4.3a ERMUSR 04-13-2021G.4g1Performance Metrics and Incentive Compensation
1.0Purpose and Summary
our strategic goals and mission. By improving our efficiency and level of performance in
meeting our strategic goals and mission we can improve the delivery of value to our customers.
To create incentives for employees to take personal responsibility for accomplishment of the
Metrics-based Incentive Compensation system (
ERMU will have an opportunity, as a group, to earn annual incentive compensation for each
qualifying employee by contributing individually to the overall success of ERMU on a daily
basis.
Under UPMIC, either all qualifying employees will earn an incentive compensation distribution
in a given year, or none will. And not only will incentive compensation under UPMIC in that
sense be an all or nothing proposition each year, but there will be an equal percentage sharebasis
for all on which the incentive compensation will be paid out if earned. This appropriately
reflects the reality that we all succeed, or fall short, together as a team.
To administer the UPMIC and measure objectively the level of performance that must be
achieved for qualifying employees to earn incentive compensation, the attached UMPIC
be subject to revision annually based on the performance metrics adopted by the Commission
Performance Metrics and creating incentive for employees to achieve the goals the Metrics
embody, the Utilities believes it will be better able to focus efforts and resources on becoming
more efficient and successful in meeting our strategic goals and mission and delivering improved
value to our customers.
2.0Utilities Performance Metrics Score Card
As reflected on the Score Card, the Performance Metrics are divided into the following three
categories: Safety, Reliability and Quality of Utility Services; WorkforceDevelopment; and
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Financial Goals. These categories are used to characterize the overall strategic goals and mission
of ERMU.
Under the Performance Metrics, these three main categories are then divided into various
weighted factors, or sub-categories. These sub-categories, their percentage weight, and the goal
or target for each, shall be established by the Utilities Commission annually. The Performance
Metrics as adopted are reflected in the attached Score Card. As discussed above, the
Performance Metrics and thus the Score Card are subject to modification and adoption by the
Commission annually, which will normally occur during the U
3.0Utilities Performance Incentive Compensation Distribution Criteria
Under the UMPIC a Performance-Based Compensation Incentive, if earned, will be distributed
to Qualifying Employees annually. The total amount available to beearned by Utilities
employees as a Performance Based Compensation Incentive each year will be an amount up to
Period.
The measuring period used to calculate how much, if any, of the Performance-Based
Compensation Incentive the Utilities employees have earned will be the calendar year (the
received its audit in the spring of the year following the Measurement Period, the Performance
Metrics will be applied to determine whether the Performance-Based Compensation Incentive
has been earned for the Measurement Period. In doing so, the performance of the Utilities in
each sub-categorywill be reviewed. If the sub-category performance meets or exceeds the
established goal, the sub-category will be scored with the designated percentage that will
contribute to a total Performance Metrics Multiplier to be used as a factor in calculating the
maximum factoring effect of 100%. The Multiplier is used to determine how much, if any, of
the amount established by the Commission for the UMPIC Performance-Based Compensation
Incentive has been earned in the Measurement Period. (For example if the Multiplier equals
100%, the distribution would equal 2%. If the Multiplier equals 75%, the distribution would
equal 1.5%.) In other words, the amount establishedby the Commission may be earned on an
annual basis by the group of Qualifying Employees (as defined below in Section 4.0) in whole,
in part, or not at all.
After the Multiplier is calculated on the Score Card, the Performance Based Compensation
Incentive earned, if any, will be distributed to Qualifying Employees. The total amount to be
distributed as the Performance Based Compensation Incentive will be the product of: a) the
mployees during the
Measurement Period.
The percentage of the Performance Based Compensation Incentive awarded to each Qualifying
Employee will be based on the gross wages of each Qualifying Employee during the
Measurement Period. To each Qualifying Employee, the distribution would be allocated in a
earned during the Measurement Period were equal to $50,000 and the Multiplier was equal to
100%, the total distribution to that employee would be equal to: $50,000 x 2% x 100% =
$1,000.)
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industry or customer base, the Commission reserves the right to withhold distribution of the
Performance Based Compensation Incentive in any given year.
4.0Employee Qualifications and Distribution of the Incentive Compensation
An employee of the Utilities willbe eligible for participation in the Performance Metrics
Incentive Compensation distribution if the employee meets the following eligibility requirements
a.The employee is in good standing with the Utilities. An employee would not be eligible
while on disciplinary probation or a performance improvement action plan.
b.The employee was a Full Time or Part Time employee during the Measurement Period.
Seasonal, and Temporary employees are not eligible.
The UMPIC Performance Based Compensation Incentive distribution will be made to Qualifying
Employees on the first payroll date after the thirty day period following the date on which the
in an open meeting.
GP:3300714 v4
AdoptedDecember 12, 2012
Revised January 14, 2020
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