2017-014 Compensatioin Plan Implementation
Date: February 17, 2017 Report No. 2017-014
INFORMAL STAFF REPORT
TO MAYOR AND CITY COUNCIL
SUBJECT:
Compensation Implementation Impact
EXECUTIVE SUMMARY:
Council approved a contract with UM Global HR (UMGHR) on February 2, 2016, to conduct a
comprehensive compensation and classification study. The study encompassed all regular, non-
civil service positions (excluded temporary, seasonal, Police civil service, and Fire civil service
positions). New pay plans were implemented on October 8, 2016, as a result of the study. Any
employee whose salary fell below the new minimum starting rate for their position received an
increase, up to the new minimum. A total of 193 employees were eligible for such an increase.
BACKGROUND:
During the January 24, 2017, City Council meeting, Councilmember Bagheri requested
information about the implementation of the compensation study and its impact. Specifically, she
requested information on the cost to implement the plan and the number of employees impacted.
DISCUSSION:
Dan Ulibarri and Elena Mason with UM Global HR conducted the comprehensive review of the
City’s compensation and classification program. Results of their study were presented to the City
Council in two phases. On July 21, 2016, Council was provided an overview of the following:
A summary of the issues with our current compensation program;
An overview of general compensation program principles and objectives; and
A summary of the salary survey results based on market study conducted by UM Global
HR (UMGHR).
At the August 1, 2016, Council meeting, Dan and Elena presented:
Their recommendations for our salary structures;
The cost impact associated with the recommended salary structures, and
Market trends for reward and recognition programs.
Based on Council’s positive response to the recommendations made by Dan and Elena, we
implemented the following:
Maintained three (3) separate pay plans: General, Electric, and Technology;
Eliminated the bifurcated career ladders (Business and Technical) and combined positions;
Date: February 17, 2017 Report No. 2017-014
Ensured the exempt pay plan was compliant with the pending new Fair Labor Standards
Act minimum salary threshold (one of the exemption tests under the law is to ensure the
salary is at least $47,476);
Expanded the range spread (difference from minimum to maximum rate) from an average
of 35% to a uniformed 66% spread, which will slow down how quickly an employee will
reach the maximum rate of pay for his/her position;
Pay plans are cut into 7 segments to allow for career progression within pay grades (e.g.
minimum rate, P10, P25, P50, P75, P90, and maximum rate; note: P = percentile);
Each of the pay plans now have consistent grade differentials (% increase from minimum
of one grade to the minimum of the next higher grade; or from P25 of one grade to P25 of
the next higher grade, etc.); and
Added more pay ranges to better differentiate between jobs due to their complexity.
The new pay plans were implemented on October 8, 2016. The FY 16/17 budget included funding
to provide an increase for any employee whose pay fell below the new minimum rate for his/her
position. 193 employees received such an increase and the total cost to adjust their salaries was
$449,123 (of this amount, the General Fund cost $214,109). A breakdown of the number of
employees impacted and the cost by fund is included in the attached report.
CONCLUSION:
The implementation of the recommendations provided by Dan Ulibarri and Elena Mason with UM
Global HR had a financial impact of $449,123. A total of 193 employees had their rates adjusted
to reflect the new minimum rate for their position.
ATTACHMENTS:
Exhibit 1 – Compensation Plan Implementation Impact Report
STAFF CONTACT:
Carla Romine, Director of Human Resources
940-349-8344
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