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Group standing outside orange brick Wilson Library beneath the library sign: Mary Schoenborn, Linda DeBeau-Melting, Matt Bowers, Peter Weinhold, Sue Hallgren.

U Libraries performance management/merit pay project group members worked carefully for months to develop the new system. They are (left to right) Mary Schoenborn, Linda DeBeau-Melting, Peter Weinhold, Matt Bowers, Sue Hallgren, and (not pictured) Arlys Totushek and Brent Allison.

The path to merit pay

Consultative process benefits University Libraries in the effort to reward high performance

By Lindsey Dickenson

Brief, July 25, 2007

This month, civil service staff in the Twin Cities campus libraries moved to a merit pay plan--a compensation system in which base-pay increases are individual instead of across the board.

University Libraries staff and managers are using their new performance management system to set goals for the 2007-08 fiscal year. Civil service staff will first be awarded merit pay at the end of the fiscal year, beginning in 2008.

The change hasn't come overnight. The path began one year ago and has been marked by careful research, employee involvement, and lots of healthy debate.

Recognizing and rewarding high performance was a key recommendation that emerged from the University's strategic positioning process over the past two years. With the approval of several new policies and a revised tenure code in 2007, the Board of Regents has set the stage for stronger performance management and wide use of merit pay. (See box, below right.)

University Libraries support the movement to reward excellence, says Linda DeBeau-Melting, associate University librarian for organization development. DeBeau-Melting is also the project lead for the libraries' civil service performance management and merit pay program. She says University Libraries benefited from work of the Office of Human Resources (OHR) and the Civil Service Committee (CSC).


*The Board of Regents approved two new policies March 9--(1) Employee Performance Evaluation and Development and (2) Employee Compensation and Recognition. The first holds leaders, administrators, and supervisors accountable for fair performance evaluation. The second describes the U's commitment to reward meritorious employee performance and contributions.

*The revised faculty tenure code, passed by the University Senate in April and approved by the Board of Regents June 8, strengthens the U's commitment to rewarding high faculty performance and identifies more rigorous criteria.

*All academic professional and administrative (P&A) staff and faculty members are expected to receive annual performance reviews that determine merit-based pay increases.

* Currently, about 8.2 percent of the University's 5,064 civil service staff members are in merit-pay programs.

* For bargaining unit employees to be eligible for merit pay, the contract governing each unit would need to be negotiated to specify increases based on individual meritorious performance instead of across the board.

Note: Official Board of Regents policies are published in PDF format.

In 2005 and 2006, OHR and the CSC collaborated to review performance management and merit pay for civil service staff at the University. Two task forces developed and improved University-wide guidelines, templates, support tools, and communication materials to help colleges and departments improve performance management systems and move to merit pay.

University Libraries took full advantage of the work of the task forces. Matt Bowers is head of borrowing privileges and fines and libraries security and safety coordinator. Bowers also chaired the CSC in 2005-06 and is a current member of the Libraries Civil Service Committee.

"The Libraries have placed a high value on the professionalism and work ethic of the library staff," says Bowers. "An improved performance evaluation system and better communication between managers and staff will build on that tradition."

Some library employees expressed concerns based on previous efforts at the University, he says. Bowers believes that improving performance management is key to implementing a merit pay plan.

"Merit pay crashed over two issues: low-percentage pay plans and perceived favoritism," says Bowers. "These are still potential problems. A merit plan needs what we are now building--a strong performance management system that looks at all aspects of a particular job. We also have stronger support across the entire University administration."

DeBeau-Melting says the Libraries' highly consultative approach has also been beneficial. The plan to move to merit pay initially received a mixed review from the Libraries Civil Service Committee and the Libraries Leadership Council, composed of department directors across the system.

"On one hand, they were excited to move with the University's focus of rewarding high performers," says DeBeau-Melting. "But they had significant concerns about the culture change involved in moving to a merit-based program after many years of across-the-board increases, the relatively small amount of dollars available for distribution each year, and the equitable application of the performance criteria."

In discussions with both groups, staff members of the performance management/merit pay project group agreed that a larger pool of dollars was desirable to distribute with a merit pay program. They also emphasized that performance management sessions for supervisors would stress strong communication with employees throughout the performance-year cycle, establishment of clear performance standards and goals, equitable application of performance standards, annual evaluations that would be both evaluative and developmental, and an annual assessment of the program.

Making the merit plan work means rigorous review of the evaluation process and continuous training and support, says Bowers.

While not always easy, the feedback-rich process has continued to improve the tools and educate employees about performance management and merit pay programs.

"We just finished five performance management sessions for civil service staff and four for supervisors," says DeBeau-Melting. "We purposely kept them small to encourage discussion, and we had some very excellent dialogues. We will continue to offer these sessions for new supervisors and staff who join the Libraries."

These thorough discussions and training sessions are helping to build confidence that the merit pay plan will work.

"We will still need to do a lot of work to ensure this merit plan works effectively," says Bowers. "That means rigorous review of the evaluation process and continuous training and support for managers and staff."

University Libraries administration is planning for continued training and program evaluation once the merit pay program is in place. DeBeau-Melting says the Libraries Civil Service Committee will work with Libraries administration to develop an assessment process that will include ideas for continually improving performance management system and the education and training that support it. So far, she is satisfied with the process.


The following units are now using merit pay systems for civil service staff.

* Carlson School of Management
* U of M Foundation
* Office of the General Counsel
* Office of Human Resources
* Dept. of Civil Engineering, Institute of Technology
* Minnesota Geologic Survey, Institute of Technology
* University Libraries
* University Relations
* University Services (CPPM, EHS, Fin&Acct, IS)

"There has been anxiety about this, and Libraries managers and staff have really wanted to discuss and understand how the system would be built and function," says DeBeau-Melting. "While there have been bumps, we are coming out with a stronger performance management system with a more focused evaluation process and support for continuing development of our civil service staff members. Staff feedback has been essential in achieving that outcome."

University Libraries became one of 13 University units using merit pay for civil service employees in 2007-08 (see box, right). The total number of civil service employees in those 13 units is estimated at 417, about 8.2 percent of the civil service workforce of more than 5,000 at the U. As the University looks for ways to implement regents policies and reward outstanding performance, merit pay for civil service employees is expected to become a bigger focus.

"We are looking at ways to enhance performance management across the University and then more widely implement merit pay plans," says vice president for human resources Carol Carrier. "It will take time and resources to implement improved performance management practices where needed, and once we're confident those tools and systems exist, it will take more time and resources to shift all eligible employees to merit pay.

"I'm happy with the progress that's being made in departments across the University," Carrier says, "and I commend University Libraries for its thorough process."

FURTHER READING Performance Management, OHR Merit Pay Programs, OHR Civil Service Committee update, May 2005, including background on the OHR/CSC task forces on performance management and merit pay.

Board of Regents Policies Employee Performance Evaluation and Development (PDF)
Employee Compensation and Recognition (PDF)
Faculty Tenure (PDF) See a list of all Board of Regents Policies in both HTML and PDF format.