The City of Modesto's Incentive PlanThe Purpose of an incentive plan is to align the employee's performance to the organization goals. To have employees accountable for the product or performance based on a set of standards is the company's overall goal. Along with wages and salaries many companies offer incentive pay designed to motivate its employees (Noe, Hollenbeck, Gerhart, and Wright, 2003).
The City of Modesto pay structure is a traditional salary incentive plan. There is a starting base pay for hourly employees and management positions have the option of negotiating at which step to commence at, depending on their experience. An employees work experience is determined by human resource and based on past work history, education, and experience. After the base pay, each step has a five percent increase.
Each position within the city has five steps of pay, A through E. All employees have a probation period of one year.
Once the employee passes their probation, they are subject to a performance appraisal. Based on receiving a favorable annual performance appraisal, the employee is awarded the next pay step. To receive the pay increase employees must meet a set of standards. Standards set by the individuals supervisor and based on four to five performance points.
An employee must "meet standards" and or "exceed standards" on all points to gain the pay raise. By chance if the employee "does not meet standards", there is no pay increase (City of Modesto, Human Resource). The draw back to this type of pay structure is after the fifth pay step, E there are no more pay increases, other than the occasional cost of living allowance. Many times the COLA does not keep up with inflation. To compensate for the five-step pay incentive, the City of Modesto offers two other incentives,