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HomeMy WebLinkAboutPackets - Council Packets (887) AGENDA ORO VALLEY TOWN COUNCIL STUDY SESSION AUGUST 22, 2007 ORO VALLEY TOWN COUNCIL CHAMBERS 11000 N. LA CANADA DRIVE STUDY SESSION - AT OR AFTER 5:30 p.m. CALL TO ORDER ROLL CALL 1. DISCUSSION OF TOWN CLASSIFICATION AND COMPENSATION PLANS INCLUDING RECLASSIFICATIONS, PROMOTIONS AND MARKET ADJUSTMENTS ADJOURNMENT POSTED: 08 16 07 9:00 a.m. cp The Town of Oro Valley complies with the Americans with Disabilities Act (ADA). If any person with a disability needs any type of accommodation, please notify the Town Clerk's Office at (520)229-4700. TOWN OF ORO VALLEY COUNCIL COMMUNICATION MEETING DATE: August 8, 2007 TO: HONORABLE MAYOR & COUNCIL FROM: Sandra L. Abbey, Human Resources Director SUBJECT: Discussion of Town classification and compensation plans including reclassifications, promotions and market adjustments SUMMARY: Policy 6 (ATTACHMENT 1) of the Town Personnel Policies and Procedures Manual provides the following broad, policy level guidance regarding Classification: 1. Requirement of preparation of a classification plan 2. Provision that the plan shall be adopted and may be amended and revised from time to time by action of the Town Council 3. Requires Town Council approval for additions to the classification plan 4. States the Chief of Police has discretion to make assignments and reassignments within the Police Department Policy 12 (ATTACHMENT 2) of the Town Personnel Policies and Procedures Manual provides the following broad, policy level guidance regarding Compensation: 1. Requirement of preparation of a pay plan, including some limited criteria for development of such plan 2. Provision that the plan shall be adopted and may be amended from time to time by action of the Town Council In addition to broad policy statements, procedures to carry out policies are normally enacted by the Town Manager through the use of Administrative Directives (formerly standard operating procedures). The Town Manager has directed the Human Resources Director to review existing procedures, analyze potential options or updates that may be required, and develop an Administrative Directive that will provide detailed information and implementation guidance with regard to preparation and administration of the Town Classification and Compensation plans. To that end, and in order to seek discussion and direction from the Town Council, on the overall compensation philosophy and classification strategy desired for Town employees, tonight's discussion will review our current procedures (ATTACHMENT 3); and suggest some recommendations for the future (ATTACHMENT 4) that could be used as a guideline for developing a comprehensive set of compensation and classification procedures. We also propose to enact the reclassifications, promotions, and market adjustments currently on hold, in accordance with the procedures outlined in ATTACHMENT 3 before moving forward with any future changes. ATTACHMENTS: 1. Policy 6 2. Policy 12 3. Current Procedures (documented in Administrative Directive format) 4. Potential recommendations or alternatives to explore for the future Department Head Town Manager ATTACHMENT 1 POLICY 6 - CLASSIFICATION SECTION 1. Preparation of Plan: The Town Manager will ensure the preparation of a classification plan consisting of descriptions of positions defined by specifications and qualifications. The classification plan should be so developed and maintained that all positions substantially similar with respect to duties, responsibilities, authority, and character of work are similarly classified and compensated. SECTION 2. Adoption, Amendment, and Revision of Plan: The classification plan may be amended from time to time by action of the Town Council. SECTION 3. New Positions: When a new position is created, the classification plan shall be amended to provide therefore. The Town Council must approve any additions to the Town's Classification Plan. SECTION 4. Reclassification: When the duties or responsibilities of positions have changed significantly the Town Manager will ensure that the position is classified accordingly. SECTION 5. Special Assignment: Police officers may be temporarily assigned by the Chief of Police to positions or special assignments of law enforcement outside the classified service. Special assignments may be for indefinite periods of time, and officers while on special assignment, continue to accrue benefitsp ursuant to all other policies of the Town. Selection, assignment and reassignment are not grievable under POLICY 18, "Grievance Procedures", Section 4. When relieved from special assignment the officer shall be returned to his/her former position. ATTACHMENT 2 POLICY 12 COMPENSATION SECTION 1. Preparation of Plan: The Town Manager shall ensure that a pay plan is created. In arriving at salary rates or ranges, consideration may be given but not be limited to prevailing rates of pay for similar work in other public or private employment in the Tucson metropolitan area or defined labor market, to current costs of living, to suggestions of Department Heads, to the Town's financial condition and policies, and to other relevant factors. The Town Manager, or the person or agency employed for that purpose, shall thereafter make such further studies of the pay plan as may be requested by the Town Council. SECTION 2. Adoption of Plan: The pay plan shall be adopted and may be amended from time to time by action of the Town Council. Amendments and revisions shall be submitted to the Town Council through the Town Manager. ATTACHMENT 3 SUBJECT NUMBER PAGE Classification and Compensation Procedures 1 of 6 DRAFT— CURRENT PROCEDURES PAGE ISSUE DATE I. PURPOSE The Town's classification and compensation plans provide a method for assigning a whole job classification to each job in the Town, and a market-based method for determining pay ranges for each classification. Some public safety positions have an alternate compensation structure based on a negotiated step plan. The Town Manager ensures the preparation of a classification plan that includes one classification designation for each job description. Job descriptions are highly detailed and include specifications and qualifications. Each classification (i.e.job) is assigned either a pay range based on competitive market salary data, or a position on the public safety step plan as negotiated. The classification and compensation plans may be amended from time to time by action of the Town Council. The Town's compensation philosophy is to provide externally competitive salaries for all job classifications. Base salaries reflect this philosophy so long as salary ranges are adjusted annually based on cost of living and market changes. Salary increases are based on a combination of annual cost of living adjustments and/or merit or step increases as budgeted and approved by the Mayor and Town Council. II. DEFINITIONS A. Job Evaluation- a systematic process to determine how a job compares with other jobs and to assign it to an appropriate classification and salary range. B. Job Description—a written description of the general purpose of a job, including the essential functions and job duties, specifications and requirements including the knowledge, skills, abilities and other criteria normally needed for successful performance of the job. C. Classification—following job evaluation, a method of grouping positions with similar duties, responsibilities, authority and character of work into similar classification levels or bands using internal job evaluation data, and then assigning each position to a pay range within the classification band using external market salary data. Note: currently the Town considers each job description to be a separate classification, rather than grouping similar positions together into classification bands. D. Reclassification—a systematic process for re-evaluating a position that has significantly changed and no longer meets the criteria for inclusion in the current classification. May also be referred to as reallocation, reassignment, upgrading, or downgrading. E. Promotion—a competitive process for filling an existing vacant position internally. F. Special Assignment—Provision of extra job duties or responsibilities by the Department Director on a temporary basis. III. PROCEDURES 1. Administration of the Classification Plan a. Initial assignment to a classification and/or pay range A job evaluation is conducted for each new job to be classified. Each job is described in a detailed job description including the essential job functions, specification of skills, knowledge and abilities for success in the job, and minimum requirements. The job is then classified using the "whole job"method of classification where each job description is considered a separate classification and is slotted into the Town's existing salary structure. A job description is developed in order to document the classification. These are developed jointly by the supervisor for the position and the human resources staff. Job descriptions that apply to more than one position or department(for example Office Assistant), are generic in order to apply to similarly situated positions throughout the Town. When hired, each employee is provided with a copy of their job description. From time to time either human resources or the supervisor will request a review and update of the job description based on changes to the job duties. If such updates are substantial enough that the job is no longer reflective of the original classification, the job may need to be reclassified according to the process detailed in section III. 1. c. below. Salary ranges have been established and are adjusted from time to time in order to reflect competitive market positioning. Jobs (classifications) are assigned a salary range based on comparative market data. The Human Resources Director makes recommendations to the Town Manager regarding which municipalities and other agencies should be considered comparators based on proximity and demographic similarity with the Town. Step Plans are available for specified public safety positions as negotiated. b. Adjustments to the classification plan In order to maintain the Town's competitive ability to attract and retain staff with the skills, knowledge and abilities to complete the Town's mission, on an annual basis, if a cost of living adjustment is budgeted and approved by the Mayor and Town Council, the classification salary structure is adjusted by the same percentage as the approved cost of living adjustment. Additionally, from time to time, the human resources department conducts a salary survey of comparable jobs in the relevant labor market. If the midpoint of the salary range for a specific classification is more than 10% below the average midpoint of the comparable jobs surveyed in the relevant labor market, the Human Resources Director will recommend adjusting the salary range for the affected job to better reflect a competitive market position. Such market adjustments are appropriate only on an as needed basis and should not take the place of annual cost of living adjustments made to the entire pay structure. (see section III.2.b. for additional information). Finally, if Town management has identified the need for new jobs that are not currently included in the classification salary structure, the human resources office will research the position, work with the supervisor to evaluate the job, develop a job description, conduct a benchmarking survey of comparable jobs in the relevant labor market, and recommend adding the new classification to the structure. Such additions are reviewed and approved by the Town Council, normally in conjunction with the budget procedures related to requesting new positions. c. Adjustments to individual employee salaries Reclassification of a position is required when a position no longer adequately serves the purpose of the Town, either due to changes in Town priorities, programs or services, or based on additional duties or responsibilities assigned to existing staff members such that their jobs no longer reflect the current classification. It is the responsibility of the Town Manager to see to it that the position is reclassified (in accordance with policy 6), in order to avoid liability in cases where an employee is required to work outside their classification. The following steps are currently required prior to reclassification of a position: • Evaluation of job being done, or required to be done, by the incumbent conducted by the supervisor in consultation with human resources. This may include evaluations that are part of outside, professional management studies. • Creation of job description (unless a current job description adequately reflects the classification). • A memorandum shall be written by the Department Director to Town Manager with justification, including the results of the job evaluation or management study. • The Town Manager requests recommendation from Human Resources Director to include a benchmarking salary study of comparable jobs in the relevant labor market, and assignment of the position (if new)to a salary range. • Town Manager may approve reclassifications to existing classifications; and refers requests for new positions to the Mayor and Town Council for approval, normally during the annual budget approval process. 2. Administration of the Compensation Plan a. Base Pay Employees initially hired to work for the Town negotiate a base pay rate with the immediate supervisor, in consultation with a member of the human resources staff. The negotiated base pay rate is normally confined to an amount not more than the midpoint of the salary range to which the position is assigned, or step-one of the appropriate step plan, for those staff members included on the negotiated public safety step plan. The Town Manager shall approve all base pay offers, and may require justification such as documentation of prior experience, education or skills commensurate with the base pay rate negotiated. b. Annual Adjustments to Base Pay (COLA, Market) In order to maintain the competitive positioning of both employee salaries and of the base pay structures, annual across the board increases may be approved by the Town Council as part of the budget process. Normally the across the board increase is referred to by the Town as a Cost of Living Adjustment, and has been based on data gathered from the Eller College of Business at the University of Arizona, as well as budget availability, public safety MOU negotiations, and the Town Manager's budget recommendation. In addition to across the board increases, market adjustments to selected classifications may be recommended by the Human Resources Director based on salary survey data that indicates the midpoint of the classification is more than 10% below the average midpoint for the classification in comparable positions in the relevant labor market. Market adjustments are applied to the classification as a whole, rather than to individual salaries; however, adjustments to incumbent salaries may be approved based on the following: incumbents in a position to receive a market adjustment will receive a salary adjustment of 2.5% for each pay grade increased, up to but not over the midpoint of the new salary range. In the event an incumbent already earns a salary over the midpoint of the new salary range, the incumbent would not receive a market adjustment, since they are already being paid more than the market average for the job. c. Merit Awards and Step Plan Progression In order to recognize and encourage meritorious performance, if approved and budgeted for by the Town Council on an annual basis, merit pay increases or step plan progression increases may be earned by employees based on their annual performance evaluation ratings. On or around an employee's anniversary date in their current position, an employee receives an annual performance evaluation. For employees who are paid in accordance with the negotiated public safety step plan, employees who receive a performance evaluation rating of at least"meets requirements" shall progress to the next higher step on the step plan. If an employee is already being paid at the highest step on their step plan, they are not eligible for an anniversary date pay increase. For employees paid on the merit pay plan, employees who receive a rating of"meets requirements" or higher rating shall receive a salary increase between 2.5%to 4% of midpoint, up to but not over the maximum of their salary range. These increase percentages must be approved, and may be adjusted annually by the Town Council during the budget approval process. *Please note that for the current budget year, no step increases or merit pay increases have been approved. 3. Status Changes a. Lateral transfers involve a change of an employee from one position to another position assigned to the same salary range. Such transfer may involve the employee staying in the same classification, yet transferring to a different department, or may involve a new classification that is assigned to the same pay range as the previous classification. Lateral transfers normally are initiated by employees who may apply to transfer to a vacant position through the internal or external recruitment procedures. However, if found to be in the best interests of the Town, and/or the employee, lateral transfers may be initiated by the management as part of a reorganization, or in order to better carry out the Town's mission. There is normally no pay change to an employee transferring to a lateral position. b. Promotions involve a change of an employee from one position to another position in a higher salary range. Promotions are based on a competitive internal process involving the employee completing an application for the vacancy or promotional opportunity, meeting all the criteria for promotion, and being selected by the supervisor for the position. Employees who are promoted normally receive a salary increase commensurate with the duties of the new position. Note: the promotional process utilized by the Police Department serves as a model for other departments who may wish to utilize a promotional opportunity process in cases where a vacancy does not currently exist. c. Voluntary or Involuntary Demotions may occur when an employee changes from one position to another position assigned to a lower salary range. Voluntary demotions into a vacant position are applied for and selected based on current internal and/or external recruitment procedures. Involuntary demotions may occur if it is found to be in the best interests of the Town to move the employee into a position in a lower salary range. Involuntary demotions require prior consultation with the Human Resources Director and final approval of the Assistant Town Manager. Employees who are demoted normally do not have a change to their salary except that an employee who earns a salary higher than the maximum for the position they are demoted to, would have their salary lowered to meet the maximum of the new salary range. d. Special Assignments have primarily been utilized by the Police Department, although the methods used by the Police Department could be adapted to other departments if found to be necessary. Police officers may be temporarily assigned by the Chief of Police to positions or special assignments of law enforcement outside the classified service. Special assignments may be for limited or for indefinite periods of time. Officers on special assignments continue to accrue benefits in accordance with Town policies. Special assignment pay may be awarded to officers serving such assignments. When relieved of special assignment, the Officer shall be returned to his/her former position and pay. e. Interim responsibilities may be assigned, regardless of position, if found by management to be necessary. Staff members may be temporarily assigned to additional duties or responsibilities as an interim measure, particularly when a management vacancy occurs and requires a staff member to temporarily fulfill the assignment pending recruitment and hiring. Employees assigned temporary or interim positions shall receive temporary assignment pay, which will end at the end of the month in which the temporary or interim assignment concludes. f. Reclassification of a position is required in order to prevent additional liability for pay inequities in the event that the duties or responsibilities of a position have changed, or are planned to change significantly, Two examples: For example, if the Town foresees a need for less construction and more preventative maintenance of streets, it may be desirable to transition construction employees into preventive maintenance roles. This type of reorganization is generally much more cost effective than terminating existing, knowledgeable Town staff and hiring new staff members with the needed skills, but no knowledge of Town procedures and no track record of loyalty and experience with the Town. In such a case, existing employees could be developed and trained with the needed skills, and then could be reclassified into the needed positions. If the classification to be filled does not currently exist in the classification structure, the Town Council must approve the addition to the classification system, normally in conjunction with the budget process. Another example of the need for reclassification is in the event a department requires an employee to take on more challenging or higher level responsibilities in their job family, without necessarily adding new staff. In such an event an existing Office Specialist (for example)may progress to the point where they are handling all the responsibilities of, and meet all the requirements of, a Sr. Office Specialist. If it is beneficial for the Town to have a Sr. Office Specialist in the position, it is more financially and ethically desirable to reclassify the existing staff member who already knows the Town's procedures and is loyal and experienced with the Town, rather than to terminate the successful current employee and hire a new Sr. Office Specialist with no knowledge or experience in the Town, simply because a new position could not be added. This is the advantage of reclassification over adding new positions (note: reclassification is also often called reallocation or upgrading). In accordance with Town policy when the duties or responsibilities of a position have changed significantly, it is the Town Manager's responsibility to ensure that the position is reclassified appropriately. All reclassifications will be made in accordance with the steps outlined in section III. 1. c. of this Administrative Directive. Note: Based on the clear documentation above of our current procedures, and the extensive reclassification steps that have already been undertaken by the Directors and Town Manager as outlined in this procedure, it is recommended that before proceeding to make any changes to our classification and compensation plans for future years,we should enact the reclassifications, promotions, and market adjustments currently on hold,yet budgeted for in the current fiscal year. Budgeted funds are available, and the above procedures have been followed. ATTACHMENT 4 Defining the Town's FUTURE Compensation Policy One of the most important functions of the Mayor and Town Council with regard to employment matters is in defining the philosophy the Town will take in developing and administering the Compensation program. Decisions to be made include the following: • Will base salary decisions be based on External market pricing or internal job factors (or a combination)? • Will progression along the pay structure be based on length of service or merited performance? • Will salaries fall openly in any position along a pay range, or only in specific defined steps? • Will external factors be used to make annual salary adjustments—i.e. across the board increase based on wage inflation, cost of living increases, market changes, etc? • Will the Town strive to have midpoints that are within 10% of the market pricing midpoints? Or is a different goal acceptable? For example, within 5%, within 15% or within 20%? • Will employee salary and benefits costs be viewed as a cost (liability) in the budget, or a valued investment in an important Town resource (our employees) that helps the Town carry out it's mission? These are questions for the Mayor and Council to consider and answer, in order for the Human Resources staff to develop a long-lasting, comprehensive set of policies and procedures for implementing the compensation philosophy. Recommended Strategies and Options for Evaluating and Classifying Jobs As the Town's policy making body, there are several options that relate to the overall strategy for classifying jobs and compensating employees, the Town Council may wish to review. The Council would then be in a position to direct staff to complete the necessary procedural details in preparing both an updated classification plan and an updated compensation procedure to be brought back to the council for approval prior to implementation Whole Job Methods. Internal Ranking or External Slotting—Using a previously developed salary structure, each job is compared either to other jobs internal to the organization (ranked in order of importance) and assigned to a salary grade on the existing salary structure; or each job is slotted into the salary grade with the midpoint that most closely matches average market pay for comparable jobs. With this method there are no pre-defined definitions or factors to consider in determining which salary grade a position shall be classified, but the whole job is simply compared to others internally or externally and slotted into the closest pay grade match. Advantages—simple to administer, take very little training or expertise in classification methods to implement, and is inexpensive to replicate by HR or compensation staff. Disadvantages—not based on any specific criteria, difficult to justify and defend if internal ranking is used without objective criteria, may be skewed depending on objectivity and comparability of market data if external market slotting is used. Quantitative Methods. Point Factor or Compensable Job Component—These systems are based on identifying the compensable components or factors of a job—such as level of job knowledge, accountability, working conditions, decision-making authority, etc. then assigning numerical points to each job component or factor. The points are added up and the salary grade is determined based on the number of points assigned to the job. Advantages—Relatively objective and reliable as long as the system is set up by someone with expertise in point factor job evaluation, and as long as leadership recognizes the validity of the system and supports the numerical rating completed by the classification specialist. The system can be tailored to organizational values by weighting the points assigned to each job factor accordingly. Disadvantages—Expensive and time-consuming to develop and administer—usually requires a dedicated classification specialist with specific software to compute multiple regression analyses to determine objective numerical values or"worth" of each job. Can be difficult to explain to employees why certain jobs have higher point values than others. Combination Classification (recommended)— Starting with a whole job evaluation,jobs are grouped into pre-defined classification bands based on internal factors such as job family, functional role within organization, or decision-making organizational level. Once assigned to a pre-defined classification band, the position would be assigned to a salary grade and range based on competitive market pricing within the broader classification band. Example of organizational level classification bands (RECOMMENDED): Executives and Manager Band-definition: This classification band includes exempt supervisoryand management staff who head a specific organizational unit such as a department, division, program or project and who regularly supervise at least 2 Full-Time employees or the equivalent. Salary Grade Example Job Title Range Minimum Range Maximum M1 Project Supervisor $50,000 $75,000 M2 Division Manager 60,000 86,500 _ M3 Director 81,000 120,000 M4 Assistant Town Manager 98,500 150,000 M5 Town Manager 135,000 199,000 Professional Band-definition: This classification band includes exempt employees who are members of recognized professions normally requiring experience, certification or membership in a professional organization, an advance educational degree, and who exercise a significant amount of independent decision-making and judgment in carrying out their responsibilities. Salary Grade Example Job Title Range Minimum Range Maximum P1 Librarian $43,500 $65,000 P2 Econ.Devel. Specialist 45,600 68,500 P3 Plans Examiner II 48,000 72,000 P4 Sr.Planner 51,600 77,500 P5 Civil Attorney 60,000 89,000 P6 Sr. Civil Engineer 66,200 99,000 Office Support Band-definition: This classification band includes staff who provide non-manual, office, clerical, administrative, or semi-professional business and operational support to the organization. Salary Grade Example Job Title Range Minimum Range Maximum 01 Receptionist $21,200 $31,800 02 Office Assistant 23,500 35,200 03 Sr. Office Assistant 26,500 39,800 04 Accounting Clerk 28,500 42,800 05 Office Specialist 30,700 46,200 06 Sr. Court Clerk 32,300 48,500 07 Sr. Office Specialist 34,800 52,200 Example of Job Family classification bands Computer and Information Technology Job Family- definition: This classification band includes non- exempt or exempt positions performing technical, professional, administrative or managerial functions requiring specific computer hardware, software, programming, analysis, and other related computer or information technology experience. Salary Grade Example Job Title Range Minimum Range Maximum Cl GIS Technician $37,500 $56,200 C2 IT Technician 45,600 68,500 C3 GIS Analyst 47,000 70,200 C4 Database Analyst 55,600 83,400 CS Network Administrator 58,500 87,800 C6 IT Director 80,600 121,000 General Administration Job Family-definition: This classification includes non-exempt or exempt positions performing support, technical, professional, administrative or managerial functions related to the general business or public administration functions of the organization. Salary Grade Example Job Title Range Minimum Range Maximum G1 Receptionist $21,200 $31,800 G2 Office Assistant 23,500 35,200 G3 Sr. Office Assistant 26,500 39,800 G4 Accounting Clerk 28,500 42,800 GS Office Specialist 30,700 46,200 G6 Sr. Court Clerk 32,300 48,500 G7 Sr. Office Specialist 34,800 52,200 G8 Admin. Services Mgr 42,000 63,000 G9 Econ. Develop. Spec. 45,600 68,500 G10 Management Assistant 51,600 77,500 G1 1 Economic Devel. Admin 74,000 110,000 G12 Assistant Town Mgr 98,200 147,000 G13 Town Manager 135,000 199,000 Engineering Job Family-definition: This classification band includes non-exempt or exempt positions performing technical, professional, administrative or managerial functions requiring specific skills, knowledge and abilities related to field of civil or general engineering. Salary Grade Example Job Title Range Minimum Range Maximum El Civil Engineering Tech $37,500 $56,200 E2 Sr. Civil Eng. Tech 43,400 65,000 E3 Civil Eng. Designer 49,200 73,700 E4 Civil Engineer 57,000 85,500 E5 Sr. Civil Engineer 66,100 92,000 E6 Eng. Division Mgr 75,000 110,000 E7 Town Engineer 89,000 133,000 Next Steps Based on the direction from the Council, as well as information from other municipalities, focus groups . p g ups and meetings with employees, employee groups, managers and others, a detailed con compensation policy p Y and procedures, as well as administrative directives and guidance for redefiningand administeringthe classification s fication and compensation plans will be drafted and returned to the Council for approval. Depending on the extent of changes and training required to implement such changes, implementation couldp be available as soon as fiscal year 08-09.