Classification for the Future

1. Classification for the Future The Ups and Downs of Class Consolidation International Personnel Management Association Training Conference Ottawa, Canada October 19-23, 2002

2. Agenda • Why class consolidation • Different ways to consolidate • Outcomes • Lessons learned • Discussion by Gwinnett County and City of Dallas

3. Why Class Consolidation? • The average number of employees to class titles is 3 • Most organizations have expanded the number of titles by an average of 10% per year • Jobs and technology have changed • Most employees want their own job title • Individual job titles mean higher pay

4. Different Ways to Consolidate • By occupational focus • Engineering • Finance • Human resources • Etc • By department focus • Public Works • Fire • Budget office • By salary grade

5. Entry Developmental Full Performance Master/Supervisory Basic skills, learns to do things “our way” Developing proficiency Fully competent to perform all aspects of job Recognized expert Four Levels of Work

6. Outcomes-Positives • 50% reduction of classifications • More generic class descriptions • Easier management of personnel • Less administrative time spent on class reviews • Fewer pay grades

7. Outcomes-Negative • Employees don’t “see” their position in the class description • Employees treated more generically • Potential higher payroll • Perceived pay compression of employees who used to be in different pay ranges are now in the same • Requires strong management

8. Gwinnett County Government Roderick Powell, SPHR Human Resources Director

9. Organization Facts: • 3,859 authorized positions in 2002 • Approx. 650 job classifications before study • Approx. 650,000 citizens served • Nonunion environment – “unofficial” unions organized but not recognized by the BOC as bargaining unit • Full service Human Resources Department: • Compensation • HRIS / Records • Employee Relations • Organizational Development • Employment

10. Prior System • 10 Point FES (Factor Evaluation System) • Used same system since 1983 • 2001 Requests for Reclassification • 248 Requests / 85 position studies completed • 74 upgraded, 1 downgraded, 10 stayed the same • Compensation System managed by a Division Director and 2 HR Generalists

11. Difficulties with Prior System: • Bureaucratic system • Department Review • Merit Board Approval • BOC approval • System manipulation to get upgrades • Too many individual classifications • Job description too detailed/job specific • Request for reclassifications submitted for every little change in duty • Focus is on volume and length of job description

12. Consolidation Process • Fox Lawson & Associates contracted to consolidate where feasible • PDQs (Position Description Questionnaires) completed by every employee • Peer panels conducted for job families • Employees selected at random by FLA to represent each classification • Some individual (unique job) interviews conducted • Jobs requiring licenses/certifications in the same classification as others that did not have the same requirement were compensated through Pay for Performance System.

13. Timeline: • Contract awarded in May 2001 • PDQs submitted to FLA in August 2001 • Peer Panel interviews Jan/Feb 2002 • Draft consolidated job descriptions June 2002 • Merit Board & BOC final approval Dec 2002 • To be implemented 1st Qtr 2003

14. Communication: • Countyline Newsletter Articles monthly • All employee emails and memos • All employee meetings • Weekly update meetings with County Admin & COO • Dept Director / Elected Official Briefings • Supv/employee Education • Broad banding • New DBM System • Generic Job Descriptions • New Performance Management System • Dept POC (Point of Contact) Meetings • AskCCR@hotmail.com • AskCCR Comment box

15. Results: • Job classifications reduced from approx. 650 to 300 • Job family approach: • Classifications grouped by type of work not department • Similar knowledge and skills • 3 to 4 levels in each job family

16. Reactions: • Consolidation of 650 to 300 tough to digest • Many concerns from departments and employees • Internal equity compared to “old FES system” • Resistance to change became an issue • Detailed/custom job descriptions to generic • Work job titles • Entitlement mentality vs. Pay for Performance • External market pay vs. COLAs (3% annually)

17. Reviews & Appeals • HR/FLA vs. Department/Employees • Formal appeals to FLA • Requests for review – HR Director

18. Thoughts & Recommendations • Communicate timeline and progress throughout process • Top management commitment • Consultants with Government experience • Try to “manage expectations” • Ability of Consultant/Contractor to defend policies/data/implementation • “True Commitment” to market pay

19. City Of Dallas Compensation – 2001 and Beyond

20. Before 2001 • In1994, switched from step system to pay for performance • Ten pay schedules: • Seven civilian • Three uniformed • 950+ classifications • HR functioned as pay & classification police

21. Driving Change • Need for market competitiveness • Organizational changes • Flatter structure • Span of control initiative • Need for more pay plan flexibility and simplicity • Broadly titled jobs allow flexibility in job assignments • Smaller staff in HR to monitor pay actions and maintain numerous classifications • Departments wanted more autonomy in pay issues

22. Residual Issues • Step mentality alive & well • Longevity & loyalty strongly valued • Assumption: long tenure = good performance • Pay grade = status • Classification system used to “reward” employees with upgrades • Learning about pay for performance: • Supervisors hesitant to be honest with employees about poor performance issues • Performance pay not successfully tied to actual performance

23. First Step: Consolidate Pay Plans • Consolidation of five civilian pay plans into one • Implementation of $10/hour minimum wage • Big change! • Ugly, but a start • Inappropriate overlap between grades • Compression

24. Next Step: Separate the Grades from the Titles Title Grade Title/Grade Clerk 35 Clerk I _________________ Clerk II Clerk 36 _________________ _________________ Clerk III Senior HR Analyst Clerk 37 Human Resources Analyst 55 ___ • Job titles separated from pay grades • Roman numerals and/or senior designates levels 75 76 77 83

25. Old Structure 25 levels Inconsistent percentages between minimum and maximum Inconsistent percentages between grades New Structure 20 levels Consistent range spread of 65% Consistent differential between grades of 10% Use of alphabetic designation instead of numeric Next Step: Fix the Salary Structure

26. Minimum Midpoint Maximum % Min to Max % Between Midpoints Grade Annual Annual Annual 71 18,356 21,126 23,897 30% 73 22,943 25,365 27,787 21% 4% 72 22,943 24,281 25,618 12% 15% 74 22,943 26,576 30,209 32% 5% 75 22,943 28,091 33,239 45% 6% Old Pay Structure

27. Minimum Midpoint Maximum % Min to Max % Between Midpoints New Grade Annual Annual Annual C $22,891 $30,331 $37,770 65% 10% A $16,649 $22,060 $27,471 65% B $20,810 $27,573 $34,337 65% 10% D $25,180 $33,364 $41,547 65% 10% E $27,698 $36,700 $45,702 65% 10% New Pay Structure

28. And Then-the Classifications Problems: • Over 950 classifications • Many single-incumbent titles • Descriptions narrow in scope • Difficult to maintain • Too much emphasis on internal equity

29. Classification Solutions • Consolidate jobs to allow more flexibility • Emphasize pay, not title or grade level • Allows movement of employees within departments to meet work level needs • Shrinking budgets & staff • Level of service demand remains constant

30. Changes to the Classification System • Classification reduction: 950 to 450 • Title Consolidations: • Managers • Supervisors • Inspectors • Laborer/maintenance titles • Customer service titles • Office/clerical • Executives

31. Change Methodology • Considered: • Common elements with other jobs • Similarity of basic qualifications with other titles • Organizational structure around this job • Appropriate pay grade for the job • Median pay for this job • Cost of the consolidation

32. Change Methodology con’t • Worked closely with customer departments to meet organization’s needs • HR team met with every department’s executive team • Discussed proposed consolidations • Made revisions as needed • Buy-in from City Manager and executive team • Ultimate decisions on some titles made by Ultimate Compensation Manager (aka City Manager)

33. Impact & Issues • Employees • Below minimum of new range received salary increase • Above maximum of new range had no change to pay for two years • Cost • Civil Service • Created changes to minimum qualifications • Developed subsets of broad classifications • Consider impact on Reduction in Force procedures • Collective bargaining agreements/unions

34. Lessons Learned • Start early • Work with client departments and civil service system • Communicate, communicate, communicate • Employees • Management • Not the same message to all! • Be prepared for grade level envy • Keep an eye on the cost

35. Ongoing Issues • Municipalities very comfortable with old-style compensation plans: resistance to change • Conflict with: • Efforts to combine market sensitivity with pay for performance • Pressure to emulate private sector • Training management on compensation issues • Creating freedom with fences • Some departments love the freedom, some don’t

36. Ongoing Issues • Success in tying performance pay to actual performance • Developing HR's role as partners with client departments • Eliminate barriers we created ourselves • Frame salary management issues as a function of budget, not control

37. ? ? ? Question and Answer Session ? ? ? ? ? ? ?