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Moultonboro officials will examine merit-based pay proposal

September 30, 2009
MOULTONBORO — Town officials are mulling over a suggestion to moving to a merit-based pay system for town employees.

The matter was discussed during the Moultonboro Selectmen's workshop last week. The proposal was brought up as part of an ongoing discussion of town employment and policies following a study done by Gary Thornton.

Advisory Budget Committee Chair Jean Beadle said the committee is recommending that the town move away from its step-based pay system for employees and move toward a merit-based pay based on performance.

"To do that and do that efficiently the town needs to develop a very robust appraisal practice," Beadle said. "It would be an opportunity to reward those star performers sooner."

"The objective is not to pay somebody to show up, it's to pay them to do a job," said ABC member Ed Marudzinzki.

Under the concept, there would be a minimum and maximum pay range for each position. Employees would be paid more based on performance review rather than a set of established step increases as is currently used. Marudzinski said those amounts would have to be set in advance. "This is your objective and this is where you can achieve more," he said.

"It allows you when you do get a superstar here, keep them interested, keep them motivated," Beadle said.

"You run the risk of losing someone if you don't have that attitude," Marudzinski said.

Selectman Ed Charest said he had "mixed feelings about it."

"We have a small organization here, most of our employees are fairly loyal," Charest said, pointing out that it is known when someone is not doing their job. "There's some trade-offs here to having that reliability of a staff."

Charest said smaller organizations are more susceptible to office politics, and this could affect a review.

Charest also said presently there is no large turnover of employees and step increases "really aren't that much."

"We don't have in our organization any type of reward policy for those employees who go above and beyond," said Board Chair Karel Crawford. "A reward in some aspect challenges other people to step up, something that challenges everyone everyday to do better and be better and see a light at the end of the tunnel."

"I do kind of like the step idea but I don't like a guaranteed step," said Selectman Joel Mudgett.

Mudgett said that from his experience, reviews are done by a supervisor and peers, but Crawford said the evaluation process can be improved.

"We can reward them by giving them a step, but we have to do something," Mudgett said.

Town Administrator Carter Terenzini said he had concerns about the proposal.

"I do not know of a small public employer who's done a merit-based system and done it efficiently," Terenzini said, adding that there is a wide range of managers in the town that have a wide range of skills. "We need to concentrate on the evaluation tool to make that happen."

Terenzini said regardless of what is decided the current budget proposal will reflect the grade and step plan.

Town officials said it might be best to see if there is anyone who has worked in a community near Moultonboro's size where a merit-based pay system has been used to gain anecdotal evidence of how it has been used efficiently or has failed.

"I think our goal is to find a system to encourage the employees to go above and beyond, that there's some sort of performance incentive," Beadle said. "I firmly believe that needs to be researched in some fashion."

Town officials will do further research on the proposal.

Martin Lord Osman
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