The Caledonia Village Board voted unanimously at its meeting Monday night to start paying non-union represented employees salaries based on their performance and not an across the board flat percentage increase.
The system establishes a minimum, mid-point and maximum pay level for staff not represented by the village, but also establishes a pay increase based on the employee’s performance. The changes impact all village and Caledonia Utility District employees except those firefighters, police officers and highway workers represented by unions.
Village trustee David Prott explained to the board that the salaries were patterned after a salary study the Village of Mount Pleasant had done in January 2015, which they “really picked apart” and customized to meet the village’s needs.
“I think this is fiscally responsible and realistically workable in the non-represented employees wage schedules,” he said. “I believe this will solve wage compression issues that are being experienced in our current salary structure.”
Prior to passing the resolution, the village gave employees raises based on a percentage. If the employee received a satisfactory review, they all received the same salary increase.
“Essentially everyone is equal. What is being considered this evening and if adopted will change that current practice considerably,” Prott said.
With the new changes, employees will receive merit pay increases of one to three percent if they meet the criteria for either a satisfactory, very good, or an outstanding review.
“With this change, what the board is saying is that we belief in fairly compensating our employees by the performance of their workmanship,” Prott said. “And those achieving higher standards in workmanship, that should be compensated accordingly.”
Village administrator Tom Christensen said there had been a salary schedule on the books, but it had not been paid attention to over the years.
“This creates a salary schedule with different levels that can be achieved by employees,” he said. “So it creates more opportunity for employees to achieve those pay ranges.”
Village trustee Jim Dobbs said the village had talked about implementing a merit pay system for quite some time.
“This is based on a system more like what is used in the business world,” he said. “So if employees are more exceptional, they’ll be able to earn more. But if they aren’t doing exceptional work, they don’t.”
The village intends to start the system immediately since it’s just wrapping up employee reviews. The raises will paid retroactively from Jan. 1, 2016.