Good afternoon.

Welcome to this meeting of Denton City Council.

Today's Tuesday, February 17, 2026.

It is 2 p.m.

We'll call the meeting to order.

And the first thing on the agenda citizens' comments on the consent agenda seeing none.

That takes us to request for clarification on agenda items listed on the agenda for public hearing and individual consideration.

Questions about public hearings or individual consideration?

Seeing none takes us to work session.

First one is 3A, ID 252151.

Receive report hold discussion, give staff direction regarding audit project 047 employee performance management.

Hello, Mayor and Council.

I'm Madison Rorshaw, Denton City Auditor.

I'm here to present uh the findings from our audit of the city's employee performance management program.

So employees drive an organization's success, and employee performance management aims to achieve this success by aligning objective individual objectives with departmental and organization-wide priorities.

In general, employee performance management is a continuous cycle where performance expectations are established, performance is monitored, and based on that monitoring, employees are either coached to meet those expectations or good performance is recognized.

Some organizations also periodically rate performance to collect data on the workforce as a whole.

Employee performance management is primarily the responsibility of supervisors.

However, organizations often establish organization-wide performance management programs to ensure employee performance is managed consistently across varying positions and supervisors.

These programs are typically managed by human resources departments.

Since 2020, the city has added about 200 budgeted positions and plans to employ almost 2,000 people in the current fiscal year.

These employees' performance must be managed to ensure the city achieves its goals.

And I do want to uh take a moment to recognize that the city's HR department has experienced significant turnover in its organizational development team, and all three of the positions are currently vacant due to budgetary constraints, slowing progress on the team's ability to support the organization with performance management.

So this audit evaluated if the city's performance management program was transparent and consistent for all employees, increased employee performance accountability, and provided all employees employees with feedback on how their performance contributed to the city's success.

So the core of perform of employee performance management is establishing and clearly communicating performance expectations for each employee.

Industry standards generally agree that performance expectations should be measurable, defined, and relevant to the organization's goals and the employees' role.

In addition, employees should have the opportunity to provide input on non-essential performance expectations to ensure that they are realistic, attainable, and clearly understood to increase employee motivation and commitment.

Centralized performance management programs typically create training or guidance on establishing performance expectations and monitoring employee performance to promote consistency among supervisors.

During the 2023 and 2024 performance review cycles, HR issued guidance that included references to supervisors holding goal-setting meetings at the beginning of a performance rating period, but information on how to establish these goals was not made available until 2025 due to staffing limitations.

Still based on uh 67 responses to a survey of 258 supervisors.

About 90% described performance expectations that appeared to be generally relevant to the goals and objectives of the city and the employees' role.

About 58% of responses indicated that performance expectations were clearly defined, and about 52% indicated that they were measurable.

Further, supervisors generally communicate either individualized or general performance expectations verbally, but only 22% of supervisors who responded to the survey indicated that individualized performance expectations were communicated in writing, meaning that about a fifth of supervisors did not indicate that they provide their employees with regular communication about their individualized performance expectations, as outlined in the table on the slide.

While performance expectations may be shared generally through group meetings, trainings, or written procedures, helping supervisors establish uh specific written individualized expectations would help further ensure the performance management program is transparent and consistent for all employees.

For those reasons, we recommended that HR develop guidance for supervisors on how to establish and communicate performance expectations to their employee.

Once performance expectations are established, supervisors are responsible for coaching, providing feedback and supporting employee development through ongoing performance monitoring.

Industry standards generally suggest that supervisors identify key performance indicators or KPIs to monitor employee performance.

KPIs should be measurable and directly related to the employees' roles and responsibilities.

KPIs should be measurable and directly related to the employees' roles and responsibilities, and a mix of quantitative data such as the number of work orders completed and qualitative information such as collaborator feedback should be used to ensure all aspects of an employee's performance are considered.

While the city's policy requires supervisors to measure an employee's current performance levels against established criteria, training for supervisors on how to continually monitor employee performance against these expectations has generally not been developed.

Supervisors were required to hold mid-year check-ins with their employees, helping to ensure feedback was provided at least twice a year.

And HR provided guidance for employees on maximizing these check-ins for the 2024 2025 performance cycle.

City's human resources management system also includes a tool that allows supervisors and employees to document notes about an employee's performance throughout the performance cycle.

This tool was available for use during the 2023 and 2024 cycles, but guidance on using it was not provided until 2025 due to staffing limitations.

Despite conflicting training and guidance experiences, most supervisors indicate that they have developed relatively mature methods of monitoring employee performance against expectations.

Specifically, based on the supervisor survey, about two-thirds collect KPIs to monitor performance, and an additional 18% rely on self-collected qualitative information, improving accountability.

Still, about 15% of supervisors' responses indicated that they either did not collect information to monitor employee performance or that they relied on information provided by the employee themselves.

Supervisors should determine how an employee's actual performance compares to expectations based on ongoing monitoring and provide feedback.

Industry standards suggest that employees who meet or exceed expectations should be recognized to encourage continued similar performance.

And employees who underperform should be promptly addressed to support performance improvement.

Formal recognition is usually managed through organization-wide programs to ensure consistent application, and due to its significance, centralized performance management programs generally provide supervisors with training and centralized and guidance on when and how performance-based interventions should be issued.

Formal performance management actions should be documented in an employee's personnel file, and employees should be able to appeal major personnel actions.

The city has historically created a few formal avenues for recognizing employee performance, including providing merit-based pay increases and holding an annual honorary award ceremony.

However, these programs were eliminated due to budgetary constraints for fiscal year 26.

While these programs were eliminated, audit verified that a sample of employees were accurately awarded a merit-based pay increase during the for based on the 2024 performance cycle.

HR has generally not released any guidance for supervisors on recognizing employees for exceeding or meeting expectations informally, and the city does not currently allow supervisors to recognize good performance through promotion.

These uh though these methods are recommended by industry standards.

All but one supervisor of the 67 that responded to the survey indicated that they provide some sort of recognition for their employees, with most indicating that they at least provide verbal recognition and almost half indicating recognition was provided in writing.

A few supervisors expressed concerns about limitations on their ability to provide recognition for quality performance, which may indicate that some employees who are exceeding expectations may not be receiving enough recognition.

And about 7% of the supervisors indicated that they recognize employees who are exceeding expectations with additional responsibilities, despite this generally not being considered valid recognition by industry standards.