The amount the state gave state employees in merit-based bonuses and equity or retention payments more than doubled in the 2016 fiscal year, but the payments were barely more than half of what employees received three years ago, a State Journal analysis shows.
State agencies granted pay increases or one-time bonuses worth an estimated $9.7 million for 4,638 state employees — or about 15 percent of the state workforce — the State Journal found using data provided under the state’s open records law. Fiscal 2016 was the first year in which University of Wisconsin System employees were removed from the state’s civil service system.
The one-time merit-based bonus payments and retention or equity payments — some are built into the base pay and some come in one lump sum — are meant to reward job performance, to keep employees in their jobs or to bring their pay to equitable levels with their peers.
The number of awards in fiscal 2016 is up from 1,544 awards offered the previous year, during which Gov. Scott Walker suspended the payments to alleviate state budget troubles. At the time of the suspension, Walker said it was needed to balance a state budget that was facing a $283 million shortfall for that fiscal year. The state granted an estimated $3.7 million in special raises or bonuses that year.
However, the payouts for the year ending June 30, 2016, fall far short of fiscal years 2013 and 2014, when the state authorized an estimated $17.9 million and $16.3 million in payments, respectively. But as of July 1, 2015, UW System employees were removed from the state’s civil service system. The System uses its own merit system, but spokeswoman Stephanie Marquis said information about how much it paid out during the previous fiscal year was not available last week.
In fiscal 2014, UW System employees accounted for about $7.9 million of the payments, or 44 percent of the overall expenditure, said Department of Administration spokesman Steven Michels.
Walker revived such payments in 2012 — they were suspended in 2008 — after the passage of his signature collective bargaining measure known as Act 10 that eliminated union contracts for most public employees. Supervisors in state agencies are allowed to propose extra pay for employees who did superior work, were seeking other employment or were underpaid compared to others in similar circumstances.
State workers aren’t guaranteed an annual wage increase. In the 2013-15 budget, Walker offered a 1 percent wage increase across state government. Workers can earn more through job changes, promotions, supplemental pay for some positions or the merit programs.
The merit payment programs have been a point of contention between supervisors and union representatives because the bonuses are often given as one-time lump sums, instead of increases in workers’ base salaries.
Two-thirds of the payments granted through the state’s program in the 2016 fiscal year came in the form of a lump sum bonus, as opposed to increases in employees’ base pay.
Rick Badger, executive director of state employee union AFSCME Council 32, said the raise and bonus system is unfair because it relies on supervisors deciding which employees comprise the “select few” who receive bonuses.
“With the lump sums, there’s no guarantee you’re going to get an increase the next year. There’s no predictability,” said Badger. “That’s the cost-shifting that we’re seeing that is making state employment less rewarding.”
Badger said the $9.7 million spent in fiscal year 2016 on 15 percent of the state’s workforce continues a trend of not spending enough to reward all state employees.
Three agencies get most
The bulk of the awards were granted to employees at the departments of Transportation, Corrections and Natural Resources.
Nearly 800 employees within DOT received a raise or bonus with an estimated average value of $2,483 totaling $1.96 million. About 1,050 DOC employees received a raise or bonus with an average value of $1,834 totaling $1.93 million. Around 680 DNR employees received a total of $1.14 million, with an average value of $1,676.
For the purpose of the analysis, the State Journal calculated annual salaries using hourly pay rates and assuming a standard 2,088-hour work year, which may not reflect all employees’ actual salaries in all cases.
DOC spokesman Tristan Cook said the merit-based raises were separate from an additional $10 million effort underway within the agency to address staffing shortages.
DOC secretary Jon Litscher in May said all correctional officers, sergeants and youth counselors would get 80 cents more per hour, while correctional officers and sergeants at maximum security prisons in Waupun, Green Bay and Portage and youth counselors at the state’s youth prison in Irma would get the additional 50 cents per hour through January.
Average base-pay raise was 5.5 percent
According to Michels, 73 percent of the raises or bonuses granted in the last two fiscal years were based on an employee’s job performance. Twenty-seven percent of the payments in the last two years were given to employees to increase their salaries to match what others with similar qualifications and experience make, he said.
Among state employees who received an increase in base pay, the top four employees received pay increases of more than 20 percent, which were aimed at retaining them in their jobs.
Debra Morhoff, a business automation specialist at the Workforce Development Department, received the highest percent pay increase of 26.7 percent, from $31.56 per hour to $40 per hour.
Pa Vang and Philip Wegner, both nurses working for the Department of Health Services, received the next highest pay increases of 22.7 percent and 22 percent respectively, raising their pay to $32.88 and $33.73 per hour.
Kate Keshena, a psychiatrist working for DHS, also received a 20.9 percent pay increase, bringing her base pay level to $100.57 per hour.
Those workers declined to comment or could not be reached last week.
The average base pay raise was 5.5 percent and the average lump sum bonus was $1,721 in the 2016 fiscal year.
John Dipko, DWD spokesman, said the payments “serve as an important tool to retain the best and brightest workers.” He said in Morhoff’s case, the agency matched a competing job offer to retain “a highly valued, highly skilled employee” with extensive knowledge of the agency’s IT systems.
DHS spokeswoman Julie Lund said retention raises were given, in part, to compete with the private sector. Keshena’s raise put her salary more in line with other state psychiatrists, a field that is competitive in both the public and private sectors.
The programs require each agency to find the money within their own budgets.
During the recent civil service overhaul, lawmakers added $6 million for top-performing state employees.