Town wagers on merit pay

The town’s 2015-16 fiscal year budget allots $214,800 for wage increases for approximately 100 general employees. But for the first time in the town’s history, not every employee will get the same wage increase just because it’s a budgeted line item. And not every employee will automatically get a raise.

That’s because Town Manager Dave Bullock implemented a new merit-based incentive increase program for general employees that focuses on what employees have done in the past year to earn a raise rather than giving raises based on whether they’re in the budget.

“I’m a firm believer in giving raises to those employees that stand out and not just those who show up for work each day to collect a paycheck,” Bullock said.

Bullock worked with Human Resources Manager Lisa Silvertooth and Key resident and human resources guru Ross Alander (see sidebar) for more than a year to create a merit-based concept that involves employees, managers and Bullock using an intranet site to formulate employee evaluations and wage increases.

This month, managers are meeting with all town general employees for individual evaluations. Employees have access to a new online system that allows them to grade themselves on tasks and their performance throughout the year through a rating system that uses terms like “exceeds expectations” and “meets expectations.” Employees are also able to list their accomplishments throughout the year, to remind their managers and Bullock what they’ve achieved.

When evaluations are complete, Bullock will have an opportunity to see how all employees rank on a score sheet of 0 to 3, with a “0” meaning performance was flat and a “3” meaning the employee exceeded expectations.

“There will be a bell curve where I can get a sense of how evaluations went for all employees,” Bullock said. “Scoring will be a big piece of it. I’ll be able to see the shift from what employees stood out on the high and on the low end. We will look at that closely, see if it all matches up with the evaluations and allocate the money in the budget line item appropriately based on employee performance.”

A range for increase pay has not been determined yet by Bullock, who still needs to set the maximum raise allowed for employees that exceed expectations once he reviews the bell curve.

“You hope that 90% of the workforce at least meets expectations,” Silvertooth said.

Evaluations will be completed and pay raises will be established before the commission approves its fiscal year budget Sept. 30, so increases will be available to eligible employees when the fiscal year begins Oct. 1.

“It’s straight forward and efficient,” Bullock said. “If someone is doing a great job and someone else is not doing a satisfactory job, should the person not doing a great job get the same raises as those that are? I think most people would say, ‘Pay your higher performing employees better.’”

In four of the last eight fiscal years, employees received no wage increases (see box).

The merit increases also differ from employee step wage increases, which used to be given to employees based on years of service with the town. Those step wage increases have not been given to employees since 2008.

Police union employees will receive 2% wage increases as negotiated through a union contract and firefighter/paramedic wage increases still need to be negotiated this summer as part of a new three-year contract.

Firefighter/paramedics are also open to considering a hybrid version of Bullock’s new merit-based system during contract negotiations this summer.