The Committee has examined the current performance review process and is making a number of recommendations to the City Council to revise the current process. The recommendations are summarized below:

• Revise the annual performance comment form to allow for more detailed input from the Council through the use of a questionnaire/rating/comments form.
• Revise the City Manager/City Attorney reporting format to allow greater detail on Program Performance.
• Provide for a 360-degree review process, under the management of a facilitator, to gather management assessments from the direct reports of the City Manager and City Attorney for the Council evaluation.
• Direct staff to examine and recommend revisions to the current employee survey to obtain better feedback to the Council on management processes and the performance of the two Council employees.
• Revise the review meeting process to accommodate a facilitated meeting.
• Add additional meetings to allow Council to review the performance criteria and set specific goals and priorities for the City Manager and City Attorney each year.
• Revise the review timeline to better accommodate the existing budget cycle and potentially study the current process to look for ways to streamline it.

The current review process provides that a comment form, performance criteria and numerical weighting information for both the City Manager and City Attorney, contained in the Performance Review Handbook, is distributed to the City Council every fall, prior to the formal Performance review meetings for the City Manager and City Attorney. Additionally, the handbook provides an overview of the review process and the timeline.

The performance measures for the City Manager is organized into 4 broad topics (with a number of sub categories), each with a numerical weighting:

• Budget and Service Delivery Performance (45%)
• Policy and Planning (25%)
• Management (20%)
• Professional and Career Development (10%)

Similarly, the City Attorney performance measures are divided into four broad categories (and associated subcategories) with suitable weightings:

• Provision of Major Legal Services (45%)
• Provision of Legal Services – Routine Internal Activities (25%)
• Management (20%)
• Professional and Career Development (10%)

Also contained in the Handbook is a list of questions for each measure that Councilmembers are advised to consider as they determine a numerical rating and provide written commentary for each of the 4 categories.

Both the City Manager and City Attorney are required to submit their annual report to the City Council. The City Council, as a group, then meets with the City Manager and City Attorney separately to discuss their performance and the contents of their report. Subsequently, each Councilmember is then required to

1. Complete the ratings form by providing a numerical rating (50 to 100) for each of the four categories and submitting it to the Director of Human Resources.
2. Complete the comment form by commenting on each of the four performance categories and submit it to the Mayor.

The Mayor then works with Human Resources Department to sign and issue the letter of transmittal to the City Manager and City Attorney with the attached Council comments, the Council ratings summary and the Personnel Action Form (PAF).

The Council currently also implements a mid-year meeting with both the City Manager and the City Attorney to provide additional on-going verbal comments and discuss any timely issues.

Currently the City makes use of a Performance Outcome Agreement between each manager and their supervisor as the primary tool for establishing and measuring performance. The Agreement is an outcome-based method for establishing performance expectations. The Agreement defines the manager’s responsibility for three types of performance:

1. Service Delivery
2. Special Projects
3. Commitment to Excellence

The year end results for assigned Programs, Service Delivery Plans (SDP) and one time projects are measured and evaluated on their own merits. Those agreements form the documentation to support the annual reports that the City Manager and City Attorney submit to the City Council. They also form the basis for the evaluation of individual manager achievement. As detailed in the Performance Outcomes Agreement Manual, the Agreement is formatted into three parts:

Table 1: Performance Outcome Agreement format

The Sunnyvale City Charter does not provide any direction concerning the review process for either the City Manager or the City Attorney. Section 801 does outline the salary setting process for the City Manager:

The salary for the City Attorney is not discussed within the charter but Section 900 permits employment for both officers through written contract:

Both contracts for the City Manager and City Attorney provide for an annual performance review with virtually the same language:

The contracts also outline the Salary setting process as well:

1. Annually the City Council shall establish a control point salary for the City Manager which shall be competitive and shall have a reasonable spread above the next highest paid municipal official of the City of Sunnyvale. The effective date for the control point shall be the first pay period of each fiscal year, even if the control point is established at a later time. The starting salary is $135,662.00.
2. Pursuant to the City’s "Pay for Performance Plan", the City Council shall conduct an annual review of the City Manager’s performance and establish an annual performance rating for La Sala. Annual salary shall be based on the sum payment under the "Pay for Performance Plan" but shall have his salary established as a percent of the control point pursuant to the Performance Pay Matrix, attached as Exhibit "A" and incorporated by reference.

Section 4. Salary

1. Annually the City Council shall establish a control point salary for the City Attorney which shall be at ninety percent (90%) of the control point established for the City Manager. The effective date for the control point shall be the first pay period of each fiscal year, even if the control point is established at a later time.
2. Pursuant to the City’s "Pay for Performance Plan", the City Council shall conduct an annual review of the City Attorney’s performance and establish an annual performance rating for Armento. Annual salary shall be based on the control point and the "Pay for Performance Plan". Armento shall not receive any lump sum payment under the "Pay for Performance Plan" but shall have her salary established as a percent of the control point pursuant to the Performance Pay Matrix, attached as Exhibit "A" and incorporated by reference.

The subcommittee gathered and reviewed the performance review process for both the City Manager and City Attorney from a number of cities throughout the country. We also reviewed some information provided by the ICMA. While no consistent theme was apparent, a number of cities provided for a questionnaire form with detailed questions to gather the council’s perspective on very specific matters.

Those questions typically were formatted with a simple linear scale to provide a spectrum of responses. Those scales were either a numerically based one, typically 0 through 5, or a range of phrases to describe the Councilmember’s evaluation, as in "Strongly Agree" all the way down to "Strongly Disagree".

The questionnaire often provided some basis for the subsequent salary determination. Interestingly, the ICMA provided an article that suggested that the City Manager Salary be totally independent of the performance ratings.

The range of questions in those other documents was similar to, but distinctly different than, the criteria that Sunnyvale Council uses to evaluate it’s two employees. The committee liked the addition of a questionnaire to allow for a more detailed input back to the City Manager and the City Attorney but felt that the questions should reflect the City of Sunnyvale’s existing values and performance measures. To create the proposed questions, the subcommittee utilized the detailed questions contained in the existing Handbook. To supplement those questions, the committee added questions from the City’s Guiding Principles initiative. This initiative is an attempt to define an ethical framework for the existing management system. The Principles are summarized in a small handout that addresses ethical behavior related to:

• Public Service
• Respect and Recognition
• Leadership
• Honesty and Integrity

The subcommittee felt that it was appropriate and essential to provide the same framework, designed for the City Directors and Managers, for the City Manager and City Attorney. The proposed Questionnaires for the City Manager and City Attorney are provided in Attachment A and B, respectively.

The resulting questionnaire is much more extensive than the existing commentary form but provides more detailed feedback to the City Manager and City Attorney. The questionnaire is not intended to supplant any written comments that a Councilmember may also wish to make. Each Councilmember is free to add additional comments that are either general in nature or intended to clarify a response to one of the questions.

The questions are arranged under topic headings that represent the existing performance measures or the four guiding principle categories. Each response provides for a simple numerical answer, arranged on a scale of 1 to 5, which is intended to reflect how closely each Councilmember agrees with two opposing responses. A "1" would indicate that the Councilmember agrees with the response on the left and a "5" would indicate that the Councilmember agrees with the response on the right.

Although the subcommittee does not make any specific recommendation concerning any additional uses for the numerical values, they did discuss some potential ways to utilize them. Currently, the Council rates the City Manager and City Attorney on a scale of 50 to 100 on each of the 4 broad performance measures. If a Councilmember so wished, the numerical answers under a particular category could be averaged and multiplied by 20 to achieve a numerical rating that would be consistent with the existing number range. Additionally, the numerical answers for each question could be averaged across the entire Council to provide a composite answer that would reflect an average response of the entire council.

The subcommittee is recommending the Council adopt the two questionnaires as part of the review process. The Council would approve the questionnaires at the beginning of each year during the goal setting/Performance Outcome setting process. This allows the Council an opportunity to make appropriate changes to the questionnaire, if needed. Although the questions use a numerical scale to allow each Councilmember to assess the employee’s performance, the questionnaire is intended to provide only qualitative feedback to the Manager/Attorney, supplemented with appropriate comments, and no process is being recommended to translate the numerical answers into an overall score for determining either employee’s salary.

The subcommittee examined the overall process and rating system and made some observations.

Review Time Frame: The performance review time scale is protracted so that the actual yearly review process occurs 4 months into the new year. This leads to the inclusion of issues that might not be appropriate when evaluating the employee for the previous evaluation period. The primary reason for this delay is due to the process by which the city compiles and evaluates the outcome measures from the previous year.

The subcommittee feels that the process would be more effective if the formal reviews occurred closer to the end of the review period. For the City Manager, whose review is heavily dependent on the performance measures of many different departments, this will be difficult unless the existing outcome measures/performance objectives review and analysis process is streamlined.

Although a study to look at ways to make the budget process more efficient and streamline would be valuable, that study was beyond the scope of this subcommittee and it is recommended that Council direct staff to establish a program to look for ways to accelerate the data collection and analysis required under the Sunnyvale Performance and Management system (PAMS).

Setting Yearly Objectives/Performance Weightings: The subcommittee reviewed the weightings and performance objectives that the Council uses to evaluate their employees each year. These have been determined in the past and may or may not reflect the judgment of the current Council.

Articles from the ICMA suggests that Councils should meet yearly, to set the desired performance levels for the City Manager for the upcoming year. This allows Councils to adjust weightings, add additional performance measures or identify specific objectives for a given year. This would, understandably, need to be in collaboration with the City Manager and City Attorney.

This approach would be in line with the current Performance Outcomes Agreement process outlined above. The subcommittee is recommending that the Council adopt this approach for both the City Manager and the City Attorney and implement additional yearly meetings where goals and objectives for the upcoming year would be examined for each employee. In addition, the Council would review the questionnaire that is being proposed in this report and, if desired, add or modify the questions to better reflect the concerns of that City Council.

For example, in a given year, Council, in agreement with the City Manager, could specify that the Manager focus more on managerial tasks. A general application of this approach would be to adjust the weightings for Budget and Service Delivery Performance down from 45% to 35% and raise the Management weighting to 30% to reflect a Council desire to see a greater focus on improving the workforce of the city.

Similarly, the City Attorney’s weightings could be adjusted to give a focus toward management issues or specific program focuses could be given to allow the Attorney’s office to look at specific issues for the City Council.

Having separate goal setting meetings in the June/July time frame would not necessarily allow a reflection on the entire year but there is the assumption that on-going updates would allow the Council to be aware of most issues and could adequately address the upcoming year issues as they would the new fiscal year budget. The year-end reports from the City Manager and City Attorney should certainly not contain any surprises.

This additional meeting may be problematic considering the difficulty we seem to have scheduling the existing meetings. We could potentially resolve this by combining it, as a separate component, with the yearly review. This would entail additional time and make the meeting long enough that an evening might not accommodate it. We could select a Saturday and combine the two review meetings with the goal setting meetings and consume a single day, one in the morning and one in the afternoon. The disadvantage of this approach would be that the goal setting for the upcoming year would be delayed 3 to 4 months into the year.

Review Meeting Format/Facilitator: The council, at the request of recent Mayors, has met separately before the review meeting to have a frank confidential meeting. The discussions have helped Council clarify issues prior to meeting with the City Manager or the City Attorney. Both the City Manager and the City Attorney have expressed dissatisfaction with the recent yearly review meeting.

The subcommittee discussed options for improving the review meetings and is recommending that the City Council employ a suitable facilitator to moderate the review meetings and to help guide the discussion. This would free up the Mayor, who traditionally chairs the meeting, to actively participate in the discussions. The facilitator would also be able to try to balance the discussion and keep it on target. The facilitator would also be valuable to the added meeting where the Council sets the yearly priorities discussed above.

The selection of the facilitator could be problematic as each employee may have a personal favorite. The subcommittee recommends that the Director of Human Resources would provide a short list (no more than 5 names) for the Mayor and Vice-Mayor to review and make a recommendation to the Council. If this method proves unworkable, the City Manager and the City Attorney should work together to find a common facilitator if possible. The facilitator would work for the Council, with appropriate confidentiality agreements, to avoid any reporting confusion. The facilitator’s compensation would be a part of the Human Resources Department budget. If requested by either employee and agreed to by the Council, the Council could utilize two separate facilitators to accomplish the review tasks.

To minimize the additional cost and complexity, a facilitator should be retained for the entire year unless some unforeseen issue makes that impossible. The task of selecting the facilitator should be done prior to the start of the review process.

360 Review format: The current report from both the City Attorney and City Manager is generally in a narrative form with added tables and figures as appropriate. Generally, outside direct Council interaction with their employees, there is little opportunity to evaluate management practices. Based on several discussions that Council and the City Manager have had in the past, the subcommittee discussed the 360-degree performance review where input is solicited from a manager’s employees. This is partially accomplished with the employee survey that is completed periodically but the subcommittee is recommending that an additional process be added where a suitable facilitator be used to work with the direct reports for both the City Attorney and the City Manager to generate additional input to the Council concerning their management skills and styles.

The subcommittee discussed the appropriate timing for the 360-degree reviews as well as the use of the end product in the manager review process. Some experts believe that the 360-degree evaluation is appropriate for obtaining feedback on management processes but not appropriate for use in a performance review. One option discussed was to have the 360 review and the employee survey discussed below as part of the mid-year meeting with the Council employees. This would allow Council to assess the overall management system in the City on a yearly basis without directly coupling it to the salary review in the fall. An added bonus to this approach is it moves the review to a point in the year when senior staff is not consumed with the year-end budget report.

The subcommittee agreed that the 360-degree review process, being only one part of a more comprehensive review process, could be used effectively as part of the year-end review. The committee is recommending, however, that the 360-degree review be conducted in the latter half of May of each year. Assuming that the process takes several weeks to complete and allowing the facilitator at least month of analysis and report writing, the Council would expect to see results from this process in early August. This allows adequate time for Council review and any follow-up discussions prior to the Performance Review meetings.

Employee Survey Changes: Initially, the subcommittee looked at modifying the existing employee survey as a means to gather additional feedback from employees other than the direct reports on performance of the two Council employees and the overall management system. However, the subcommittee recognized that this type of survey would require an additional level of privacy and confidentiality that would undermine the intent of the original survey. Therefore, the subcommittee is recommending that a separate, distinct survey be done.

The new Management Performance survey would be targeted to City management issues and management performance. The survey would only be provided to a random sample population of City employees to reduce the logistics problems. The sample population would be designed to provide feedback from all the city departments. As it would be part of the employee review process, it would be confidential and the respondents would be assured of complete privacy. The subcommittee felt that this approach would allow for complete candor by each respondent.

To prevent any confusion and to provide an alternative viewpoint, the subcommittee is recommending that an outside contractor, independent of the contractor used for the normal, citywide employee survey, be used to conduct this Management Performance Survey. This contractor would report only to the Council and would be paid through the Human Resources budget.

The subcommittee felt that if possible, the Performance Review Facilitator, 360-review Facilitator and the Management Performance Survey would all be provided by the same contract person or organization to allow for a comprehensive analysis and to reduce the number of people involved in handling the confidential information that would be generated by these new processes. As with the Performance Review Facilitator, HR would generate a list of candidates for the Mayor and Vice-Mayor to review and make a recommendation to the City Council.

Additional costs would be incurred in a number of ways. The use of outside facilitators for both the Performance Review as well as the 360-degree review would require a yearly contract of an unknown amount. The Management Performance Survey would involve some additional costs for development, administration and analysis. If Council chooses to implement additional meetings there would be incremental costs associated with any added staffing requirements.

The subcommittee has met periodically since January. Although some of the meetings were noticed, no one from the public attended those meetings.

1. The City Council adopts the recommended changes to the City Manager and City Attorney Review Process as outlined below:
• Adopt the revised Council Questionnaire/Comment Forms (Attachments A and B).
• Add two separate additional Council meetings in June/July with the City Manager/City Attorney to set the performance objectives and special projects, with appropriate weightings, for the upcoming year and to review the Council Questionnaire/Comment Forms.
• Utilize the services of an outside facilitator to conduct the performance setting meetings as well as the performance review meetings.
• Implement a 360-degree review process by utilizing a facilitator to meet with the direct reports of the City Manager and City Attorney to provide feedback to the council on City Manager/City Attorney management activities and initiatives and their effectiveness.
• Implement a Management Performance questionnaire to be administered to a statistical sample of the City employees to solicit feedback concerning managerial effectiveness of the two Council employees and management processes within the City Government.
• Initiate a Legislative Study Item to evaluate the current budget process, looking for ways to streamline, automate and accelerate the year-end evaluation process to allow the City Manager/City Attorney to deliver their yearly report sooner and allow the review process to occur closer to the end of the fiscal year-end.

   

2. The City Council does not adopt any of the recommended changes to the City Manager and City Attorney Review Process and the current process would remain.
3. The City Council adopts the recommended changes to the City Manager and City Attorney Review Process with modifications or additions.

The Performance Review Subcommittee recommends alternative 1.

Prepared by:
Jack Walker
Councilmember

Reviewed by:
Fred Fowler
Mayor