Item 4. Compensation and Benefits Study

Transcription

1 Item 4 Compensation and Benefits Study 258

2 First 5 LA Classification and Compensation Review APRIL 21,

3 01 Introduction 260 2

4 Introduction First 5 LA asked Hay Group to review the organization s compensation practices and develop recommendations for a salary structure that would enable the organization to provide equitable and competitive pay. Specific goals of this project include: Internal Equity A review and assessment of the position and FLSA classification, job evaluation, compensation, and pay delivery mechanisms An appropriate alignment of positions in an internally fair and equitable manner External Competitiveness An understanding of how First 5 LA s base pay practices and benefits compare to other organizations in First 5 LA s market for talent A compensation study that uses organizations within the market for talent as a basis for salary comparison Alignment A review of the existing compensation practices with recommendations for any changes based upon an analysis of internal and external data Specific recommendations regarding appropriate levels of base pay 261 3

5 02 Executive Summary 262 4

6 Executive Summary: Methodology Hay Group worked with leadership and HR to learn about First 5 LA s business strategy, operating model, issues, opportunities, and challenges. Hay Group reviewed position descriptions for each role in the organization Hay Group interviewed department and program leadership to gain further insight into their organization s roles Hay Group measured the content of all jobs in the organization using Hay Group s Guide Chart SM - Profile Method of Job Evaluation All job content findings were reviewed and validated by senior leadership and HR 263 5

7 Executive Summary: Methodology Hay Group met with the Executive Leadership group to discuss which organizations First 5 LA attracts talent from and loses talent to, as well as its desired competitive pay philosophy Hay Group applied our methodology to measure First 5 LA jobs by content Job evaluation is a process to measure the size of jobs against appropriate and consistent criteria Methodology focuses on the content of the job as currently designed The Hay Group methodology measures three aspects of a job: Knowledge required (input) Problem solving involved (throughput) Results expected (output) The work measurement process reflects the culture and values of the organization 264 6

8 Job Level Evaluation Methodology Job Levels by Content We worked closely with the HR team and leadership at First 5 LA to validate job measurement findings and applied significant rigor to the job content analysis because we believe consistent internal measurements are important for employee development, salary structure development, overall fairness, and also provide a reliable map to the external market We compared different roles at similar content levels across the organization, even if the type of job they do is different We identified differences and relativities between senior and subordinate roles in a reporting ladder This helps to check the evaluation of roles but is also an important tool for organizational design Hay Group delivered a training seminar to the HR Staff in our job measurement methodology All job evaluations and resulting internal relationships have been reviewed and validated by leadership and First 5 LA HR staff 265 7

9 Job Content Levels Level Descriptors Highly seasoned professional directors overseeing a major functional areas or departments. Focuses primarily on setting longterm strategies and objectives for a function which is relatively homogeneous nature with necessity for integrating into the overall business objectives of the company. Relatively high degree of autonomy in taking action to set operational goals given general managerial direction and functional policies. Advanced level functional directors of homogeneous activities or departments. Involves the longer-term strategic planning and budgeting of all areas within the function with first-line managers responsible for daily operational implementation of action plans. Actions are typically directed by specific functional precedents and the achievement of circumscribed operational activity. Functional Managers with responsibility for managing the daily operations of department(s) or work unit while developing short to medium-term action plans for meeting functional goals. Work often accomplished through subordinate supervisors or project leaders. Consultative or research/analysis positions with a long-term development or advisory focus. Primarily composed of functionally proficient positions typically managing the daily operations of a department or a group. Requires a high degree of human relation skills for managing subordinates or working with external contacts. Also may be advanced technical positions requiring a high degree of innovative and conceptual thinking. Problems solving skills focus on broad operational and strong functional issues and heavy tactical initiatives. Quarterly or annual focus. Primarily composed of seasoned professional positions with extensive experience. Typically a manager of a small department or area or team / project leader of a technical function. Problem solving skills focus on broad operational and strong functional issues. Monthly to quarterly focus. 16 Primarily composed of highly proficient seasoned professionals. Managers of programs and events, senior individual contributor or entry managerial position over other junior level professionals. Interprets polices to develop procedures for others to use. Project based, weekly to monthly focus

10 Job Content Levels (cont d) Level Descriptors 15 Primarily composed of professional positions responsible for running multiple programs / award categories. Typically functions as a supervisor of clerical or administrative positions or entry level individual contributor professional role - may work independently on routine assignments. Uses and administers complex and diverse procedures. Daily to weekly focus This level has seasoned individual contributors with a focus on task execution and managing and delivery of medium to large projects. They interact and coordinate within and across departments to meet deadlines/ accomplish tasks. Weekly focus for planning and execution. Primarily composed of individual contributor positions involving planning, coordination and execution of small projects. Follows diverse procedures in conducting duties. Receives general work instruction and tends to be focused on daily progress and results. Primarily composed of advanced or lead clerical jobs using specialized knowledge or skill; also seasoned technical jobs are found at this level. Jobs follow a number of more complicated procedures. Jobs at this level are typically confronted with multiple choice situations and through prior exposure/experience have learned which choice is most appropriate to the situation. Mid-level administrative, production, technical or customer service jobs requiring a thorough knowledge of area supported. Usually requires high school diploma plus a few years experience or additional technical training. Competence achieved in 1 to 2 years. Work generally consistent day to day with minor variation week to week. Work often process focused. Clerical, processing, or production jobs requiring an understanding of general office work routines and procedures in a 10 vocational skill. Competence usually occurs within 6 months to one year. Work generally consistent day to day. Work often process focused, rather then task focused

11 Evaluated Job Content (Hay Grades) This table shows a brief description of the type of role associated with each evaluated job content level (Hay Grades) Description Hay Grade Executives Functional leaders and highly seasoned professionls Entry to mid level professionals Administrative/ Support Staff

12 Executive Summary: Internal Analysis As part of our study, Hay Group compared First 5 LA base salaries to job content levels agreed upon by the project team. This diagnostic practice is designed to highlight internal pay practices relative to First 5 LA s existing value structure We find that there is positive correlation between job size and base salary; that is, as job size increases, pay increases Pay varies throughout the organization, typically due to: Varying years of service Employee s salary previous to First 5 LA Outstanding individual performance Pay pressure in the external market on particular jobs and/or skill sets An FLSA review was performed to provide First 5 LA with some guidance on the appropriate exempt/non-exempt classification for its positions

13 Internal Analysis: Job content level compared to current salary ALL POSITIONS; EXCLUDING EXECUTIVE DIRECTOR $275 $250 $225 First 5 LA Internal Analysis (All Positions) Job Content Level (Total Hay Points) vs. Annualized Base Salary ($000s) Data Effective 3/10/2014 First 5 Practice +20% $200 *Excludes Executive Director Annualized Base Salary ($000s) $175 $150 $125 $100 $75 First 5 Base Salary Practice Line First 5 Practice -20% $50 $25 $ Hay Grades

14 Executive Summary: Recommendations Salary Structure Based on our review of both job content levels at First 5 LA and external market levels, Hay Group has prepared a model structure for First 5 LA to consider implementing This model takes the external market into consideration, blending market data with First 5 LA s current pay practices. The recommended structure brings First 5 LA closer to a competitive target market The investment to bring all employees salaries up to their recommended range minimum in the model structure is $55,

15 Recommended Salary Structure This table shows the recommended ranges for base salary Dollars in Thousands Hay Grade Recommended Structure Min Mid Max 25 $273.6 $342.0 $ $221.6 $277.0 $ $180.8 $226.0 $ $148.8 $186.0 $ $123.2 $154.0 $ $104.0 $130.0 $ $88.8 $111.0 $ $76.8 $96.0 $ $67.3 $84.1 $ $59.6 $74.5 $ $52.8 $66.0 $ $46.8 $58.5 $ $41.5 $51.9 $ $36.9 $46.1 $ $32.8 $41.0 $ $29.4 $36.7 $

16 Executive Summary: External Analysis Hay Group constructed an external market for comparison by utilizing a combination of sources representing organizations with which First 5 LA might compete for employee talent Overall, base salary levels fall around the median of the market (the competitive level), with some variances by grade level: Support, administrative positions and entry to mid-level professionals tend to be paid in line with the market For seasoned professional roles and functional leaders, there is less differentiation in base salary between different grade levels than is seen in the market Higher-level directors and executives generally fall below the market, but move closer to the market at the executive levels

17 Current Salary Compared to the Proposed Structure $275 $250 $225 $200 First 5 LA Model Salary Structure Analysis* Job Content Level (Total Hay Points) vs. Annualized Base Salary ($000s) Data Effective 4/1/2014 *Excludes Executive Director Structure Max Structure Mid Annualized Base Salary ($000s) $175 $150 $125 $100 Structure Min $75 $50 $25 $ Hay Grades

18 Executive Summary External Analysis Benefits First 5 LA provides a full range of benefit programs to its employees that is above market median for those earning up to $100,000 and below market median for those earning more than $100,000. The table below summarizes First 5 LA s competitive market position by benefit program component: Benefit Area First 5 LA vs. Market Salary $100,000 Salary > $100,000 Total Benefits P50 P75 < P50 Retirement P25 P50 P25 P50 Healthcare > P75 > P75 Disability < P25 < P25 Death P75 P25 P50 Other Benefits P50 P75 P50 P