Salary adjustments are made on an occasional basis in all organizations. They can also be done at any time of the year. There are three basic types of salary adjustments. They include adjustments for promotion, adjustments needed for internal equity and a cost of living adjustment. A city is generally prohibited from giving bonuses.
The cost of living adjustment is one that is accomplished across the board, given to all employees, at the same rate. It generally addresses the concept that things are more expensive now then in the past. There is no one standard that is used to set the rate of adjustment but rather some form of an inflation factor is considered.
A promotional raise is just that. The raise is give to an individual that takes on more responsibility by being promoted into a new or expanded position. Promotional raises can be of any amount based on job requirements.
The last form of salary adjustment is used to deal with other issues. For instance it can be used to address long term percentage increases where an inequity exists with lower paid over higher paid employees. Over time the range becomes skewed making an adjustment desirable for lower paid positions. This is a form of internal equity.
In Minnesota we have a law regarding pay equity where female employees must be paid on the same scale as male employees for the same job worth. Pay equity adjustments are made periodically to address these concerns. The State of Minnesota requires reporting for Pay Equity every three years. With that reporting, if a position is out of compliance the employer must make an adjustment to bring the wage scale into compliance.
Recently the City Council made adjustments to wage rates for four employees. Two were considered promotions as greater responsibility was given to them. Two other salary adjustments were considered pay equity adjustments.
The council has been concerned about personnel costs and has been very frugal in that regard. There is some thought that internal equity among employees needs to be further considered. The ability to raise revenues and maintain services has to be considered while addressing these issues. Compensation needs to be fair and in parity with others within the organization. The challenge is finding that balance.
