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R 4072 I I RESOLUTION N0.4072 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ARROYO GRANDE ESTABLISHING A MANAGEMENT MERIT PAY PROGRAM WHEREAS, the City Council of the City of Arroyo Grande ("City") approved salary and benefit adjustments for management employees for Fiscal Year 2007-08 and Fiscal Year 2008-09 in on August 28, 2007; and WHEREAS, the City Council deems it in the best interest of the City that compensation for management employees be based upon performance and merit; and WHEREAS, the City Council deems it in the best interest of the City that compensation for management employees be adjusted as hereinafter provided NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Arroyo Grande that: 1. The Management Merit Pay Program set forth in Exhibit "A" attached hereto and incorporated herein by this reference is hereby approved, to be effective beginning February 13, 2008. 2. All other management employee salary and benefit terms and conditions remain in full force and effect. On motion of Council Member Costello seconded by Council Member Guthrie and on the following roll call vote, to wit: AYES: Council Members Costello, Guthrie, Arnold, Fellows, and Mayor Ferrara NOES: None ABSENT: None the foregoing Resolution was passed and adopted this 12`" day of February 2008 RESOLUTION N0.4072 PAGE 2 TONY F A, MAYOR ATTEST: KELLY W TMO E, CITY CLERK APPROVED AS TO CONTENT: STEVEN'ADAMS, CITY MANAGER APPROVED'AS TO FORM: TIM THY J. EL, CITY ATTORNEY ' Exhibit A CITY OF ARROYO GRANDE MANAGEMENT MERIT PAY PROGRAM Objective Salaries for management employees are established on a merit pay basis to recognize and compensate employees for performance level, ability to meet and exceed expectations, and successful and timely execution of goals and objectives. The provisions outlined in this program do not apply to increases determined to be cost of living adjustments (COLAs). Performance Evaluation A performance evaluation report is completed for each management employee on an annual basis and is due on the employee's City employment anniversary date. Merit pay is evaluated and determined in conjunction, and based upon the results of, the performance evaluation report. Merit Pay Increases Increases for management employees within the classification pay range shall be recommended by the supervisor and approved by the Department Director and City Manager. The increase amount shall be based upon performance level. If the employee receives an overall average performance score of 5 or above, the employee shall be eligible for a merit increase of 3% within the classification pay range. If the employee receives an overall average performance evaluation score of 6 or above, the employee shall be eligible for a merit increase of 4% If the employee receives an overall average performance evaluation score of 7 or above, the employee shall be eligible for a merit increase of 5%. I If the employee receives an overall average performance evaluation score of 8 or above and a minimum of 80% (fractions rounded to the nearest number) of goals and objectives from the prior year have been completed and/or maintained on schedule, the employee shall be eligible for a merit pay increase up to 6%. If the employee receives an overall average performance evaluation score of 9 or above and a minimum of 90% (fractions rounded to the nearest number) of goals and objectives from the prior year have been completed and/or maintained on schedule, the employee shall be eligible for a merit increase up to 7%. If the employee receives an overall average performance evaluation score of 9 or above ' and 100% (fractions rounded to the nearest number) of goals and objectives from the prior year have been completed and/or maintained on schedule, the employee shall be eligible for a merit pay increase up to 8%. I Management Merit Pay Program Page 2 In order to maintain the existing merit pay level, the management employee shall receive a minimum overall average performance evaluation score of 4 or above. An overall average performance score below 4 will result in a reduction of up to 2% in annual pay within the salary range set forth for the employee's classification. Any such reduction shall be subject to due process provisions as set forth in the City's Personnel Regulations. Goals and Objectives During the annual performance evaluation process, goals and objectives for the upcoming year shall be recommended by the employee, determined by the supervisor, i and reviewed and approved by the Department Director and City Manager. Goals and objectives may include both project/program and performance goals and objectives. Project/program goals include proposed work to develop, implement and/or improve a project or program. Performance goals and objectives include targeted and measurable achievements related to ongoing responsibilities. Once determined, to qualify for merit pay or merit bonus pay the following year, project schedules shall be prepared and submitted for all identified project/program goals and objectives. Project/program schedules shall be maintained on a monthly basis to track the status of project/program goals and objectives. The requirement for completion of goals may be adjusted or waived if special circumstances have considerably impacted the ability of the employee to accomplish established goals during the course of the year and adjustments have been agreed to by the supervisor. Such circumstances include health or family issues that have impacted attendance, adjustments to goals due to changes in priorities, and workload assignments not anticipated when the goals were established. If adjustments to work load and priorities are established, the supervisor shall meet with the employee to prepare and review changes to goals and objectives, as well as ~ project/program schedules. Proposed changes shall be reviewed and approved by the Department Director and City Manager and included in the personnel file with the prior ~ evaluation report. Merit Bonus Pay If a management employee's salary is at the top of the classification pay range, or if the i employee is eligible for a merit pay increase that would exceed the top of the classification pay range, the employee shall be eligible to receive up to 2% one-time merit pay bonus for extraordinary work performance. ~ In order to be eligible for up to 1 % in merit bonus pay, the management employee shall ' have accomplished and received the following on his/her performance evaluation report: A score of 8 or above on each performance criteria score; and A minimum of 75% of goals and objectives from the prior year shall have been ~ maintained and completed on schedule; or Management Merit Pay Program Page 3 • Have successfully completed an extraordinary accomplishment determined by the City Manager to warrant special recognition. In order to be eligible for up to an additional 1% in merit bonus pay, the management employee shall have accomplished and received the following on his/her performance evaluation report: • A score of 9 or above on each performance criteria score; and • 100% of goals and objectives from the prior year shall have been maintained and completed on schedule; or Merit bonus recommendations shall be submitted to the City Manager in a separate memorandum prior to presenting the performance evaluation report to the management employee. Merit bonus pay may be received in a lump sum amount. Merit bonus pay shall not be considered part of the employee's base salary. Merit bonus pay shall be presented on a one-time basis for any given year and shall be considered independently each year. OFFICIAL CERTIFICATION I, KELLY WETMORE, City Clerk of the City of Arroyo Grande, County of San Luis Obispo, State of California, do hereby certify under penalty of perjury, that the attached Resolution No. 4072 is a true, full, and correct copy of said Resolution passed and adopted at a regular meeting of the City Council of the City of Arroyo Grande on the 12"' day of February 2008. WITNESS my hand and the Seal of the City of Arroyo Grande affixed this 19`" day of February 2008. `i1/i~ KELLY ET ORE, CITY CLERK