House of Representatives

HB 2262

performance based incentives program

Sponsors: Huppenthal

 

DP

Committee on Retirement & Government Operations

DP

Caucus and COW

 

X

As Transmitted to the Governor

 

HB 2262 establishes a performance based incentive program to promote efficiency and effectiveness in state government. 

 

History

Laws 1993, Chapter 14, established the Performance Based Incentives Pilot Program that enabled state agencies and universities to develop performance based incentive programs to promote efficiency and effectiveness in state government. The program was established to provide incentive for employees to meet or exceed predefined standards of performance.  These standards were determined by agency goals that would result in cost reduction, increased productivity and improved quality of state services or products.   Incentives for employee were in the form of a monetary bonus.   The program was intended to determine if monetary rewards would prove to be enough of an incentive to increase the level of employee performance above the current standard.  A primary example of such a pilot program was established in the Accounts Payable Unit of the Management Services Division of the Arizona Department of Administration (DOA).   The level of customer satisfaction through surveys and discounts taken for prompt service of payment to vendors measured the degree of success of the program for each quarter.   The funds for the program were to be generated from money saved from discounts taken.   Another pilot program was established at ASU Laboratory Stores and results were quickly seen, prior to the approval of the program.  The store’s manager attributed the immediate success of the program to the reward attached to being accountable for employee’ action.

 

Provisions

 

·        Allows for the director of the Department of Administration (DOA) and the executive director of the Arizona Board of Regents (ABOR) to establish a performance based incentive program to promote efficiency and effectiveness in state government.    The director of DOA shall identify agencies and ABOR shall identify universities in which to implement the program.

 

·        Requires DOA and ABOR to cooperate with agency directors and universities in developing a performance based appraisal system of state employee performance that is based on goals of the participating agency or university and authorizes recognition of employee performance based on the outcome of appraisal.

 

·        Requires the program to be implemented through the cooperation of DOA, the Department of Public Safety (DPS), manager of the state compensation fund, superintendent of public instruction, superintendent of the state schools for the deaf and the blind, executive director of the ABOR and the presidents of each university under their jurisdiction.

 

·        Allows for the expenditure of up to eighty per cent of excess vacancy savings and monies appropriated from the state general fund or other sources, including federal enhanced funding received for quality initiatives, to recognize employees participating in the incentive program.

 

·        Requires that federal enhanced monies remain in a separate agency or university account at the end of the fiscal year for use by the agency or university in accordance with the conditions imposed by the funding source and not revert to the state general fund.

 

·        Defines excess vacancy savings as any monies saved or generated in personal services and employee related expenditures by:

 

1.      Not filling a position which has become vacant by termination of an employee.

2.      Not filling a newly authorized position.

3.      Filling an authorized position at a grade or step lower than is authorized by the Legislature.

4.      A downward reclassification of an authorized position.

 

·        Clarifies that excess vacancy savings are any vacancy savings that are over and above the amount eliminated from an agency’s budget as a result of the applied vacancy factor reported in the annual appropriations report prepared by the Joint Legislative Budget Committee (JLBC).

 

·        Stipulates that performance compensation using monies from excess vacancy savings or other fund sources shall not be added to an agency’s salary base.

 

·        Provides that state employees may receive recognition increase compensation for future services, but the increase may not exceed $200 per month per employee.

 

·        Establishes the Performance Based Incentives Program Oversight Committee and specifies the makeup of the committee.

 

·        Requires all entities in cooperation with DOA and ABOR to submit a report to the Performance Based Incentives Program Oversight Committee on the progress and expenditures of their participating agency related to the incentive program on or before December 1 of each even-numbered year and notify the Committee of any substantive changes made to the program.

 

·        Specifies the responsibilities of the committee. 

 

·        Allows the Committee to terminate or place an approved program on probationary status for failing to meet approved goals and objectives. 

 

·        Repeals the Performance Based Incentive Pilot Program.

 

·        Removes the State Compensation Fund from the performance based incentive program.

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·        45th Legislature                                                                                                                             

·        First Regular Session                                 3                                                             April 23, 2001

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