Pay Study Review City Auditor

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Pay Study ReviewCity Auditors
OfficeDecember 8, 2003
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CWA Pay Study Review

• Primarily Internal Equity Driven
• 21 benchmark positions represented approximately
  251 position classifications (lt10 coverage)
• The remaining 230 position classifications were
  slotted based on managements job value judgments
• Employee pay ranges increased 6.2 at midpoints,
  on average

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MAP Pay Study Review

• Primarily External Equity Driven
• 54 benchmark positions represented approximately
  210 position classifications (26 coverage)
• The remaining 156 (74) position classifications
  were slotted based on managements job value
  judgments
• Employee pay ranges increased 19.7 at midpoints,
  on average
• Separately, management position pay ranges
  increased 24.9 and professional/admin ranges
  increased 14.6, on average

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MAP Cost Factors

• Salaries are a key expenditure for the City
• MAP positions represent an annual payroll of more
  than 19 million (salaries only)
• Approximately 354 employees averaging just under
  55,000 annual salary
• Range increases exceed typical market
  maintenance/COLA range adjustments of 3 by
  approximately 16 at midpoints
• Applied to the MAP payroll, the salary exposure
  is increased approximately 3 million annually

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Alachua County Financial Trends Report
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MAP Pay Study Review

• Even though the costs of the proposed MAP Pay
  Plan are higher than historical patterns, are the
  increases justified by the pay study results?

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WorldatWork Information on External
Competitiveness
Companies need to closely monitor labor costs to
make sure that they neither overpay (leading to a
higher cost than necessary in providing a product
or service) nor underpay (possibly leading to
higher turnover, which could hurt
productivity). Has the City of Gainesville
experienced high turnover?
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Turnover Analysis
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Dept. of Labor Employee Turnover RatesGovernment
versus Total Industry and GovernmentNovember
2001 October 2002
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WorldatWork Information on External
Competitiveness
In general, companies tend to survey other
companies similar to themselves in all or some of
the following characteristics size, industry
type, geographical location, revenue/income size
and required job skills.
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City of Gainesville Pay Study Assumptions
There is a Gainesville Factor. We often hear
talk of the Gainesville factor. That is, that
over-qualified people work for less in
Gainesville because it is such a good place to
live. Human Resource professionals have a name
for this factor the cost of labor differential.
Therefore, we gave more weight to surveys that
included a cost of labor differential. For
example, in its published data Mercer takes the
market data for each survey data point, and then
reduces them by 9-12 to reflect the cost of
labor in Gainesville, a direct reflection of the
Gainesville factor.
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City of Gainesville Pay Study Assumptions
Salary.com professional guidance related to
geographical indexing Data provided represents
national averages which are then adjusted to
specific metropolitan regions through a
geographic differential to reflect differences in
pay levels in different cities or geographic
areas.
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Salary.com Information on Industry and
Organization Size
It is most common for the industry of the company
to influence the pay of senior employees and
those whose skills are less transferable to other
industries. If you are looking at a management or
an executive position, the industry is very
relevant to how much you're paid. Clerical and
lower level positions are, as a rule, affected
only slightly.
It is most common for the size of the company to
influence the pay levels of more senior
employees. If you are looking at a management or
an executive position, the size of the company is
one key measure to determine pay levels.
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MAP Pay Study Examples

• Geographic Indexing
• Industry Type
• Size of Organizations

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Summary

• We reviewed the data underlying the market study
  which led management to recommend increasing MAP
  pay structures significantly, on average,
  approximately 20 at midpoint
• We believe many of the assumptions that led to
  the Citys determination of market are subjective
  and that some of the issues raised by our
  presentation rise to the level of policy
  decisions
• With this information, the City Commission can
  more effectively provide policy guidance to
  management on general market rate issues,
  resulting in fair and equitable wages for City
  employees