1986-102-Approving Management Performance And Compensation Plan For The Town Of Los Gatos (FY 1986-87)RESOLUTION NO. 1986 -1.02
RESOLUTION APPROVING MANAGEMENT PERFORMANCE AND
COMPENSATION PLAN FOR THE TOWN OF LOS GATOS
(FY 1986 -87)
BE IT RESOLVED by the Town Council of the Town of Los Gatos
that the MANAGEMENT AND COMPENSATION PLAN proposed for the Town for
Fiscal Year 1986 -87 (a copy of which is attached hereto) is hereby approved.
PASSED AND ADOPTED at a continued regular meeting of the Town
Council of the Town of Los Gatos, California, held on the 14th day of
July, 1986, by the following vote:
AYES: COUNCIL MEMBERS Joanne Benjamin, Thomas J. Ferrito,
and Mayor Terrence J. Daily
NOES: COUNCIL MEMBERS Eric D. Carls
ABSTAIN: COUNCIL MEMBERS
ABSENT: COUNCIL MEMBERS Brent N. Ventura
SIGNED:
4-4-
KAY-0F THE TO �OF LOS AT S
ATTEST:
C�OFTHE OF LQ GATOS
Town of Los Gatos
MANAGEMENT PERFORMANCE AND COMPENSATION PLAN
BACKGROUND
The Town management performance and compensation plan emphasizes performance
demands while at the same time providing adequate compensatory incentives.
This plan is based upon the assumptions that:
1. Managers are not extended technicians but rather are individuals with the
unique responsibility for analyzing and synthesizing the input of
subordinates, peers, and the public in making decisions regarding the
allocation of human and financial resources for which they should be held
accountable; and
2. A compensation plan for management should not gust provide a financial gain
for employees but should also create direct benefits to the Town organization
and the public it serves.
The overall objective of the plan is to establish regularly utilized, practical,
and uniform performance measurement and related compensation procedures. It is
anticipated that adoption and implementation of this plan will solidify
management from a labor relations and morale standpoint and will increase
productivity in response to Town Council policy decisions, administrative
direction, and resident needs. The processes by which compensation will be set
will permit the Town to attract and retain competent personnel and to encourage
their professional development. Individual salaries and the supplemental
benefits which form the compensation package will no longer be set based upon
historical precedent but upon clearly delineated, measurable standards of
performance understood by all levels of management.
PLAN ELEMENTS
Participants
Attached as Appendix A is a list of the positions designated as management. The
list includes department heads, division heads, and other professional and
administrative level personnel whose scope of responsibility have a major impact
upon the organization and the services it provides.
Sal ary
Sound personnel practices dictate that maximum salary levels should be based on
the following considerations:
1. Prevailing labor market conditions.
2. Ability of the Town to pay.
3. Local cost of living.
4. Organized employee group increases.
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5. Internal organizational relationships.
6. Each position has a maximum dollar value to the community.
Good management practice dictates that individual management salaries should
relate the above considerations to predetermined levels of performance. The
salary setting process outlined in this section and the procedures recommended
for future utilization are intended to weight the above elements appropriately
and apply them systematically.
The Town Manager completed a survey of local municipal employers and has reviewed
various internal salary relationships among Town management personnel. On the
basis of this analysis, management salary levels are established for the FY
1985 -86 fiscal year as detailed in Appendix B.
1. Market salary surveys will be conducted periodically. Additionally, in
non - survey years, recommendations for adjustments to levels will be offered
in order to maintain the competitiveness of the Town's salary structure.
2. Funding for management salary increases will be requested by the Town Manager
in the proposed operating budget. These requests will take into
consideration the Town's ability to pay, prevailing wage concept, and
increases provided organized employees. The sum requested will be sufficient
to provide both prevailing wage maintenance adjustments and incentive
increases to deserving employees. However, all funds will be allocated based
upon the outcome of performance evaluations (see sample, Appendix C).
3. After adoption of the Town's operating budget, management salary funds --
less ten percent (10 %) - will be allocated to departments on the basis of
the relation each department's management payroll has to total management
payroll. Department heads will allocate these appropriations to subordinates
based upon the results of the completed performance evaluation process
described in the Evaluation element of the program. Increases will be
granted to department heads by the Town Manager on the same basis. The Town
Manager will review all completed performance evaluations and will have final
authority to approve all salary changes for management employees.
4. The ten percent (10 %) of management salary funds not allocated to departments
will be reserved for use by the Town Manager. The Manager may utilize these
funds and funds remaining after performance increases are allocated by
department heads to recognize exemplary performance as defined in the
Evaluation element. Exemplary performance increases will provided on a
one -time, lump -sum basis, and shall not be considered part of an employee's
base pay.
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S. An employee's actual salary may not exceed the maximum unless an exemplary
performance increase has been granted. An employee's actual salary may fall
anywhere below the maximum.
Supplemental Benefits
Benefits should be considered part of compensation paid. As such, the benefits
provided by the Town should be competitive with the market. In order to determine
the position of the Town's benefit package in relation to the "competition,"
benefit information was requested from the agencies participating in the salary
survey.
In addition to being competitive, a benefit program should be feasible from an
administrative standpoint and should be integrated fully into the compensation and
performance plan. The benefit package should be complementary and supportive and
viewed in perspective with the Town's ability to pay, the program provided
organized employees, and internal classification relationships.
The full implementation of the total compensation and performance concepts
outlined in this plan will require that changes be made in the methodology by
which supplemental benefits are allocated. The actual dollar amount (up to the
maximum specified for each grouping) granted to each individual will be supported
by his /her performance evaluation. Each individual may then use his /her benefit
grant to "purchase" those items which best suit his /her personal needs. A list of
dollar cost items will be developed by staff and made available to employees. The
list will contain a variety of benefits limited by administrative load and market
availability. Appendix D lists the current benefit schedule and benefit selection
guidelines.
Evaluation
The key element of this plan is the performance evaluation system. The
effectiveness of the system is dependent upon the planning that supports it and
may be measured by the quality of actual employee performance. The primary
purpose of the appraisal program is to motivate each employee to work at his /her
capacity. A secondary purpose is to provide a basis for recognizing personnel in
accordance with their individual performance and to identify those employees whose
work is not in keeping with appropriate standards. In the absence of a uniform
and practical methodology for evaluating performance, the overall goals and
objectives of the organization may not be translated into action plans,
compensation adjustments may be made on the basis of intuition or haphazard
observation, and employees may not be held accountable for important decisions.
As conceived in this report, the Town's management appraisal program is designed
as a communications process which not only permits but requires inputs and
feedback from all organizational levels in establishing goals, objectives, work
responsibilities and standards of performance measurement. The methods and
techniques proposed are intended to be applied uniformly in all departments and
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divisions. The program is flexible enough to be adaptable to the philosophy,
characteristics and operational methods of various organizational units.
Adoption and implementation of this plan element will establish a more accurate,
objective, and reliable method of measuring performance that will benefit the
Town and develop the individual manager.
The process of establishing performance standards begins with the adoption by the
Town Council of the budget. The budget represents the resources allocated to
attain certain organizational objectives. from the objectives set in the budget,
the manager responsible for each organizational segment (department division,
section) will develop a management plan which will indicate each segment's goals,
objectives, and work program as they tie into the goals, objectives, and work
programs of the next highest organizational segment. All performance targets
will contain milestone dates for interim measurement purposes. It is anticipated
that factors outside the individual employee's control may occur affecting due
dates. These conditions will be discussed and, at the direction of the
evaluator, dates may be modified at full point value. All contract projects
completed in the assigned year will receive a numerical score depending on final
completion date and alternative value of the project.
The performance targets (management performance contract) for an individual will
consist of his /her specific work responsibilities to be accomplished during the
fiscal year. Each performance target will be accompanied by performance
measurements (quantitative or qualitative). This approach assumes that extensive
dialogue will occur between an individual and his /her immediate superior in the
establishment of work programs. It also assumes that there will be a continuing
dialogue regarding work programs throughout the term of the contract. Contracts
may be changed at any time with mutual consent of the parties to the contract.
Performance targets will be defined in quantifiable terms where possible.
,However, it is recognized that not all programs can be fully evaluated in
quantifiable terms. It is also recognized that many programs are influenced by
uncontrollable external forces. Therefore, performance contracts may include a
performance target entitled "Program Evaluation" with a value not to exceed 25%
of the point value assigned to the program. The point score awarded this
performance target will be based on an overall program evaluation considering any
factors not measured by specific performance targets, and the response of the
program to uncontrollable external forces. The performance target may also be
used to recognize negative performance.
It should be noted that each objective and activity will be weighted by assigning
a point value to it. Performance values are derived by multiplying point values
by the percentage of results achieved. Completion of all work programs will
result in the attainment of all objectives and a performance value score of 100.
Incomplete accomplishment of work programs will result in a score of less than
100.
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For compensation purposes, the performance score is expressed as a percentage and
multiplied by the maximum percentage salary increase available to management
employees. An employee must achieve a score of at least 70 points in order to be
eligible for a performance increase (see example, Appendix C).
An employee may have up to ten (10) points added to his /her score based upon
elements not contained in the formal management performance contract. These
points may be granted by a supervisor based upon items such as the development
and implementation of new programs; efficient and effective operation of on -going
programs; completion of special projects; or accomplishments in areas of concern,
such as conservation, interdepartmental communications, improved community
relations, staff development, and quality of written or oral communications
addressed to superiors or the Town Council. Points added in this manner must be
accompanied by written documentation as to the accomplishment or achievement and
the basis for establishing the relative value. An employee may become eligible
for an exemplary performance award by achieving a total performance score of 100
or more. The performance of such employees will be reviewed by the Town Manager,
who may grant exemplary performance increases in the manner and up to the maximum
dollar amount provided as discussed previously. All other performance appraisals
will also be reviewed by the Town Manager (see sample, Appendix C).
Draft management contracts shall be submitted to the appropriate manager no later
than July 15 of each year. Contracts will be finalized no later than August 1 of
each year.
Management performance shall be formally evaluated on a quarterly basis. The
Manager or superior have a continuing responsibility throughout the year to
review efforts vis -a -vis work program milestones and to take actions necessary to
l ensure performance targets are achieved. Any modifications which result from
quarterly review will be considered by higher levels of management in accordance
with the establishment of the employee's initial goals and objectives. It is
anticipated that assumptions outside the individual employee's control under
which goals and objectives are established may be altered. Through periodic
performance review sessions (which may occur throughout the year), these
conditions should be discussed and performance plans modified to include
additions, deletions, and date changes with mutual consent of the employee and
his /her immediate supervisor. The importance of the appraisal process cannot be
underestimated. It is recognized that competent managers will regard this
process as an ongoing responsibility and participate with subordinate managers on
programming objectives, planning work programs, establishing and revising
measurement standards as appropriate, and counseling and training newly appointed
managers. The actual performance evaluation and allocation of compensation are
the culmination of the entire evaluation program. Completed evaluations will be -
retained
as part of an employee's personnel history.
SALARY ADJUSTMENTS FOR NEW HIRES
Management employees hired during the fiscal year shall be eligible for salary
increases on the basis of the number of months employed by the Town during the
fiscal year. The employee will be eligible for 1/12 of the total salary increase
available for each full calendar month of employment with the Town in his /her
management position. For instance, an employee hired on January 1 of the fiscal
year would be eligible for 6/12 of the salary increase available.
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SALARY ADJUSTMENTS FOR MANAGEMENT EMPLOYEES ON EXTENDED LEAVE.
An incumbent management employee who is on extended leave from his /her position
due to sickness, disability, or employee - initiated leave without pay status shall
receive no salary adjustment until returning to full -time work. .Salary
adjustments will become effective the first of the calendar month following the
employee's return to work. Performance salary adjustments shall be factored in
such a way that 1/12 of the amount available for salary increase shall be
deducted from the total amount available for each full calendar month that the
employee is absent from the job because of unauthorized leave, suspension,
sickness, disability, or employee- initiated leave without pay.
Vacation or sick leave may not be used intermittently during an extended leave to
interrupt a determination that an employee is absent for any full calendar month
period. Vacation or sick leave may be used to assure continuation of payroll
status in order to retain insurance benefits under the cafeteria benefits
program.
Employees who are absent from work due to a work - related disability shall not be
eligible for any salary adjustment until the employee returns to the job
full -time. Salary adjustments will become effective the first of the calendar
month following the employee's return to work. Performance salary adjustments
shall not be factored by the 1 /12th rule described above for any determination of
salary -a justments.
LEAVE ACCRUALS
Management employees shall not accrue vacation or sick leave during any period of
unauthorized leave, suspension, or leave without pay.
EXEMPLARY PERFORMANCE AWARDS
As provided in the plan, these awards are discretionary on the part of the Town
Manager. Awards are available only for employees scoring 100 points or more on
their individual performance evaluations. Awards may be made on either a
percentage or flat dollar amount basis each year so long as all awards during any
one year shall be either on a percentage basis or a flat dollar amount.
CONTINUATION OF BENEFITS
Management employees shall continue to receive cafeteria fringe benefits so long
as those employees remain on the Town payroll.
PLAN REVIEW
In order to assure the continued relevance of the Management Compensation Plan to
both the Town and its management personnel, the Plan shall be reviewed in its
entirety annually or as necessary throughout the year. That review shall include
discussions with affected management personnel.
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MANAGEMENT POSITIONS
Assistant to the Town Librarian
Assistant Town Manager
Assistant Town Engineer
Building Official
Community Services Program Manager
Director of Community Services
Director of Parks, Forestry, and Maintenance Services
Finance Administrator
Maintenance Superintendent
Parking Program Manager
Parks and Forestry Superintendent
Parks Maintenance Supervisor
Planning Director
Police Chief
Police Commander II
Police Commander I
Public Works Maintenance Supervisor
Senior Planner
Town Engineer
Town Librarian
Appendix A
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Appendix B
MANAGEMENT SALARY LEVELS
FY 1986-87
Classification
Maximum
Police Chief .........
$57,603
Director of Parks, Forestry,
and Maintenance Services .........
$53,172
Police Commander II .......
$52,064
Assistant Town Manager
Planning Director .......
$50,403
Town Engineer
Finance Administrator
Police Commander I .........
$45,972
Associate Civil Engineer
Building Official
.........
$43,757
Senior Planner
Town Librarian
Maintenance Superintendent
Parking Program Manager .........
$42,095
Parks and Forestry Superintendent
Community Services Program Manager
Park Maintenance Supervisor .........
$38,218
Public Works Maintenance Supervisor
Rev. 7/11/86
Page 9 Appendix C
SAMPLE APPLICATION OF SALARY POLICIES
Town Manager's Budget Request for Management Salaries
- a total of 10% -
Proposed Range Adjustment - total of 5%
Current Employee Salary: $30,000
Current Employee Maximum Salary Level: $35,000
Proposed Employee Maximum Salary Level: $36,750
Alternate A
Evaluation Points: 65 - no salary increase
Alternate B
Evaluation Points: 90
Salary increase based on 90% of 10% = 9%
$30,000 x 1.09% _ $32,700
Alternate C
Evaluation Points: 105
Salary increase based on 100% of 10% = 10.0%
$30,000 x 1.10% + $33,000
Appendix D
MANAGEMENT SUPPLEMENTAL BENEFITS
FY 1985-86
Vacation Cafeteria
Tears of Accrual Sick Life Benefits
ITEM Service (Days) Leave Insurance Allocation
Assistant Town Manager
Building Official
Director of Community
Services
Planning Director
Police Chief
Town Encineer
Director of Parks,
Forestry, and
Maintenance Services
Town Librarian
GROUP II
Associate Civil Engr.
Maintenance Supt.
Parking Program Mgr.
Parks Maint. Supr.
Parks/Forestry Supt.
Police Captain
Public Works Maint.
Supervisor
Police Lieutenant
Senior Planner
0-4 15 days $4,420
5-10 20 days per year
10+ 25 days
0-5 15 days
6-14 20 days $3,920
per year
15+ 25 days
All management employees must take at least ten (10) days of vacation
per calendar year. (Employees are exempt from this provision until their
second calendar year of employment with the Town.)
2. An employee who has a vacation balance after meeting the requirements of
#1 above may request to be paid in full for up to ten (10) days' accrued
vacation in any one calendar year. Annual cash-outs will be available
during December of each calendar year.
3. Management en ' ployees may accrue no more than fifty (50) days of vacation.
Accruals in excess of this maximum will be deducted at the end of each pay
period when the maximum is exceeded. Exceptions to the accrual limit will
only be granted if the Town cancels vacation(s) or the employee cancels
vacation due to an emergency or disability, or to meet commitments man-
dated by the Town. Such exceptions must be approved by the Town Manager.
_10-
Rev. 6/17/85
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PERSONAL LEAVE
Each management employee will be eligible for a maximum of 40 hours personal
leave each calendar year. Personal leave is to be taken at employee discretion.
Personal leave may not be carried over from year to year, nor may it be cashed
out.
SICK LEAVE CASH -OUT
Beginning with the twelve -month period from 12/1/81 to 11/30/82, and annually
thereafter, management employees may at their individual discretion cash -out
accumulated sick leave as follows:
Sick Leave Use Eligible for
12/1 to 11/30 Cash -Out
0 -12 hrs 6 days at 75% value
13 -24 hrs 6 days at 2/3 value
25 -32 hrs 6 days at 50% value
In order to be eligible for the annual sick leave cash -out program, an employee
must have a sick leave accrual balance of at least 15 days on November 30 of the
year cash -out is taken.
CAR ALLOWANCE
4 All management personnel shall receive a car allowance of 5200 /month unless an
incumbent is not required to possess a valid California driver's license as a
condition of employment.
If exceptional work circumstances warrant, the Town Manager may assign a Town
vehicle to a management employee for official use only. Town vehicles so
assigned may be used by employees ation to and from home /work;
vehicles may not be used for any personal business whatsoever.
ADMINISTRATIVE LEAVE
Upon approval of his /her department head (or by the Town Manager in the case of
department heads), management employees are eligible for up to 40 hours
administrative leave with pay per calendar year. This leave is not cumulative from
year to year; nor may this leave be cashed out.
Administrative leave may be granted in recognition of extraordinary work hours by
management personnel. Specific examples include unanticipated emergency situations,
extraordinary Council or Commission meetings, and extensive weekend work.
DISABILITY INSURANCE
Management employees shall receive Town -paid disability insurance providing
disability benefits equal to sixty percent (60 %) of salary subject to a thirty (30)
day waiting period for insurance benefits.
r931fflv
Medical Coverage
Single Double Family
KAISER $ 927.24 $1842.48 $2615.76
BLUE CROSS 1509.00 3018.00 3795.72
LIFEGUARD 1020.00 2031.60 2809.20
Dental Program
TOWN SELF-INSURANCE PROGRAM ($360)
Additional Life Insurance
Deferred Compensation
Uniform Allowance
Medical Examination
Local Memberships
Management Development
TOTAL:
Note: Medical Examination allocations may be used for eye examination and the
purchase of prescription eyewear.
Local Membership allocations may be used for reimbursement of membership costs
for "in-Town" facilities and organizations only.
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1. For all current employees, benefit selections must be made prior to the
beginning of each fiscal year. No changes to selected dollar ($) allocations
may be made after that 'time. Dependent status changes may be made during the
fiscal year. However, changes increasing contribution rates must be borne by
employees through payroll deductions. No refunds or reallocations of benefit
dollars may be made for reductions in dependent coverages or insurance rate
changes. Insurance rate increases beyond those already incorporated in the
rates listed will be borne by the Town.
2. All benefits selected from the cafeteria plan must be paid for in full from
the maximum benefit provided except when the maximum is insufficient to cover
all insurance coverages selected. In such case, the premium amount not
funded by the Town-provided benefit shall be paid through an employee
deduction applied against the medical premiums.
3. Funding for Deferred Compensation may only be provided after all other
benefits selected by the employee are paid for in full from the maximum
benefit provided.
4. No unexpended dollar amounts associated with selected benefits may be
disbursed to a terminating employee.
5. All benefit selections are subject to State and Federal rules, regulations,
and laws regarding employee benfits and tax status. No guarantee is made
regarding the tax-exempt status of any and all benefits presented or
selected.
6. Management employees will be eligible for benefits on the first day of the
month following their hire date. They will be eligible for a total benefit
calculated as follows:
Number of Months Left in Fiscal Year divided by 12 multiplied by Approp.
Group Benefit = Total Benefit
7. In order to have claims for management development approved for payment, the
courses and/or seminars taken by the employee should be approved as
job-related by the department head (Town Manager, for the department head)
prior to individual's enrollment. Such approval should be granted in writing
and shall include a brief description of the course or seminar content and an
explanation of job relatedness. After successful completion of the course or
seminar, the individual employee shall submit to his/her department head a
claim form detailing the expenses incurred up to the maximum reimbursement
permitted.
Claims for medical examination reimbursement shall be signed by the
individual employee and the department head. Requests for approval of claims
for reimbursement for medical examinations shall show the total charges for
medical examination up to the maximum reimbursement allowable. The claim
form shall be signed by the individual employee and shall be accompanied by
an invoice from the physician.
PERSO:MGTCOMOPLAN