Employees would be rewarded for money-saving ideas.
By: Jill Matthews
MONTGOMERY The Township Committee has begun to work through the details of a proposed employee incentive program for its municipal staff.
The program, proposed by Committeeman Mark Caliguire in September, is a performance-based awards plan for township employees designed to promote efficiency and prevent overspending on township services.
The plan would reward employees with a percentage of total savings for innovative plans that identify or design cost savings for the township. The proposal would also include rewards for department heads based on their total annual departmental budget savings. In order for the incentives plan to apply, the savings must total at least $1,000.
Also as part of the proposal, the cost savings of a particular project cannot result in the diminution of township services and must not violate any environmental protection ordinances.
Under the current proposal, an employee who identifies or designs a program that produces cost savings would receive 20 percent of the total savings of the program, not to exceed a total of $20,000. If employees work together to design a cost-saving program, the group would split equally the 20-percent bonus.
But if two employees each claim the same cost-savings idea as their own, a problem could arise.
"The assumption is that if you have people to work on it together, you would not have that kind of thing happening," said Mayor Louise Wilson. "If you have two people in the office submitting the same thing, then I would say the committee would probably meet with the department head, send it back, and say, ‘Work this out.’"
All cost-saving program ideas must be submitted in writing to a five-member Incentives Committee for consideration. The committee would be comprised of two Township Committee members, the township administrator, the township chief financial officer and one Montgomery resident appointed by the mayor.
While there would be no limit to the number of times an employee could receive awards for different cost-saving project suggestions, each suggestion would result in only one award. The cost-savings award would be based on actual savings realized in the first year of implementation.
"As a starting point, I think the overall goal of this program should be clear, that is, to enhance municipal services, save taxpayer money and enhance municipal employee morale," said Mr. Caliguire. "My experience has been that any organization, whether public or private, benefits when the people making up the organization believe in what they are doing and feel they have a stake, monetary or otherwise, in the success or failure of the organization."
Department heads would be evaluated under a slightly different method from their employees. Department heads would be eligible for a bonus based on the difference between their projected department budget and their actual budget for a fiscal year.
Department heads would be awarded 20 percent of the annual budget cost savings, not to exceed $20,000. For example, if a department saved $10,000 on one project, $40,000 on another and $20,000 on a third program in one fiscal year, the department head would stand to be awarded a bonus of $14,000 or 20 percent of the total cost savings at the end of the year.
The township administrator and township chief financial officer are both department heads in the municipal government and serve as members of the Incentives Committee, creating what may be a conflict of interest.
"My understanding is that they will not be making the judgments about their own ideas," Mayor Wilson said. "It is certainly worth debating at the Township Committee level as we continue to discuss this whether or not the CFO is involved with judgments where it’s who gets the incentive awards and who doesn’t."