Tuesday, October 16, 2012

Compensation Plan

People work at jobs for many reasons. Some of the reasons include the rewards of the job itself. Some involve the reward of helping others. Some are rewarded in the personal pride of doing a job well. All of us work to receive a paycheck. That paycheck provides for our subsistence but also our quality of life.


Recently the city was involved in the negotiations with a labor union. Union goals, among other things, are to help maintain and grow the quality of life for their members. The quality of life that remains of a primary focus is that of compensation. A labor contract provides for a set amount of wages for the type of job being accomplished and the growth in rates that can be expected over time. In simple language how much do I make this year and what can I expect for a raise next year? A contract may only last 2-3 years but expectations in wage rate growth are defined so employees know what to expect. A contract was agreed to and those in the union have a clear expectation as to what will happen concerning wage rates.

Other employees of the city have the same concerns as those of union members. They want some assurance of how they will move through the salary range. They understand that you don’t start at the top of the range but want to know that if they work hard and do a great job, they will receive some rewards in an increase in salary.

The city has been working on a pay plan to do just that. The plan provides for an approach to periodic increases in salary that are given employees that do quality work. Increases are not automatic as positive performance reviews are required. Increases are not guaranteed at times of extreme fiscal stress. The policy does however give an expectation that good employees have the ability to move through the salary range.

Recently the city council recognized the need to give non-union employees some assurance in how they would be compensated over a period of time. They adopted a pay plan for these employees starting in 2013. The plan is somewhat in keeping with the pay arrangements made for the union employees, trying to maintain some parity among all employees of the city. With parity in mind, fairness to all employees is important in managing an organization and its personnel.