Laserfiche WebLink
122089.14 <br />/ <br />TO: Mayor and City Council <br />FROM: Mark E. Bernhardson, City Administrator <br />DATE: December 20, 1989 <br />SUBJECT: Compensation Incentives <br />mm. MEETING <br />JAN 81990 <br />-"V fiF <br />Attachments: A. Article "Paying for Performance" <br />Governing December, 1989 <br />ISSUE - <br />1. Presentation of general incentive concepts for compensation. <br />2. Request of Council to give conceptual direction that they <br />agree with in development of a compensation program. <br />INTRODUCTION - In the development of the current compensation <br />plan, which was done in part to meet the State’s pay equity plan, <br />the elements of the plan provided for: <br />1. Internal Equity - The FOCUS study which was to <br />provide a method for internally relating the relative <br />value of each of the jobs. <br />2. External Equity - The compensation plan indicated <br />that where significant deviations in the market for a <br />job either positively or negatively from the internal <br />equity that the plan could use the outside market to <br />adjust those. <br />3. Step Incentives - For persons in a new position, <br />their ability to perform the job grows with experience <br />on the job and the job value is based on their fully <br />performing the job. To accomodate this "learing curve" <br />the person starts at a compensation rate less than the <br />top level for the position. If they demonstrate <br />adequate progression in job growth '■biy can move up <br />eventually to the compensation for fully performing the <br />job. <br />4. Annual Adjustments - The annual adjus ment was a <br />means to ”hold the position pay neutral in relationship <br />to cost of living. The annual adjustment is based on <br />the idea that pay for a position at the beginning of one <br />year would change due to inflation during the year. <br />Because inflation by the end of the year that same <br />salary would not buy as much as it would at the <br />beginning of the year. In order to compensate for that <br />inflationary increase, the plan provides for an annual <br />adjustment which theoretically places the employee back <br />at the same place as they were at the beginning of the