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1 PERFORMANCE EVALUATION Authorization: Act 688 of 2009 amends Arkansas Code Annotated to provide a performance-based merit increase pay system based on employee performance evaluation. If the Department of Human Services (DHS) policy conflicts with Legislative statute Act 688, or with Department of Finance and Administration (DFA) Office of Personnel Management (OPM) compensation policies, then the provisions of Act 688 and OPM policies are the final controlling authority Purpose: The performance evaluation system serves a number of purposes: Encourages employees to improve quality/quantity of services and work produced; Develops employee knowledge and skills; Motivates employees to achieve better performance; Improves communication between the supervisor and the employee concerning job duties and performance expectations, and the overall goals and objectives of the work unit, the Division and DHS Definitions Above Average: On a regular basis, performance is characterized by high quality and quantity of work that exceeds most position requirements, key objectives and management expectations. Employee demonstrates outstanding skills and abilities, and assignments are accomplished in a highly effective manner with limited guidance and direction Comments: This section is found on all of the Merit Pay Forms. It is used to make additional comments regarding the performance or rating of the employee Competency-Based Criteria: Job-related requirements must be successfully completed by employees. These requirements include, but are not limited to, meeting job knowledge and experience requirements, completing mandated job-related training, demonstrating satisfactory job performance and exhibiting appropriate conduct. DHS managers/supervisors evaluate employees utilizing competency-based criteria and certify that such criteria have been met and applied before implementing promotions or merit pay increases Core Performance Expectation Classified Professional and Executive (N grades) and Unclassified (U Class Codes): This is the criterion for evaluating performance and results. It may be a quantity or quality of output to be produced, a rule of conduct to be observed, a model of operation to be adhered, or a degree of progress toward a goal. EFFECTIVE DATE: October 1, 2010 Page 1 of 12

2 Demotion: Change in job status in which an employee decreases his/her current pay grade. A demotion (voluntary or involuntary) of one or more grades in the Career Service Pay Plan ( C Grades) will result in a 10% decrease. A demotion (voluntary or involuntary) of one or more grades in the Executive and Professional Pay Plan ( N Grades) will result in a 12% decrease Duty Area: Duty areas are identified as the major responsibilities of the position comprised of tasks with a common theme Eligible Employee: Employees who have continuous employment with the State in a regular full-time position for twelve months, or a part-time employee in a regular full-time position for twelve months, shall be eligible to be evaluated for a pay increase under the merit increase pay system. Part-time employees shall receive the merit pay increase on a pro-rata basis. Note: Temporary extra help employees are not considered part-time and are not eligible Exceeds Standards: Performance consistently exceeds position requirements and management expectations. Resourcefulness and depth of knowledge are of the highest quality. Assignments are accomplished in an exceptional manner with minimal direction and are characterized by outstanding achievements seldom accomplished within the agency/institution Lateral Transfers: A change of position or job classification within the same pay grade in which an employee does not receive an increase or decrease in pay, which may or may not involve a change in job duties. If the change to a new position or job assignment involves new job duties or new standards, the employee must receive new standards for the new job. The employee s Merit increase eligibility date does not change Merit Increase Eligibility Date (MIED): Date the employee is eligible for the Merit Increase. The date will either be October 1 or the anniversary date of the latest hire date. Employees must have 12 continuous months of state service to be eligible and receive a Satisfactory or higher performance evaluation Merit Increase Pay System: The OPM policy and Ark. Code Ann et seq. establish a merit increase pay system that is linked to an annual employee performance evaluation system. DHS follows the OPM guidelines of timing and amount of merit increase awards, employee eligibility, and related rules and procedures that control merit increases for DHS employees Mid-Point Evaluation: The employee evaluation that is to begin six months from the start of the rating period. The second (2 nd ) period is defined as the six months remaining of the rating period Minimum Behavior Standards: Minimum behavior standards, and discipline as defined in DHS Policy 1084, Employee Discipline Policy: Conduct/Performance, and DHS Policy 1087, DHS Employee Drug and Alcohol Prevention, Code of Ethics, and all DHS and Divisions policies are included as part of the minimum behavior standards and performance evaluation. EFFECTIVE DATE: October 1, 2010 Page 2 of 12

3 Performance Evaluation System: A system for establishing performance expectations, monitoring employees performance of job duties and tasks, compliance with rules, policies and procedures, and supervisors providing feedback, and assessing employee performance. The Performance Rating Categories and Scale are as follows: A. - Exceeds Standards (E) or numerical scale B. - Above Average (A) or numerical scale C. - Satisfactory (S) or numerical scale D. - Unsatisfactory (U) or numerical scale Probation: Probationary status for purposes related to this policy is the status an employee is in during his or her initial new hire to DHS, to include any extension of that new hire s probationary status Promotion: Employee being moved to a position that is one grade or higher than the employee s current grade level. An example is a competitive promotion. Promotions usually represent a 10% increase for C Grades or 12% increase for N Grades per OPM guidelines Rater: A person designated to supervise employees and is responsible for developing, monitoring and evaluating performance standards and results for employees who report to them directly (subordinates). Please Note: A rater must complete all subordinate reviews prior to being eligible for a merit pay increase based on their own performance Result: The outcome of the performance compared to the standards or core expectations of the job Reviewing Official: Normally the Reviewing Official is the rater s supervisor or manager. The Reviewing Official approves the performance evaluations of the rater s subordinates Salary Savings: Funds accumulated as savings to fund the Merit Pay System. This usually occurs when regular salary positions remain vacant due to normal attrition (terminations and retirements) and job duties are either redistributed or vacant positions are refilled at lower salary rates than those of previous incumbents Satisfactory: Performance meets all or most and may occasionally exceed work objectives and management expectations. Employee demonstrates good knowledge of job duties, and assignments are accomplished effectively with normal supervisory guidance Standards Classified Employees in the Career Service Pay Plan ( C Grades): The performance standards describe in detail what is considered the satisfactory level of performance. This allows the rater to identify when an employee exceeds the standard or performs below the acceptable level of performance. The standard should EFFECTIVE DATE: October 1, 2010 Page 3 of 12

4 be measurable, observable, realistic in terms of the job, within the employee s control, and expressed in terms of expected results Task: The smallest essential part of a job. A unit of work activity that is a logical and necessary action in the performance of a job Unsatisfactory: Performance does not consistently meet management expectations. Requires more than normal guidance and direction. Improvement and/or development are necessary if the rater elects to continue the incumbent s employment Eligibility and Merit Increase awards: Merit increases may be awarded to employees based on their most recent approved annual performance evaluation. A. An overall Satisfactory rating shall be eligible for a.75% merit increase. B. An overall Above Average rating shall be eligible for a 1.5% merit increase. C. An overall Exceeds standards rating shall be eligible for a 2.25% merit increase. D. An overall Unsatisfactory rating for midpoint, second period or annual evaluation shall not be eligible for a merit increase. E. If the Chief Fiscal Officer of the State (CFO) determines that general revenues are insufficient to implement the authorized merit increases, the CFO, with the approval of the Governor, may suspend or reduce the percentage of authorized increases until such time as general revenues become sufficiently available to provide merit increases Employees are not eligible for the annual merit increase if they receive one or more disciplinary actions during the last twelve months rating time period, including written warning, suspension without pay, involuntary demotion, or placed on disciplinary probation. However, Non-Disciplinary Counseling statements and verbal coaching discussions are not considered to be disciplinary actions, and do not preclude the employee from eligibility for their next MIED Managers and supervisors who fail to complete an annual evaluation of employees under their administrative control shall not be eligible for a merit increase for the supervisor s next scheduled MIED Managers and/supervisors must be in compliance with Executive Order 86-1, Executive Order trainings, and Governor s Policy Directives and timely on all performance evaluations for employees they supervise Performance Planning Phase I Performance planning is establishing written performance expectations at the beginning of a performance year to identify the primary duty areas, performance work standards and goals, and other job-related behaviors and competencies EFFECTIVE DATE: October 1, 2010 Page 4 of 12

5 expected of the employee. The supervisor determines the primary Job Duty areas for the employee s position by reviewing the functional job description, the state s job classification system job description, and may consider additional sources of jobrelated performance criteria used by other supervisors with the same or similar positions in DHS or the division. A. The supervisor and employee discuss the performance criteria at the beginning of the evaluation year. The performance categories/duty areas may also be common or generic for similar or same positions within a common job classification(s), and the supervisor may include additional job duty areas and standards to specifically address unique duties assigned to the employee. The supervisor may revise and inform the employee during the year if job duties/goals/standards assigned to the employee must be changed to achieve the mission/goals of the work unit or division. B. The Performance standards/criteria established by a supervisor are subject to review and approval by higher-level management: Reviewers and/or Human Resources staff or Oversight Review Committees, and the Division Director or DHS Director/designee. C. All forms, signature process and discussion with the employee regarding work expectations for the coming year must be completed within 30 days of MIED date. D. The original is maintained in the supervisor s file and the employee will be given a copy Performance Evaluation Forms: All eligible employees are to be evaluated using one of the approved DHS PE forms (DHS-1973). There are PE forms for certain job classifications/categories of positions as follows: - DHS Senior Management PE Form, Form DHS 1973-F - DHS Managers/Supervisors PE Form, Form DHS 1973-B - DHS Employee PE Form, Form DHS 1973-A The Specific Duty Areas identified on the PE Form should be assigned a percentage (%) weight according to the importance of the employee s job duties, with the most important Duty Area receiving the highest percent weight, and with the overall total of all Duty Areas equal to 100%. See Form DHS 1973-C Numerical Ratings: Use only whole or half numbers in the rating of each job duty area (for example 1.0, 1.5, 2.0, 2.5, 3.0, 3.5, 4.0, 4.5, 5.0) A rating of Unsatisfactory in any Duty Area, or a rating of Needs Improvement in two or more categories, or a rating of Does not meet standards in Compliance category precludes an employee from receiving an overall Above Average or Exceeds Standards for the rating period. These ratings require prior documentation and justification to support the rating. EFFECTIVE DATE: October 1, 2010 Page 5 of 12

6 Monitoring Performance and Feedback Phase II Supervisors will monitor and document employee performance throughout the rating period. The purposes of the review and feedback sessions during the appraisal period are: A. To provide feedback to the employee concerning the overall assessment of performance during the rating period. B. To review and update duties/performance standards in light of changing requirements of the employee's position. C. To identify areas of performance requiring improvement, and D. To identify if there is additional training needed to facilitate improvement Mid-Point Evaluation covers the first six months of the rating period. A mid-point review is required at the end of the six-month period. The second (2 nd ) period covers the last six months of the rating period. The supervisor and reviewing officials must approve the evaluation using the appropriate Performance Evaluation form and criteria established. The supervisor should meet and discuss with the employee to ensure employee awareness of his or her performance. The supervisor and employee will both retain a copy of the approved mid-point evaluation If an employee s performance becomes Unsatisfactory (below Performance Expectations) or violates policies/work rules, the supervisor will at a minimum provide coaching or guidance intended to clarify expectations or correct behavior, at any time during the performance period. Depending on the severity of the employee s offense or performance below expectations, and whether the Unsatisfactory performance is a first time or a repetitive problem, the supervisor may choose one or a combination of the following methods to improve or correct the employee s performance: A. Conduct one or more verbal coaching discussions with the employee; or B. Provide a written Performance Improvement Plan (See DHS Form 1103); or C. Send to formal training class(s) internal or external; or D. Refer employee to the EAP (Employee Assistance Program); or E. Apply DHS Policy 1084, DHS Employee Discipline Policy: Conduct/Performance. Employees who fail to complete or achieve the supervisor s performance expectations and standards or job assignments during the performance improvement period are subject to further disciplinary action. (See DHS Policy 1084, DHS Employee Discipline Policy: Conduct/Performance) Employees on Disciplinary Probation Status: A performance evaluation must be conducted at the end of the probationary time period. EFFECTIVE DATE: October 1, 2010 Page 6 of 12

7 A. If the employee s performance has not reached the level of Satisfactory, the probation period may be extended not to exceed 180 days or the employee may be demoted or terminated in accordance with DHS Policy 1084, DHS Employee Discipline Policy: Conduct/Performance. B. If the employee has met the standards for satisfactory performance at the end of the probationary period, the employee will be removed from probationary status Employees on New Hire Probation Status: A performance evaluation must be conducted at the end of the probationary time period for new hires. A. If the new hire employee s performance has met the level of satisfactory at the end of the probationary period, the employee will be removed from probationary status, B. If the new hire employee has not met the standards for satisfactory performance at any time during the probationary period, the employee will be subject to extended probation (not to exceed 180 days in total), or disciplinary action or termination in accordance with DHS Policy 1084, DHS Employee Discipline Policy: Conduct/Performance Final Annual Employee Evaluation Phase III Supervisors complete the year-end performance evaluation of each employee within 30 days prior to the employee s eligibility date (MIED). Supervisors must obtain approval from higher level reviewing officials in their division prior to discussing the final evaluation rating with the employee Supervisors must submit a Form DHS-1973 to the Reviewing Official. If applicable, the Oversight Committee and Division Director/designee should review the evaluation prior to discussing with the employee Employee Acknowledgment of Evaluation: After management approvals, the supervisor then meets with the employee to discuss the evaluation. The employee signs as having received the evaluation and documents date of receipt Employees who receive an overall Unsatisfactory evaluation (score of 2.99 or below) on the final year-end evaluation will automatically be placed on probationary status for 30 to 180 days (to be determined by the supervisor), unless more severe disciplinary action is warranted and approved in accordance with Policy DHS Employee Discipline Policy: Conduct/Performance Merit Increase/Salary costs: The DHS Director, or Division Director or designees must approve final annual PE ratings and Merit increase cost across the Division. EFFECTIVE DATE: October 1, 2010 Page 7 of 12

8 Employee Comments and Appeals Process A. When an employee receives and reviews their performance evaluation, the employee is allowed the opportunity to agree or disagree and write comments and provide support documentation if they believe the supervisor s evaluation was not accurate or complete. However, it is not the role of the employee to determine their own overall performance evaluation/rating. B. The employee may submit an appeal within five working days of the date of receipt of the performance evaluation, if the overall score is Satisfactory or Unsatisfactory. A written request for appeal must be sent to the Division Director/designee or the division Human Resources officer. The Division Director/designee shall obtain statements from both the employee and the supervisor or meet individually with them. The Division Director/designee will make an appeal decision and inform both the supervisor and employee in writing no later than fifteen working days after receipt of the employee s request. The appeal decision is final and binding Responsibilities DHS Responsibilities: A. Develop and maintain DHS policy for employee performance evaluation, and ensure compliance with state law and OPM policies for performance evaluations and merit increases. B. Provide training/orientation to supervisors about the performance evaluation policy, procedures and forms, including information regarding competencybased criteria that employees must meet to be eligible to receive a merit pay increase Oversight Committee Responsibilities: A. Administer performance evaluations within the division. B. The Division Directors may appoint a designee or an Oversight Committee to review Performance Evaluations to: 1. Ensure all employees are evaluated. 2. Prepare a summary report of performance evaluations to the Division Director. 3. Identify patterns of performance evaluations that appear too high or low in work units to determine if rating scores are being consistently applied for common job classifications and fairness across work units, locations, and the division. 4. Review and administer employee appeals, if designated by Division Director. EFFECTIVE DATE: October 1, 2010 Page 8 of 12

9 Reviewing Official Responsibilities A. Identify patterns of performance evaluations that appear incomplete, inconsistent, or an overall pattern of too high or low ratings in the work units. B. Confirm that documentation supports a performance evaluation for merit pay increase. C. Review and sign the Performance Evaluation Form, and discuss any needed changes in scoring with the supervisor, before discussion with the employee Supervisor/Manager Responsibilities A. Supervisors must monitor employee performance and provide direction and coaching to employees to help them know their assigned job duties, what is expected in terms of work results and behaviors in working with others, and inform the employee when he or she is not meeting performance standards, policies or work rules, or supervisor s expectations. B. Complete Performance Evaluation forms within thirty days prior to the scheduled MIED and assure that all criteria have been met for employee s rating and/or merit pay increase. C. Complete performance evaluation forms for each employee under their supervision for the required mid-point and annual year-end performance rating. Failure by the supervisor/manager to initiate and complete a performance evaluation on each employee under their supervision will result in the supervisor/manager being ineligible for a merit pay increase and subject to other disciplinary action as deemed appropriate by the Division Director. D. Supervisors evaluations must be honest, accurate and candid and should evaluate both the employee s strengths and accomplishments, any weaknesses or areas of needed improvement, and be discussed with the employee. E. Discuss recommended performance evaluations with reviewing officials and obtain all approvals prior to meeting/discussing final evaluations with employees Employee Responsibilities: A. Understand and perform in a satisfactory manner the assigned duties and performance criteria for the job classification/position and duties/goals/standards assigned by the supervisor. B. Provide documentation of work performance (certificate of completion of training, commendations, work completion status reports, samples of work produced, etc.) to supervisor for consideration in final rating. C. Demonstrate satisfactory conduct and compliance with all applicable policies. EFFECTIVE DATE: October 1, 2010 Page 9 of 12

10 D. Keep the supervisor informed regarding progress or difficulties concerning the job duties and Performance Evaluation criteria Performance Evaluation Dates Employees Rehired into State Employment Employees who are rehired into state employment who have not accumulated twelve months of continuous state service shall have their latest hire date become their merit increase eligibility date. This date will then become their merit increase eligibility date for the remainder of their career with the State of Arkansas Employees on Extended Leave A. Supervisors of employees on extended military leave without pay will use the employee s most recent performance evaluation score to determine the amount of the merit increase. If the military member has accumulated six months of actual work experience, a new performance evaluation will be accomplished and the result of that evaluation will be used to calculate the amount of merit increase. B. Employees on extended leave such as catastrophic leave, or leave without pay must have accumulated six months of actual work experience in order to be eligible for their merit increase. After the merit pay cycle in which the employee was on extended leave is completed, the employee s merit increase eligibility date will revert to October 1 or the latest hire date, whichever is applicable Executive and Professional Employees All Executive and Professional employees in positions placed in salary grades N900 s series, and who have completed continuous state employment for a period of twelve months, are eligible for annual Performance Evaluations as described in this policy. Those employees who have not accumulated twelve months of continuous state employment shall have their latest hire date become their merit increase eligibility date Employees Transferring Laterally, Promotion, or Voluntary Demotion Employees that transfer laterally, promote, or voluntarily demote within an agency/institution or to another agency/institution will be eligible to receive an annual merit increase on their merit increase date. The employee s performance evaluation and date of merit increase eligibility remain October 1 or the latest hire date, whichever is applicable. EFFECTIVE DATE: October 1, 2010 Page 10 of 12

11 Employees Being Promoted, Demoted or Transferring If the employee leaves within the first ninety days of the evaluation cycle, the new supervisor will evaluate the employee on the established performance standards for the new position and the former supervisor need not complete an evaluation If the employee leaves after the first ninety days of the evaluation cycle, a formal evaluation (including communicating the results to the employee) will be completed by the former supervisor and forwarded to the new supervisor. (Human Resources should be contacted for performance ratings/assessments of state employees outside DHS.) This evaluation should assist the new supervisor in assessing the employee's overall performance level but will not obligate the new supervisor to prorate the assessment, or to take into consideration elements of the employee's former position. The new supervisor and reviewing officials has final authority in establishing the new performance evaluation plan and determining the overall rating If the employee terminates state service, is promoted, demoted or transfers to another section within the last 90 days of the rating period, the previous supervisor completes the formal evaluation When a Rating Supervisor Leaves When a rating supervisor terminates state service, is promoted, demoted or transfers to another section he or she must, before leaving, complete a performance evaluation and send the DHS-1973 form to the reviewing official for all employees whose evaluation cycle ends within ninety days. (If the rating supervisor fails to do the evaluation, it will be completed by the reviewing official.) If the supervisor leaves within the first ninety days of an employee's rating period, he or she is not responsible for completing an evaluation of the employee. The new supervisor will be responsible for evaluating the employee's performance at the end of the rating period If the supervisor leaves after the first ninety days and prior to the last ninety days of an employee's evaluation cycle, the supervisor will complete a formal evaluation. The evaluation should assist the new supervisor in assessing the employee's level of performance prior to separation but will not obligate the new supervisor to prorate the assessment Employees remaining in the same position, but having several different supervisors during the rating period, should be evaluated by the reviewing/designated official when no one supervisor has adequate documentation or knowledge of the employee s performance to complete the evaluation Documentation Employees are rated on the current evaluation period, not on information from past evaluation periods. Performance ratings can increase or decrease on the Year End Evaluation column. EFFECTIVE DATE: October 1, 2010 Page 11 of 12

12 For probationary employees, a performance improvement plan will be issued that: (a) outlines specific performance expected which will lead to improvement of overall performance; (b) cites a day evaluation period that represents the probationary status period; (c) recommends training, if necessary, that will lead to improvement; and (d) outlines (when appropriate) what actions will be taken by the supervisor to assist the employee in performance improvement. Additional documentation in the form of memorandums and action plans may be included During the probationary period, the supervisor must document periodic counseling sessions. The employee is to be informed of his/her progress or lack of improvement and given specific information or training on how to improve or continue improving performance Two files are required for each employee: the official file located in DHS Human Resources and the supervisor's file. Only pertinent information that supports the performance assessment given by the rating supervisor should be retained. These files must be kept available for employee review for three years The employee receives a copy of the performance evaluation after all appropriate signatures are obtained Employee Refusal to Sign Completed Evaluation If the employee refuses to sign the completed performance evaluation, the rating supervisor will explain that the employee's signature does not necessarily mean agreement with the performance evaluation. The employee must be offered an opportunity to make written comments. If the employee still refuses to sign, the rating supervisor and another supervisor will make a notation on the DHS-1973, Performance Evaluation Form, and forward it to DHS Human Resources References to Other Related DHS and OPM Policies; -DHS Policy 1081, Ethical Standards for DHS Employees -DHS Policy 1084, Employee Discipline Policy: Conduct/Performance -DHS Policy 1086, Employee Grievance/Mediation Policy -DHS Policy 1087, Employee Drug and Alcohol Prevention -DHS Policy 1105, Anti-Fraud and Code of Ethics Policy -DFA Merit Pay System Guide Originating Section/Department Contact Office of Policy Administrative Program Management P.O. Box 1437/Slot WG-3 Little Rock, AR Telephone: EFFECTIVE DATE: October 1, 2010 Page 12 of 12

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