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HomeMy WebLinkAbout2021-4020Contract # 2021-4020 PROPOSAL CLASSIFICATION AND COMPENSATION STUDY FOR THE CITY OF COLUMBIA HEIGHTS, MINNESOTA 0 2/20/2020 Prepared by: Keystone Compensation Group LLC 3316 Ensign Ave N Minneapolis MN 55427 Telephone: 612-810-3522 E-Mail:5abboud@ke ston�amp.net Web: www.ke stonecam .net KEYSTONE COMPENSATION fiwupLL. linking business and rewa Contract # Compensationssification and2021-40 20 Study TABLE OF CONTENTS Topic page # Background and Objectives------------------------------------------------------------------------------ 3 Project Summary and Deliverables-------------------------------------------------------------------- 3 Framework for Conducting this Compensation and Classification Study ---------------------- 4 Steps for Completing This Study---------------------------------------------------------------------- 5 Project Team and Related Experience---------------------------------------------------------------- 7 Project Budget Summary and Estimated Timeline ------------------------------------------------ g Client Data Confidentiality Statement------------------------------------------------------------------ 9 Business Description of Keystone Compensation Group LLC------------------------------------- 9 ProjectApproval------------------------------------------------------------------------------------------- 10 Biographies of Project Team---------------------------------------------------------------------------- 11 E $ ■ , +TO ■ Febr a� r24-02.0 ,,, Classification and Compensation Study BACKGROUND AND OBJECTIVES The City of Columbia Heights (City) is requesting a proposal from Keystone Compensation Group LLC for providing compensation consulting services. These services include high-level review of job descriptions, evaluating jobs using the Keystone Job Leveling System, conducting a competitive market analysis, and preparing recommendations for updating the City's compensation program. City leadership would like to ensure internal equity compliance while offering competitive pay in comparison with comparable cities in the metro area. The City has approximately 110 full-time employees in about 67 job classifications. Several bargaining units represent different employee groups. The City currently uses a step pay program to administer compensation and the Hay Job Evaluation System to evaluate and slot jobs into grades. The compensation program is currently in compliance with the State Pay Equity requirements. This proposal outlines our understanding of the scope of this study, steps we would take to meet its objectives, approximate timeline, and an estimate of the financial budget to complete the project. PROJECT SUMMARY AND DELIVERABLES 1. Conduct an initial meeting with the City Manager and HR Manager to confirm objectives of this program review and establish guidelines for compensation program strategy going forward. Discuss feedback from managers and be mindful of it during this study. 2. Review the current job descriptions and confirm contents. This step is completed internally with assistance from the consultant. 3. Evaluate City jobs using the Keystone Job Leveling System. Calibrate results in consultation with City Manager, HR, and department heads. 4. Collect market data from a select peer group of comparable cities. 5. Conduct comparisons of internal pay with the market and summarize findings. 6. Calibrate the current salary ranges with the market and confirm internal equity. Compliance with State Pay Equity is key to this step. 7. Prepare recommendations for revising the current salary ranges based on internal job evaluation results and market analysis. 8. Prepare an estimate for the budget impact of the recommended salary ranges on payroll budget and individual pay. This analysis is used to create a transition plan. 9. Prepare a summary report to outline project steps, methodology, and analysis results. Information provided to City HR electronically. Contract # 2021-4020 Contract # 20 1-4020 FRAMEWORK FOR CONDUCTING THIS COMPENSATION AND CLASSIFICATION STUDY Meet with City Leadership to Discuss Compensation Program Strategy Collect Job Descriptions Evaluate Jobs Using and City Camp Data I{eystone Job Leveling System Calibrate Jobs and Collect Market Data Prepare Statistical Grade Assignment from Peer Group Cities Analysis for Market Data Prepare Pay Calibrate Salary Estimate Potential Impact Ranges Internally Comparisons and and Externally with on Payroll Budget Confirm Internal Equity the Market (transition Ulan) Develop Study Prepare Present Results to Recommendations Summary Leadership and Report. City Council Contract # 2021-4020 Co' C .ra ca�io# n 021sat on'StZf� STEPS FOR COMPLETING THIS STUDY The lead consultant would start this project with a planning meeting with the HR Manager and City Manager. Keystone proposes the following steps for completing this study: 1. INITIAL PLANNING MEETING a. Review current pay practices and confirm deliverables from this study. This includes gathering current compensation program information and discussing important feedback on the current system. b. Discuss methodology for selecting peer group cities and collecting market data. This discussion will include establishing the criteria for selecting other cities with which to compare City wages (proximity, population size, and talent source). c. Discuss and confirm pay structure design, including number of grades and steps, and alignment with the market. Address the need for different bargaining groups. d. Give high level presentations to department heads and City Council. 2. HIGH-LEVEL OVERVIEW OF JOB DESCRIPTIONS a. At our initial meeting with the City leadership we learned that job descriptions are current. Some jobs may need to be updated. This step would be completed internally with assistance from the consultant. b. The consultant would keep some important observations about job descriptions during the job evaluation process. We would share these observations with the HR Manager. c. Use final descriptions to evaluate jobs and assign them to grades. 3. EVALUATE CITY JOBS USING THE KEYSTONE JOB LEVELING SYSTEM a. Keystone Job Leveling System uses compensable factors recognized globally by most of the job evaluation systems. Keystone Consultants have significant experience and understand the principles used to design and implementing job evaluation systems. b. Use the Keystone Job Leveling System to evaluate City jobs and review results with the City project team. c. The final job evaluations are combined with market data using trendline analysis in order to update the salary ranges and confirm job grades. 4. COLLECT MARKET COMPENSATION DATA FROM THE LEAGUE OF MN CITIES SURVEY a. Keystone would collaborate with City leadership to develop and confirm a peer group to use for the competitive market analysis. b. Consultant collects market data from the LMC survey and use job descriptions to match City jobs to the survey. We would review market data and may call participants to get clarifications on matches if needed. Contract # 2021-4020 February 20, 2020 Classification and Compensation Study 5. PREPARE COMPARISONS WITH THE MARKET AND CALIBRATE SALARY RANGES a. Use market data and job evaluation points to analyze the current ranges and compare them with the market. b. Prepare scatterplots and trend lines to illustrate the City's pay position relative to the market. This step helps identify anomalies or potential issues with internal equity compliance (State Pay Equity Act). c. Use market data and job grades to calculate and recommend new salary ranges. d. The City would like to maintain the current six bargaining units schedules and offer competitive pay based on market. We would prepare scenarios to offer these schedules. e. Prepare a summary of findings and review it with City project team. 6. PROVIDE AN ESTIMATE FOR THE BUDGET IMPACT TO IMPLEMENT THE NEW RANGES a. Assign employees to their new pay steps and evaluate their wage changes. b. Identify areas where salary actions maybe needed and provide recommendations. c. Create an overall summary of the budget impact for transition to the new ranges. d. We understand that for budgeting purposes, City would like this study completed by August 2021 or earlier. 7. PREPARE THE FINAL REPORT The consultant would prepare a summary report that includes study methodology, benchmark analysis results, specific observations, and recommendations. All information would be provided to City HR electronically. 8. ONGOING CITY SUPPORT We approach this study as a business partner invested in the success of this program and implementation. Our goal is to ensure knowledge transfer from the consultant to City staff and to help the City sustain the program internally going forward. We would be available to support the City after project completion and to answer questions. Simple and short inquiries are answered at no additional cost, while more substantial work would be quoted separately. ,ontract # 2021-4fl2� Classification and Compensation Study PROJECT TEAM AND RELATED EXPERIENCE This project would be led by Dr. Saado Y. Abboud as the first contact for the City. Stefan Peterson, a Sr. Consultant with Keystone, assists with job description review and provide benchmarking and analytical support to this project. Among the specific experience that Saado has related to public sector compensation and this study: 1. Consulted with many counties and cities in Minnesota. Clients include the City of St. Louis Park, City of Prior Lake, City of Lino Lakes, City of Monticello, City of Shakopee, Scott County, Dakota County, Anoka County, Carlton County, McLeod County, Cook County, Crow Wing County, City of Minneapolis, City of Rochester, City of Hutchinson, and others. 2. Extensive experience with developing and implementing compensation programs in various industries including government, non-profit, and private sectors. 3. Currently manages an annual compensation survey with 14 major counties and large cities in Minnesota covering over 170 jobs. Counties and cities like Hennepin County, Ramsey County, Dakota County, Anoka County, St. Louis County, Olmsted County, Carver County, Scott County, Sherburne County, Stearns County, City of Rochester, City of Bloomington, and other agencies participate in this annual market study. 4. Managed the annual market survey for Minnesota metro cities and counties for over 12 years (Stanton Group Metro Survey). This survey is currently part of the League of MN Cities Survey. 5. Saado also authored several articles for the WorldatWork Journal including one on performance -based compensation program implemented at Scott County. He received Author of the Year Award for writing this publication. 6. Many years of experience as a corporate compensation manager, professional consultant, and Board leadership of several professional compensation associations. _Contract # 2021-4020 _1'cbruary 20, 20 Classification and Compensation Study PR0jECT BUDGET SUMMARY AND ESTIMATED TIMELINE Budget Estimate for the City of Columbia Heights Compensation Program Review (2-20-2020) Step Description Tentative Step Owner Notes Budget Thneline Estimate Initial planning meeting City & Onsite meeting with City HR to 1 project information Weeks 1 3 Keystone confirm plan. See Step #7 for collection, strategy, and meetings with City Council and timeline approval Department Heads $5,750 City has 67 job classifications. :High level review of job Weeks 4-10 Keystone 2 descriptions and provide Internal leveling review ;suggestions, if needed Includes calibration of job levels 3 EVya uate jobs using Keystone ]Job va uation ys em Weeks 8-15 Keystone with. City Leadership 4 survey jobs using LMC Weeks 12 19 Keystone Use trendlines/analytics to help explain findings Compensation analysis, 5 update structure, compliance Weeks 20-23 Keystone $8,500 Summarize practical implications check, recommendations 6 i�lrar 6�attil}on Week 24 Keystone Assign employees to new steps and estimate transition impact Meet with City leadership Varies City & Keystone Onsite meetings at the beginning 7 team and Council to discuss project plan and results and end of the study $5,250 Electronic copies of work g sFilielentation Varies Keystone documents delivered to HR As needed 9 Follow up and final check -in Varies K(gtYAe Timeline may vary depending on Weeks 1- 25 $19,500 availability of information to : Kevstone Notes Keystone would invoice the City in three installments based on project milestones. The estimate in this proposal is a not -to -exceed amount and is based on project scope. Timeline is a placeholder for steps. Upon accepting proposal, consultant would prepare a project plan with more precise timeline and desired completion date. Keystone Compensation Group LLC amContract # 202120 Febrgary 20, 2020 Classification and Compensation Study CLIENT DATA CONFIDENTIALITY STATEMENT Keystone treats information and materials we obtain from our clients during our engagement as confidential information. We would not share it with a third party except as directed by our clients or as required by law. Furthermore, we do not disclose information obtained from our clients with the public media or press. Keystone expects our clients to maintain strict control over all proprietary systems obtained from us and to limit disclosure to others, who need to know, within their entities according to Minnesota Statute-13.435 (types of data not considered public). BUSINESS DESCRIPTION OF KEYSTONE COMPENSATION GROUP LLC Keystone Compensation Group LLC is a professional consulting firm specialized in market research, design, development, and implementation of compensation programs. While we place significant emphasis on market research and designing compensation programs, we also appreciate the importance of supporting our clients with managing and communicating these programs. With an average experience of more than 25 years in the field, our consultants have acquired significant knowledge and expertise in various industries and organizations. We devote significant time upfront to better understand the challenges facing our clients. In addition, we view compensation budget as a strategic investment that organizations make in their employees. Our role is to help clients manage this investment to better attract, motivate, and retain qualified talent and improve their business outcomes. Contract 2021-4020 Classification and Compensation Study PROJECT APPROVAL This proposal is prepared based on our understanding of the scope of the services requested and conversations with the City Manager and HR Manager. Additional work outside of the scope may be priced separately upon request from the City. We can start this study within 2-3 weeks of receiving approval for this proposal and upon receiving the information needed to get started. We are privileged to be considered for this project and look forward to the opportunity to work with you on this important study! If you have any questions, please call Saado Abboud at: 612.810.3522 or email him at: sabboud@keystonecomp.net . If you approve this proposal, please sign below and return a copy of this page to: Saado Abboud at: sabboudPkey8onecomp.net City Authorized Signature: Kelfi Bourgeois Q ty Manager 07/29/2020 Approved by i le Date Contract#_202.1-4020 Februarv_20, 2020 Classification and Compensation Study Saado Y. Abboud, Ph.D. Keystone Compensation Group, LLC Principal Consultant 3316 Ensign Ave North Minneapolis MN 55427 Tel: 612.810.3522 Sabboud@keystonecomp.net www.keysto neco mp. net Saado is a founding partner of Keystone Compensation Group LLC with over twenty-five years of experience in the field of compensation. His experience involves all phases of compensation program development, strategy, design and management. His clients include organizations in private, public sector, and nonprofit. He consults with top executives and board of directors on executive compensation design and management. His combined experience in managing compensation programs within a Fortune 100 company and as a professional consultant gives him a balanced view while working with his clients. Most recently Saado served as Vice President, Compensation Practice for Stanton Group, a regional consulting and survey research firm in Minneapolis. He worked closely with business and HR leaders as well as Boards of Directors to develop rewards programs for executives, middle management, and other employees. Saado's compensation experience includes developing base pay, short-term and long-term incentive programs to attract and motivate employees. He also helps his clients with communicating reward programs. Prior to joining Stanton Group, Saado spent several years in a senior leadership position at Best Bu, Co. with responsibilities over corporate compensation programs as well as executive compensation Among his other accomplishments was taking a key role in restructuring the HR function and leading several technology initiatives to support business growth. He contributed articles and interviews to several trade publications, including Workspan, a monthly journal for total rewards professionals, Minnesota Bankers News and the Twin Cities Business Journal. Early in his career, Saado taught at the college and graduate school levels, domestically and abroad. He has a doctorate and master's degrees from the University of Minnesota in Quantitative Analysis. He also received his MBA degree in Corporate Finance from the University of St. Thomas. Saado is a certified compensation professional (CCP), a member of WorldatWork, and Chairman of the Local Network Advisory Board for WorldatWork. Saado also served for several years on the Twin Cities Compensation Network Board of Directors. Qatractand sincation# 2021-40Compensation Stu?0 Stefan K. Peterson, UP Keystone Compensation Group, LLC Principal Consultant 3316 Ensign Ave North Minneapolis MN 55427 Tel: 952.270.1114 Speterson@keystonecomp.net www.keystonecoml2.net Stefan is a Senior Compensation Consultant at Keystone Compensation Group LLC with over thirty years of experience in the field of compensation. His experience involves managing compensation, benefits, and human resources systems. His compensation and benefits career included organizations in the healthcare, retail, technology, and manufacturing industries. His experience in managing compensation and benefits programs within Fortune 100 companies and midsize organizations uniquely qualifies him to solve diverse client challenges. Most recently Stefan served as Sr. Director of Compensation and Benefits at Fairview Health Services, a premier healthcare organization in Minneapolis. He had responsibility over a team charged with the redesigning of compensation and benefits programs as well as the implementation of new human resources and payroll systems. He also provided executive compensation consulting services and developed HR Committee meeting materials. Stefan's compensation experience includes developing base pay, short-term, and long-term incentive programs to attract and motivate employees. Prior to joining Fairview Health Services, Stefan held several senior leadership positions at Nash Finch Company, Pearson Inc., National Computer Systems, BMC Industries, Alliant Techsystems and Honeywell Inc. In all these organizations he had broad responsibilities over base pay programs, job evaluation, and executive compensation. Stefan has a master's degree from Gonzaga University in Human Resources Management and a bachelor's degree in Political Science from University of North Dakota. He has been a faculty member at the Metropolitan State University for over twenty years teaching compensation and benefits classes. He is a Certified Compensation Professional (CCP) and a Senior Professional in Human Resources (SPHR). Stefan is a member of WorldatWork and the Twin Cities Compensation Network (TCCN). He also served on the Twin Cities Compensation Network Board of Directors.