The recent resignation of Kathryn Shen from her position as director of the city's Human Resources Department was prompted by the department's "changing needs" and reached by a mutual decision between Shen and City Manager James Keene, according to Keene.
Shen abruptly resigned from her title as "chief people officer" last month and was quickly replaced by Rumi Portillo, who currently serves as director of Human Resources for the City of Los Gatos. The City Council approved Portillo's unanimously appointment this week. Portillo will officially start her new position on Jan. 19.
The change comes at a time when the city is wrestling with a gaping unfunded liabilities for employee pensions and health care. Palo Alto is also facing increasing challenges in recruiting workers for some of the more technical positions in the Public Works and Utilities departments.
Keene, who as city manager has the authority to fire and hire department heads, told the Weekly that Shen's departure came after a "mutual decision" about shifting priorities within the department.
"In every organization, there are points where the fit between the team and the organization's objective needs change," Keene said. "We got to a point where I thought things we'll need to do in the future were going to demand probably a little bit of a different mix of skill set and interests than Kathy has."
Keene said Shen is particularly strong on issues such as training, employee development and health and wellness. These strengths notwithstanding, Keene said the city plans to make some systemwide changes with its enterprise resource planning (ERP) software (which is used to track employee performance), an effort that requires a more technical focus, he said. Keene and Shen "mutually agreed that changing direction was good," he said.
"Kathy is a real professional and she realizes that if I want to go in a different direction, she also wants to go in a different direction," Keene added.
Shen's "release and transition agreement" notes that she "intends to resign from City employment" and that she releases the city from any and all future claims or other legal actions relating to her employment with the city.
As part of the agreement, Shen will also receive a payment of $59,607, consistent with her contract's provision that she receive severance pay equal to three months salary. Keene said such a payment is typically offered to ensure employees have "transition money" when they conclude their employment.
"We've been talking for a while about going into a new direction," Keene said. "She was out looking for what she will be doing next. She served us really well and we want to be sure she has some transition funding while we move on."
Shen was hired by Keene in 2012.
Portillo, who had also served as employment manager for the cities of San Jose and Sunnyvale, made her public debut in Palo Alto this week. Moments after the council approved her contract, she said she is excited to join Palo Alto as the new "chief people officer," as the director's position is titled.
"I know we have challenges ahead on recruitment and retention," Portillo said. "I bring 25 years of experience to help address that."