Nicole HillNicole HillHRD 880 Research Concepts and SkillsHRD 880 Research Concepts and Skills

Dr. Stephen BronackDr. Stephen BronackApril 27, 2009April 27, 2009

Replacing Antiquated Replacing Antiquated Pay Increase Systems in Municipal Pay Increase Systems in Municipal

Governments Governments With Comprehensive Merit Pay With Comprehensive Merit Pay

SystemsSystems

AbstractAbstract The United States Department of Labor defines merit pay as a The United States Department of Labor defines merit pay as a

raise in pay based on a set of criteria set by the employer. This raise in pay based on a set of criteria set by the employer. This usually involves the employer conducting a review meeting usually involves the employer conducting a review meeting with the employee to discuss the employee's work with the employee to discuss the employee's work performance during a certain time period. Merit pay is a performance during a certain time period. Merit pay is a matter between an employer and an employee. This system matter between an employer and an employee. This system gives employers more flexibility to reward good employees gives employers more flexibility to reward good employees for their work, while creating a more heightened sense of for their work, while creating a more heightened sense of fairness among everyone involved. My paper hopes to provide fairness among everyone involved. My paper hopes to provide arguments as to how Merit Pay/Pay for Performance can arguments as to how Merit Pay/Pay for Performance can improve several different aspects of the municipal government improve several different aspects of the municipal government working environment including increased productivity, working environment including increased productivity, customer service, longevity, and overall moral.customer service, longevity, and overall moral.

IntroductionIntroduction Within my arguments I will also use real responses and Within my arguments I will also use real responses and

statistics from my municipalities recent employee survey that statistics from my municipalities recent employee survey that will support an across the board change in the system and a will support an across the board change in the system and a gradual phase out of the current system. There has been a gradual phase out of the current system. There has been a whole new emphasis on performance appraisal and merit pay. whole new emphasis on performance appraisal and merit pay. There are calls for a thorough examination of their There are calls for a thorough examination of their effectiveness and the long term effects of implementing such a effectiveness and the long term effects of implementing such a system. In the book system. In the book Pay for PerformancePay for Performance looks at whether the looks at whether the concepts work and how they can be applied most effectively in concepts work and how they can be applied most effectively in the workplace. ”It is important to look at performance the workplace. ”It is important to look at performance appraisal and pay practices in the private sector and whether--appraisal and pay practices in the private sector and whether--and how--private industry experience is relevant to federal and how--private industry experience is relevant to federal pay.” (Flannery, Hofrichter, and Platten). It focuses on the pay.” (Flannery, Hofrichter, and Platten). It focuses on the needs of the federal government, exploring how the federal needs of the federal government, exploring how the federal pay system evolved.pay system evolved.

What Do The People Say?What Do The People Say?

During our recent employee During our recent employee survey 62% of employees felt survey 62% of employees felt that their compensation was that their compensation was not keeping pace with the not keeping pace with the increases in job duties and increases in job duties and requirements. requirements.

Literature ReviewLiterature Review

EducationEducation Municipal GovernmentMunicipal Government HealthcareHealthcare

ArgumentArgument

RIFTSRIFTS FurloughsFurloughs mandatory retirementmandatory retirement elimination of fringe and basic benefit programs elimination of fringe and basic benefit programs Lay-offsLay-offs

Employees feel disenfranchised with the status quo, and in order to keep good productive employees in the fold, merit pay is a good solution. This entails simply paying them for the hard work that they do.

Change in the Lay of the Land

Arguments (cont.)Arguments (cont.)

Slaying the Dreaded Slaying the Dreaded “Step “Step Increase/Longevity” Increase/Longevity” SystemSystem

ArgumentArgument

So Long Job Security…Hello Layoffs! So Long Job Security…Hello Layoffs! Municipal Government sector was a sure bet Municipal Government sector was a sure bet

for job security…no long necessarily the case. for job security…no long necessarily the case.

IDENTIFICATION OF IDENTIFICATION OF PROBLEMS WITH CURRENT PROBLEMS WITH CURRENT

SYSTEMSYSTEM

(1) inefficient pay plan(1) inefficient pay plan (2) non motivating work environment,(2) non motivating work environment, (3) lack of employee productivity(3) lack of employee productivity (4) biased performance reviews. (4) biased performance reviews.

IMPLICATIONS OF IMPLICATIONS OF RECOMMENDED ACTIONRECOMMENDED ACTION

By implementing replacing our old antiquated By implementing replacing our old antiquated step system with performance appraisal based step system with performance appraisal based increases, with the center being merit pay increases, with the center being merit pay based, this will help alleviate employee based, this will help alleviate employee concerns associated with the previous pay concerns associated with the previous pay plan, improve employee morale, improve plan, improve employee morale, improve employee productivity, improve employee employee productivity, improve employee motivation and reduce biased evaluations motivation and reduce biased evaluations

CONCLUSIONCONCLUSION

What does it all really What does it all really mean anyway?mean anyway?

Questions?????Questions?????

Nicole HillNicole Hill nikki2002h@aol.comnikki2002h@aol.com