue 5% of annual salary 401 (k)
Contribution
CHAPEL HILL 3.75 to 9/1/93 Continue 5% of annual salary 401(k) plan contribution
2 based
on grade
DURHAM (CITY) 3 .0 7/5/93 Continue 5% of annual salary 401(k) Contribution
DURHAM COUNTY 5.0 * Continue 5% of annual salary 401(k) Contribution/Add bonus
payable if budget surplus/Class and Pay Study Implementation
*For employees with 2 years service, effective 7-1-93. For
employees with 1-2 years service, 2.5 on 7-1 and 2 .5 on
anniversary date. For employees with less than 1 year,
2.5 on anniversary date.
RALEIGH 2 .5 8/7/93 Continue deferred compensation (457) matching contribution up to
1.75% of annual salary/Reduce Longevity Pay for new staff to 1%
at 5 years and 2% at 10 years.
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WAKE COUNTY 2 .5 7/1/93 Continue 5% of annual salary 401(k) Contribution 0
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ORANGE COUNTY 2 . 0 7/5/93 Extend Longevity Pay eligibility to 10 years
:chart.doc
June 30, 1993
PROPOSED FISCAL YEAR 1993-94 MERIT PAY PLANS -
AVERAGE
MINIMUM MAXIMUM MERIT
EMPLOYER MERIT* MERIT PROJECTED ELIGIBILITY
CARRBORO No Merit Plan Funded
CARY 2 .5 7 .5 3.5 Be rated Above. Standard or higher
CHAPEL HILL Not Not Not Avail. *To be used for merit or adjust-
Avail. Avail. Proposed funding ments to bring employees on step
at 1% of payroll*
DURHAM (CITY) 2 .5 5 . 0 5.0 Be rated satisfactory or higher
(up to Step 15 of 19 Step pay
plan)
DURHAM COUNTY $600 $1800 $870 Be rated at exceeds expectations
or higher
ORANGE COUNTY 1.25 3.75 2 .3 Be rated Effective or higher
RALEIGH 2.5 5. 0 3.9 If in lower part of range, be
(approx) rated satisfactory. If in higher
part of range be rated above
standard.
WAKE COUNTY 2 .5 7 .5 5 If rated above meets standards and
within department budget of 2.5% rt
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