New Jersey School Boards Association Compensation Study

1. New Jersey School Boards AssociationCompensation Study Employee Communication December 17, 2003

2. Established inPhiladelphia in 1943 2,200 employees 35 Countries/75 Cities HayGroup – Who we are

3. Sample of Our Clients

4. Today’s agenda • Introduction: • Reasons for the study • Study methodology • Measuring job content • Classification and compensation structure

5. Reasons for the study • Assess market competitiveness of total compensation practices • Ensure internal equity • Provide recommendations for changes to the current grade and salary structure • Update job description information • Update the job measurement methodology

6. Study methodology • Collect current job content information for all employees, via existing job descriptions. Additional data will be collected as needed. • Evaluate all jobs using Hay Guide Chart method • Design a job classification and compensation structure that ensures: • Internal equity • External competitiveness • Communicate findings

7. Hay Guide ChartProfile Method of Job Evaluation • A point-factor methodology • The most widely used system in the world • Evaluates jobs based on content • Focuses on work content, not people or individual performance or competence • Applies objective, rational and consistent method of evaluation to all jobs • Uses set of three common factors for all jobs • Basis for assessing and ensuring internal equity • Enables external comparisons to assess pay competitiveness

8. Job evaluation objectives • Establish the relative rank order of jobs • Design a classification structure to accommodate all jobs based on job evaluation results that will: • Meet the need for structure, and • Provide adequate management flexibility • Provide an objective measure of job size for comparison with other jobs • Support analysis of organizational effectiveness, progression and succession plans, and person/job alignment

9. Job evaluation factors • Know-How • Depth and breadth of specialized knowledge • Managerial know-how • Human relations skills • Problem-solving • Thinking environment • Thinking challenge • Accountability • Freedom to act • Magnitude • Job impact on end results

10. Know-how • Sum total of every kind of skill, however acquired, necessary for acceptable job performance: • Depth and breadth of specialized knowledge • How much knowledge about how many things • Managerial know-how • Know-how of harmonizing and integrating diversified functions involved in managerial situations • Human relations skills • Skills needed to influence the behavior of others both inside and outside the organization

11. Problem Solving • The thinking required for analyzing, evaluating, creating, making conclusions and dealing with challenges: • The thinking intensity (which employs know-how) to identify, define, and resolve a problem • The degree of freedom (internal or external) permitted to initiate the thinking process • The thinking challenge defined by the level of judgment required to come to conclusions, formulate strategies, provide answers, consider new things...

12. Accountability • Answerability for actions and the consequences thereof: • Freedom to act • degree of freedom of action given to a job by the organization • Magnitude • gauges how much of the organization is affected by the jobholder’s accomplishment of the job’s basic purpose • Job impact on end results • nature and effect

13. Market comparisons • Job evaluation does not produce pay rates • Pay rates will be recommended following comparisons of New Jersey School Board’s cash compensation practices to the market • Data sources used for the market comparisons will include: • Hay’s proprietary databases • Special Association surveys • Other industry or occupation specific compensation surveys

14. Hay compensation surveys • One of the largest compensation databases in the world • Include exempt & non-exempt jobs • Cover a multitude of market segments • Allows use of Hay Points for more precise and customized comparisons • Provide data on base salary & total cash

15. 200.0 P90 P75 150.0 AVG MVMPA P25 P10 Annual Dollars ($000) 100.0 50.0 2000U.S.A. Chart A Hay Compensation Report All Industrial Organizations Base Salary (Data as of May 1, 2000) 0.0 0 200 400 600 800 1000 1200 1400 1600 240 480 720 960 1440 P90 $41.1 $62.0 $86.5 $114.4 $164.8 P75 36.8 59.0 82.4 105.7 152.1 Median 33.8 55.5 76.6 96.7 138.2 P25 30.6 51.1 70.6 89.6 129.7 P10 27.7 46.6 65.6 85.4 118.1 Average 33.6 54.7 76.3 97.7 140.8 Hay Compensation Report(sample) Survey Points 15

16. Recommending pay rates • Each job will be compared to a comparable position in the market • The current average base salary and total cash for all NJSBA incumbents in that job will be compared to the market average salary and total cash • Based on all comparisons, Hay will determine New Jersey School Board’s overall position in the market • Hay will recommend: • Competitive pay rates for all positions • Salary administration policies and practices

17. Wrap Up • Any questions regarding the project can be directed to the Project Manager, Kimberly Blum, NJSBA Human Resources. • Questions and answers • Closing and thank-you