1. 2014 Total Compensation Survey2014 Total Compensation Survey August 1, 2012 Lidia Santiesteban OSHRD Compensation 1

2. Objective 2 Discuss an overview of the 2014 Total Compensation Survey and recommended improvements. Provide the group with projected deadlines of steps in the critical path of the survey process. Discuss agencies’ desired changes to the process and ideal end product.

3. 2014 TCS Process Improvement Objectives Streamline and enhance our salary survey process by: – Aligning methodology with industry standards, – Minimizing the scope of the survey to facilitate responses, – Developing appropriate criteria to target most comparable participants, – Revising the benchmark selection process, – Modernizing the benchmark descriptions, and – Reconsidering and validating the indexing process. 3

4. What Needs Fixing… 4 Every two years we use a consultant to conduct a customized compensation and benefits survey at a cost of ~ $147,000. The survey is cumbersome; the benchmark descriptions are long, wordy and not consistent with professional survey standards. We do not use the benefits component of the survey results for any identifiable purpose. We use the compensation component of the survey results to determine the market rates (in 2006, 2008 and 2010, neither the salary structure nor individual salaries were adjusted as a result of the market comparison). It is not used for salary setting purposes for new classes or for new hires. It does not include WMS or Exempt positions and it is not used in setting market based salaries for this group.

5. Criteria To Identify Participants: 5 Current TCSIndustry StandardsRecommendations At least 50 employees. Able to provide base salaries and benefits/pay practices information. Able to easily self identify their positions to two or more benchmark descriptions. The selected participant base ensures representation by industry type and geographic location across the state. Keep the participant base as constant as possible to conduct market trends analysis from survey to survey. In similar industries. In the market location where you hire from and lose employees to. Have similar revenue levels and organizational structure. Apply standard practice approach listed above. Collect sector sensitive data to include private and public employers with whom we directly compete for talent.

6. Criteria For Out-Of-State Participants: 6 Current TCSIndustry StandardsRecommendations Per capita state expenditure. Per capita income average hourly earnings. Number of full-time equivalent state employees per capita. Per capita state expenditure for education. N/AState population. Similar revenue levels. Individual income levels (similar population demographics). Number of full-time equivalents. Unemployment rate. Cost of living relative to the national average in comparison to Washington State (similar individual spending). Real Domestic Product (Similar economic trends) – The GDP is the value of all goods and services produced.

7. Benchmark Selection Process: 7 Current TCSIndustry StandardsRecommendations It is usually found in large numbers in both state government and among the employers surveyed, can be readily identified and thus compared, and the results can be used for determining the state’s competitiveness in pay for a relatively large number of other job classes, or the data are needed to establish rates for a problem area of employment (recruiting/retention difficulty). Identify job segments; such as, occupational groups or job families (i.e. career tracks or ladders) and anchor points that exemplify the essential knowledge, experience, skills and abilities to fully perform the work. Jobs with similar progressive education, skill and experience that characteristically cross- pollinate talent. Jobs an employee can move laterally or be promoted without requiring additional specialized training. Use job content, occupation, job family, career path, crosspollination, ranking (based on complexity of responsibilities and minimum requirements) and stronger, same and weaker relationships for both.

8. Job Indexing Process: 8 Current TCSIndustry StandardsRecommendations The class is in the same class series as the benchmark, or There have been traditional, recognized, or accepted salary relationships (internal alignment) in the state service, or There has been a history of employee movement between classes, such as through promotions, demotions or transfers, or The nature of work, job preparation, minimum qualifications and major skills are similar, or Strong organizational, or Relationships are identified through an intensive evaluation process such as a broad classification study. Identify job content and determine occupational group, job family and career path. Rank jobs within the same occupational group, job family and career path – these may be weaker, same or stronger in comparison. The nature of work, job preparation, minimum qualifications and major skills are similar or in a reasonable progression. There has been a history of employee movement between classes through promotions, demotions or transfers (cross-pollination). Use job content, occupation, job family, career path, crosspollination, ranking (based on complexity of responsibilities and minimum requirements) and stronger, same and weaker (+ = -) relationships for both. Example Occupation = Engineering Job Family = Civil Engineering Career Path = Civil Engineer 1, 2, 3

9. Survey Scope: 9 Current TCSIndustry StandardsRecommendations Public and private sector in the state of Washington and selected other states based on identified criteria. Base compensation (cash) and welfare benefits (content, not value). Actual salaries are used to determine salary comparability. Benchmarks selected based on established criteria (2010 survey included 50 in-state and 23 out-of-state benchmarks). Used to determine prevailing rate. N/ATarget which benchmarks go to which participants. For example: Send only engineering benchmarks to engineering firms, legal benchmarks to law firms, and IT benchmarks to information technology firms. Reduce the bulk of the survey by using shortened benchmark descriptions that focus on the body of work and removing benefits from the survey (find other sources of data for benefits). Survey for salary ranges (min, mid & max).

10. Application of Survey Results: 10 Current TCSIndustry StandardsRecommendations We use the current survey data to support labor contract negotiations. Determine prevailing rate as required by RCW. In support of labor negotiations. Adjust pay structure and adjust pay components. Set salary for new employees and make routine pay decisions. Set pay ranges for new jobs. Make changes to components of the pay structure. Determine the merit increase trend. Internal pay alignment or realignment. Align pay policies to market. Apply industry standards whenever possible even if not able to adjust pay to prevailing rate. Example: Change pay schedules to provide for additional growth without a general pay increase. Use to set pay ranges for new classes. Use for setting individual pay. Use for internal alignment. Include WMS and Exempt benchmarks.

11. Discussion Period 11 What is your agency’s current/desired use/applicability of the survey? Of the changes we are undertaking, what is the most important to your agency? In an ideal world what would the final survey product do for your agency?

12. Work Briefing Schedule 12 Occupational GroupBenchmark & Indexing Meetings Administrative Services9/4/2012 8:30 a.m. – 10:00 a.m. Financial Services9/4/2012 10:30 – Noon Information Technology9/4/2012 1:00 p.m. – 2:30 p.m. Legal Services9/5/2012 8:30 a.m. – 10:00 a.m. Regulatory Services9/5/2012 10:30 – Noon Protective Services & Safety Compliance9/5/2012 1:00 p.m. – 2:30 p.m. Institution, Food & Personal Services9/6/2012 8:30 a.m. – 10:00 a.m. Healthcare9/6/2012 10:30 – Noon Social Services9/6/2012 2:00 p.m. – 3:30 p.m. Information Services9/11/2012 8:30 a.m. – 10:00 a.m.

13. Work Briefing Schedule 13 Occupational GroupBenchmark & Indexing Meetings Education & Library Services9/11/2012 10:30 a.m. – Noon Retail Operations & Marketing9/11/2012 1:00 p.m. – 2:30 p.m. Marine, Ferries & Aircraft9/11/2012 3:00 p.m. – 4:30 p.m. Recreation & Athletics9/12/2012 8:30 a.m. – 10:00 a.m. Agricultural Operations9/12/2012 10:30 a.m. – Noon Science & Engineering9/12/2012 1:00 p.m. – 2:30 p.m. Maintenance, Trades & Labor9/12/2012 3:00 p.m. – 4:30 p.m.

14. Survey Timeline 14 August 2012 – Communicate 2014 TCS plan to Labor Relations Office, unions, agencies and higher education institutions. – Finalize draft benchmark descriptions and indexing relationships. September 2012 – Hold benchmark and indexing briefing sessions for agencies and higher education institutions. October 2012 – Identify survey participants. – Gather benchmark and indexing feedback from agencies and higher education institutions. November –December 2012 – Hold benchmark and indexing briefing sessions for unions. – Receive benchmark and indexing feedback from unions. – Receive feedback on survey participants from all stakeholders.

15. Thank you! 15 Questions?