Board Members present: Dorothy Anderson, Jeff Osanka, Mike Dyer, and Sandra Bishop. Vice President Smith was excused.
Others present: Randy Berggren, Deobrrah Brewer, Tom Buckhouse, Will Bondioli, Marty Douglass, Dick Helgeson, Garry Kunkel, Jean Meyers, Dick Varner, and Krista Hince of the EWEB staff; Chris Cardwell, Cardwell Group consultant; Frank Nearing, KLCC; and Kim Kunkel, Minutes Recorder.
President Anderson called the meeting to order.
COMPENSATION PLAN
Human Resource Specialist Jean Meyers said the objectives of this Work Session were to
Noting that the Board has completed its task of crafting a compensation strategy and objectives, Ms. Meyers explained that the compensation plan development project has entered phase four, which calls for data collection an analysis. She said the analysis is scheduled for completion in approximately six months, concurrent with the beginning of the budget cycle.
Referring to a series of overhead displays, copies of which were distributed to the Board, Compensation Consultant Chris Cardwell reviewed the agreements made during previous meetings with the Board. The Board confirmed the agreements.
Referring to the Base Pay Strategy agreements concerning work descriptions, Commissioner Osanka requested that the second bulleted item under Comments be amended to read "If necessary, specific job descriptions could still be developed."
Referring to the Base Pay Strategy agreements concerning market pay analysis, Commissioner Osanka stressed that EWEB should hire from a local, specifically Lane County, pool of qualified applicants as opposed to engaging in regional or national recruitment. He suggested that offering compensation that is comparable to the average level of pay in Lane County will serve as a disincentive to outside applicants and result in EWEB attracting and hiring a greater number of local applicants. Commissioner Osanka said he thinks there are well-qualified applicants in the Lane County area; however, many of EWEB's job descriptions set forth such specific sets of requirements that many individuals are excluded. He suggested that EWEB create broad job descriptions so that Lane County residents may successfully apply for such positions. General Manager Randy Berggren said he disagrees with the assumption presented by Commissioner Osanka. He said he is not convinced that many Lane County residents possess the skills necessary for some positions at EWEB and in failing to challenge or test such an assumption, EWEB risks being unable to perform at the level necessary to compete in a volatile market.
President Anderson suggested addressing the issue of local versus regional and national hiring separate from the compensation plan project. Commissioner Osanka requested that in their regular course of duties, staff investigate the issue.
Mr. Cardwell presented a brief overview of incentive compensation in terms of
Mr. Cardwell reviewed an analysis of three alternative incentive approaches. The analysis measured each approach in terms of
With regard to their alignment with philosophy, the alternative incentive approaches were rated, as follows:
Gain Sharing: Moderately strong
Goal Sharing: Strong
Combination: Strong
Referring to the goal sharing alternative, Commissioner Osanka inquired, based on Mr. Cardwell's experience, what are organizations' level of success in meeting established goals? Mr. Cardwell responded that an organization will typically award about half its award potential in a given year.
Commissioner Osanka inquired as to the recommended number of goals an organization should establish. Mr. Cardwell responded that between three and five goals, with five as the suggested maximum, is the guideline and only the highly prioritized goals of an organization should be used as triggers for incentive pay.
Mr. Cardwell said he recommends that EWEB implement in mid-1998 or January, 1999, an organization-wide incentive plan based on the aforementioned "combination" approach. He suggested that the plan provide awards based on achieving a small number of organizational goals (financial, safety and service). Additionally, Mr. Cardwell recommended that EWEB consider adding "team" goals after the plan is fully functioning, and goal setting/performance management skills are well-established.
Mr. Berggren explained that the organizational goals of "financial, service and safety," are based on existing key result areas and their appropriateness in terms of incentive compensation will be re-evaluated after one year. Noting the importance of establishing time constraints relative to this project, Commissioner Bishop said she was unwilling to support an open-ended process and discouraged staff from "reinventing the wheel."
Commissioner Dyer expressed support for the recommended strategy. Noting that he has experienced professional settings in which goals were simply a means by which to achieve incentive pay and were meaningless in terms of strengthening the organization, Commissioner Dyer said it is important that employees have something at risk. He suggested a scenario in which base pay may be x-amount minus one with incentive pay is x-amount plus two. Mr. Cardwell agreed that how EWEB might achieve a balanced mix of base pay versus incentive pay is an issue to consider.
In response to a solicitation for Board direction from Ms. Meyers, the Board expressed support for staff proceeding with the recommended incentive compensation strategy.
Referring to a December 31, 1997, memorandum concerning benefits that was included in the meeting agenda packet per a request by Commissioners, Ms. Meyers said the attached benefits survey results serve as a benchmark for the provision of benefits.
Mr. Berggren commented that although the survey information was somewhat dated (1994), no significant shifts in the have occurred. In summary, Mr. Berggren said the study results indicate that EWEB falls within the average, with the exception of retirement for which EWEB ranks high, in terms of the level of benefits it provides. Noting that he is not anxious to conduct a new benefits study at this time, Mr. Berggren said that if the Board was interested in exploring the issue of benefits as part of this project, retirement might be an appropriate area of focus.
Commissioner Bishop said she was unwilling to modify the retirement benefits of current employees.
Commissioner Dyer expressed his opinion that a benefits survey should include more private sector businesses. In addition, Commissioner Dyer said that if the Board does not address benefits as part of the compensation plan, he is unwilling to make cuts in benefits at a later date. Commissioner Osanka said he agreed. He said the issue of benefits should have been considered prior to proceeding with the compensation plan project. Echoing Commissioner Bishop's objection, President Anderson said she was unwilling to cut existing retirement benefits.
Ms. Meyers summarized the Board's direction to staff, as follows: Do not begin new benefits study work at this time. Anticipate ongoing Board/staff discussion concerning benefits. The Board agreed that no formal Board action was needed with regard to its direction to staff.
The meeting adjourned at 7:40 p.m.