ORANGE'S INCENTIVE PLAN WAS ORIGINATED BY THE CITY MANAGER IN APRIL 1973, IN RESPONSE TO A ROUTINE REQUEST FOR PAY INCREASES BY THE CITY OF ORANGE (CALIF.) POLICE ASSOCIATION. THE ASSOCIATION FELT THAT THE ORANGE POLICE SHOULD BE REWARDED FOR THE CITY'S LOW CRIME RATE RELATIVE TO REPORTED CRIME RATES IN NEARBY JURISDICTIONS. THE CITY MANAGER FELT THAT MAKING WAGE INCREASES CONTINGENT ON REDUCTION IN CRIME RATES WOULD BE MORE ACCEPTABLE TO CITY TAXPAYERS AND WOULD HELP JUSTIFY SUCH INCREASES. THE PLAN INITIALLY COVERED ABOUT 133 SWORN AND 33 UNSWORN PERSONNEL. THE EXISTENCE OF POLICIES REQUIRING THAT A 15 PERCENT PAY DIFFERENTIAL BE MAINTAINED BETWEEN CERTAIN MANAGEMENT AND NONMANAGEMENT EMPLOYEES MEANT THAT POLICE SERGEANTS AND LIEUTENANTS WERE EFFECTIVELY INCLUDED IN THE PROGRAM. A MEMORANDUM OF UNDERSTANDING PROVIDED FOR AN ACROSS-THE-BOARD INCREASE IN WAGES OF ALL COVERED PERSONNEL AT CERTAIN POINTS IN TIME IF THE TOTAL REPORTED NUMBER OF FOUR REPRESSIBLE CRIMES -- RAPES, ROBBERIES, BURGLARIES, AND AUTO THEFTS -- FELL BY SPECIFIED PERCENTAGES DURING BASE PERIODS. THERE WERE TWO PERIODS OVER WHICH THE CRIME RATES WERE ASSESSED: ONE 7 MONTHS AND ONE 20 MONTHS LONG. AN EXTENSIVE PROCEDURE WAS DEVELOPED FOR PREPARING, MONITORING, AND CHECKING THE DATA ON THE FOUR TYPES OF CRIMES. TWO TYPES OF ADJUSTMENTS WERE MADE TO THE RAW DATA; CRIMES FOR WHICH SUSPECTS WERE APPREHENDED AT THE SCENE OR CLOSE BY WERE NOT INCLUDED IN THE CRIME STATISTICS USED IN THE INCENTIVE PROGRAM, AND CRIMES THAT INVESTIGATION INDICATED WERE UNFOUNDED WERE OMITTED. DEPARTMENT ACTIONS IN RESPONSE TO THE PLAN INCLUDED THE CREATION OF A CRIME PREVENTION BUREAU AND A SPECIAL ENFORCEMENT TEAM, AND THE INCREASED SHARING OF INFORMATION BETWEEN THE VARIOUS UNITS OF THE DEPARTMENT. UNDER THE PLAN, POLICE IN ORANGE ACHIEVED THEIR GOAL OF REDUCING THE COMBINED RATE OF THE FOUR CRIMES AND QUALIFIED FOR THE MAXIMUM POSSIBLE REWARDS: A 2 PERCENT WAGE INCREASE EFFECTIVE AFTER THE CLOSE OF THE FIRST BASE PERIOD, AND A 3 PERCENT INCREASE ADDED AT THE CLOSE OF THE SECOND. DURING THE FIRST PHASE OF THE PROGRAM, THE COMBINED MONTHLY RATE FOR THE FOUR CRIMES DECLINED 9.2 PERCENT COMPARED TO THE PREVIOUS YEAR. DURING THE SECOND PHASE, A 4.1 PERCENT DROP WAS ACHIEVED. THE PROGRAM WAS TERMINATED BECAUSE OF THE DIFFICULTY IN FURTHER REDUCING THE CRIME RATE, THE NEED FOR INCREASED MANPOWER, EXTERNAL CRITICISM, CRIME REDUCTION EFFORTS BY NEIGHBORING JURISDICTIONS, AND THE FINITE NATURE OF THE INCENTIVE PROGRAM. SUMMARIES AND CONCLUSIONS REGARDING PROGRAM PRODUCTIVITY, LABOR-MANAGEMENT RELATIONS, AND EMPLOYEE SATISFACTION AND RELATED ISSUES ARE PROVIDED. TABULAR DATA RELATING TO THE CRIME RATE DECLINES AND ACCOMPANYING WAGE INCREASES ARE PROVIDED. (KBL)