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E I k River <br />Municipal Utilities <br />COMMISSION POLICY <br />Section: <br />Governance <br />Category: <br />Delegation to Management Policies <br />Policy Reference: <br />Policy Title: <br />Performance Metrics and Incentive <br />GAgI <br />Compensation <br />1.0 PURPOSE AND SUMMARY <br />The successful performance of the ERMU is measured in terms of the Utilities' ability to meet <br />our strategic goals and mission. By improving our efficiency and level of performance in <br />meeting our strategic goals and mission we can improve the delivery of value to our customers. <br />To create incentives for employees to take personal responsibility for accomplishment of the <br />Utilities' strategic goals and mission, the Utilities has established a Utilities Performance <br />Metrics -based Incentive Compensation system ("UPMIC"). Through UPMIC the employees of <br />ERMU will have an opportunity, as a group, to earn annual incentive compensation for each <br />qualifying employee by contributing individually to the overall success of ERMU on a daily <br />basis. <br />Under UPMIC, either all qualifying employees will earn an incentive compensation distribution <br />in a given year, or none will. And not only will incentive compensation under UPMIC in that <br />sense be an all or nothing proposition each year, but there will be an equal percentage share basis <br />for all on which the incentive compensation will be paid out if earned. This appropriately reflects <br />the reality that we all succeed, or fall short, together as a team. <br />To administer the UPMIC and measure objectively the level of performance that must be <br />achieved for qualifying employees to earn incentive compensation, the attached UMPIC <br />Performance Metrics Policy Scorecard ("Scorecard") has been created. The Scorecard will be <br />subject to revision annually based on the performance metrics adopted by the Commission <br />annually for the coming year ("Performance Metrics"). By tracking and measuring the <br />Performance Metrics and creating incentive for employees to achieve the goals the Metrics <br />embody, the Utilities believes it will be better able to focus efforts and resources on becoming <br />more efficient and successful in meeting our strategic goals and mission and delivering improved <br />value to our customers. <br />Page 1 of 3 <br />55 <br />