The state’s proposed compensation system for classified employees, emergency closings and the new employer cash-match program were among the topics covered by human resources director Glenda Humphreys at the March 1 meeting of the Hourly and Classified Employees Association.

Humphreys reported it looks promising that the proposal put forth by the state Commission on Reform of the Classified Compensation System will be approved in the General Assembly this session. Under the new plan, state agencies would replace the current grade and step system with a “banded” system that features pay for performance, with fewer grades, or bands according to the new terminology, and higher limits on maximum salaries within the bands.

“How you’re paid now is based on the duties of your position. Under the new system, it’s going to be based on those duties in addition to how well you perform those duties and what your knowledge, skills and abilities are – in essence, the totality of what you do, which is something we’ve not had the flexibility to do in the past,” Humphreys said.

“The benefit for employees is it’s going to be (true) pay for performance; there will no longer be across-the-board increases.” The idea behind the new plan, she explained, is to move away from the concept of the classification of one’s position driving compensation and to a system where employees are compensated based on their job performance.

In the new performance appraisal system, instead of the current five levels of performance ratings, there would be only three: noncontributor, contributor and extraordinary contributor. “In order to be an extraordinary contributor or a noncontributor, there has to be significant documentation, and specific incidents have to have occurred to have been documented during that cycle,” Humphreys said. “I think it’s going to force us into a bell curve where we’re going to have more people falling in the contributor range.

“The increases are going to be formula-based. So, for example, if you’re a contributor, depending upon the funding, all contributors would get a 3 percent increase. Extraordinary contributors would get a higher-percentage increase in addition to a one-time bonus that recognizes exceptional performance for that year.”

One of the attractive features of the new system is the provision for employers to reward classified employees, either on an individual or team basis, with one-time bonuses for successful performance, Humphreys noted. Rewards could also be issued for completing degrees or earning credentials that prove to enhance an employee’s ability to perform on the job.

The new system also addresses salary compression. “In our current system, and especially in the years where we either had no increases or marginal increases, we had the situation (in some cases) where you have long-term classified employees making the same or not much more than new hires, because the market has driven what we’ve needed to pay new hires,” Humphreys said. “That causes compression.

“We will be able to make those in-range adjustments to adjust for compression where it’s most prevalent. Obviously, this is tied to budget; we’re not going to be able to fix everything within the first year of roll-out, but we do have the flexibility now to start chipping away at some of the problems our current system has built over the years.”

In addition, the new compensation system would provide more opportunities for career development.

“A lot of classified employees, in order to move up in the system (currently), have to leave the job they like,” Humphreys explained. “They go to another department to get a promotion. In the new system there will be ways to move you up without you having to leave your job or without having to play the reallocation game.” Reallocations, she added, are going to diminish. Also under the new system, promotions would be negotiable up to a 15 percent raise. The amount of the raise would be based on knowledge, skills and abilities as they relate to the new position.

More defined career paths are another feature of the new plan, which would in some cases allow for promotions without having to take on a supervisory role. Also, it would be easier to transfer to a similar position in a different office or department.

The conversion to the new compensation system is to be completed by Oct. 1 of this year. The first performance evaluation under the new system will occur by October 2001, with the first payment under the new plan occurring Nov. 25, 2001. The new plan will require major adjustments on the part of the Human Resources Department as well as employees and supervisors, but Humphreys believes it will be good for all concerned.

“This is going to be a major culture change, not only for this university, but for the commonwealth of Virginia,” she said. “We (now) have a system that’s based on entitlement: if you’ve been here this long, if you do this much, you’re going to get a raise. This new system is going to be based on results: how well have you maintained your knowledge, skills and abilities, or improved them, and how well have you done your job.”

As part of the new system, supervisors will take on a major role in compensation decisions. Managers won’t be able to say to an employee, for example, “I can only give you four steps because that’s what the state policy says,” Humphreys noted.

“So, with flexibility comes accountability (regarding) fiscal resources and people resources. It’s going to improve our ability to be competitive in this market. We can reward our strong performers and really see a defined career path at the university.”

Humphreys emphasized that no employee will lose money in the move to the new system, but also that there will be no increases initially.

The new performance appraisal system also includes an employee self-evaluation component and calls for “upward evaluation of supervisors,” she added. “Employees will have the opportunity to provide feedback on their supervisors. Initially, it’s intended for developmental purposes – to help managers improve and advance their skills where they need to.”

While the new compensation system “will provide a wealth of opportunity we’ve never had before,” it will still be driven each year by state budget allocations, Humphreys cautioned. “The current pay for performance system we have been under since 1991 has been funded three times, where you could truly differentiate in terms of salary based on performance,” she said. The Human Resources Department will send out detailed information about the new system shortly. Employees can also obtain information at the following address: www.hrs.virginia.edu/hrs/ compcomm/commin.

•new state guidelines regarding emergency closings and the application of the leave policy. Under a revised policy that became effective Feb. 14, employees who, for example, call in by 8 a.m. to say they are not coming in to work because of inclement weather when the school is open will only owe personal leave for the amount of time the school remains open that day. If the university shuts down at noon, employees who stayed home that morning would not have to take eight hours of personal leave.
Humphreys also announced that she sent a memo to Provost Jo Ann Gora expressing what she said was the sentiment of a number of employees who felt the administration should give greater consideration to its decisions regarding keeping the school open or closed during inclement weather and to communicate those decisions in a more timely fashion.

•the state’s new “cash match” program which is available to full-time faculty members, faculty administrators and part-time and full-time classified employees who participate in a tax-sheltered annuity or the state’s deferred compensation plan. Beginning with the March 25 to April 9 pay period, qualified employees (must have been continuously employed by the state for at least one year) will be eligible for an employer “cash match” contribution of up to $10 per pay period for the remainder of the fiscal year. The state will match employees’ contributions of $10 to $20 per pay period with a 50 percent matching contribution.

•the fact that health insurance rates will go up after July 1, and that the Healthkeepers and Sentara HMOs will no longer be offered after that date. Information on existing and new health insurance providers will be forwarded to employees who are enrolled in these two plans.

•proposals before the General Assembly that include two versions of a classified employee salary increase (2.4 percent or 3.5 percent for those who rank at the “meets” or higher performance levels) and a recommended change to the annual-leave accrual system, whereby classified employees with 15 or more years of service would earn seven hours of leave per pay period and those with 20 or more years would earn eight hours.

•a proposed bill that would add a 12th state holiday by splitting the current Lee-Jackson-King Day. As proposed, Martin Luther King Jr. Day would be observed on the third Monday of January and Lee-Jackson Day the Friday before. If approved, Humphreys said she did not know how Old Dominion would choose to observe the extra day.

Also at the meeting, Judy Harrell, a former full-time employee in the Human Resources Department, discussed the Hourly and Classified Employees Association’s plans to form a HACE retirees chapter. She is serving on a steering committee that will meet with retired staff members from the past five years to discuss forming an organization.

Such a group, she said, could help out with various HACE activities, do volunteer or paid work in their old offices when current employees are out on leave, and take part in social activities.