Download Category - Hertford County Public Health Authority

Administrative Policy and Procedure
HERTFORD COUNTY PUBLIC HEALTH AUTHORITY
TITLE:
Employee Cost Reduction Reward Program
POLICY NUMBER ________________
DATE APPROVED 11/26/07
BENCHMARK
DATES REVIEWED/REVISED 10/7/08 11/3/09 12/7/10
REVIEWED REVIEWED
APPROVED BY: _________________
Chairperson, HCPHA BOH
__________________
HCPHA Health Director
REVIEWED
_________________
Chief Finance Officer
Policy
Hertford County Public Health Authority (HCPHA) shall seek to reward employees who identify and who help
implement initiatives that improve the efficiency of agency operations through an Employee Cost Reduction Reward
Program
Purpose
To reward employees or groups of employees who submit approved cost reduction plans will receive 10 percent of
the savings realized during the first year for projects that save at least $2,500. The maximum amount that will be
awarded is $10,000. Applicable taxes and other deductions will be applied to reward
Applicable Laws and Rules
Position (s) Primarily Responsible
Health Director
Chief Finance Officer
Program Directors
Procedures
Employee Suggestion Program Committee:
 The Employee Suggestion Program Committee shall consist of the following members:
o Finance Director or alternate. (Designated as Chair and Suggestion Program Coordinator).
o Health Director or alternate.
o Personnel Director or alternate.
o Employee Relations Committee Chair or alternate.
Submission Eligibility:
 Suggestions must be submitted on the currently approved Employee Suggestion Program Form.
 This form should be submitted to the Employee Suggestion Program Coordinator.
 All suggestions will be acknowledged and accepted for review.
 If a suggestion is not implemented, it is not eligible for an award.
 Suggestions which are directly related to the following subjects are not eligible for awards.
o Personal grievance
o Matters discussed during collective bargaining
o Classification and pay of positions
o Matters previously or currently under study or review by management
o A duplicate of another suggestion already under consideration
o Matters which are the result of assigned or contracted auditing, studies, surveys, reviews, or
research
Page 1 of 3
o
o


Matters requiring legislative or Court action other than by County ordinance
Matters requiring the initiation of routine maintenance activities or adherence to prescribed safety
practices. Minor safety problems such as loose carpeting, frayed electrical wiring, etc., should be
reported through normal channels.
o Stricter enforcement of already existing rules, regulations, and laws within the Agency
o New or newly modified or designed equipment (that part which is exclusively new), systems,
procedures or forms shall not be open to suggestions for the first ninety (90) days of actual use, or
the warranty period (if applicable) of the equipment, system, procedure or form, etc., in the agency
operation.
o Suggestions recommending the use or purchase of a specific product brand.
o An idea awarded cash under a previous suggestion is not eligible for another cash award for a
similar application of that idea.
To be eligible for a cash award, suggestions must be implemented within one (1) year after approval.
The eligibility of unusual or borderline suggestions will be determined by the Committee.
Employee Eligibility:
 All employees of HCPHA are eligible to submit suggestions.
Special Awards:
 Granted upon the recommendation of the Committee and at the discretion of the Health Director
Suggestion Evaluation
 The Coordinator will decide what evaluation process is needed to determine all matters of cost
effectiveness.
 The Coordinator is responsible for notifying employees of the disposition of suggestions.
Awards and Savings
 The Committee will vote on the applicability of an award.
 Award presentations will be made quarterly.
 There are three types of awards:
o Cash Awards
o Certificates of Award (Signed by the Board of Health and Health Director)
o Certificates of Commendation (Signed by the Board of Health and Health Director)
 Certificates of Award will accompany all cash awards.
 Certificates of Commendation will be issued to employees whose suggestions contain genuine merit, but
are not recommended for a cash award.
 The intangible cash awards are made available from budgeted funds in the General Fund.
 The costs of tangible cash awards are offset by the net savings or revenue increase in the affected
operating departments.
Determination of Savings:
 Generally accepted accounting principles will be the guiding influence in determining savings.
 The following list may be useful in identifying relevant cost elements:
1. Personnel Services
a. Direct labor cost (use mid-point of range if specific data is unknown)
b. Fringe benefits (if applicable)
c. Overtime or stand-by costs
d. Management and administrative costs (10%)
2. Equipment or Capital Costs
a. These costs will be amortized over the life of the equipment and the first years depreciation is
considered as implementation costs, i.e., $10,000.00 equipment cost with a five year
expected life will equal a $2,000 implementation cost.
3. Energy or Fuel Costs
4. Materials and Supplies
a. Materials - the new material or purchased parts comprising a major component of the activity
under investigation.
b. Supplies and tools - items used in order to perform the service, i.e., forms, secretarial
supplies, nuts or bolts, tools, etc.
5. Financial Elements
a. Interest savings or expense
Page 2 of 3
6.
b. Inflation considerations
Miscellaneous Costs
a. Additional or reduced space requirements,
b. Training efforts,
c. Communications (telephone, mail, etc.),
d. Safety and security
e. Contractual arrangements (rentals, leases, etc.),
f. Transportation costs,
g. Maintenance and repairs,
h. Inventory levels
i. Down time for equipment.
Taxes:
 Cash awards made to agency employees for their suggestions are considered wages.
 Subject to FICA, FIT/EIC, Retirement, and income tax withholding
Amount of Awards:
 “Tangible” suggestion awards are 10 percent of the estimated first years net savings or net increase in
revenue with a minimum of $10.00 and a maximum net award of $1,000.00.
 “Intangible” suggestion awards are based on a scale of applicability:
 Group awards shall be prorated among those employees making the suggestion.
Definitions:
 “Suggestion” is a written original idea proposed by an employee to the Employee Suggestion Program
Committee that clearly suggests a specific method to do any job or procedure better, quicker, easier, safer,
or at less cost; to handle additional work load with the same staff, to produce a more efficient operation with
better control, to increase revenue, or to improve the quality of service.
 “Net Increase in Revenue” means the estimated first year net increase in revenue resulting from the
adoption and implementation of a suggestion.
 “Net Savings” means the estimated first year net cost avoidance/reduction resulting from the adoption and
implementation of a suggestion.
 “Tangible” means suggestions for which monetary value can be precisely determined.
 “Intangible” means suggestions involving improvements in working conditions, changes in procedures,
revisions of forms, improvement in employee morale, or employee health or safety, for which the monetary
value cannot be precisely determined.
Page 3 of 3