Board of Directors Regular Meeting Agenda


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Meeting Date: 10/20/2016  

SUBJECT MATTER:
Receive, consider and act upon 2017 proposed employee salary adjustments;
FISCAL IMPACT:
The 2017 Adopted Budget included $651,000 or 3% of payroll for employee wage increases.
BACKGROUND:
The 2017 Adopted Budget included a 3% general wage increase for employees. Staff was tasked with returning to the Board with recommendations for the manner and amount of wage increases for 2017.
 
The Board asked staff to consider adding a pay for performance element for salary increases, and staff is appreciative for the Board’s direction to reward employees for meritorious performance. 
 
The Bureau of Labor Statistics reports a Wage Index for the Houston-The Woodlands – Sugar Land area in various industries, including Government.  For the 12 months ending July 2016, the wage index for Government is 2.2%.  Based on this Wage Index, staff recommends a 2.25% general wage increase for eligible employees in 2017 that have had a satisfactory performance evaluation.
 
Organizations have struggled with how to reward their top performers in a meaningful way, while controlling rising payroll costs.  If a top performer receives a 3% salary increase, and someone who meets expectations receives a 2% salary increase, this can have a negative impact on top performers.  Increasingly, organizations have provided one-time incentives to their top performers to continue their high performance.
 
The former Community Associations of The Woodlands established an incentive pool which was used to reward employees annually in November of each year.  Employees had to meet a specific set of criteria that stated that an employee had fulfilled all of their normal job duties in addition to performing added duties to accomplish a special project or achieve a certain goal.  

Based on the Board’s discussion during the recent budget process, staff proposes The Township re-establish an incentive pool to reward our top performing employees.  Department heads would make recommendations to the President/General Manager, which would contain the amount proposed, as well as reasoning for the incentive.  The incentive would be given at the same time that employees receive their annual performance evaluation.  Department heads would receive a budget based on their department payroll.  This incentive is expected to be given to a small number of employees; those employees who are critical to the department’s performance and who provide outstanding customer service to our residents and internal customers.  The establishment of this incentive pool will provide recognition to our most valuable assets.  The incentive pool for 2017 would be .75% of payroll or $162,750 for both regular employees and firefighters. All eligible employees will be eligible for a 2.25% general wage increase, and outstanding employees will be eligible for an additional one-time incentive at management’s discretion, based on exemplary performance and no disciplinary action.
 
Fire Fighters and Dispatchers already have an incentive program which provides them higher ranks and salary as they gain additional education and certification.  Over the years, the rank of firefighter has increased at an amount greater than the Driver and Lieutenant positions, causing the firefighter rank to compress these higher ranks.  A market review shows that while we are competitive in our firefighter rank, we have fallen behind in the Lieutenant ranks and compression exists between ranks.  Staff proposes to grant a 2.25% increase to all Fire Fighters, and to use the remaining .75% to address these issues.  Dispatchers and Fire Administration employees will be eligible to participate in the one-time incentive pool, as described above.
 
The Township’s salary package has been designed to be competitive in order to attract and retain qualified employees and staff believes these proposed 2017 salary recommendations will allow the Township to continue to attract and retain qualified employees.
 
RECOMMENDATION:
  • Authorize a 2.25% general wage increase for all eligible employees,
  • Establish an incentive pool using the remaining .75% to reward top performing general employees, and
  • Utilize .75% of firefighter payroll to address compression issues between ranks of firefighters.

    

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