Idea #336 -- Employee Incentive/Bonus/Employee Programs

Idea #336 – Employee Incentive/Bonus/Employee Programs

Report Status: Fully Reviewed

Researched by: Norma Massarotti

Original Idea as Submitted

Explore ways to incentivize town employees to look for improved efficiency and financial opportunities. The incentive could take several forms: incentive bonus pool for cost saving measures; incorporating cost savings into manager's objectives (rewarded if met); Employee recognition award for any employee, where there is both public recognition and also a financial incentive that could scale with the size of the savings.

Other ideas included in this report

• 50 - Establish an incentive bonus pool for department heads and other employees to reward them for the development and implementation of innovative and cost-saving ideas.

• 51 - Incorporate costs savings into managers' objectives and issue merit increases if cost savings are met

• 324 – Implement an Innovation or Employee Recognition Award program for individual contributor

Weighted Final Score: 54 (Financial Impact: 4, Operational Impact: 4, Time Scale: 2, Ease of Implementation: 2)

Background Information

Members of the SCIG-Subcommittee met with the Town Human Resources Manager and the Town Administrator and gathered the following input:

• Incentive Programs: None exist; Implementation is restricted by what unions can accommodate for union workers

• Merit Pay Programs: Not applicable for union workers, is in place for non-union though the conducting performance reviews was only implemented in FY2019. Merit is tied to performance and incremental to Cost of Living Adjustment. Employees’ objectives do not include ones to take losses out.

• Both Merit and Incentive programs could be pursued but would need to be fully defined and negotiated into future contracts for applicable employees.

Recommendations

Design and implement an employee recognition program that acknowledges a specific accomplishment, action or behavior by an employee that goes above what is expected as part of his or her job responsibilities. Program should be designed and aligned to by Human Resources, Town Administrator, and Department Managers and then presented to the Select Board for approval.

• Monthly recognition award of $50 gift certificate from a business in Belmont to fixed number of employees (individual contributors) per month (e.g., two employees per month are selected)

• Employees can be nominated by anyone (residents, colleagues, managers, etc.)

• Nominations/Recognition should be connected to a specific accomplishment, action or behavior that is consistent with what the Town desires of its employees

• Agenda topic of “Employee Recognition” is added to an existing monthly meeting where department heads review nomination forms and select awardees

• Management/Execution by managers needs to be timely, sincere, consistent, and personal to be meaningful

• Public recognition can be made through the town website, the Town Administrator monthly bulletin, and even a designated monthly Select Board meeting

• Existing department budgets are expected to cover cost of program

SCIG recommends that the Select Board and School Committee begin to incentivize department heads to look for improved efficiency and financial savings opportunities (without impacting the quality of services or education) through first augmenting/revising their leaders’ next year’s annual objectives/goals to include one, if one does not already exist, to deliver cost savings/greater efficiencies to the Town of Belmont resulting from efforts like outsourcing, regionalization, improved warranty terms, make vs. buy, savings from a technology change, productivity improvement (efficiencies), cost avoidance, etc.. As current contracts for these senior positions include a preset percent salary increase, it is not recommended that an incremental bonus be provided in addition to compensation outlined in the contract at this time. What is recommended is modifying objectives for senior leaders in FY23 beginning July 1, 2022, to include an objective with a quantified target to deliver cost savings to the Town of Belmont. This step will help to begin to build a culture and the associated actions to drive cost savings without compromising on the quality of services or education.

The next phase of this step of revising goals and objectives to include cost savings, could entail growing the employee recognition program later to include a higher monetary award to employees for cost savings ideas that will result in savings to the town without compromising on quality of services or education. The savings projects ideas will need to be tracked through the different phases of Identified, and if approved, Initiated, and Implemented. As this monetary award will be higher, input from unions will be required. Human Resource managers can consult with companies in the private sector who also have unions and have employee recognition programs that have a monetary award.

SCIG also recommends that the Town of Belmont leverage the use of the Collins Center for Public Management and its network to assess and drive compensation package changes that potentially include bonus pools to incentivize leaders to deliver savings and drive efficiencies in their respective municipals. The approach to leverage the use of the Collins Center will better ensure that compensation practices in Belmont are consistent with other municipals.

Next Steps

• Select Board and Town leaders align on whether to proceed with an employee recognition program and ask the Human Resource Managers to design one and present it for approval and implementation

• Select Board and School Committee review and modify existing Goals and Objectives for senior leaders to include to include one to deliver cost savings/greater efficiencies to the Town of Belmont. The objective should include a quantified target.

  • Later, after consideration, thought and union consultation if required, leaders consider modifying the employee recognition program to include another tier for awarding employees more dollars for cost savings ideas that are identified, approved and initiated and implemented.

• Select Board / Human Resource managers collaborate with the Collins Center to redesign and propose compensation packages that include bonus pools to incentivize leaders to deliver savings and drive efficiencies.