12-22-2008 CC - Laserfiche WebLink

Home Browse Search

HAY Point Analysis and 2009 Pay Plan December 22, 2008 Page 2 Springsted Observations Market competitiveness. Discontinuation of the DCA Stanton Survey raised the question of how the City would define its market. Defining the market is an important aspect of the Compensation Policy. It is not so much a question of identifying cities that are similar to Mounds View in all characteristics, such as geographic proximity, tax capacity, budget, number of employees, services provided, and where the city is in its development / redevelopment cycle. Rather the objective is to define labor market, i.e. to understand what employees are being paid in similar organizations so that the City of Mounds View can be proactive in attracting and retaining employees. This information gives the City a realistic sense of the labor market in which it operates. The City can then choose whether it wants to set salaries at the market rate or alternatively, pay employees more or less than the market rate. We recommend that the City continue to use the comparable cities identified in our analysis. We specifically recommend that New Brighton and Anoka be added to the list of comparable communities given their geographic proximity and identification by the League of Minnesota Cities’ cluster methodology as metro old growth cities. A weakness of the current compensation policy is that it relies solely on market comparables for each Mounds View position. While some positions are commonly found in all cities, it would be unusual for a city the size of Mounds View to identify an adequate number of comparisons for all of its positions. The policy does not adequately address how pay scales will be developed for positions which do not have comparable positions. Jobs are dynamic; over time they change to address unique circumstances or to meet needs that are considered to be priorities by the governing body. Generally, market salary surveys are conducted using benchmarks that reflect the breadth of the organization from the bottom to the top and across all departments. A pay structure can be developed that allows the City to survey a representative number of positions and to assign those positions for which there is not comparable data to an appropriate pay range based on job evaluation. We recommend creating a classification plan and assigning each position to an appropriate pay grade based on the evaluation of each position. Internal equity. Compensation policies also address equity among the internal pay relationships of its positions. A job evaluation system is used to rate each position based on its skill level and a series of work-related dimensions, such as physical demands, human relations skills, independence of action, and impact of end results. For most organizations, internal equity is integral to its compensation policy. Job evaluation results are considered when assigning positions to a pay range. Structure. The City should give serious consideration to developing a pay plan that assigns positions to specific grades. This structure can be created using the market salary survey and revised job evaluation points. Using both market data and job evaluation data provides a structure that takes into account market and internal equity. A pay plan based on grades has a number of benefits compared to the present system, which ties each position’s pay scale to market comparison. First, market comparisons will not be available for all positions, which means that the pay scales for some positions cannot be determined using market data. Without market data, there is neither a clear nor equitable approach for determining the position’s salary scale.