The goal of performance management is to support the organization’s strategic direction and to drive the accomplishment of the Utilities Board’s established Ends Policy. The system benefits customers in a number of ways by driving employee performance and removing the entitlement mentality of older systems that rewarded seniority over performance. - The program was designed so all employees can earn performance pay based on their success in meeting performance plan objectives and competencies.
- Performance pay is not guaranteed, and the amount an employee receives varies from year to year.
- Performance pay is not a bonus. It is nondiscretionary and is based on performance plans set in advance. Bonuses are often discretionary or arbitrary awards, and are not tied to an individual’s annual performance and are not based on previously set metrics.
- We continue to refine the program and implemented changes for the 2008 plan year to help ensure that performance objectives and competencies continue to be aligned with our strategic destination, goals, targets and measures.
- By making every employee accountable to meet and exceed their work goals, the performance of the entire organization is increased. The end result is a utility that offers extremely reliable service, some of the lowest rates in the nation and excellent customer service.
1. What is performance management?
Performance management involves employees, as individuals and members of a team, in improving organizational effectiveness and the accomplishment of an organization’s mission and goals. 2. Why does Springs Utilities have a performance pay program?
The purpose of our performance pay program is to emphasize employee accountability, encourage support for the organization’s strategic direction, and to drive the accomplishment of the Utilities Board’s established Ends Policies. The program helps to ensure that individual goals and objectives are in line with the organization’s goals and objectives. It involves planning, monitoring, appraising, rewarding and improving performance in support of our business strategy. 3. What are the origins of Springs Utilities' performance pay program?
The Utilities Board provided direction in the development of the performance management process prior to its implementation in 1997. In 1998, we implemented the performance management program as one component of the total compensation package. Governance policy EL 5 states that the organization provides a compensation program that: - Addresses individual accountability.
- Motivates and rewards knowledge and skills.
- Encourages organizational flexibility and responsiveness.
- Provides consistency with geographical and professional markets.
4. What are the benefits to customers of a performance management program?
Employees are measured based on performance expectations and goals set in advance. Getting employees involved in the planning process helps them better understand the goals of the organization, what needs to be done, why it needs to be done, and how well it should be done. Employees are held accountable as they work assignments or responsibilities through ongoing performance plan monitoring. By tying performance pay to an employee’s performance plan, employees have a clear incentive for meeting organizational goals and for providing the best possible service to customers. 5. How is performance pay earned?
Performance pay is earned for sustained performance over the performance plan year and must be re-earned each year. It is paid as a lump sum on a common date each year (typically in mid-April). All employees have the opportunity to earn performance pay. An employee can earn a portion of his/her performance pay by receiving a rating of “meets expectations” or higher. 6. How is performance pay different from bonuses?
Bonuses are often discretionary or arbitrary "awards" given to employees. Bonuses are not tied to an individual's annual performance and are not based on previously-set metrics/performance plans. The performance pay system is nondiscretionary and is based on performance plans set in advance. The better an employee performs in meeting the metrics set in these plans, the more likely he/she is to earn a portion of performance pay. Unlike bonuses, performance pay serves as an incentive for a higher level of performance and accountability through the use of specific performance goals and objectives. 7. Are written plans required to receive performance pay?
Yes. To qualify for performance pay, all employees must have a written performance plan in place, with measurable objectives, and must complete a self evaluation followed by a supervisory evaluation. 8. Are supervisors trained on performance management?
Yes. Supervisors are provided training in performance management best practices. Training courses, supervisory discussion groups and coaching are offered to further enhance the quality of the process. Additionally, the program is periodically monitored and audited for consistency, compliance and quality. 9. How does Springs Utilities’ performance pay compare?
Our performance pay program is market based, as are all the components of the total compensation program. The program design and payout targets have been reviewed and validated by three separate external consulting firms (most recently in 2004), as well as through several published compensation survey sources. Based on these periodic assessments, we make regular changes to the program to stay competitive with the market and to more accurately support business strategies and customer interests. To illustrate this point, we made several adjustments to the program for the 2007 review year. A separate review by the Utilities Policy Advisory Committee is currently underway. 10. How much does the performance pay program cost?
The cost of the program is approximately $10 million annually. This equates to approximately one percent of the overall annual budget of nearly $1 billion. Additionally, Springs Utilities’ total labor cost represents only 18 percent of the organization’s annual budget. | 
