CLASSIFICATION AND
COMPENSATION STUDY
FEBRUARY 2004
Submitted by:
CPS Human Resource Services 241 Lathrop Way
Sacramento, CA 95815 916-263-3600 916-263-3613 (Fax)
Table of Contents
I. Executive Summary ... 5
II. Introduction... 16
III. Study Background... 17
A. Phase One... 17
B. Phase Two ... 18
C. Classification and Compensation System Components ... 19
1. Classification Plan ...19
a. Grouping Similar Jobs... 18
b. Classification Review Process ... 18
c. Classification Descriptions vs Position Descriptions ... 19
2. Internal Equity...20
3. Labor Market Competitiveness...21
4. Compensation Plan ...21
IV. Study Methodology... 22
A. Classification Review... 23
1. Analysis of Current Classification Specifications... 23
2. Position Description Questionnaires...23
3. Employee & Management Orientation Meetings ... 24
4. Employee & Management Interviews. ...24
5. Analysis of Classification Concepts ...24
B. Internal Equity ... 25
1. Assessing Internal Alignment of Jobs... 25
2
3. Multiple Rater Approach ... 26
4. Determine Point Factor Ranges ... 26
C. Labor Market Survey... 27
1. Phase 1 Survey ... 27
2. Phase 2 Survey ... 27
D. Compensation Plan... 28
E. Knowledge Transfer/Training... 28
V. Findings & Recommendations... 30
A. Classification Plan ... 30
1. Classification Plan Findings...30
2. Classification Plan Recommendations ...35
B. Internal Equity ... 38
1. Internal Equity Findings ...39
2. Internal Equity Recommendations...42
C. Labor Market Survey... 44
1. Labor Market Findings...46
2. Labor Market Recommendations ...49
D. Compensation Plan... 50
1. Compensation Plan Findings...51
2. Compensation Plan Recommendations ...55
VI. Recommended Approach for Implementation... 60
Appendices... 62
Appendix A: Position Appraisal Method... 63
Appendix B: Employers Surveyed for Phase 1 ... 77
Appendix D: Management & Non-represented Listing of Proposed
Classification Title Changes ... 79
Appendix E: Proposed Occupational Index, Management &
Non-represented Classes ... 88
Appendix F: Glossary of Terms/Classification Terms... 99
Appendix G: Internal Equity Point Bands... 105
Appendix H: Phase 1 Labor Market Survey Summary ... 113
Appendix I: Phase 2 Labor Market Survey Summary ... 116
Appendix J: Base Pay Plan, Option 2 ... 119
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Charts, Tables and Figures
Chart 1: Summary of Consultant’s Methodology
Table 1: Phase 1 Classification Description Quality Table 2: Overview of Classification Changes Table 3: Point Band Ranges
Table 4: Salary Increases Reported by Washington State Local Governments
Table 5: Pierce County Current Pay Grids and Pay Ranges Table 6: Pay Plan Option 1
Figure 1: Existing Pierce County Administrative Support Titles Figure 2: Limitations to Broad Classifications
Figure 3: Survey Results Definitions
Figure 4: Illustrative Example of Progression with Performance Figure 5: Illustrative Example of Possible Progression with
Executive Summary
Modern classification and compensation systems consist of four basic elements: 1) the
classification plan; 2) the compensation plan; 3) an internal equity method for linking the plans; and 4) labor market data for gauging an organization’s relative competitiveness with respect to the labor market. These four elements are the foundation upon which the fundamental
personnel policies of fairness and consistency are established. They are how agencies put into practice the principle of equal pay for equal work.
A county-wide performance audit in 1998 described Pierce County’s classification and compensation structure as “outdated and cumbersome.”1 In early 2002, before revising the classification and compensation plan, the County sought the expertise and objectivity of external consultants experienced in public sector human resources practices. CPS, Human Resource Services (CPS) was selected to conduct a comprehensive review of the classification and compensation plans. The stated objectives of the comprehensive review were to:
¾ Review internal and external salary equity based on market data; ¾ Conduct a salary market study; and
¾ Make recommendations on salaries, classifications, and related issues.
The project was divided into two phases with Phase 1 including 106 classes (5 of which are elected,) with198 executive/managerial, elected, and non-represented Sheriff and legal positions. Phase 2 focused on the remaining 1,030 non-represented positions in 344 professional, maintenance/trades, and general classes. Represented positions were not included in the study. The project scope included evaluating the currency and completeness of classification descriptions; assessing the internal equity of the classifications; gauging the external competitiveness of the County’s management and non-represented pay scales; and the administrative efficiency of the pay structure (E, W, N, R, K, C and G pay grids, 125 pay ranges covering the studied classes.)
6 CPS analyzed incumbent duties and responsibilities through the collection and analysis of position description questionnaires, existing class descriptions and interviews with 50% of the position incumbents. Next, CPS applied a point factor approach to the classifications to re-establish an internal equity system for management and non-represented classifications. The project included a custom labor market survey for each of the study phases, supplemented by commercial private and public sector surveys. The examination and analysis of the current positions, the internal equity and pay structure, and the market data resulted in the development of classification and compensation plan recommendations for improvement.
As the findings include a variety of alternatives, Pierce County plans to examine the options presented to determine the best course to proceed. The consultant’s findings and
recommendations provide direction on changes that will enhance the classification plan, internal equity process, pay plan structure, and external alignment vis-à-vis relevant labor markets.
Study Findings and Recommendations
The findings are specific to the following four categories – Classification Plan, Internal Equity, Labor Market and Compensation Plan.
A. Classification Plan
The County last conducted a comprehensive review in 1980. Since that time there have been significant changes in services, technology, operations and organization. The concepts suited to the 80’s no longer meet the required operational competitiveness and evolving working culture, resources and government service standards of the 21st century.
Finding A.1: The management and non-represented classification plan, as a whole, no longer adequately and consistently reflects the work assigned and manner by which work is organized in Pierce County.
By collecting details of duties and responsibilities assigned to County employees through the position description questionnaires, CPS analyzed work content not only to the existing class descriptions but also across departments and functions. CPS found instances of jobs with essentially similar functions classified in different titles. In other instances CPS found jobs with
the same classifications performing functions of different complexity and difficulty. Some classifications only distinguished the incumbent’s time in grade rather than job content. The impact of the County not having conducted more frequent comprehensive reviews of the classification plan is that the County may be overpaying or underpaying its workforce relative to their duties and responsibilities, as well as the labor market.
Finding A.2: Although the County has adopted broad classification concepts in some occupational areas, the County still has many classifications with narrow distinctions.
Since narrow classifications are typically related to narrow compensation ranges, the
classification system is often used to resolve other management issues such as compensation constraints and/or performance reward. For instance, a particular department may have an outstanding employee who is maxed out in the current pay grade. One resulting action is often a slight change of work scope resulting in a new classification and a higher pay grade.
Because the concepts and work distinctions are narrowly drawn, most work changes require reclassification. Re-organization, work process or technology changes also frequently require classification changes when an organization has narrow classes. As many agencies are finding, (and as the County has probably experienced in its use of broad titles such as in the Information Technology Specialist series) broader class concepts assist the jurisdiction in providing greater ease in work assignment changes to accommodate job restructuring and improve organizational efficiency. The broader class concepts also provide greater assurance that positions within the same occupational field, level of responsibility and similarity of duties are being treated fairly and equitably in terms of relative compensation.
Finding A.3: Although the Personnel Department updates classification descriptions when there is employee turnover, the County’s classification plan is sufficiently outdated so that this process can no longer assure classification consistency.
Lack of consistency is another problem with outdated classification plans. Without systematic updating of the classification plan, different formats occur over time. Some departments resort to creating their own written descriptions to meet internal management needs. This can result in
8 multiple formats and, in essence “mini-personnel systems.” Without consistency and reliability, fundamental fairness is compromised.
Finding A.4: Reclassification appears to have been used to promote some employees without having substantive changes in the level of responsibility, particularly in the use of training and lead work classes.
Outdated and narrowly based classifications are the result of using reclassifications to promote employees without substantive changes in the level of responsibility. For some classification series, the practice has been to create a separate classification level to recognize lead duties, and assign a higher pay grade although the overall scope of work is very similar.
Recommendation A.1: Adopt the Proposed Occupational Index presented in AppendixE where CPS consolidated the County’s current 450 management and non-represented classifications to 322 classifications.
Recommendation A.2: Complete a comprehensive updating of the written classifications for management and non-represented positions.
In keeping with the County’s move towards broader classes, CPS provides recommended consolidations for classifications. To support the broader classes, new, modified or updated descriptions will be needed to best manage the staffing, classification and compensation functions.
Recommendation A.3: County Council, Courts, and Elected Offices have closer consultation with the Personnel Department on
classification matters for County-wide implementation consistency.
Although these departments are exempt from the personnel system, consistent classifications and compensation plans for all departments under the County system reduce potential County liabilities, improve employee morale and increase operational efficiency.
Recommendation A.4: Systematically review management and non-represented classifications on a more frequent and comprehensive basis.
While the County Personnel Department regularly updates classifications with attrition and turnover, and writes descriptions for newly created classifications, there is no substitute for across-the-board classification studies. CPS typically suggests that organizations review their classification system every 7 to 8 years to ensure the concepts remain valid, the job content is current, and the positions are properly classified. Alternatively, the County could review annually at least 10% - 15% of the management and non-represented classes after the new classification plan is in place to maintain efficiency.
Recommendation A.5: Abolish training/lead work classifications.
Adding a higher level class in a series should occur only when there has been a substantive change in the level of responsibility. It should not occur just because an employee has been in a job for specific number of years; has reached the end of their pay grade; or because of their work performance.
CPS supports the recognition of lead work responsibility as a sound personnel management practice. However, use of a pay policy to recognize lead work is preferable, particularly when the overall scope of work is very similar. There may still be some exceptions to addressing lead work strictly through a pay policy, such as when the lead capacity demands substantially more difficult or complex duties than the positions that it leads. It is our understanding that Pierce County already has a pay policy for recognizing lead work.
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B. Internal Equity
Internal equity refers to the hierarchical relationships among job classifications within an organization. It is a fairness criterion that guides a jurisdiction in deciding the relative ranking value of a job classification to the organization. For example, those classifications requiring a greater level of knowledge or ones with a higher level of managerial responsibility should be paid more than classes with less knowledge requirements and responsibility.
Finding B.1: Pierce County does not have a systematic job evaluation process. Reliance upon job-to-job comparisons is no longer a dependable method for making classification and pay grade decisions.
The County employs a well known job evaluation methodology called job-to-job comparison, also know as whole job ranking. In whole job ranking, jobs are compared to one another as a whole. Some jobs are considered more valuable than others based on the historical pay relationships, labor market data, and the intuitive knowledge and judgment of the analyst. Although whole job ranking is well suited to some organizations, it is difficult to maintain for very large, multi-function organizations. The job-to-job comparison methodology is no longer
meeting Pierce County’s needs.
Finding B.2: Adopting a consistent and systematic job evaluation method will markedly reduce the number of pay grades needed for the management and non-represented classification plan, thereby making both the classification and pay plans easier to administer and producing more consistent application.
Point factor evaluation compares and evaluates all classes of work against the same standards. As a result, it is less subjective than comparing one position against another. It focuses the evaluation on a number of factors considered important to the organization, rather than an assessment of task changes. It recognizes strong and weak aspects of all jobs. Two jobs may receive similar or identical evaluation, but one may rank higher due to supervisory duties, while the other may receive higher points due to greater technical knowledge required.
The Project Steering Committee adopted the following seven (7) common factors for Pierce County as defined in the Position Appraisal Method (PAM). These factors are:
Nature of Work and Knowledge and Ability Requirements
Supervision Exercised/Scope of Responsibility
Scope and Effect of Decisions and Actions
Problem Solving and Complexity/Guidelines
Application of Authority
Purpose and Nature of Work Contacts
Physical and Sensory Demands and Hazards
Recommendation B.1: Adopt the Position Appraisal Method (PAM), a point factor evaluation tool, to establish and maintain an internal equity system for management and non-represented classification plan.
Recommendation B.2: Adopt the weighting of the Position Appraisal Method (PAM) factors as agreed upon by the Project Steering Committee and Performance Audit Committee.
Recommendation B.3: Adopt a varying 35/40/45 point band-width approach for establishing the internal equity system as it provides the best alignment of duties and responsibilities, and is a workable method for the County to transition to a new pay structure.
C. Labor Market Survey
CPS conducted two labor market surveys. A survey of 53 Phase 1 benchmark jobs was
conducted in May of 2002 (executive/managerial, elected and non-represented Sheriff and legal classes.) A second survey of 71 Phase 2 benchmark jobs was conducted in June of 2003 (non-represented professional, maintenance, trades, and general classes.)
For the Phase 1 survey, CPS compiled labor market information for 53 comparable jobs using a list of agencies and benchmark jobs developed in consultation with the County’s Personnel
12 Department, Project Steering Committee, and the Performance Audit Committee. A group of 49 employers were asked to participate in the survey. Pierce County is the second most populated county in Washington State, next to King County. Therefore, CPS surveyed the top seven Washington counties with respect to largest population as well as other employers in the Northwestern States and similar sized organizations throughout the U.S. Thirty-one employers responded to the market survey.
For the Phase 2 project, CPS conducted a second labor market survey of 71 benchmark jobs in 40 agencies in the local Puget Sound area and the Western states. A national survey was not included for these benchmarks jobs. Fifty percent of the employers surveyed responded to the Phase 2 survey and the response was evenly divided between local Puget Sound and Western region agencies. Additional data for both surveys came from published labor market studies.
Finding C.1: For executive level and senior management jobs – Pierce County’s current maximum (top pay step) is close to the local market maximum average (1% above the market benchmark maximums), and higher than the larger regional market average (10.1% above the market maximums.)
Finding C.2: For middle and line management, supervisory, professional, and non-represented administrative, trades, maintenance and support jobs – Pierce County’s current maximum base pay rates are at the local market, and at the average for the regional market.
Finding C.3: Although the overall maximum salary average is close to the labor market average, there is great variation in how individual benchmarks are positioned compared to the labor market. Some positions are up to 29 percent above market and others are up to 22 percent below market. Recommendation C.1: Use labor market data for setting the
In the analysis of pay data, it is important to remember that it is difficult, if not impossible, to make precise matches between classes of work in different public sector jurisdictions. Matches between public and private sector organizations are even more difficult. In most cases there is no such thing as one overall prevailing rate, rather there is a range of wages from high to low.
Therefore, the results of labor market surveys and analysis and evaluation of data provide a general guide in development of pay recommendations. Most importantly, the external data must be balanced by the need for maintaining an appropriate internal alignment within the County’s organizational framework.
Recommendation C.2: CPS acknowledges that there are some jobs that must be paid at labor market due to labor constraints or
shortages. CPS recommends tracking those jobs; and paying labor market rates for the duration of the need.
Under special circumstances, Pierce County may need to pay a classification a higher rate than suggested by internal equity ratings to attract or retain qualified employees. The reason may be changes in resource availability, market demand, or special intermediate needs of the County. When the need arises for such out of class/pay rate compensation, the County should be flexible in meeting such accommodation in order to be competitive or efficient. But such special compensation should be temporary in nature and implemented only for the duration of the need.
D. Pay Plan Structure
The County’s current management and non-represented base pay structure consists of seven pay grids that include 125 pay ranges, with 98 ranges now in use. When initially developed more than 20 years ago, each pay grid was intended to correspond with major occupational categories. The E grid was for executive/managerial level classifications; the R grid for professional legal classifications; the K grid for professional classifications; the G grid for general classifications; and so on. There are at least three different pay range widths used among the 98 ranges, 25%, 30%, and 35%.2 The majority of pay ranges have 10 incremental steps, from the starting rate to the maximum rate.
14 For the majority of the classifications, employees progress two steps each year until they reach the maximum rate of the range. Employees typically reach the top of their pay grade in five years if they start at the minimum rate of the range, and even sooner if they start somewhere within the range. Progression through a pay range is generally based on an employee’s time in grade.
Finding D.1: The current system of grids and pay ranges (125 ranges, 98 ranges now in use) has become difficult to manage consistently and is unnecessarily complex.
Over time, as the organization has increased in size and complexity, the decision of the grid on which to place jobs has become unclear. The vast numbers of pay grades have little dollar difference, but permit the continuing creation of new titles with new grades, thus perpetuating the complexity.
Finding D.2: The shorter pay range widths of 25%, 30% and 35%, and the way that employees progress through a pay range, result in many employees being maxed out at the top of their salary ranges in 5 years or less. This can create pressure on the classification
system to reclassify jobs in order to provide pay increases. Finding D.3: The practice of automatic vs. meritorious step increases is restrictive and prohibits recognizing and rewarding variable contribution and performance.
Recommendation D.1: Pierce County should move away from automatic step increases and consider greater recognition of performance in granting pay increases.
A new pay plan with fewer pay grades is urgently needed. A new base pay plan is needed for traditional reasons of fundamental fairness and administrative efficiency. More importantly, however, a new base pay plan is needed to support managerial accountability, organizational flexibility, and to recognize individual performance and responsibility.
The reduced number of pay grades for the management and non-represented classification plan will make both the classification and base pay plans easier to administer, and more
understandable by policy makers and employees alike. Most importantly, it will allow more consistent application by the Personnel Department and enhance their service to the departments and employees.
Recommendation D.2: Establish a new base pay structure for Pierce County with fewer, wider pay bands consistent with the method of linking compensation to internal equity and a competitive placement within the labor market.
Recommendation D.3: Adopt a new pay plan for management and non-represented classifications that better supports rewarding performance rather than tenure, and allows for different scenarios for progression including performance-based variable pay that must be re-earned annually.
Public officials, private sector employers and taxpayers are increasingly questioning the practice of granting automatic pay increases without regard to performance, as is common in step
compensation plans. The fixed step plan also denies County managers the opportunity to reward good performance. Pierce County government is committed to rewarding and retaining competent employees who achieve results in the services they provide. The proposed pay plan can support this goal by permitting variable pay progression based on performance,
development and tenure.
A detailed discussion of methodology, findings, and recommendations is provided in the following sections of this report.
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II. Introduction
In 2002 and 2003, CPS Human Resource Services (CPS) conducted a comprehensive review of the classification and compensation plans for County management and non-represented positions. The stated objectives of the comprehensive review were to:
¾ Review internal and external salary equity based on market data; ¾ Conduct a salary market study; and
¾ Make recommendations on salaries, classifications, and related issues.
The methodology in assessing the currency of the classification plan included: collecting up to date job content from all employees in the form of position description questionnaires (PDQ’s), interviewing over 600 (nearly 50%) of the position incumbents, applying a point factoring approach to re-establish an internal equity system, and conducting two custom labor market surveys, one for each of the study phases. The custom survey was supplemented by commercial private and public sector surveys.
Throughout the project, CPS consultants teamed with Pierce County Personnel Department staff in planning and coordinating project activities and progress. Additionally, several training sessions for internal staff were delivered in order to assure the transfer of knowledge on methodologies, practices and tools.
This report represents our findings and recommendations regarding policies, practices and the job classifications as a result of a comprehension review in both Phases 1 and 2. As the findings include a broad array of issues, Pierce County plans to examine the options presented to determine the best course to proceed. The consultant findings and recommendations provide direction on changes that will enhance the classification plan, internal equity process, pay plan structure, and external alignment vis-à-vis relevant labor markets.
III. Study Background
A county-wide performance audit in 1998 described the County’s classification and
compensation structure as “outdated and cumbersome.”3 In early 2002, before revising its classification and compensation plan, the County sought the expertise and objectivity of external consultants experienced in public sector human resource practices. CPS, Human Resource Services was retained to conduct the project.
Pierce County employs 1,228 management and non-represented staff, and 1,892 represented staff covered by 25 bargaining agreements. The County’s focus for the study was management and non-represented positions, which comprise about 40% of the workforce. The study was divided into two phases with Phase 1 including 198 executive/managerial, elected, and represented Sheriff and legal positions. Phase 2 focused on the remaining 1,030 non-represented positions in professional, maintenance/trades, and general classifications.
Represented positions were not a part of the study. The last comprehensive classification study was conducted in 1980.
A. Phase One
Phase 1 of this comprehensive review was carried out under the auspices of the Performance Audit Committee. Phase 1 examined 106 classes (5 of which are elected officials),
executive/managerial and non-represented Sheriff and legal classifications on the E, W, N, and R pay grids. Phase 1 was also used to assess the condition of the Pierce County’s
classification and compensation system and to decide whether to proceed with the larger second phase of the review. At the conclusion of Phase 1, CPS reported its findings and recommendations to the County’s Performance Audit Committee:
1. The classification plan required updating;
2. The internal equity system was essentially non-existent; 3. The pay plan needed restructuring;
18 4. The majority of employees in Phase 1 jobs are topped out or near topping out in their
pay range;
5. Ninety-eight different pay grades (out of 125 designated) are in use for the E, W, N, R, K, C, and G grids. This makes salary administration unnecessarily difficult and most likely results in jobs being re-classed to achieve pay raises, but without a corresponding substantive change in factors that warrant a higher class; and
6. The 25%, 30%, and 35% widths of pay ranges (minimum to maximum) may be too narrow.
CPS recommended that Pierce County complete Phase 2 of the review assessing the classifications, pay plan, market competitiveness of the remaining management and
non-represented positions in 344 job classifications, and apply an internal equity system to establish a relative ranking for these classifications.
B. Phase Two
The County elected to proceed with the consultant’s recommendation for Phase 2, and work was started in October 2002. The second phase included 1,030 non-represented positions in the professional, maintenance/trades, and general classifications. Phase 1 consisted principally of department heads, senior officials and key staff in the Executive branch, County Council, and Prosecutor’s office, comprising 16% of the management and non-represented workforce. The other 84% of management and non-represented positions were addressed in Phase 2.
Although outside the County’s personnel system, the Courts and County elected officials chose to participate in the study due in part to its comprehensive nature and a common desire to strengthen the classification and compensation plans. CPS supports the participation of these departments in the study because as an employer, the County is viewed as one organization.
The second study phase was performed under the direction of the Personnel Department, with the Performance Audit committee maintaining contractual oversight. Phase 2 began with a series of employee project orientation meetings and incumbents completed a modified Position Description Questionnaire from Phase 1. The remaining project steps followed the same patterns as those in Phase 1. At the conclusion of Phase 2, CPS combined the findings and recommendations with Phase 1 results in order to provide a comprehensive review of the classification and compensation plans for County management and non-represented positions.
C. Classification and Compensation System Components
There are four basic elements that make up a classification and compensation system: 1) the classification plan; 2) an internal equity method for linking the classification and pay plans; 3) labor market data for assessing the organization’s relative competitive position; and 4) the compensation plan. The comprehensive review of Pierce County’s classification and compensation system involved examining each of these parts.
1. Classification Plan
A classification plan is the foundation upon which a sound personnel management program is established. The classification plan is the basis for developing and implementing other personnel functions such as recruitment and selection, training, performance appraisal,
succession management, etc., and when applied in concert with those functions it assists in the development of employees in meeting organizational and performance goals. A classification plan also provides a basis for legal defense of employment-related litigation, and developing a job worth hierarchy for base pay purposes.
a) Grouping Similar Jobs. A classification plan groups together into classes those jobs that are basically similar in kind and responsibility of work performed, and training and experience requirements. Job classification is a group of one or more positions,
regardless of location, that are alike enough in duties and responsibilities to be called by the same title, to be given the same pay scale under similar conditions and to require substantially the same qualifications. Several jobs performing similar work may be “classified” in the same classification. By contrast, a position is a group of essential functions, duties, and responsibilities assigned to one individual employee.
For a classification, the same pay range can apply with equity under the same, or substantially the same, employment conditions; and the same recruitment and selection criteria may be used to choose qualified employees.
b) Classification Review Process. The classification process deals with job content, not an individual’s quality of work performance or qualifications. It records only the duties
20 that have been assigned to jobs by management. A classification review reflects neither the manner in which such duties are being performed, nor an individual’s efficiency, capability, length of service, or experience.
c) Classification Descriptions vs Position Descriptions. Ordinarily, two important documents exist simultaneously in public personnel systems: individual position
descriptions and classification descriptions. Each document serves a different purpose. The position description identifies specific tasks performed by a single job. It may be used to orient new employees, establish criteria for performance evaluations, improve communications between employees and supervisors, or serve as the basis for managers to reorganize work units or restructure jobs. The Position Description Questionnaires (PDQ’s), such as the one completed by employees for the
comprehensive review, are used as an information-gathering tool for developing a position description, or could be used as the position description. A classification description, on the other hand, is the basic tool by which management administers the personnel function, primarily in the areas of compensation, recruitment, and selection in accordance with federal and state fair employment laws. Classification descriptions are also referred to as “classification specifications” or “class specs” and hence the term “classification plan.”
2. Internal Equity
Internal equity refers to the hierarchal relationship among job classifications within an
organization. It is a fairness criterion that guides a jurisdiction in deciding the relative value of a job classification to the organization. Internal equity is used to establish and maintain a pay structure in a consistent and reliable way. An internal equity system uses job factors to rank positions by job content. Those classifications requiring a greater level of knowledge, or ones with a higher level of managerial responsibility, should be paid more than classes with less knowledge and responsibility. Internal equity is based on consistent and reliable job content documentation. This documentation commonly includes valid and accurate position description questionnaires, employee and supervisor interviews, current classification descriptions, and organizational charts.
3. Labor Market Competitiveness
Agencies rely on labor market data collected from other employers, both public and private, to gauge their competitive position. Market data using custom and commercially produced
surveys is used for designing and maintaining pay grades and pay plans. Although market data is a very useful tool in salary administration, it is tempered by a jurisdiction’s ability to pay. Most agencies strive to be competitive with their base pay and employee benefits. There are periods however, when a jurisdiction may need to be less competitive in order to live within its revenue. Market data is also useful in this context for “re-calibrating” a pay plan if an economic downturn appears of to be of significant duration.
4. Compensation Plan
All of the pay ranges, together with the compensation policies, are referred to as the compensation plan. The goal of an effective compensation plan is to motivate employees to perform behaviors desired by the jurisdiction. The compensation plan puts a dollar value to the rankings of the internal equity system. The basic purpose of Pierce County’s compensation plan is to enable it to recruit, retain, and motivate employees; be competitive in the market place; and to assure fair and reliable processes for administering the compensation plan. An assessment of the compensation plan includes the ease of administering the plan, the competitiveness of the pay scales, criteria for progressing through pay ranges, and numerical indicators such as turnover rates and compa-ratios.4
4 ratio. The ratio of the actual pay rate to the midpoint or some other control point for the respective pay grade. Compa-ratios are used mainly to measure and monitor the actual pay rates of individual employees to the midpoint or some other control point of a pay range.
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IV. Study Methodology
The approach followed for both phases of the review was the same except for the addition of the employee project orientation meetings at the start of Phase 2, and use of a CPS modified position description questionnaire for the second phase. The final findings and
recommendations from both phases of the studies are presented as one report, reflecting the inter-relatedness of the jobs studied. The following sections discuss the consultant’s
methodology. Chart 1 depicts the methodology followed by CPS in reviewing the classification and compensation system.
A. Classification Review
1. Analysis of Current Classification Specifications. CPS reviewed existing Pierce
County classification specifications in preparation of both Phase 1 and Phase 2 of the project. Classification descriptions were reviewed to assess class concept validity, format consistency, and sufficiency of internal equity criteria. When there are several series or levels within the same class, classification specifications for all levels are reviewed for distinguishing differences and common traits.In order to ensure that recommendations for classification and compensation are based on current and accurate job content, the County needed updated information on
employees’ assigned duties and responsibilities. This was done through the completion of the Position Description Questionnaires.
2. Position Description Questionnaires. In February 2002, prior to the involvement
of CPS, the County’s Personnel Department requested that all executive/managerial and non-represented Sheriff and legal positions complete a Position DescriptionQuestionnaire (PDQ) describing their current job duties and responsibilities. The
Personnel Department distributed standard PDQ’s to incumbents covered by Phase 1 of the review, in advance of selecting a consultant. Employees received written
instructions on how to complete the questionnaire. PDQ’s were reviewed and signed by supervisors and department heads or appointing authorities. The consultant team received copies of all questionnaires turned in by employees and copies of existing classification descriptions for Phase 1 positions.
For Phase 2, CPS provided a modified questionnaire for employees to complete and held a series of meetings for County employees to explain how to complete the PDQ, and to respond to questions about the project. As with Phase 1, CPS reviewed copies of all questionnaires submitted, and copies of existing classification descriptions for Phase 2 positions. If an incumbent employee failed to submit a completed PDQ documenting their job duties, then the position was excluded from review.
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3. Employee & Management Orientation Meetings. Due to the large number and
geographic dispersion of jobs covered by Phase 2, employee meetings were held to address the study purpose, scope of review, methodology, and how to complete the PDQ. In these meetings the consultants emphasized that the review was not intended to justify individual increases or decreases in pay or to evaluate employee performance or workload, but instead it was directed at assessing the classification and compensation system, and preparing recommendations to correct any systemic changes found. The consultants also responded to employee questions about the review. These project orientation meetings were held at numerous times and locations to encourage
attendance by all employees whose positions were covered by Phase 2 of the review.
4. Employee & Management Interviews. CPS next conducted onsite job analysis
interviews with department heads and a sample of employees in both phases of the review. The criteria for determining employees to be interviewed included: obtaining representation at various organizational levels; instances where clarification was needed about an employee’s PDQ; and interviewing at least one incumbent in eachclassification. CPS also sought to accommodate employee requests to be interviewed. The consultant team interviewed 62% percent of the employees covered by Phase 1 and 48% of the employees covered by the Phase 2 of the study.
5. Analysis of Classification Concepts. Based on the review of questionnaires and
employee interviews, CPS analyzed work duties and responsibilities to validate current titles and, where necessary, propose new or consolidated titles. In analyzingclassification concepts CPS takes into consideration:
¾ Occupations and functions ¾ Organizational structure ¾ Reporting relationships
¾ Minimum knowledge and ability requirements
¾ Complexity, scope, decision making, and criticality of work
These concepts aid in determining whether positions are sufficiently alike to be classified the same and consequently compensated the same.
Position classification assists management by providing flexibility in organizing and structuring work to effectively meet operational needs. It also supports sound human resource practices by consistently recognizing work across departments, so employees assigned similar duties are classified the same. A current classification plan provides a fair basis for recognizing and compensating employees who are assigned substantively higher level responsibilities. From the review and analysis of job content and class descriptions, CPS was able to recommend a number of changes to the classification plan.
B. Internal Equity
1. Assessing Internal Alignment of Jobs. CPS applied a quantitative job evaluation
system during Phase 1, known as the Position Appraisal Method (PAM), to gauge the presence and extent of an “internal equity” system. Based on its internal equity analysis of Phase 1 classifications, CPS concluded that Pierce County no longer had a viable internal equity system and recommended establishing one during Phase 2, using the Position Appraisal Method.The Position Appraisal Method enables jurisdictions, such as Pierce County, to
systematically and consistently value work in relation to other work being carried out in the organization. The PAM compares and evaluates all classes of work against the same defined job factors. As a result, it is less subjective than comparing one position as a whole against another. It focuses evaluation on all defined factors and recognizes strong and weak aspects of all jobs. Two jobs may receive similar or identical
evaluation, but one may rank higher due to supervisory duties while the other may receive higher points due to greater technical knowledge required.
2. Point Factor Evaluation. All job classes were rated on every factor. The most
descriptive degree defined in the PAM for each factor was matched to the job. Each of the factors had points assigned to each descriptive degree. Then the point values for all factors were totaled, giving each classification a numeric value. The total point values for the classes provided a relative ranking, or relative internal worth, for each26 in how the PAM system works and practiced applying the factors to sample jobs to better understand the effect of specific factors and factor weights. Appendix A outlined the PAM, the factors utilized and the degree definitions.
The point factoring results were shared with the Project Steering Committee to affirm the factor weights and internal relationships it created5. Committee members also reviewed the point factoring results and provided comments. As supported by job content, further refinements in point factoring were made as a result of Steering Committee comments and suggestions.
During the Phase 2 of the study, CPS applied the point factoring system to the remaining management and non-represented classifications for those that with written
documentation of current job content. Internal equity analysis from both study phases was then combined.
3. Multiple Rater Approach. The factor and degree definitions were interpreted and
applied by the consultant team using a multiple rater approach. With this method, several raters evaluate or rate the classifications on each of the seven factors and then compare the ratings for each factor, and identify, discuss and resolve any factoring differences to ensure inter-rater reliability.4. Determine Point Factor Ranges. Point factoring systems result in point scores that
are used for ranking job classifications and developing pay ranges. To establish a framework for clustering the classifications by point scores, natural breaks in the data are used. When there are no natural breaks or the overall data set is very broad, as with the County’s management and non-represented classifications, then point ranges are used to introduce data breaks. These data breaks determine the number of pay ranges.The point ranges are also referred to as job bands. Between each job band there is a minimum of 5 points to separate the bands. This is to avoid the possibility of “close to” or “almost” being applied to rationalize assigning a classification to the next higher band.
5. Internal relationships are the differentials created between supervisory and subordinate positions, and the differentials established along occupational lines.
Point factoring is nonetheless dependent on the quality and accuracy of the job content provided.
The setting of band-widths allows the introduction of some very basic labor market differences as we begin to build the structure for a new pay plan. The width of a point factoring band can be used to represent the type of labor market an organization draws from. A shorter width may represent the local market and a longer width may represent a regional or even national market.
C. Labor Market Survey
CPS conducted two labor market surveys. A survey of 53 Phase 1 benchmark jobs was conducted in May of 2002. A second survey of 71 Phase 2 benchmark jobs was conducted in June of 2003. A list of employers surveyed in Phases 1 and 2 is shown in Appendices B and C.
1. Phase 1 Survey. In the recruitment of executives, Pierce County competes in local,
regional and national labor markets. CPS compiled labor market information for 53 comparable jobs using a list of agencies and benchmark descriptions developed in consultation with the County’s Personnel Department, Project Steering Committee, and the Performance Audit Committee. A group of 49 employers were asked to participate in the survey. The employer group was comprised of 18 local public sector employers, 13 local and state governments in the Pacific Northwest region (Washington, Oregon and Idaho), and 18 local governments nationally and in the Western region (Appendix B.) Pierce County is the second most populated county in Washington State, next to King County. CPS surveyed the top seven Washington counties with respect to largest population. Thirty-one employers responded to the market survey.2. Phase 2 Survey. CPS conducted a second labor market survey of 71 benchmark
jobs in 40 agencies in the local Puget Sound area and the Western states ofWashington, Oregon, California, Nevada, and Utah (Appendix C.) Only agencies in Western states were included in the Phase 2 survey, whereas the Phase 1 survey included local governments in non-Western states. Fifty percent of the employers surveyed responded to the Phase 2 survey and the response was evenly divided between local Puget Sound and Western region agencies.
28 Additional data came from published surveys. The 2002 - 2003 Northwest Management and Professional Salary Survey by Milliman USA was used as a source of private sector data. The Washington County Employees Salary and Benefit Surveys for 2002 and 2003, published by the Association of Washington Cities, in cooperation with
Washington State Association of Counties served as one means of assessing the comparability of employer data. This was in addition to calling employers and verifying the comparability of individual benchmarks reported. The most recent salary and benefit survey of the National Association of Medical Examiners (2002) was also a published survey source for Medical Examiner and pathologist benchmarks.
D. Compensation Plan
The 16 job bands established by point factoring analysis provide a structure for creating a new pay plan. The market surveys showed that Pierce County, overall is competitive with the local Puget Sound labor market. In designing a new pay plan the challenge is to maintain the County’s competitive position and put in place a structure that reflects internal job worth, while remaining cognizant of the County’s fiscal position. CPS developed three pay plan options for consideration. All three options include a base pay range and a variable pay range, with a combined range for each grade of 50%. Pay Plan Options 1 and 3 are designed with open ranges for both the base rate and variable pay ranges, whereas the base rate ranges for Pay Plan Option 2 are incremental steps similar to the County’s current pay structure. For all three pay plan options, advancement to the variable part of the range and progression through it would be based on employee performance, and require more than just satisfactory or average performance.
E. Knowledge Transfer/Training
CPS continues to encourage knowledge transfer to Pierce County Personnel Department staff. It is critical that County staff responsible for administering the classification and compensation plans understand CPS’ strategies, methodologies, approaches, and tools used in the study to ensure consistent application and continuation of best practice classification and compensation activities. Teams were set up combining Personnel Analysts and consultants for designated study group and/or departments to conduct audit meetings, PAM factoring and evaluation of
results. Formal training sessions were also conducted for Pierce County Personnel Department staff for the following topics:
¾ Classification & Compensation Systems ¾ Job Evaluation and Analysis
¾ Classification Specifications ¾ Conducting Classification Studies ¾ Internal Equity
¾ Position Appraisal Methods (PAM)
The report’s remaining sections discuss our findings and recommendations with respect to the classification plan, internal equity, labor market, and the pay plan structure.
30
V. Findings & Recommendations
A. Classification Plan
Classification is the process of grouping individual positions into broader groupings for personnel, budgeting and other management purposes. Classification sorts the work of individual positions based on type of work and then levels of responsibility and difficulty. As such, it is not an exact science but rather a reasonable arrangement of work efforts and activities. Beyond legal constraints, what is most reasonable is that which works best for a particular organization.
The resulting classification descriptions serve as the basic documents for many human resource management functions. They are used to develop recruitment and selection criteria. The job content in classification descriptions is a basis for training and development programs. It is also the basic document for position classification and compensation decisions.
1. Classification Plan Findings
The Personnel Department has done well trying to maintain the integrity of the class concepts. The Department updates the classification descriptions for the Executive branch jobs when there is turnover. This has produced a generally consistent classification for many of the jobs. However, without the benefit of comprehensive classification studies, without a structured job evaluation tool and with the availability of many different pay grades, there is the tendency to recognize and distinguish many differences in work.
The County last conducted a comprehensive review in 1980. Since that time there have been significant changes in services, technology, operations and organization. The classification concepts suited to the 80’s no longer meet the required operational competitiveness and evolving working culture, resources and government service standards in the 21st century.
Finding A.1: The management and non-represented classification plan, as a whole, no longer adequately and consistently reflects the work assigned and manner by which work is organized in Pierce County.
In reviewing the detail of County work assignments described in the position description questionnaires, we noted several instances of:
Jobs with different titles performing essentially similar duties and responsibilities.
Jobs with the same class title, with significantly different assignment of duties and responsibilities.
Jobs distinguished by time in grade rather than by job content.
The Information Technology area is an example of these findings. The title Department
Information Technology Specialist is used for those IT jobs in departments outside the
Information Services Department. Information Services Department employees are classified as Information Technology Specialist; yet all are performing information technology work.
The administrative support area also demonstrates the need for more frequent classification reviews. There are 20 different titles, listed in Figure 1, to describe essentially five different levels of clerical and administrative work.
Consultants noted in some of the departments that employees have been kept at a higher classification within a class series even though the employee is performing lower level work. Although fairly rare, we found this situation to occur more often in County departments that are
Figure 1: Existing Pierce County Administrative Support Titles
PA LEGAL ASSISTANT OFFICE ASSISTANT 1
COUNCIL ADMIN 1 OFFICE ASSISTANT 2
COUNCIL ADMIN 2 OFFICE ASSISTANT 3
COUNCIL ADMIN 3 OFFICE ASSISTANT 4
COUNCIL ADMIN 4(A) ADMINISTRATIVE AIDE
COUNCIL ADMIN 4(B) ADMINISTRATIVE ASSISTANT
COUNCIL LEGAL CLERK 2 SUPERVISORY ADMIN ASST
DATA ENTRY TECH 2 JUV COURT ADMIN SPEC
DATA ENTRY TECH 3 CONFIDENTIAL SECRETARY
32 exempt from the Personnel System than those that are governed by it. As an example, an employee who has previously been in a supervisory classification, but is no longer supervising subordinates; or an employee who has been at a higher level classification and has duties removed due to reorganization, job restructuring or some other reason, may still remain in the higher level classification and corresponding pay grade. This practice, if allowed to continue, undermines the integrity of the classification plan and the County’s ability to fairly and
consistently administer the plan.
Finding A.2: Although the County has adopted broad classification concepts in some occupational areas, the County still has many classifications with narrow distinctions.
In reviewing the class specifications, Pierce County’s management and non-represented
specifications have become outdated. In some instances the classification factors that comprise the descriptions are no longer current. Some of the descriptions are now narrowly defined to apply only to specific departments, while others are overly broad and no longer meaningful for describing distinguishing features of a classification. This makes it difficult to not only
administer a classification plan, but also results in jobs that perform similar work being assigned to different titles and pay grades. Pierce County may be overpaying some job positions and underpaying others. This can create the perception of “favored departments” or “favored employees,” thus creating employee relations and morale problems.
Broad vs Narrow Class Concepts
Over time, it appears that classifications defining a narrower range of duties have evolved/been created. This occurs in response to a “special request” from departments to create a
department-specific classification; or because a job doesn’t precisely fit an existing
classification; and/or to pay a job at a rate higher than an existing class. In Pierce County, this has resulted in many narrower class concepts.
The County has already accomplished broader class concepts with some series like the Planner series. As other public sector organizations have experienced, the County might have found that broad concepts better support modern organizations. Agencies are examining, more
frequently, the use of more broadly defined job classifications as a tool for structuring and aligning work and human resources.6 The advantages of broad class concepts include:
Greater ease of administration, especially with regard to work changes, as well as record keeping and analysis of classification and pay relationships.
Greater assurance that positions within the same occupational field, level of responsibility and similarity of duties are being treated fairly and equitably. Greater ease of job rotation and work assignment changes to accommodate job
restructuring and work changes required to manage organizational efficiency.
Limitations to Broad Classifications and the Americans with Disabilities Act
As a caveat to the advantages of broad classifications, noted in Figure 2, are some of the limitations to broad classifications. Physical requirements are a key feature for defining distinct qualifications. Most of the classification descriptions in Pierce County have no assessment of working conditions and physical demands of the various jobs.
The Americans with Disabilities Act (ADA) of 1990 provides that, in an employment context, employers are to make “reasonable accommodations” for those defined as disabled under the act. “Reasonable Accommodation” includes adapting job duties, work environment or physical demands of the job. Assessing the “reasonableness” of such an accommodation requires first determining and documenting the physical demands and working conditions of the position. While the ADA prescribes the accommodation analysis to be job and person specific, written descriptions are a source document under the ADA for evaluating the reasonableness of the accommodation to be made. CPS collected working conditions and physical demands information for the Phase 2 positions in the modified position description questionnaire.
6 Modernizing Job Classification, National Academy of Public Administration, 1996.
Figure 2: Limitations to Broad Classifications Selection processes and hiring requirements.
If jobs that are significantly different are combined too broadly, the job descriptions cannot be used effectively as a guide for hiring employees.
Physical requirements of work. The Americans with Disabilities Act requires job descriptions that accurately identify physical requirements of work. If jobs have significantly different physical requirements, they must be separated for selection purposes.
Internal equity. Jobs that are different in terms of compensable factors, such as knowledge, problem solving, or accountability, should be classified separately in order to help ensure internal equity.
34 Finding A.3: Although the Personnel Department updates
classification descriptions when there is employee turnover, the County’s classification plan is sufficiently outdated so that this process can no longer assure classification consistency.
Lack of consistency is another problem with outdated classification plans. Without systematic updating of the classification plan, differing formats occur over time. Some departments resort to creating their own written descriptions to meet internal management needs. This can result in multiple formats and, in essence “mini-personnel systems.” Without consistency and reliability, fundamental fairness is compromised.
There were notable differences in the quality of the classifications for Phase 1 jobs vs. Phase 2 jobs. There were a higher number of jobs in Phase 1 that either have no written classification descriptions or they were in an outdated format. This may be attributed in part to the positions of the County Council, Superior and District Courts, and the Prosecuting Attorney being exempt from the Personnel Department’s administration of the classification plan.7 Out of the 101 classifications in Phase 1 whose duties are not defined by code, written descriptions do not exist for 25% of the current classification titles. Phase 2, under the management of the Personnel Department, had few missing classifications.
Table 1: Phase 1 Classification Description Quality Government Branch # of Class Titles # of Missing
Descriptions # in Current Format County Council 18 10 1 Courts 7 2 2 Executive 76 13 50 Totals 101 25 53
Finding A.4: Reclassification appears to have been used to promote some employees without having substantive changes in the level of responsibility, particularly in the use of training/lead work
classifications.
Reclassification and Use of Training/Lead Classifications
Another concern with outdated and narrowly based classifications is the use of reclassifications to promote employees without there being substantive changes in the level of responsibility. Reclassification should occur only when there has been a substantive change in the level of responsibility. It should not occur just because an employee has been in a job for a specific number of years; has reached the end of their pay grade; or level of work performance.
For some classification series the County has had in place a “trainee” level classification, such as Legal Assistant 1, whereby the employee is “promoted” at the end of a specified period of time. The training classifications are separate from the concept of a probationary period of employment. Under a training classification, employees are expected to be doing work at the next higher classification level after an initial induction and probationary period. They are automatically moved to the next classification level at the end of the training time, which may run from one to two years depending on the classification in question. In another example, “trainee” classification was used to address performance issues.
Then too there are classifications developed just to recognize lead work responsibility. For some classification series, the practice has been to make a separate classification level to recognize lead work and assign a higher pay grade. This can be addressed via a lead work pay policy instead of creating a new classification.
2. Classification Plan Recommendations
Outdated and non-existent classification descriptions create personnel management difficulties in addition to improper compensation and morale problems. Having updated written
descriptions also assists Pierce County with assuring compliance with fair employment laws and practices, and other employment related laws and regulations.
36 CPS estimates that the County could streamline its management and non-represented
classification plan by up to 32%, from 450 to 322 classifications, by using broader class concepts and applying them to jobs in the Courts, County Council and Elected Official’s departments, as well as departments of the Executive branch.
Occupational Index & Related References
To help understand the degree of consolidation that CPS advocates for the management and non-represented classifications, CPS has prepared a table with current and proposed
classification titles. Appendix D illustrates the management and non-represented class listing and proposed consolidation of classification title changes.
A classification plan has the same need for organization, as do various financial accounts in a chart of accounts. The grouping of the different classifications into a systematic plan based on occupational similarities is called an occupational index. The Proposed Occupational Index, in Appendix E, organizes the proposed classification titles by occupational groupings. Appendix F contains a glossary of commonly used terms relating to classification and compensation
systems.
Overall, CPS’ recommendations can be summarized in the following Table 2.
Table 2. Overview of Classification Changes
Classification Issue Number
Current number of titles in use, Phases 1 and 2 450 Current average number of positions per class 2.73
Number of titles proposed 321
Proposed average number of positions per class 3.83
Recommendation A.1: Adopt the Proposed Occupational Index presented in AppendixE where CPS consolidated the County’s current 450 management and non-represented classifications to 322 classifications.
Recommendation A.2: Complete a comprehensive updating of the written classifications for management and non-represented
positions.
When moving toward broader classes, CPS advocates the County seek, when possible, to consolidate classifications. New, modified or updated written descriptions will be needed to support broader classification and to best manage the staffing, classification and compensation functions.
Recommendation A.3: County Council, Courts, and Elected Offices have closer consultation with the Personnel Department on
classification matters for County-wide implementation consistency.
Although these departments are exempt from the personnel system, consistent classifications and compensation plans for all departments under the County system improves employee morale, increases operational efficiency, and minimizes potential employment related liability for the County.
Recommendation A.4: Systematically review management and non-represented classifications on a more frequent and comprehensive basis.
There is no substitute for across-the-board classification studies. CPS typically suggests that organizations review their classification system every 7 to 8 years to ensure the concepts remain valid, the job content is current, and the positions are properly classified. Or, alternatively review annually at least 10% - 15% of the management and non-represented classes after the new classification plan is in place to maintain efficiency.
38 Recommendation A.5 Abolish training/lead work classifications.
By maintaining a training level of classifications and then “promoting” employees at the end of the training period, the County is creating an expectation that reclassification may occur after a particular time in grade. Such an expectation, if it exists, needs correction. Adding a higher level class in a series should occur only when there has been a substantive change in the level of responsibility. A job should not, however, be reclassified to a higher pay grade as a reward for an employee’s work performance. Superior performance is best addressed through recognition and performance management policy and practice. Similarly, a job should not be reclassified just because an employee has topped out in their pay grade; or has been in a job for a prescribed number of years.
CPS supports the recognition of lead work responsibility as a sound personnel management practice. However, use of a pay policy to recognize lead work is preferable, particularly when the overall scope of work is very similar. There may still be some exceptions to addressing lead work strictly through a pay policy, such as when the lead capacity demands substantially more difficult or complex duties than the positions that it leads. It is our understanding that Pierce County already has a pay policy for recognizing lead work.
B. Internal Equity
Internal equity refers to the consistency of classification and pay within an organization. Job evaluation is the method for determining the relative internal worth of job classifications to the organization. Internal equity is also the means for linking jobs with readily available market data with those jobs that are unique or specific to the organization, and therefore more difficult to find comparables matches in the labor market. Without an established job evaluation system, job classifications get assigned to pay grades based on individual employee attributes rather than job content and labor market considerations. This undermines the principle of “equal pay for equal work” and basic principles of public personnel management.