Subject: APPROVAL OF REVISIONS TO THE CITY OF SAN JOSE PAY PLAN FOR EXECUTIVE STAFF EMPLOYEES
1. Adoption of a resolution to amend the City of San Jose Pay Plan to provide general increases for Executive Staff employees in the amounts of 3% effective June 23, 2002 and 3% effective June 22, 2003.
2. Authorize Appointing Authorities to grant no general increase to any Executive Staff employee who receives an overall performance evaluation rating that is below "Satisfactory."
On June 26, 2001, Council approved a resolution providing general increases for non-Senior Staff employees designated as Executive Management (Unit 99), in the amounts of 5% effective June 23, 2002 and also in June 22, 2003. This action was recommended primarily to provide the same levels of general salary increase as was approved for the other groups in the non-sworn workforce.
Executive Staff consists of 65 employees who serve as either Assistant or Deputy Directors in various City departments. The pay range for Deputy Directors is approximately $88,743 – $134,338 per year and for Assistant Directors, approximately $95,468 – $144,590 per year. Both of these pay ranges will be adjusted by 5% effective June 23, 2002 to retain internal pay relationships with other City jobs.
Along with increasing the pay ranges, the Council action in June 2001 also authorized the individual Executive Staff employees to receive the 5% general pay increases this June and in June of 2003. In contrast, "Senior Staff" employees (Department Heads and the City Manager's staff) are not authorized to receive general increases, so that their pay is fully performance-based.
Ideally, employees at the Executive Staff level should also be compensated in accordance with their individual job performance. By receiving 5% general increases as scheduled, there will not be the means to use job performance as a significant determinant of pay, or to distinguish employees who achieve outstanding performance from those whose performance is viewed as satisfactory, or less.
In order to provide a meaningful level of pay for performance, it is recommended that a 3% general increase be implemented for Executive Staff instead of the previously established 5%, for each of the next two years. The 2% difference will then be available to use to recognize levels of performance that exceed expectations, where appropriate, for Executive Staff employees. The 3% general increase, instead of no general increase, acknowledges that this group is potentially affected by pay compaction with the lower level employees they supervise and manage, who will receive the 5% general increases.
The second recommendation pertains to the relationship between general increases and performance pay. All Senior and Executive Staff members will receive annual performance reviews at the end of the fiscal year. Since the Senior Staff group is compensated based on a full performance pay model, employees whose performance is rated as “satisfactory,” will receive a pay increase that is minimal and less than that for those rated as “commendable” or higher. Those rated less than “satisfactory” will not receive any pay increase.
In contrast, the Executive Staff employees, because they will receive a general increase, will still receive a 3% pay increase, regardless of the results of their performance review. To establish a higher link between performance and pay for this group, it is recommended that Executive Staff employees, whose overall performance rating is below the level of "satisfactory," not be entitled to the general increase.
This resolution was coordinated with the City Attorney, Office of Employee Relations, the Budget Office, and the affected employees.
Acting Director, Human Resources