1988-142-Amending Management Performances And Compensation Plan For The Town Of Los Gatos (FY 1987-88/88-89)RESOLUTION NO. 1988 -142
RESOLUTION AMENDING MANAGEMENT PERFORMANCE
AND COMPENSATION PLAN FOR THE TOWN OF LOS GATOS
(FY 1987- 88/88 -89)
BE IT RESOLVED, by the Town Council of the Town of Los Gatos, that the
Management and Compensation Plan for the Town for the Fiscal Years 1987 -88 and
1988 -89 (a copy of which is attached hereto) is hereby approved, as amended.
PASSED AND ADOPTED at a regular meeting of the Town Council of the Town
of Los Gatos, California, held on the 5th day of July 1988 by
the following vote:
AYES: COUNCIL MEMBERS Joanne Benjamin, Thomas J. Ferrito,
Robert L. Hamilton & Brent N. Ventura
NOES: COUNCIL MEMBERS None
ABSTAIN: COUNCIL MEMBERS
ABSENT: COUNCIL MEMBERS Eric D. Carlson
SIGNED: Azl wtt
VICE,,rAYOR OF THE TOWN 0 OS GATOS
ATTEST:
CLERK HE TOWN OF LOS GAT
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 provides 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 just 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 intended that adoption and implementation of this plan will
solidify management from a labor relations and morale standpoint and will
facilitate increased productivity in response to Town Council policy decisions,
administrative direction, and resident needs. The processes by which
compensation is set will help to attract and retain competent personnel and to
encourage their professional development. Individual salaries and the
supplemental benefits which form the compensation package are not set based
upon historical precedent but upon 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.
Salary
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.
-1-
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.
At least every two years, the Town Manager's office will complete a survey of
local & similar municipal employers and review various internal salary
relationships among Town management personnel. On the basis of this analysis,
management salary ranges will be established for the fiscal year (see Appendix
B). See Appendix C for applicable cities.
1. Additionally, in non - survey years, recommendations for adjustments to
levels may 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.
3. After adoption of the Town's operating budget, management compensation
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. An amount equal to two percent (2%) of management compensation will be
budgeted and 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.
-2-
5. All management employees have the option to assume payment of their own
PERS contribution at the beginning and during the last one year of their
employment with the Town. The monies previously paid to PERS by the Town
to cover the employee's contribution will be added to the employee's
salary. An employee who does opt for this conversion and proceeds to pay
the employee's contribution shall not be forced to retire within one year
nor shall the employees have the option to revert back to Town -paid
employee contribution.
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 is also included in the survey of other
municipalities.
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 an evaluation is feedback between the Manager, Department Heads and
other levels of the organization. Another purpose of the appraisal program is
to motivate each employee to work at his /her capacity and to provide a basis
for recognizing personnel in accordance with their individual performance and
to identify where work could be improved as it does not meet expected
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.
-3-
As conceived in this report, the Town's management appraisal program is
designed as a communications process which not only permits but requires input
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
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 and points may be modified.
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
uncontrolable 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 uncontrolable external forces. The performance target may also
be used to recognize where negative performance can be improved.
-4-
It should be noted that each objective and activity will be weighed 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.
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, inter - departmental 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. A list of special projects will be identified
annually by the Manager with the adoption of the plans for which the individual
may receive points on the management contract or be considered for an exemplary
performance award.
For compensation purposes, the total performance score is expressed as a
percentage and multiplied by the maximum percentage salary increase available
to management employees.
The minimum salary increase available to Management employees will be that
available to bargaining unit employees.
Salary ranges for Management personnel will be reviewed annually by
classification and will be adjusted by either the % available to the Town's
bargaining units or adjusted to reflect the results of the market survey (see
description of market survey) whichever is greater. The top of the range is
considered the control point. An individual's pay can exceed the control
point, but any increase above the control point is subject to re- evaluation
annually.
An individual's compensation adjustment will be based on performance as
demonstrated by the review of the Management Plan and the % accomplished. An
individual may receive no increase or any amount up to the total $'s available
for annual increases, subject to a maximum of 10 %. As indicated above, the top
of the salary range for the classification will be adjusted at a minimum by
that percentage granted to the bargaining unit, but may be adjusted higher
based on the Management compensation survey. No individual, however, is
guaranteed to receive the same increase. All increases will be based on
performance.
-5-
To determine the total available for Management increases, the following will
occur:
Market survey of comparable positions in similar organizations. See
Attachment C for list of selected agencies.
Ranges by classification will then be adjusted to equal the market survey
average or the % granted to the Town's bargaining units, whichever is
greater.
The dollar difference between the current actual Management salaries paid
and the dollar change in Management ranges will be available for
Management compensation increases.
Management employees will then be eligible to receive an increase from 0
to 10% based on performance limited to the total dollars available for
Management personnel. Department heads will recommend increases for
their Management personnel to the Town Manager who will give final
approval to the increases on a Town -wide basis.
As indicated, individuals may exceed the top of their salary range
(control point) but will be re- evaluated annually and may subsequently be
paid an amount lower than the top of the range.
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. If a contract is not prepared and finalized no increase
will be considered.
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 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 under - estimated. 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. The evaluated employee may attach to the
evaluation form any written comments and these will become a part of the report
as well.
SALARY ADJUSTMENTS FOR NEW HIRES
Management employees hired during the fiscal year will complete a management
plan within 30 days of their appointment. The employee will then be eligible
for a salary increase based on what portion of the plan is completed by
year -end. The general duties will be pro -rated by the number of months of
employment with the Town. For example, an employee hired on January lst of the
fiscal year would be eligible for 6/12 of the points for general projects.
Specific projects completed will receive full- value.
Bonus points may be added to an individuals performance based on specific
documented accomplishments which could warrant up to the full increase
available under the management compensation plan.
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. The
employee will then be considered for an adjustment, when a complete year of
work has elapsed since their last evaluation. Time absent will rounded to the
closest month. Salary adjustments, if any, will become effective after the
employee has completed a full year since their last evaluation /increase.
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 subject to the provision above and will be considered for a salary
adjustment on their anniversary date.
LEAVE ACCRUALS
Management employees shall not accrue vacation or sick leave during any period
of unauthorized leave, suspension without pay, or leave without pay.
-7-
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 and
shall be considered one -time, non - recurring awards.
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.
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 12 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
12/1 to 11/30
0 -24
25 -32
33 -48
Eligible For
Cash -Out
6 days at 75% value
6 days at 2/3 value
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 22 days on November 30 of the
year cash -out is taken.
i
CAR ALLOWANCE
All management personnel shall receive a car allowance of at least $200 /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 for transportation 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.
CAFETERIA BENEFIT OPTIONS
3iCisi2a:%'
Amount
Medical Coverage
Single
Double
Family
Kaiser 1,096.92
2,181.84
2,931.96
Lifeguard 1,240.20
2,472.00
3,457.20
Blue Cross 4,155.36
8,310.84
9,243.72
Dental Program
TOWN SELF - INSURANCE PROGRAM ($360)
Additional Life Insurance
Deferred Compensation
Uniform Allowance
Medical Examination
Local Memberships
Management Development
TOTAL
Note: Medical examination allocations may be used for eye examination and the
purchase of prescription eyewear.
Local membership allocations may be used for reimbursement of membership
costs for "in- Town" facilities and organizations only.
See Appendix D for current allocation to Management supplemental benefits
-10-
1. For all current employees, benefit selections must be made prior to the
beginning of each fiscal year. No changes to selected dollar ($)
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 e paid for in full from the maximum
benefit provided.
4. No unexpended dollar amounts associated with selected benefits may e
disbursed to a terminating employee.
5. All benefit selections are subject to State and Federal rules, regulations,
and laws regarding employee benefits 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. All requests for reimbursement must be approved in advance on a Request for
Reimbursement Form. The employee may select to receive reimbursement
before or after completion of the course. All expenses must be documented
however, with a copy of the course description, flyer, registration packet,
etc. Receipts must also be submitted for any books.
Following completion of the course, documentation must be submitted to
reflect satisfactory completion, i.e., passing grade, or verification of
completion of the course. If reimbursement (or advance) is requested prior
to course completion, documentation of satisfactory course completion must
be submitted within 3 months of the completion of the course.
Documentation within the prescribed time frames is the responsibility of
the employee.
If documentation is not received, a deduction will occur on the paycheck to
cover the expenses advanced the employee will be notified in advance prior
to any deduction from the pay check. All other finance and paperwork
procedures must also be followed.
-11-
8. 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 from shall be signed by the individual employee and shall be
accompanied by an invoice from the physician.
BUDGE:TC 7/5 -1
DS:mp 07/01/88
-12-
APPENDIX A
MANAGEMENT POSITIONS
Assistant Town Manager
Associate Civil Engineer
Building Official
Community Services Manager
Director of Parks, Forestry, and Maintenance Services
Finance Administrator
Maintenance Superintendent
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
Library Director
Rev.07/01/88
-13-
Misc. Management
Police Chief
Planning Director
Director of PFM
Town Engineer
Assistant Town Manager
Commander II
Library Director
Building Official
Associate Civil Engineer
Sr. Planner
Finance Administrator
Parks /Forestry
Superintendent
Maintenance Superintendent
Community Services Manager
Commander I
PM Supervisor
PW Supervisor
APPENDIX B
MANAGEMENT SALARY LEVELS
(1)87 -88
(2)88 -89
$63,500
$66,000
53,428
60,000
$56,500
$58,760
53,428
58,760
53,428
58,76o
55,187
57,395
53,000
55,120
46,382
53,000
49,617
51,500
46,382
51,500
48,750
50,700
44,620
50,700
44,620
50,700
40,510
50,700
48,750
50,700
40,510
42,130
40,510
42,130
-14-
APPENDIX C
*Campbell
*Cupertino
*Gilroy
*Los Altos
Milpitas
*Morgan Hill
Mountain View
Palo Alto
San Jose
Santa Clara
*Saratoga
Sunnyvale
*Watsonville
*Eureka
*Menlo Park
Pleasant Hill
*San Carlos
*Marina
Martinez
Monterey
*Roseville
*Santa Cruz
Review to include:
- Average of all agencies listed
- Average of agencies starred
- Average of agencies starred in County
-15-
Appendix D
MANAGEMENT SUPPLEMENTAL BENEFITS
ITEM
GROUP I
Assistant Town Manager
Building Official
Planning Director
Police Chief
Town Engineer
Director of Parks,
Forestry, and
Maintenance Services
Library Director
Finance Administrator
191.16181= 0 4
Associate Civil Engr.
Maintenance Supt.
Parks Maint. Supr.
Parks /Forestry Supt.
Police Captain
Public Works Maint.
Supervisor
Police Commander I /II
Police Lieutenant
Senior Planner
Community Services Manager
•:: i•
Vacation Cafeteria
Years of Accrual Sick Life Benefits
Service (Days) Leave Insurance Allocation
0 -4 15 days $5,117
5 -10 20 days per year
10+ 25 days
0-5 15 days
6 -14 20 days $4,617
per year
15+ 25 days
1. 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.
BUDGE:TC 7/5 -1
-16-