Carlsbad establishes new ‘pay-for-performance’ policy

CARLSBAD — City Council approved an agreement with the Carlsbad City Employees’ Association that linked salary raises of city employees to job performance at its June 18 meeting. 

The city already has a merit-based pay system for its managers, but the new “pay-for-performance” system applies to all other city employees from planning to clerical to finance, excluding police and firefighters.

The change will take effect in 2014 and impact the 331 employees represented by the Carlsbad City Employees’ Association.

Carlsbad is the first city in San Diego County to establish such a system for the majority of its employees, though other public agencies, including Olivenhain Municipal Water District, have linked salaries to job performance for decades.

“Our dollars are less and less. So how do you create the efficiency and energy in the work force to do more with less money?” said Mayor Matt Hall about the shift.

“Often you’ll have 10 people in a canoe rowing and you’ll have maybe one or two who don’t have their oars in the water. This will help make sure that every one in the organization is pulling their weight.”

Currently, city employees receive pay raises automatically by advancing on a pay scale.

With the new pay system, raises will be determined annually based on how well an employee has met certain job criteria. An employee’s supervisor will set yearly goals and review progress towards these goals midway through the year before raises are determined at the end of the year.

Each position will have a set minimum and maximum salary range.

“The talk is now focused on getting things done, as opposed to an across the board situation where you’re eligible for the same increase as a coworker who may not be at the same level of performance as you are,” said Julie Clark, the city’s human resources director.

City Council allocated a 4 percent increase in the budget for raises effective Dec. 31, 2014, which supervisors will allocate to employees proportionally based on performance reviews.

The city spent almost two years developing the new system, and took input from the Association into account.

Pam Drew, an associate city planner and president of the Carlsbad City Employees’ Association, said that members were glad for the opportunity to contribute to the new employee evaluation and pay system, but are apprehensive about some changes.

Of the Association’s 299 active members, 201 voted in support of the new system while 20 members voted against it.

Drew said that members were most concerned about funding for future salary adjustments and potential bias on employee reviews.

“We got 4 percent this year (budgeted for raises), but another year it could be 2 or 5 (percent), which does worry some members about whether it will be there in future years,” Drew said. “We just hope that if this (new pay system) is important to the City Council that they’ll continue to fund it.”

The budget for pay raises will continue to be negotiated between City Council and the Association, regardless of the pay system, according to Clark.

Employees voiced concerns about the potential for subjectivity of performance reviews.

“The system is really dependent on how well the supervisors evaluate the employees,” Drew said.

Clark explained that the city is working to avoid any kind of bias by establishing clear performance criteria and having all reviews checked by department heads. Employees can also appeal their reviews to higher management.

Moreover, Hall pointed out that part of the agreement does allow the city to consider outsourcing some of its services, which could be a potential avenue for the city to save money.

With the city’s new efficiency incentives, City Council feels comfortable requesting bids for services from the private sector to see how city employees compare cost-wise.

Currently, about 55 percent of park operations and maintenance is outsourced, he said.

“This isn’t about being cheap. This is about competitive analysis for high standard work,” said Hall.

He said that any savings from outsourcing would be reinvested in community programs and services.

He added that after the new pay system has been established and kinks have been worked out, City Council might consider a similar salary system for police and firefighters in future years.