Butler County merit pay plan to save $122.3 million over 10 years

More than half of the non-union employees under the Butler County commissioners direct control performed well enough to qualify for at least a two percent increase on their base pay and the same percentage in lump sum payouts quarterly.

Butler County plans to spend just shy of $2 million this year rewarding 155 non-union staff. A resolution passed recently showed 90 people qualified for raises that are two percent or higher — up to a total of three percent — added to their base pay and another lump sum incentive payment of up to four percent.

Commissioner Don Dixon said the fact that 58 percent of the staff qualified for two percent or more shows him the pay-for-performance plan is working.

“Our plan works,” he said. “It’s doing exactly what it’s supposed to do. The people who earn it, that put the extra effort in, the people who are productive, get compensated for their work.”

A total of seven people earned the highest percentage for the base increase at three percent and three people are getting the top lump sum amount of four percent, paid quarterly.

The commissioners have been pushing merit pay for years for the entire county, union and non-union alike. They have used iterations of the new plan for their people in the past but Dixon said the key here is the two part plan. The raises from a pool of money equal two percent of the total annual base salary for “Part A” of the plan and another two percent for “Part B”.

“The important part is there is Part A and Part B, base only moves two percent the other is a one-time, it’s doesn’t go on the base,” he said. “When you put the whole program together and do the analysis if you took two and two sand that equals four and if you take four times the salary and compound it over ten years and then take two and two which is four again but only compound it two for the ten years, there is a big difference.”

Human Resources Director Jim Davis said over 10 years the county will save $122.3 million by only compounding the two percent rather than the full four percent.

“The beauty of this thing is it really is in line with our wage projections, it’s sustainable for a long time, it’s sustainable as we see out into the future,” he said.

County Administrator Charlie Young said they have spoken with all of the elected officials and everyone is on board with the new concept for raises.

“All of the elected officials have indicated their support for this and that they intend to implement,” he said. “They might not implement it in exactly the same fashion that the commissioners do but they understand the goals and concepts behind it and they are committed to those goals and concepts.”

Trying to get the unions to warm up to merit pay has been difficult and even resulted in a Children Services strike in 2014. As of today 10 of 14 union have agreed to some component of performance or incentive pay. Davis is currently in union negotiations with the Child Support Enforcement Agency and a new Children Services contract will be hammered out in the Spring.

The social workers walked a picket line for three weeks in August and September of 2014 and returned to work without a sealed deal. They ratified a new deal the next April

The last negotiation with BCCS was the most rancorous Davis said he has ever endured but he is hopeful the new talks — likely to begin in April — will be tranquil.

“I’m really positive we can get this thing settled without a strike,” he said. “But it really remains to be seen, it’s just hard to say. I think our performance pay system has improved quite a bit since that last time so that helps, that’s a big part of it, always.”

Union Chief Becky Palmer has similar hopes, she said the relationship between two sides has greatly improved.

“We’ve had labor management (meetings) and we’re trying to work together more,” she said. “I’m hoping that makes a difference for this negotiation and I think that it will.”

As for the new merit pay system, she said they are not wild about the lump sum part because it doesn’t better their retirement bottom line but she is encouraged by the fact the county set the portion that does compound at the cost of living.

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