10/06/2008 Council Packet (2) - Laserfiche WebLink

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Introduction 1 1. Introduction Springsted The City of Lino Lakes, Minnesota, retained Springsted Incorporated to conduct a Human Resource Audit of the City's positions in the summer of 2008. The Study represents a comprehensive review of the components that affect an organization's compensation program — job descriptions, current compensation structure, the City's pay philosophy, regional market competitiveness of City salaries, the internal equity of salaries paid to comparable City positions, and ongoing maintenance and administration of the compensation system. A review was also conducted on the City's performance evaluation system. A classification and compensation system provides the framework for determining how employees will be paid. As a general rule, most organizations conduct new classification and compensation studies approximately every five to seven years ensuring their ability to hire and retain qualified employees and that internal relationships are equitable. The external market comparison is important because it ensures that the compensation plan is adequate to attract new employees and retain existing employees. If compensation levels fall below those in the regional marketplace: • the organization will experience difficulty hiring people • increased employee turnover as employees seek jobs with other organizations that will pay the market rates for their skills and abilities Organizations should expect some employee turnover, but when it becomes excessive turnover has a serious impact on the organization's overall effectiveness. Advertising costs are a measurable component of turnover, and as the City moves through the selection process the time spent by current employees covering the void left by the departing employee often diverts their attention from their day to day responsibilities creating overtime demands and often frustration on the part of the remaining employees as they attempt to meet deadlines and maintain acceptable levels of service. These are some of the hidden and non - quantifiable costs associated with turnover. In addition, time spent by City staff participating in the recruitment and selection process for new employees: • often diverts focus from their other duties and responsibilities • slowing progress on meeting established goals • adding to frustrations in meeting other job objectives beneficial to the City There is also a substantial cost to turnover that comes with training new employees. Employees receive significant on-the-job training which diverts the attention of other employees away from their regular duties to assist in training. Organizational effectiveness is affected as employees train new employees as those new employees endeavor to become proficient in their job. While these costs are not necessarily visible in expense reports, they will show up in performance data in the form of reduced service outcomes. Lino Lakes, Minnesota. Human Resource Audit.