Bonus system changes would reduce payout, increase accountability, redirect funds to the needy

By on September 17, 2013

CPS Energy’s earned incentive pay (EIP) program, widely known as the utility’s bonus pay system, will be altered in a way that would increase accountability and reduce the payouts to employees, CEO Doyle Beneby said last week.

He announced the change at a Sept. 9 public information session held by the company’s Board of Trustees at the Tripoint YMCA to discuss the utility’s rate increase request.

Beneby suggested redirecting the money saved, which could total more than $4 million, to expand affordability programs for low-income customers such as the utility’s Residential Energy Assistance Program (REAP).

“The community has concerns about our compensation structure. We are sensitive to that,” he said.

Speaking at the public input session, Beneby suggested overlaying a standard performance distribution rating system for individual employees on top of the existing company-wide incentive pay system.

Under the current system, in place since 2000, when company-wide goals are met in areas such as safety, affordability, customer satisfaction and reliability, employees are eligible for incentive pay.

Beneby arrived at CPS Energy in 2010.

Under the proposed new system, if company-wide goals are achieved, incentive pay would be paid out in tiers, based on individual performance. Underperforming employees would remain ineligible.

Details are still being evaluated, but the plan would go into effect for the next fiscal year, which begins Feb. 1, 2014.

This Post Has 5 Comments
  1. Ruth on said:

    I think bonuses based on individual performance is great as opposed to a blanket bonus. This will increase customer satisfaction because each employee knows they are accountable for themselves only. They don’t reap the benefits of others’ hard work nor do they have to carry anyone else’s weight.

  2. Jerry Hepler on said:

    They already receive a bonus…It’s called a salary. Customer service is terrible, they’ve done nothing to reduce costs, and infrastructure still needs upgrading. I think that covers about every aspect of the company. I ask you who in this company deserves a bonus?

    • Tracy Idell Hamilton on said:

      hi Jerry,

      Thanks for reading. You’re right, we’ve had some terrible customer service issues lately — and under the existing at-risk pay, or bonus plan, executives could lose up to 35 percent of their salaries if they don’t meet the goals set this year for customer service (Among other metrics) You can read more about what CPS Energy is doing to rectify the customer service problem here: http://blog.cpsenergy.com/go-online-customer-service/

      It’s incorrect, however, to say that CPS Energy has done nothing to reduce costs. CEO Doyle Beneby and executives have been so diligent about reducing costs, in fact, that CPS Energy didn’t have to ask for a rate increase in 2012, as it had previously planned for. If you look at page 12 of the presentation Beneby gave to the City Council last week, http://www.cpsenergy.com/files/Rate_Adjustment_Request_Presentation_091813.pdf you’ll see that CPS Energy saved $97 million through attrition, reduced health care costs, business proces improvement and eliminating a key environmental upgrade to the Deely coal plant.

      You’re also right that infrastructure still needs upgrading, and that’s where the $65 million raised by the increase will go: http://blog.cpsenergy.com/capital-projects-drive-rate-request/

      Finally, wanted to let you know that in response to questions from the Council, Beneby said he believed the Board of TRustees is open to revisiting the bonus system it put into place 13 years ago.

      Thanks for commenting!
      ~Tracy

      • JOSE CARRASQUILLO SR on said:

        This is a waste of my time. CPS don’t listen to customers they just want more money for themselves. If they didn’t give those big bonuses to high employees making over a 100 thousand a year there will be money for improvement without raising rates.

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