1986 07 14 CC Minutes, Special60714-1
MINUTES OF THE SPECIAL MEETING
OF THE CITY COUNCIL OF THE CITY OF BAYTOWN
July 14, 1986
The City Council of the City of Baytown, Texas, met in
special session on Monday, July 14, 1986, at 5:00 p.m. in
the Council Chamber of the Baytown City Hall with the
following attendance:
Fred T. Philips Councilman
Jimmy Johnson Councilman
Perry M. Simmons Councilman
Ron Embry Councilman
Roy Fuller Councilman
Rolland J. Pruett Councilman
Emmett 0. Hutto Mayor
Fritz Lanham City Manager
Eileen P. Hall City Clerk
The meeting was called to order with a quorum present,
and the following business was conducted:
Receive Report of Waters, Trego & Davis Concerning Personnel
Study
Jeff Grady, with Walters, Trego & Davis, was present to
review the report with council. He explained that the
company had initiated the study by visiting with the council,
city manager and department heads to get a feel for the
organization. A key element in the whole process is communi-
cation. Representatives of the company met with the employees
to explain how the study would be implemented and to answer
questions.
The foundation of the entire process is the job descrip-
tions. That is the information from which you can go in
various directions. It serves as a basis of communication
between the employee and the supervisor. It provides
information to perform the salary surveys, and allows one to
compare jobs to each other. Each employee had the opportunity
to complete a job description questionnaire which asked
things like what are the major elements of your job, what
kind of environment do you work in, what are the various
responsibilities of the job, etc. There were numerous
opportunities for review of that.
Once the job descriptions were developed, the process
of developing a salary structure was possible. He mentioned
that a number of people in working with compensation systems
are familiar with what is called a market driven system.
In this system, there is a particular job and through a
survey of the market, a determination is made that the market
for that particular job is below or over, the structure is
adjusted accordingly. The City of Baytown is moving away
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Minutes of the Special Meeting - July 14, 1986
from a solely market driven system into a system that combines
the market with internal equity. In this system you con-
sider what the market pays for the jobs, and how do those
jobs compare with each other within the organization, not
doing either independently of the other.
To develop.that system, you start off going in two
different directions. The first phase was the salary survey
to determine where the city's jobs compared to the market.
Here the data was obtained from area cities and from some
of the area industries. The data from the private sector
is more limited than that from public sector. Jobs are
benchmarked for survey, not all jobs are surveyed. As
a general rule of thumb, about 30% were surveyed. This
survey determines that the City of Baytown is close to
the market. The employees had been divided into two
categories. System A was representative of managers
and professionals and System B which included the majority
of employees. System B was at 98.5% of the market which
means that according to the jobs surveyed and the market
defined, city salaries under System B are approximately
1.5% behind the market. This means that the city if very
close to what the market will bear. System A jobs were
down abut 92.3% which means that these were a little further
behind, about 7.7%.
While the salary survey process was going on to deter-
mine external equity, another process was going on to
determine internal equity. How does the job stack up
compared to other jobs? Here is where jobs were divided
into System A and System B.
A compensable or point factor system was used to
determine the worth of the job. To actually weigh the
jobs, committees of employees were involved. System A
had nine people and System B had fifteen. Both committees
met over a two to three day period. The committees were
selected to provide a cross-section of the entire organ-
ization, the object being not to rely solely on the
questionnaire, nor soley on consultants knowledge, nor
solely on the department head's knowledge. There should
be a mixture to develop a good product. The committees
ranked each job using the factors provided and those
weights were provided to determine total points for each
job. The result is that the jobs then can be ranked from
top to bottom.
At this point in the process, internal and external
equity are put together. On page 2.51 salary structure
is discussed. Salary structure is nothing more than what
is the job worth. Any job has a range which the organization
is willing to pay. There is a minimum for that job, a mid-
point and a maximum. The idea was to develop a structure
using the job evaluation data and using the salary survey data.
iN
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Minutes of the Special Meeting - July 14, 1986
The concerns that the company addressed are the width
of the salary range. The public sector is notorious
for being very narrow in ranges; therefore, the ranges
are now wider. Also, mid -point progression was addressed,
that is how much of a percentage raise is there from
the mid -point of one range or grade to the next? It
is possible for a senior employee in a lower level job
to be making more than his supervisor. That is acceptable
in some instances, but can be taken too far.
Exhibit C of the report provides the actual proposed
structure that has been developed. System A starts with
Grade 40 and ends with Grade 50 with the minimum, mid-
point and maximum salaries for each of those grades.
System B starts with Grade 14 through Grade 26 with
the minimum, mid -point and maximum salaries for those
jobs. The result is that each job within the city
organization is fixed into a grade with a new proposed
salary structure.
While the structure is being developed, the con-
sultants began the work on the development of a per-
formance appraisal system. This system will allow a
person's performance in the job to drive his potential.
Councilman Embry inquired how the study team
weighed the public sector market input against the
private sector market input.
Mr. Grady responded that both were put on the
same type of plot. The main thing is that with a
private sector job, one must consider if the job matches
that in the public sector. There is always going to
be a job that someone may decide to go to, but that
does not qualify as the market if the jobs are not
comparable. When going into the private sector, the
primary concern then is, do the jobs match? There
were matches for secretarial jobs and maintenance
personnel, but you get outside of that and there isn't
a lot of good data. In the private sector, there are
no street maintenance workers or building inspectors.
Councilman Embry inquired if the data included
time in the job, and Mr. Grady responded that it only
included actual salaries paid. The group did look
at the benefits but only to determine if the benefits
were reasonable in comparison to others. In most
cases, benefits are fairly similar.
Now the city has a structure with minimum starting
salaries based on a performance appraisal driven
system, which says that council with the help of the
staff will say that there is so much available for
salaries. Therefore, if X is equal to 4%, then the
exceptional performer can potentially get 5% or 6%
and the performer who is not where he should be would
get 1% or 2%, but the average will get 4%.
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Minutes of the Special Meeting - July 14, 1986
To develop the criteria for determining exceptional,
average and below average performers, job families are
developed. Eighteen job families were developed for the
organization. Jobs that were similar in nature were gropped
together. There were a few jobs that had enough people
in them to have a manual to themselves, for instance
police and fire. Employee groups developed the criteria
for the manuals.
The city will be provided with a software program
called Computer Assisted Performance Evaluation (CAPE)
that runs on the personal computers. This software will
enable personnel to enter that data and keep track of it:
It can determine if the raters are being too lenient or
too severe in their ratings.
Once the structure and performance appraisal manual
are developed, the last thing -that the group will provide
are some salary and performance appraisal guidelines.
Two days of training have been completed thus far, but
not all the supervisors have been through the training.
The purpose is to get all the supervisors together and
show them how it works. Supervisors must be told that
performance evaluation is a relationship. It is a relation-
ship that fosters communication..because the employee will
be told immediately when something is done correctly and
immediately when something is done incorrectly. There will
be an exchange of information throughout the rating period.
The group filmed five different scenes to illustrate points
to be made during training.
Council has the option of phasing out the old system
and adopting the new one as of October 1, moving the new
structures into place with new titles.and on October 1,
begin doing performance appraisals. Do those from October
1 through March, but do that one solely for coaching and
counseling. Identify the problem areas, and then look at
from April through September as being the first six-month
cycle for actual performance based increase.
As part of this process, there are jobs that are
identified as being below the minimum. It is recommended
that those positions be moved to minimum as soon as possible.
In System A, there are five employees below the minimum.
The annual cost to adjust those salaries to minimum is
$5,000. In System B, there are thirty (30) employees below
the minimum and the annual cost to adjust those salaries
to minimum is $23,000.
As part of the process, there are those jobs that are
historically over valued. The company recommended that
council freeze salaries of those employees at their current
levels. As the system grows, each year the structure will
be adjusted as the market moves and eventually that structure
will catch up. There are no employees in System A above
the maximum. Within System B, there are thirty-three (331
who are at maximum'for a total amount on a monthly basis
of approximat-ely $3,000. The average of those 33 is at
$90 a month. Both systems are very close to what the group
expected.
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Minutes of the Special Meeting - July 14, 1986
Civil Service employees that are under 1269m, Police
and Fire, that statute prohibits the use of pay differ-
ential based on performance. Therefore, the aspects
of the program that deal with pay for performance would
not apply to police officers and firefighters; however,
this would serve as a tool for coaching and counseling.
The council has several options:
1. If there is no money available, there are no
salary increases.
2. Fund one across the board increase.
3. Fund one performance base increase either
once a year or one cycle a year.
4. Fund two performance base increases.
5. A combination.
Which options are based on three assumptions:
a. No across the board increases.
b. Bring all employees who are currently below
the minimum and meet minimum job requirements to
the minimum at a cost of $32,000 annually.
C. Funding a salary increase of up to three (3%)
percent on basis of performance. Employees
would be eligible for increases based on their
anniversary dates beginning in April. From
October to March, all employees would be
evaluated for purposes of counseling and then
from April to September, everyone would be
evaluated a second time and that evaluation
would enable an employee to receive an average
of three (3%) percent.
Whatever council does for non -civil service employees,
should be done for civil service employees. If the three
(3%) percent figure is used for non -civil service employees,
then the three (3%) percent would need to be included as
a cost of living increase for civil service employees.
Upon completion of the presentation by Mr. Grady,
council made certain inquiries concerning the report.
Councilman Embry requested that the group go back to compare
jobs in the private sector such as financial institutions,
commercial establishments and insurance companies to those
jobs held in the public sector. Council instructed the city
manager to develop a budget that would reflect monies
necessary to bring those positions below minimum that meet
the requirement of the job to minimum. Council had no
problem with implementing the pay for performance study on
October 1 as a tool for coaching and counseling and to have
a structure by which to hire. However, no direction was
given the administration with regard to attempting to
implement the actual pay for performance since council has
not been presented with the proposed budget for 1986/87.
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Minutes of the Special Meeting - July 14, 1986
Adjourn
There being no further business to be transacted, the
meeting was adjourned.
Eileen P. Hall, City Clerk