06-05-2017 Council Packet - Laserfiche WebLink

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WS – Item 11 WORK SESSION STAFF REPORT Work Session Item No. 11 Date: June 5, 2017 To: City Council From: Jeff Karlson Re: Step Adjustments for New Employees Background Mayor Reinert asked me to provide some background on step adjustments for new employees. Every City employee is on a step program, which includes non-union employees and those covered by a collective bargaining agreement. Typically, a new employee will start at the first step of the compensation plan. However, a new hire can start at a higher step based on years of experience. Employees are hired with the expectation that if they perform their job duties at a satisfactory level, they will move to the next step of the pay plan until reaching the top step in accordance with the labor agreement or non-union compensation plan. It is a decisive factor in recruitment and retention. With the exception of AFSCME employees, every other employee serves a 12-month probationary period before becoming eligible for a step increase. Prior to this year, new hires were given a six-month performance review and another appraisal before the end of their 12-month probationary period. Under the new the performance management system implemented earlier this year, an employee’s performance will be reviewed quarterly. AFSCME employees are eligible for a step increase after a six-month probationary period and on their anniversary date thereafter. Periodically, a councilmember will question why the City grants “automatic” step increases every year until an employee reaches the maximum pay range. It’s a fair question. First of all, step adjustments are not automatic. Employees must meet performance standards to advance to the next step. Granted, it is rare that an employee does not meet minimum standards. When an employee is not (especially a union employee), the City must present clear evidence for withholding a pay increase, which will still likely result in a union grievance. Secondly, the City of Lino Lakes needs to remain competitive in the public sector labor market. Third, it is important the pay plans are equitable across the board to meet the state’s pay equity guidelines. Finally, it would be a contentious process if the city administrator had to clash with the Council every year to get raises for the non-union staff.