Austin, May 10, 2000

Comptroller's Office Hears Pay For Performance Issues

Summary

Poor performers in the workplace cannot be ignored under pay for performance initiatives, according to testimony given at Comptroller Carole Keeton Rylander's e-Texas Government Performance Task Force public hearing in Houston.

"We need to reward good performers and identify poor performers," said Belinda Schmidt, manager for benchmarking for the American Productivity and Quality Center in Houston. "This allows for the training and managing of the poor performers to be good performers."

The May 10 hearing was one of several the Comptroller's office is holding in connection with Comptroller Carole Keeton Rylander's e-Texas initiative. E-Texas is a citizen commission charged with developing recommendations to help Texas state government meet the challenges of the Internet Age.

Major Issues

Major issues discussed by panelist include:

• Rewarding good performance in the workplace,
• Identifying and improving poor performance, and
• Attracting and retaining employees in the public sector.

Panelist Commentary

"In developing a pay for performance system, we developed a pay for high performance system," said Morris Winn, director of Human Resources for the State Comptroller's office. "Good performance is why you get a paycheck every month, high performance is going beyond the call of duty."

Winn said rewarding employees for high performance requires an accountability system for managers. He said management must know what the employees are doing and how they are doing it.

"This system forces managers to put out performance expectations and standards," he said. "It encourages and forces better communication between management and the employees."

Belinda Schmidt has found that in some private companies, employees are rewarded immediately for good performance.

"Companies are giving bonuses at the time the exceptional work is done, instead of later," she said. "Employees are being rewarded for good work, when the work is done instead of getting a good work bonus at the end of the year or a later date."

This type of immediate bonus has proven beneficial for employee morale and innovative thinking in the workplace, according to Schmidt.

She added that in rewarding for good work, employers must also find a way to bring poor performers up to an acceptable level. She said employers must focus on employee development as well as increased employee performance.

In the public sector, Winn is finding that pay for performance works, when you have the funds available.

"Our problem is that we [state government] don't have the money to pay and reward employees," Winn said. "We have to find extra money in our budgets for pay for performance rewards."

Workforce commissioner Diane Rath agreed that the public sector does not always have the money needed to pay its employees what they deserve. Therefore, the public sector is looking at alternatives to retain and recruit employees.

Rath said the Workforce Commission lists three methods of rewarding employees for exceptional work:

1. Merit increases are pay increases based on job performance being above expectations, and include one-time cash bonuses for excellent project work.

2. Information technology bonuses are for the information technology divisions of state agencies, allowing for better pay and benefits to help recruit and retain these employees in high-demand.

3. Performance leave allows an employee to earn extra time off instead of extra pay.