agenda 07 10 08

Residents Voice 1

LWVJuly 10, 2008

Residents Voice

07/10/08

Residents Voice 207/10/08

The age-old question;

“How should we know what we don’t know ?”

Residents Voice 307/10/08

Why would you ask,

“Does PCM Utilize

Epistemology in their Management

Philosophy?”

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Residents Voice 507/10/08

For Example:Who Would Have Thought To Ask;

• “Do we have an Incentive Plan?”– There was no documented reference to it.– No verbal reference to it by the GM.

• So, Why would anyone ask that question before it came to light in late 2006?

Residents Voice 607/10/08

Residents Voice 707/10/08

Why do we need an Incentive Plan?

As Opposed To:

Residents Voice 807/10/08

Managerial “Carrots” in the Corporate World

• Compensation • Extra Bonus• Benefits• Responsibility • Treat With Respect • Expertise at Job• Enjoys Job & Environment

Residents Voice 907/10/08

PCM Philosophy

• Apparently PCM believes that motivation comes through Bonuses (Money).

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What is the Problem ?

• That we have an incentive plan?– No! It may or may not be justified in the future!

• That the resident/owners were unaware of the plan?– Yes! Implementing a plan that costs millions of

dollars without approval of the owners is THE PROBLEM!

Residents Voice 1107/10/08

Where Could We Have Started looking for ?????

• A Job is defined by what is called a; “Job Description”

• This defines what is expected of an Employee by an Employer.

• Using this Job Description to compare with what an Employee does, defines when employees get raises and promotions.

Residents Voice 1207/10/08

Who Creates the Job Descriptions?

• Managing Agent?– The employees are employed by PCM.

• Boards of Directors?– They have no part in this.– The employees belong to Managing Agent.– Should they be involved?

•DEFINITELY!

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WHY?

• We would have recognized that the “Incentive/Bonus Plan” if it was included in the Job Descriptions.

• Or, WAS IT ?

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Was it In The Management Agreement ?

• No! There is no reference to it prior to 2007.

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When Did Bonuses Originate?

• ???? 1996 ????

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How Did They Originate?

• The Managing Agent Implemented the Incentive Program.

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Who Authorized the Incentive Plan?

• The Managing Agent.

Residents Voice 1807/10/08

Where Did The Money Come From?

• When PCM came in under budget, 15% of the savings went into the Bonus Plan (it is rumored).

• By-the-way: –What motivation is there for the

GM to have a low budget?

Residents Voice 1907/10/08

Who Reviewed the Bonuses?

• Managing Agent – YES!

• Boards – NO!

Residents Voice 2007/10/08

What Should We Expect Now?

• A full disclosure of all past years Bonus and Incentive costs:

– How Much.– Why? (The justification!)– To Whom.

Residents Voice 2107/10/08

WHY?

“To know what we don’t know ?”

Residents Voice 2207/10/08

Maybe we will learn to ask a pertinent question and expose something else

that we

“Don’t Know!”

Residents Voice 2307/10/08

THE END