Workforce Investments1
The City’s Compensation & Classification System and Benefit programs link to the
City’s Strategy map relative to the focus area of Performance Management and
Service Delivery. The specific corporate objective that is met by this Resolution are
L3 and L4.
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This presentation will cover three topics: 1) Compensation & Classification System;
2) Benefit Programs; and 3) Training & Development.
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The current compensation program was developed in 2006 by an outside
consultant: Water’s Consulting Group. This consultant has extensive experience
developing public sector compensation programs. They were able to provide the
City with a quality plan with proven methodology. The program was implemented in
two phases: Phase I was implemented in FY 2007 and Phase II in FY 2008.
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The consultant developed the program using the following phases:
1.Employee and Management Communication
Project began with communication to employees and management to explain the process and to obtain commitment and
support from those working on the project. The consultant conducted general employee meetings with all employees to
explain the objectives and the role of each employee. The consultant also conducted management briefings with the
executive team throughout the process, provided project updates and discussed key results.
2.Comprehensive Position Analysis
The first step in the position analysis phase was for every employee to complete a Job Description Questionnaire. The
questionnaire asked employees to describe what they do and what they view as their essential functions. In addition it asked
for physical demands and environmental conditions. Because all employees completed their own evaluation, this provided a
realistic review of fC each position within the City. Supervisors S reviewed each questionnaire and were asked to include
additional information as necessary. In addition to the questionnaires, the consultant conducted interviews with supervisors
and management to collect additional data regarding the essential functions of the positions. The consultant reviewed each
classification to determine if there were classifications that could be combined to more accurately support the City’s work
environment. At this point in the process, only functions were reviewed and pay was kept out of the process until the very
end. This allowed for more objective and reliable information from employees and supervisors.
3. Job Evaluation
A point factor job evaluation methodology was used in order to determine the internal worth of each civilian position. A point
factor systems measures positions in terms of the degree to which several compensable factors are present in a given
position. Compensable factors are paid-for, measurable qualities, features, requirements or constructs that are common to
many diff different tki kinds d of fj jobs. b E Each hf factor t h has d defined fi dl levels l and dth the l levels l provide id a measurement t scale l f for rating ti each h
factor. This allows for an orderly method for measuring each job relative to every other job. The compensable factors are
specific to the City of Southlake and include: education, experience, management and supervision, human collaboration
skills, freedom to act, technical skill, fiscal responsibility, and working conditions.
Supervisors were asked to complete a Job Evaluation Manual on each job classification. The Job Evaluation Manual
captures the supervisor’s rating of the compensable factors and supervisors were instructed to considers what the job
requires most of the time under normal circumstances. The consultant then used the completed Job Evaluation Manuals to
create a hierarchy of jobs. A Job Evaluation Team was formed to assist in reviewing the evaluations of all positions to
establish their relative value within the City. Team members consisted of department directors and key managers. The team
conducted an extensive review of the job evaluation process and the final result was a hierarchy reflecting each position
worth relative to one another. Based on this hierarchy, positions were assigned to pay grades within the pay plan.
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4. Salary Survey Collection
The first step was to identify and define the competitive market (index or survey cities) and select positions for
which valid data can be collected. Often called benchmark positions. Index cities were selected based on the
following criteria: 1) employer size and complexity; 2) geographic proximity; and 3) nature of services provided.
Benchmark positions were selected based on the following criteria: 1) positions are reasonably well known and
clearly described; 2) commonly found in other organizations to ensure sufficient salary information; and 3)
positions that are historically difficult to recruit or retain employees. Benchmarks are used as reference points
for pricing non-surveyed classifications. The consultant collected and analyzed salary data from 12 index cities
and reviewed 74 classifications. Private sector data was also collected and reviewed.
5. Salary Structure and Design Development
Th The salary l structure t t ( pay plan) l ) was developed d l d t taking ki i into t account t th the f following: ll i 1) width idth of f pay grades; d 2)
midpoint progression from one grade to the next; 3) overlap of one grade to adjacent grades; and 4)
organizational financial resources. The structure was designed to achieve a competitive level compared to the
market data collected with a market policy of 103% of the weighted market average salaries. Steps were
established at 3% - 3.2% to allow for employee progression through the grade. Pay structures were developed
with pay lines drawn that blended market data to establish smooth progression between grades within pay
structures. Actual salaries were overlaid on each structure to provide a comparison of the organization to the
structure. Pay spreads wre set at 40% between minimum and maximum salary for non-exempt and exempt.
19% - 30% for DPS.
6 6. Implementation & Roll Roll-out
Three plans were developed: Non-exempt, Exempt, & Public Safety. Executive staff are unclassified.
The current pay plan is tenure based; meaning that employees move from one step to the next based on tenure
and available funding. For example: a new employee is hired at step 1. The employee successfully completes
a 6 month probationary period (1 year for DPS) and will move to step 2. That 6 month date will become the
annual date at which time an employee will move to the next step. However, step increases were frozen in
FY10 and are proposed to remain frozen in FY11.
Finally, the new compensation program was implemented in two phases. The first phase placed employees on
the new pay plan, but not necessarily on step appropriate to their tenure in the position. Phase II placed
employees on the step most appropriate to their tenure.
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The goals of the compensation program are to 1) maintain a competitive edge,
attract and retain the workforce, and to be fiscally sound.
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Each year Human Resources completes a compensation survey to determine the
City’s position within the market. The survey reviews the benchmark positions using
data from the index cities. Data is collected from the annual TML salary survey and
directly from index cities. When available, private sector data is collected from the
US Bureau of Statistics and is included in the survey review. In FY09 market
adjustments were made based on the survey data. In FY10 all pay was frozen.
The Job Evaluation Team will meet every couple of years to review all classifications
to ensure proper placement on the pay plan. This review was last completed in
2009. The team will also meet to review new classification requests and
classification adjustments for placement on the pay plan.
Job descriptions py are reviewed each time a vacancy occurs to ensure the description p
accurately reflects the essential functions of the position.
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Data collected was collected in May for the FY 2011 Market Survey and analyzed in
conjunction with budget planning.
As anticipated last year, there was little movement in the market. In addition, we
anticipate little movement in FY11. Civilian pay is appropriate when compared to
index cities. DPS continues to lag the market, but at the same rate as indicated in
the last year’s survey. On average, executive pay also lags the market. It is
important to note that we anticipate very little market movement in FY11.
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This chart graphically shows Southlake’s midpoint when compared to the index city
midpoint.
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This chart graphically shows Southlake’s midpoint when compared to the index city
midpoint.
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This chart graphically shows Southlake’s midpoint when compared to the index city
midpoint.
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This chart graphically shows Southlake’s midpoint when compared to the index city
midpoint.
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This chart graphically shows Southlake’s midpoint when compared to the index city
midpoint.
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This slide shows the recommendations for FY11.
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The City offers benefits to all full-time employees. Benefits include medical
insurance, dental insurance, life insurance, accidental death and dismemberment
insurance, long term disability, medical and dependent care flexible spending
accounts, and an employee assistance program.
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This chart shows the cost of employee only medical insurance at our index cities.
As you can see, the City’s contribution beginning 10/01/10 will be $417.28 per
month. The average employer contribution is $449.18.
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This chart shows the cost of family medical insurance at our index cities. This does
not include the cost of the employee only coverage. As you can see, the City’s
contribution is $375.00 per month. The average City contribution is $574.58.
Southlake employees pay $506.10 per month for family coverage. The average
employee contribution is $309.03.
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The Texas Municipal Retirement System (TMRS) is a non-traditional, joint
contributory, t ibt hb hybrid id dfi defined d plan. l It i is non-tditi traditional l bit because it i is not t a standard tdd
salary and service formula pension plan. It is Joint Contributory because both the
employee and the City contribute to the plan. It is a Hybrid defined benefit plan
because it has elements of both a defined contribution plan and a defined benefit
plan.
•Defined Contribution elements: member’s basic benefit is calculated based
on account balances rather than on a benefit multiplier applied to salary and
service, but investments are not member directed like most defined f
contribution plans. Think 401k plans.
•Defined benefit features: 5% interest credit floor, prior service credits,
updated service credits, cost of living adjustments to annuities, and lifetime
annuity payable upon retirement.
There are currently 833 employer actively participating in the TMRS retirement plan.
in 2010 the City made 2 significant plan changes:
1) Decreased the repeating Consumer Price Index (CPI) annuity increases to
retirees from 70% to 50% of the CPI.
2) Dropped the transfer provision from Updated Service Credits. Updated Service
Credits may increase value of employee retirement benefits by accounting for
increases in salary later in an employee’s employee s career and any city plan improvements
(example – increasing contribution from 6% to 7% contribution rate). Transfer
provision looked at employee’s salary at a previous employing TMRS City and
updated it to account for increases salary later in career and Southlake picked up
the increase. This was provision was dropped.
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There are currently 52 Retirees. The average annual annuity is $14,998. The
average annual annuity for a Public Safety retiree is $24,317.
The annuity is calculated based on the following factors: 1) total member deposits
and interest; 2) City matching funds; 3) life expectancy at retirement; 4) the monthly
payment option chosen; 5) beneficiary life expectancy, if applicable; and 6) future
interest of 5%.
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This chart shows Southlake’s benefits to payroll ratio in comparison with the market.
It is important to note that both Keller and North Richland Hills participate and
contribute towards Social Security. The City of Southlake opted out of the social
security program in the late 1980’s. As such, both employees and the City do not
contribute to the program. Employees will not receive service credits or social
security benefits for time worked with Southlake. Instead, the City has chosen to
offer the TMRS retirement program to employees.
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Finally, the City provides training and development for employees. In FY 2010
organizational development and sexual harassment prevention training was
provided organization wide. In FY 2011 the City will be providing Values Based
Leadership, ethics and diversity, and safety training.
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If you have any questions regarding this presentation please feel free to contact me
at t 817-817 748 748-8063 8063. Th Thank k you.
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