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HomeMy WebLinkAboutMinutes 1984-05-14Mayor Mark N. Addiego Vice Mayor Richard A. Haffey Council: Emanuele N. Damonte Gus Nicolopulos Roberta Cerri Teglia AGENDA ADJOURNED REGULAR MEETING CALL TO ORDER ROLL CALL PLEDGE OF ALLEGIANCE: AGENDA REVIEW ORAL COMMUNICATIONS COMMUNITY FORUM 1. Study of the performance pay plan evaluation process. O0° MINUTES City Council City Council Conference Room May 14, 1984 ACTION TAKEN ADJOURNED REGULAR MEETING 5:25 p.m. Mayor Addiego presiding. Council present: Council absent: Nicolopulos, Teglia, Haffey and Addiego. Damonte. Councilman Damonte arrived at 5:26 p.m. Recited. AGENDA REVIEW City Manager Birkelo stated that he had nothing to add to the agenda. ORAL COMMUNICATIONS No one chose to speak. COMMUNITY FORUM No one chose to speak. Mr. George Sipel suggested some objec- tives for discussion: 1) To talk about the feedback from the questionnaire to see if everyone was in agreement and understood or if something additional was to be added; 2) What is involved in the performacne pay plan; 3) For Council to give him enough input to develop a policy statement or develop one here tonight; 4) To agree on a future process and what is to take place with a schedule to come back to Council. He stated that he had addressed the feedback in the memo to Council. He stated that the key things that came out of the comments, as he read it was: 1) The strong need to improve performance; 2) The need to stimulate good performance, especially on the part of some managers, and with respect to others leaves something to be desiredd; and it was felt that the salary plan can be used as a motivator or stimulator of performance or you would like to try to 5/14/84 Page 1 AGE.DA ACT O. TAKE, Study of the performance pay plan evaluation process - Continued. use it as a tool. He said there was less agreement on some other things, and agreement that some department heads are paid too much and others not enough. He stated that there was no specific eva- luation in effect, no formal system and the need for the Council to correct that by being involved in the process - he stated that there was a little less agreement on that than on other things. Councilman Damonte stated that this body was going to establish a tool by which to measure performance. Vice Mayor Haffey questioned when the initial evaluations would happen. Mr. Sipel stated that the question really before that was what kind of an eva- luation tool was the Council going to use. He stated that probably it would be six months, maybe sooner, because the issue was to give some standards by which to perform and then give them the time to do it; Council may wish to give some feedback based on what they know now. Councilman Damonte questioned what would be used as a benchmark to evaluate how the people are doing. Vice Mayor Haffey stated that the mana- gers would probably appreciate feedback both positive and negative. City Manager Bi rkelo stated that the management had asked for a performance evaluation plan for at least a year. Mr. Sipel stated that the issue is, how did the Council plan to use the infor- mation, do you plan to use it to reduce pay or to increase it. Mayor Addiego stated that it was a two edged sword that could swing both ways. Councilman Damonte stated that the Council had to establish for what reason they were using it, if it is for the eva- luation for improvement or if it's on the other si de that we are collecting data - in the event we have to let them go. He 5/Z4/84 Page 2 AGENDA ACTION TAKEN Study of the performance pay plan evaluation process. stated that it was the positive compared to the negative. Councilwoman Teglia stated that when this plan was together and the Council applied it she assumed that in the worst cases that all of the people will be given time to attempt to meet our goals - and they can do it or tell them straight out they can't and use the year to find another job. She stated that she wanted to see capable people in the positions and she felt there were capable people, but some were not performing; and it's not a matter of pay and Council needed to find out why. Discussion followed: if management was going to help Council to formulate the individual objectives; needed a give and take on the individual management goals, but not on the system of establishing goals. Mr. Sipel stated, Council was saying it would like to have some process to give them feedback on the performance plans initially and establish some objectives for the next year, criteria for salary increases and a process for evaluation to go on throughout the year. He stated that there are a number of things needed to happen for a program to be successful. He stated that Council was talking about the philosophy and the general policy; why are we doing this in the first place, and then get into some guidelines and procedures that can be written over the next month or two. He continued, then some training for the Council and City Manager on how to evaluate and then the implementation. He recommended that the Council follow his suggestions even though it seemed a long process and needed a lot of effort. He stated that if the Council was involved in actually evaluating employees, you could probably figure a couple of hours per year per employee and if you are all involved then it's times five if all are involved. He stated that if it a committee then you might want to try something along that line which is the process generally followed. 5/14/84 Page 3 AGENDA ACTION TAKEN Study of the performance pay plan evaluation process - Continued. He stated that some of the elements of the plan: 1) there is the pay itself, if a plan like this is going to work it has to be equitable to the external market and the pay cannot be that much higher or lower; and you can't say that if you have super performance you can make what everyone el se makes - there needs to be equitability inside the organization and the jobs are in line with each other. He stated that if a performance pay plan is going to work there has to be enough money in it for someone to be motivated. He continued, if Council said if you do well I will give you 2% or so - that will not motivate them - you need to say 3, 4 or 5%. He stated that they may be moti- vated from the system for the feedback and setting objectives and maybe because of their professionalism - there are a variety of reasons. Discussion followed on the definition of professionals; the fact that Council hires and fires department heads; the desirability of working in this City; previous recruitments for department heads in the City; salary being an indu- cement for attracting qualified depart- ment heads and methods of recruitment; a low turn over in department heads; defi- nition of self motivation; evaluation process being subjective or objective: references from former employers on performance of prospective department heads; assessment centers, etc. Mr. Sipel stated that if the performance evaluation process was established it had to be maintained to effect a status quo with standards. Discussion followed: that pay was a tem- porary incentive; that accountability was what was needed to make a difference and was more reliable than a pay raise; giving credit for a job well done, etc. Mr. Sipel stated that the evaluation pro- cess would allow the Council to get to a job well done because it was giving feed- back on their performance whereas now they only know about it when they screw up. He stated that performance was the second part of the plan and the hardest part of the plan to do. 5/14/84 Page 4 AGE"DA ACTION TAKE" Study of the performance pay plan eval uati on process. He stated that there was the opportunity to set up some risks by giving people a change to take risks. He stated that Council wanted people to do more and get out there and try things by implying that it would accept some risks and failures. Councilman Damonte stated that with some failure there would be dismissal and then the risk taking will minimize. City Manager Birkelo stated yes, if the risks were too high. Mr. Sipel stated that the third part of this was to hold people accountabe with a commitment on Council's part to spend whatever time it takes to do it. He stated that a successful program needed: 1) Sufficient funds to do it, which at this time he did not know what that meant; 2) Latitude to reward the excellent folks. He stated that if the organization is typical you have ten people, one or two that are marginal on the one side and one or two super on the other side, then you will need to find money for the one side. He stated that there needed to be an active performance appraisal system with objective devices and a key to set it up. He stated that the material on other cities, most of which did not have really active eval- uation systems, but there were a few exceptions in this area that do a super job. He stated that most of the time it was just automatic increases and you go in and ask why someone got 10% and someone else zero percent which was sub- jective and they could only tell you someone is really great. Discussion followed on the bonus plans in the private sector; behavorial bonus points on the scale of five down to one on department heads before Council at a meeting, their poise, appearance, articu- lation and ability to put across their point; oral communication; that elected officials cannot be evaluated; meeting the job standards; following through on a job; Council to decide what categories are important for evaluation; if a person exceeds the standards it could mean a salary increase: letting Staff know what 5/14/84 Page 5 AGENDA ACTION TAKEN Study of the performance pay plan eval uati on process. is acceptable and what is not; etc. Mr. Sipel stated that his would show what performance levels were acceptable and what was below acceptance; that the per- centage span could be from 10~ - 20~. He stated that the other part was the set of objectives that are agreed upon mutually for a year or six months that these people are going to try to achieve and how we are going to measure the perfor- mances. He stated that next would be how the total job was managed, you measure how the individual did in oral com- munications, leadership, decision making, etc. He continued, you measure in terms of how he or she achieves the specific five or six objectives that have been set out for them; how is his shop working which the City Manager would be better able to evaluate from seeing it on a day to day basis and the Council would know how the performance was perceived by the clientele. He stated that the Council needed to decide on what the criteria was going to be based and then come to some agreement on the descriptions. He stated that he had outlined the basic components of the system for both pay and performance evaluation and asked Council to describe their philosophy of the system. Discussion followed: benevolent dictatorship; motivation and higher per- formance levels; make sure that the Managers use their potential; make people want to come here and work; make the City a desirable place to work in; retention of managers; make them feel their worth no matter how low it might be; make the managers feel important; make the employees feel they are very fortunate to have a job in this City because the City recognizes their worth; the element of buying into the community. Mr. Sipel stated that employees should be working hard with pay as the motivator; direct Council involvement in the process; a willingness to reward and a desire to differentiate among performances. Councilwoman Teglia stated that a reward 5/14/84 Page 6 AGENDA ACTION TAKEN Study of the performance pay plan evaluation process. should be withheld i f performance 1 evel is low. Vice Mayor Haffey stated there should be fairness and objectivity in the appraisal system. Mr. Si pel stated that he would take that list and develop a philosophy and a policy for the Council to approve. He questioned the criteria the Council wanted to use to judge department managers. Discussion followed: how well they manage their departments; oral com- munications well written staff reports; employee contact; skill level of their specific level of expertise; ability to work with others; not to be absorbed by the team; initiative, independence; the way the managers treat the public; creativity and innovation; ability to teach; loyalty; leadership and inspira- ti on to their employees; moral s; sensi ti vi ty. Mr. Sipel reiterated: inspiration/ leadership; problem solving; integrity/ loyalty; ethics/morality; empathy; problem solving; well groomed; two way communications; inter-personal skills; self starting mechanisms; bright wide-awake and strong; efficient; employee development; fi scal responsibility/procedural skills; etc. Mr. Sipel stated that he would develop this list and bring it back to Council. He stated that next he would develop a schedule and come back to Council in two weeks as he had the philosophy and the policy statement and after that would be the criteria which might take longer to fully develop - perhaps three weeks and get someone from personnel to assist. He continued, then we will talk about the framework for the plan after Council has read through the material on other city plans. He stated that Council must establish dollar limits for the total amount of the program. Discussion followed: that the executive management cost was half a million 5/14/84 Page ? AGENDA ACTION TAKEN Study of the performance pay plan evaluation process. dollars; put $25,000 - $50,000 in the plan; that the median management salary in the market was slightly higher than this City's, that the public safety area was further behind the median; incentive pay programs in the private sector and public jurisdictions; San Mateo's plan; Sunnyvale's program which was a point system of evaluation; Mountain View's program that has a management plan and then a plan for the supervisory level. Mr. Sipel suggested that Council start with the management group and next year go to the next group. Vice Mayor Haffey stated that the Council might want to modify the percentage later on as it adopted the plan for other mana- gers or lower level managers which was a point system of evaluation; Mountain Views control point program that has a management plan and than a plan for the supervisory level. Mr. Sipel suggested that Council start with the management group and next year go to the next group. Mr. Sipel stated that the control point represents the average pay for that job in the market place. He continued, if it was $2,000 a month the Council would go 10-20~ about that figure or 20~ below which would be a 40~ spread and the salary could be set any place within those parameters. Vice Mayor Halley stated that one thing that paralyzed this City and all of labor negotiations and will paralyze the City is finding out what the control point is and deciding our market place and what City it wants to be like. Mr. Sipel stated that it shouldn't be hard to fi nd cities that are close in terms of size. Vice Mayor Haffey thought Redwood City would be a perfect example. Mayor Addiego stated that it was impor- tant that the City be a leader among cities. 5/14/84 Page 8 AGENDA ACTION TAKEN -- 1. Study of the performance pay plan eval uati on process. Cassette #2 Vice Mayor Haffey stated that Palo Alto was a City he would like this City to emul ate. Mayor Addiego mentioned Brisbane, Pacifica and San Bruno. Mr. Sipel mentioned Mountain View and Daly City. Councilwoman Teglia stated that she did not want this City compared with Daly City. Discussion followed on including the cities of Newark, San Leandro, Hayward, Vallejo, Palo Alto, Mountain View, Palo Alto, San Rafael, San Bruno, Redwood City, Brisbane, San Mateo and Daly City as benchmark cities for the plan. Discussion followed on percentages to be used in the plan: using zero to 15% on a new employee, after someone gets into the organization and into the plan using 10 to 15%; after two to three years the employee would be up to 30% and then there would be a 71~% spread which would bring them into the incentive range; that the zero percent would be the normal step A and the control point is step E on a five step plan; that it could be 30% below and 10% above; looking at total compensation; whether this plan was a panacea for all of the cities ills; people who do not respond to the incen- tive plan could be put on a six month probation; that less than a standard increase (3 or 5%) was a good indication that the person had to shape up; indivi- dual motivation; necessity for good per- formance evaluations by the City Manager; that the plan was a three step process; that the criteria would be to the Council in the next three weeks; that the evaluation would take place at the end of June and there would be a full year to implement the system; that Mr. Sipel and the City Manager would begin talking to the Staff about the plan; per- formance evaluations for the executive management to be performed by 6/1/84 and the Council would review and make recom- mendations on the performance of every member beginning 4/15/85 and 7/1/84 for 5/14/84 Page 9 AGENDA ACTION TAKEN Study of the performance pay plan eval uati on process. ADJOURNMENT: RESPECTFULLY SUBMITTED, City of South San Francisco the initial evaluation; evaluate people every six months and the second eva- luation comes with the salary increase; that the Council wanted a review and eva- luation from the City Manager of each of the members in the Executive Management Group April 15th of each year; on 7/1/84 the City Manager would sit with the Council for the evaluation process; that the City Manager and City Attorney would be a part of the evaluation plan; that individual Councilpeople would write an evaluation on each department head and they would be compiled to look for a con- sensus in advance and it would be discussed with the department head; orga- nizational structure alternatives to be done in July after the budget session; bonus method for that year's performance and if received and the performance level drops they could lose the bonus; SB831 which affected teachers. City Manager Birkelo stated that the FAA had approved the noise easement that the City had adopted. M/S Haffey/Teglia - To adjourn the meeting to Wednesday, 5/16/84 at 7:00 p.m., at City Hall for a study session with the Planning Commission on the Housing Element. Carried by unanimous voice vote. The meeting was adjourned at 7:10 p.m. APPROVED: Ma. rk N. Addie.~o', M~ City of South San Francisc~/ The entries of this Council meeting show the action taken by the City Council to dispose of an item. Oral communications, arguments, and comments are recorded on tape. The tape and documents related to the items are on file in the Office of the City Clerk and available for inspection, review and copying. 5/14/84 Page 10