1. 1 Compensation Overview Council Budget Work Session #2 Dianne Randall Foster Director of Human Resources March 7, 2007

2. 2 AGENDA Understanding the City’s Pay System  Compensation Philosophy  How It Works  Market Comparability  Salary Study Results  Human Resources Recommendations  Questions/Worksheet

3. 3 Compensation Philosophy Compensation Philosophy:  enhance organization performance  through a combination of base pay, rewards and incentives  which attract, retain and motivate  high performing employees

4. 4 City’s Pay System How It Works  Merit City’s basic compensation tool Employee pay is based on job performance  Market Adjustments General Wage Increase Based on what the organization can afford to remain competitive in the job market  Pay Range Adjustments Based on market justification Enable the successful recruitment and retention of employees

5. 5 City’s Pay System How It Works  Each position is assigned a salary range based on market data and the City Manager’s determination of the strategic value of positions and/or employees to the organization  Salary Range consists of : Minimum - entry level (minimum qualifications) Mid-point – middle of the range (skilled/experienced) Maximum – top of range (maximum value for position)

6. 6 City’s Pay System How It Works  Vacant positions are posted with the salary range identified  In the past, we recruited mostly at or about the entry level wage  Organizational needs of many departments often necessitate in-hiring rates for more seasoned employees with critical skill sets.

7. 7 City’s Pay System How It Works  Once an employee is hired, the annual pay increase is based on the merit review. This basic pay tool allows us to simultaneously reward high performance and ensure that our employee salaries keep pace by awarding:  2% for met  3% for achieved  4% for surpassed  5% for exceeded

8. 8 City’s Pay System Market Comparability  Goal is to ensure that our employees are generally paid in accordance with our regional competitors  Salary comparisons for FY08 were compiled by IPAC (Intergovernmental Personnel Advisory Committee) using SevaNet. The localities in the region have decided to transition to a new salary survey system called TechNet. Future market comparisons will be compiled using this system.

9. 9 City’s Pay System Market Comparability  Pay Administration Complication Factors Very difficult to predict the market While we have a structure which allows us to gather information about what our competitors are currently paying, we do not have any way to adequately determine what they are going to do in the future Average actual salary comparisons are more difficult to compare due to the variance in tenure and the number of incumbents in the positions

10. 10 City’s Pay System Market Comparability-Consultant Guidelines  Watson Wyatt Worldwide, a leading compensation consulting company recommends: Annual review of 20% - 25% of permanent positions In – depth analysis of positions that deviate 10% or more from market

11. 11 City’s Pay Plan Market Comparability-Human Resources Analysis  Review 25% of the positions every year  Conduct in-depth analysis of benchmarked positions 10% above or below the average market minimum comparables for the region  Review 10% of the positions against private sector benchmarks  Review other positions as issues with retention or attraction arise  Generally speaking, we would expect to be somewhere in the middle or around the regional average

12. 12 Salary Study Results Public Safety Comparisons  Police Division  Fire Division

13. 13 Public Safety - Police Recruit LocalityTitle Minimum Salary City of Virginia BeachPolice Officer Recruit36,088 City of HamptonPolice Recruit33,946 City of Newport NewsPolice Officer Recruit33,620 City of NorfolkPolice Recruit33,000 City of ChesapeakePolice Officer Trainee32,640 City of PortsmouthPolice Officer Trainee31,411 Hampton min from average market min+1.78%

14. 14 Public Safety – Police Officer I LocalityTitle Minimum Salary City of Virginia BeachPolice Officer37,915 City of HamptonPolice Officer35,620 City of Newport NewsPolice Officer35,620 City of NorfolkPolice Officer I34,650 City of ChesapeakePolice Officer34,136 City of PortsmouthPolice Officer32,983 Hampton min from average market min+1.59%

15. 15 Public Safety – Police Officer II LocalityTitle Minimum Salary City of HamptonPolice Officer40,065 City of NorfolkPolice Officer II38,320 City of Virginia BeachPolice Officer37,915 City of ChesapeakeNo Match City of Newport NewsNo Match City of PortsmouthNo Match Hampton min from average market min +5.11%

16. 16 Public Safety – Senior Police Officer LocalityTitle Minimum Salary City of NorfolkNo Match40,846 City of HamptonPolice Officer40,065 City of ChesapeakeSenior Police Officer39,817 City of Newport NewsPolice Officer, Senior38,000 City of PortsmouthNo Match City of Virginia BeachNo match Hampton min from average market min +1.29%

17. 17 Public Safety – Master Police Officer LocalityTitle Minimum Salary City of HamptonPolice Officer46,092 City of ChesapeakeMaster Police Officer46,042 City of Virginia BeachMaster Police Officer43,970 City of NorfolkNo Match43,372 City of Newport NewsPolice Officer, Master43,305 City of PortsmouthNo Match Hampton min from average market min+4.35%

18. 18 Public Safety – Firefighter Recruit LocalityTitle Minimum Salary City of Virginia BeachFirefighter Recruit36,088 City of HamptonFirefighter Recruit33,946 City of Newport NewsFirefighter / Medic Recruit33,620 City of NorfolkFirefighter Recruit33,000 City of ChesapeakeFirefighter Trainee32,640 City of PortsmouthFirefighter Trainee31,411 Hampton min from average market min+1.84%

19. 19 Public Safety - Firefighter LocalityTitle Minimum Salary City of NorfolkFirefighter EMT38,222 City of Virginia BeachFirefighter37,915 City of HamptonFirefighter35,620 City of ChesapeakeFirefighter/EMT34,136 City of PortsmouthFirefighter32,983 City of Newport NewsNo Match Hampton min from average market min-0.54%

20. 20 Public Safety – Medic Firefighter LocalityTitle Minimum Salary City of Virginia BeachFirefighter Medic41,850 City of HamptonMedic Firefighter38,644 City of NorfolkFirefighter EMT-C36,473 City of Newport NewsFirefighter / Medic35,620 City of PortsmouthNo Match City of ChesapeakeNo Match Hampton min from average market min+1.75

21. 21 Public Safety - Paramedic LocalityTitle Minimum Salary City of Virginia BeachMaster Firefighter Medic46,195 City of Hampton*Medic Firefighter42,644 City of NorfolkFirefighter EMT-P42,129 City of ChesapeakeFirefighter/Paramedic39,817 City of Newport NewsFirefighter/Medic Sr38,000 City of PortsmouthFirefighter/Paramedic34,631 Hampton min from average market min+6.20% *Includes Paramedic Incentive

22. 22 Salary Study Results General Workforce Comparisons  Administrative/Technical

23. 23 General Employees - Custodian Minimum LocalityTitleSalary Private SectorJanitor20,200 City of Virginia BeachCustodial Worker II19,951 City of Newport NewsCustodian II18,782 City of PortsmouthJanitor17,491 City of NorfolkCustodian17,085 City of ChesapeakeHousekeeper16,849 City of HamptonCustodian16,595 Hampton min from average market min-7.97%

24. 24 General Employees – Account Clerk I Minimum LocalityTitleSalary Private SectorAccounting Clerk I24,500 City of NorfolkSupport Technician23,029 City of ChesapeakeAccount Clerk22,172 City of PortsmouthFiscal Support Specialist I21,261 City of Virginia BeachAccount Clerk I20,962 City of Newport NewsAccounting Assistant20,780 City of HamptonAccount Clerk19,336 Hampton min from average market min-10.65%

25. 25 General Employees – Customer Service Specialist Minimum LocalityTitleSalary City of Virginia BeachAccount Clerk II25,541 City of ChesapeakeCustomer Service Clerk II24,940 Private SectorCustomer Service Rep I24,500 City of PortsmouthCustomer Service Specialist22,324 City of NorfolkCustomer Service Rep19,799 City of HamptonCustomer Service Specialist19,336 City of Newport NewsNo Match Hampton min from average market min-16.48%

26. 26 General Employees – Staff Support Technician I Minimum LocalityTitleSalary Private SectorSecretary I25,300 City of Virginia BeachOffice Assistant I23,138 City of ChesapeakeOffice Specialist I22,172 City of HamptonStaff Support Technician I20,871 City of Newport NewsAdministrative Assistant I20,780 City of PortsmouthOffice Specialist II20,248 City of NorfolkNo match Hampton min from average market min-3.31%

27. 27 General Employees – Senior Library Assistant Minimum LocalityTitleSalary City of Virginia BeachLibrary Information Specialist III34,349 City of NorfolkLibrary Associate II31,504 Private SectorLibrarian Assistant29,600 City of PortsmouthLibrary Associate25,843 City of HamptonSenior Library Assistant24,321 City of Newport NewsLibrary Technician Sr23,440 City of ChesapeakeLibrary Assistant II22,172 Hampton min from average market min-11.44%

28. 28 General Employees – Senior Heating and Air Conditioning Mechanic Minimum LocalityTitleSalary Private SectorHVAC Mechanic II38,700 City of Virginia BeachHVAC Technician II34,349 City of Newport NewsMaintenance Mechanic II32,406 City of NorfolkOperating Engineer II31,504 City of HamptonSenior HVAC Mechanic30,592 City of PortsmouthBuilding Maint Spec II (HVAC)28,492 City of ChesapeakeNo Match Hampton min from average market min-3.46%

29. 29 General Employees – Telecommunications Specialist – Entry Level LocalityTitle Minimum Salary City of Virginia BeachCommunications Officer I29,619 City of HamptonPS Telecommunications Specialist28,341 City of ChesapeakeDispatcher Trainee26,975 City of Newport NewsDispatcher I, 91126,445 City of PortsmouthCommunications Dispatcher I25,843 City of NorfolkPublic Safety Telecomm Trainee24,871 Hampton min from average market min +5.95%

30. 30 General Employees – Park Ranger LocalityTitle Minimum Salary City of Newport NewsPark Ranger II33,715 City of ChesapeakePark Ranger I29,177 City of HamptonPark Ranger26,255 City of NorfolkNo Match City of PortsmouthNo Match City of Virginia BeachNo match Hampton min from average market min-16.51%

31. 31 Salary Study Results General Workforce Comparisons  Managerial/Professional

32. 32 General Employees - Buyer Minimum LocalityTitleSalary Private SectorBuyer II42,500 City of Virginia BeachBuyer I32,693 City of Newport NewsBuyer I31,735 City of ChesapeakeProcurement Specialist I31,558 City of NorfolkBuyer I31,504 City of PortsmouthBuyer31,411 City of HamptonBuyer29,034 Hampton min from average market min-8.64%

33. 33 General Employees – Senior Recreation Professional Minimum LocalityTitleSalary City of Virginia BeachRecreation Specialist II37,915 City of NorfolkSenior Recreation Supervisor I37,325 City of Newport NewsRecreation Program Coord, Sr35,845 City of ChesapeakeRecreation Specialist II34,133 Private SectorRecreation Coordinator32,800 City of HamptonSenior Recreation Professional31,358 City of PortsmouthRecreation Program Specialist29,916 Hampton min from average market min-10.47%

34. 34 General Employees - Accountant Minimum LocalityTitleSalary City of PortsmouthAccounting Specialist II46,409 City of Newport NewsAccountant II42,975 City of ChesapeakeAccountant II39,930 City of Virginia BeachAccountant II39,834 City of HamptonAccountant36,581 Private SectorAccountant I34,300 City of NorfolkAccountant II34,151 Hampton min from average market min-10.03%

35. 35 General Employees – Senior Systems Analyst Minimum LocalityTitleSalary City of Virginia BeachSystems Analyst II56,285 City of NorfolkProgrammer/Analyst V51,507 City of PortsmouthInfo Tech Systems Analyst II51,166 Private SectorApplications Systems Analyst II49,600 City of Newport NewsSystems Analyst II48,590 City of ChesapeakeSystems Analyst I48,582 City of HamptonSenior Systems Analyst46,090 Hampton min from average market min-10.03%

36. 36 General Employees - Architect Minimum LocalityTitleSalary City of Virginia BeachArchitect59,133 City of NorfolkArchitect III54,461 City of Newport NewsLicensed Architect51,600 City of HamptonArchitect49,781 Private SectorArchitect IV46,400 City of ChesapeakeNo Match City of PortsmouthNo Match Hampton min from average market min-9.60%

37. 37 General Employees – Recreation Professional LocalityTitle Minimum Salary City of NorfolkRecreation Supervisor35,138 City of Virginia BeachRecreation Specialist I32,693 Newport NewsRecreation Program Coordinator31,735 City of ChesapeakeRecreation Specialist I29,177 City of HamptonRecreation Professional26,882 City of PortsmouthNo Match Hampton min from average market min -16.48%

38. 38 General Employees – Crime Analyst LocalityTitle Minimum Salary City of Virginia BeachPublic Safety Analyst II43,970 City of NorfolkManagement Analyst I37,325 City of Newport NewsCrime Analyst II35,845 City of ChesapeakeCrime Analyst Specialist32,821 City of HamptonCrime Analyst31,358 City of PortsmouthNo Match Hampton min from average market min -16.36%

39. 39 Recommendations Resulting from Market Review 4% Merit Pay - Based on the prior year, an average 4% merit increase is anticipated  A pay range adjustment of 2% to all ranges is recommended to enable us to recruit qualified and talented employees and retain motivated, high- performing employees 3% General Wage Increase (GWI) for all employees to ensure that our competitive position within the region is maintained

40. 40 Recommendations Resulting from Market Review Re-classification/re-structuring of positions that were significantly below regional comparisons Adjusting pay rates and employment status for those WAE employees working 30 hours per week to Permanent pay rates and status Due to pending legislation, the cost for the minimum wage adjustment was calculated based on a proposal to increase the minimum hourly wage from $5.15 to $6.15 per hour

41. 41 Recommendations Resulting From Market Review The cost to implement the pay range and associated salary adjustments is as follows:  Merit4% avg. $3,062,497 (+2% range adjustment)  GWI3% 2,353,653  WAE to PPT 244,046  Minimum wage 34,174  Reclassification 104,092  Promotion Policy Change 180,051  Total$5,978,513

42. 42 Recommendations Resulting from Market Review Health Insurance  costs are estimated to rise by 13%  City will share the increase proportionately with employees Monthly increase Employee Only$ 10.02 Employee + 1 minor 18.54 Family 41.94

43. 43 Council Options In your budget worksheet, we will be seeking your guidance for the FY 08 employee compensation package Your options include:  Pay Do merit only Do both merit and 3% GWI Do merit and 1% or 2% GWI  Health insurance Fund health insurance as proposed Pick up 100% of increase The total compensation package will be based on the combination of options chosen in each of the package components