6c supp SandB

ITEM NO:           6c _supp 
MEETING DATE:       November 10, 2015 
2016 Salary and Benefits
Resolution 
First Reading

Topics 
Resolution Background 
Resolution Changes for 2016 
Standard Work, Non-represented range
structure 
New Performance Pay plan 
New Parental Leave plan 
Update  Pay Equity Review 
Performance Pay plan non-financial goals 
Topics to be covered

Background 
RCW 53.08.170 specifies Commission must
authorize pay and benefits 
Resolution has become lengthy and
complex 
Resolution includes program authorization
as well as considerable program detail 
2016 Resolution is streamlined and
simplified 
Resolution has become a long and detailed document

Recommended Changes for 2016 
Preamble 
Adding a reference to RCW 53.08.170 
Section I - Definitions 
Editing definitions to remove details found in
Port policies or program guides 
Section II  Jobs and Pay 
Reorganized for a more logical flow 
Updating standard workweek to 40 hours 
Increasing pay ranges by 2% 
Focus on authorizing Total Rewards programs

Recommended Changes for 2016 
Section III  Performance Pay 
New Section 
Authorizes a new annual lump sum
Performance Pay plan 
Self-funding plan 
Rewards Port performance, financial and non-
financial 
Employee performance ratings inform individual
performance awards 
Performance Pay reinforces Paying for Performance

Performance Pay  Business Case 
A Performance Pay program 
Is consistent with high performance, results
oriented organization 
Will help the Port compete with private sector
employers for talent 
Supports employee retention 
Connects employees to Port goals 
Sets us apart from other Public Sector agencies
we compete with for talent 
Performance Pay makes good business sense

Performance Pay  Market Competitive 
2015 Performance Pay Plans 
Industry             % of Employers Offering 
Public Sector                            42% 
Public & Private Sector Transportation          94% 
All Industry                               93% 
Source: Aon Hewitt 
National Payout Averages 
All Industry = 19.4% 
Public/Private Sector Transportation Industry = 18.2%
Public Administration = 7.7% 
Performance Based Pay Plan offered by 38.5% of
responding airports (ACI survey) 
Performance Pay is a market competitive practice

Performance Pay  Funding 
50% Financial performance 
The net positive variance, if any, of: 
Port-wide non-aeronautical revenue (total Port
revenue excluding aeronautical) vs. budget 
+ total Port expense vs. budget 
X 50% 
= Payout Pool 
50% Non-financial performance 
2 goals, each worth 25%, paid only if Payout Pool
meets minimum threshold 
Financial and Non-Financial Goals = Balanced Approach

Performance Pay  Funding Example 
Goal Met = Pool Sufficient for Minimum Payout 
2016 Budget    2016 Actual*    Variance 
Non-Aeronautical Revenue                      $325.6m       $335.6m      $10.0m 
Total Port Expense                        $335.4m       $325.4m      $10.0m 
Total Variance                                  $20.0m 
x 50% to the Payout Pool                                                $10.0m 
* Actual is an example only 
Goal Met      Portion Payout Funded     Payout Pool 
Financial                  50%               $5.0M 
Non-Financial #1           25%              $2.5M 
Non-Financial #2           25%              $2.5M 
Total Payout               100%             $10.0M 
Positive budget variance funds pool, multiple goals determine payout

Performance Pay - Payouts 
Based on employees performance review rating 
Performance   Payout     Example #1     Example #2     Example #3 
Rating       Factor     Minimum Payout 
1        No Payout         0%             0%            0% 
2        1 X Payout         1%             3%            5% 
3        2 X Payout         2%             6%            10% 
4        3 X Payout         3%             9%            15% 
5        4 X Payout         4%             12%           20% 
Average Payout              2.35%         7.05%        11.75% 
Cost to Fund                $2.242M        $6.727M       $11.212M 
Positive Variance Needed       $4.484M       $13.454M      $22.424M 
Individual payouts vary by employee performance

Recommended Changes for 2016 
Section IV  Employee Benefits 
Reorganized for better flow 
Eligibility and other administrative details
moved to policy or program guide documents 
Adding new Paid Parental Leave program 
4 weeks of paid leave during the first 12
months after birth, adoption or foster care
placement of a new child 
Mothers and fathers are eligible 
New Paid Parental Leave program added

Recommended Changes for 2016 
Section V  Benefits for Retirees 
Section is reorganized for a better flow 
Adding free airport parking for retirees 
Section VI  Benefits for Commissioners 
Section is reorganized for a better flow 
Reimbursement of healthcare premiums paid to
another entity removed due to possible ACA and
tax implications 
Sections reorganized for easier use

Recommended Changes for 2016 
Section VII  Notification 
Adding a commitment to notify the Commission
in advance of material changes to
administrative details of programs authorized in
the Resolution 


Advance Commission notification added

Pay Equity 
Pay programs for non-represented employees
designed to provide fair and equitable pay 
An Office of Federal Contract Compliance Programs
audit in 2011 showed no evidence of gender pay
discrimination 
High level internal analysis in August 2015 showed
no pattern of discrimination 
In the past 5 years no employee complaints based on
gender pay equity 
Thorough gender pay equity analysis scheduled for
first quarter 2016 
Pay equity an important component of pay programs

Conclusion 
Salary and Benefits Resolution changes fall
into 2 categories 
Streamlining and simplifying 
Changes to programs or plans authorized 
Sections are reorganized to be easier to use 
Added, deleted or changed programs are
consistent with the Port's Total Rewards
Philosophy and pay for performance focus 
Updated programs and easier to use Resolution

Performance Pay 
Non-Financial Goals 
Environment/Energy: Create and adopt a Port-wide strategy to
move all operations toward an energy portfolio that reduces GHG
emission by X% per year, and helps meet future load growth
through conservation and renewable energy sources.
Social Responsibility: Increase Small Business contracting
participation across the Port to 35%. 
Social Responsibility/Economic Development: Increase
employment and training opportunities related to middle class
jobs by increasing internship positions by 50% over 2015.

Performance Pay 
Non-Financial Goals 
Social Responsibility/Economic Development: Ensure success of
the Port's newly established Small Business Incubator/Accelerator
Program by developing an action plan for incorporating each
division in the ongoing execution of the program. 
Safety: Achieve excellence in safety and further reduce workforce
injuries by achieving a 95% or better score on the Annual Safety
Evaluation.

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