ARIZONA STATE SENATE
Phoenix, Arizona
performance based incentives
program
Statutorily
establishes a performance based incentive program and performance based
incentives program oversight committee.
In
1993 the Performance-based Incentive Pilot Program (PIPP) was established in
session law for state agency employees to encourage continuous improvement
through a program of bonuses for improved performance. In essence, PIPP promotes efficiency and
effectiveness in state government programs and services through monetary
incentive. The program provides a
financial bonus to workgroups/teams for improved performance, which results in
a cost reduction, improved service, enhanced product quality or better
productivity. The program was expanded
in 1995 to include all employees in state government. In 1999 S.B. 1081 increased the maximum performance incentive
award from $100 to $150 per employee per month and the repeal date was extended
to December 2005. There are currently
seven personnel systems in effect in Arizona.
This legislation will broaden the PIPP program to encompass all seven.
There
is no direct fiscal impact to the state general fund associated with this
legislation.
1. Allows 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.
2. Requires the Director of DOA to identify state agencies in which to implement the program and requires the Executive Director of ABOR to identify state universities in which to implement the program.
3. Requires the Director of DOA and the Executive Director of ABOR to cooperate with the directors of agencies and the presidents of universities in order to:
a.
develop
a performance appraisal system based on agency and university goals and
objectives.
b.
Authorize
all participating agency directors and university presidents to recognize the
performance of state employees, who are under their authority, based on the
outcome of their appraisal.
4. Requires the Director of DOA to cooperate with the Director of the Department of Public Safety, the Manager of the State Compensation Fund, the Superintendent of Public Instruction and the Superintendent of the State Schools for the Deaf and Blind to implement the performance based incentives program.
5. Requires the Executive Director of ABOR to cooperate with the president of each university, under the jurisdiction of the ABOR, to implement the performance based incentives program.
6. Stipulates that the Director of DOA, the Director of the Department of Public Safety, the Manager of the State Compensation Fund, the Superintendent of Public Instruction and the Superintendent of the State Schools for the Deaf and Blind may authorize the expenditure of up to 80 percent of excess vacancy savings to recognize participating employees.
7. Allows participating agencies and universities to use monies appropriated from the state general fund and other sources, including federal enhanced funding received for quality initiatives.
8. Stipulates that federal enhanced monies do not revert to the state general fund. States that 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 federal funding source terms and conditions.
9. Uses the same definition of excess vacancy savings as is in current statute, except that excess vacancy savings are any vacancy savings over and above the amount eliminated from an agency’s budget as the result of the applied vacancy factor reported in the annual appropriations report prepared by the Joint Legislative Budget Committee.
10. Stipulates that any incentive or performance compensation using excess vacancy savings monies or other fund sources, including state general fund appropriations, will not be added to an agency’s salary base.
11. Allows the recognition of state employees to be in the form of an increase for future service, but prohibits the increase from exceeding $200 per employee per month.
12. Establishes a performance based incentives program oversight committee consisting of the following members:
a.
the
Director of the Department of Administration or the Director’s designee.
b.
the
Executive Director of ABOR or the Executive Director’s designee.
c.
two
members of the Senate, from different political parties, and two members of the
House of Representatives, from different political parties, appointed by their
leadership. One Senator and one
Representative will each serve as co-chair.
d.
the
Executive Manager of the Governor’s Office for Excellence in Government or the
Executive Manager’s designee.
e.
an
agency director appointed by the Governor.
f.
a
representative from the Governor’s Office of Affirmative Action who is
appointed by the Governor.
g.
two
public members who have expertise in compensation analyses, one nominated by
the President of the Senate and one nominated by the House of Representatives.
13. Requires the committee to:
a.
develop
and adopt guidelines for a state employee performance based incentives program,
including agency and university goals that result in cost reduction, increased
productivity and improved quality of the delivery of state services or
products.
b.
identify
incentives and available resources to provide incentives, such as vacancy
savings achieved in state agencies and universities.
c.
coordinate
with state agencies and universities participating in the ongoing performance
based incentives program to evaluate the success of the program.
d.
review
agency and university requests to participate in a pilot incentive program or
an established performance based incentives program and make recommendations on
those requests to the Director of DOA or the Executive Director of ABOR.
14. The committee may recommend that the Director of DOA or the Executive Director of ABOR place an approved program on probation or may terminate an approved program for failure to meet approved goals and objectives.
15. Requires the Director of DOA in cooperation with the Director of the Department of Public Safety, the Manager of the State Compensation Fund, the Superintendent of Public Instruction and the Superintendent of the State Schools for the Deaf and Blind and the Executive Director of ABOR, in cooperation with the president of each university, to provide a report to the committee before December 1 of each even numbered year. Stipulates that the report is to discuss the implementation or progress of an approved program and the expenditures of each participating agency or university related to the program
16. Requires an approved program to notify the committee, the Director of DOA or the Executive Director of ABOR, as applicable, when it makes any substantive changes to the approved program.
17. Repeals all prior session law relating to the Performance Based Incentive Pilot Program.
18. Provides for a general effective date.
3rd Read
3/20/01 53-0-7-0
Prepared by Senate Staff
April 5, 2001