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1_Compensation Study Review Presentation VILLAGE OF NORTH PALM BEACH COMPENSATION STUDY REVIEW July 30, 2013 l Study Directive Hired independent consultant, Evergreen Solutions toy • Review current environment and conditions i • 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) i • 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 l 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 h 1 Ammk 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 IE TUA I'1E ST. LU4 Someplace Special "'x 91maw �fk XCII SST • r jl 5i! F'.. A n•.: �r r...rp.r �LORIpA ;ar ; Market Salary Survey Summary The City's Market Position Is Relatively Consistent Across Minimum, Midpoint, And Maximum i ' • 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 l 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 i 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 i� 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