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S-1187 - 02/21/2007 - SALARY ADMIN POLICY - Ordinances Supporting Documents
G A 94,F �- CO U Nth, I' EAN 10.11. 5) °o I AGENDA ITEM Regular Board of Trustees Meeting of February 27, 2007 SUBJECT: 2007 Salary Plan and Salary Administration Policy FROM: Jeff Moline, Assistant Village Mana 6�%_ BUDGET SOURCE/BUDGET IMPACT: Full Time Salaries RECOMMENDED MOTION: I move to approve Ordinance 2007 - SAP -EXI -S -1187 approving the 2007 Salary Plan and Salary Administration Policy for All Full Time Non - Represented Employees of the Village of Oak Brook in accordance with the recommendations from the Hay Group and Village Staff as presented. Background /History: In accordance with the Oak Brook Salary Plan and Salary Administration Policy, Village Staff, with the approval of the Village Board retained the Hay Group to perform a Salary Plan Study of all pay grades for full time (non- represented) positions within the Village of Oak Brook. The study consisted of a survey of 16 municipalities set as comparable communities through arbitration in 1997 along with the additional systematic point review of specific ranges and job models in relation to current pay to determine whether these target items needed to be amended. Attached is the 2007 Hay Study report and recommendation for a 2007 Pay Plan along with the resulting recommendation from Village Staff as outlined in the memorandum from Jeff Moline, Assistant Village Manager dated February 21, 2007. The recommendation as presented would enable the Village to meet its policy of maintaining pay ranges at the 66% market percentile of comparable communities Recommendation: Staff recommends the Village Board approve Ordinance 2007 - SAP -EX I -S -1187 approving the 2007 Salary Plan and Salary Administration Policy for All Full Time Non - Represented Employees of the Village of Oak Brook in accordance with`the recommendations from the Hay Group and Village Staff as presented in the memorandum of February 21, 2007. Last saved by Document3 Last printed 2/23/2007 4 57 PM VILLAGE OF OAK BROOK Interoffice Memorandum DATE: February 21, 2007 TO: Village President and Board of Trustees FROM: Jeff Moline, Assistant Village Mana SUBJECT: Recommendation for the 2007 Salary Plan and Salary Administration Policy In accordance with the Village of Oak Brook Personnel Manual and Salary Administration Policy, Village Staff, with the approval of the Village Board retained the Hay Group to perform a Salary Plan Study of all pay grades for full time positions within the Village of Oak Brook. The study consisted of a survey of 16 municipalities set as comparable communities through arbitration in 1997 along with a review of adjustment pay schedules and the additional systematic point review of specific ranges and job models in relation to current pay to determine whether these target items needed to be amended. The policy of the Village of Oak Brook sets the goal of the Village pay plan to target all pgy grades to pay at the 66% of like communities. As is fully set forth in the Hay Study highlights listed below, this target is the major measurement in the 2007 Hay Study. Based on the 2007 Hay Study, the Recommendation for the 2007 Salary Plan and Salary Administration Policy is as follows: A) Extension of Range Adjustments for each Pay Grade consistent with the recommendation from the Hay Group Pay Study which will enable Oak Brook to maintain the market 66th percentile of pay policy (Table 1, herein). B) Extension of a Pay Adjustment to Full Time Employees consistent with the range increase proposed by the Hay Group with a maximum 2007 Pay Adjustment increase of 5 %. C) Continuation of the Merit Pay for employees moving through grade and continuation of the Longevity Pay attached to the Performance Appraisal in the amounts of $400, $500, and $600 for service of 10, 15, 20 years respectively. D) Approval of a revision to the Village Personnel Manual to amend the pay increase provision provided to employees receiving promotion from one (1) pay grade to another pay grade. 2007 Salary Ranges: Establishment of Minimum and Maximum Pay per Grade The Village of Oak Brook has eleven (11) pay grades, each with a minimum and maximum pay range. All non -union full time employees fall within a grade, save the Village Manager, and no employee has a salary higher than their respective salary maximum. The recommendation for the 2007 Pay Grades is based on the pay study completed by Hay Group. This study is somewhat similar to the Department of Labor's approach to analyzing pricing for the consumer price indexing. That is, the salaries and job functions of the same "target set" of employment positions are compared every three years with positions in each of the Oak Brook eleven (11) pay grades represented in the mix. In addition, at staff request Hay evaluated 5 additional positions and analyzed the internal equity of the positions, and in particular, pay ranges 7, 8, and 9 to determine if an additional range should be created. Hay reviewed the positions and provided the raw data for the 5 positions as requested and determined based on the points per job model that the addition of a grade is not warranted. The result of the Hay Study indicate that the Village needs to implement the following "% Change" increases listed in Table 1 in order to maintain the P66 market level of pay. The complete study is attached as Exhibit 1. Table 1 * The minimum 3.8% adjustment will be applied to grades 1 and 2. Movement through Pay Grades: Performance Based Merit Increase Movement. through a respective pay grade is based on performance and only affects those emnlovees that have not reached the top (maximum) of the pay Grade; approximately 43% of all emplovees are moving through grade. Each of the recommended 2007 Pay Grades has a spread of 35% from the minimum of the range to the maximum of the range. Employees are generally hired at or near the minimum of the pay range and then receive a pay increase based on performance (merit increase) on the employee's respective anniversary date. Under the present Salary Plan, top performing employees can move from the minimum of the pay grade to the maximum of the pay grade in approximately 7.5 years. Once an employee reaches the top of their respective pay range (topped out), the employee thereafter only receives the range adjustment. As stated in the Personnel Manual and Salary Administration Policy, the objectives of a performance appraisal are several: 1. To develop and improve performance and to maintain performance at the highest possible level. 2. To provide for variation in compensation and incentive based as directly as possible upon merit. 3. To assist supervisors in personnel administration and organizational management. Merit adjustments are determined based upon the employee's performance as measured through the standard Employee Performance Appraisal approved by the Village Manager for all departments. Merit adjustments shall occur within the parameters of the Salary Plan with a minimum of 0.00% for employees N Current 2006 Ranges Hay Recommended 2007 Ranges Grade Minimum Maximum Spread Minimum Maximum Spread % Change 11 79800 115691 45% 89657 121037 35% 4.6 10 72109 104540 45% 81591 1 10148 35% 5.4 9 69021 93382 35% 73525 99259 35% 6.3 8 62924 84968 35% 65459 88370 35% 4.0 7 52910 71585 35% 57394 77481 35% 8.2 6 47408 64141 35% 50718 68469 35% 6.7 5 42965 58130 35% 46351 62573 35% 7.6 4 39342 53229 35% 41984 56678 35% 6.5 3 36150 48910 35% 37616 50782 35% 3.8 2 32959 44591 35% 33249 44887 35% 0.7* 1 30548 41330 35% 30548 41330 35% 0.0* * The minimum 3.8% adjustment will be applied to grades 1 and 2. Movement through Pay Grades: Performance Based Merit Increase Movement. through a respective pay grade is based on performance and only affects those emnlovees that have not reached the top (maximum) of the pay Grade; approximately 43% of all emplovees are moving through grade. Each of the recommended 2007 Pay Grades has a spread of 35% from the minimum of the range to the maximum of the range. Employees are generally hired at or near the minimum of the pay range and then receive a pay increase based on performance (merit increase) on the employee's respective anniversary date. Under the present Salary Plan, top performing employees can move from the minimum of the pay grade to the maximum of the pay grade in approximately 7.5 years. Once an employee reaches the top of their respective pay range (topped out), the employee thereafter only receives the range adjustment. As stated in the Personnel Manual and Salary Administration Policy, the objectives of a performance appraisal are several: 1. To develop and improve performance and to maintain performance at the highest possible level. 2. To provide for variation in compensation and incentive based as directly as possible upon merit. 3. To assist supervisors in personnel administration and organizational management. Merit adjustments are determined based upon the employee's performance as measured through the standard Employee Performance Appraisal approved by the Village Manager for all departments. Merit adjustments shall occur within the parameters of the Salary Plan with a minimum of 0.00% for employees N performing "Below Standards" to a maximum of 5.00% for "Excellent" performance, provided employees can not exceed the maximum salary range for the position. Longevity Pay: Also included in the Salary Plan for 2007 is the continuation of the Meritorious Longevity Pay for topped out employees based on years of service. The premise of this benefit is that employees are recognized for dedicated service in that full time Oak Brook employees that receive a performance review score equating to "Meets All Standards" performance shall receive an annual one (1) time lump -sum longevity pay beginning in their tenth (10th) year of employment and commencing annually thereafter according to the following schedule: Years 10 —14: $400.00 Years 15 —19: $500.00 Years 20 and on: $600.00 Amendment to Employment Positions: Re -title the position of Accounting Manager to Assistant Finance Director: Darrell Langlois, Finance Director, requested that the current position of Accounting Manager be re- titled to Assistant Finance Director. This change would be in title only and is consistent with the survey data received by the Hay Group. That is, of the 12 municipalities reporting on the position of Accounting Manager, 6 of the municipalities title the position with a "close" or "slightly larger" set of responsibilities and with fairly consistent pay as Assistant Finance Director. Therefore, the Manager's Office is recommending the change in title be made and the pay remain consistent with the present Accounting Manager structure. Personnel Manual Amendments: Finally, another area of the Village Pay Plan that has been under review and one that the Village had Hay research relates to timing of salary adjustments, and more specifically, the impact of the timing of adjustment on employees that have received promotion. The problem is that the Village extends a 5% base salary pay increase to employees that are being promoted for all promotions. This practice does not take into account employees being promoted from a non - exempt to an exempt pay classification (loss of overtime) and the timing impact of moving from a January 1 increase at "top -of- grade" to receiving salary increases on the anniversary date of the promotion. For example, if a sergeant in the tenant the employee is moving from Police Department is promoted by the BFPO from sergeant to lieu g grade 8 to grade 9, loses the ability to earn overtime and receives only a 5% increase. In some cases, the promotions under the current practice can result in loss of pay. Therefore, the recommendation from staff is to amend the Personnel Manual to include the following provision in Section 3.06 that reads as follows: Full time employees that earn promotion from one full time position to another full time position shall be entitled to a five (5) to twelve (12) percent increase to their base salary based on a recommendation from their department head and approval of the Village Manager. As such, promotions that have been approved within the last two calendar years will be reviewed and if necessary, adjustments approved by the Village Manager. 3 Budget Impact Due to the implementation of this recommendation will result in the need for a budget offset of approximately $80,000. However, the delay in hiring in some of the current budget positions that are being advertised for currently as well as the savings recognized while the Village searches for a new manager will greatly offset this impact. Attached is a copy of the 2007 Salary Plan that includes the Salary Plan and Salary Administration Policy for approval at the February 27, 2007 Village Board Meeting. Staff will prepare the necessary ordinance to amend the Personnel Manual as outlined in this memorandum for review and approval by the Village Board on the March 13, 2007 Village Board Consent Agenda. 4 February 20, 2007 Mr. Jeff Moline Assistant Village Manager Village of Oak Brook 1200 Oak Brook Road Oak Brook, IL 60523 Dear Mr Moline Hay Group, Inc Suite 1250 111 East Wacker Drive Chicago, IL 60601 -4402 USA tel +1 312 228 1800 fax +1312 228 1888 www haygroup corn As you requested, Hay Group conducted a market competitiveness study and developed recommended 2007 salary ranges for the Village of Oak Brook. This letter summarizes the methodology, analysis findings, and recommendations Project Methodology Hay Group and the Village of Oak Brook ( "Village ") developed a custom salary survey to collect market salary data. A total of seventeen comparable municipalities were invited to participate and fifteen organizations submitted data. The Village's data were also included in the analysis. The organizations that submitted market data include the following• ❑ Bloomingdale ❑ Lombard ❑ Burr Ridge ❑ Oak Brook Terrace ❑ Downers Grove ❑ Westchester ❑ Elmhurst ❑ Western Springs ❑ Glen Ellyn ❑ Westmont ❑ Hinsdale ❑ Wheaton ❑ LaGrange ❑ Willowbrook ❑ LaGrange Park Civil Engineer H ❑ Hay Group and the Village of Oak Brook developed twenty -six job models that are representative of the various job families and levels at the Village. The jobs contained in the survey are as follows• t u� ❑ Accounting Assistant ❑ Fire Chief ❑ Accounting Manager ❑ Information Systems Technician I ❑ Assistant Village/City Manager ❑ Information Systems Technician 11 ❑ Battalion Chief (Fire Captain) ❑ Police Chief ❑ Building Inspector ❑ Police Lieutenant ❑ Building Maintenance Technician ❑ Police Records Clerk ❑ Civil Engineer H ❑ Police Sergeant ❑ Communications Operator ❑ Public Works Employee I ❑ Communications Supervisor ❑ Public Works Employee II ❑ Deputy Fire Chief ❑ Public Works Foreman ❑ Deputy Police Chief ❑ Purchasing Clerk ❑ Deputy Village /City Clerk ❑ Receptionist/Clerk ❑ Director of Community Development ❑ Secretary Survey participants matched jobs in their organization to the survey model jobs, when appropriate, and provided the corresponding salary range minimums and maximums and the average actual base salary of the incumbents in each matched job. In addition, survey participants provided general compensation planning elements such as planned salary increase budget and planned salary range movement. Hay Group summarized the collected data and provided participants a survey report that provided a summary of the data in aggregate, and well as broken out by each participating organization. Hay Group also utilized the market data to analyze the Village's market competitiveness and to develop two options for 2007 salary ranges Analysis Findings The enclosure provides a graphical depiction of the Village's current salary range maximums and minimums compared to the current market 66h percentile salary range maximums and minimums Across all salary grades, the Village's salary ranges fall below the market 6e percentile; however, level of competitiveness varies by grade, as is illustrated below. For purposes of the analysis, Hay Group also discounted the survey data for the five benchmark jobs in grades 1 - 3 to account for the Village of Oak Brook's reduced workweek of 35 hours for many of the jobs in these grades. The majority of participating organizations have 40 -hour workweeks for jobs in these grades Recommendations The Village has historically targeted the market 6e percentile for its salary ranges and Hay Group recommends continuing this practice. To construct the recommended salary ranges, Hay Group targeted the market 66th percentile for salary range maximums Based on the Village's current salary practice, salary grades 1 - 9 have a 35% spread between the maximum and minimum salary in each range and a 45% spread for salary grades 10 - 11. Hay Group recommends that the Village review the range spreads for grades 10 and 11. Although the larger spread establishes a wider range for the Village's top jobs, if all range maximums are anchored at P66, the range minimums for grades 10 and I I will be anchored at less competitive levels than the range minimums for grades 1 — 9. If the Village wishes to keep all range maximums anchored at P66, Hay Group's recommends that the range spreads should be 35% for all grades to ensure consistent competitiveness throughout the ranges. We have included this spread change in our recommended structure In developing our recommendation, we have projected the market data from the custom survey by 3.5 %, thereby creating a market P66 maximum that is approximately 3 5% higher at each grade level Hay Group has done this in anticipation of most responding Villages and Cities moving their structures by an average of 3.5% in 2007 By projecting the market data by 3.5 %, the recommendation aims to bring Oak Brook's salary ranges in line with where the market will be by the middle of 2007 The current salary ranges, recommended salary ranges, as well as the percent change in each salary range are summarized below. Recommended 2007 salary ranges will result in an aggregate increase of 5.2% over the current 2006 salary ranges. Mr Jeff Moline — Village of Oak Brook February 20, 2007 Page 2 - 4 r� A�Nswaul s 01, 2007 Recommendation F--J,nh Fvaluatinn Pnints I Current 2006 Rannas I Recommended 2007 Ranges Grade Mira Mid Max rMinimum Maximum Spread Minimum Maximum Spread % Chan e 11 639 703 766 9 800 $115 691 45% $89 657 $121 037 35% 4 6% 10 533 586 638 2,109 $104,540 45% $81,591 $110,148 35% 54% 9 451 492 532 $69,021 $93,3821 35% 73,5251 $99,259 35% 1 63% 8 373 412 450 $62,924 $84,968 35% $65,459 $88,370 35% 40% 7 314 343 372 $52,910 $71,585 35% $57,394 $77,481 35% 82% 6 264 289 313 $47,408 $64,141 35% $50,718 $68,469 35% 67% 5 226 245 263 $42,965 $58,130 35% $469351 $62,573 35% 76% 4 189 207 225 $39342 53,229. 35% $41,984 $56,678 35% 65% 3 158 173 188 $36,150 $48 910 35% $37,616 $50782 35% 38% 2 133 145 157 $32,959, $44,591 1 35% $33,249 $442887 35% 07% 1 111 1 122 1 132 1 $30,5481 $41,330 35% 1 $30,548 $41,330 35% 00% Jeff, please review the analysis findings and recommendation and contact me at 312 - 228 -1822 if you either have any questions or want to discuss the recommendation Sincerely, 70 IAJ r M or Michael Metz Consultant Enclosure Mr Jeff Moline - Village of Oak Brook February 20, 2007 Page 3 - 4 r .e� 0 0 L 0 0 a� �a saeiioa lenuud T M T N T T T O T O O LO M N T O O 69 L V Y v °o ' �v m ,y Y � f6 t� Oa o^ NO O > O 1 N N c to O LL N O O O U O O O O O O Ld L6 O L r O O x C Y 6f} g � o �- m � Y � I m E 0 L m C. 0 v 0 i LM L U saeiioa lenuud T M T N T T T O T O O LO M N T O O 69 L V Y v °o ' �v m ,y Y � f6 t� Oa o^ NO O > O 1 N N c to O LL N O O O O O O O O O O Ld L6 O L r O 69 T 6R 69 6f} 69 saeiioa lenuud T M T N T T T O T O O LO M N T O O 69 L V Y v °o ' �v m ,y Y � f6 t� Oa o^ NO O > O 1 N N c to O LL N r 7.. .. z t.. 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