Employment Practice 5

Contents 1 WHAT 1.1 EMPLOYEE PAY 2 WHO 3 WHY 4 HOW 4.1 Establishing Pay Rates 4.1.1 Manager, Specialist, and Excluded Positions 4.1.2 Represented Positions 4.2 Incentive Programs 4.2.1 Performance Incentive Plan 4.2.2 Special Incentives 5 ROLES 5.1 All Employees 5.2 Supervisors 5.3 Human Resource Managers/Officers 5.4 Labor Relations and Safety Staff 5.5 Compensation and Benefits 5.6 Disbursement Services 5.7 Board of Directors 6 RESOURCES 7 REVISION HISTORY

WHAT

EMPLOYEE PAY

TVA's pay rates, pay policies, supplemental pay, and incentive plans are based on:

• Rewarding team performance through performance-based incentive plans, such as the Performance Incentive Plan for all employees. This team performance enables TVA to achieve its goals.
• Rewarding individual performance that supports accomplishment of TVA objectives through the Manager and Specialist Compensation Plans.
• The "prevailing rate" concept described in the TVA Act.
• Negotiated labor agreements.
• Federal laws and regulations.

WHO

• All employees

WHY

By providing competitive compensation, TVA enhances its position in the labor market-which in turn helps TVA hire and retain quality employees and achieve its short- and long-term goals.

HOW

Establishing Pay Rates

TVA uses salary surveys of competitive rates for similar work to determine its pay rates and establish its salary budgets.

Manager, Specialist, and Excluded Positions

TVA establishes pay rates for manager, specialist, and excluded positions. Manager and Specialist employees receive quarterly and annual performance reviews. Compensation awards are based on the individual's performance, position in the salary range established for his or her job classification, and the compensation plan budget. A compensation matrix, reflecting performance and position in range, is used to help managers determine the employee's individual award.

Excluded employees' pay reflects the pay levels established for comparable represented positions.

Represented Positions

Pay rates for represented positions are negotiated between TVA and the Tennessee Valley Trades and Labor Council, the International Brotherhood of Teamsters, and the Salary Policy Employee Panel. Salary policy employees on represented schedules go from one within-grade rate to the next when they complete a full period of "fully adequate" or better creditable service. See the Articles of Agreement for details.

Incentive Programs

The Board of Directors reviews various aspects of incentive programs each year to determine if plan changes are required and if the programs should be continued.

Performance Incentive Plan

Performance Incentive Plan is a customized incentive plan designed to recognize and reward all employees when TVA meets targeted goals. Performance goals are established for each Plan Year, which extends from October 1 to September 30 (the same as TVA's fiscal year). These goals emphasize high performance, teamwork, innovation and continuous improvement. When TVA achieves these goals, employees are eligible to receive lump-sum awards.

Special Incentives

Special incentives may be developed by organizations to meet defined operational goals. Awards that result from these plans may offset awards from other incentive programs. Board approval is required to implement these plans.

ROLES

All Employees

• Work together to meet Performance Incentive Plan goals to improve TVA's performance.
• Work toward achievement of individual goals they have established in conjunction with their supervisors.

Supervisors

• Review agency progress toward Performance Incentive Plan goals with employees.
• Establish annual work group goals that support the accomplishment of agency and organizational goals.
• Facilitate accomplishment of goals.
• Appraise the progress of employees.
• Determine the overall performance level and annual award of each manager and specialist employee.

Human Resource Managers/Officers

• Work with supervisors to communicate information about pay and incentive plans to employees.
• Answer employee questions.
• Day-to-day administration of employees' pay.

Labor Relations and Safety Staff

• Negotiates all represented employee pay plans and pay schedules, including Trades and Labor pay rates for work performed by TVA contractors.
• Advises on provisions of labor contracts with the Council, Teamsters, and the Panel.

Compensation and Benefits

• Develops pay plans for management specialist, excluded and all represented positions, including Trades and Labor employees of contractors.
• Conducts TVA wage, salary, and benefit surveys.
• Develops and administers TVA's job classification systems.
• Administers Performance Incentive Plan.
• Communicates Performance Incentive Plan goals and results.
• Works with human resource officers to administer the Manager and Specialist Compensation Plans effectively.

Disbursement Services

• Administers the time-reporting system and pay rules in the calculation of gross pay.
• Makes payroll deductions based on statutory requirements and employee elections.
• Generates net pay records and authorizes disbursements.

Board of Directors

• Approves all new pay schedules and incentive plans and incentive plan awards prior to implementation.
• Approves the Performance Incentive Plan including performance areas, indicators, and goals.
• Approves the attainment of Performance Incentive Plan goals, and payment of awards.
• Has final approval of salary structure adjustments, compensation budgets and the Manager and Specialist Compensation Plan.

RESOURCES

• Human Resource Managers/Officers
• Labor Relations and Safety Staff
• Compensation and Benefits
• Disbursement Services Department
• Accounts Payable Department
• TVA Practices list
• TVA Procedures list

This practice is based on various Board actions and negotiated labor agreements.

REVISION HISTORY

May, 1996