Classification, Compensation, and Benefits Study for New Hanover County, NC FINAL REPORT

Transcription

1 Classification, Compensation, and Benefits Study FINAL REPORT June 06, 2014

2 EVERGREEN SOLUTIONS, LLC Chapter 1 - Introduction Evergreen Solutions was contracted in September 2013 by New Hanover County, North Carolina to conduct a for the organization. This report consists of five chapters detailing the study process, findings and recommendations. This analysis provides the County with information related to current employee demographics, employee feedback regarding the current classification and compensation systems, and salary market competitiveness. Analyzing internal and external equity of the current compensation system were focal points of the study. Internal equity relates to the fairness of an organization s compensation system with regard to how the system evaluates each employee s role and contribution by the same criteria, and organizes positions within common pay ranges. To understand the internal equity of the County s compensation system, an analysis of internal conditions was conducted and provided a foundation for the study. Next, an evaluation of the work performed by County employees was performed. By reviewing the skills, capabilities, and duties of each position it was determined whether similar positions were compensated in a similar manner within the organization. External equity was then reviewed to determine the market competiveness of the compensation system. This was accomplished through examining any differences between what County employees are compensated and what compensation is available in the market place for the same skills, capabilities, and duties. For this analysis, a market salary survey was conducted. In summary, for this study, Evergreen Solutions was tasked with: Collecting and reviewing current environmental data present at the County. Conducting a classification analysis utilizing the Job Assessment Tool (JAT) point factor methodology to assess internal equity of the current classification plan. Conducting market salary and benefits surveys to address external equity and provide feedback to the County regarding current market competitiveness. Developing strategic positioning recommendations using market data and best practices. Developing a compensation structure and implementation plan for the County. Developing and submitting draft and final reports summarizing findings and recommendations. Evergreen Solutions, LLC Page 1-1

3 Chapter 1-Introduction Updating classification specifications utilizing employee and supervisor responses provided in the JATs. 1.1 STUDY METHODOLOGY Evergreen Solutions combined qualitative as well as quantitative data analysis to produce an equitable solution to maximize the fairness and competitiveness of the County s classification and compensation structure and practices. Project activities included: conducting a project kick-off meeting; conducting orientation and focus group sessions with employees; conducting classification assessments utilizing the Job Assessment Tool (JAT); conducting salary and benefits surveys; revising classification specifications based on employee JAT feedback; developing a new compensation plan; developing recommendations for compensation management; developing detailed implementation plans; and creating draft and final reports. Kickoff Meeting The kickoff meeting provided an opportunity to discuss the history of the County, finalize the work plan, and begin the data collection process. Data collection of relevant background material (including existing pay plan, organization charts, policies, procedures, classification specifications, and other pertinent material) was part of this process. As well, this meeting provided an opportunity for Evergreen Solutions to begin to understand the pay plan structure and the nature of the work performed by County employees. Employee Outreach Outreach consisted of orientation meetings and focus groups sessions. The orientation meetings briefed employees and supervisors on the purpose and major processes of the study. This process allowed questions to be answered and resolved any misconceptions about the study and relevant tasks. In addition, employees were asked about their experience with the organization and to identify any concerns they had about the existing classification and compensation systems. This information provided basic perceptional background as well as a starting point for the research process. The focus group sessions were designed to gather input from the employees varied perspectives as to the strengths and weaknesses of the current systems. Feedback received from employees in this context was helpful in highlighting aspects of the systems which needed particular attention and consideration. Job Assessment Tool (JAT) Classification Analysis Employees were asked to complete individual JAT surveys, where they shared information pertaining to their work in their own words. The responses were analyzed, compared to the current classification specifications and individually scored based five compensable factor Evergreen Solutions, LLC Page 1-2

4 Chapter 1-Introduction questions. Each of the compensable factors (Leadership, Working Conditions, Complexity, Decision Making, and Relationships) were given weighted values based on employee responses which resulted in a point factor score for each classification. The rank order of classifications by JAT scores was used to develop the proposed compensation structure, and combined with market data, formed the foundation for the recommended solution. Leadership This factor relates to the level of leadership exercised in the organization. For example, an employee may follow directions provided by her/his supervisor, or determine strategy and provide leadership over entire departments or the County as a whole. Working Conditions This factor is utilized to understand the employee s physical working conditions; impact on those conditions as well as the working conditions impact or potential impact on the employee. Complexity Complexity describes the nature of work performed and includes responses ranging from entry level manual or clerical tasks up to advanced scientific, legal, or executive management duties. Decision Making Responses for this factor range from employees who follow guidelines and make few if any decisions to employees who make decisions that impact the entire organization. Relationships This factor has responses that range from employees who work primarily alone, those who work as members of a team, those who oversee teams and those who report to elected officials or the general public. Salary and Benefits Surveys To develop the salary survey, the external market peers were defined as identified public sector organizations with similar characteristics, demographics, and service offerings as the County. Private sector data was available through private sector survey data available to Evergreen Solutions. Benchmark positions were identified from each area and level of the organization and included a cross-section of positions at the County. Once the peer and benchmark information was finalized, a survey tool and approach was designed to solicit salary and benefits information from each of the peer organizations. When the results were received, the data was analyzed and the results provided as aggregate findings. Classification Description Revision Based on employee feedback and supervisor comments on the JAT, classification specifications are being reviewed and updated to better reflect work performed and revisions to the classification structure. Also included in this process is a review and update of any changes to Fair Labor Standards Act (FLSA) status for each position. Evergreen Solutions, LLC Page 1-3

5 Chapter 1-Introduction Solution Creation and Implementation As part of the study, the County identified its desire to maintain its competitive position in the market. Doing so will enable the County to continue to hire and retain highly qualified employees committed to public service. Following the design of the classification structure and analysis of internal and external equity of the compensation system, a competitive pay plan was designed. Desired range spreads (distance from minimum to maximum) and midpoint progressions (distance from the midpoint of one pay grade to the next) were established, and provide ample opportunity for employee salary progression through the ranges. Once the pay plan was created, classifications were slotted into the structure using market data, results of JAT scoring, and current market best practice trends. Particular attention was paid to the review and grade assignment of highly competitive classifications; i.e., skills that may be difficult to recruit or retain. The final step, the creation of the solution, identified the costs associated with implementing the new pay plan; i.e., the data from the classification pay grade assignments (or market data for elected officials or appointees by the Board of County Commissioners) were applied to the individual incumbents in the organization. This allowed the County to view the total costs associated with the pay plan changes. Recommendations were also provided on how to implement the classification and compensation structure, and maintain it going forward. 1.2 REPORT ORGANIZATION This report includes the following chapters: Chapter 2 Summary of Employee Outreach Chapter 3 Assessment of Current Conditions Chapter 4 Market Summary Chapter 5 Recommendations Evergreen Solutions, LLC Page 1-4

6 EVERGREEN SOLUTIONS, LLC Chapter 2 - Summary of Employee Outreach Following the kickoff meeting and data collection, Evergreen Solutions conducted a series of orientation and employee focus group meetings with County employees and supervisors in October The meeting format and questions were designed to provide information to employees regarding the classification and compensation study, and to solicit input on a number of topics related to the study. The meetings were well attended and the comments were valuable. Findings from these meetings are summarized below. General Feedback Employees who participated in these meetings generally regarded the County as a good, place to work. They appreciated the benefits provided by the County, believed the reputation of organization was very good, and enjoyed the workplace environment and their co-workers. However, employees also suggested a few areas where the County could improve. For example, they believed that some areas of the organization should have additional classification levels available to increase their ability to advance and that new employee salaries unfairly approximate those of employees who have worked with the County for many years. They also expressed a desire to see significant changes made to their performance evaluation system. The employees positive comments regarding the current classification and compensation system included the following: Employees highly valued the benefit plan provided by the County. Employees cited the personal leave-roll over into their sick leave (once the maximum accumulation of personal leave was met), and subsequent credit of sick leave hours toward retirement as something that they would not want to see changed. Many employees appreciated that management was conducting a classification and compensation study. Participant employees also provided suggestions for areas for improvement. For example: Some expressed a desire to receive increases that rewarded them when their performance truly exceeded expectations. Some would like to see classification specifications updated to more accurately depict the work that they perform. Evergreen Solutions, LLC Page 2-1

7 Chapter 2-Summary of Employee Outreach Benefits Observations A strong majority of meeting participants were very pleased with the employee benefits package offered by the County. These positive comments, as well as areas for improvement, are listed below: Employees overwhelmingly appreciated their health and retirement plans; paid time off policies, both vacation and sick; and the County s Wellness Program. Many employees expressed a desire to receive tuition reimbursement. Employees would like some level of 401K match made by the County. Some employees would like to be able to sell back vacation time. Compensation Issues Focus group participants also offered the following comments related to compensation: A few employees mentioned they would like to receive pay increases for time (tenure) with the County. Many employees believed their salaries had fallen behind their market peers. Some employees expressed a desire to receive more than minimal differentiation in merit increases related to level of performance; i.e. a greater percentage increase for each higher level of performance. Classification Issues Participants also provided the Evergreen Solutions team with issues specific to individual classifications. Below are issues that were mentioned to the team: A few employees mentioned that team leaders were performing similar work as supervisors. Many employees requested that additional levels (classifications) be created for some job families to provide for additional career growth and advancement. A few employees stated that there were few opportunities for advancement for nonsworn employees in the Sheriff s department. Performance Management Employees were asked about their current performance evaluation system. Below are a few of their comments related to this process: Evergreen Solutions, LLC Page 2-2

8 Chapter 2-Summary of Employee Outreach Employees would like to have a more consistent process, with a more simple performance evaluation tool, and a clear understanding of the relationship of performance and merit increases. Some employees expressed the desire to have input from all of the managers with whom the employees work, rather than just one supervisor; while others expressed that they were told their merit increase by their supervisor only to be told later that their increase was lowered by a higher level manager. Some employees expressed that when the system works well, they believe the County is a good place to work. Market Peers Focus group participants were asked to indicate the organization s biggest competitors for quality employees. These are listed below: City of Greensboro; City of Wilmington; Town of Cary; Brunswick County; Durham County; Forsythe County; Guilford County; Mecklenburg County; Wake County; and Pharmaceutical Product Development. Benchmark Positions Employees were also asked which positions or functional areas within the County present the greatest challenges with regard to recruitment and retention. The functional areas mentioned by focus group participants were: Environmental Health; Fire Services; Parks/Gardens; 911 Emergency Management; and Information Technology. SUMMARY While the concerns discussed above were cited by employees who participated in the orientation and focus group meetings, overall, they believed that the County is a good place to work. In fact, many employees cited the benefits package, the quality of co-workers, and the work environment as reasons why they remain employed with the County. Evergreen Solutions, LLC Page 2-3

9 Chapter 2-Summary of Employee Outreach The information received during this employee outreach provided a foundation the remainder of the study and aided Evergreen Solutions in the development of recommendations provided in Chapter 5. Evergreen Solutions, LLC Page 2-4

10 EVERGREEN SOLUTIONS, LLC Chapter 3 Assessment of Current Conditions The purpose of this statistical evaluation is to provide an overall assessment of the structure of the current County compensation plan. This chapter includes a pay plan analysis, grade placement analysis, quartile analysis, and employee tenure and distribution analysis. Data included here reflects the information and demographics in place at present and should be considered a snapshot in time. The insights gained from this chapter provided fertile ground for more detailed analysis and recommendations through the course of this study but were not sufficient cause for recommendations on their own. By reviewing the County s compensation structure and employee demographics, Evergreen Solutions gained a better understanding of the structures and methods in place at New Hanover County. This information, when integrated with stakeholder, employee feedback and peer market data, was used to develop recommendations appropriate for the County. Pay Plan Analysis An organized pay structure provides employees with an understood method of salary progression, eliminating confusion about future increases or equity among different pay grades. The County currently has a single pay plan in which employees are assigned pay grades based on their classifications. The pay plan consists of 75 pay grades, 69 of which are occupied by at least one County employee. 70 of the pay grades are arranged in an open range configuration, which means they have an established minimum salary and maximum salary. Typically, employees are hired at or close to their pay grade s minimum salary, and their salaries progress through the pay grade during the course of their careers. Five pay grades MGCA, MGCK, MGCM, MGRD, and MGSH are flat rate pay grades, meaning that the incumbents assigned to these pay grades are elected officials or appointed by the Board of County Commissioners, and their salaries must be approved by the Board of County Commissioners. All five of these pay grades possess a single incumbent. Range spreads are a way of measuring how wide pay grades are and are calculated as the percent difference between the pay range minimum and maximum, relative to the pay range minimum. The five flat rate pay grades have range spreads of 0 percent. The range spreads of the remaining 70 pay grades vary between 23 percent and 54 percent, with an average range spread of 52 percent. Exhibit 3A illustrates the County s current pay plan. For each grade, the hourly and annual rates of the minimum, calculated midpoint, target, and maximum salaries are given, as well as the range spread and the number of employees assigned to the grade. The grades with the highest number of employees are 1300, 22LE, and 2431, with 189 employees, 186 employees, and 120 employees, respectively. Thirteen pay grades possess a single employee. Evergreen Solutions, LLC Page 3-1

11 Chapter 3-Assessment of Current Conditions EXHIBIT 3A CURRENT PAY PLAN Grade Hourly Annual Hourly Annual Hourly Annual Hourly Annual Range Minimum Minimum Midpoint Midpoint Target Target Maximum Maximum Spread Employees 1100 $ $24,274 $ $30,774 $ $27,227 $ $37,274 54% $ $27,248 $ $34,486 $ $30,514 $ $41,725 53% $ $30,098 $ $38,168 $ $33,717 $ $46,238 54% $ $33,010 $ $41,850 $ $36,982 $ $50,690 54% F1 $ $31,479 $ $39,857 $ $35,196 $ $48,235 53% 19 21F2 $ $33,106 $ $41,934 $ $37,026 $ $50,762 53% $ $35,922 $ $45,510 $ $40,248 $ $55,099 53% 35 22FL $ $38,914 $ $49,310 $ $43,618 $ $59,706 53% 26 22LE $ $36,192 $ $45,843 $ $40,518 $ $55,494 53% $ $38,854 $ $49,182 $ $43,493 $ $59,509 53% $ $42,453 $ $53,768 $ $47,507 $ $65,083 53% $ $46,779 $ $59,290 $ $52,374 $ $71,802 53% 14 32LE $ $46,821 $ $59,332 $ $52,437 $ $71,843 53% $ $50,440 $ $63,908 $ $56,472 $ $77,376 53% 67 41LE $ $50,523 $ $64,012 $ $56,555 $ $77,501 53% $ $53,310 $ $67,538 $ $59,738 $ $81,765 53% 14 42BC $ $55,994 $ $70,928 $ $62,712 $ $85,862 53% $ $56,202 $ $71,198 $ $62,962 $ $86,195 53% $ $59,842 $ $75,816 $ $66,997 $ $91,790 53% 45 51LE $ $60,008 $ $76,045 $ $67,226 $ $92,082 53% $ $64,210 $ $81,328 $ $71,906 $ $98,446 53% $ $68,661 $ $86,934 $ $76,877 $ $105,206 53% $ $72,467 $ $91,874 $ $81,182 $ $111,280 54% 5 62LE $ $70,970 $ $89,898 $ $79,477 $ $108,826 53% $ $76,336 $ $96,731 $ $85,488 $ $117,125 53% $ $81,162 $ $102,836 $ $90,875 $ $124,509 53% $ $87,048 $ $110,282 $ $97,469 $ $133,515 53% $ $91,707 $ $116,199 $ $102,710 $ $140,691 53% $ $95,555 $ $121,067 $ $107,037 $ $146,578 53% $ $99,424 $ $125,965 $ $111,322 $ $152,506 53% $ $104,208 $ $132,039 $ $116,730 $ $159,869 53% $ $115,731 $ $146,630 $ $129,646 $ $177,528 53% 0 APZ1 $ $35,922 $ $45,510 $ $40,248 $ $55,099 53% 6 APZ2 $ $37,378 $ $47,351 $ $41,850 $ $57,325 53% 2 APZ3 $ $38,896 $ $49,254 $ $43,514 $ $59,613 53% 1 CEZ1 $ $35,922 $ $41,714 $ $40,248 $ $47,507 32% 2 CEZ2 $ $36,670 $ $42,089 $ $41,080 $ $47,507 30% 1 CEZ3 $ $42,453 $ $53,768 $ $47,507 $ $65,083 53% 14 Evergreen Solutions, LLC Page 3-2

12 Chapter 3-Assessment of Current Conditions EXHIBIT 3A (CONTINUED) CURRENT PAY PLAN Grade Hourly Annual Hourly Annual Hourly Annual Hourly Annual Range Minimum Minimum Midpoint Midpoint Target Target Maximum Maximum Spread Employees CSZ1 $ $46,779 $ $52,166 $ $52,374 $ $57,554 23% 2 CSZ2 $ $49,109 $ $56,472 $ $54,995 $ $63,835 30% 1 CSZ3 $ $52,374 $ $62,088 $ $58,656 $ $71,802 37% 0 DAZ1 $ $33,010 $ $41,850 $ $36,982 $ $50,690 54% 1 DAZ2 $ $34,341 $ $43,524 $ $38,480 $ $52,707 53% 1 ECZ1 $ $32,406 $ $41,080 $ $36,275 $ $49,754 54% 1 ECZ2 $ $33,384 $ $42,307 $ $37,336 $ $51,230 53% 0 ECZ3 $ $34,029 $ $43,129 $ $38,147 $ $52,229 53% 0 ECZ4 $ $35,381 $ $44,835 $ $39,645 $ $54,288 53% 0 ELZ1 $ $30,098 $ $38,168 $ $33,717 $ $46,238 54% 1 EOZ1 $ $30,098 $ $38,168 $ $33,717 $ $46,238 54% 11 EOZ8 $ $32,510 $ $41,184 $ $36,421 $ $49,858 53% 2 FLZ2 $ $39,698 $ $50,297 $ $44,489 $ $60,897 53% 3 GMZ1 $ $24,274 $ $30,774 $ $27,227 $ $37,274 54% 28 LCZ1 $ $53,310 $ $67,538 $ $59,738 $ $81,765 53% 15 LCZ2 $ $54,350 $ $68,879 $ $60,902 $ $83,408 53% 2 LEZ2 $ $52,021 $ $65,915 $ $58,261 $ $79,810 53% 6 MGCA $ $147,400 $ $147,400 $ $147,400 $ $147,400 0% 1 MGCK $ $76,741 $ $76,741 $ $76,741 $ $76,741 0% 1 MGCM $ $175,000 $ $175,000 $ $175,000 $ $175,000 0% 1 MGRD $ $58,171 $ $58,171 $ $58,171 $ $58,171 0% 1 MGSH $ $118,187 $ $118,187 $ $115,586 $ $118,187 0% 1 NTZ1 $ $38,854 $ $49,182 $ $43,493 $ $59,509 53% 4 NTZ2 $ $40,019 $ $50,658 $ $44,803 $ $61,298 53% 2 NUZ1 $ $50,440 $ $63,908 $ $56,472 $ $77,376 53% 41 NUZ2 $ $51,938 $ $65,822 $ $58,178 $ $79,706 53% 11 NUZ3 $ $53,019 $ $67,170 $ $59,362 $ $81,321 53% 2 SWZ1 $ $50,440 $ $63,908 $ $56,472 $ $77,376 53% 17 SWZ2 $ $51,459 $ $65,198 $ $57,616 $ $78,936 53% 83 SWZ3 $ $51,938 $ $65,822 $ $58,178 $ $79,706 53% 2 SWZ4 $ $53,019 $ $67,174 $ $59,363 $ $81,328 53% 0 TEZ1 $ $30,098 $ $38,168 $ $33,717 $ $46,238 54% 64 TEZ2 $ $30,701 $ $38,896 $ $34,362 $ $47,091 53% 4 TSZ1 $ $35,922 $ $45,510 $ $40,248 $ $55,099 53% 11 TSZ2 $ $36,670 $ $46,436 $ $41,080 $ $56,202 53% 5 UCZ1 $ $35,381 $ $44,834 $ $39,645 $ $54,288 53% 95 UCZ2 $ $36,795 $ $46,623 $ $41,226 $ $56,451 53% 3 Source: Evergreen Solutions, November Evergreen Solutions, LLC Page 3-3

13 Chapter 3-Assessment of Current Conditions The County currently has an organized pay structure, which is important because it helps employees understand their opportunity for future salary increases and provides clarity regarding equity among different pay grades. Additionally, an established pay structure allows the County to analyze and address problems regarding potential compression within job classifications and grades with a sense of consistency and thoroughness. The current inconsistencies in the range spreads of the pay plan make it difficult for employees to understand the rationale for having either a narrow or wide spread for their classification s range. Grade Placement Analysis In assessing the overall effectiveness of an organization s pay plan and policies, an analysis is performed to determine employee salaries in comparison to their classification range. Grade placement analysis provides insight into career progression as well as potential market competitiveness. The five incumbents assigned to flat rate pay grades are excluded from this portion of the analysis, so they do not appear in Exhibits 3B through 3E. Pay grades with no incumbent employees were also excluded from this analysis. Grade midpoint is often considered the most accepted market average. Therefore, it is important to examine the percentages of employees who fall above and below the calculated midpoint of their respective pay grade. Exhibit 3B provides the breakdown of employees above and below midpoint by pay grade. A total of 1,368 employees (87.6 percent) are below the midpoint of their pay grades. A total of 194 employees (12.4 percent) are above the midpoint of their pay grades. An uneven split of employees above and below the midpoint of pay ranges, which is observed here, is a sign of salary compression. EXHIBIT 3B EMPLOYEES ABOVE AND BELOW MIDPOINT BY PAY GRADE Grade Employees # < Mid % < Mid # > Mid % > Mid % % % 1 5.9% % % % % 21F % 0 0.0% 21F % 0 0.0% % % 22FL % 1 3.8% 22LE % 5 2.7% % % % % % % 32LE % % % % 41LE % % % % 42BC % 0 0.0% % % Evergreen Solutions, LLC Page 3-4

14 Chapter 3-Assessment of Current Conditions EXHIBIT 3B (CONTINUED) EMPLOYEES ABOVE AND BELOW MIDPOINT BY PAY GRADE Grade Employees # < Mid % < Mid # > Mid % > Mid % % 51LE % % % % % % % % 62LE % % % % % % % 0 0.0% % % % % % % % % APZ % % APZ % % APZ % 0 0.0% CEZ % 0 0.0% CEZ % % CEZ % 1 7.1% CSZ % 0 0.0% CSZ % 0 0.0% DAZ % 0 0.0% DAZ % 0 0.0% ECZ % 0 0.0% ELZ % 0 0.0% EOZ % % EOZ % % FLZ % % GMZ % 1 3.6% LCZ % 1 6.7% LCZ % 0 0.0% LEZ % % NTZ % 0 0.0% NTZ % 0 0.0% NUZ % 0 0.0% NUZ % % NUZ % 0 0.0% SWZ % 1 5.9% Evergreen Solutions, LLC Page 3-5

15 Chapter 3-Assessment of Current Conditions EXHIBIT 3B (CONTINUED) EMPLOYEES ABOVE AND BELOW MIDPOINT BY PAY GRADE Grade Employees # < Mid % < Mid # > Mid % > Mid SWZ % 3 3.6% SWZ % 0 0.0% TEZ % 6 9.4% TEZ % % TSZ % % TSZ % % UCZ % 3 3.2% UCZ % % Total % % Source: Evergreen Solutions, November Exhibit 3C shows the distribution of employees at the minimum or maximum of the pay plan. Employees at the grade minimum are typically relatively new to the organization or to the classification after a recent promotion. Contrarily, employees at the grade maximum are typically highly experienced and highly proficient in their classification. The data indicates that a total of 170 employees (10.9 percent) are at the minimum of their assigned pay grade, while a total of 16 employees (1.0 percent) are at the maximum of their assigned pay grade. There appears to be a large portion of County employees clustered at the minimum of their respective pay ranges. This could be a sign that the County s current compensation practices limit opportunities for employee salary increases. Alternatively, this clustering could be evidence that the County has high turnover rates and thus has relatively new employees who have not progressed through their pay ranges. The analysis of employee tenure describes if issues with turnover exist. EXHIBIT 3C EMPLOYEES AT MINIMUM AND MAXIMUM BY PAY GRADE Grade Employees # at Min % at Min # at Max % at Max % 1 3.6% % 0 0.0% % 0 0.0% % 7 6.2% 21F % 0 0.0% 21F % 0 0.0% % 0 0.0% 22FL % 0 0.0% 22LE % 0 0.0% % 1 1.5% Evergreen Solutions, LLC Page 3-6

16 Chapter 3-Assessment of Current Conditions EXHIBIT 3C (CONTINUED) EMPLOYEES AT MINIMUM AND MAXIMUM BY PAY GRADE Grade Employees # at Min % at Min # at Max % at Max % 1 0.8% % % 32LE % 0 0.0% % 1 1.5% 41LE % 0 0.0% % 1 7.1% 42BC % 0 0.0% % 0 0.0% % 2 4.4% 51LE % 0 0.0% % 0 0.0% % 0 0.0% % 0 0.0% 62LE % 0 0.0% % 0 0.0% % 0 0.0% % 0 0.0% % 0 0.0% % 0 0.0% % 0 0.0% % 0 0.0% APZ % 0 0.0% APZ % 0 0.0% APZ % 0 0.0% CEZ % 0 0.0% CEZ % 0 0.0% CEZ % 0 0.0% CSZ % 0 0.0% CSZ % 0 0.0% DAZ % 0 0.0% DAZ % 0 0.0% ECZ % 0 0.0% ELZ % 0 0.0% EOZ % 0 0.0% EOZ % 0 0.0% FLZ % 0 0.0% GMZ % 0 0.0% LCZ % 0 0.0% LCZ % 0 0.0% LEZ % 0 0.0% Evergreen Solutions, LLC Page 3-7

17 Chapter 3-Assessment of Current Conditions EXHIBIT 3C (CONTINUED) EMPLOYEES AT MINIMUM AND MAXIMUM BY PAY GRADE Grade Employees # at Min % at Min # at Max % at Max NTZ % 0 0.0% NTZ % 0 0.0% NUZ % 0 0.0% NUZ % 0 0.0% NUZ % 0 0.0% SWZ % 0 0.0% SWZ % 0 0.0% SWZ % 0 0.0% TEZ % 0 0.0% TEZ % 0 0.0% TSZ % 0 0.0% TSZ % 0 0.0% UCZ % 0 0.0% UCZ % 0 0.0% Total % % Source: Evergreen Solutions, November Quartile and Tenure Analysis Quartile analysis provides greater insight into the distribution of employees across the classification pay range. Employee pay is slotted within one of four equal distributions. The first quartile represents the lowest end of the pay range at 0-25 percent. The second quartile represents the percent section of the classification pay range. The third quartile represents percent of the classification pay range. The fourth quartile is percent of the classification pay range. This analytical method provides an opportunity to assess whether employee salaries are appropriately disbursed throughout the pay range. Quartile analysis is also used to determine if clusters of employee salaries exist. For example, an above and below analysis may indicate a healthy distribution of salaries on either side of midpoint. However, upon further review, a quartile analysis may reveal a clustering of employee salaries in the first quartile. This information while not definitive alone, when combined with other information can shed light on any root issues within the current compensation and classification plan. Exhibit 3D illustrates how many employees are within each quartile of each existing pay grade, as well as the average tenure of employees within each quartile of each pay grade. Exhibit 3E displays graphically how the employees within each pay grade are distributed among the quartiles. Evergreen Solutions, LLC Page 3-8

18 Chapter 3-Assessment of Current Conditions EXHIBIT 3D QUARTILE AND TENURE ANALYSIS GRADE Total 1st Quartile 2nd Quartile 3rd Quartile 4th Quartile Average Tenure Employees # Employees Avg Tenure # Employees Avg Tenure # Employees Avg Tenure # Employees Avg Tenure F F FL LE LE LE BC LE LE Evergreen Solutions, LLC Page 3-9

19 Chapter 3-Assessment of Current Conditions EXHIBIT 3D (CONTINUED) QUARTILE AND TENURE ANALYSIS GRADE Total 1st Quartile 2nd Quartile 3rd Quartile 4th Quartile Average Tenure Employees # Employees Avg Tenure # Employees Avg Tenure # Employees Avg Tenure # Employees Avg Tenure APZ APZ APZ CEZ CEZ CEZ CSZ CSZ DAZ DAZ ECZ ELZ EOZ EOZ FLZ GMZ LCZ LCZ LEZ NTZ NTZ NUZ NUZ NUZ SWZ SWZ SWZ TEZ TEZ TSZ TSZ UCZ UCZ Overall Total (67.6%) 312 (20.0%) 138 (8.8%) 56 (3.6%) Overall Average Source: Evergreen Solutions, November Evergreen Solutions, LLC Page 3-10

20 Chapter 3-Assessment of Current Conditions EXHIBIT 3E QUARTILE ANALYSIS (PERCENTAGE OF EMPLOYEES PER PAY GRADE) % 75.00% Percent of Employees 50.00% 25.00% 0.00% F1 21F FL 22LE LE LE BC LE LE Pay Grade 1ST QUARTILE 2ND QUARTILE 3RD QUARTILE 4TH QUARTILE Evergreen Solutions, LLC Page 3-11

21 Chapter 3-Assessment of Current Conditions EXHIBIT 3E (CONTINUED) QUARTILE ANALYSIS (PERCENTAGE OF EMPLOYEES PER PAY GRADE) % 75.00% Percent of Employees 50.00% 25.00% 0.00% APZ1 APZ2 APZ3 CEZ1 CEZ2 CEZ3 CSZ1 CSZ2 DAZ1 DAZ2 ECZ1 ELZ1 EOZ1 EOZ8 FLZ2 GMZ1 LCZ1 LCZ2 LEZ2 NTZ1 NTZ2 NUZ1 NUZ2 NUZ3 SWZ1 SWZ2 SWZ3 TEZ1 TEZ2 TSZ1 TSZ2 UCZ1 UCZ2 Pay Grade 1ST QUARTILE 2ND QUARTILE 3RD QUARTILE 4TH QUARTILE Source: Evergreen Solutions, November Evergreen Solutions, LLC Page 3-12

22 Chapter 3-Assessment of Current Conditions The observation made in the Grade Placement Analysis that the majority of County employees are in the lower half of their assigned pay ranges is also observed in the Quartile Analysis. Over half of employees, 67.6 percent, are in the first quartile of their pay ranges, and 20.0 percent are in the second quartile of their pay ranges. This is a stark contrast to the third and fourth quartiles, in which 8.8 percent and 3.6 percent of employees salaries fall, respectively. Several pay grades have a single incumbent, such as 7200, APZ3, and CEZ2; this explains why these types of pay grades show all employees occupying a single quartile. However, some pay grades with a larger number of employees also exhibit clusters of employees in the same quartile, which can be a sign of compression. For example, 95.8 percent of the 48 employees in pay grade 21F2 are in the first quartile, as are 81.7 percent of the 186 employees in pay grade 22LE. As can be seen in Exhibit 3D, the average tenure of the first quartile employees in grades 21F2 and 22LE is 4.3 years and 3.7 years, respectively. Relatively short average tenure of employees in these quartiles generally may indicate that employees may not have had the opportunity to progress their salaries through their pay ranges. A contributing factor to the County s salary compression was that ranges were adjusted when overall salary adjustments were given; therefore, a number of employees with less tenure remained in the lower quartiles of their salary ranges. More appropriate approaches in making range adjustments are discussed in Chapter 5 of this report. Another way to identify compression is to investigate tenure within each quartile of the pay grades. Typically, average tenure is lowest in the first quartile and highest in the fourth quartile, and is increasing through the second and third quartiles. Average tenure that does not follow this trend can be an indication of progression issues. Exhibit 3D indicates that this upward trend in tenure across the quartiles exists at the County. Average tenure is 4.9 years for employees in the first quartile, 14.3 years in the second quartile, 19.3 years in the third quartile, and 21.7 years in the fourth quartile. This trend is also observed in 50, or 78.1 percent, of the 64 pay grades included in this portion of the analysis. The majority of the 14 other pay grades only deviate slightly from this increasing trend. However, one pay grade in particular, grade 6300, shows a complete reversal of this pattern. In grade 6300, there are no employees in the first quartile, but the employees in the second, third, and fourth quartiles have average tenure of 30.2 years, 16.7 years, and 10.5 years. This is not necessarily an indication of compression, as the employees in the third and fourth quartiles may have been hired with a wealth of prior experience or education and therefore were initially placed in the upper levels of the pay range. In addition to the analysis of tenure within each quartile of each pay grade, the overall tenure at the County and overall tenure of all pay grades was analyzed in Exhibit 3F. This exhibit includes all 1,567 County employees and all 69 County pay grades with at least one employee assigned to it. Analyzing tenure in this way can help to identify pay grades with low tenure and thus high turnover rates as well as pay grades with high tenure in which employees may be nearing retirement. Evergreen Solutions, LLC Page 3-13

23 Chapter 3-Assessment of Current Conditions EXHIBIT 3F EMPLOYEE TENURE BY PAY GRADE Grade Count Avg Tenure F F FL LE LE LE BC LE LE APZ APZ APZ CEZ CEZ Evergreen Solutions, LLC Page 3-14

24 Chapter 3-Assessment of Current Conditions EXHIBIT 3F (CONTINUED) EMPLOYEE TENURE BY PAY GRADE Grade Count Avg Tenure CEZ CSZ CSZ DAZ DAZ ECZ ELZ EOZ EOZ FLZ GMZ LCZ LCZ LEZ MGCA MGCK MGCM MGRD MGSH NTZ NTZ NUZ NUZ NUZ SWZ SWZ SWZ TEZ TEZ TSZ TSZ UCZ UCZ Overall Average 8.7 Source: Evergreen Solutions, November Evergreen Solutions, LLC Page 3-15

25 Chapter 3-Assessment of Current Conditions The data show the average tenure across all County employees is approximately 8.7 years. This is slightly above the national median, which, according to recent statistics from the Department of Labor, is 7.8 years for employees in the public sector. 1 Higher than average tenure employees undoubtedly possess a wealth of institutional knowledge which, if lost without preparation, could leave the County with knowledge gaps that could significantly affect the quality of services provided in the future. Pay grades MGCA, 62LE, and 8100 have the longest average tenure at the County, with average tenures of 29.4 years, 27.4 years, and 25.3 years, respectively. Lower than average tenure can identify positions with significant turnover or retention issues. Pay grades MGRD, 21F1, NTZ2, ECZ1, and APZ3 have the shortest average tenure at the County, with average tenure of 0.9 years, 1.2 years, 1.9 years, 2.0 years, and 2.0 years, respectively. Further analysis of market data may reveal that compensation issues, such as a lack of competitiveness with the market, may be causing lower tenure in these classifications. It should be noted that tenure for elected and appointed positions varies and by nature of the positions, is not associated with turnover issues. Employees by Department As of October 2013, the County employed 1,567 individuals, all of whom were included in this section of the study. The following analysis is intended to provide basic information regarding how employees are distributed among departments. The County s employees are spread among 28 departments. Exhibit 3F depicts the number of employees and the number of classifications in each department and the percent breakdown of employees by department. As the exhibit illustrates, the largest department in the County is the Sheriff s Office, with 459 employees, representing 29.3 percent of the County s total workforce, while the Cooperative Extension is the smallest department, with one employee, representing 0.1 percent of the County s total workforce. 1 United States Department of Labor, Bureau of Labor Statistics. (September 2012). Employee Tenure Summary [Economic News Release]. Retrieved from Evergreen Solutions, LLC Page 3-16

26 Chapter 3-Assessment of Current Conditions EXHIBIT 3G EMPLOYEES BY DEPARTMENT Department Employees Classes % of Total CENTER % BUDGET % COMMUNITY JUSTICE SERVICES % COOPERATIVE EXTENSION % COUNTY MANAGER % DEVELOPMENT SERVICES % ELECTIONS % EMERGENCY MANAGEMENT % ENGINEERING % ENVIRONMENTAL MANAGEMEN % FINANCE % FIRE SERVICES % GOVERNING BODY % HEALTH % HUMAN RESOURCES % INFORMATION TECHNOLOGY % LEGAL % LIBRARY % MUSEUM % NHCTV & PUBLIC AFFAIRS % PARKS & GARDENS % PLANNING & INSPECTIONS % PROPERTY MANAGEMENT % REGISTER OF DEEDS % SENIOR RESOURCE CENTER % SHERIFF % SOCIAL SERVICES % TAX % Total % Source: Evergreen Solutions, October Overall, the County s compensation plan has a solid structure on which to grow. The key points of the current pay plan are: The County s current pay plan consists of 70 open range pay grades and 5 flat rate pay grades. The average range spread of the open range pay grades is 52 percent, which is within best practice. Evergreen Solutions, LLC Page 3-17

27 Chapter 3-Assessment of Current Conditions Across all positions, 87.6 percent of employees salaries fall in the lower half of the assigned pay range, and 67.6 percent fall in the first quartile of the pay range. This would initially appear to be a concern. However, the County has increased their pay structure and range minimums consistently for the past several years. This has caused an appearance that employees salaries are not progressing through the salary ranges, when in fact the structure has artificially created this issue. These points along with the following market analysis were used to develop recommendations for a new classification and compensation system best suited to the County. Evergreen Solutions, LLC Page 3-18

28 EVERGREEN SOLUTIONS, LLC Chapter 4 Market Summary The analysis in this chapter compares the County s salary and benefits data collected to the salary ranges for benchmark positions and the different benefits offered in the market. The data from target market peers were used to evaluate the overall compensation and benefits policies at the County at a fixed point in time. This methodology is used to provide an overall analysis and not to evaluate salaries or benefits offered for individual positions. Market comparisons do not translate well at the individual level because individual compensation and benefits is determined through a combination of factors, including demand for the type of job, performance, prior experience, and, in some cases, an individual s negotiation skills during the hiring process. A combination of factors, including the market survey, is used when developing classification plans, individual salary recommendations, and changes to an organization s benefits package. Market data collected at the time of the study and provided a snapshot of the most up to date market conditions. However, market conditions change over time, so market surveys should be completed at regular intervals in order for an organization to maintain market competitiveness as the market changes. Evergreen Solutions consultants conducted a comprehensive salary survey and a comprehensive benefits survey. Both surveys were sent to the 40 market peers identified in Exhibit 4A. This chapter summarizes the results of the salary and benefits surveys separately. Evergreen Solutions, LLC Page 4-1

29 Chapter 4-Market Summary EXHIBIT 4A TARGET PEERS Targets Alamance County, NC Union County, NC Brunswick County, NC Wake County, NC Buncombe County, NC City of Asheville, NC Cabarrus County, NC City of Charleston, SC Cumberland County, NC City of Charlotte, NC Catawba County, NC City of Durham, NC Charleston County, SC City of Fayetteville, NC Davidson County, NC City of Greensboro, NC Durham County, NC City of Greenville, NC Fairfax County, VA City of High Point, NC Forsyth County, NC City of Raleigh, NC Gaston County, NC City of Wilmington, NC Guilford County, NC City of Winston-Salem, NC Iredell County, NC Cape Fear Community College, NC Johnston County, NC New Hanover County Schools, NC Mecklenburg County, NC New Hanover Med-Regional, NC Onslow County, NC Pharmaceutical Product Development Orange County, NC State of North Carolina (State Ports) Pitt County, NC Military Ocean Terminal Sunny Point Rowan County, NC Verizon Wireless Source: Evergreen Solutions, February SALARY SURVEY RESULTS The salary survey included the 40 market peers listed in Exhibit 4A and 80 job classifications. When seeking to compare the County to its peers, a number of factors were taken into account, such as the location and size of the organization. Salary data was collected from 27 of the target peers (those who responded to our request to participate) and aggregately, market relevant matches were made for all 80 positions. Data collected from organizations outside of the County s geographic area were adjusted for cost of living using national cost of living index factors. This calculation allowed salary dollars from entities across the state to be compared in spending power relative to the County. Exhibit 4B displays a summary of the collected salary data and shows the percent differentials of the County s current pay plan. Survey minimum indicates the average peer response to the minimum pay for that classification; survey midpoint indicates the average midpoint in the peer response range for that classification; and survey maximum indicates the average peer response to the maximum salary for that classification. Percent differentials are shown for the minimum, midpoint, and maximum. The percent differentials indicate how the County s salary ranges compare to the market average at those points. A positive differential indicates that the County is above the market average and a negative differential indicates that the County is below the market average. Also included in Exhibit 4B is the average salary range for each classification surveyed, which is determined by the Evergreen Solutions, LLC Page 4-2