Changes to Employee Incentive/Merit Policy - Next 2022/2023 Incentive Year
There have been some changes made to the Employee Incentive/Merit Program for the 2022-2023 incentive year. The new policy is now uploaded to the intranet. We will explain the changes and the reasons behind them, but first we thought we would give some background on the program development since we have so many new employees.
POLICY PURPOSE
The policy was adopted in 2019 and the District had three main goals for incentivizing employees:
DISTRICT GOAL #1:
The first goal was to encourage employees to recognize and value the District’s overall goals. These goals are tied to reliability and sound fiscal management. This is why the District must meet its goals before an employee can be eligible to meet individual goals for the incentive/merit rewards.
DISTRICT GOAL #2:
The second goal of the program was to inspire employees to embrace personal growth, teamwork, and cross-departmental communication. This makes us a better organization by not only developing well-rounded employees, but also creating a culture of efficiency and open communication.
DISTRICT GOAL #3:
The final goal was to create PUD ambassadors in the community. As employees volunteer in the community, they build personal relationships outside of the PUD with many people in the organizations they work with (who are mostly PUD customers). These relationships help build trust in the PUD and create educational opportunities for people to learn the value of Mason PUD 3 and public power.
LESSONS LEARNED
The financial benefit to employees if they achieve each level of incentive is very generous and we want to see this program continue. As with any new programs, there are lessons learned along the way. In the beginning, there were many things we weren’t sure of - like:
How much the annual incentive would be?
What types of volunteer opportunities would employees be involved in?
How big of an administrative burden would there be in managing employee forms/applications to meet audit requirements?
Would the requirements of the program be too strict or lenient to incentivize employees to help the District meet the goals of the program?
We are proud and humbled by our employees’ participation in this program and generosity to our community. We are certainly making progress on the three District goals for the program, however there needed to be some adjustments to the policy to ensure that the original intent is being honored. The following is not an exhaustive list of the changes but include the more significant changes you should be aware of.
WHAT ARE THE MAJOR CHANGES?
CHANGE #1 UTLITY GOALS – Section 1.2 Excellent Financial Management
Under this section we removed the requirement for the utility to achieve an award for “the Excellence in Financial Reporting for its Comprehensive Annual Financial Report (CAFR) through the Government Finance Officers Association (GFOA)”.
REASON: The finance department is considering producing a different type of annual financial report which would not include the submittal for a GFOA award. The new language allows for flexibility in the format of the annual report and the requirement for a clean audit under Section 2.1 still remains.
CHANGE #2 INDIVIDUAL GOALS - Section 2.1 Professional Development and Employee Communications
The requirement for Professional Development has been modified under this section. Employees must still complete at least twelve (12) hours of manager/supervisor approved training annually, however no more than six (6) hours can be from required safety-related training (such as OSHA, First Aid, Flagging, Active Shooter, and similar safety training). Additionally, attendance at safety meetings will not be considered eligible training.
REASON: Certain training, such as the annual OSHA training, is required and we have learned over the last couple years that many employees are able to meet this requirement by simply doing training that is required and has been assigned to them. This was not the intent of the program as it doesn’t ‘incentivize’ employees to take ownership of their own professional development. Since there are now so many virtually options available, an employee can request approval for various training through many different programs. Some examples of qualified training includes: NeoGov Learn, Archbright, NWPPA, EAP training, etc.
CHANGE #3 INDIVIDUAL GOALS – Section 2.2 Community Involvement
The requirement for Community Involvement/Volunteer hours under this section has been modified. It is still a sixteen (16) hour requirement, however the language has been changed to read “for two separate community organizations,” not just two “activities” (since an ‘activity’ has been allowed to be with the same organization). The hours don’t need to be divided equally, but an employee must at least volunteer with two separate approved, local, community organizations to earn this level of incentive.
REASON: Since the goal of this level of incentive was to build ambassadors in the community, the original intent was to ensure that employees were branching out beyond their personal sphere of influence by volunteering in more than one organization. The language of “two separate activities” provided leeway for employees to stick with one organization for two activities but employees are only build relationships with the same people. Under the new language, more people (customers) can be reached by requiring two or more organizations.
CHANGE #4 INDIVIDUAL GOALS – Section 2.3 Donation of Personal Funds
Three main changes have happened under this section of the policy.
The first is that all donations will require the employee provide a receipt.
Second, a minimum donation requirement relative to an employee’s base salary has been added.
Third, language has been added to clarify that a donation of ‘in-kind’ or ‘goods’ to a charitable organization will not qualify for a donation of personal funds.
REASON/RECEIPT: The administrative burden of obtaining documentation has proven to be rigorous. Since the program participation is voluntary and the financial benefit to the employee is significant, the District will be shifting the burden of obtaining/providing a receipt on the employee/applicant. It is critical for the continuation of this incentive/merit program that it meet audit requirements. If an application is missing a receipt or any back-up documentation, it will be returned to the employee to remedy and re-submit.
REASON/MINIMUM: This incentive section was provided as an option for employees who preferred to make their community impact through donation of personal funds rather than volunteering time. Employees can choose one or the other, or in many cases employees generously do both and earn a bonus level. However, because of the monetary value of this incentive, and as an employer of choice in Mason County with competitive wages and benefits, we wanted to ensure that the personal fund donation would be valuable to the community as well. This entire program is voluntary and each level is voluntary as well, so a minimum donation requirement relative to an employee’s base salary to an organization of choice within the approved local community list will meet this level’s qualification.
REASON/IN-KIND OR GOODS: While this may be a valuable donation to our community, this type of donation is too difficult to administer, quantify, and document for auditing purposes.
WHAT IF SOMETHING WAS ALLOWED UNDER THE PREVIOUS POLICY?
Keep in mind that some things may have been allowed under the previous version of the policy (and in your most recent incentive/merit application finalized this month) but may not be allowed under the new version. If you have questions about specific scenarios, please contact Terri or Thedra in HR to seek clarification.