HBA-DMH S.B. 1488 77(R) BILL ANALYSIS Office of House Bill AnalysisS.B. 1488 By: Haywood Appropriations 5/8/2001 Engrossed BACKGROUND AND PURPOSE Many private companies and federal agencies have adopted pay-for-performance (PFP) compensation systems. PFP systems are designed to increase productivity by recognizing the best performers and rewarding them accordingly. PFP furthers performance-based management by linking the goals of the organization to employee performance measures. Through PFP planning, individuals participate cooperatively with the agency to meet the goals in the agency's strategic plan of operation. Senate Bill 1488 requires each state agency to adopt policies to ensure that an employee's performance expectations are linked to the goals in the agency's strategic plan of operation and establishes a task force to evaluate employee compensation systems. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. ANALYSIS Senate Bill 1488 amends the Government Code to require each state agency to adopt policies to ensure that an employee's performance expectations are linked to the goals in the agency's strategic plan of operation. The bill establishes a task force to evaluate employee compensation systems and requires the task force to: _evaluate the strengths and weaknesses of the current merit increase system for compensating employees; _identify statewide opportunities for funding pay-for-performance policies and practices to supplement current efforts at recruiting and retaining employees; and _provide recommendations on those matters to the legislature not later than January 1, 2003. The task force is composed of following appointees by the governor: a representative of the governor's office; three representatives from state agencies that employ fewer that 100 full-time employees; three representative from state agencies that employ at least 100 but fewer than 1,000 full-time employees; and three representative from state agencies that employ 1,000 or more full-time employees. In addition, the state auditor appoints a representative of the state auditor's office who is required to sever as the presiding officer of the task force; the comptroller of public accounts appoints a representative of the comptroller's office; and the director of the Legislative Budget Board appoints a representative of the Legislative Budget Board. EFFECTIVE DATE September 1, 2001.