State Codes and Statutes

State Codes and Statutes

Statutes > North-carolina > Chapter_126 > GS_126-7

Article2.

Salaries, Promotions, andLeave of State Employees.

§ 126‑7.  Compensationof State employees.

(a)        It is the policy ofthe State to compensate its employees at a level sufficient to encourageexcellence of performance and to maintain the labor market competitivenessnecessary to recruit and retain a competent work force. To this end, salaryincreases to State employees shall be implemented through the ComprehensiveCompensation System based upon the individual performance of each Stateemployee. The Comprehensive Compensation System shall combine salary increasesand awards into an interrelated system of compensation that furthers therecruitment, retention, career service, and outstanding performance of Stateemployees.

(a1)      Repealed by SessionLaws 1993, c. 388, s. 1.

(a2)      For the purpose ofthis section, unless the context indicates otherwise:

(1)        "Career growthrecognition award" means an annual salary increase awarded to a Stateemployee whose final annual performance appraisal indicates job performancethat meets or exceeds management's expectations and performance requirements;

(2)        "Cost‑of‑livingadjustment" means a general salary increase given to State employees inresponse to inflation and labor market factors;

(3)        "Performancebonus" means a salary increase that is awarded in a lump sum to a Stateemployee whose final annual performance appraisal indicates job performancethat exceeds management's expectations and performance requirements.

(b)        To guide theGovernor and the General Assembly in making appropriations to fund theComprehensive Compensation System, the State Personnel Commission shall conductannual compensation surveys. The Commission shall present the results of thecompensation survey to the Appropriations Committees of the House and Senate nolater than two weeks after the convening of the legislature in odd years andMay 1st of even years.

(b1)      The ComprehensiveCompensation System shall consist of the following components: (i) the careergrowth recognition award, (ii) the cost‑of‑living adjustment, and(iii) the performance bonus. The career growth recognition award shall be theprimary method by which an employee progresses through his or her salary rangeand shall be awarded annually to employees who qualify for the award. Anemployee may receive, within a 12‑month period, the career growthrecognition award, the cost‑of‑living adjustment, and theperformance bonus, if the employee's job performance equals or exceeds thelevel of performance set forth in subdivisions (4), (4a), and (4b) ofsubsection (c) of this section. No employee shall be eligible to receive duringa 12‑month period a performance bonus greater than the maximum amount orless than the minimum amount established by the Commission. Nothing in thissection shall affect the system of longevity payments established by theCommission.

(c)        Career growthrecognition awards, cost‑of‑living adjustments, and performancebonuses shall be based on annual performance appraisals of all employeesconducted by each department, agency, and institution. The State PersonnelCommission, under the authority of G.S. 126‑4(8), shall adopt policy andregulations for performance appraisal. The policy and regulations shall includethe following:

(1)        The performanceappraisal system of each department, agency, or institution shall be designedand administered to ensure that career growth recognition awards, cost‑of‑livingadjustments, and performance bonuses are distributed fairly.

(2)        To be eligible todistribute career growth recognition awards, cost‑of‑livingadjustments, and performance bonuses, a department, agency, or institutionshall have an operative performance appraisal system which has been approved bythe Commission. The performance appraisal system adopted shall use a ratingscale of five levels, with level four or better qualifying for performancebonuses, level three or better qualifying for career growth recognition awards,and level two or better qualifying for cost‑of‑living adjustments.The performance appraisal system adopted shall adhere to modern personnelmanagement techniques and practices in common use in the public and privatesectors.

(3)        The State PersonnelDirector shall help departments, agencies, and institutions to establish andadminister their performance appraisal systems and shall provide initial andongoing training in performance appraisal and performance systemadministration.

(4)        An employee whoseperformance is rated at or above level four of the rating scale shall beeligible to receive, subject to the rules and regulations of the Commission, aperformance bonus unless the employee's supervisor justifies in writing to theemployee the decision not to award the performance bonus. Other than theCommission, no department, agency, or institution shall set limits so as topreclude an employee whose performance exceeds management's expectations andperformance requirements from consideration for a performance bonus.

(4a)      An employee whoseperformance is rated at or above level three of the rating scale shall receivea career growth recognition award unless the employee's supervisor justifies inwriting to the employee the decision not to give the career growth recognitionaward. The career growth recognition award shall represent a two percent (2%)increase within the employee's assigned pay grade. In no event shall any awardincrease an employee's compensation above the maximum of the range. Other thanthe Commission, no agency, department, or institution shall set limits so as topreclude an employee whose performance meets or exceeds management'sexpectations and performance requirements from receiving a career growthrecognition award.

(4b)      An employee whoseperformance is rated at or above level two of the rating scale and who has notreceived a suspension without pay or demotion that has not been resolved shallreceive a cost‑of‑living increase. Other than the Commission, noagency, department, or institution shall set limits or initiate writtendisciplinary procedures for the purpose of precluding an eligible employee fromreceiving a cost‑of‑living adjustment.

(5)        Repealed by SessionLaws 1993, c. 388, s. 1.

(5a)      Repealed by SessionLaws 1993, c. 388, s. 1.

(6)        The State PersonnelDirector may rescind any career growth recognition award or performance bonusthat does not appear to meet the intent of the provisions of the performanceappraisal system and require the originating department, agency, or institutionto reconsider or justify the increase.

(7)        An employee whodisputes the fairness of his or her performance appraisal or the amount of aperformance bonus awarded or who believes that he or she was unfairly denied acareer growth recognition award or performance bonus shall first discuss theproblem with his or her supervisor. Appeals of the supervisor's decision shallbe made only to the grievance committee or internal performance review board ofthe department, agency, or institution which shall make a recommendation to thehead of the department, agency, or institution for final decision, or whenconsented to by both the agency and the employee, the supervisor's decision maybe appealed by following the alternative dispute resolution process adopted bythe State Personnel Commission. The State Personnel Director shall help adepartment, agency, or institution establish an internal performance reviewboard or, if it includes employee members, to use its existing grievancecommittee to hear performance pay disputes. Notwithstanding G.S. 150B‑2(2)and G.S. 126‑22, 126‑25, and 126‑34, performance pay disputes,including disputes about individual performance appraisals, shall not beconsidered contested case issues.

(7a)      Each department,agency, and institution shall establish a performance management and payadvisory committee as part of the performance appraisal system. The purpose ofthe committee is to ensure that salary increases and awards are made in anequitable manner. The committee shall be responsible for reviewing:

a.         Agency salaryincrease and award policies to determine whether this section and anyguidelines promulgated by the State Personnel Commission have been adhered to;

b.         Agency training andeducation programs to determine whether all employees receive appropriateinformation; and

c.         Performanceappraisal ratings within the department, agency, or institution to determinewhether an equitable distribution has been made.

            Thecommittee must have a minimum of five members. The head of each department,agency, and institution shall appoint the members of the committee with equalrepresentation of nonsupervisory, supervisory, and management employees. Thecommittee shall elect its own chair.

            Theperformance management and pay advisory committee shall meet at least two timeseach year. The committee shall submit a written report following each meetingto the head of the department, agency, or institution. The report shall includerecommendations for changes and corrections in the administration of theperformance management system. The recommendations of the committee shall beadvisory only. The head of the department, agency, or institution shall respondto the committee within three months. Copies of the report shall be included inthe report to the Office of State Personnel that is required of that agency,department, or institution. Summaries of the report shall be included in theannual reports that are mandated by this subsection.

(8)        The State PersonnelDirector shall monitor the performance appraisal system and the distribution ofsalary increases and awards within each department, agency, and institution.Each department, agency, and institution shall submit to the Director annualreports which shall include data on the demographics of performance ratings,the frequency of evaluations, the distribution of salary increases and awards,and the implementation schedule for salary increases and awards. The Directorshall analyze the data to ensure that salary increases and awards aredistributed fairly within each department, agency, and institution and acrossall departments, agencies, and institutions of State government and shallreport back to each department, agency, and institution on its appraisal anddistribution performance.

(9)        The State PersonnelDirector shall report annually on the Comprehensive Compensation System to theCommission. The report shall evaluate the performance of each department,agency, and institution in the administration of its appraisal system and thedistribution of salary increases and awards within each department, agency, andinstitution and across State government. The report shall includerecommendations for improving the performance appraisal system and alleviatinginequities. Copies of the report, as adopted by the State Personnel Commission,shall be sent to the Governor, Lieutenant Governor, President Pro Tempore ofthe Senate, Speaker of the House of Representatives, the standing personnelcommittees of the House of Representatives and the Senate, and the StateAuditor. The State Personnel Director shall recommend to the General Assemblyfor its approval sanctions to be levied against departments, agencies, andinstitutions that have deficient performance appraisal systems or that do notlink salary increases and awards to employee job performance. These sanctionsmay include withholding salary increases and awards from the managers andsupervisors of individual employing units of departments, agencies, andinstitutions in which discrepancies exist.

(10)      Repealed by SessionLaws 1993, c. 388, s. 1.

(d)        Repealed by SessionLaws 1993, c. 388, s. 1.

(e)        The Governor andthe General Assembly, subject to availability of funds, shall advance theState's Comprehensive Compensation System by recommending and making annualappropriations to the Comprehensive Compensation System in the followingmanner:

(1)        The career growthrecognition award component shall be funded each year at the level required forfull implementation as provided by this section.

(2)        To the extent thatexpansion funds are available, the Comprehensive Compensation System shallreceive an additional appropriation to fund cost‑of‑livingadjustments. Any remaining available funds shall next be allocated to providefor performance bonuses. The level of the performance bonus allocation shallnot exceed two percent (2%) of the total employee payroll. (1965,c. 640, s. 2; 1975, c. 667, s. 2; 1977, c. 802, s. 40.5; c. 866, s. 6; 1977,2nd Sess., c. 1213; 1989, c. 796; 1989 (Reg. Sess., 1990), c. 1025, s. 1; c.1028; 1991, c. 689, s. 187(b)‑(e); 1993, c. 388, s. 1; 1995, c. 141, s.6; c. 509, s. 67; 1998‑212, s. 28.16B(a).)