Item 9D
Establishing a Strategic Employee Compensation System
August 6, 2013
Item 9D
Approval of Employee Compensation System
Compensation Systems
City
(Institutional)
Strategy
Compensation
Strategy
Job
Structure
Job
Analysis
Pay
Methods
Salary
Structure
Integrated
Compensation
System
Outcomes
Vision
Valuation
Market
Model
Performance
Transparency
Governance
Classification
Reporting
Job Levels
Job/Work Design
Titles
Job Duties
Evaluation Factors
Internal/External
Evaluation
Salary Ranges
Control
Market
Movement
Pay Administration
Pay Progression
Pay for Performance
Variable/Incentive Pay
Strategic comp system to support City strategy
Foundation for HR initiatives
Employee engagement
Open/transparent system
City of Southlake Strategy Map
Critical Business Outcomes
CBO1 - Continue to implement Southlake 2030 Plan by focusing on short-term initiatives.
CBO2 - Become an employer of choice by developing a plan to recruit, develop and retain employees committed to excellence.
CBO3 - Develop long-term strategies to address future financial uncertainties and challenges.
CBO4 - Improve mobility by proactively completing traffic analysis of key areas.
CBO5 -Optimize resources through collaboration and partnerships to reduce costs and add service value.
The City of Southlake provides municipal services that support the highest quality of life for our residents, businesses, and visitors. We do this by being an exemplary model of balancing
efficiency, fiscal responsibility, transparency, and sustainability.
Deliver on Our Focus Areas
Performance
Management &
Service Delivery
C1 Achieve the highest standards of safety & security
C2 Provide travel convenience within City & region
C3 Provide attractive & unique spaces for enjoyment of personal interests
C4 Attract & keep top-tier businesses to drive a dynamic & sustainable economic environment
C5 Promote opportunities for partnerships & volunteer involvement
Serve our Customers
Manage the Business
B1 Achieve best-in-class status in all City disciplines
B2 Collaborate with select partners to implement service solutions
B3 Enhance resident quality of life & business vitality through tourism
B4 Provide high quality services through sustainable business practices
B5 Enhance service delivery through continual process improvement
B6 Optimize use of technology
Provide Financial Stewardship
Promote Learning and Growth
F1 Adhere to financial management principles & budget
F2 Invest to provide & maintain high quality public assets
F3 Achieve fiscal wellness standards
F4 Establish & maintain effective internal controls
L1 Ensure our people understand the strategy & how they contribute to it
L2 Enhance leadership capabilities to deliver results
L3 Attract, develop & retain a skilled workforce
L4 Recognize & reward high performers
L5 Empower informed decision-making at all levels in the organization
C6 Enhance the sense of
community by providing excellent customer service and citizen engagement opportunities
L6 Foster positive employee engagement
ICMA Code of Ethics
Handle all matters of personnel on the basis of merit so that fairness and impartiality govern decisions, pertaining to appointments, pay adjustments, promotions and discipline.
Evolving Our System
Best Practices
Current Framework
Employer of Choice
Compensation Study
Compensation Study
Current Environment: Employee Characteristics
Minimum Requirements
51% Higher Education
14% require 5+ years experience
High Hazard Jobs
Average Tenure: 8.25 Yrs
Promotion Rate: 32%
Diversity Rate: 22%
Average Age: 38
Current Environment
Average Market Turnover: 7.25%
Cost of Turnover:
6 Firefighters: approx. $210,000
Current Environment
Exit Interview Comments…
6 out of 10
employees said compensation was primary reason for seeking alternative employment.
“The initial base salary is good but there is nothing setup for the future as far as a compensation plan.”
“There needs to be a pay plan in place so individuals know what to expect and to look forward to in the future.”
“In years past, step and pay increases were good …. My only increase since then was due to promotion and a small COLA type increase…increases are necessary.”
Current Environment
Current Compensation Philosophy & Framework
Current Environment
Labor Market
7%
Compensation Study
Market Study Steps
Establish Labor Market
Determine Market Philosophy
Survey the Market
Establish Labor Market
Geographic Location
Market Comparison:
7 to 18 cities
33 different cities
Recommended Labor Market
* Newly Proposed
Market Study Steps
Establish Labor Market
Determine Market Philosophy
Survey the Market
Percentile - Recommended
Market Philosophy Options
Weighted Market Average - Current
Pay Ranges
Conservative
Stable
Actual Salaries
Aggressive
Unpredictable
Market Position Options
Lag the Market
Match the Market
Lead the Market
Recommended Market Position
Lead the Market
60th Percentile
Similar to current philosophy
Market Study Steps
Establish Labor Market
Determine Market Philosophy
Survey the Market
Market Survey Findings
Market Study Summary
60th Percentile
Compensation Study
Pay Plan Structures Evaluated
Recommended Structure
Range Movement Options
Options considered
Tenure
Base Adjustment
COLA
Merit
Hybrid: Base Adjustment and Merit
Market Comparison
Recommended Range Movement
Compensation Study
Implementation Options
$145,560
50 Employees
$216,253
67 Employees
$466,253
215 Employees
Recommendation
Compensation Study
Recommended Compensation Philosophy Summary
Recommendation
City Council approve a Strategic Employee Compensation System as presented.
Questions?
Cost Comparison
Note: this slide is for illustrative purposes only; future increases will be included for City Council consideration in future proposed budgets.
Current Philosophy
Recommended Philosophy
Percentile Benefits
Structures Found in Market
Civilian Employees
Public Safety
Employees Impacted