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1985-05-22 adjMay 22, 1985 (Afternoon - Adjourned Meeting) (Page 1) 3. An adjourned meeting of the Board of Supervisors of Albemarle County, Virginia, was held on May 22, 1985 at 2:00 P.M., in Meeting Rooms 5 and 6, Second Floor, County Office Building, Charlottesville, Virginia, this meeting being adjourned from May 15, 1985. PRESENT: Mr. F. R. Bowie, Mrs. Patricia H. Cooke (arrived at 2:05), Messrs. Gerald E. Fisher, J. T. Henley, Jr., C. Timothy Lindstrom and Peter T. Way. ABSENT: None. OFFICERS PRESENT: Mr. Guy B. Agnor, Jr. County Executive. Agenda Item No. 1. Mr. Fisher. The meeting was called to order at 2:05 P.M. by the Chairman, Agenda Item No. 2. Work Session: Revision of Pay/Classification Plan, including Merit Pay. The following memorandum dated May 17, 1985, was received from Dr. Carole A. Hastings, Director of Personnel: "Attached please find a revised performance evaluation system being recom- mended for local government employees. The plan has several advantages over the current performance evaluation system as follows: The plan requires a close alignment between an employee's job des- cription and performance evaluation. The current plan evaluates only 12 characteristics which may or may not apply to each position. e The new plan provides for a complete cycle of evaluation, involving the employee in a review of their position description, the setting of performance standards, feedback at the mid-year point, and finally the evaluation itself. 3. The new plan provides an appeals process for performance evaluation. The new plan requires that an unsatisfactory evaluation be handled according to specified procedure included within the plan. The new plan was developed by a committee of local government employees. The committee is recommending the retention of the current two and one-half and five percent merit ratings. 1984 - 1985 Statistics: Since July 1, 1984, through the end of March 1985, a total of 148 evalua- tions have been reported. The various categories are as follows: Number of Employees 24 (16% of Evaluated Employees) 60 (41% of Evaluated Employees) 64 (43% of Evaluated Employees) Total 148 (59.4% of Total Employees) Merit Increase 0 2 1/2 percent 5 percent The proposed plan has more stringent criteria clearly establisking merit increases for performance that is above average or outstanding (not average) and also dealing with unsatisfactory performance more effectively. Response to Mr. Bowie's Proposal: The evaluation committee discussed at length Mr. Bowie's memorandum of May 7, 1985. The discussion centered on the advantages and disadvantages of the proposal to replace the current merit pay plan with a bonus and longevity system. While the advantage of such a proposal could be possible savings to taxpayers, committee members identified many disadvantages as follows: 'Bonus Payments. The bonus payment would not become part of an employ- ee's base salary· Thus, financial transactions such as making commit- ments for mortgages, cars, or other long-term purchases would be affected since one's salary would be subject to fluctuations. In addition, employees would,retirement, life insurance, and social security benefits which are currently a function of salary and which increase when merit raises are currently achieved· Recruitment for Employees. Exhibit 3 contains the results of recent survey conducted among several localities in Virginia. The following questions were asked: Does your locality have a merit system of performance evaluation? Does the merit payment become part of the employee's base salary? Is there a quota for how many employees can achieve merit? Is there a fixed limit on the funds that can be expended for merit? The survey results clearly illustrate that the majority of counties/cities having merit systems allow this payment to become part of the base salary. If Albemarle County were to change this payment method, problems in recruit- ing new employees could result. Salaries would have to rise in order to account for the loss of cumulative raises, thus negating some of the poten- tial benefits to taxpayers. 3.2O May 22, 1985 (Afternoon - Adjourned Meeting) (Page 2) Incentive -- The current method of payment provides an incentive to be meritorious since the raises are compounded and increase earning potential. For every year a raise is granted, the employee gains cumulative rewards. Bonus payments would have to be significant in order to provide the same incentive. Quotas on numbers of employees who can receive merit or on the dollars that can be expended - Any limit on the number or money involved in the merit system would negate the basis of such a system (i.e., to encourage employees to achieve their potential in the organization). Quotas build manipulation into merit systems and discourage employees since true performance ratings must be altered to fit within the quota. Financial Implications: Exhibit 4 presents several comparisons between the current system of payment and the longevity/bonus method. Example 1 presents the difference in earnings between Employee A who earned merit in the first year and Employee B who earned merit in the seventh through tenth years. Even though Employee A has earned more on a cumulative basis at the tenth year, Employee B does earn significantly more at the end of 20 years. Example 3 presents a simulated bonus/longevity plan for two employees. The total dollar amounts paid to these employees does not differ significantly even though Employee B earned merit four times as opposed to Employee A earning a bonus once. Example 4 presents an employee who, under the County's current plan, earns merit at 21/2 percent each year versus an employee who only receives longe- vity increases. The meritorious employee earns more after 20 years. Using this last example, it is important to realize the impact of the two systems on retirement. Employee A, under the merit plan, would retire with $64,000 worth of life insurance vs. $54,000 for Employee B. Assuming both employees are 62 at retirement, Employee A would realize $99 per month more upon retirement than Employee B. This would have to be considered in discussing any changes to the current system. Summary: It is recommended that the proposed plan be adopted without changing the current method of payment for merit. If changes in payment are desired by the Board, the request is that such changes take effect July 1, 1986. Recent changes i~n the employee master file which includes payroll would make major changes in payments impossible to go into effect by July 1, 1985. If there are questions concerning this report, I would be happy to address them." Mr. Fisher said the decisions on the merit pay system are fundamental because the Pay/Classification Plan is based on a vested merit pay system. There is no way that employees can move up the scale on the pay plan at the current time without merit pay. Dr. Carole Hastings, Director of Personnel, said that this essentially is the same plan that the Board looked at in August, 1984 but did not adopt. In response to Mr. Bowie's memorandum (see minutes of May 15, 1985), she outlined what the employees who served on the Evaluation Committee felt about the idea of having a bonus type system as opposed to vested merit pay. She outlined the disadvantages the committee found. Dr. Hastings said her staff has just been through many months of extensive work revising the current payroll system to make it work more efficiently with the data processing system. She would ask that if there are to be major changes in pay grades, that~ the Plan be implemented on July 1~ 1986, because it is not possible to effect any changes in the employee master file for the July 1, 1985, payroll. Dr. Hastings then went on to explain the procedures used for evaluating a person under the proposed merit system. The employee's job description (which has been redrafted) will be the basis for the whole evaluation system which does not occur just every twelve months, but which is to be an ongoing process. This system spells out the responsibility of the employee's supervisor, and there is an interim conference required at six months if an employee is experiencing problems. The evaluation rating will be based fifty percent on job performance and fifty percent on basic job characteristics. There is a written pro- cedure for dealing with an employee who is having major performance problems. There is an appeals process for any employee who feels his/her assessment is unfair. It is recommended that the two-step merit system be retained. Under this new plan, a satisfactory performance will be rewarded only by granting the general increase given to all employees. Any employee receiving a second unsatisfactory evaluation should be "moved out of county service". Dr. Hastings said the staff would like to try this plan for a year. Mr. Bowie said he is disappointed because he had asked for alternative ways to reward outstanding employees to provide legitimate career progression. He feels the Board has gotten "several pages of reasons why we can't do that." In the memorandum he notices that it is not sixty-six percent of the employees who received a merit increase last year, but eighty-four percent, which is twenty percent higher than the figure addressed in his memorandum. As far as he is concerned, that is beyond comprehension. The memorandum mentions that retirement benefits, life insurance, etc. would be affected by a bonus payment system. His point is that granting life-long retirement benefits, life insurance, etc. on a one-time meritorious rating is excessive, but that is what the current system does. Also, he did not note on the list of counties and towns studied the names of Louisa, Greene, Nelson, or the City of Charlottesville. He does not believe that Albemarle competes against other localities in the job market. Dr. Hastings said Charlottesville has a vested system. The counties and cities listed are the ones which had forwarded a copy of their merit plans for review. May 22, 1985 (Afternoon - Adjourned Meeting) (Page 3) 320A Mr. Bowie said he had hoped to get some financial information to verify the statements in his memorandum. He had pointed out that after twenty years of employment, Employee "A" (with several meritorius ratings) makes less money than Employee "B" who received only one meritorius rating (that being in his first year of employment). That is not correct. He had hoped to get an analysis showing the total payroll impact, not employee to employee. Mr. Bowie said he had used those two examples to show that the system is not even fair to the County's own employees. What is the cost to the County to run a legitimate, fair, promotion system? Any response should be based on total impact, and not just on an individual employee. The answer seems to be, "let's look at it for another year and hope it gets better." Mr. Bowie said he does not think that is a legitimate answer. Mr. Fisher said the question of alternatives is one which he has thought about for a long time. The whole pay plan is based on the fact that an employee coming into the system is hired within the first three or four steps of a grade with a fixed salary. The only way he can move to a higher salary permanently is through a merit pay system. The other option is to do as is done for the teachers and give an increase each year with or without a merit review, and he does not care for that method. Mr. Henley said he thinks the salary scales are increased each time the pay plan is revised, so there certainly is a raise for the employee. Mr. Lindstrom said there is a question which is basic to this discussion which has not been addressed. That is the difference in perspective as to what an employee expects to get when he/she takes a job. Mr. Lindstrom said he also has a concern about percentages and thinks that eighty-four percent is a problem. He does not see how this new plan addresses that problem. Normally if someone takes a job and there is no longevity or merit pay, that person will move on to a better job elsewhere. When an employer does not want that person to leave, he raises the pay scale. The County does something different in that every year it gives a general increase for cost-of-living to keep people on an equal footing. That is the equivalent of what a lot of employers do. The question is whether the County will not offer merit pay except to a small number of people who are surely doing an outstanding job as opposed to paying the cost-of-living adjustments and every three or four years when the County feels it is no longer competitive, have a reevaluation and adjust the scale. Mr. Henley said he thought that is what is being done now. Mr. Lindstrom said that is one system, and he is not arguing against it, but does the County want to continue building in increases for people even though their jobs don't change, or does the County want a system where the only adjustment is a cost-of-living increase with an occasional adjustment to the pay scale? Mr. Fisher said he does not think the Board understands the way the Pay/Classification Plan works. Unless the employee has a right to increase his/her earning capability on a permanent basis, he does not think the employee will continue to work for the County. Mr. Lindstrom said he takes exception to that. He has never worked under any system, and cannot relate to the person who feels that every year he will get a cost-of-living and maybe a built in merit increase. Mrs. Cooke said that in the business community the employer looks at productivity. She has trouble trying to grasp giving someone money for doing the same amount of work day after day. She does not, at this point, have a set opinion on how it should be changed. Mr. Henley said he never would have voted for a merit plan if he had known it would go this far. He thinks it has gotten out of "tilter". Mr. Agnor agreed. He said when there was a single merit step, the number of employees granted an increase ranged from twenty- eight to thirty-eight percent year after year. When the two-step system was adopted two years ago, it got out of control. The staff would like to "tighten the controls" and try the plan for one more year. Mr. Bowie said he feels that even that percentage shows that the evaluation system is not good. It is not "meritorious". It is just a promotion system. If the County is protecting the employee against inflation, the salary is being raised every year and every two or three years there is a big study to make sure that the salaries being paid are fair. He questions the need to provide additional promotions beyond that. Mr. Fisher said if the increase is only to offset the cost-of-living, it does not increase the employee's purchasing power. He does not think that kind of system is adequate. There needs to be some way to recognize people who produce more. The system has gone from one of recognizing a select group of people who are outstanding, to penalizing the fifteen percent of the employees who are not. Mr. Lindstrom said he is uneasy about a system that rewards an employee just because he has been in the same job for ten years and done an adequate job. Dr. Hastings said if the Board wants an alternative method of payment, she will be glad to further study the problem and come up with something that is workable. If there was a misunderstanding about what the Board wanted, the staff only had a week to prepare for this meeting. In order to come up with an alternative method, it will take quite a long time to prepare such a plan and get it into effect with the data processing system. Mr. Bowie said the staff's problem with data processing, or how the system is put into effect, is not a concern here. The concern is how the County pays people. If he, personally, were going to support any expansion of the current system, it would be with a ceiling. It would require someone to make a decision as to which employee is better. That is what a quota does. That is what a manager is supposed to do. Dr. Hastings said she agrees that there has been a problem with the current merit system, and one of those problems is that the "satisfactory" employee has been receiving a one-step merit increase. Mr. Henley said he knows an increase is an increase no matter what it is called. If a person works for the County, he will get ~.~ an increase. He thinks "cost-of-living" is something dreamed up by the Federal government. He does not get a cost-of-living increase every year. 320B May 22, 1985 (Afternoon - Adjourned Meeting) (Page 4) Mr. Lindstrom said he thinks there are four basic things being talked about on different levels: (1) Should the County have just the base pay with the cost-of-living? (2) Should there be merit? (3) Should there be longevity? He thinks the question comes down to: "Should there be a vested~merit system, and should there 'be a fixed number of employees who can get that increase each year, or should it be available to anyone who meets the standard?" Mr. Bowie said the problem is that everybody will meet the standard. That has been shown by the statistics presented today. Mr. Bowie said he really does not support longevity. An employee is only worth more money if he is doing a better job. He does lean toward merit to make the promotional system based on the best employee. But, a system Where there is a guaranteed annual salary, and a guaranteed annual increase just as long as an employee is satisfactory is a system he does not support. He believes that a cap (limit) needs to be set by the Board. The Board included $50,000 in the budget for 1985~86~ilf~i.~rit~!increase He feels that when that amount is exhausted, that should be it. Dr. Hastings said the biggest change in the plan was the institution of the two and one-half percent merit step. The figure presented earlier was for only three-quarters of the year. In the five percent level, 43 percent of those people who had been evaluated were recommended, but when all employees have been evaluated for the year, this group will probably be at about 33 percent of the total number of employees. There are not more people in the "outstanding" range than in the past, but when the middle range of merit was implemented, it brought in a whole different group of people. Mr. Fisher said he agrees with Mr. Bowie and Mr. Lindstrom that the definition of merit is in jeopardy. He feels only a minority of employees are meritorious. He would like to see it limited to about one-third of the employees no matter what financial amount is set. Mr. Way agreed. He believes the more sophisticated the evalution tool becomes, the more people get merit. He does not have any basis for saying this, but he has heard the same statements about the evaluations of teachers in the school system. He feels it will be the same thing for County general government employees. He believes that regardless of the tool, in the final analysis the evaluation is subjective. There is no way to get a completely impartial evaluation. The more questions you ask, the easier it becomes to pick one person over the other.. Mr. Lindstrom feels the key to this is having a ceiling on the number of eligible employees. He does not remember the Board ever saying it wanted a merit system without.a ceiling, and when it was set up originally a pool equal to a certain percentage of the payroll was set aside for this, but the Board later found that when there was money left in a departmental budget it could be, and was being, used for a merit increase. He has not heard a single Board member disagree with putting a ceiling on the merit system. Mr. Agnor said an amount equal to one percent of the total payroll did fund the merit system until two years ago when the second step was added. It then became totally insufficient. Mrs. Cooke said when the evaluation tool becomes so complicated that it becomes the employer's responsibility to look for ways to give an'employee a raise, or a way to reward that employee, it takes the responsibility away from the employee to look for ways to better his own performance. There are certain jobs where a person cannot be paid but a certain amount, and if that person is dissatisfied, it is his responsibility to better his own skills, and to look for ways to make more money. NobOdy is indispensible. Mrs. Cooke said she hates to see any employer start looking for ways to give an employee more money just to keep him. She thinks it is bad to take incentive away from the individual. Mr. Bowie agreed, and said he feels a Complicated system makes it poSsible for a manager not to have to manage. Mr. Bowie said in relation to the $50,000 merit pool that was mentioned, there was a perception among Board members when he first became a Board member that this amount funded the merit pool, but it only funded it in the year in whiCh the award was made. That is because many people do not get the award until close to the end of the year. Next year the system will cost $127,000 and the next year and every year thereafter. The $50,000 figure mentioned is really immaterial because.that $50,000 will cost a million dollars in ten years. Mr. Agnor said that is because of the vesting. Mr. Lindstrom said that is the issue to focus on. He asked Dr. Hastings if she wanted to make an argument for merit without a set limit, since no member of the Board has disagreed with the idea of placing a limit on the merit plan. Dr. Hastings said she knows there are financial constraints, but it scares her in terms of.putting quotas on the merit. There is a lot of research on merit systems, and one of the biggest factors in failing merit systems is putting on a "cap". It forces a manager to look at a given number of people who are eligible for merit, and to pick which will receive the merit. It comes down to choosing a certain group one year, and another group another year. That tends to create a disincentive among some of the employees. If the Board's concern is a financial one, she would prefer that a given amount be set aside for merit, and then after the evaluations are completed, adjust the percentages that can be awarded so that they fit within the amount of money allotted. Mr. Fisher asked why that method is different from setting a limit on the number of employees. Dr. Hastings said it would allow a department head to reward a whole group of employees with some amount rather than giving the five percent increase to only a selected few. Mr. Fisher said the whole pay Plan is based on the fixed steps. Dr. Hastings said she understands that, and it will take time to implement changes in the plan. Mr. Agnor said that is the reason the staff is asking to try the plan for one more year to see if the number of people receiving merit can be "tightened". M~. Agnor said he would prefer to have a dollar limit rather than a limit on the number of employees. Mr. Bowie said the problem is that no one can give a dollar limit that is meaningful. He has no particular problem with the two-step merit, but he thinks there must be a percentage limit set. He has some trouble with the most senior level of employee getting a merit increase. Reasonably effective managers are going to get an increase just because they are there. In most systems, there is a point in management above which there is a different way of determining salaries. May 22, 1985 (Afternoon - Adjourned Meeting) (Page 5) 221 Mr. Lindstrom said the tough issue is the one of vesting a one-time merit throughout an employees' lifetime. He has no problem with a merit concept, but the real issue is how to balance the morale of the people working for the county with the financial consequences of a merit system. Mr. Lindstrom said he has never focused on that consequence of the system until recently. Mr. Fisher said if the system is done on a longevity basis, which is the one the teachers are on, everyone automatically gets a raise every year and keeps it for their entire length of employment with the County. Mr. Henley said he will go along with either one of those as long as the cost-of-living is eliminated. He feels a raise is a raise, no matter what it is titled. Mr. Bowie said the system is becoming more and more complicated. He senses that some kind of merit is probably better than longevity, but it needs a cap. As far as he is concerned, there can only be a promotion through meritorius work, and in there should also be a demotion for unmeritorius work. He does not support a longevity program although he asked that the concept be analyzed. Mr. Agnor said the staff ran a number of alternatives, and vesting in a merit system costs more money. The County competes with that in the marketplace. In the State of Virginia, if a locality has fifteen employees, it must have a merit system, although the systems are administered in many different ways. Mr. Agnor then went on to explain many different variations that could be used, and the cost impact of each. He does not feel that the total impact on the payroll will be any greater than a vested program that is managed well. Depending on how the system is changed, it will not be worth the number of dollars it will take to implement the change as opposed to retaining the present system if it is managed well. Mr. Way asked Mr. Agnor's reaction to Dr. Hastings suggestion to set a limit on the dollar amount instead of a cap on the number of employees so that the system could be more flexible. Mr. Agnor said the plan would need to be pulled apart and reworked in a different manner. He would prefer the opportunity to try "to pull the number down" to a reasonable level Without having a "quota" system. He would prefer to work without a quota and report back to the BOard as to whether the system is becoming manageable depending on whether it is a one-step or two-step system. Mr. Lindstrom said it depends on whether the evaluations are graded on a curve or an absolute scale. Reading through the materials forwarded to the Board, it is clear that the grading is occurring on an absolute scale. Mr. Henley said if he has to vote for vested merit system, he will not vote for it applying to more than twenty-five percent of the employees. Mr. Lindstrom asked if staff had information from other communities as to the percentage of employees receiving merits. Dr. Hastings said she did not have that information. Mr. Fisher said the State of Virginia had gone to about ninety-five percent of the employees receiving a merit, and they are now changing to what is called a proficiency system. At this time, Mr. Agnor suggested that the new evaluation system be adopted, that the system be limited to a one-step merit of five percent, and that this be done without a quota or a ceiling, and that the staff report to the Board every three months what the averages have been through the prior three months, and that this process be continued from July, 1985 to June, 1986. If it is found that the system is not being managed well, or is not dropping below the fifty percent level, the evaluation criteria can be changed in the following year. Mr. Henley said he feels that if the Board votes for such a system, the staff will be requesting another personnel person, and he can't support that request. Mr. Fisher said the Board needs to stop and decide on a definition of "merit". Mr. Henley has suggested that it be twenty-five percent of the employees if the merit increase is vested. He asked for other thoughts. Mr. Bowie said he would be willing to support that concept for one year while staff tries to develop a system which is fair and does not take a department head's total time to administer. Mr. Fisher said he also agrees that there should be a limit. Mr. Lindstrom asked if a merit system is an employee's right or a privilege. Dr. Hastings said the law does not require either a merit system or a cost-of-living increase. Mr. Lindstrom asked about the denial of a merit without some reason. Dr. Hastings said when a matter of judgment takes away the potential for an increase, there has to be some documentation. Mr. Lindstrom said he was puzzled by a part of the merit system where a department head, at a six-month review, tells the employee what he must do to qualify for a merit. Dr. Hastings said she worked with both employees and department heads in trying to understand the problems of the current system. Many people felt the midyear review would be beneficial since they felt that the merit review happened suddenly, and the department head has not talked with the employee during the year to discuss problems. Mr. Lindstrom said his reaction to this is that it is a lot to handle, and if somebody is going to get a merit, he does not need someone to sit down and explain problems. Mr. Lindstrom said he is willing to go along with Mr. Agnor's suggestion even though it may not sound that way. He felt someone did need to sit down and justify the whole system to the Board as a vested system. He has trouble with the mental transition because he has never worked in such a system, but he is willing to support it even though he believes there should be a smaller percentage of people receiving merit, relative to the number now getting the merit. He is willing to trust staff to tighten it down and give it another year. He is willing to live without a mandated ceiling. Mr. Henley said he thinks if the Board makes the increase vested, it is a "prize plum", and it should only be for a few people He is willing to take the responsibility of putting a quota on the system, and taking that burden off of the shoulders of the staff. Mr. Bowie said he hates to vote against his own proposal, and he has trust in the County Executive and his staff, but if the Board is going foward he will support a quota, even if the plan is only for one year. Mr. Lindstrom said this may be something the Board should have looked at several years ago, but he is willing to let things be pulled into shape by the staff, and not by Board mandate. Mr. Agnor said he does not know what the new evaluation system will do, and his suggestion that it be brought down below fifty percent was just an idea of what could be accomplished. Mr. Bowie said he thinks the Board should go on record right now and say that beyond a certain point, the Board will not support the system, and not waste time seeing if that is the way the system goes. Just start at that point, and not waste the time. 322 May 22 1985 (Afternoon - Adjourned Meeting) ' (Page 6) Dr. Hastings said if the Board goes with the one, five percent step suggested by Mr. Agnor, historical data shows that there will probably be a percentage the Board is satisfied with. Mr. Lindstrom said he thinks that eliminating the one step will eliminate a number of problems. He thinks that all involved have a ceiling in mind for the system. He appreciat ~s the problems of mandating the system. He is willing to let there be some flexibility in the system. Mr. Henley said that in order to get to some decision, he will offer motion to establish a quota of twenty-five percent and that the system be vested. Mr. Lindstrom asked about the one step. Mr. Henley said he does not mind doing that, but with a twenty-five limit on the number of employees getting the merit, and it be limited to one-step of five percent, that it be vested, and that the system begin on July 1, 1985. Mr. Bowie seconded the motion. Mr. Lindstrom said he thinks that if the plan carries only one, five percent step that alone forces people to make decisions. There is a big difference between no merit and five percent, so he will not support the motion. He thinks there should be just the one step, but not the twenty-five percent limit. Mr. Henley said that might do, but there is a big Problem and he thinks there should be a limit on the number of employees who get the merit. He feels more comfortable with the twenty-five percent than either thirty or thirty-five percent. Mr. Fisher asked if any other staff members had thoughts about the plan. Mr. Ray Jones said the Pay/Classification Plan began in November, 1974 and it has slowly moved away from the initial concept. When the two and one-half step was added in 1983, the plan became less of an award for performance than one for outstanding work. The consultants said something was needed to reward employees and also to attract the best employees. During the last eighteen months he has sit in with department heads on interviews, and the question always arises as to the number of steps and how a person moves up the scale. If the County now changes how an employee moves on the scale, he feels there will be a real problem. Generally the questions are the same regardless of the employees ranking within the organization. Mr. Robert Tucker said he feels the merit system will be more beneficial to the County as a single step. There did not seem to be too much of a problem staying with thirty-three percent when there was a single step. He thinks it will be~Dugh tc make rewards to certain people, and it will be found that certain people will have to be eliminated from the system. If it comes down to rewarding a certain number of people this year, and a different group of people another year because of the quota, it may be a problem. Mr. Bowie said that is not his concern. He seconded the motion, and has heard a couple of new comments. He is now in a position of being about to vote on something he is not sure about. He does not understand what the twenty-five percent means. He wants a limit on the number of people who get the merit. Mr. Henley said he meant it to be twenty- five percent of General Government employees. Mr. Bowie said he does not have a problem voting on a quota, but does not understand how it can be implemented fairly. Mr. Henley said that is best left to the staff to figure out. Mr. Agnor said there has never been a limit imposed on individual departments. Mr. Henley said he thinks he would have put a limit on the merit system from the beginning if he had realized it was vested. Mr. Fisher said he has thought all along that there was a limit. He thought it was one-third. The whole system has gotten out of control, and the Board needs to take that control back. He thinks twenty-five percent is a little tight, but he thinks there needs to be a limit. Mr. Way said he would prefer to have a dollar figure instead of a percentage. He agees that there needs to be a cap. He can support the twenty-five percent, but if staff comes back next year and says it needs to be higher, it can be considered at that time. Mr. Lindstrom said the Board is taking some very drastic action and on very short notice. The twenty-five percent is eight percentage points below what he had assumed was an informal guideline. He thinks it is important to respect the staff that administers this plan. The Board approved the two and one-half percent step, and understood when it was done that it might increase the number of people receiving the merit increase. Now, the Board is taking that back, but to go the extra step and put an absolute cap on it is more drastic than he feels is necessary. Mr. Agnor said he would like to mention one more problem with an absolute cap. Merits are given all during the year and he does not know how to manage the system and still spread the merits over the entire year. Mr. Henley suggested that all merits be given at the same time, rather than spreading them over the year. Mr. Bowie said he is thinking through his position as the seconder of the motion. He wondered if the Board could go with guidance rather than a mandate, and change if a report is received that the Board does not like. Mr. Henley said he does not see how this could be figured quarter by quarter. Mr. Lindstrom said Mr. Bowie is suggesting a modification of Mr. Henley's motion that it be a guideline rather than a mandate, and that there would be quarterly reports from the staff. Mr. Fisher asked Mr. Henley if he would accept that change, or would he rather have some one make a substitute motion. Mr. Henley he is willing to look at it the third quarter and see what is happening. Mr. Henley said he thinks there should be a quota. Mr. Bowie said he is having a lot of problems with the motion. Mr. Fisher said the motion is to~adop the ,Albemarle County Classified Employee Evaluation Plan, with Appendix:, as attached to a memorandum from Dr. Carole A. Hastings, addressed to the Board Of Supervisors and dated May 1 a985, on the subject "Merit Performance Plan", with a mandate that there be only one, five- percent merit step; merit may be awarded to no more than twenty-five percent of employees; the merit increase may be vested; the new plan is to take effect on July 1, 1985; and a report is to be made to the Board each quarter on the number of employees receiving such merit incre~ At this time, roll was called, and the motion carried by the following recorded vote: AYES: Mr. Bowie, Mrs. Cooke, Messrs. Fisher, Henley and Way. NAYS: Mr. Lindstrom. Mr. Henley said he thinks the staff should reorganize so that a quarter won't be such a problem. Mr. Fisher said he believes this is a reaction to a system that has gotten out of control. May 22, 1985 (Afternoon - Adjourned Meeting) (Page 7) 323 The Board next discussed the Pay/Classification Plan. Mr. Fisher said he did not like the survey materials that the Board received on April 10, and he did his own report on the Pay/Classification Plan just last night. He then handed some new materials to the Board for review. What is being discussed is the salary that will be paid to new employees, because the salary of current employees will not be affected by this plan. In checking the various survey materials, he paid particular attention to those of the Charlottesville area so there would be people competing in the same job market. The formulas used by Dr. Hastings include at least six items, only one of which is the market survey. Those include: salaries paid by other employers; market survey; salary relation between subordinate and superior; salary in relation to similar positions in other departments; salary relation between position in general government and the schools. In general, he thought the market survey was pretty good, although for some positions the market data was very scarce. He concluded that a number of current categories have a pay grade that is above the market. Some are below, but other are above: there are 43 categories which are not changed; 19 that will receive a one-step increase; nine categories receive a two-step increase; four categories receive a three-step increase; and one category goes up five steps. Mr. Fisher said he compared that with the market and to current salaries, and he feels an error was made in that no category is slated to be reduced, even though the market showed that several categories should be reduced. Mr. Fisher said he reviewed some of the material with staff and they had justified some of the changes, but have also accepted that pay grades can go down as well as up. He agrees with their justification and feels that he can recommend adoption of the pay scale mailed to the Board for today's meeting, that scale with pencilled in figures. In 32 different categories, the pay will be lower than originally recommended by the consultants, some being two or more pay grades. Dr. Hastings said some of these changes will be different from those adopted by the School Board for clerks and custodial personnel. She will have to go back to the School Board for these changes. Mr. Bowie said it seems to him that the Board should go along with the market. This change will not take money away from any employee, it just means that if a job comes open, a new employee will start at this new salary. Mr. Way asked Mr. Fisher if he agreed with the jobs descriptions that have been deleted or retitled, etc. Mr. Fisher said he did not go over that. He is willing to take staff's recommendation on that part of the plan. Dr. Hastings said the job descriptions came about by talking with the various department heads. Mr. Bowie asked how often this type of plan will be done. Dr. Hastings said a full review will be done every three years, but a scan of the market will be done every year. Mr. Bowie said he feels it probably would have been helpful if the Board had been brought in at the beginning of the study instead of the end. Mr. Fisher said it is normal that management will try to avoid conflict with employees, and he knows that employees resist any change in a pay plan. He feels it is the Board's responsibility to decide this type of thing, and he does believe there will be some dissatis~. faction.'~ He indicated in his analysis that he feels some positions should be increased beyond the recommendation. When he looked at the market survey, he did not understand some of the recommendations, but on the whole feels they are pretty good. Mr. Agnor said staff had just received a copy of the new State Pay/Classification Plan, and they found that the County's account clerk position will need to be amended according to that plan, so this will be brought back as a separate item. At this time, Mr. Bowie offered motion to adopt a revised "Pay/Classification Plan for General Government Employees" as modified, on Page 4 of a memorandum dated May 21, 1985, from G. E. Fisher to the Board of Supervisors, column titled "Modified Staff Recommendations". The motion was seconded by Mr. Henley. Roll was called, and the motion carried by the following recorded vote: AYES: ....... Mr. Bowie, Mrs. Cooke, Messrs. Fisher, Henley, Lindstrom and Way. NAYS: None. Agenda Item No. 3. Request to Create a New Agricultural/Forestal District. Mr. Fisher said'a member of the Board is needed to serve on the Agricultural/Forestal District Advisory Committee, and also someone from the farm community to replace Mr. Yost. Motion was offered by Mr. Henley, seconded by Mr. Way, to refer a request to establish the Eastham Agricultural/Forestal District to the Planning Commission. Roll was called and the motion carried by the following recorded vote: AYES: Mrs. Cooke and Messrs. Fisher, Henley, Lindstrom and Way. NAYS: BoWie. None. ABSENT: Mr. Motion was offered by Mr. Henley to reappoint persons who previously serv~dea on the Agricultural/Forestal Advisory Committe, those persons being: Corwith Davis, Jr., Joseph H. Jones, Bruce Hogue, Steve Murray, William R. Washington, Babs Huckle and Lindsay G. Dorrier, Sr. The motion was seconded by Mrs. Cooke. Rollwas called and the motion carried by the fOllowing recorded vote: AYES: Mr. Bowie, Mrs. Cooke, Messrs. Fisher, Henley, Lindstrom and Way. NAYS: None' ' May 22, 1985 (Afternoon - Adjourned Meeting) (Page 8) Agenda Item No. 4. Approval of Minutes: This item was skipped. ___ December 19, 1984, and January 2, 1985. Agenda Item No. 5. Appointment: Advisory Council on Aging. Motion was offered by Mr. Way, seconded by Mr. Bowie, to reappoint Rev. Rebecca Jordan to a new term which will expire on June 1, 1987. Roll was called and the motion carried by the following recorded vote: AYES: Mr. Bowie, Mrs. Cooke, Messrs. Fisher, Henley, Lindstrom and Way. NAYS: None. Agenda Item No. 6. Other Matters Not on the Agenda from the Board and the Public. Mr. Bowie said when the Board discussed the 240 units of Section 8 HUD Moderate Rehabilitation HUD funds, he wrote a letter to the area legislators. He has received a letter from Senator Warner saying he has contacted the Secretary of Housing and Urban Development and expresed his support of the application. Mr. Agnor noted that each year the School's staff has gone on a flex working schedule for the summer. He has indicated to his department heads that they may user~ this type of scheduling as long as it does not affect the efficiency of the operation. Mr. Bowie said he supports flex time. Agenda Item No. 6a. Executive Session: Legal Matters. At 4:29 P.M., motion was offered by Mr. Bowie, seconded by Mr. Lindstrom, 'to adjourn into executive session to discuss legal matters pertaining to Greenwood Chemical, personnel matters and acquisition of property. Roll was called, and the motion carried by the following recorded vote: AYES: Mr. Bowie, Mrs. Cooke, Messrs. Fisher, Henley, Lindstrom and Way. NAYS: None. The Board reconvened into open session at 4:45 P.M. Agenda Item No. 7. Adjourn. With no further business to come before the Board, the meeting was immediately adjourned. ~~/~/~hairman !