SENATE BILL REPORT

EHB 1480

BYRepresentatives Hankins, Sayan, R. Fisher, Belcher and Fraser; by request of Secretary of State

Changing provisions relating to the productivity board.

House Committe on State Government

Rereferred House Committee on Appropriations

Senate Committee on Economic Development & Labor

Senate Hearing Date(s):March 27, 1989

Majority Report:  Do pass.

      Signed by Senators Lee, Chairman; Anderson, Vice Chairman; McMullen, Matson, Murray, Saling, Smitherman, West, Williams.

Senate Staff:Charles A. Woods (786-7452)

                  March 27, 1989

AS REPORTED BY COMMITTEE ON ECONOMIC DEVELOPMENT & LABOR, MARCH 27, 1989

BACKGROUND:

The ten member Productivity Board was established in 1982 to oversee two programs designed to encourage and reward suggestions by state employees to improve the efficiency of government operations.

The employee suggestion program offers a cash incentive to employees whose suggestions result in cost savings or cost avoidances for a state agency.  The award comes from the agency's appropriation and consists of 10 percent of one year's savings, up to a limit of $10,000.  Agencies may grant leave in lieu of cash awards for cost avoidances.

Awards for suggestions which generate revenue can be drawn from the general fund with joint approval of the Productivity Board and the Director of Financial Management, subject to legislative appropriation.

Under the teamwork incentive program (TIP), an agency work unit prepares quantifiable measures of program output and performance and, at the end of a year of participation, compares its operating costs to a) the prior year, b) an average of no more than three prior years, or c) engineered standards.  Units participating for more than one year compare current year costs only to costs from the prior year.  TIP awards are 25 percent of identified cost savings, distributed pro rata among members of the work unit.

Agencies may also give recognition awards to employees, not to exceed $50 in value.

The Productivity Board is funded by an appropriation from the personnel service fund.  Agencies transfer 10 percent of any savings gained from the employee suggestion program or TIP to the service fund.  The board makes the final decision on all awards.

SUMMARY:

Awards for employee suggestions that generate revenue to the general fund or other funds are to be distributed by the Director of Financial Management from moneys appropriated to the Office of Financial Management for that purpose.  Transfers are to be made from any other funds to the general fund to cover the cost of award payments.  Employees no longer have the option to take leave in lieu of a cash award under the employee suggestion program.

Agencies are no longer required to transfer 10 percent of cash savings generated by the employee suggestion or teamwork incentive programs to the personnel service fund for support of the Productivity Board.

Work units participating in the teamwork incentive program for two or more consecutive years may elect to compare their operating costs to average costs from the previous three years, rather than relying solely on the prior year's figures for comparison.

The maximum value of recognition awards is increased from $50 to $100.

Appropriation:    $50,000 to the Office of Financial Management

Revenue:    none

Fiscal Note:      available

Effective Date:The bill contains an emergency clause and takes effect on July 1, 1989.

Senate Committee - Testified: No one