Skill-based Pay

1. Skill-based Pay City of Missoula

2. Why invest in skill-based pay? Maximizing our service to community—building social capital: • Community leadership and investment • City recognizes it is important to actively lead the community forward • Best Place Project, Community Quality of Life Initiative, etc. • Flexibility and dedication to progress builds City’s greatest strength • An innovative and skilled workforce • Leaders recognize investment is requirement to build and maintain a successful community • Skill-based pay system builds future leaders and entrepreneurs—long-term return on skill-based pay investment • Skill-based pay system is a change mechanism to keep City moving forward

3. Community growth and improvement • Development of skills at City broadens region’s skilled professionals and trades people • Builds community growth beyond the direct scope of City employment • Helps attract new businesses here • Builds labor force—impacts quality of life, middle class will grow and overall tax base increase • Skill-based pay will help the City to be a better steward of public money • Community investing in workforce improvement not job-based salaries • City as a place to grow/mature…adds value for public • Encourages lifelong learning • Those just out of school can learn skills to drive career • Median age is 32.50, City needs the cultivation of job skills for younger workers • Can build partnerships with University and schools based on skill lists

4. Enhanced workforce • Skill-based pay encourages critical thinking, builds dedication to the organization • Attracts/rewards achievement-oriented individuals • Builds responsiveness to current fast-moving and technology-based generation—can build career • Skill-based pay redefines success in the workplace • Shifts emphasis from job-focused to person-focused • Individual initiative rewarded • Levels of innovation increase • Shows City is dedicated to investing in its people • Greater employee fulfillment at work, enhanced productivity, reduced “it’s not my job” mentality • Employees will be happier and more productive at work • Increases job satisfaction, flexibility and cross-training • Absenteeism likely to decrease—turnover reduced • Program is developed with input from employees • Owned and managed by employees—creates better buy-in and organizational commitment • “What gets measured gets done”: a comprehensive measurement system for City

5. Enhanced workforce (con’t) • Skill-based pay encourages succession planning • Cross-training and flexibility, leadership skills and tasks shared, potential managers emerge • Ensures uninterrupted continuation of City’s mission and services during leadership or workforce transitions • Program is developed with input from employees • Owned and managed by employees—creates better buy-in and organizational commitment • “What gets measured gets done”: a comprehensive measurement system for City • Skill-based pay encourages succession planning • Cross-training and flexibility, leadership skills and tasks shared, potential managers emerge • Ensures uninterrupted continuation of City’s mission and services during leadership or workforce transitions

6. There were four qualified respondents to the City’s RFP. The Waters Group was chosen. The reasons for our consensus recommendation are noted below: • Highly dedicated to building relationships with City management and staff • First step is to understand City’s organizational culture and work within it • Proposal is tailored to City’s needs • Willing to utilize City staff and resources to reduce cost • Has flexibility built into proposal, program to be adjusted to City’s needs and economic constraints • Emphasizes training and communication with every employee • Views management and employees as experts on how the system should be developed—identifies the need for employee participation at all levels • Waters emphasizes need for skill-based training and orientation for all—reflected in timeline and plan • Open about challenge changes pose • Wants to make positive and participatory process • Long-term view of how the City can implement and maintain • Clear understanding of how policy issues and political climate can effect changes in pay systems • Included resources and strategy that will save time and money in long-term • Waters has existing “skill inventory,” can personalize for the City/use as starting point • Salary survey included in the price—City has not surveyed for 10 years • Provides thorough, understandable, and comprehensively structured implementation and maintenance plan • Proposal includes resource development—allows staff to maintain in the future • Personal investment in our success—wants “model city” for marketing purposes—doesn’t usually bid here

7. Four firms responded to the RFP. The firms not selected were: Associated Employers, Fox Lawson &Associates, and Public Sector Personnel Consultants. The firm bids were: • Associated Employers: $10,500 for Phase One only • Public Personnel Consultants $55,000 • Fox Lawson & Associates $55,000 with an additional $10,000 later • Waters Consulting Group, Inc. $90,000

8. Justification The Waters Group is a leader in the creation and implementation of skill-based pay systems. Waters’ proposal demonstrated the highest level of expertise regarding skill-based pay, Waters has successfully implemented it in other municipalities, and Waters best tailored their proposal to City needs. Associated Employers and Public Personnel Consultants did not have experience with designing and implementing skill-based pay. Fox Lawson & Associates’ proposal did not include employee participation at all levels which the Committee sees as crucial for building buy-in City-wide.

9. Financial Implications • Requested budget for Waters Consulting Group (FY14 &FY15) services, plus ongoing implementation of skill-based pay for employees: • FY 2014: $30,000 • FY 2015: $45,968 to $55,161 • FY 2016 and ongoing: $75,000 (all inclusive: pay raises, new staff oversight)

10. Waters Consulting Group website http://www.watersconsulting.com/