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to set our salary control points. The final conclusions, which have been discussed and approved by the Department Heads and City Council are attached for your information as Exhibit 1. 2. Pay for Performance Plan In the last couple of weeks I have had numerous discussions regarding the implementation of the pay for performance system. There are several key elements that I hope have been explained. To help the understanding by our entire management staff I will be discussing this again at the next All Management Meeting. A. PAY FOR PERFORMANCE One of the most important elements of the program is that this is truly a pay for performance system. The existing plan is based on the concept that an individual will normally be hired or promoted into a classification at 80% to 96% of the control point. Individuals who fully meet expectations will be paid between 96% and 104% of the control point. Individuals who exceed expectations may be paid between 104% and 112% of the control point and individuals who far exceed expectations may receive between 112% and 120% of the control point. In reviewing the plan I believe it is important that we emphasing strongly that for anyone to be over 104% of the control point they need to be exceeding our high organizational standards. Fully meeting standards or doing a few extra projects annually, will not result in exceeding the 104% of control point. I intend to work with department heads to maintain that standard. It is also important to note that being paid at 104% of the control point one year does not guarantee that standard the next. Each year will be evaluated separately. Periodically, like this year, we will adjust control points to try to maintain as much internal and external consistency as possible. When that occurs individuals may get larger increases to adjust for the control point movement. Again performance will be important, as evaluated by the individual's supervisor. It is also important to note that the plan intends for individuals to be promoted to a position below the control point and to advance over time. No one can expect to immediately be at the control point or above. The system was designed so that individuals may move along the control point continum over a period of time.