Attachment #5.
ID #__________
ESP Program – Evaluation Form
Calculating Tangible Suggestions
Award payments for measurable cost savings will be calculated as 10 percent of the first year’s net savings minus the amortized costs of the expected life of the implemented suggestion.
Labor Costs:
*Identify current annual man-hours required and those needed under the new process.
*Apply labor costs, direct and indirect; use an average hourly rate.
Materials Costs:
*Identify units of measure (tons, copies, kilowatts, items, miles), annual number required and annual cost for current and suggested methods.
Miscellaneous:
*Calculate and note any other costs for either the current or proposed methods. These might include contract payments, one time charges, utility or maintenance costs.
Implementation Costs:
*List one-time expenditures to implement.
*Amortize cost over expected life.
Example:
Item: Truck
Cost: $20,000
Expected life: 5 years
First year cost: $4,000
The $4,000 cost would be subtracted from the gross annual savings to show the first year’s net savings.
Calculating Tangible Savings Suggestions to be Utilized by Evaluation Panel
Year Cost Savings
Benefits: For tangible savings, determine anticipated reductions in materials, supplies, equipment, or work hours required to perform relevant tasks and then compute their dollar values for the first calendar year during which a suggestion will be in effect. | Amortizing Costs: If the suggestion is expected to continue in effect over a period of years, the cost of implementation should be amortized over a sufficient number of years to allow a reasonable first year’s net savings as a basis for granting an award. |
Labor Savings | Over What Period of Time Do You Recommend This Cost Be Amortized? |
Position Title | Other Tangible Benefits (in dollars per year) |
Salary Rate $ | Saves materials costs $ |
Hours Saved | Saves equipment costs $ |
Total Estimated Annual Savings | Saves overhead costs $ |
Cost of Implementation: Include one-time only costs of labor, supplies, materials, and equipment. Do not include costs which will recur. | Additional revenue $ |
Estimated One Time Cost of Implementation | Other (specify) |