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HomeMy WebLinkAbout2013-01-29; City Council; Resolution 2013-0311 RESOLUTION NO. 2013-031 19 20 21 22 23 24 2 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, SETTING COMPENSATION ^ FOR INTERIM CITY ATTORNEY ASSIGMENT 4 5 WHEREAS, the City Attorney has retired effective December 30, 2012; and 6 WHEREAS, Assistant City Attorney Jane Mobaldi has been has been appointed 7 interim City Attorney until the appointed City Attorney begins work at the City; and ^ WHEREAS, the Interim City Attorney's compensation will be $2,000 for the interim period; and WHEREAS, an additional maximum 6.19 percent ofthe Assistant City Attorney's current annual salary may be authorized by the City Council based on performance in accordance with Council Administrative Order 66. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of 9 10 11 12 13 14 j3 Carlsbad, California, as follows: 16 1. That the above recitations are true and correct. 1^ 2. That the interim City Attorney will receive $2,000 for the interim period. An 18 additional maximum 6.19 percent of her current annual salary may be authorized by the City Council based on performance in accordance with Council Administrative Order 66 (attached as Exhibit 2). The City Council will make a final determination as compensation with this range based on performance. // // 25 // 26 // 27 // 28 2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of Carlsbad on the 29*^ day of January 2013, by the following vote to wit: AYES: NOES: Council Members Hall, Packard, Wood, Blackburn, Douglas. None. ABSENT: None. MATT HALL, Mayor ATTEST: stant City Clerk (SEAL) .X\V»lllf/, > ry.-- ..oc. ••.H»7 < CITY OF CARLSBAD 1200 Carlsbad Village Drive Carlsbad, CA 92008 ADMINISTRATIVE ORDER NO. 66 TO: ALL DEPARTMENTS FROM: City Manager SUBJECT: PERFORMANCE MANAGEMENT AND COMPENSATION SYSTEM FOR MANAGEMENT EMPLOYEES PURPOSE; To support City Council goals by establishing a program to manage the job performance and compensation of City management level employees. POLICY: The delivery of top-quality public services is one ofthe key goals for the City of Carlsbad. In order for employees to meet this goal and to perfonn their jobs effectively, a system has been designed to provide both positive and negative feedback and to reward employees for their contributions. The Performance Management and Compensation System ensures that management employees have the necessary knowledge, skills and abihties to excel at their jobs, that they consistently demonstrate these competencies on the job, that they have contributed to the achievement of significant and measurable goals, and that they are fairly compensated for doing so. BACKGROUND: The City Council delegated its authority to the City Manager to administer a Performance Management and Compensation System for management employees, and this program was fully implemented during the 1998/99 fiscal year. Guidelines for administering this program have been summarized in the Management Compensation Plan and further defined in the Performance Management and Compensation Handbook. The purpose of this Administrative Order is to provide a full description of the program and guidelines for its administration. The Performance Management and Compensation System is comprised of two major components: 4 Performance management — emphasizing an employee development approach to performance appraisal, including: • Aligning individual contributions with organizational direction • Developing and demonstrating competencies on the job, and • Measuring achievement of individual goals which are linked to departmental and City goals Compensation — ensuring our pay practices are competitive in our labor markets and effective in motivating and rewarding performance. Our compensation program includes: • A market-based pay structure • Base pay that rewards development and demonstration of competencies in the job • Incentive pay that rewards measurable achievement of specific goals The System's two parts work in tandem to reward employee performance based on demonstrated competencies and achievement of predetermined goals. The following illustrates these two key components and how they work together: Performance Management Competencies and Goal Acliievements Base Pay + ^^^^^centive Pay Eligibility for Base Pay Increase Eligibility for One-time Cash Payment Compensation *A11 pay (base and incentive) is PERS eligible. J Performance Management The two major components of perfonnance management are: • the development and demonstration of specific competencies, and • the accomplishment of goals. The Perfonnance Management program is based on the concept of continuous coaching/feedback between the reviewer and the employee. In'addition to this ongoing dialogue, each performance management cycle includes three interrelated phases: Performance Planning, Performance Update and Performance Review. The Performance Management and Compensation System covers a 12-month period that coincides with the City's fiscal year. Competencies Competencies are the knowledge, skills, abilities and behaviors expected of City of Carlsbad employees. • Core competencies refer to knowledge, skills, abilities and behaviors expected of all employees to reflect the City's mission, vision and goals. The Performance Management program requkes employees to demonstrate five core competencies. • In addition, management employees may be assessed on up to six functional competencies. Functional competencies refer to knowledge, skills, abilities and behaviors expected in a specific job and, therefore, may vary fi-om department to department and job to job. Goals Goals describe how the individual's contribution links and aligns with his or her department's goals and objectives and, ultimately, with those of the City Council. Goals are set at the beginning of the perfonnance management cycle'and employees are evaluated at the end ofthe cycle as to how well they accomplished their goals. Reviewers and employees jointly develop two to five significant, strategic goals that link their contributions to the success of their department and/or to City Council goals and objectives. Goal achievements are defined at two levels: • Threshold is the minimum perfonnance level that must be achieved. • Target is the desired perfonnance level needed to support attainment of organizational goals. I i Compensation Linking Pay and Performance The Compensation Program links directly to the Performance Management Program. Competencies and goals directly affect both base and incentive pay. Employees can eam: • Increases to base pay for demonstrating competencies • Incentive awards, or one-time cash payments, for a^jhieving pre-determined goals. An employee's performance, as evaluated against the selected competencies, is rewarded by a base pay adjustment. Base pay adjustments are ongoing and are added to the employee's annual salary. An employee's performance, as evaluated against the achievement of annual goals, is rewarded by an incentive award. Incentive payouts are one-time cash payments to an employee. They do not recur automatically fi"om year to year. Both the base pay increases and the incentive payments comprise the cash compensation available to management employees and are rep'ortable as compensation to CalPERS. Base pay and incentive pay awards for managers hired or promoted into management during the review cycle will be prorated according to the schedule outlined in Attachment A. Goal Achievement Rating At least Threshold (1 on all goals) Target (Average of 1.6 or higher) Overall Competency Rating Cash Compensation At least Achieves Expectations (1.8 or above) Base Pay increase At least Achieves Expectations (2.0 or above) Incentive Pay Base Pay The purpose of base pay is to reward demonstrated competency. Employees who demonstrate competencies and whose salary is below or within market range receive a base pay increase that is added to base pay. No employee will receive a salary adjustment that puts his or her base pay above the salary range maximum for his/her assigned salary range. Based on results of their performance review, employees are eligible for a base pay increase if they: • Receive an average overall competency rating of "Achieves Expectations," and • Achieve at least Threshold performance on each of their goals. How the Base Pay Program is Designed The base pay component of the Compensation Program is designed to be competitive with the job market. To ensure competitive pay levels, the City conducts an in-depth analysis ofthe market to determine how our base pay levels compare with eleven comparable cities and public agencies in San Diego County. To conduct the analysis, the City performs an extensive review to compare job content, job classification and salary information between City of Carlsbad classifications and appropriate classifications in the comparator group. Classifications are considered benchmarks if there is a 70% to 80% match between the competencies and duties required for jobs at the City ofCarlsbad and those for the comparator group. We collect data for more than 75% of the management jobs in the City of Carlsbad. . The comparator group includes the following pubhc agencies in San Diego County: • City of Chula Vista • City of National City • City of El Cajon • City of Oceanside • City of Encinitas • City of Poway • City of Escondido • City of Santee • Helix Water District • City of Vista • City of La Mesa Using the comparator group of 11 pubhc entities, the Human Resources Department matches City of Carlsbad jobs to similar jobs in the comparator group. Pay data is collected for all benchmark jobs, and a salary structure is developed using this competitive pay data. Some jobs cannot be matched to the external market. These jobs (called non-benchmarks) are assigned to the base pay structure based on comparison to the benchmark jobs to ensure that jobs within a pay grade require a comparable level of skills, effort and responsibility. The City Council approves any changes to the base pay structure. In keeping with the City Council's philosophy to pay at an elevated position in the market, the market range is designed to match the 75* percentile of the comparator group. This figure is statistically derived by determining the median actual salary within the survey market, and calculating the actual 75* percentile to set the midpoint ofthe market range. Highest Comparator Rate Market Range 75th percentile - Calculated using actual distribution of salaries Median Lowest Comparator Rate Base Pay Structure The key element of the employee base pay program is the base pay stmcture. Covering all management jobs, the base pay structure reflects competitive pay levels for jobs assigned to each pay grade and provides the basis for equitable pay decisions. Here's how the base pay structure works: • The structure includes eight pay grades, from grade 1 to grade 8. • There is a 10% to 20% difference between the market range of each grade. • A pay range is associated with each grade. Each range has a minimum, market range, and maximum. The market range represents the range of competitive base pay rates for jobs assigned to the grade. • There is a 38% to 45% difference between the minimum and the maximum of each pay range, which allows managers to recognize different levels of competency and contribution within a given range. • The ranges are wider at the higher grades to reflect the broader range of competencies represented in jobs in those grades. • More experienced employees are paid in the market range. • Newly hired or employees with less experience are paid below the market range. Pay Grade Range Maximum M arket range Below market Range Minimum How Base Pay Increases Are Determined Base pay increases are determined by the employee's individual performance and the location ofthe employee's base pay in the range. An employee's salary may not exceed the maximum amount assigned to the pay grade that includes the employee's job. Our goal is to move employee pay levels to the market range (competitive pay level for jobs in the grade) over time. Employees who are paid below the market range may be ehgible to receive a higher increase to bring pay for their position and performance closer to the market for their job. After all performance appraisals have been completed, each employee's annual increase is determined using the following matrix, which takes into consideration two factors: performance and position in range. This matrix will change from year to year. The amount of money used to fund the base pay matrix is set by the City Council on an annual basis and is based on the City's economics, the survey market data, demographics, and other factors as determined by the City Council. Base Pay Matrix Budget Set by Council Position in Range Performance Rating Below Market Range Within Market Range At Market Maximum Exceeds Expectations A B 0% Achieves Expectations C D 0% Needs Improvement 0% 0% 0% The City Council determines the budget amount for management base pay increases for each fiscal year. Base pay increase percentages in the matrix will be detennined after all performance ratings have been determined. As shown above, those employees receiving a **Needs Improvement" performance rating or whose base pay is at the market maximum are not eligible for a base pay increase. After all performance ratings have been determined, the dollar or percentage amount approved by Council will be spread appropriately to employees whose perfonnance ratings and position in the range assigns them to cells A, B, C, and D in the above Base Pay Matrix. Because the intent is to move high-performing employees who are paid below market range into the market range as quickly as possible, the percentage granted to employees in cell A hkely will be greater than the percentage granted to employees in cell B. Similarly, increases granted to employees rated in cell C likely will be higher than the percentage granted to employees in cell D. Base pay increases are awarded once a year at the conclusion ofthe performance review cycle, which occurs after the end ofthe fiscal year. Incentive Pay Incentive Pay is offered in addition to Base Pay with the objectives to: • Recognize and reward individual high performance. • Recognize and reward teamwork toward achieving strategic, operational, departmental and program goals. All management employees are eligible for Incentive Pay if they: • Receive an "Achieves Expectations" competency rating of 2.0 or higher on their performance review, and • Achieve an average rating on goals of Target (1.6 or higher). 8 Calculating the Incentive Pay Award Incentive pay will be a one-time cash payment and will be calculated as a percentage of annual base pay. Potential payouts for goal achievement will be set annually by the City Council at the beginning of each perfomiance cycle. Incentive pay is considered reportable compensation to CalPERS. Payment Timing Incentive pay awards are paid once a year, as soon as possible after the end ofthe fiscal year. Employees must be employed with the City on June 30 ofthe fiscal year in which the incentive is eamed to be ehgible for an award. Federal and state income taxes and other applicable taxes will be deducted fi-om incentive payments. Employees who tenninate employment after June 30 will be ehgible for a retroactive base pay increase for the time period between July 1 and their termination date, providing that the City Council approves base pay increases that are retroactive to July 1. ACTION This Administrative Order shall become effective immediately. Date: CV^w^ Cr. ^ OPFi^ RAYM City Manager Attachment \1 Attachment A City of Carlsbad Eligibility for Mid-Cycle New Hires/Promotions If you were newly hired as a management en^loyee on: Then you are eligible for the following percentages of incentive pay and base pay increases approved by the City Coimcil: Quarter/Month of Hire Incentive Pav' Base Pav^ QI July 75% 92% August 75% 83% September 75% 75% Q2 October 50% 67% November 50% 58% December 50% 50% Q3 January 0% 42% February 0% 33% March 0% 25% Q4 April 0% 0% May 0% 0% June 0% 0% If you were promoted from a non- management to a management position on: Then you are eligible for the following percentages of incentive pay and base pay increases approved by the City Council: Quarter/Month of Hire Incentive Pav' Base Pav^ QI July 75% 100% August 75% 100% September 75% 100% Q2 October 50% 100% November 50% 100% December 50% 100% Q3 January 0% 100% Februaiy 0% 100% March 0% 100% Q4 April 0% 0% May 0% 0% June 0% 0% 'Actual incentive pay award depends on eligibility percentage, approved incentive pay award, individual base pay, and individual performance ratings. ^Actual base pay increase depends on the base pay eligibility percentage, the approved salary range, the base pay matrix, individual base pay, and individu^ performance ratings.