Board Members present: Susie Smith, Dorothy Anderson, Peter Bartel, and Mike Dyer. Commissioner Bishop was excused.
Others present: Randy Berggren, Cathy Bloom, Tom Buckhouse, Marty Douglass, Dick Helgeson, Garry Kunkel, Roseanna McArthur, Jean Meyers, Jim Origliosso, Dick Varner, Shirley West, and Krista Hince of the EWEB staff; Chris Cardwell, Consultant; and Daniel Lindstrom, Minutes Recorder.
Vice President Dyer called the Work Session of the Eugene Water & Electric Board (EWEB) to order at 5:35 p.m.
General Manager Randy Berggren stated that the Work Session would provide the Board an update on development of a pay plan for employees in Trades, Labor and Crafts (TLC) job families. He said the discussion had been previously scheduled for June, but had been advanced because the plan was nearing completion.
Human Resource Specialist Jean Meyers stated that the purpose of the staff presentation was to help the Board understand and support the proposed Performance-Based Pay Plan for TLC employees. She described presentations to be made and encouraged Commissioners to ask questions and express concerns about its goals and targets.
Facilities Services Division Director Tom Buckhouse explained that the 157 employees to be involved in the TLC plan were in electric, construction, operational, landscape, and water service craft fields. He said 81 of those covered were in the Electric Division, 52 in the Water/Construction Division, 18 in the Facilities Services Division, and 6 in the Steam Division. He said approximately one-third of the employees covered were "Red Lined."
Mr. Buckhouse read and commented on a list of those who served on the Plan Design Team.
Electric Division Director Garry Kunkel reviewed the background for the TLC plan. He described how concerns had been raised about using a merit-based pay system for Electric Crafts in development of the Board strategy for the EWEB Total Compensation Plan. He explained that in response to the Board's encouragement to the General Manager to evaluate pay options more traditional to trades and craft job families, the Executive Management Team determined to develop pay options maintaining a connection to pay structures used in traditional craft journey and apprentice programs.
Mr. Kunkel described Board agreements and support for development of the plan. He reviewed Red Line issues, the appropriateness of individual merit for TLC, and the process followed to develop performance-based outcome measurements.
Water & Steam Divisions Director Dick Helgeson reviewed common attributes of TLC employees which made it appropriate to develop a unique pay plan, as follows:
Ms. Meyers explained that the plan would apply to all TLC employees at EWEB and would provide performance-based award opportunities equivalent to those available to other employees. The plan would include base pay adjustments equal to average pay increases for comparable jobs in other organizations, and performance-based team awards. The TLC plan has two basic design elements:
She reviewed how team performance awards would be administered, including that redlined employees who are not eligible for base wage increases will be eligible to receive this award based on results. This factor is significantly different from the MAPT (management, administrative, professional, and technical) plan where currently Red Lined employees are not eligible for any "similar" pay opportunity.
President Smith joined the Work Session at 6:15 p.m.
Fiscal Services Supervisor Dick Varner distributed copies of a document entitled "Funding Available for TLC Team Performance Awards. He reviewed data it contained about revenue available for payout of TLC Performance Awards through the budget and realized cost savings. He noted that efficiency improvements and direct customer savings were not included in the calculations provided.
Commissioner Bartel asked what would happen when a TLC performance goal was attained. Mr. Varner replied that goals were re-established annually. Consultant Chris Cardwell said that it was possible for TLC goals to be identified as maintaining safety, water quality, or service levels.
Commissioner Bartel asked how the TLC plan provided incentive for innovation. Mr. Cardwell replied that the plan could transition in time to include special recognition elements not yet developed. Mr. Helgeson described the Performance Improvement Program developed for Construction Department teams as an example of an incentive program. Mr. Kunkel added that operator controlled production loss was another example, but suggested that some TLC job family cultural issues inhibited individual innovation.
Commissioner Bartel asked what the annual budget of the TLC plan would be. Mr. Varner replied that the total cost of the program would be unclear until additional work was completed through the budget process. He said the value to the organization, actual savings, and enhanced reliability of services created by the plan would not be known until we had more time and experience to determine those exact values.
Commissioner Bartel asked if staff was "relatively pleased" with the TLC plan. Mr. Berggren replied that management was extremely pleased with the process which had developed the plan. He said organizational learning from the experience was high, that a cultural shift had begun through it which involved the trading of personal interests for organizational interests.
President Smith asked if TLC employees were universally pleased with the results of the process. Ms. Meyers replied that some had expressed reservations about the proposed plan, but had also said that they were willing to invest themselves in the outcome because the plan contained many elements which they had shared as being of importance, such as the team opportunity.
President Smith asked how employees in management, administrative, professional, and technical (MAPT) job families were reacting to the proposed TLC plan. Ms. Meyers said that she believed concerns would be raised and that it will be an issue which would need to be managed in such a way as to help all employees realize that the market is constantly changing and it's highly likely EWEB may have several different pay plans for various occupational groups in the future. Those plans may not always "look" the same but in spite of the differences they could be designed equitably.
Mr. Cardwell added that it would be important to point out that the total award package in the plan was not significantly different than what would have been available in the previously proposed merit plan.
Mr. Varner said he believed it was possible that, in a few years, it could be determined that additional groups should migrate to the TLC plan, or another group-specific plan created.
Mr. Berggren said that what had been learned from the TLC development process could have applications to the merit plan developed for other EWEB employees.
Mr. Helgeson pointed out that in work areas where a significant number of high-level employees were Red Lined, performance-based team awards were an incentive. He said he believed the TLC plan would gain the support of most employees because they were part of the goal setting processes.
Treasurer Jim Origliosso said the Financial Services Division had many MAPT employees and that he believed there would be some interest to develop a program similar to that prepared for TLC employees. He said he welcomed such a inclination.
Director of Corporate Services Roseanna McArthur said she had anticipated that there would have been an objection to changes made to the compensation plan of Power Traders, but that there had been little. She said she believed the change had been viewed as a positive development.
Mr. Kunkel stated that approximately one-half of Electric Division employees would be covered by each of the pay plans and that he had been receiving feed back that it would not likely create difficulty.
Mr. Berggren said he believed development of the TLC plan was a "powerful piece of work" in that it honored direction given by the Board and implemented employee preferences. He said the plan was easily understood and emphasized a team culture which appeared to be in the best interests of the organization. He said it would be important for management to determine how what was learned could be pro-actively applied to other areas of EWEB.
President Smith observed that employees were being asked to adapt to significant changes in compensation plans. She suggested that there might be wisdom in fully testing the TLC plan before elements of it were implemented elsewhere.
Commissioner Dyer said he was most favorably impressed with the TLC plan because it appeared to be able to "pay for itself."
In response to a question from Ms. Meyers, President Smith determined there was general consensus to endorse the TLC Compensation Plan.
The Work Session adjourned at 7:25 p.m.