1. Report on Total Compensation
Presentation to the
City of Greenville and Greenville Utilities Commission January 11, 2011
Presented by:
THE WATERS
CONSULTING
GROUP, INC.
It is our understanding that the items on your agenda tonight relate to benefits and their costs, as well as discussion concerning modifying those benefits. We want to share with you the fact that this study relates to the issues being discussed tonight.
Dallas  Seattle  Austin  Cleveland

2. Today’s Discussion Classification and Compensation Study Status
Definition of Total Compensation
Analysis of Public and Private Sector Data
Methodologies
Summary of Total Compensation Comparison
Proposed Compensation Philosophy
Retiree Benefits Review
Specifically, our purpose tonight is to provide a brief update on the Classification and Compensation Study that began in ___ of this year. And, secondly, to discuss how this study can assist you in evaluating your benefit offerings and determine if changes are appropriate.
©2011 The Waters Consulting Group, Inc.

3. Focus on Total Compensation
Simply Defined: An Organization’s commitment to how it values its employees
Goal of the Philosophy: Attract, Retain, and Motivate Qualified Employees
Specifically, our purpose tonight is to provide a brief update on the Classification and Compensation Study that began in ___ of this year. And, secondly, to discuss how this study can assist you in evaluating your benefit offerings and determine if changes are appropriate.
©2011 The Waters Consulting Group, Inc.

4. Standard Components of Total Compensation
Direct Pay
Wages/Salaries
Benefits
Medical/Life Insurance
Retirement
Workers Comp
Paid Leave
Rewards
Merit Pay
Bonuses
©2011 The Waters Consulting Group, Inc.

5. Project Update COMMUNICATION Job Evaluation
Salary, Benefits, and Pay Practices Survey
Salary Structure
Job Analysis
System Administration
Goals &
Objectives
So, let’s begin with a brief overview of the study. (Explain the chart above.)
Compensation
Philosophy
COMMUNICATION
©2011 The Waters Consulting Group, Inc.

6. Review of Total Compensation Components
Greenville Compensation Components
Salaries
Benefits
Paid Time Off (Holidays, Vacation and Sick)
Health, Dental and Vision Benefits
Disability and Life/AD&D Insurance
Retirement, Social Security, Medicare, Deferred Comp.
Longevity Pay*
*discontinued for all Commission/City employees hired after June 30, 1993
Specifically, our purpose tonight is to provide a brief update on the Classification and Compensation Study that began in ___ of this year. And, secondly, to discuss how this study can assist you in evaluating your benefit offerings and determine if changes are appropriate.
©2011 The Waters Consulting Group, Inc.

7. Public Sector Methodology: Salaries
Selected comparable organizations
Collected salary data on 150 similar positions
Analyzed the salary data:
-Applied geographical adjustment
-Applied “aging” factor (to July 1, 2011) – 2.5%
-Average salary for each position surveyed
Determined average salary for selected positions included in Total Compensation Analysis
Specifically, our purpose tonight is to provide a brief update on the Classification and Compensation Study that began in ___ of this year. And, secondly, to discuss how this study can assist you in evaluating your benefit offerings and determine if changes are appropriate.
©2011 The Waters Consulting Group, Inc.

8. Public Sector Benchmark Organizations: Salary and/or Benefits Study
Asheville, NC
Cary, NC
Clarksville, TN
Concord, NC
Denton, TX*
Durham, NC
Fayetteville, NC
Flower Mound, TX*
Garland, TX*
Gastonia, NC
Greenwood, SC
Greenwood CPW
Greer CPW, SC
*EMS Providers
Guilford County, NC*
High Point, NC
Jacksonville, NC
Kissimmee, FL*
Kissimmee Utility Authority, FL
Lafayette, LA
Ocala, FL
Pitt County, NC
Rocky Mount, NC
Smithfield, NC
Springfield, IL*
Wilmington, NC
Wilson, NC
Specifically, our purpose tonight is to provide a brief update on the Classification and Compensation Study that began in ___ of this year. And, secondly, to discuss how this study can assist you in evaluating your benefit offerings and determine if changes are appropriate.
©2011 The Waters Consulting Group, Inc.

9. Public Sector Benchmark Organizations
Contacted but Unable/Declined to Participate
Albany, Georgia
Albany Water, Gas, and Light Commission
Alexandria, VA
Duluth, MN
Fayetteville Public Works
Florence, AL
Florence Utilities (Gas, Water, Wastewater, Electric)
City of Greer, SC
Hamilton, OH
City of Independence, MO / Independence Power & Light
Johnson City, TN
Johnson City Power Board
Naperville, IL
Orange County Water & Sewer Authority
Terrebonne Parish, LA
©2011 The Waters Consulting Group, Inc.

10. Public Sector Benchmark Organizations for Total Compensation Study
Asheville, NC
Cary, NC
Clarksville, TN
Denton, TX*
Durham, NC
Flower Mound, TX*
Garland, TX*
Greenwood, SC
Greer CPW, SC
Guilford County, NC*
High Point, NC
Kissimmee, FL*
Kissimmee Utility Authority, FL
Lafayette, LA
Pitt County, NC
Springfield, IL*
Wilmington, NC
Wilson, NC
*EMS Providers
Date of Data Collection:
June-October 2010
Key Factors in
Participant Review
Commonality of Positions
Competition for Jobs
Location/Proximity
Services Provided
Comparable in Size and Budget
Benchmark would work for City and Commission
Specifically, our purpose tonight is to provide a brief update on the Classification and Compensation Study that began in ___ of this year. And, secondly, to discuss how this study can assist you in evaluating your benefit offerings and determine if changes are appropriate.
©2011 The Waters Consulting Group, Inc.

11. Private Sector Methodology: Salaries
Included: Published Private Sector Salary Data
Direct match to Commission and City positions based on duties and requirements (Mercer, Watson/Wyatt, and Capital Associated Industries data utilized in WCG Market Analysis)
Data is available for clerical, technical, skilled, maintenance, professional and management positions
Determined average salary for employee groups included in Total Compensation Analysis
Rejected: Bureau of Labor Statistics Report “Employer Costs for Employee Compensation–June 2010,” issued September 8, 2010
Unable to identify appropriate matches
Includes many jobs that are not comparable to City and Commission jobs – e.g., jobs in sales and manufacturing
Caution by BLS regarding comparisons to public sector
Specifically, our purpose tonight is to provide a brief update on the Classification and Compensation Study that began in ___ of this year. And, secondly, to discuss how this study can assist you in evaluating your benefit offerings and determine if changes are appropriate.
©2011 The Waters Consulting Group, Inc.

12. Public Sector Methodology: Benefits
Collected data on costs of benefits
Utilized appropriate calculation method to arrive at cost per employee per year for each benefit
Calculated average employee cost per year for all benefits
Specifically, our purpose tonight is to provide a brief update on the Classification and Compensation Study that began in ___ of this year. And, secondly, to discuss how this study can assist you in evaluating your benefit offerings and determine if changes are appropriate.
©2011 The Waters Consulting Group, Inc.

13. Private Sector Methodology: Benefits
Included: Bureau of Labor Statistics Report for benefits analysis
Differentiate Based on Comparable Size : Table 8 of BLS Report, Employers with more than 500 Workers
Convert value of benefits to a “% of base salary”
- Reported as “Cost per Hour Worked”
- Convert to “% of Base Salary”
Example: Health Benefits
Specifically, our purpose tonight is to provide a brief update on the Classification and Compensation Study that began in ___ of this year. And, secondly, to discuss how this study can assist you in evaluating your benefit offerings and determine if changes are appropriate.
BLS Value = $3.42/hour worked
BLS Salary = $26.35/hour worked
Health benefits = 13% of base salary
©2011 The Waters Consulting Group, Inc.

14. Comparison to Public and Private Sectors
Public Sector
-Average salary for clerical, technical, skilled, maintenance, professional and management positions (from salary survey conducted by WCG for the Market Analysis)
-Value of benefits calculated by WCG for public sector based on data reported by public sector organizations
Private Sector
-Average salary for clerical, technical, skilled, maintenance, professional and management positions (from published surveys utilized by WCG in Market Analysis)
-Value of benefits for private sector based on applying “Benefit as a % of Base Salary” to the average private sector salary
©2011 The Waters Consulting Group, Inc.

15. Comparison of Average Total Compensation
Organization
Benefits as % of Base Salary
Base Salary as % of Total Comp
Benefits as % of Total Comp
Public Sector
48%
67.6%
32.4%
Private Sector
43.0%
69.9%
30.1%
City and Commission
47.4%
67.8%
32.2%
©2011 The Waters Consulting Group, Inc.

16. Comparison of Benefits as % of Base Salary
©2011 The Waters Consulting Group, Inc.

17. Comparison of Benefits as % of Total Compensation
©2011 The Waters Consulting Group, Inc.

18. Comparison of Salary as a % of Total Compensation
©2011 The Waters Consulting Group, Inc.

19. Policy Maker Direction Needed
A compensation philosophy that directs:
Prioritization of dollars between direct pay, benefits, and rewards
Relationship of pay structures to market
So, what does this have to do with your agenda tonight? We believe it’s important to have a competitive compensation package. We believe that have data about benefits provided by comparable organizations can give you facts on which to make a comprehensive comparison, which can lead to fact-based decision making on this issue. The compensation philosophy developed through this study can provide the framework within which you make decisions about changes in benefits. We believe you are a step ahead, in having this study and in looking at the issues.
©2011 The Waters Consulting Group, Inc.

20. Proposed Total Compensation Philosophy
GUC/COG will:
Provide a competitive base salary- not an aggressive one but a salary comparable to what an employee could get in its defined market
Provide affordable benefits that meet the general needs of employees while focusing on options to control costs
Continue benefits options for retirees that allow continued access while focusing on cost sharing and cost control measures
Consider additional options to encourage high levels of job performance
Focus on employee growth, motivation, and performance through professional development and training
©2011 The Waters Consulting Group, Inc.

21. Pay Policy Options Above Market Strategy
Range midpoints above market average pay
At Market Strategy (recommended)
Range midpoints at market average pay
Below Market Strategy
Range midpoints below market average pay
©2011 The Waters Consulting Group, Inc. 21

22. Benefits of Recommended Approach
Balances employer cost with compensation needs
Continues ability to compete in the market, attracting quality employees
Maximizes retention in key positions
Minimizes impact on current employees
Provides flexibility to respond to market changes
Clearly communicates values to all employees
Offers employees the opportunity to grow and develop
Continues the focus on employee recognition and pay for performance
©2011 The Waters Consulting Group, Inc.

23. Pay Policy Options Above Market Strategy
Range midpoints above market average pay
At Market Strategy (recommended)
Range midpoints at market average pay
Below Market Strategy
Range midpoints below market average pay
©2011 The Waters Consulting Group, Inc. 23

24. Next Steps Decision Regarding Pay Policy
Development of Pay Ranges Based on Pay Policy Decision
Reviews by Leadership Team
Options and Costing for Implementation
Adoption of Plan
Final Report Development and Presentation
Communication and Training
©2011 The Waters Consulting Group, Inc.

25. Retiree Health Benefits
©2011 The Waters Consulting Group, Inc.

26. Retiree Benefits: Methodology
Public Sector: Gathered public sector data on retiree benefit offerings and cost
Private Sector Retiree Benefit Offerings: Available in Capital Associated Industries Survey
Retiree Costs: Cost data not included in Bureau of Labor Statistics Report
Specifically, our purpose tonight is to provide a brief update on the Classification and Compensation Study that began in ___ of this year. And, secondly, to discuss how this study can assist you in evaluating your benefit offerings and determine if changes are appropriate.
©2011 The Waters Consulting Group, Inc.

27. Comparison of Retiree Medical Benefits to Private Sector
Employer
Medical Benefits Under 65 – Average % of Premium Paid by Employer -
“Retiree Only”
Medical Benefits Over 65 – Average % of Premium Paid by Employer –
Private Sector – CAI Survey – “Over 500 Employees” - PPO
34% provide health benefits to retirees.
Cost Share is 67%
Cost Share is 95%
Greenville City/Commission
©2011 The Waters Consulting Group, Inc.

28. Comparison of Retiree Medical Benefits to Public Sector
Employer
Medical Benefits Under 65 – Average % of Premium Paid by Employer -
“Retiree Only”
Medical Benefits Over 65 – Average % of Premium Paid by Employer –
Annual Cost of Health Benefit/Retiree/ Year
Public Sector Benchmarks who pay a % of premium
69% provide health benefits
Cost Share is 80%
44% provide health benefits
Cost Share is 81%
$8,801
Greenville City/Commission
Cost Share is 95%
$4,975
©2011 The Waters Consulting Group, Inc.

29. Cost Containment Measures
Question: Are you considering taking any steps to reduce the cost of retiree benefits?
Responses:
6 of 14: No changes at this time.
4 of 14: Increasing amount retirees pay for health benefits
2 of 14: Within last two years, retirees hired after a certain date will not receive health benefits
1 of 14: Must be 62 when retiring to be eligible to receive health benefits and organization only pays for three (3) years – until retiree eligible for Medicare
1 of 14: Evaluating establishing a health clinic for employees and retirees
Specifically, our purpose tonight is to provide a brief update on the Classification and Compensation Study that began in ___ of this year. And, secondly, to discuss how this study can assist you in evaluating your benefit offerings and determine if changes are appropriate.
©2011 The Waters Consulting Group, Inc.

30. Summary Of Retiree Benefits Analysis
Wide variety of:
- Health benefit offerings for retirees
- Cost-sharing with retirees
- Eligibility requirements for health benefits
No definitive conclusion can be drawn
Philosophy of each organization should guide retiree benefit decisions
So, what does this have to do with your agenda tonight? We believe it’s important to have a competitive compensation package. We believe that have data about benefits provided by comparable organizations can give you facts on which to make a comprehensive comparison, which can lead to fact-based decision making on this issue. The compensation philosophy developed through this study can provide the framework within which you make decisions about changes in benefits. We believe you are a step ahead, in having this study and in looking at the issues.
©2011 The Waters Consulting Group, Inc.