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Home My WebLink AboutItem 4City of Lakeville Human Resources Memorandum To: Mayor and City Council Justin Miller, City Administrator From: Tammy Schutta, Human Resources Manager Date: July 16, 2018 Subject: Job Classification and Compensation Study Background It is important for the City of Lakeville to maintain internal pay equity and to attract, motivate and retain talented and highly skilled employees that will align with the City’s vision plan, Envision Lakeville. The City entered into a professional services agreement with Springsted Incorporated to conduct a job classification and compensation study last fall for City Council and employees. The first part of the study included a review of the salaries for the Mayor and City Council. The second part of the study included a review of our position descriptions. City staff also completed Position Analysis Questionnaires (PAQ). Springsted Inc. utilized the SAFE job evaluation system to review and rate each job position. The job evaluation factions are: • Training and Ability • Experience Required • Level of Work • Human Relations Skills • Physical Demands • Working Conditions/Hazards • Independence of Actions • Impact on End Results • Supervision Exercised The third part of the study included collecting salary data from our comparable cities. Our current benchmark communities are: Apple Valley, Blaine, Bloomington, Brooklyn Park, Burnsville, Coon Rapids, Eagan, Eden Prairie, Edina, Maple Grove, Minnetonka, Plymouth, St. Louis Park and Woodbury. Based on the results of the market study, Springsted Inc. is proposing a 7-step pay scale. The proposed pay scale consists of 25 grades allowing for expansion. There is a 6% difference between grades. The salary range from minimum to maximum is 24.72%. The City’s current salary structure is a 6-step pay scale. The salary range from minimum to maximum is 20%. There are 43 grades. There is a 5% difference between grades. Based on the job evaluation and market study, there are forty-four (44) employees identified as being below the recommended pay range. Thirty -three (33) non -union employees and eleven (11) union employees. Please note the four labor contracts are in place through December 31, 2019. The market adjustments for each of the four unions will be addressed during negotiations for the 2020 – 2021 labor contracts. The Personnel Committee reviewed the three options Springsted, Inc. proposed to implement the new pay plan. Option 1 includes moving employees identified as below minimum salary to the minimum of their proposed grade on the proposed pay scale. This would be thirty-three (33) non-union employees identified as being below the recommended pay range. All other non-union employees would progress to the next step increase on their anniversary date. Option 2 moves employees identified as below minimum salary to the step 1. All other employees would move to their next step on 1/1/2019. Option 3 places employee salaries within the proposed grade based on the number of years of service. The Personnel Committee reviewed these materials and indicated their support for Option 1. If not for the compensation study, the 2019 general fund levy would need to increase by approximately 3% to accommodate planned cost of living adjustments, step increases, and transition costs of new employees added mid-year 2018. Implementing Option 1 would result in a levy increase of approximately 3.5% (or .5% higher than otherwise planned). The personnel committee also indicated their desire to continue moving towards a more performance-based compensation system. All employee step increases would be tied to an annual performance review. An evaluation that results in an acceptable performance report would entitle the employee to progress to the next step in their position grade. The City’s compensation philosophy could also include the ability to advance an employee two steps if they are far exceeding expectations. The City Council may also want to consider performance based awards for high performing employees that have reached the top of their pay scale. Lastly, the Personnel Committee discussed adopting a formal compensation philosophy. Included is a draft compensation philosophy statement for your review. The draft language includes establishing salaries that are within + or - 10% of the midpoint of the market average of comparable cities. Recommendation Staff and the Personnel Committee supports Option 1 and moving the thirty-three (33) non- union employees identified as below minimum salary to the minimum of their proposed grade on the proposed pay scale beginning January 1, 2019. Staff is seeking direction on how the City Council would like to proceed with the results of the compensation study. City of Lakeville, MinnesotaPay Scale% Between Grades: 6%% Between Steps: 3.75% Range: 24.72%Starting midpoint: 44,000Grade12345671 39,399.29 40,876.76 42,409.64 44,000.00 45,650.00 47,361.88 49,137.952 41,763.24 43,329.37 44,954.22 46,640.00 48,389.00 50,203.59 52,086.223 44,269.04 45,929.13 47,651.47 49,438.40 51,292.34 53,215.80 55,211.404 46,925.18 48,684.88 50,510.56 52,404.70 54,369.88 56,408.75 58,524.085 49,740.69 51,605.97 53,541.19 55,548.99 57,632.07 59,793.28 62,035.526 52,725.13 54,702.33 56,753.66 58,881.93 61,090.00 63,380.87 65,757.667 55,888.64 57,984.47 60,158.88 62,414.84 64,755.40 67,183.72 69,703.118 59,241.96 61,463.53 63,768.42 66,159.73 68,640.72 71,214.75 73,885.309 62,796.48 65,151.35 67,594.52 70,129.32 72,759.16 75,487.63 78,318.4210 66,564.27 69,060.43 71,650.19 74,337.07 77,124.71 80,016.89 83,017.5211 70,558.12 73,204.05 75,949.20 78,797.30 81,752.20 84,817.90 87,998.5812 74,791.61 77,596.29 80,506.16 83,525.14 86,657.33 89,906.98 93,278.4913 79,279.11 82,252.07 85,336.53 88,536.64 91,856.77 95,301.40 98,875.2014 84,035.85 87,187.20 90,456.72 93,848.84 97,368.18 101,019.48 104,807.7115 89,078.00 92,418.43 95,884.12 99,479.77 103,210.27 107,080.65 111,096.1716 94,422.68 97,963.53 101,637.17 105,448.56 109,402.88 113,505.49 117,761.9517 100,088.04 103,841.35 107,735.40 111,775.47 115,967.05 120,315.82 124,827.6618 106,093.33 110,071.83 114,199.52 118,482.00 122,925.08 127,534.77 132,317.3219 112,458.93 116,676.14 121,051.49 125,590.92 130,300.58 135,186.85 140,256.3620 119,206.46 123,676.70 128,314.58 133,126.38 138,118.62 143,298.07 148,671.7421 126,358.85 131,097.31 136,013.46 141,113.96 146,405.73 151,895.95 157,592.0522 133,940.38 138,963.15 144,174.26 149,580.80 155,190.08 161,009.71 167,047.5723 141,976.80 147,300.93 152,824.72 158,555.65 164,501.48 170,670.29 177,070.4224 150,495.41 156,138.99 161,994.20 168,068.99 174,371.57 180,910.51 187,694.6525 159,525.14 165,507.33 171,713.85 178,153.12 184,833.87 191,765.14 198,956.33Step City of Lakeville, MinnesotaImpact# of StaffCurrent SalaryProposed SalaryDifference % IncreaseTotals 223 15,626,936.65$ 15,749,945.37$ 123,008.72$ 0.79%Employee Below Min 44 1,791,776.15$ 1,914,784.86$ 123,008.72$ 6.87%Employee Within Range 178 13,769,358.90$ 13,769,358.90$ -$ Employee Above Max 1 65,801.61$ 65,801.61$ -$ # of StaffCurrent SalaryProposed SalaryDifference % IncreaseTotals 223 15,626,936.65$ 16,020,128.39$ 393,191.73$ 2.52%00$ Employee Below Min 44 1,791,776.15$ 1,914,784.86$ 123,008.72$ 6.87%Employee Within Range 178 13,769,358.90$ 14,039,541.91$ 270,183.02$ 1.96%Employee Above Max 1 65,801.61$ 65,801.61$ -$ # of StaffCurrent SalaryProposed SalaryDifference % IncreaseTotals 223 15,626,936.65$ 16,626,876.79$ 999,940.14$ 6.40%00$ Employee Below Min 44 1,791,776.15$ 2,133,606.80$ 341,830.65$ 19.08%Employee Within Range 178 13,769,358.90$ 14,427,468.38$ 658,109.48$ 4.78%Employee Above Max 1 65,801.61$ 65,801.61$ -$ Option 1 - Move to MinOption 2 - Next StepOption 3 - Yrs of Svc City of Lakeville Compensation Philosophy Purpose The purpose of the City of Lakeville’s compensation program is to attract, motivate and retain talented and highly skilled employees that will align with the City’s vision plan, Envision Lakeville. External Market It is important for the City of Lakeville to be competitive within the metro area to attract as well as retain highly skilled and talented employees who will contribute towards Envision Lakeville by providing services that add value and develop a work place of choice. Market Positioning To be competitive within the external market, the City Council will establish starting salaries that are within + or - 10% of the midpoint of the market average of comparable cities. Our current benchmark communities are: Apple Valley, Blaine, Bloomington, Brooklyn Park, Burnsville, Coon Rapids, Eagan, Eden Prairie, Edina, Maple Grove, Minnetonka, Plymouth, St. Louis Park and Woodbury.