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Classification for the Future. The Ups and Downs of Class Consolidation International Personnel Management Association Training Conference Ottawa, Canada October 19-23, 2002. Agenda. Why class consolidation Different ways to consolidate Outcomes Lessons learned
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Classification for the Future The Ups and Downs of Class Consolidation International Personnel Management Association Training Conference Ottawa, Canada October 19-23, 2002
Agenda • Why class consolidation • Different ways to consolidate • Outcomes • Lessons learned • Discussion by Gwinnett County and City of Dallas
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
Different Ways to Consolidate • By occupational focus • Engineering • Finance • Human resources • Etc • By department focus • Public Works • Fire • Budget office • By salary grade
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
Outcomes-Positives • 50% reduction of classifications • More generic class descriptions • Easier management of personnel • Less administrative time spent on class reviews • Fewer pay grades
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
Gwinnett County Government Roderick Powell, SPHR Human Resources Director
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
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
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
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.
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
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
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
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)
Reviews & Appeals • HR/FLA vs. Department/Employees • Formal appeals to FLA • Requests for review – HR Director
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
City Of Dallas Compensation – 2001 and Beyond
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
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
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
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
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
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
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
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
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
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
Changes to the Classification System • Classification reduction: 950 to 450 • Title Consolidations: • Managers • Supervisors • Inspectors • Laborer/maintenance titles • Customer service titles • Office/clerical • Executives
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
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)
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
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
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
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
? ? ? Question and Answer Session ? ? ? ? ? ? ?