Covington City Council considers pay for performance structure

COVINGTON — City employees could receive a paycheck based solely on their performance if the Covington City Council changes its current pay plan structure.

The council reviewed its current plan and how the city can move into a pay-for-performance structure during the second budget meeting on Monday.

Consultant Whit Perrin Wright reviewed the pay plan and recommended a few changes the city should consider in order to retain more employees, including adding bonuses and increasing the pay range (entry level to maximum).

The city’s current plan offers incentive steps to encourage employees to undergo job-related continued education certifications. However, many employees are topping out in their salary range who have already taken advantage of all the incentive steps.

Wright said about 35 percent of employees have reached their maximum pay and more than 50 percent of employees will soon reach that cap.

“Not every job keeps growing in value because of the short learning curve,” Wright said. “So eventually, you have them topping out. If there is a learning curve, such as those in management, they have to keep learning because things like technology or programs keep changing. The incentive steps work for some jobs, but most of your employees are reaching that limit.”

Councilman Chris Smith noted that employees reaching their maximum salary could show a dedicated workforce.

Wright said that 35 percent of the city employees have been in their position for 20 years or more.

“A lot of people are happy to work here and are fully invested,” Wright said. “They’ve accumulated some retirement credits so it’s in their best interest to stay with them for those benefits. But in a few years, the city will start to see a turnover due to those employees retiring.”

Because the city has been successful in retaining employees, only 87 people have been hired within the last five years. Wright said there will be more turnover in the new hires if the economy continues to grow. She suggested to be more competitive the city should increase it’s pay range.

“An increase of pay range gives the city the ability to recruit and retain employees. The goal is to hire someone at the mid-range, then as they go on and prove that they are an asset to the city, then you want to have some kind of raise for them,” Wright said.

Wright suggested before moving into a pay-for-performance structure, the city should implement those changes for a year and train the management supervisors on how to evaluate employees on performance.

The city currently enforces performance evaluations, but Human Resources Manager Ronnie Cowan said the evaluations aren’t tailored to each job specifically and are ineffective.

“Performance evaluations are very messy but necessary and need to be done well,” Wright said. “Unless you have a good way to evaluate performance and have trained supervisors on how to do that, you’ll hit problems with legal and unhappy employees.”

Wright also suggested to communicate on all levels what is expected from employees and supervisors before the pay-for-performance structure is enforced.

The council will have the final budget meeting at 5:30 p.m. May 22 to discuss department budgets.