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11 <br />consistent and effective application of the Association performance <br />appraisal evaluation criteria. Such procedures and guidelines shall define <br />how performance objectives, measure and standards are developed; when <br />and how performance reviews are to be carried out; how overall <br />performance ratings will be determined; and how performance based <br />monetary incentive payment options are to be exercised. <br />7. If it is determined by CalPERS that the “Bonus” is not eligible to be <br />included as “PERSable” compensation, the City shall convert the bonus to <br />two (2) additional merit based steps at increments of two and one half <br />percent (2.5%) for the last year that the employee earned the Bonus. The <br />Association understands and agrees that these steps would be merit based <br />and employees must maintain a Significantly Exceeds rating to receive or <br />maintain the five percent (5%) or Exceeds Expectations rating to receive <br />or maintain the two and one half percent (2.5%). Employees who do not <br />receive Significantly Exceeds rating or Exceeds Expectations rating will <br />be returned to Step D of the Association salary schedule. <br />4.9 Promotional Salary Advancement. When an employee is promoted to a position in a <br />higher classification from a position in a lower classification in the bargaining unit, they <br />shall be reassigned to the lowest step in the appropriate salary rate range for the higher <br />classification that gives the employee a minimum increase of one (1) salary step <br />(approximately five percent (5%)) over their current base salary step (plus any pay for <br />performance bonus if said employee was at top step in their current classification) and <br />exclusive of any pay additive or additives such as shift differential, assignment pay, <br />special skill pay, or the like. <br />4.10 Demotion. When an employee is demoted to a position in a lower classification, their <br />salary rate shall be fixed in the appropriate salary rate range for the lower classification in <br />accordance with the following provisions: <br />A. The salary rate shall be reduced by at least one (1) step. <br />B. The new salary rate must be within the appropriate salary rate range. <br />D. The new salary rate shall not be higher than the salary step to which the employee <br />would have been entitled had their service time in the higher classification been <br />spent in the lower classification. <br />4.11 Reallocation of Salary Rate Ranges. An employee who is employed in a classification <br />which is reallocated to a different salary rate range from that previously assigned shall be <br />retained in the same salary step in the new salary rate range as he or she had previously <br />held in the prior rate range and shall retain credit for length of service in such step <br />towards advancement to the next higher step. <br />ARTICLE V