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REQUEST FOR COUNCIL ACTION Date: July 8, 2013 Item No.: 13.b Department Approval Interim City Manager Approval Item Description: Classification & Compensation Study Policy Recommendations and Implementation Page 1 of 3 B ACKGROUND 1 At the June 17 th meeting, the City Council instructed staff to bring back a compensation policy 2 for consideration. Staff recommends updating the policy to state that the compensation policy of 3 the City would be to provide wages equal to 100% of the average of peer communities. 4 The current compensation plan is based on meeting 97% of Roseville’s peer community’s 5 average for wages of benchmark positions. This policy was designed and implemented as a 6 result of the last compensation study conducted in 2002. The current compensation plan also has 7 a merit pay component that allows for the top 20% of performers to earn up to 115% of top pay 8 based on achievements and overall performance. At time of implementation, it was expected 9 that the entire compensation plan including the merit pay component would be fully funded over 10 the years to reward staff based on achievements and performance. 11 Since that time, the current compensation plan has not worked according to its design. The 97% 12 pay plan component has slipped to closer to 95% over time. In addition, the merit pay program 13 has never been appropriately funded to reward achievement, nor has it been applied equally 14 across the city. If the City were fully funding the current compensation program as policy 15 indicates, we would need to allocate an additional $121,755 (of which $67,846 would be levy 16 funds) just to get back in conformance with the 97% of the average compensation level. 17 Additionally, if you factor in budgeting for merit to comply with the policy then another 18 $200,000 will need to be allocated annually just to maintain and continue the current 19 compensation plans and policy. This is a total cost of $321,755. 20 P OLICY O BJECTIVE 21 To deliver a wage system and structure that is fair and equitable while allowing Roseville to 22 attract and retain quality staff in the marketplace. 23 24 B UDGET I MPLICATIONS 25 To a service organization especially, staff is an asset much the same as the equipment used to 26 provide services. Without a focus to maintain th e organizations assets they decline in value and 27 production output. Thus, a balance of funding for all asset classes needs to be achieved. 28 29