Classification Plan and Compensation Structure

November 25, 2019

Presentation Agenda

• Project Goals

• Project Plan

• Project Timeline

• Findings and Discussion

Project Goals

• College had not comprehensively reviewed the classification system for employees for nearly 20 years, with the last review taking place in 2001.

• College contracted with Gallagher Benefit Services (GBS) to assist in the evaluation of jobs and their classifications with the goal of aligning all appropriately.

• This analysis included:

• Ensuring duties and responsibilities of positions matched with the correct FLSA status

• Assurance that positions across campus are classified correctly within a new system dependent upon decision-making in routine performance of the job.

• Conducting a custom survey to determine where the College pays relative to the market.

• Designing a salary structure that aligns with external market and addresses internal equity.

• Engaging significant training with consultant to perform job evaluations and provide salary adjustments as needed on an ongoing basis.

Project Plan: Purpose

• The purpose of undertaking a comprehensive overhaul of all positions was to ensure that:

• Jobs are classified appropriately

• Pay and benefits are fairly structured

• Pay, in the future, is based on fair and documented information and data

• The College has a compensation system that is easy to understand and manage

Project Timeline / Phasing

1. Classification and Job Evaluation

2. Compensation Analysis

3. Project Finalization

Classification and Job Evaluation

• What is job evaluation?

• A defined methodology to determine the relative value of jobs within an organization.

• Provides the basis for determining pay.

• College worked with Gallagher to use the Decision Band Method ™ for all of its job evaluations.

Job Evaluation Process: Summary

• Partnered with Gallagher to review all job descriptions and update where appropriate

• More than 150 job descriptions reviewed

• Solicitation for management review to ensure accurate and up-to-date descriptions submitted

• All job descriptions were reviewed multiple times: management, Human Resources, Consultant, etc.

• Focus group interviews with consultant for selected positions

• Gallagher’s proprietary job evaluation methodology – Decision Band Method – then used to evaluate and place all positions

• All assigned grades were reviewed with HR and Administration to ensure internal alignment

What is the Decision Band Method?

The value of a job should reflect the importance of the job to the

organization.

The importance of a job is directly related to the decision-making

requirements of the job.

Decision-making is common to all jobs.

Decision-making is measurable.

Decision Band Method™

STEP 2: Determine appropriate grade

Jobs with coordinating or supervisory responsibility within the same band are placed in the higher grade

Jobs without this responsibility within the same band are placed in the lower grade

Grade Assignment

STEP 3: Determine appropriate subgrade

PRIMARY CRITERIA Job Difficulty

IS AFFECTED BY Task Complexity Task

Occurrence

IS DETERMINED BY Number of TasksDiversity of

TasksTask

FrequencyPercentof Time

STEP 1: Determine appropriate band

Band A: Defined

Determine manner and speed to perform defined

steps of an operation

Band B: Operational

Determines how and when to perform steps of

processes

Band C: Process

Develops and selects appropriate

process to accomplish operations of programs

Band D: Interpretive

Interprets programs into operational plans and

deploys resources

Band E: Programming

Plans strategies, programs and allocates resources to

meet goals

Band F: Policy

Organization scope, direction, and goals

Determining Grade

BAND GRADE

F11 Coordinating/Supervisory

10 Non-coordinating

E9 Coordinating/Supervisory

8 Non-coordinating

D7 Coordinating/Supervisory

6 Non-coordinating

C5 Coordinating/Supervisory

4 Non-coordinating

B3 Coordinating/Supervisory

2 Non-coordinating

A1 Non-Coordinating

0 Non-Coordinating

• Coordinating: a coordinating grade is assigned to an employee who supervises an employee within the same Band.

• Non-coordinating: a non-coordinating grade means an employees who either a) does not supervise another employee or b) who supervises an employee within a lower Band.

Coordinating vs. Non-Coordinating Grades

• Coordinating: a coordinating grade is assigned to an employee supervises an employee within the same Band.• Ex: a C5 employee is one who supervises employee(s) who are classified as C4.

• Non-coordinating: a non-coordinating grade means an employees who either a) does not supervise another employee or who supervises an employee within a lower Band. • Ex: a B2 employee is one who either is not supervisory or who does supervise an A level employee.

• Example coordinating with subgrade: C52

• Example non-coordinating with subgrade: B23

Next Steps: Compensation Survey

• Human Resources and Lewis & Clark leadership worked together with Gallagher to design a compensation survey to send to peer organizations.

• In order to assess competitiveness with the market, we sought data on:

• Base salary

• Pay Schedule Adjustments and Pay Increases

• Pay Progression and Pay Increase Policies

• Benefit Premiums

• Retirement Benefits

• Gallagher then conducted a custom market survey to collect compensation data from the selected comparable Colleges.

• The data was collected by phone calls and emails to survey participants.

• Upon receiving the participant data, Gallagher performed analysis to ensure integrity of the data.

Data Comparison / Analysis• After consultation with the College, the survey was sent to 35 community

colleges across the country (11 from Illinois).

College Comp Group College Comp Group

Arkansas State University-Beebe (Beebe, AR) IPEDS Illinois Eastern Community Colleges ICCB

Barton County Community College (Great Bend, KS) IPEDS Illinois Valley Community College ICCB

Black Hawk College (Moline, IL) IPEDS Kankakee Community College ICCB

Canada College (Redwood City, CA) IPEDS John A Logan College ICCB

Casper College (Casper, WY) IPEDS Lake Land College ICCB

Cedar Valley College (Lancaster, TX) IPEDS McHenry County College ICCB/IPEDS

Central Arizona College (Coolidge, AZ) IPEDS Linn-Benton Community College (Albany, OR) IPEDS

Central Lakes College-Brainerd (Brainerd, MN) IPEDS McHenry County College (Crystal Lake, IL) IPEDS/ICCB

Cerro Coso Community College (Ridgecrest, CA) IPEDS Mohave Community College (Kingman, AZ) IPEDS

College of Southern Idaho (Twin Falls, ID) IPEDS Morton College (Cicero, IL) IPEDS

Community College of Aurora (Aurora, CO) IPEDS Northeast Community College (Norfolk, NE) IPEDS

Danville Community College (Danville, VA) IPEDS Rogue Community College (Grants Pass, OR) IPEDS

East Mississippi Community College (Scooba, MS) IPEDS Santa Fe Community College (Santa Fe, NM) IPEDS

Hawkeye Community College (Waterloo, IA) IPEDS South Puget Sound Community College (Olympia, WA) IPEDS

Hutchinson Community College (Hutchinson, KS) IPEDS South Suburban College (South Holland, IL) IPEDS

Indian Hills Community College (Ottumwa, IA) IPEDS Southside Virginia Community College (Alberta, VA) IPEDS

Kishwaukee College (Malta, IL) IPEDS Trinity Valley Community College (Athens, TX) IPEDS

Lake Superior College (Duluth, MN) IPEDS

Compensation Survey - Design

• Market Pricing

• In addition to the custom survey, Gallagher also included data from the following published salary survey sources:

• CUPA, Mercer, Economic Research Institute, Willis Towers Watson

• Data cuts for the survey sources included:

• Associate / Community Colleges

• Higher Education

• By geographic region (state, city, region, etc.)

• National data

• A geographic differential was then applied using cost of labor data gathered from the Bureau of Labor Statistics to ensure that all of the salary data gathered was aligned with the Godfrey, IL market.

• All data was aged appropriately

Market Comparison

• Market Comparison – Staff

• Gallagher used defined guidelines to determine the competitive nature of actual compensation and aggregated comparison data with the market.

✓After reviewing Lewis and Clark benchmark data as part of the market survey, the College was shown to be “competitive” with the market

• The findings of the survey showing a competitive salary structure for the College came following months of data surveying, data comparisons, and structured data analysis between the College and the consultant.

• After comparing compensation to the market, Gallagher was able to perform data analysis which allows for the foundation of creating connected salary ranges.

Findings and Analysis – Structure Terms

• Salary Ranges

• A salary range is the range of pay established by employers to pay employees performing a particular job or function.

• Salary ranges have a minimum pay rate, a maximum pay rate, and a midpoint (with the midpoint usually placed at the 50th percentile of the market).

• The salary range is determined by conducting and completing a market analysis.

• Current salary for a position was then compared to its placement in the new salary range.

Salary StructureFull Implementation: July 1, 2022

DBM

RatingMinimum Midpoint Maximum

Range

Spread

A11 $19,526 $24,407 $29,288 50%

A12 $22,784 $28,480 $34,176 50%

A13 $26,042 $32,553 $39,064 50%

B21 $29,310 $36,638 $43,966 50%

B22 $32,569 $40,711 $48,853 50%

B23 $35,827 $44,784 $53,741 50%

B24 $39,907 $49,884 $59,861 50%

B25 $44,800 $56,000 $67,200 50%

B31 $39,907 $49,884 $59,861 50%

B32 $44,800 $56,000 $67,200 50%

C41 $47,000 $61,100 $75,200 60%

C42 $50,133 $65,173 $80,213 60%

C43 $53,266 $69,246 $85,226 60%

C44 $57,189 $74,346 $91,503 60%

C45 $61,894 $80,462 $99,030 60%

C51 $57,189 $74,346 $91,503 60%

C52 $61,894 $80,462 $99,030 60%

D61 $65,817 $85,562 $105,307 60%

D62 $68,950 $89,635 $110,320 60%

D63 $72,083 $93,708 $115,333 60%

D71 $76,006 $98,808 $121,610 60%

D72 $80,711 $104,924 $129,137 60%

Findings and Analysis – Structure

• Implementation Plan

• November 7, 2019, Board of Trustees approved implementation of the new classification system and connected compensation structure.

• Implemented over the course of four fiscal years

• Goal: All positions currently below market, or under the new range minimum, will be placed into the range by July 1, 2022.

• A 3.5 year phase in until fully realized

• A 2.5 year phase in until annual salary rate meets range minimum

• Following completion of the evaluation, a total of 76 current employees are below the proposed minimum salaries for their connected placements.

•Median salary adjustment equivalent to approximately $5,000

Related Policy Changes

•Salary Adjustments: Positions Below Minimum

•All employees who are in positions currently below market/new range minimum amount (see slide 17) will receive salary adjustments effective 12/1/19, 7/1/20, 7/1/21, and 7/1/22 or until their annual salary reaches the range minimum of their subgrade, whichever comes first.

•Any salary adjustment received on any of the dates noted above or any date prior to 7/1/22 will count toward placing the position into the new range (i.e. the amount received for a salary adjustment relative to the new classification system does not come in addition to any other salary increase which may be approved by the Board of Trustees).

Related Policy Changes

•Salary Adjustments: Positions Within Range or Above Range Maximum

•Any employee who has a salary in range on December 1, 2019 will not receive a salary adjustment relative to the new compensation schedule, but will continue to remain eligible for salary adjustments in the future provided their salary remains in range.

•Any employee who has a salary in range on December 1, 2019 but later exceeds their range maximum may receive a lump sum payment in lieu of an increase to base salary.

•Any employee who has a salary exceeding their range maximum on December 1, 2019 will not receive a salary adjustment relative to the new compensation schedule, but will remain eligible for salary adjustments if approved by the Board of Trustees.

Related Policy Changes

• Internal Promotions

• The employee’s current annual salary shall be increased to the minimum of the new pay range or an 8% increase in current salary, whichever is greater.

• Prior policy = 5% or min of new grade.

• In a case where a full-time employee applies for or is placed in a position which is in a classification that is one band higher (e.g. promoting from a band C position to a band D position such as movement between a C41 position and a D61 position), at the discretion of the Vice President of Administration and College President, the employee’s salary may be increased by up to 12%, or to the minimum of the new subgrade, whichever is greater.

• Prior policy = 5% or min of new grade.

Position Changes/Upgrades

• Five-Step Process

1. Supervisors must submit a proposal with revised job description describing rationale for change by February 28 of any calendar year.

• Additional essential duties and job functions may not be given to an employee proactively or prior to the conclusion of the HR approval process. Doing so will not enhance the likelihood of approval of the new or elevated position.

2. Proposal and job description reviewed by the Director of HR and VP Administration using applicable methodology to grade positions

3. HR/Administration will meet with the supervisor and respective Vice President to discuss departmental and College needs tied to the request

4. Human Resources will make recommendation to President resulting from position review

• If approved will not be effective until the following fiscal year.

• Any recommendation is subject to the approval of the President

5. HR will meet with the requesting supervisor and Vice President with decision

• The funding for upgraded position is subject to the authorization of the Board of Trustees and budgetary approval.

When will I find out my grade placement?

• All full-time staff employees will receive an email communication before December 1, 2019 which will provide information on the following:

• Grade placement in new system effective December 1, 2019

• FLSA status (exempt/non-exempt)

• Information on any connected compensation adjustment (if applicable)

• Process for appealing placement

• Process for how future grade adjustments must take place

• Salary Structure (effective July 1, 2022).

Questions