HomeMy WebLinkAbout48-10 RESOLUTIONRESOLUTION NO. 48-10
A RESOLUTION AMENDING RESOLUTION NO. 138-06 TO DELAY THE
REQUIREMENT TO PERFORM A COMPREHENSIVE MARKET SURVEY
FROM 2010 TO 2012
WHEREAS, the City Council adopted Resolution No. 138-06 which established a
compensation philosophy for city employees; and
WHEREAS, the adopted philosophy calls for a comprehensive market survey every four
years, beginning in 2006, to ensure the City retains a competitive posture regarding city
employee compensation; and
WHEREAS, current economic conditions have led to a city-wide pay freeze, and
expending approximately $20,000.00 for a comprehensive market survey, at this time, would not
appear to be a wise use of city financial resources.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF FAYETTEVILLE, ARKANSAS:
Section 1. That the City Council of the City of Fayetteville, Arkansas hereby amends
Resolution No. 138-06, by changing the first bullet -point on page two (2) of the City of
Fayetteville's Compensation Philosophy to read as follows:
<6. •
identify a solid set of benchmark positions and conduct a
market review every year and a comprehensive market survey every four
years, beginning in 2012, to ensure the City retains a competitive posture;
If
PASSED and APPROVED this 6th day of April, 2010.
APPROVED:
By.
IONELD J N Mayor
ATTEST:
By:
SON
SMITH, City Clerk/Treasurefirm,
....................
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Missy Leflar
Submitted By
City of Fayetteville Staff Review Form
City Council Agenda Items
and
Contracts, Leases or Agreements
4/6/2010
City Council Meeting Date
Agenda items Only
Human Resources
Division
Action Required:
Finance & Internal Services
Department
Staff requests that the Council consider amending the City's Compensation Plan to allow deferral of a $20,000 Market
Study expenditure that was scheduled for 2010. The purpose of the Study would be to provide the Administration with
guidance whether employee pay is in line with the market. Since current economic conditions are precluding
employee raises in 2010, it would not seem like a prudent expenditure for 2010.
No cost
Cost of this request
1010.1220.5315.00
Account Number
1010.1220.5315.00
Project Number
Budgeted Item
X
20,000.00
Category / Project Budget
None
MAG 4 Year Benchmark
Program Category / Project Name
MAG 4 Year Benchmark
Funds Used to Date Program / Project Category Name
20,000.00 Professional Services
Remaining Balance Fund Name
Budget Adjustment Attached
R..m9 cl.kasts
Finance and Internal Services Director
3 it • zo its
Date
3-1
Date
•11-2JAIS
Date
Date
ita
Prate
Previous Ordinance or Resolution #
Original Contract Date:
Original Contract Number:
Received in City
Clerk's Office
Received in
Mayor's Office
Comments:
Revised January 15, 2009
L
THE CITY OF FAYETTEVILLE, ARKANSAS
DEPARTMENT CORRESPONDENCE
ARKANSAS
www.accessfayetteville.org
CITY COUNCIL AGENDA MEMO
•
To: Mayor Lioneld Jordan and City Council Members
Thru: Paul Becker, Director of Finance & Internal Services
From: Missy Lefiar, Human Resources Director
Date: March 18, 2010
Subject: Should the City spend $20,000 in 2010 on an employee compensation market study?
PROPOSAL:
Due to current economic conditions, City employees are presently in a wage freeze. The City's MAG
Compensation Plan, which Council approved in 2006 during more robust economic times, calls for the City to
conduct a compensation market study every four years. Since the Plan was adopted in 2006, the first market
study is due this year. The cost of such a study is $20,000 and was approved as part of the HR budget. The
purpose of the study would be to see if City employee pay is in line with other employers so that it doesn't lose
employees to other employers who are able to offer more competitive wages. To quote the Plan verbatim the
purpose is to "...ensure the City retains a competitive posture," (See page 2 of the attached Plan, which in turn is
attached to Council's August 29, 2006 Resolution adopting it).
The Human Resources Division believes it would be unwise stewardship of financial resources to move forward
with spending the $20,000 for an employee pay market study this year, when circumstances do not permit raises
to be given to employees. It would seem more logical to defer the market study expenditure until such time as
funding is available to act on its findings. Another consideration is that if the market study were done now, it's
possible that by the time funding for raises were available in a different year there might be questions as to
whether the 2010 market study data still applied to the realities of the different year. It seems like the best
practice would be to conduct the study in the same year that funding were available to address any resulting
recommendations for pay increases.
The Administration recommends that, given current economic conditions, it would be best to defer the market
study until 2012. The proposal is therefore to amend the second bullet point of page 2 of the "City of
Fayetteville's Compensation Philosophy". The proposal is to insert the phrase "beginning in 2012" into the
bullet point. This would change the bullet point from reading "Identify a solid set of benchmark positions and
conduct a market review every year and a comprehensive market survey every four years to ensure the City
retains a competitive posture" into "Identify a solid set of benchmark positions and conduct a market review
every year and a comprehensive market survey every four years, beginning in 2012, to ensure the City retains a
competitive posture". The net effect would be to defer the first four year market survey from 2010 to 2012.
RECOMMENDATION:
Staff recommends that Council approve amending the Compensation Plan as described above.
BUDGET IMPACT:
$20,000 would be saved in the 2010 City budget.
&ad
RESOLUTION NO.
A RESOLUTION AMENDING RESOLUTION NO. 138-06 TO
DELAY THE REQUIREMENT TO PERFORM A
COMPREHENSIVE MARKET SURVEY FROM 2010 TO 2012
WHEREAS, the City Council adopted Resolution No. 138-06 which
established a compensation philosophy for city employees, and
WHEREAS, the adopted philosophy calls for a comprehensive market
survey every four years, beginning in 2006, to ensure the City retains a
competitive posture regarding city employee compensation, and
WHEREAS, current economic conditions have led to a city-wide pay
freeze, and expending approximately $20,000.00 for a comprehensive market
survey, at this time, would not appear to be a wise use of city financial resources.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF
THE CITY OF FAYETTTEVILLE, ARKANSAS:
Section 1. That the City Council of the City of Fayetteville, Arkansas
hereby amends Resolution No. 138-06, by changing the first bullet -point on page
two (2) of the City of Fayetteville's Compensation Philosophy to read as follows:
I/
•
identify a solid set of benchmark positions and conduct a
market review every year and a comprehensive market
survey every four years, beginning in 2012, to ensure the
City retains a competitive posture; "
PASSED and APPROVED this 6th day of April, 2010.
APPROVED: ATTEST:
LIONELD JORDAN, Mayor SONDRA E. SMITH, City Clerk/Treasurer
•
•
RESOLUTION NO. 138-06
A RESOLUTION TO ADOPT THE CITY'S COMPENSATION
PI-IILOSOPHY FOR CITY EMPLOYEES
WHEREAS, the City Council has studied and debated what type of
compensation philosophy should be adopted in setting the City of Fayetteville employee
compensation; and
WHEREAS, the City Council has retained the Management Advisory Group,
Inc. to assist in drafting this compensation philosophy.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF
THE CITY OF FAYETTEVILLE, ARKANSAS:
Section 1: That the City Council of the City of Fayetteville, Arkansas hereby
adopts the City of Fayetteville Employee Compensation Philosophy attached as Exhibit
A.
PASSED and APPROVED this 29th day of August, 2006.
APPROVED. ATTEST:
By
DAN COODY, Ma
By:
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SONDRA SMITH, City lerk
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cifY OF FAYETTEVILLE'S
COMPENSATION PHILOSOPHY
Background
The City Council is committed to ensuring that Fayetteville remains a highly
desirable City in which to live and work. In order to accomplish the goals set forth in the
City Council $ Strategic Plan, the workforce must possess key attributes associated with
excellence. The following key characteristics for all employees are desired:
Key Characteristics of City Employees
• highly skilled;
• customer service oriented;
• possess personal integrity and exhibit ethical behavior;
• highly productive and focused on quality results;
• team players;
• seek opportunities to improve services;
• understand technology;
• value diversity; and,
• committed to the City s welfare.
•
The City recognizes the need to put new systems in place to enable the
organization to be effective, efficient, and responsive in a rapidly changing environment.
One such system is an effective compensation plan. This plan should be based on a
clear compensation policy that is aligned with the City s strategic goals. The economic
resources of the City must be considered in the implementation of a compensation
philosophy, as the City Council is responsible for maintaining a sound financial program
for the City. The objectives of a sound compensation policy include the following:
Objectives of a Sound Compensation Policy
• identify the appropriate labor market for comparing city jobs;
• determine an appropriate relationship to the labor market;
• establish a stated market position so that both current and
prospective employees know what to expect;
9.1anagement Advisory gmup,
The City of Fayetteville's Compensation Philosophy
• Identify a solid set of benchmark positions and conduct a market
review every year and a comprehensive market survey every four
years to ensure the City retains a competitive posture,
• adopt a policy that allows the City to offer more competitive salaries
to highly qualified candidates based on their qualifications and
experience; and
• adopt a policy and process that rewards employees based on
perforrnance and achievements while remaining sensitive to
economic factors.
In a competitive labor market, the City s pay and classification plan should be structured
to provide the flexibility necessary to meet changing economic and employment
conditions. The City Council has already committed to -adopting a competitive pay
system that will address the current needs of the City and meet the challenges of the
future.
City Council's Direction for Compensation Plan
A. Results of City Council Survey
To establish the framework of the City $ pay philosophy, MAG surveyed City
Council members to determine their views. Questions focused on critical issues
underlying the compensation philosophy.
An analysis of the results of the survey revealed that there is support for
competitive salaries to recruit and retain highly qualified City employees.
The City Council survey results indicated that they recognized the City s need to
recruit professional positions on a regional basis, white other positions can be recruited
on a more local basis.
In the information gathered from City Council, there was support that performance
criteria should play a role in the determination of salary increases. The use of
performance criteria should particularly apply to management positions. Finally, in
,farzagement Advisory group, Inc 2
•
The City of Fayetteville's Compensation Philosophy
addition to the aforementioned factors, there was °agreement that the City has and
should retain a competitive position in its benefits package.
Budgetary constraints were viewed as a limiting factor in the implementation of
any compensation philosophy.
B. Incorporating City Council's Goals Into the Compensation Plan
The City Council s current (2003-2008) strategic plan includes the conduct of a
classification and compensation study. This was point number 60 in the list of 71 goals
and objectives.
In order to meet the overall goal of placing the City of Fayetteville in a competitive
position relative to its markets, it is proposed that the overall pay line be set at the market
average. This is accomplished by aligning the mid -point pay for all job classes to the
average mid -point pay for the labor market. The adoption of this structure will address
several key issues identified by the City's leadership. These issues include:
• structuring its compensation plan to enable the City to be competitive in its
labor market;
• attracting highly qualified new employees; and
• establishing a proactive compensation plan that will enable the City to
maintain a competitive position in future years.
lfartagenunt Advisory gm", Inc 3
•
•
The City of Fayettevilie's Compensation Philosophy
Benefits of Adoptinithe Proposed Coinnensation Philosophy
The City Council, citizens, and employees of the City of Fayetteville can benefit
from the adoption of the proposed compensation philosophy in the following ways:
• Citizens of the City of Fayetteville can have confidence that the pay
philosophy of the City fosters the excellence in the City workforce
embodied in the City Council s vision, strategic goals, core values
and desired characteristics of City employees.
• The City will become an employer of choice, by positioning itself
competitively relative to other employers.
• Current employees will know and understand what the City's pay
philosophy will be. This will provide employees with a better sense of
economic security and stability.
• Prospective employees will know and understand the City's
compensation philosophy, which will enable them to make an
informed decision with respect to accepting a position with the City
of Fayetteville.
• The decisions with respect to employee compensation will be made
using dearly identified standards for all employees.
• By setting the pay line at the market average, the City will ensure
that the City s compensation structure does not degrade relative to
the marketplace. This will confirm that the City Council s strategic
goal of an excellent workforce is translated into a meaningful and
competitive position relative to the labor market.
This philosophy will serve as the guiding force for the upcoming development
of the City s new compensation plan and related administrative policies.
•
94artagenzent Atiritory grvizp, Inc.
The City of Fayetteville's Compensation Philosophy
Proposed Compensation Philosophy
The City s proposed Compensation Philosophy is as follows: The City of
Fayetteville is committed to recruiting, retaining and motivating an excellent
workforce by providing a high quality of work life to City employees through a
competitive compensation structure, competitive benefits program, and a
challenging and enriched work environment
In order to deliver high quality municipal services, the City s workforce must possess key
attributes associated with excellence. Therefore, the following key characteristics for all
employees are desired'
• highly skilled;
• customer service oriented;
• possess personal integrity and exhibit ethical behavior;
• highly productive and focused on quality results;
• team players;
• seek opportunities to improve services;
• understand technology;
• value diversity; and,
• committed to the City s welfare.
The City will achieve this pay philosophy by implementing the following initiatives:
Hiring
• provide a base compensation structure that Is competitive with and strives
to be above the average market salaries as incorporated into the City s
compensation and classification plan.
• provide for flexibility in both hiring rates and providing compensation for
existing employees that Is both flexible and internally equitable.
• provide an appropriate set of benchmark positions which establish the
foundation for the City s pay line and provide a consistent means for the
City to review the market every year and conduct a comprehensive
market survey every four years.
Management Advisory group, htc.
5
The City of Fayetteville's Compensation Philosophy
Retaining
•
• provide for a meaningful way for employees to move through the
compensation plan based on both experience and achievement so that
employees can anticipate rewards based on contributions, experience
and performance.
• provide that the annual review of the market and adjustments to the City s
overall compensation plan of not less than the cost of living increase
become a part of the budgeting process through periodic surveys and the
incorporation of the results into the City s proposed budget for personnel
costs.
• adopt a policy of regularly reviewing the City s benefits and rewards
programs to maintain competitiveness with the City s market.
Motivating
• provide for a performance and experience recognition program that
incorporates the following:
o the ability to review and rate performance for all employees and to
provide adjustments to employees based on their consistent level
of achievement and successful experience on the job;
o a bonus program to provide one-time, on -the -spot rewards for
meritorious service; and,
o a compensation program that recognizes incentives based on job
related professional or academic achievements.
The proposed compensation philosophy would result in consistently positioning
the City s pay line at the market average. Additionally, the City would adopt a policy of
regularly evaluating its benefits and performance rewards pr6gram to ensure that the
City s position relative to the market did not erode.
1
Ifanagement Advisory group, Inc
6
"m• •
Michele Bechhold '
Submitted By.
City of Fayetteville
Staff Review Form
City Council Agenda Items
or
Contracts
Special Meeting 812912006
City Council Mooting Date
Human Resources
Division
Action Required:
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3/0341 /01,
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Operations
. Department
Staff recommends adoption of a Compensation Philosophy for the City of Fayetteville.
Cost of this equest
Account Number
Project Number
Budgeted hem
•
Category / Project Budget
Funds Used to Date
Remaining Balance
Budget Adjustment Attached
Program Category / Project Name
Program / Project Category Name
Fund Name
ea,.
t D rector
City Attomey
Finance and internal Service Director
'Mayor
42/
0)03-0 G
Previous Ordinance or Resolution #
--Date Original Contract Date:
Original Contract Number:
sic." • 1.1-o
Date
Date
Date
Received in Mayor's Office
Dirergtailso
Comments:
•
;IA "CI
Welty:a
CITY COUNCIL AGENDA MEMO
Special City Council Meeting August 29, 2006
TO: Mayor Dan Goody and the City Council
THRU: Gary Dumas, Operations Directo
FROM: Michele Bechhold, Human Resources
DATE: August 23, 2006
SUBJECT: Compensation Philosophy — Discussion and Approval
Recommendation
Staff recommends the adoption of a compensation philosophy for the City of Fayetteville.
Discussion
After questions arose in 2005 about implementing the results of a salary survey performed by
Condrey & Associates, the City made a decision to formalize its pay strategy and define a
compensation philosophy. The City, like many other public sector organizations, spends about
80% of its operating budget on components of employee compensation. Based on the amount
of fiscal resources dedicated to employee compensation and benefit programs, it is a natural
progression to desire to align compensation strategies with a defined goal that supports the
overall mission of the organization.
Compensation philosophies generally focus on recruitment, internal and external equity, and
retention. The statement should support the operational needs and strategic plans of the City.
It should function as a communication tool to inform employees and applicants how the
organization intends to pay.
A sound compensation philosophy allows the Council to provide understandable, consistent
direction to senior management staff on compensation issues
On August 15, 2006, the Council Compensation Committee invited all City Council members to
attend a meeting with Alan Johnson, Vice President of Management Advisory Group, Inc. The
goals of this meeting were to provide information about compensation philosophies and to solicit
input from the Council to determine the direction of the compensation philosophy for the City.
All Council members were provided worksheets which they could return to MAG anonymously.
The draft compensation philosophy is scheduled to be delivered to the City on August 24, 2006.
Staff will distribute this to all Council members and employees for review. Carolyn Long „CEO
of Management Advisory Group, Inc., will be on-site to facilitate discussion of the compensation
philosophy for this Special City Council meeting.
Staff is available to answer any questions you may have.
RESOLUTION NO.
A RESOLUTION TO ADOPT THE CITY'S COMPENSATION
PHILOSOPHY FOR CITY EMPLOYEES
WHEREAS, the City Council has studied and debated what type of
compensation philosophy should be adopted in setting the City of Fayetteville employee
compensation; and
WHEREAS, the City Council has retained the Management Advisory Group,
Inc. to assist in drafting this compensation philosophy.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF
THE CITY OF FAYETTEVILLE, ARKANSAS:
Section 1: That the City Council of the City of Fayetteville, Arkansas hereby
adopts the City of Fayetteville Employee Compensation Philosophy attached as Exhibit
A.
PASSED and APPROVED this 2901 day of August, 2006.
APPROVED:.
By:
DAN COODY, Mayor
ATTEST.
By:
SONDRA SMITH, City Clerk
•
From: Clarice Pearman
To: Sechhold, Michele
Date: 9.1.06 4:04PM
Subject: Res. 138-06
Michele,
Attached is a copy of the above resolution passed by the City Council, August 29, 2006 special meeting. If
anything else Is needed please let me know.
Thanks.
Clarice
CC: Audit
•