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<br /> <br />5.Development of the CityÔs Compensation Policy <br /> <br />A pay philosophy guides the design of a compensation system and answers key questions regarding pay <br />strategy. It generally takes a comprehensive, long term focus and explains the compensation programÓs <br />goals and how the program supports the employerÓs long-range strategic goals. Without a pay <br />philosophy, compensation decisions tend to be viewed from a short-term tactical standpoint apart from <br /> <br /> <br />the organizationÓs overall goals. <br />Market competitiveness and internal equity are among the most important areas addressed in a pay <br />philosophy. An organizationÓs desired market position involves defining the market and identifying where the <br />organization wants to be positioned within that market. Market position should balance what it takes to attract <br />new employees and retain skilled employees (in other words, elim <br />leave the organization) with the organizationÓs financial resources. Internal equity expresses an organizationÓs <br />desire to provide comparable pay to positions with comparable duties and responsibilities. <br /> <br />A pay philosophy should be developed that establishes a compensation program based on individual em <br />performance as a key feature of the pay philosophy. Therefore, we emphasize references to performance in the <br />pay philosophy discussion. As part of the study, it is recommended that the City consider these concepts in the <br />adoption of a formal pay philosophy: <br />Providing fair and equitable rates of pay to employees; <br /> <br />Defining the CityÓs market area; <br /> <br />Developing a system that establishes a Ðmarket rateÑ for each po <br /> <br />and maximum rates that the City will pay individuals within a po <br />Establishing rates of pay that allow the City to compete successfully for new employees within <br /> <br />its market area; <br />Establishing a market position that is fiscally responsible with public resources; <br /> <br />Ensuring that pay rates for existing employees are based on individual performance that meets or <br /> <br />exceeds expectations and reflects changing economic conditions; <br />Developing a compensation system that allows employees to progre <br /> <br />long as their performance consistently meets expectations; <br />Developing pay administration policies and procedures that ensure their consistent application <br /> <br /> <br />between departments; and <br />Ensuring that the compensation program is understandable to employees, supervisors, managers, <br /> <br /> <br />the City Council and the public. <br /> <br />Springsted will meet with the CityÓs Personnel Committee to discuss development of the CityÓs pay <br />philosophy. <br /> <br />6.Employee Communications <br /> <br />Springsted will develop a communications strategy to inform employees of job evaluation and pay grade <br />assignments. Employee communications will be developed explaining the study methodology, employee input <br />opportunities, study recommendations and the process used for reviewing requests for reconsideration by <br />employees who do not agree with the assigned classification. The consultant will participate in the review of <br /> <br />employee requests for reconsideration. <br /> <br /> 7 <br /> City of Arden Hills, Minnesota. Proposal to Conduct a Position Classification and Compensation System Study <br />