Total Classification & Compensation Study
Our goal is to implement a compensation and classification program that will enhance employee engagement and satisfaction to attract and retain a diverse and highly qualified workforce.
It is a best practice for organizations to routinely conduct these studies to ensure that pay practices and strategies remain competitive, sustainable and equitable.
- What is “total compensation”?
Total compensation includes both the cash and benefits employees receive in exchange for their work. Examples of cash compensation include base salary, cost of living adjustments, overtime pay, lump sum payouts, vacation and holiday pay, sick leave cash-outs, and other cash incentives that may be available. Examples of benefits include the cost of medical, dental, vision and prescription coverage for employees and their dependents, commute incentives, deferred compensation and defined retirement benefits plans, life insurance, long and short-term disability, training and education benefits.
- Why are we doing a classification and compensation study?
The County’s compensation and classification plan has not been evaluated since 2002. It is a best practice for organizations to routinely validate and assess their classification and compensation programs. Appropriate compensation and classification alignment enhances employee engagement and satisfaction, and helps to attract and retain a diverse, highly qualified workforce. Conducting this study may also address other challenges the County sometimes experiences such as overlap, pay inversion and compression.
- What is benchmarking?
Benchmarking is the process we will use to compare our jobs with other employers’ jobs based on similar responsibilities, to identify the market rate.
- Will all positions be benchmarked?
No. Establishing benchmark jobs is an industry practice when conducting compensation surveys. HR, in partnership with Segal Waters, will choose the most populated and representative County jobs to survey, that are also similar to jobs commonly found in the public and private sectors. Although not every County job is included, the survey will include a sufficient number of benchmark jobs to be representative of the County’s classification plan.
- With whom will the jobs be benchmarked to?
The county will use a combination of public and private sector data. The County, in consultation with Segal Waters Consulting, has selected the following peer public employers for the custom survey portion of the study. Factors used to select the following organizations for survey purposes include the following:
- Competition for employees;
- Geographic proximity;
- Commonality of positions; and
- Nature of services provided.
State of Washington Snohomish County King County Thurston County Clark County Spokane County Kitsap County Multnomah County (OR) Washington County (OR) City of Tacoma City of Seattle
- How will the consultants account for geographical differences in the market?
To adjust for geographic difference in the cost-of-labor between the Pierce County and peer employer locations, Segal uses the cost-of-labor differentials report by the Economic Research Institute (ERI) for each peer location.
It is important to note that the cost-of-labor differentials do not necessarily reflect cost-of-living differences. Cost-of-living differences (which reflect the supply and demand for goods and services) are not necessarily a good predictor of salary levels. In other words, while the cost of housing (or other goods and services) in Tacoma, WA may differ from the cost of housing in another peer employer’s location by a certain percentage, the prevailing salaries may not differ by the same percentage. For adjusting salaries in a market study such as this one, the cost-of-labor differentials provide a more accurate method of determining whether employers are paying a competitive wage appropriate to a given geographic area.
- What is the difference between cost of labor and the cost of living?
“Cost of living” refers to the costs to a consumer in a specific geographic area. It reflects the price of food, housing, groceries, transportation, taxes and entertainment. Simply put, it’s the cost of maintaining a certain standard of living.
“Cost of labor” refers to the difference in pay or labor market for a job from one location to another. Another way to phrase this is that the cost of labor is what a particular geographic market offers as the “going rate” or compensation for its jobs.
- Will the study result in changes in my classification or pay?
Changes to classification and pay ranges are possible, though no reduction in individual pay will be recommended by Segal. Changes as a result of the study are subject to collective bargaining, the Career Service Administrative Guidelines, Executive and Council.
- Will my health benefits change?
A goal of this study is to evaluate the County’s current benefits programs with other public employers to assess our competitiveness in the market. While it is possible that changes may occur, changes with a fiscal impact are contingent on budget, collective bargaining, and Council adoption of the recommended changes.
- Isn’t this just a way to save money and pay me less?
No, this study evaluates the County’s entire compensation program using objective market data and comparable jobs, which will allow the County to implement a pay program that is sustainable, competitive, and equitable. Any changes recommended that impact represented positions must be bargained with the appropriate union(s) prior to implementation.
Total compensation considers both cash and benefits when calculating the value employees receive in exchange for their contributions.
Benchmark jobs are positions that remain consistent across the industry in terms of duties and responsibilities, which can therefore be compared from one organization to another. Conversely, non-benchmark jobs are those for which valid and reliable survey data is not available. They might be jobs that are unique to an organization or there are not reliable comparisons in the market.
A set of guiding principles that are based on values that drive decision-making.
The primary job duties and responsibilities that an individual must be able to perform with or without a reasonable accommodation.
Positions covered by a Collective Bargaining Agreement.
Positions not covered by a Collective Bargaining Agreement.
A job title is defined by a generalized set of duties and responsibilities. While two people may not do exactly the same work in their positions, two people in the same title generally do work at the same level and in some cases, the same type of work. An example would be an Office Assistant 1 title, which contains multiple positions across the organization.
A written definition of the duties and responsibilities specific to a job title.
A systematic method of categorizing positions into occupational families, providing a framework for the assignment of job codes, job titles, FLSA, EEO codes, and salary grades.
Position Description Questionnaire (PDQ)
The Position Description Questionnaire is a tool used to collect information about the duties and responsibilities of a position. This information is used to appropriately benchmark positions in the market and to classify positions appropriately.
Establishing a compensation rate for a job title based on comparable benchmark jobs in the labor market.
This refers to the levels or hierarchy of job and pay ranges.
The span from minimum to maximum that constitutes the spectrum of wage established for a particular job grade.
The gathering of data on wages paid by other employers for benchmark jobs.
FLSA (Fair Labor Standards Act)
The Fair Labor Standards Act (FLSA) establishes minimum wage, overtime pay, recordkeeping, and child labor standards affecting full-time and part-time workers in the private sector and in Federal, State, and local governments.
When newer staff and less experienced staff are better compensated than experienced staff performing the same type of work.
When differences in pay of two positions (often in the same series) are too small to be considered equitable or appropriate. Compression and inversion challenges largely occur because of salary structures and compensation strategies that have not been evaluated, modified, or re-designed in response to organizational changes in size, market forces, reporting relationships, and/or any other developments such as number of grades, distances between grades and spreads.
Identified and defined by a combination of factors, e.g., geography (local, regional, national, international), industry, organization size. It reflects the environment in which an organization competes for qualified staff.