1_Compensation Study Review Presentation VILLAGE OF NORTH PALM BEACH
COMPENSATION STUDY REVIEW
July 30, 2013
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Study Directive
Hired independent consultant, Evergreen Solutions toy
• Review current environment and conditions
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• Conduct independent market salary survey
• Develop and/or revise compensation structure and hierarchy
• Develop unbiased market-based compensation recommendations
• Develop and submit draft and final reports summarizing findings
and recommendations
Methodology
• Compilation of data :
— Job descriptions
— Current compensation & pay plan
— Current salary data
• Department head meetings
_• Staff meetings
• Market salary survey
• Comparable municipalities
• Local trends
• Competitors �
• Private industry
• Solution recommendations
• Draft & final reports
Findingsm Local Trends
• Recent improvements in the economy and property values have lead
many local market peers to provide adjustments to employee pay
• Research finds that the following local peers have increased or are
considering increases to employee pay in recent months:
City of Palm Beach Gardens
Palm Beach County Sheriff's Office
Palm Beach County Public Schools
Palm Beach County Fire Rescue
Village of Royal Palm Beach
Town of Jupiter
City of Greenacres
Broward County
State of Florida
• Many Private Industry Employers are Planning for Approximately 2-3
Percent Salary Increases
Findings- Current Pay Plan
• Currently 3 pay plans, Fire, Police, and General
• Narrow range spreads (distance between minimum and
maximum) vary from 36 to 60 percent
• Majority of employees are above midpoint. (64 percent)
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• Viable Plan Pay would reduce the number of employees in—
the 3rd and 4th Quartiles _
• Historically hiring farther into the ranges than minimum,
negating purpose of minimum
• Average tenure across the city is approximately 7.3 years
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Findings- Current Pay Plan, contd .
• Ranges had not been moved in many years
— Forced the Village to hire at the 50% level and above
to be competitive
— Caused 46 instances throughout the salary structure
of employees being topped out in their grade
• Compensation had not been evaluated in 11 �
years
• Turnover increasing annually as economy
improves
Market Survey Responses A*-j
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City of Dania Beach City of Vero Beach City of Stuart Village of Palm
Springs
City of Lighthouse Town of Hypoluxo Village of Royal City of Cooper city
Point Palm Beach
City of Parkland Town of Lake Park Village of Tecluesta Town of Jupiter
City of Sebring Town of Lantana Town of Juno Beach Palm Beach County
City of West Palm Town of Palm Beach City of Palm Beach Palm Beach County
Beach Gardens Sheriff
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Market Salary Survey Summary
The City's Market Position Is Relatively Consistent
Across Minimum, Midpoint, And Maximum
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' • At Minimum, VNPB Is 6 Percent Below Average
• At Midpoint, VNPB Is 7. 1 Percent Below Average
• At Maximum, VNPB Is 5 .5 Percent Below Average
• Individual Classes Are More Significantly Below
Market
Market Salary Survey Summary, contd .
Evergreen Determined That 11 Classifications Were Greater Than
10.0 Percent Below Market. These Are Listed Below:
— Fire Inspector
— Pool Lifeguard
— Golf Driving Range/Ranger
— Library Clerk ,
— Supervisor Recreation
— Police Captain
— Fire Chief
— Director Of Human Resources
— Director Of Information Technology
— Director Of Parks & Recreation
— Director Of Public Works
Additional Salary Data Points
• PEPIE data for 45 local agencies was obtained
Data showed that our current salaries were at
least 15% lower than market
• League of Cities data for approximately 8 local
agencies was obtained
— Data showed that our current salaries were at
least 18% lower than market
Market Comparison Chart — Key Jobs
POSITION
I& MIN MIN MAX MAX f
Director of Park & Rec -26% -11% -23% -22% -10% -22%
Director of IT -24% -42% -31% -19% -49% -45%
DirectorofPublicWorks -15% -16% -20% -12% -12% -17%
Village Clerk -1% -4% -10% 2% -3% -8%
Pool Lifeguard -34% -44% -26% -29% -38% -24%
Supervisor of Recreation -12% -29% -23% -10% -26% -26%
Executive Assistant 1% 3% -7% 1% 3% -8%
Mechanic -4% -15% -8% 1% -19% 14%
Code Compliance Officer -6% -6% -8% -6% -4% -4%
Permit & Licensing Tech -6% -13% -5% -1% -11% -5%
Police Officer -7% -8% -12% -9% -10% -12%
Police Sergeant -4% 1% -11% -7% -11% -11%
Police Captain 3% -10% -9% -15% -24% -20%
Firefighter/Paramedic -4% -5% -12% -4% -2% -12%
Firefighter Lieutenant -1% -15% -7% -8% -18% -8%
Fire Inspector -40% -56% -28% -37% -52% -27%
enchmark Average -11% -17% -15% -11% -18% -15%
Market Benefits Survey Summary
• Market average benefits percentage of total compensation
ranged between 28 and 35 percent
• The Village's benefits ratio is approximately 33 percent,
indicating that the package as a whole is in line with market
i peers
• Evergreen recommendation would reduce benefits ratio to
30%
• Benefits are commonly referred to when employees are
asked why they stay with their employer
Evergreen Pay Plan Recommendations.
• Increase the range spreads from current
average of 50% to 60% to : 4
— Reduce the frequency of employees topping out r
— Provide a normalized progression curve through
grade
• Reduce distortions in grade as a result of current
practice of hiring in the upper quartiles
• Provide for more competitive starting salaries in the
lower quartiles
• Move salary ranges up 8.5% to better align
with local market
Benefits Of Changes
• New Salary Ranges Are Much More Relevant And
Make The Village Competitive
• New Range Spreads Allow For More Sustained
Growth In Grade And Reduce The Recurring
_ Problem Of Topping Out In Grade
• New Ranges Allow Us To Place New Employees
Lower In Grade Range Quartiles And In The
"Sweet Spot"' Of The Progression Curve
• Salary Increases Will :
— Allow For Smoother Union Negotiations
— Correct Equity Concerns
— Improve Employee Morale And Reduce Turnover
Evergreen Pay Plan Recommendations,
• Bring About Consistency In Range Structure
— Approximately 8.5 Percent Increase In Value Of Pay Plan
— 60 Percent Range Spread
— Consistent And Tiered Range Progression
• Slight Expansion Of The IAFF And PBA Pay Plans
— Additional Grades Provide Increased Flexibility
• Re-number Pay Plans To Bring Continuity
— 100's Series For General Employees (Including FPE)
— 200's Series For IAFF Employees
— 300's Series For PBA Employees
• Specific Salary Adjustments For Classes Found To Be Below
Market To Curb Turnover
• Annual Benchmarking To Determine and Monitor
Compensation Plan Market Status
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Staff Alternative Approach
• Developed A Quartile Based Model That Reduced �
1 The Pay Adjustment In The Upper Quartiles
• Reduces the 8. 5% Salary Adjustment �
� Recommendation To Approximately 4. 5 %
• Combined Equity Adjustments And Salary
Adjustments For Affected Positions With NTE Of
10%
• Result Is A Total Compensation Increase Of
$344, 000 For The Compensation Study
Adjustments
Staff Alternative Approach
• Current range percentile & tenure show only a 0. 14
correlation very weak)
• Typically Tenure and Progress Through the Range
Would be More Significantly Linked .
• Salary Increases Based on Tenure is Not the Best 9
Approach .
• Quartile placement in the new ranges was calculated.
• Employees in lower quartile receive larger increases
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than those n higher quartiles
Staff Alternative I
Salary Adjustment Weighted for Quartile Placement
— 15t quartile employees — 7%
_ 2"a quartile employees — 5%
— 3rd quartile employees — 4% i
— 4t" quartile employees — 2%
Staff Recommended Changes
Continuous Analysis of Industry Trends
• The More Commonly Recommended Interval is 3-5 Years
• Annual Benchmark Analysis of Key Jobs Should be Completed
• Movement of Key Market Peers Should be Tracked Regularly and
the Pay Plan Should be Adjusted as Necessary to Keep Pace
With the Market
• Participation in the Annual PEPIE Survey is Invaluable
(Public Employee Personnel Information Exchange)
• Continuous Monitoring of Turnover
• Revision of Performance Evaluation Process and Practices
Proposed Salary Administration
Approach
Nft
s
Changes We Want To Make In
Performance Evaluations
• Reduce the criteria evaluated from 19 down to 7 or 8
• Of those, three will be
— Safety
— Customer Service
- - Teamwork
• The rest will be selected by the supervisor and will
relate directly to the outcomes desired for each job
• All evaluations performed simultaneously Mid-Year
• First year adjustments will be normalized
• Acquire Web-based Performance Evaluation System
Typical pay/longevity
progression curve
15= zed 3rd 4thW Sweet spot
Quart Quartile Quartile iartile
AW
Pay
Longevity in grade
Salary • Approach
$$$$$$$$$$$
Merit Pay Budget
� Established
Budget amount converted
to overall merit pay percentage
and percentages determined for ,
> X.X/O
" Successful 11
each uartile osition
Individual employee rating
derived from performance
Evaluation process, including
supervisory peer reviews
Quartile position determined > 2ndQuartile
Sample Merit Payout Matrix Established
Based On Evaluation Score And Positio
In Grade Range (QuartilAV )
Ra[ing 1*' quartile 2n° quartile 3'^ quartlle 4'^ quartile
Web Based Appraisal System To Assure
� Uniformity In Evaluations
We will acquire a web based appraisal system that will:
— Provide job specific objectives that can be updated any _
time
— Provide simplified documentation of achievements and
concerns
— Allow for real time input by both supervisor and
employee
— Allow for 360 evaluations
— Dramatically streamline the appraisal writing process
— Address grammar, spelling, and legal concerns as
appraisal created
— Provide distribution metrics of grades to avoid skewed
results
Successful 11 Exceptional Exceptional
Successful Successful 11
•
CC S
elow Standards IC L Development
Supervisory Peer Reviews
• Supervisors with familiarity with operation will
assist in conducting group employee reviews
• Each employee in the evaluation group will be
plotted on the matrix and the panel will assess i
accuracy
• Adjustments in scoring will be made as necessary
• Village Manager has Final Approval prior to
Performance Evaluation meetings with
employees
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Benefits of Changes in Appraisal
System
• Better documentation of appraisal process
• Simpler approach to evaluations and pay
administration
• More direct and usable feedback for
employees
• More transparent
• Reduces prospect of skewed results
Summary
• Staff Recommendation Reduces Cost From 8.5%
($650k) to 4.5% ($344k)
• Recommendations based on Market Analysis-
both Comparables and Competitors {
• Does Not Require Tax Increase based on Special i
_ Operating Expense Account Approach
• Focus Must be on Position; NOT the Person
• Village Unions and Staff Aware of Compensation
Study Results
• Employees are the Village's most
valuable asset