The city of Denison released this past week an inaugural set of statistics on its new merit-based pay raise system, which was instituted by the City Council in late 2012 to reward high-performing employees. Of the 170 city employees the new system covers — a number that does not include police or firefighters — three employees received a "Needs Improvement" grade, 114 were labeled "Satisfactory," 37 were "Commendable," and 16 earned a "Superior" ranking.

The city of Denison released this past week an inaugural set of statistics on its new merit-based pay raise system, which was instituted by the City Council in late 2012 to reward high-performing employees. Of the 170 city employees the new system covers — a number that does not include police or firefighters — three employees received a "Needs Improvement" grade, 114 were labeled "Satisfactory," 37 were "Commendable," and 16 earned a "Superior" ranking.


All employees rated "Satisfactory" or better will receive a 3-percent raise, and those ranked in the top two categories will receive an additional one-time bonus commensurate with their grade — $500 for commendable and $1000 for superior.


"Overall, I think we implemented the performance pay system about as effectively as it could have been," wrote City Manager Robert Hanna in a letter to council members discussing the results. "I believe the merit system we have implemented will make it easier for the city to address performance issues because we have created an evaluation system that requires documentation for all events, positive or negative."


When asked to assign a grade to the merit-pay system in its first year, Mayor Jared Johnson said the program deserved high marks and will hopefully improve over time.


"I would say it’s commendable; it was a good first year," said Johnson. "We made a policy decision that we were no longer going to do across-the-board pay increases, because it didn’t reward our star employees and it provided no incentive for those who were underperforming to try and bring up their work level. It’s a major change, and it’s going to take some time to evolve."


Hanna said the city conducted extensive training with managers to "clearly define performance expectations and … curb bias inherent in any performance appraisal system." He further explained that the low number of employees graded as "Needs Improvement" was a result of the city working to remove poor-performing employees on an ongoing basis, not just during yearly reviews.


"I do believe that the organization does a good job of weeding out the non-performers outside the annual evaluation process, so I don’t expect to see a classical distribution curve," he wrote. "We plan to continue to reinforce the training regimen for the par performance system throughout the year."


Councilman Matt Hanley, who expressed reservations when the system was implemented last year, said many of his concerns about grade inflation were alleviated by the Hanna’s letter.


"There’s always room for improvement in any new process that we roll out, but I’m very glad we started this project," said Hanley. "Am I satisfied with the results? Absolutely. I think it’s ultimately going to achieve what we’re looking for."


Johnson emphasized that the development of merit pay for the city is continuing, but that the innovative nature of the project and its potential to benefit the city were his biggest take-aways from the results.


"We established a tool that (managers) can use going forward, and from that perspective, it certainly was a success," he said. "The basic premise the council wants to achieve is to reward our top performers. Our employees often go everyday unnoticed, but they are what makes our city thrive from a service delivery standpoint. They’re the city’s number one asset as we provide service to our citizens."