Classification for the Future The Ups and Downs of Class Consolidation International Personnel Management Association Training Conference Ottawa, Canada.

Classification for the Future

The Ups and Downs of Class Consolidation

International Personnel Management Association

Training ConferenceOttawa, Canada

October 19-23, 2002

Agenda

• Why class consolidation• Different ways to consolidate• Outcomes • Lessons learned• Discussion by Gwinnett County and

City of Dallas

Why Class Consolidation?

• The average number of employees to class titles is 3

• Most organizations have expanded the number of titles by an average of 10% per year

• Jobs and technology have changed• Most employees want their own job title• Individual job titles mean higher pay

Different Ways to Consolidate

• By occupational focus– Engineering– Finance– Human resources– Etc

• By department focus– Public Works– Fire– Budget office

• By salary grade

Four Levels of Work

• Entry

• Developmental

• Full Performance

• Master/Supervisory

• Basic skills, learns to do things “our way”

• Developing proficiency

• Fully competent to perform all aspects of job

• Recognized expert

Outcomes-Positives

• 50% reduction of classifications• More generic class descriptions• Easier management of personnel• Less administrative time spent on

class reviews• Fewer pay grades

Outcomes-Negative

• Employees don’t “see” their position in the class description

• Employees treated more generically• Potential higher payroll• Perceived pay compression of

employees who used to be in different pay ranges are now in the same

• Requires strong management

Gwinnett County Government

Roderick Powell, SPHRHuman Resources Director

Organization Facts:• 3,859 authorized positions in 2002• Approx. 650 job classifications before study• Approx. 650,000 citizens served• Nonunion environment – “unofficial” unions

organized but not recognized by the BOC as bargaining unit

• Full service Human Resources Department:– Compensation– HRIS / Records– Employee Relations– Organizational Development– Employment

Prior System

• 10 Point FES (Factor Evaluation System)– Used same system since 1983

• 2001 Requests for Reclassification– 248 Requests / 85 position studies

completed– 74 upgraded, 1 downgraded, 10 stayed the

same

• Compensation System managed by a Division Director and 2 HR Generalists

Difficulties with Prior System:

• Bureaucratic system– Department Review– Merit Board Approval– BOC approval

• System manipulation to get upgrades• Too many individual classifications• Job description too detailed/job specific• Request for reclassifications submitted

for every little change in duty– Focus is on volume and length of job

description

Consolidation Process

• Fox Lawson & Associates contracted to consolidate where feasible

• PDQs (Position Description Questionnaires) completed by every employee

• Peer panels conducted for job families– Employees selected at random by FLA to represent

each classification– Some individual (unique job) interviews conducted

• Jobs requiring licenses/certifications in the same classification as others that did not have the same requirement were compensated through Pay for Performance System.

Timeline:

• Contract awarded in May 2001• PDQs submitted to FLA in August

2001• Peer Panel interviews Jan/Feb 2002• Draft consolidated job descriptions

June 2002• Merit Board & BOC final approval Dec

2002• To be implemented 1st Qtr 2003

Communication:

• Countyline Newsletter Articles monthly• All employee emails and memos• All employee meetings• Weekly update meetings with County Admin & COO• Dept Director / Elected Official Briefings• Supv/employee Education

– Broad banding– New DBM System– Generic Job Descriptions– New Performance Management System

• Dept POC (Point of Contact) Meetings• [email protected]

• AskCCR Comment box

Results:

• Job classifications reduced from approx. 650 to 300

• Job family approach:– Classifications grouped by type of work

not department– Similar knowledge and skills– 3 to 4 levels in each job family

Reactions:

• Consolidation of 650 to 300 tough to digest• Many concerns from departments and employees

– Internal equity compared to “old FES system”

• Resistance to change became an issue– Detailed/custom job descriptions to generic– Work job titles

• Entitlement mentality vs. Pay for Performance• External market pay vs. COLAs (3% annually)

Reviews & Appeals

• HR/FLA vs. Department/Employees

• Formal appeals to FLA

• Requests for review – HR Director

Thoughts & Recommendations

• Communicate timeline and progress throughout process

• Top management commitment• Consultants with Government experience• Try to “manage expectations”• Ability of Consultant/Contractor to defend

policies/data/implementation• “True Commitment” to market pay

City Of DallasCity Of Dallas

Compensation – 2001 and BeyondCompensation – 2001 and Beyond  

Before 2001

o In1994, switched from step system to pay for performance

o Ten pay schedules:o Seven civilian o Three uniformed o 950+ classifications

o HR functioned as pay & classification police

Driving Change

o Need for market competitivenesso Organizational changes

o Flatter structureo Span of control initiative

o Need for more pay plan flexibility and simplicity o Broadly titled jobs allow flexibility in job

assignments o Smaller staff in HR to monitor pay actions and

maintain numerous classificationso Departments wanted more autonomy in pay issues

Residual Issues

o Step mentality alive & wello Longevity & loyalty strongly valuedo Assumption: long tenure = good performance

o Pay grade = statuso Classification system used to “reward” employees

with upgrades

o Learning about pay for performance:o Supervisors hesitant to be honest with

employees about poor performance issueso Performance pay not successfully tied to

actual performance

First Step: Consolidate Pay Plans

o Consolidation of five civilian pay plans into one

o Implementation of $10/hour minimum wage

o Big change!o Ugly, but a start

o Inappropriate overlap between gradeso Compression

Next Step: Separate the Next Step: Separate the Grades from the TitlesGrades from the Titles

Title/Grade Title

Grade

Clerk 35

Clerk 36

Clerk 37

Human Resources Analyst 55

Clerk I

Clerk II

Clerk III

Senior HR Analyst

_________________

_________________

_________________

___

75

76

77

83

o Job titles separated from pay grades

o Roman numerals and/or senior designates levels

Next Step: Fix the Salary Structure

o Old Structure

o 25 levels

o Inconsistent percentages between minimum and maximum

o Inconsistent percentages between grades

New Structure

o 20 levelso Consistent range

spread of 65% o Consistent differential

between grades of 10%

o Use of alphabetic designation instead of numeric

75

72

71

Maximum

MidpointMinimum

74

4%21%27,78725,36522,94373

6%45%33,23928,09122,943

15%12%25,61824,28122,943

30%23,89721,12618,356

5%32%30,20926,57622,943

Grade

Annual AnnualAnnual% Min

to Max% Between Midpoints

Old Pay StructureOld Pay Structure

E

B

A

Maximum

MidpointMinimum

D

10%65% $37,770$30,331$22,891C

10%65%$45,702$36,700$27,698

10%65%$34,337$27,573$20,810

65%$27,471$22,060$16,649

10%65%$41,547$33,364$25,180

New Grade Annual AnnualAnnual

% Min to Max

% Between Midpoints

New Pay StructureNew Pay Structure

Problems:

o Over 950 classifications

o Many single-incumbent titles

o Descriptions narrow in scope

o Difficult to maintain

o Too much emphasis on internal equity

And Then-the Classifications

o

o Consolidate jobs to allow more flexibility

o Emphasize pay, not title or grade level

o Allows movement of employees within departments to meet work level needs

oShrinking budgets & staff

oLevel of service demand remains constant

Classification Solutions

o ManagersoSupervisorsoInspectorsoLaborer/maintenance titlesoCustomer service titlesoOffice/clericaloExecutives

o Classification reduction: 950 to 450

o Title Consolidations:

Changes to the Classification System

Change Methodology

o Considered:o Common elements with other jobs o Similarity of basic qualifications with other titleso Organizational structure around this jobo Appropriate pay grade for the jobo Median pay for this jobo Cost of the consolidation

Change Methodology con’t

o Worked closely with customer departments to meet organization’s needso HR team met with every department’s executive

teamo Discussed proposed consolidations o Made revisions as needed

o Buy-in from City Manager and executive teamo Ultimate decisions on some titles made by Ultimate

Compensation Manager (aka City Manager)

Impact & Issues

o Employees o Below minimum of new range received salary increaseo Above maximum of new range had no change to pay for

two years

o Costo Civil Service

o Created changes to minimum qualificationso Developed subsets of broad classifications Consider impact on Reduction in Force procedures

Collective bargaining agreements/unions

Lessons Learned

o Start earlyo Work with client departments and civil service

systemo Communicate, communicate, communicate

o Employeeso Management o Not the same message to all!

o Be prepared for grade level envyo Keep an eye on the cost

Ongoing Issues

o Municipalities very comfortable with old-style compensation plans: resistance to change

o Conflict with:o Efforts to combine market sensitivity with pay for

performanceo Pressure to emulate private sector

o Training management on compensation issues o Creating freedom with fences o Some departments love the freedom, some don’t

Ongoing Issues

o Success in tying performance pay to actual performance

o Developing HR's role as partners with client departmentso Eliminate barriers we created ourselveso Frame salary management issues as a

function of budget, not control

Question and Answer SessionQuestion and Answer Session

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