Gilbert Town Council Study Session
50 E Civic Center Dr.
Gilbert Town Council Meeting
50 Civic Center Dr.
Item of Interest:
#24. HUMAN RESOURCES. Consider approval of a Compensation Philosophy and Strategy for Gilbert’s Classification and Compensation Study.
Here is the Draft Copy:
TOWN OF GILBERT, ARIZONA
PROPOSED FOCUS FRAMEWORK FOR THE TOWN OF GILBERT’S CLASSIFICATION AND COMPENSATION SYSTEM
PURPOSE AND PHILOSOPHY
The purpose of the Town of Gilbert’s (Town) classification and compensation system is to support the recruitment, success, and retention of qualified and productive employees and to encourage and reward activities that promote the Town’s vision, mission and values as a high performance organization. To that end, the Town desires to recruit and retain individuals who are customer oriented, demonstrate initiative, are team players, and accept responsibility, authority and accountability for work performance. Once employed, the Town believes that incentives are critical if the employees are to be successful in achieving the mission, goals and objectives of the Town. The Town will offer appropriate developmental and advancement opportunities and recognize performance with incentives for employee success, retention and professional development. The Town will administer this in an open, fair, and equitable fashion.
GOAL 1 – ORGANIZE THE WORK
To provide for a simplified classification system that defines the general scope and complexity of the work required. The classification system will also facilitate internal equity across all jobs within all departments of the Town of Gilbert.
OBJECTIVE 1 – Develop broad job classes.
To establish a classification structure that reflects meaningful and measurable differences in the level of work within each occupational group.
a) The classification system will consist of broadly defined classes that reflect the essential duties and responsibilities performed by incumbents in each class. This approach will facilitate flexibility in the assignment of duties to individual employees within the job classification.
b) Where practical and feasible within each occupational group, there will be an opportunity for career advancement. The differences in job levels will be clearly defined and legally defensible.
OBJECTIVE 2 – Develop and maintain a classification structure with job descriptions.
The classification plan will meet the current needs of the departments while providing maximum flexibility to manage and organize the work in a changing environment.
a) The existing classification system will be reviewed to identify current requirements that may inhibit management flexibility. Recommendations will be made to make the system consistent with the Town’s goals and objectives and will position the Town to be responsive to change.
b) The job descriptions, including the statements of essential duties, minimum qualifications, and physical (ADA) requirements, will be written to reflect the current needs of the Town. The goal is to ensure that new hires are qualified and capable of performing the work required and that the work being performed is reflected by an appropriate title. Incumbents who currently do not meet the minimum qualifications will be grandfathered into their current classes. However, any incumbent not meeting the new minimum requirements will be encouraged to acquire the required knowledge and/or skills within a reasonable time period so that they will be qualified for other positions within the Town as opportunities arise.
OBJECTIVE 3 – Create a process for requesting reclassification of jobs.
The reclassification process will be administered by Human Resources in an efficient, cost effective, responsive, fair, and equitable manner to meet the needs of both the Town and its employees. Because the Town has adopted the concept of broad job classifications, the number of reclassifications should be minimal since the differences between classifications will be clearly defined.
a) Timetables will be established which will set the time that the reclassifications will be reviewed and acted upon.
b) Responsibilities for each step of the reclassification process will be established to include the employee, supervisor, manager, department director, Assistant Town Manager and Human Resources.
c) Employees will be notified in writing of the results of the reclassification process and the reasons for approval or denial.
d) Employees who are reclassified will not receive any adjustment in their base compensation unless the salary range for the class into which they are reclassified has a minimum salary that exceeds the employee’s current salary. Reclassification should not be used to circumvent promotions into a higher job classification.
e) An employee reclassified into a job classification having a lower maximum rate of pay than the employee’s current salary will have may their salary reduced to the job rate of the new salary range or frozen as appropriate in accordance with the Personnel Rules.
OBJECTIVE 4 – Develop a process for creating new job classes
The classification system will be responsive to organizational and environmental change through the creation of new classes and redefinition of job responsibilities as defined by the Town and its departments.
a) The job descriptions will be reviewed by the departments on an annual basis to ensure they meet current needs. Human Resources will facilitate the review process.
Human Resources will respond to department requests for individual reclassification, and will assist with the revision of class specifications and development of new class specifications within the broad class concept, as necessary to meet the on-going operational requirements of the Town of Gilbert.
GOAL 2 – DISTRIBUTE PAY
The compensation system will reflect both internal equity and external parity within the various labor markets in which the Town must compete. The system will also reward employees who perform at “above standard” levels within their respective job class.
OBJECTIVE 1 – Total Compensation.
Compensation shall be defined as the value of base compensation (cash), any variable compensation (cash), and employee benefits.
a) The Town will evaluate cash compensation and employee benefits independently of each other although it is the Town’s policy to achieve market parity for both base pay and employee benefits as outlined in this Goal.
OBJECTIVE 2 – Determine the competitive market and benchmark positions.
Compensation levels will reflect the multiple and varied labor markets covering all Town jobs.
a) For management level classes (Department Managers and above), the labor market will include similar-sized cities (approximately 50%-200% of the Town’s population size) and other public sector organizations with which the Town competes for labor throughout the southwestern United States. Organizations will be similar in character as the Town of Gilbert (located in a metropolitan area and/or be rapidly growing). Private sector shall also be included for those jobs existing in the private sector (e.g. Finance, IT, Human Resources.) Public sector data may be obtained either through surveys of specific organizations that meet the specified criteria or from published sources so long as the data reflects the defined labor market. Private sector data will be obtained from published sources.
b) For Professional and other Exempt Job Classifications, the labor market will include similar-sized cities (approximately 50%-200% of the Town’s population) and public sector organizations with which the Town competes for labor throughout Arizona. In 2012, this could include the cities of Chandler, Glendale, Mesa, Peoria, Scottsdale, Surprise, Tempe, and Tucson. Although outside of the size parameters, the City of Phoenix, Maricopa County and Pinal County may also be appropriate for certain jobs where the scope and level of work are comparable to jobs within the Town of Gilbert. Private sector shall also be included for those jobs existing in the private sector (e.g. Finance, IT, Human Resources.) Public sector data may be obtained either through surveys of specific organizations that meet the specified criteria or from published sources so long as the data reflects the defined labor market. Private sector data will be obtained from published sources.
c) For Sworn Public Safety FLSA Non-Exempt level classes, the labor market will include cities and other public sector organizations with which the Town competes for labor in Maricopa and Pinal Counties. Public sector data may be obtained either through surveys of specific organizations that meet the specified criteria or from published sources so long as the data reflects the defined labor market.
d) For all other FLSA Non-Exempt level classes, the labor market will include cities and other public and private sector organizations with which the Town competes for labor in the greater Phoenix metropolitan area. With this as a general strategy, it is understood that there may be case-by-case instances where the Town may look outside this defined labor market (for example, jobs such as those in information technology) when necessary to achieve recruitment objectives. Public sector data may be obtained either through surveys of specific organizations that meet the specified criteria or from published sources so long as the data reflects the defined labor market. Private sector data will be obtained from published sources.
OBJECTIVE 3 – Determine job value.
To determine different levels of job value using a formal method of job evaluation.
The Human Resources Director shall select a job evaluation methodology that is appropriate for use with broad classifications as outlined in Goal 1.
OBJECTIVE 4 – Develop pay ranges for each broad class.
Pay grades will be between the second and third quartiles of the defined labor market for each job as reported in salary survey results in order to recruit and retain qualified employees as outlined in the purpose and philosophy statement. This means that the Town will pay at a level where at least 25% of the labor market will pay more and 25% of the labor market will pay less. Pay range minimums and maximums will be established from survey results. The actual placement for an individual job classification relative to market will be based on the Town’s needs relative to the market.
a) The salary structure will provide sufficient breadth to recognize the increased value to the Town based on performance that meets or exceeds standards for the job. Accordingly, range spans will progress from approximately 25-30% to approximately 50-70%, depending on the level of job and salary range for the job classification. Job rate progression between salary ranges will be at least five percent.
b) For sworn public safety FLSA non-exempt personnel, the job rate shall be the top of the salary range for the job classification. For all other job classifications within the Town, the job rate shall be set at the midpoint of the salary range.
c) The length of time for progression from the bottom of the salary range to the job rate of the established salary range will increase as jobs move up the salary grade structure. Progression above the job rate will be based solely on performance that is above standard. Merit compensation may or may not be added to the base compensation.
d) The hiring range will be from the range minimum to the job rate, based on qualifications and dependent on market conditions. Appointment above the job rate, but not to exceed the maximum, will be allowed subject to the approval of the Town Manager. The Department Director shall submit an exception request to the Town Manager. The exception request shall include a pay rate recommendation from Human Resources.
e) Funding for all positions shall be at the job rate (midpoint or maximum based on the type and level of the job) of the established salary grade for the classification.
f) When a market comparison rate for a specific job/class exceeds the defined job rate by at least 15%, a market premium may be applied to the specific job/class and paid to all employees in the job/class who meet the specific requirements for the premium (e.g. one engineering specialty within the broader class of engineer). The market premium amount shall be applied to the full salary range for the job/class. The market premium shall be subject to review, no less frequently than every two years, and shall be adjusted as appropriate based on the market review. At such time as the market differential becomes 10% or less, the market premium will be eliminated.
g) When necessary and appropriate, the Town may use recruitment and/or retention incentives in order to compete for skills that may be in limited supply and are necessary in order to recruit and/or retain an individual into a position defined as a critical need by the Town Manager. The amount of the recruitment and/or retention incentive shall be based on data obtained from survey results.
h) Reclassification/promotion policies will be administered so that resulting salaries are competitive with average salaries in the relevant labor market.
OBJECTIVE 5 – Ensure equity.
Classifications for which there is no available market data or are not used in development of the salary structure (e.g., specialized jobs without peers in the marketplace) should be placed in the relevant salary structure based upon their internal relationship with other classes within the occupational group as determined through a standardized job evaluation process that is appropriate for use with a broadly based job classification structure and system.
The compensation structure will be based on market salary data for benchmark job classifications compiled through a salary survey. Placement of individual job classifications within the overall salary grade structure will be based on their relative internal value using a formalized job evaluation tool to be selected by Human Resources consistent with the broad job classification philosophy outlined in Goal 1.
OBJECTIVE 6 – Issue Total Compensation Statements.
Because compensation includes base pay, employee benefits, and variable compensation, employees need to be fully informed regarding their compensation and benefits.
The Town shall annually issue a statement to all employees reflecting the total value of the compensation and benefits package.
OBJECTIVE 7 – Link performance management plan to compensation.
Salary advancement shall be based on successful performance in the job class as determined through a valid job related performance appraisal system.
a) Employees who are hired below the job rate and have satisfactory performance should be eligible to receive a salary increase following completion of an initial employment period that will be established for each job classification. Thereafter, all salary increases should be granted annually, assuming 12 months of continuous full-time service within the same position and satisfactory performance. Employees should receive salary increases until they reach the job rate of the salary grade for successful performance. Employees who perform at less than standard or successful should not receive any in-range adjustment. Advancement beyond the midpoint (for those jobs where the midpoint of the range is the job rate) should be based solely on performance that exceeds defined standards or expectations for incumbents in the job class.
b) Employees who have reached the midpoint of the salary range (for those jobs where the job rate is the midpoint of the salary range) for their job classification and whose performance exceeds the standard for the job class shall be eligible for compensation advancement or merit awards. Salary advancement shall be granted to those employees whose above standard performance is on-going and their long-term performance indicates that such above standard performance is the norm. For those employees who demonstrate above standard performance for a single year but prior years performance has been at standard, the employee will receive a merit award that will not be added to the employees’ base pay for subsequent years.
Where necessary and appropriate, skill and/or competency based pay may exist in lieu of specific performance criteria.
Note: The goals, objectives and strategies set forth in this plan are subject to budgetary limitations. Nothing contained herein is to be construed as a binding contract.
GLOSSARY OF TERMS
An opportunity for an employee to earn additional compensation beyond the level of his/her current position. Advancement can result either from a change in job classification or an increase in salary within an established salary range.
A number of classes to which an employee may progress based on increasing knowledge, experience, skill and/or competencies. The progression may be either vertical or horizontal.
A group of jobs that are related in terms of work performed but differ in terms of level of work and minimum qualifications. In a class series, an individual employee will typically have the opportunity to progress to the higher level or levels as (s) he develops increased capabilities and the organization has the need for work at the higher level. Not all jobs are part of a series.
A process to determine the relative value of jobs within the organization. There are different approaches to job evaluation ranging from informal methods such as whole job ranking and market pricing to formal approaches such as point factor, factor comparison, scored questionnaires and the decision banding. The informal methods do not use any specific or structured criteria in determining job value. The formal approaches use pre-established criteria and all jobs are measured against the same set of standards resulting in a job hierarchy that is normally more understandable and defensible.
A differential that is paid to employees within a specific job/class when the labor market value of the job exceeds the Town’s established salary range midpoint by at least 15%.
A group of jobs that fall within a single occupation. Occupational groups may include one or more class series and individual job classes that are not part of a series. The various series and jobs are normally related by the type of work performed, such as administrative, but each series or job will have unique requirements. Typically, jobs in an occupational group fall within the same employment category and would, therefore, be treated in a similar manner.
The minimum and maximum dollar value of a job or group of jobs that have similar economic value to the Town. Each job classification will be assigned to a salary range. Each position within the job classification will be paid at a rate that is no less than the minimum of the salary range and no more than the maximum of the salary range assigned to the job classification. The salary range is based on a combination of internal equity as determined through job evaluation ratings and external (market) value of the job.