June 22, 2001

Reviews affect raises

Featured Image

Dr. James O'Neill, right, and Dr. Jon Eliason, a resident, perform an annoplasty on a 10-month-old patient last week. (photo by Dana Johnson)

Reviews affect raises

For the first time in Vanderbilt University Medical Center history, the employee raises that will take effect in the next few weeks are directly linked to performance evaluations.

The merit raise plan was adopted after the employee satisfaction survey in 1999 indicated that employees were not satisfied with across-the-board, non-merit-based raises, and preferred that compensation be linked to performance.

The long-discussed Pay for Performance system was implemented as employees were evaluated for their work during the past year. Under the performance development program, individual performance is graded on a 5-point scale, including performance of key job functions and adherence to the VUMC credo and other policy/regulatory compliance requirements. At the manager’s discretion, staff in some areas are also graded on area-specific job functions. While adherence to the credo is weighted at 25 percent of the final score and performance of key job functions is weighted at 75 percent, managers have discretion over how to apply weighting guidelines for those specific job functions.

The employee’s salary increase is a direct result of the cumulative evaluation score. The annual salary increase ranges from 3.25 to 4.25 percent. Employees had to receive a minimum score of 3.0 on the 5-point scale to receive the minimum raise of 3.25 percent. The distribution range was 3.0 to 3.7, 3.25 percent; 3.8 to 4.4, 3.75 percent; and 4.5 to 5.0, 4.25 percent.

Susan Mezger, director of HR Programs, said the new system worked well in its first year, but emphasized that the process was still being refined.

“Some people are saying this is a great system and others have expressed areas in which they would like to see improvement, particularly in the performance evaluation process,” she said. “But we are working to continuously improve communication and implementation.”

Through focus groups, the administration is planning to continue to consider employees’ opinions of the system. “The objectives of focus groups is to get feedback from the employees on what worked and where we have opportunities for improvement. This is a work in progress,” Mezger said.

To lay the groundwork, in spring 1998 managers met in focus groups to test the design of a staff performance development process, drafted by the Learning Center and Human Resource Services, intended to align individual performance with the overall goals of VUMC. To support fairness and consistency, VUMC job descriptions were rewritten to include concrete descriptions of duties categorized by key functions and an account of expected performance. Supervisors received training early in 1999, and by July of that year all staff and supervisors initiated the annual cycle of job evaluations and performance development. The way was paved to performance based compensation.

“The main goal of Pay for Performance is to be able to recognize through compensation the contribution of employees to the success of the medical center,” said Dr. Harry R. Jacobson, vice chancellor for Health Affairs. “It will provide flexibility in compensating individuals based on their relative contributions to the medical center’s progress. There are plenty of examples showing that compensating staff based on performance helps to retain the best people. Through the program, we are striving to be the employer of first choice.”