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Classification and Compensation 4 E. Development of City's Pay Philosophy While salary survey data will assist the City in establishing its position in the competitive market, job evaluation is the mechanism that ensures that internal relationships are equitable and in compliance with the Minnesota Local Government Pay Equity Act. Springsted has developed and copyrighted a job evaluation system known as Systematic Analysis and Factor Evaluation (SAFE') System. The SAFE system is a unique job evaluation method designed to measure job factors which apply specifically to local government. This system has been successfully used for many years and has been reviewed by the United States District Court, in conjunction with an Equal Employment Opportunity (EEO) suit, and found acceptable to the Court. The system rates and ranks jobs based on various skill levels and work factors. The result is an equitable and consistent method of evaluating jobs and relating classes to the compensation plan. The system facilitates proper and equitable comparisons between and among classes, and minimizes the appearance of favoritism in evaluating, rating and ranking jobs. Each classification will be evaluated and assigned to an appropriate salary grade based on the classification system and prevailing rates paid by survey participants. The elements considered in determining the relative value of classifications are: • Training and Ability • Level of Work • Physical Demands • Independence of Actions • Supervision Exercised • Education and Experience • Human Relations Skills • Working Conditions/Hazards • Impact on End Results A pay philosophy guides the design of a compensation system and answers key questions regarding pay strategy. It generally takes a comprehensive, long term focus and explains the compensation program's goals and how the program supports the employer's long -range strategic goals. Without a pay philosophy, compensation decisions tend to be viewed from a short-term tactical standpoint apart from the organization's overall goals. Market competitiveness and internal equity are among the most important areas addressed in a pay philosophy. An organization's desired market position involves defining the market and identifying where the organization wants to be positioned within that market. Market position should balance what it takes to attract new employees and to retain skilled employees (in other words, eliminating higher pay as the reason employees leave the organization) with the organization's financial resources. Internal equity expresses an organization's City of Lino Lakes, Minnesota. Proposal to Conduct a Classification and Compensation Study