Performance Management Discussion Guide Career Service Authority

Transcription

1 Performance Management Discussion Guide Career Service Authority This reference was created for supervisors and managers as an informational guide regarding the recent Total Compensation modernizations and their effects on performance reviews and merit increases. This overview reflects the City s policies and processes provided by the Career Service Rules as they relate to performance management and Career Service employees. Revised

2 PERFORMANCE MANAGEMENT DISCUSSION GUIDE The City s new Total Compensation program is underway for eligible City employees. There are some important points that you and your staff should be aware of, as it will affect performance reviews and merit increases going forward. 1. The City implemented an Enhanced Performance Rating Scale, increasing the number of ratings from three to five. 2. The City implemented a Simplified Pay model, which eliminated fixed steps from each pay range. Implementing Simplified Pay s provides the City with the ability to adjust pay ranges based on the market, eliminating the force fitting of adjustments to 2.25% increments. 3. The City implemented a Flexible Merit Increase Table, which was designed to provide supervisors and managers with flexibility and a small amount of discretion in determining merit increases. The Flexible Merit Increase Table was also designed to be anchored to the external market. As a result, the increases that appear in the Flexible Merit Increase Table will change from year-to-year, based on variations in the market. 4. The City implemented a Common Performance Review process which not only improves the timeliness of completing performance reviews and providing feedback to employees but also improves the City s ability to forecast, manage, and budget merit increases. Performance Rating Scale The new Enhanced Performance Rating Scale appears below. The new performance rating scale better defines the performance criteria associated with each rating category: 5 = Outstanding (consistently delivers outcomes not often achieved by others; always exceeds standards) 4 = Exceeds Expectations (consistently performs well above expected job requirements. Outcomes frequently surpass expectations) 3 = Successful (consistently achieves performance standards) 2 Below Expectations (meets many, but not all job requirements. Outcomes are generally less than expected, with improvement required in one of more specific areas) 1 or below = Failing (work does not meet expectations in most, if not all, areas) With the implementation of eperformance, supervisors and managers now have the ability to weigh performance outcomes. Because of this capability, overall performance ratings calculated in eperformance will be rounded to the nearest whole number rating. Rounding will be applied using the method below. 5 - Outstanding: 4.5 or above 4 - Exceeds Expectations: Successful: Below Expectations: Failing: 1.4 or below Simplified Pay s Instead of dividing a pay range into steps (18 for non-exempt pay ranges and 22 for exempt pay ranges), pay ranges will be divided into quartiles, or four segments. Within pay ranges, the quartile minimums are used as a marker to identify the beginning of a new quartile. Employees will maintain their current rate of pay with the change to Simplified Pay s. Unlike steps, an employee s rate of pay can be anywhere in the pay range and does not need to fall on a quartile minimum. To view the new Simplified Pay s and to determine which quartile an employee falls into, consult the new pay table. located at 2

3 Flexible Merit Pay Increase The merit (pay) increase that an employee may receive will be determined based on the employee s annual performance rating and the employee s location in the pay range. As previously mentioned, the Flexible Merit Increase Table was designed to be anchored to the external market. As a result, the increases that appear in the Flexible Merit Increase Table will change from year-to-year, based on variations in the market. The target average merit increases for 2011 is 2.2% distributed among each department or agency s eligible employees. City Council is responsible for approving the merit budget every year. The Career Service Board is responsible for approving the Flexible Merit Increase Table annually, based on an amount that City Council allocates. The 2011 Flexible Merit Table appears below for your reference The 2011 Flexible Merit Table Ratings 1 st 2 nd 3 rd 4 th Maximum 5 = Outstanding % % % % Merit Payment 4 = Exceeds Expectations % % % % Merit Payment 3 = Successful % % % % 0.0% 2 = Below Expectations % % 0.0% 0.0% 0.0% 1 = Failing 0.0% 0.0% 0.0% 0.0% 0.0% Note: Each performance review rating is rounded for the purposes of the flexible merit increase. Common Performance Review Date With a common performance review date, all eligible employees will be reviewed at the same time, instead of receiving performance reviews on their anniversary date. For the 2011 performance evaluation process, all employees will be evaluated for the same review period, January 1, 2010 through December 31, This year, Supervisors will meet one-on-one with employees to deliver performance evaluations and to inform them of their pay increase amount between April 2 and April 15, This takes place after performance ratings and increases have been approved by the department. Below are the key performance evaluation dates for 2011 as described in Career Service Rule 13 (Appendix A). Key Performance Evaluation Dates for 2011 January 1 through February 17 March 8 through March 31 April 2 through April 15 May 13 Performance evaluations written for all employees for the review period of January 1 through December 31, 2010.* Department and agency managers are provided with worksheets to allocate performance increases and determine costs. Supervisors meet one-on-one with employees to deliver performance evaluation and pay increase amount. Performance pay increases delivered in the first paycheck in May Based on the timeline above, employees will find out what their performance rating and merit increase will be between April 2 and April 15 of Eligible employees will receive their pay increase on May 13, *Performance evaluations must be approved by managers and completed in eperformance by Feb

4 2011 PEP/R MEETINGS AND DISCUSSIONS An additional goal of PEP/R meetings in 2011 is to communicate the new changes in rating scale, common anniversary date, and merit pay allocation. The best way to do this is to communicate openly and honestly. Because there will probably be a smaller number of people earning the higher ratings, you may expect some reactions of disappointment or dissatisfaction. A general script for this meeting is on the next page. These suggestions will help you stick to the topic at hand and alleviate potential confusion or concerns. While you don't have to read the script word-for-word, it is a general outline on how to deliver the appropriate information at the appropriate time. It s important to stay with the script and remain calm and non-defensive. Tips for Planning Your Meetings: Write down what you plan to say. Practice with someone. Select a private meeting place to ensure confidentiality. Minimize interruptions - turn off your cell phone and close your . Review the PEP/R beforehand. When Conducting the Meeting: Things to do: Review the PEP/R before the meeting Remain calm and focused Use good eye contact Be clear, concise and respectful Help the employee understand his/her value to the organization Help the employee understand that you want him/her to succeed Allow the employee a chance to respond Listen to the response Be available and visible afterwards Follow up after a few days to continue discussion about the employee s goals and identifying ways to enhance the things about the job that matter to him/her. Things to avoid: Do not blame others for the rating decision (you represent the organization and its management). Do not say you disagree with the decision Do not discuss the status of other employees Do not guarantee that the employee will get a better rating in the future Do not argue with the employee Do not go off topic; stay focused on the task at hand. Tips for Closing the Conversation Thank the employee for his/her service. Answer the questions you can and promise to find out what you don t know Promise to be available and have further conversation about PEPs, ratings, the employee s aspirations, things that would make the job better, etc. Sample Language for a PEP/R Meeting As you know, the City has adopted a new rating and merit pay format that takes effect this year. The purpose of expanding the ratings from 3 to 5 is to enhance the performance rating scale for more accurate ratings. One of the purposes of a common rating period is to better predict the impact that merit increases will have on the City s limited budget and to ensure that employees performance evaluations are kept current. This year, each agency has been allocated a budget that allows for merit increases (the first in several years) averaging 2.2% across the overall agency. Theoretically, we could simply apply a 2.2% increase to every employee. But that would defeat the purpose of having different ratings that distinguish the very best performers from the vast majority who are good at their jobs, and from those few who need improvement in their work. Therefore, it s important to make the higher ratings mean something and that the lower ratings lead to improved performance. In order to meet the budget expectation of 2.2% and also make the higher ratings more meaningful, there will be fewer of the higher ratings than in the past. Every employee is a valuable asset to the organization and the majority performs their work at the expected level (which is by definition, a successful rating). 4

5 Present the PEPR with its rating and review it with the employee. I appreciate your understanding as we transition into these changes. If you are interested in seeking a higher rating, I promise to work with you to figure out exactly what you could do to earn that in the future. Meanwhile, I will check in with you periodically to answer questions and do what I can to help you make this job satisfying. I don t want to lose you to another job or another supervisor. The City will never have a lot of money to use as an acknowledgement of your contribution, so we need to work together to find other ways to make this job the best it can be for you. PERFORMANCE REVIEWS & MERIT PAY INCREASES FREQUENTLY ASKED QUESTIONS Performance Rating Scale What is different about the performance rating scale? Starting January 1, 2010, the City implemented an Enhanced Performance Rating Scale, increasing the number of ratings from three to five. The new performance rating scale better defines the performance criteria associated with each rating category. The chart below may help you understand how the old three rating system will be converted to the new five category system. Why is my performance rating generated in e-performance different from the new Enhanced Performance Rating Scale? With the implementation of e-performance, supervisors and managers now have the ability to weigh performance outcomes. Because of this capability, ratings calculated in e-performance will be rounded to the nearest whole number rating. Rounding will be applied using the following method. 5 - Outstanding: 4.5 or above 4 - Exceeds Expectations: Successful: Below Expectations: Failing: 1.4 or below 5

6 Simplified Pay s What is a Simplified Pay and where are the steps? With the new Simplified Pay s, pay ranges will be divided into four segments, or quartiles. The quartiles serve as a way to divide pay ranges instead of using steps. Within pay ranges, the quartile minimums are used as a marker to identify the beginning of a new quartile. See example of the new Simplified Pay s below. 2nd 3rd 4th Maximum 615-A $39,257 $43,766 $48,274 $52,783 $57, A $49,038 $56,337 $63,637 $70,936 $78,235 Are there jumps or intermediate steps between quartile minimums? No, the new Simplified Pay s do not contain any additional markers or steps other than the quartile minimums. Will an employee's rate of pay be increased or reduced to equal a quartile minimum? No, employees will maintain their current rate of pay with the change to Simplified Pay s. Unlike steps, an employee's rate of pay can be anywhere in the pay range and does not need to fall on a quartile minimum. How do I know where I am in the pay range if it no longer has steps? In order to determine location in the pay range, an employee will need to find the two values in the new pay range that his/her salary lies between. For example, an employee within pay grade 615-A, earning $43,100, would be in the first quartile. The employee's salary is greater than the range minimum, which is $39,257, but is less than the second quartile minimum, which is $43,766. See example below. 2nd 3rd 4th Maximum 615-A $39,257 $43,766 $48,274 $52,783 $57,291 Flexible Merit Pay Increases How do employees move through the new pay ranges? Employees will move through the range based on pay increases associated with their annual performance evaluation, much like it has been in the past. What type of pay increases can employees receive? All pay increases shall be delivered to employees through the annual performance evaluation. The increase that an employee may receive will be determined based on the employee's annual performance rating and the employee's placement in the pay range. The Flexible Merit Increase Table provides supervisors and managers with flexibility and discretion in determining merit increases. Will the flexible merit increase amount change every year? The flexible merit table was designed to be anchored to the external market; therefore, the increases that appear in the Flexible Merit Increase Table will change from year-to-year, as a result of fluctuations in the market. The 2.2% increase allocated in 2011 may be a different amount in

7 How did the City arrive at this 2.2%? The 2.2% increase is anchored to the external market. This means that it is consistent with what other organizations are awarding for pay increases. Can a manager, just give all employees a 2.2% increase and be done with it? No, per Career Service Rule 13, merit (pay) increases should be allocated to all eligible employees using the Flexible Merit Increase Table. The merit increase an employee may receive is determined based on the employee s annual performance rating and the employee s location in the pay range. Ratings and increases must be approved by the department before the supervisor meets with the employee. Will the merit increases be different between different jobs within the City? The City will be using one Flexible Merit Increase Table for eligible City employees in the career service personnel system. What happens if an employee is at the top of the pay range? If an employee is at the top of the pay range (pay range maximum) he/she will not receive an increase in base pay. Instead, the employee will receive a lump sum payment equal to 1% of his/her annual salary if he/she has earned an annual performance rating of Exceeds Expectations or Outstanding. Are there going to be any bonuses paid in 2011? No What type of performance rating will enable an employee to move up in the pay range, and by how much? Employees may receive merit increases for Successful, Exceeds Expectations, and Outstanding, no matter where they are in the pay range. The only exception to this would be if an employee earns the maximum rate of the pay range. In this scenario, the employee will receive a lump sum payment equal to 1% of the employee's annual rate of pay if he/she has earned an annual performance rating of Exceeds Expectations or Outstanding, which is similar to the current system. An employee may also receive a merit increase if his/her performance rating is Below Expectations, provided the employee is in the first two s of the range. Common Performance Review Date Why is my annual performance review date changing? The City is moving to a common performance review date, which means that all employees will be reviewed at the same time. This change is effective January 1, The new performance review time period will follow a calendar year. For instance, in 2011, all employees will be reviewed based on performance that occurred from January 1 through December 31, Can an agency designate that all employees review date be moved to the same date? What are the exceptions to this, if any? The move to a Common Performance Review Date is applicable all Career Service Status employees. My anniversary date is on October 2, so I received my 2010 performance evaluation in October Under the new system, the review period is January 1 through December 31, Does that mean that I will be reviewed again for the whole year? Yes, most employees will experience an overlap in review periods for 2010 and This approach allows all evaluations to be aligned to the same effective date. 7

8 When will I find out what my job performance rating and merit pay increase will be? When will my merit pay increase take effect? Based on the timeline above, employees will find out what their performance rating and merit increase will be between April 15th and May 12th of Employees will receive their pay increase on May 13, 2011, retroactive to January 2, 2011 Below are some key performance evaluation dates for Key Performance Evaluation Dates for 2011 January 1 through February 17 Performance evaluations written for all employees for the review period of January 1 through December 31, 2010.* March 8 through March 31 April 2 through April 15 May 13 Department and agency managers are provided with worksheets to allocate performance increases and determine costs. Supervisors meet one-on-one with employees to deliver performance evaluation and pay increase amount. Performance pay increases delivered in the first paycheck in May Based on the timeline above, employees will find out what their performance rating and merit increase will be between April 2 and April 15 of Eligible employees will receive their pay increase on May 13, *Performance evaluations must be approved by managers and completed in eperformance by Feb. 17. Will my pay increase be retroactive to the first of the year? Yes, the effective date for the merit increase will be the first Sunday of the New Year; therefore, in 2011, the effective date of the merit increase is January 2, References for Additional Information Career Service Rule 13 (PEPRs) For questions about the Total Compensation Modernizations, contact compensation@denvergov.org. For questions about Training and Organizational Development questions, contact training@denvergov.org. For Human Resource related questions, contact hr@denvergov.org. City and County of Denver Human Resources Career Service Authority 201 W. Colfax Ave. Dept. 412 Denver CO, hr@denvergov.org Printed on recycled paper 8