Governor reinstates pay increase for state employees

Press release from Indiana Governor Mitch Daniels:

Governor reinstates pay increase for state employees

(INDIANAPOLIS) – Governor Mitch Daniels sent a letter to state employees today to advise them that following a two-year pay freeze most will be eligible for a modest pay increase in 2011.

In the letter, the governor said those who receive a positive performance review will receive, on average, a 1.3 percent increase. The raises will be a flat amount: $1,000 for employees who earn an evaluation of outstanding (approximately 5 percent of employees); $750 for those who exceed expectations (10 percent of employees), and $500 for those who meet expectations (75 percent of employees). Employees who are evaluated as needing improvement or who do not meet expectations will not receive a pay increase.

“It has been very disappointing to me that we have not been able to recognize financially your hard work over the last two years,” Daniels wrote. “Of course, few of the taxpayers who pay our salaries have had pay increases, and many have lost income or their jobs. Still, I have really regretted our inability to give pay raises during this recession.”

State employees did not receive pay increases in 2009 or 2010 when the governor reduced spending throughout the executive branch of state government as state revenues fell off during the national recession. However, the pay for performance evaluation plan the governor instituted in 2006 has remained in place, and outstanding performance has been rewarded through the state’s spot bonus program and the governor’s public service achievement awards.

Daniels has asked the leaders of the state’s executive branch agencies to forego a salary increase. For the third year in a row, Daniels will not accept the salary increase for the governor approved by the General Assembly three years ago.

State employee reviews are currently being conducted, and the pay increases will be effective in February.

Text of the letter:

Dear fellow state employee:

First and foremost, I’m profoundly grateful for your hard work and service to our state. Not a day goes by that I don’t learn of a state employee who has found a way to save taxpayer’s dollars or serve the public better with the dollars we have. This creative collective effort is a big reason that Indiana state government is solvent when so many other states are broke, cutting employee pay and laying off thousands of workers.

It has been very disappointing to me that we have not been able to recognize financially your hard work over the last two years. Of course, few of the taxpayers who pay our salaries have had pay increases, and many have lost income or their jobs. Still, I have really regretted our inability to give pay raises during this recession.

In addition, our transition to a performance-based culture in which the best workers are rewarded has been largely interrupted by the national economy. Though we have continued our employee awards and bonus programs, I am very eager to resume pay increases for the best among us.

Therefore, I am authorizing a small increase for state employees who meet or exceed expectations. This will be a flat dollar increase, tilted toward high performing, lesser paid employees. In 2011, our highest performers will receive an average 2.5 percent increase; some of these individuals may earn as much as a 4 percent increase. On average, all employees receiving a positive review will get a 1.3 percent increase. On average, all employees receiving a positive review will get a 1.3 percent increase. Agency heads will not be eligible for any increase, and I will once again forgo the raise voted for the governor’s job by the General Assembly three years ago. These actions, modest as they are, do resume our policy of properly compensating our high performers through our pay for performance review system.

Again, I am deeply grateful for your service to Hoosiers all across our great state, and wish we could do more to reward it. Keep up the good work. We still have much to do to continue to move Indiana forward. Happy Holidays to you and yours.

Best regards,
Mitch Daniels

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