Board Members present: Dorothy Anderson, Susie Smith, Jeff Osanka, Mike Dyer, and Sandra Bishop.
Others present: Randy Berggren, Garry Kunkel, Dick Helgeson, Tom Buckhouse, Jim Origliosso, Jean Meyers, Roseanna McArthur, Shirley West, and Krista Hince of the EWEB staff; and Chris Cardwell, Consultant, and Kim Kunkel, Minutes Recorder.
President Anderson called the meeting to order.
OVERVIEW OF THE COMPENSATION PLAN
Human Resources Specialist Jean Meyers opened the presentation by reading an article about the changing world view of compensation. She said the article prompted her to consider the fact that the political nature of pay structures may be the biggest challenge EWEB faces as it restrucutures its compensation plan. Ms. Meyers stressed the importance of addressing this issue throughout the compensation system redesign process.
Referring to a series of overheads, copies of which were distributed to the Board, Consultant Chris Cardwell reviewed the following objectives of the work session:
Mr. Cardwell briefly reviewed the discussion and outcomes of the October 8 meeting and inquired as to whether the Board had any unresolved issue it wished to raise.
Vice President Smith reported that during the interim following the October 8 meeting she attended a management seminar at which was presented national survey information concerning what motivates employees. She said while "interesting work" was ranked number one, pay was not among the top 10 motivators. Vice President Smith said she understands that EWEB is considering incentive and performance-based pay as supportive of the utility's performance goals; however, she does not want to consider pay as the motivating factor for employees.
Mr. Cardwell responded that some research suggests that a good compensation plan is one that inspires in employees a feeling of neutrality; neither satisfaction nor dissatisfaction. Vice President Smith noted that the seminar trainer had stressed the importance of separating pay and performance appraisal.
Commissioner Osanka inquired as to whether EWEB has data regarding the employee view of compensation issues, perhaps data collected during the last compensation review, and stressed the importance of communicating with employees during the current compensation system restructuring process. Mr. Origliosso responded that EWEB employees were generally dissatisfied with the compensation plan developed in 1990. Noting that surveys were conducted in 1990 regarding satisfaction with the process and results, Ms. McArthur said the issue of concern to employees was not necessarily about pay, but rather the equity of the point system. She said staff could provide Commissioners with the 1990 employee survey data. With regard to Commissioner Osanka's comment concerning communication with employees, Ms. Meyers said staff fully intends to engage employees. She said one aspect of an upcoming employee survey will be compensation-related.
Returning to the aforementioned series of overhead displays, Mr. Cardwell reviewed the revised Draft 4 EWEB Total Compensation Philosophy and Draft Pay Strategy. Mr. Cardwell provided detail regarding the following key elements of base pay:
With regard to the Work Descriptions element, Commissioner Osanka inquired as to whether EWEB employees have filed grievances about being asked to complete tasks outside their job descriptions. Ms. Meyers responded that although such grievances are not common at EWEB, when they do occur, staff attempts to distinguish between an employee's perception and an actual instance of working outside a job classification. Noting that staff informs employees filing such grievances that requests for employee generalization and cross-functioning are becoming increasingly common, Ms. Meyers said staff responds to actual instances of working outside a job classification by having the assigned supervisor explain to the employee how their job has changed.
With regard to the Work Evaluation item, Mr. Berggren commented that this element places boundaries around how internal equity is tested, ensuring that comparisons are limited to functional areas.
In response to Ms. Meyers' comment that equity is a goal that has not been met under the current compensation plan, Vice President Smith inquired as to how equity will be established under the proposed plan. Mr. Cardwell responded that the proposed plan will place employees into a specific level of an individual function in an attempt to translate market data for one position to other positions within that function. He said the balance between market and internal equity will be achieved by utilizing one system by which to consider all ratings for a particular position and then determining whether the numbers are sensible or EWEB should detour from the market.
(The Commissioners took a short break)
With regard to the Pay Structure item, Vice President Smith inquired as to the rationale for the proposed structure, stressing that performance-based pay does not motivate employees. Mr. Cardwell responded that the performance-based pay sends a consistent message to the individual employee that outstanding performance will be rewarded. Vice President Smith said it seems that the proposed structure has a propensity, equal to that of the current system, to incite an "entitlement mentality." She said she was nervous regarding the proposed flexibility that will be afforded supervisors in ranking employee performance and expressed an interest in seeing fair and objective guidelines that will govern that process.
Noting that the proposal calls for updating market pay every year, Vice President Smith suggested moving all employees' performance evaluation dates to January 1. Mr. Cardwell agreed that it is "cleaner" to establish a uniform performance evaluation date for all employees.
Vice President Smith expressed interest in viewing additional compensation plans against which to compare and contrast the proposed system. Commissioner Osanka expressed support for viewing additional models. Commissioner Dyer said he like the proposed compensation system in that it provides supervisors with the latitude to evaluate different levels of employee performance and award a greater or lesser increase based on that performance. He said it may become increasingly important in a competitive environment to reward exceptional performance.
Referring to a document entitled Incentive Compensation Designs that was distributed to the Board, Mr. Cardwell reviewed elements of the following three types of incentive plans:
Mr. Cardwell reviewed
Mr. Cardwell solicited Board suggestions regarding issues to address during the December 2 Work Session on compensation. Vice President Smith requested a comparative analysis, listing pros and cons, of different base-pay options. Commissioner Bishop requested a brief presentation on the standard "step" system.
In response to a question from Mr. Cardwell, the Board tentatively agreed that the compensation plan should incorporate roles rather than specific job descriptions.
General Manager Randy Berggren suggested developing a matrix of compensation approaches that identifies the strengths and weaknesses of EWEB's alternatives and speaks to how those alternatives align with the culture of the utility. Vice President Smith expressed support for Mr. Berggren's suggestion and requested that the December 2 meeting also include examples of fair and objective criteria upon which supervisors might base their decisions regarding employee performance and the amount of resulting pay increases.
Acting Human Resource Manager Roseanna McArthur requested that the December 2 work session address Mr. Cardwell's experience, in terms of employee performance results, in working with the proposed model.
Commissioner Bishop suggested that Commissioners present the criteria and principles which they personally view as imperative to any compensation plan approved by the Board.
The meeting adjourned at 8:45 p.m.