Town Council voted last week to eliminate the town’s merit bonus plan, a rarely-used incentive that bumped town employees’ salaries when they reached the tops of their pay grades.
Knightdale employees are organized into pay grades and have 40 pay steps they can advance through. An employee moves to the next step through raises, which can include a merit raise or a cost of living increase.
But when those employees reach the 40th step, they have nowhere else to go. It doesn’t have to take an employee 40 years to advance through the pay scale; one increase (like a cost of living increase or merit raise for employees who are performing well) may translate into several steps on the scale.
Before last week, the town could give employees at the top of the scale a merit bonus every other year that keeps them at the last pay step but still gives the employee extra compensation.
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Merit bonuses differ from merit raises because they are, essentially, a raise for employees who no longer qualify for the town’s definition of a raise.
“The idea is that over the life of your career, you perhaps advance to top pay,” said Town Manager Seth Lawless. “If you get to step 40, you’ve done pretty well.”
Lawless said the merit bonus was eliminated because it wasn’t necessary.
Currently, there are only four town employees who are at the 40th step: Operations Supervisor Reed Alexander, Police Lt. Tracy Solomon, Senior Planner Jeff Triezenberg and Police Detective Don Ayscue.
Lawless said the town didn’t always fund merit bonuses, which is why employees weren’t eligible for them every year. In the past few years, he said, they’ve been funded inconsistently.
The move won’t save the town a lot of money. In 2014, the town spent just over $2,000 awarding merit bonuses. The town spent considerably more paying out merit raises to employees who had not reached the top of their pay scale.
This year, only two employees received merit bonuses in January: Solomon received a 1 percent bonus that equaled $735.48 and Alexander received a 3 percent bonus equaling $1,415.64.
Although the four eligible employees will no longer receive the merit bonuses, the can still see their paychecks rise through cost of living adjustments, which are usually tied to inflation rates.
“We don’t typically grant bonuses – we compensate folks with their salary with increases, like merit or (cost of living adjustments),” said Human Resources Director Suzanne Yeatts.
“We set salary ranges for every position and that’s based on research that we do and we set them appropriately. If someone were wanting to make more money than that, they would seek a higher paying position.”
Eliminating the possibility of merit bonuses leaves one opportunity for receiving a bonus that is even more rare, Yeatts said. Temporary assignment compensation bonuses pay employees who take over for another employee out on a long-term absence.
Some financial perks, though, are not up for elimination. Lawless said employees still receive $5 gift cards on their birthdays and $20-$25 around Christmas.