Loading...
R-99-02-11-11C1 - 2/11/1999Mayor Charles Culpepper Mayor Pro-tem Robert S161ka Connell Members Earl M Hairston Rick Stewart Earl Palmer Martha Chavez Jimmy Joseph City Manager Robert L. Bennett, Jr. City Attorney Stephan L Sheets CITY OF ROUND ROCK February 16, 1999 Ms. Sarah Hutchinson, CCP, SPHR Watson Wyatt & Company 2121 San Jacinto Street, Suite 2400 Dallas, TX 75201 -2772 Dear M . c ]nson: The Round Rock City Council approved Resolution No. R- 99- 02- 11 -11C1 at their regularly scheduled meeting on February 11, 1999. This resolution approves the agreement for an update on the City's market - based compensation system. Enclosed is a copy of the resolution and original contract for your files. If you have any questions, please do not hesitate to call. Sincerely, Enclosures Joanne Land Assistant City Manager/ City Secretary Fax: 512- 218.70097 1-800-735-2989 TDD 1- 800 - 735.2988 Voice wwwci.round -rock tx.us 221 Fast Main Street Round Rock Texas 78660. 512 -218 -5400 RESOLUTION NO. R- 99- 02- 11 -11C1 WHEREAS, the City of Round Rock desires to retain professional services to update the employee compensation review, and WHEREAS, Watson Wyatt has submitted an agreement to provide said services, and WHEREAS, the City Council desires to enter into said agreement with Watson Wyatt, Now Therefore BE IT RESOLVED BY THE COUNCIL OF THE CITY OF ROUND ROCK, TEXAS, That the Mayor is hereby authorized and directed to execute on behalf of the City an agreement with Watson Wyatt, to update the employee compensation review, a copy of said agreement being attached hereto and incorporated herein for all purposes. The City Council hereby finds and declares that written notice of the date, hour, place and subject of the meeting at which this Resolution was adopted was posted and that such meeting was open to the public as required by law at all times during which this Resolution and the subject matter hereof were discussed, considered and formally acted upon, all as required by the Open Meetings Act, Chapter 551, Texas Government Code, as amended, and the Act. ATTEST: RESOLVED this llth day of Februar, 1999. !/`' CHARLES CULPEPP 1L, Mayor City of Round Rock, Texas LAND, IC: \ WPDOCS \RZSOLUTI \R90211C1.WPD /ecg City Secretary Watson Wyatt W orldwide February 9, 1999 Ms. Teresa Bledsoe City of Round Rock 221 E Main Round Rock, TX 78664 Dear Teresa: Subject: Update of Market -Based Compensation System We are pleased to present this proposal for the first update of your market -based compensation system. This update would be in line with our recommendations that the City maintain its investment in the compensation system by conducting regular updates. To start the project, we will update your database by collecting market data for the existing jobs utilizing the same surveys that were used in the past, provided all such surveys are available. We anticipate market pricing approximately 110 jobs. At this point in time, we will also market price any new or changing positions at the City. For fee purposes, we estimate that there will be no more than 10 — 12 such positions. We will overlay your existing employee data on the market data and on the current salary structure. We will produce several reports to share with you. We will provide recommendations in the following areas: • Adjustments to your existing structure • Jobs which should be classified in a higher (or lower) grade based on the market data • Any needed market adjustments to individual employee pay We will communicate our recommendations during a one -hour conference call. We will include a fee estimate should the City require technical assistance from Watson Wyatt for costing individual market adjustments. We will be able to provide a more firm estimate once the market pricing is completed. We will summarize our findings in a report. We will provide market pricing worksheets for the jobs, a recommended salary structure, and documentation of the process. Estimated Fees: Watson Wyatt & Company Suite 2400 2121 San Jacinto Street Dallas,TX 75201 -2772 Telephone 214 978 3400 Fax 214 978 3650 We estimate that our fees for the market pricing updated we have described will be $8,500 — $10,000. Ms. Teresa Bledsoe January 27, 1999 Page 2 The fees for extensive technical assistance for costing delivery of individual market adjustments will be approximately $4000 - $5000. Should you require assistance of this type, we will be able to provide a more firm estimate following the market pricing process. The estimated fees above are for professional services only. In addition Watson Wyatt charges separately for out -of- pocket expenses for travel, special mailing, etc. Lastly, Watson Wyatt follows the standard practice for our industry and charges an additional Technical and Administrative Services fee of 5 %. This charge helps to recover our ongoing investment in technical and administrative services (i.e., computer systems, software, and hardware) that enable us to work more effectively and efficiently on our clients' behalf. Watson Wyatt bills monthly. All invoices are payable on receipt; a monthly finance charge of 1% will be applied to all invoices remaining unpaid after 30 days. Summary: We have enjoyed working with the City in the past, Teresa. We look forward to the opportunity to work with you on this important update to your system. Please let us know if you have questions or input on the process we have described. We consider this proposal to be a working document and appreciate your input. If you agree with the terms of this letter please execute both originals and return one signed copy for our files. Sincerely, Sarah Hutchinson Senior Consultant s lm Charles Culpepper Mayor DATE: February 5,1999 SUBJECT: City Council Meeting - February 11, 1999 ITEM: 11.C.1. Consider a resolution authorizing the Mayor to execute an agreement with the consulting firm of WatsonWyatt Worldwide to Update the Market -Based Compensation System. The firm was responsible for the Compensation System Update and Performance Management Redesign work that was implemented by the City in 1997. The recommendation at that time was that the City maintain its investment in the compensation system by conducting regular updates. This will be the first update of the market -based compensation system. Estimated cost for the project is between $10,000 - $14,000 dollars. Staff Resource Person: Teresa Bledsoe, Human Resource Director. Recommendations will be made in the following areas: • Adjustments to existing structure. • Jobs which should be classified in a higher (or lower) grade based on the market data • Any needed market adjustments to individual employee pay. It is estimated that it will take approximately 8 weeks to complete the project. III MI6 MI I MO t. 11011 MU 1999 Market Update Conducted by Watson Wyatt May 1999 Watson Wyatt W orldwide ,m g we O 10 - -- 110 MN OW ill an N- I so Round Rock is growing rapi Increased demand for City services The City staff is also growing Lowest unemployment rates in 20 years The pool of available workers is shrinking Substantial pressure on wages for "entry leve jobs MI ! 1.- I On -- Oa WM MS M O i ON MN MI — I Round Rock: 1.8% in March 1998 to 1.5% in March 1999 Austin area 3.4% to 2.6% San Antonio: 3.6% to 2.8% Dallas:. 3.1% to 2.8 Io Houston: 4.0% t .9°Io p - M N O- Olt -- t M l 41116 - e I A- I Service industry is exploding Hotels /motels Eating establishments Retail stores Dell continues to grow as well as other industries MI MI OE OM MI OP OM IN MB INN MI PO 41111 SIM MI OR MI UM he City of Round Rock Feeling market pressures for many positions Difficulty filling open positions; particularly entry- level positions and those with direct citizen contact Concerns about retention SO NW OM ON MO I M N OM ON O MI Mt 101 O O S OM NO Asked Watson Wyatt to conduct scheduled market update Worked with WW to ensure the update reflected the state of our City today Worked with WW to ensure accurate job matches to essential job functions Worked with WW to interpret the results of the analysis and to bring recommendations to you today 011 ■r OW - WI W - - W MI WO OW r Al OW - r - WII Compensation philosophy development arket pricing process Internal job evaluation process Salary structure development Overlay of employee salaries on recommended salary structure Market adjustments Commitment to regular market updates O NO N - I ! OM ! M i- MN al MI r N ON IN ON M New " mark-et" definition Cities and private industry Specific geographic considerations Desired position "Average to average" Based on new market Role of management Reinforcement of performance orientation OM WI I ON I OM NW UM MO r a r MN W OM - - a ON WW suggested update on biannual basis 1999 updated was scheduled early due to perceived market pressures Initially an update of market data only Interim. findings reveal that more in -depth analysis was needed - - i - ! r - - I OW - - ! - - NW - WM i Update market data in database Compare new data to existing salary structure Does the structure need to be adjusted upward and, if so, how much? Do any specific jobs need to be moved up or down in the structure to reflect changes in the market? Determine the impact on employee salaries MI MI I a- R MS MI i OM IN NM a MO N w MN MN r Pulled "same data" from "same surveys" in general Looked at a few new salary surveys Matched new jobs to salary surveys Ensured 1997 matches were still appropriate and made changes where needed r - - - - a - - - - - - - - - - - - - Compared updated market data to existing salary structure at Round Rock Structure implemented October 1997. Only minor changes to structure since implementation Determined that structure should be adjusted upward approximately 3 - 5% after review of individual jobs OM En - - - i - - ! - - - - - - NM in Reviewed each job at Round Rock 61 jobs needed to be re- slotted to a bi grade Considered market data Considered relative internal values of jobs Most impacted jobs in lower grades with multiple job incumbents - - - - - - - r w - - - - - - - - - M Water plant operators and several water line maintenance jobs Utility billing customer service jobs Municipal court clerks Library technicians and aids PARR and Public Works entry -level jobs Public safety communications Police department sworn officers All sworn fire positions below the Chief and the Fire Marshall l+ MI a• OM B- M M RN OM MO MO MN MI OM • NM MI M Recommendations: for 1999/2004 Adjust existing salary structure 4% Ensure all employees are paid at least at the minimums of the pay ranges in the new structure Provide market adjustments for individuals in jobs which were re- slotted Consider market adjustments for remaining employees to ensure desired competitive position OM OM I NM MN MI ME MO MI w- MI MI IN NM NM MI I MN Excellent alignment with market On average, structure is ``right on the market� Will ensure the City is able to hire at competitive rates Will require changing new hire rates for entry Police and Fire jobs Will require market adjustments to individual employee salaries 15- OM MI - MI MI w MN N -- NM UM E OM I NM • -- $1.250 million in salary adjustments All employees will receive at feast 3% Adjustments range from 3% -19.5% Recommended new salaries Reviewed and discussed with Department Directors Ongoing review and discussion with Human Resources and City Administration New hiring rates for police and fire OM NM MI MI - -- M - -- i MN - I I MI OM OM Timing and Pro Implementation May 13 — WW presentation to City Council May 17 -27 — Departmental meetings to discuss methodology and results Week of May 27 — Budget revision presentation to City Council June 10 — Budget ordinance first reading June 24 — Budget ordinance second reading June 26 — Beginning pay period effective date for pay increases July 16 — New pay rate reflected in pay checks or pay stubs