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Compensation Enhancement Act

Presented by the Department of Human Resources


Commissioner Rebecca Hunter

T.E.A.M. Act of 2012 Key Components

Hiring practices

Reductions in force

Employee appeals

Performance management

Merit pay

Learning & development

Background

Previously, there was little focus on performance as a


whole

Employee performance evaluations were not equitable

Most employees received a 4 for outstanding


or a 5 for exceptional

Supervisors and employees did not take the evaluation


process seriously

Background

T.E.A.M. Act began to place emphasis on performance

Act allowed for merit pay to recognize above average


performance

Individual performance plans were required to be SMART

Specific, Measurable, Achievable, Relevant and Time Sensitive

Began changing the culture to focus on performance as a


journey, not an event

S.M.A.R.T. Formula Planning Tools


Specific

Measurable

Achievable

Relevant

Time Sensitive

Work outcomes should


specify what they need to
achieve.

The work outcomes need


to be able to be measured
as to whether or not they
have been met.

The work outcomes must


be able to be met with
the resources available.

The work outcomes are


important to the agencys
goals and the specific job
function.

The work outcomes need


to have a time limit for
completion.

Specific means the work


outcome is concrete,
detailed, focused and well
defined. It must be
straightforward and
emphasize action and the
required outcome. The work
outcome must communicate
what you want to see happen.

A work outcome must be


measurable so that its
progress can be assessed.
Its important to have
measures that will
encourage and motivate
and will allow one to
determine whether or
not the work outcome
has been achieved.

The work outcome must


be capable of being
accomplished based on
the skills, knowledge and
resources available. The
work outcome can be
challenging, but not so
much so as to cause
frustration.

The work outcome must


relate to the overall
agency goal and the
specific job class.

The work outcome must


have a begin date and an
end date. Interim dates
for assessment may also
be included. Agreed
timeframes create the
necessary urgency and
prompt action.

What exactly is to be done,


with and for whom?

How will it be known that


the work outcome has
been achieved?

Can the work outcome be


met within the proposed
timeframe?

Is the start and finish


date/time for the work
outcome clearly set?

Are the limitations and


constraints understood?

Is the work outcome


described with action verbs?

Is there a reliable system


in place to measure
progress towards the
achievement of the work
outcome?

Can the people with


whom the work outcome
is set make an impact on
the situation?

Is it clear who is involved?

How much?

Is it clear where this will


happen?

How many?

Is the work outcome


possible?

What strategies will be used?


Is the work outcome well
understood?

Is it clear what needs to


happen?
Is the outcome clear?
Will this work outcome lead
to the desired results?

Can the work outcome be


met with the available
resources?

Do those tasked with the


work outcome have the
necessary knowledge,
authority and skill to
accomplish the work
outcome ?
Will this work outcome
help the agency reach its
strategic and/or
operational goals?

Is the set date/time


within the capacity of
those to whom the work
outcome is assigned?
Is the date/time for
accomplishment
reasonable?

The Performance Journey

Required SMART training for all supervisors & managers

Focused on performance coaching, not just single event


driven deadlines

Changed the Performance Management Program to


require a reviewer to approve the performance plan,
interim review discussions, and the final evaluation

Justification for Outstanding or Unacceptable ratings must


be submitted to the Appointing Authority for approval

The Performance Journey


Rating Scale Definitions
Outstanding Performance

Work outcomes consistently exceed


expected performance and affect
measurable improvements in
organizational performance

Advanced Performance

Work outcomes consistently meet and


often exceed stated expected
performance

Valued Performance

Work outcomes consistently meet stated


expected performance

Marginal Performance

Work outcomes consistently do not meet


some stated expectations

Unacceptable Performance

Unsatisfactory work outcomes

The Performance Journey

The Performance Journey

Research indicates that moving to a successful pay for


performance model should occur in phases:

Year 1 Give employees line-of-sight to performance goals

and reinforce timing and importance of discussions.

Year 2 Monitor goals and reiterate importance of


performance.

The Performance Journey

Completed 2 full performance annual evaluation cycles

DOHR continues to randomly audit performance plans to


ensure compliance with SMART principles

DOHR is launching a new curriculum called Get


S.M.A.R.T.er, which will be mandatory for all
supervisors

Market and Performance Based


Compensation Philosophy

Compensates employees based on performance

Continues to move salaries toward market value

Market and Performance Based Pay

Four Phases:

Repurpose Longevity

Implement Performance Based Pay

Increase Salary Ranges

Adjust Salaries Toward Market

Repurpose Longevity

Continues administrations focus on recruiting, retaining


and rewarding a talented workforce

Recognizes that experience is a component of a talented


workforce

Supports maintaining a competitive salary structure and


sustainable market and performance based compensation
philosophy

Repurpose Longevity

The employee will receive a permanent increase to base


salary equal to the longevity payment due to the employee as
of that date.

For example, Employee A will have worked for the state for 10
years. Employee A will receive a permanent salary increase of
$1000.

The recommended effective date of this increase would be


July 2015.

Applicability

The legislation would also not apply to non-executive


branches:

Legislative Branch
Fiscal Review
Judicial Branch
Administrative Offices of the Court
Secretary of State
Treasurers Office
Comptrollers Office
Office of the Attorney General
Higher Education

Applicability: Does Not Apply to


Statutorily mandated
salaries:

Tennessee
Highway Patrol
Law Enforcement
Training Academy
Commissioned
Officers
Wildlife Officers
Certified
Teachers (DOC,
DCS, DHS,
Special Schools)

Exempt from the


T.E.A.M. Act:

TRICOR
THDA
THEC
TACIR

Performance Based Pay

Awards employee performance

Improves efficiency

Encourages participation in programs that will improve job


performance and skills

Performance Based Pay

Apply increase based on performance rating:


Outstanding

4%

Advanced

3%

Valued

2%

Marginal

Not eligible for performance increase

Unacceptable

Not eligible for performance increase

Performance Based Pay

Based on ratings from 2014-15 cycle, which ends


September 30, 2015

Must have completed one full year of service to be eligible

Supervisors who do not timely complete the plans for their


employees are not eligible for performance based bonus

Performance payment will be made in January 2016

Increase Salary Ranges

Shift all ranges up 1%

Adjust individual salaries as needed to get employees


to new minimum

Effective January 2016

Adjust Salaries Toward Market

Apply increase based on position in the range, i.e. move employee


closer to market
Will depend on amount of dollars left after implementation of
performance based salary adjustments
Following chart is for illustration purposes only:
Position in Range

80-89

90-99

100+ (Market)

% Increase

1%

.05%

What This Means For Employees

Based on previous performance evaluation cycles, trend


data reveals that 98% of eligible employees will see a
performance based payment.

Any dollars remaining after funding performance based


payments will be used to continue to move employees
toward market.

What This Means for Employees - Example

Average salary with longevity = $43,000

Average salary without longevity = $42,000

Average longevity pay = $1,100

Average performance evaluation rating = Valued

What This Means for Employees - Example


Phase 1
Apply the employees current longevity to the
employees annual salary

Starting salary = $42,000

Add longevity to the base salary = $1,100

New base salary = $43,100

Adjustment would occur in July 2015

What This Means for Employees - Example


Phase 2
Apply performance based payment based on
performance evaluation rating

Performance based payment based on a valued rating

Valued = 2%
Advanced = 3%
Outstanding = 4%

43,100 x 2% = $862
New salary is $43,962

Payment would occur in January 2016

What This Means for Employees - Example


Phase 3
Adjust salary ranges 1% to allow structure to
remain competitive with market

New salary range minimum is $44,400

Adjust employees salary to $44,400 ($438 increase)

Salary adjustment would occur in January 2016

What This Means for Employees - Example


Phase 4
Apply market adjustment

Apply estimate of 1% to move individual salary closer to


market

$444 adjustment

Adjusted salary is $44,844

Salary adjustment would occur in January 2016

What This Means for Employees - Example

Starting salary with longevity was $43,000

Salary under Compensation Enhancement Act = $ 44,844

Increase of $1,844

Questions and Feedback

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