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1987-06-03 adjJune 3, 1987 (Afternoon-Adjourned Meeting from May 20, 1987) (Page 1) -'489 An adjourned meeting of the Board of Supervisors of Albemarle County, Virginia, was held on June 3, 1987 at 2:00 P.M., in Meeting Rooms 5/6, County Office Building, 401 McIntire Road, Charlottesville, Virginia. The meeting was adjourned from May 20, 1987. BOARD MEMBERS PRESENT: Peter T. Way. BOARD MEMBERS ABSENT: Messrs. F. R. Bowie, Gerald E. Fisher, C. Timothy Lindstrom and Mrs. Patricia H. Cooke and Mr. J. T. Henley, Jr. OFFICERS PRESENT: County Executive, Mr. Guy B. Agnor, Jr.; Deputy County Executive, Mr. Robert W. Tucker, Jr.; and Deputy County Executive, Mr. Ray B. Jones. Agenda Item No. 1. Chairman, Mr. Fisher. Call to Order. The meeting was called to order at 2:05 P.M., by the Agenda Item No. 2. Work Session: Pay for Performance Plan. Dr. Carol Hastings, Director of Personnel, presented three examples of how the Pay for Performance Plan would work, using, as examples, an employee who consistently scored above 90 throughout a five-year period; an employee who had fluctuating evaluation scores ranging from a high score of 90 to a low score of 68.5; and an employee who consistently scored above average with scores ranging from 79 to 90. The following assumptions govern the examples: 1) that the County would convert to a Pay for Performance Plan on July 11, 1987, on the basis outlined in her original report as set out in the minutes of May 13, 1987, i.e. a two and one-half percent increase being granted on July 1 for those employees receiving at least a satisfactory rating, with a two percent pool being distributed based on performance in January, 1988; and 2) that a four and one-half percent pool would be allocated in each of the subsequent years. Dr. Hastings said the proposed plan is for a pool of money to be distributed in varying amounts based on an individual's evaluation score each year. This proposed plan deletes the general cost of living increase given to employees each July regardless of performance, and the five percent merit increases to employees with outstanding scores. Under the proposed plan if an employee scores below 70 percent his/her salary would be frozen and that employee would receive no salary adjustment for the entire year. The School Board initiated a similar plan which has been working well during the past year. This plan does award the higher performing employee. Mr. Agnor said no general increase would begin on July 1, 1988, or in subsequent years, but a market survey will be done yearly to determine if a salary scale adjustment is needed. The Pay for Performance Plan does not preclude a salary adjustment due to inflation. Dr. Hastings said, as an incentive to be a high achiever, vesting of either two and one-half or five percent will be in the year beyond which the bonus is paid. Mr. Bowie said he agrees that outstanding employees should be awarded, but he continues to have a problem with vesting for life for one year of good service. The bonus is a good idea, but there should be some way to consistently prove oneself before vesting, possibly two or three years. Dr. Hastings said the vesting on this plan will be either two and one-half percent or five percent. If an employee receives a four and one-half percent bonus, he would vest only two and one-half percent. If an employee receives a 2.3 percent bonus he would vest nothing. Mr. Agnor said although the highest possible bonus is twice the bonus pool or nine percent, the most an employee can vest is five percent. Mr. Lindstrom asked the reason for the vesting. Mr. Agnor explained that the only way an employee can advance in the salary range of a position is by vesting, and retirement benefits are paid only on a vested plan. No retirement benefits are paid on bonuses. Therefore, vesting is important for retirement and as a career ladder move. Dr. Hastings said virtually all of the plans for other localities have vested merit increases. She would be seriously concerned about the county's competitiveness in hiring and attracting people to positions if it were not able to offer a vesting. Mr. Fisher said he is also concerned with vesting after only a single year evaluation and would like to know if it would be feasible to have two consecutive years of ratings before an employee could generate the five percent. Otherwise the vested amount would always be two and one-half percent. Dr. Hastings responded that it could be done. Although this idea has been discussed with department heads, there have been no employee meetings. This~ new plan will be a major change because all employees are used to getting a general increase each July 1. A system of bonuses with no vesting until the following year is a change employees will have to get used to and to change it further may result in adverse reactions. Mr. Agnor said he can understand Mr. Fisher's suggestion with regard to new employees, but he does not think it should apply to current employees. Mr. Fisher said he has grave doubts as to whether this plan will work and whether it should even be tried. Dr. Hastings said she thinks this new system will be perceived by the employees as a fairer system because the current system awards only a small number of employees a five percent increase. Mr. Fisher asked what would be the total cost borne by the County to implement this plan over a five year period. Mr. Agnor responded that it is set at four and one-half percent of the payroll each year, but that amount is subject to Board approval during budget review. Dr. Hastings said whatever the Board sets as the pool during budget review will govern the amount of money that can be distributed by this formula and distributed through individual departments. Mr. Agnor said, in addition, the departments' individual pool will depend on salaries that are budgeted as a portion of the total payroll. Mr. Bowie commented that if the Board sets no pool then there would be no salary change or bonus system for the year. Dr. Hastings replied that is correct. June 3, 1987 (Afternoon-Adjourned Meeting from May 20, 1987) (P~.e 2) Mr. Way commented that the proposed system brings the General Government and School Division closer together in parity and then asked the difference in the two plans. He feels that tremendous strides have been made in the past three years and he does not want to do anything that will jeopardize the relationship. Dr. Hastings explained that currently there a general increase distributed July 1 for each employee with a satisfactory rating. Em- ployees' salaries can be frozen in the School Division. Those employees recommended for a bonus or merit will get an equal portion of the pool. In addition there is no vesting at all of the July bonus for the School Division employees. Mr. Fisher asked if there is information available from localities on turnover rates to show any difference in morale before and after implementation of a Pay for Performance plan. Dr. Hastings replied no. Mr. Agnor commented there was a difference shown in individual personal performance of activities and acceptability of the plan. Compared to the present merit system, this pay plan will be less costly. Mr. Lindstrom said he feels relatively comfortable with the proposal and thinks it will be an advantage in terms of the County's ability to compete. He thinks the bonus check is an incentive that shows employees they are doing a good job, and it seems that this plan will save the County money. He is supportive of the idea and thinks it will pay individuals for their performance. In addition, the Board has control of the system because it can decide what amount, if any, to appropriate for distribution. Mr'. Bowie said he supports the concept and the system, but still feels that vesting should not occur until the second year. He also thinks it may be better that for an employee to receive five percent, he/she must be at that level for two consecutive years. Mr. Agnor said he thinks that existing employees should receive vesting after one year and that new employees could be required to have two evaluations before vesting. Mr. Fisher said he would like to know how the pool will be distributed according to performance, and not distributed so that each employee gets just a "trickle". Dr. Hastings said the only way to avoid that is to review the evaluators and the way they evaluate employ- ees. If a review of the system shows that department heads are distributing two percent to each employee, then they are not doing their job and it must be corrected. Mr. Agnor said department heads usually do a good job of evaluating, but he does not think it would take long for a high achiever to argue if his increase is lessened because the evaluations were "watered down" to include everyone. Mr. Lindstrom said he is willing to see how this plan works. He then offered motion to adopt the Pay for Performance Plan and the policy that any new General Government employee must have been evaluated in two consecutive years before a merit becomes vested. Mr. Way seconded the motion. Mr. Bowie said although he supports the concept, he would have no qualms about not supporting it in the future if it does not Work the way it has been dis- cussed. Mr. Fisher said he agrees with Mr. Bowie. He said the Board would like to receive periodic reports to see if the new plan is working and, if it is necessary, another work session can be scheduled after the bonus is distributed in January. There being no further discussion, roll was called and the motion carried, by the following recorded vote: AYES: Messrs. Bowie, Fisher, Lindstrom and Way. NAYS: None. ABSENT: Mrs. Cooke and Mr. Henley. Agenda Item No. 3. Executive Session: Personnel. At 3:33 P.M., Mr. Bowie' offered motion, seconded by Mr. Lindstrom, to adjourn into Executive Session for discussion of personnel matters. Roll was called and.the motion carried by the following recorded vote: AYES: Messrs. Bowie, Fisher, Lindstrom and Way. NAYS: None. ABSENT: Mrs. Cooke and Mr. Henley. Agenda Item No. 4. Adjourn. P.M. and immediately adjourned. The meeting Board reconvened into open session at 7:29