Chesapeake City Employee Pay Plan
The Plan for FAIR & EQUITABLE Pay for ALL City Employees!
Rebuttal to the Pay Plan proposed by the
Acting City Manager and the Department of Human Resources
Misrepresentations made in the presentation of the Chesapeake City Employee Pay Plan – in the
Acting City Manager and Department of Human Resources Presentation (hereafter called HR’s
presentation or HR’s plan), there were several statements made about the “Other Proposal” (i.e.
Chesapeake City Employee Pay Plan) that were inaccurate. We would like to ensure that City
Council recognizes these inaccuracies.
1. In the opening slide of HR’s presentation, there is a comparison of the Chesapeake City
Employee Pay Plan and HR’s plan as if they were in place for FY05-06 and FY06-07.
This is a highly inaccurate comparison as it states that the only increase under our plan is
the step increase, but they left out the fact that our plan allows for step increases and
market value adjustments, plus City Council can approve discretionary increases such as
general increases and cost of living adjustments, which would have made the final
results, at least, the same under both plans. Additionally, they only showed the two
highest general increase years in the last 6 years, if they had used FY01-02 and FY02-03,
our plan would have provided slightly more to the employee.
2. In HR’s presentation it stated that in the Chesapeake City Employee Pay Plan by recomputing salary placement based on entire work history, Public Safety employees
would be “Double Compensated.” In actuality, only by going back to the date of hire and
re-calculating can you erase the actions in 2001 and any other inaccurate calculations or
placements from other pay plans and correctly place employees into their proper
alignment.
3. In HR’s presentation it stated that the Chesapeake City Employee Pay Plan is a static
plan, but in reality our plan is highly dynamic by having two-year market value
adjustments for all employee job classifications, allowing Department Heads to hire new
employees above starting pay and place them in the matrix from Step 0 to Step 13 (i.e.
you do not have to hire only to the starting step), allowing the City Manager to grant a
one-time Administrative Increase of 1 to 3 steps to an employee (upon request of the
Department Head), and maintaining the ability of City Council to approve discretionary
increases such as general increases and cost of living adjustments.
4. In HR’s presentation it stated that the Chesapeake City Employee Pay Plan forces every
new employee to start at Step 1. As stated several times in our presentations, our plan
allows for Department Heads to hire new employees above starting pay and place them in
the matrix from Step 0 to Step 13. This allows for compensation of experience,
education, certifications, etc. that are above the normal requirements and to assist in
hiring the best employees when we can get them.
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Chesapeake City Employee Pay Plan
The Plan for FAIR & EQUITABLE Pay for ALL City Employees!
5. In HR’s presentation it stated that the Chesapeake City Employee Pay Plan does not
facilitate recruitment, hiring, progressive compensation and a competitive market. This is
the farthest from the truth. In our plan, a potential or current employee can actually see
their minimum salary for their entire career, including promotions and job changes. Plus,
there are many extra enticements with our plan…they are able to enter above the starting
salary (up to Step 13), all job classifications are given market value adjustments every
two years, Department Heads can request one-time Administrative Increases (up to 3
Steps) in order to keep our best employees and City Council will still have discretion in
providing flexible adjustments such as general increases and cost of living increases.
6. In HR’s presentation it stated that the Chesapeake City Employee Pay Plan is not
sustainable and that it is not feasible because City Council cannot guarantee any step
plan. Step plans are a budget item just like all other item (or any other pay plan). Our plan
has an average annual step increase of only 1.8%. When they refer to a step plan of the
past that was not able to be funded, it was one that offered a 2.5%, 5% or 7.5% increase
to employees depending on their evaluation, not a step plan with a 1.8% average increase.
In reality, City Council cannot guarantee that they can even pay current salaries in future
years except through proper budget analysis, forecasting and prioritizing. If properly
budgeted, our plan is sustainable.
Concerns with the Acting City Manager and Human Resources Plan – HR’s plan presented at the
Tuesday, March 13, 2007 City Council Work Session is said to “incorporate many of the items
employees have requested over the past year…” but fails to include items that employees have
continually asked for and essential items that must be included for a comprehensive pay plan,
although we were pleased to see that several of the Chesapeake City Employee Pay Plan
concepts were copied word-for-word.
As presented, HR’s plan was very inconsistent. In one moment they were saying the city
employees would get more from their plan, then the next moment they said their plan would cost
millions less. Mathematically, that is impossible in a closed system (no funds going outside of
the intended purpose). We were pleased to see that a member of City Council recognized the
inconsistencies and asked how it could be both ways. Unfortunately, that question was avoided
and never answered.
Here are some of our concerns with HR’s plan:
1. Open Ranges and Flexible Increases – mean that an employee will never know if they
will receive any pay increases in future years, will not know what they will make the next
year, much less in 5 years, and cannot do their own personal budget estimates. Without a
step pay plan, Human Resources is still not listening to what the employee actually have
been saying.
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Chesapeake City Employee Pay Plan
The Plan for FAIR & EQUITABLE Pay for ALL City Employees!
2. 5% Pay Grade Separations – means that job classifications that are very close to each
other in tasks have to be placed on the same pay grade or separated by 5%. So a level I
and a level II of the same type of work can be separated by 5% (or more) or will be paid
the same amount. In the Chesapeake City Employee Pay Plan, there is a 2.5% separation
so that jobs that have similar functions, but have enough differences in tasks or
responsibilities to warrant slightly different compensation, can be placed in adjacent pay
grades without over compensation or misaligning them with higher job classifications.
3. 5%, 10% & 15% for Promotions – means the City will again unfairly and inequitably
compensate employees getting promotions and the City will potentially be looking at
legal actions. Any person promoted to a first time supervisor prior to the implementation
received or will receive a 10% increase under the current system, but employees
promoted to a first time supervisor under HR’s plan will receive a 15% increase. So, if
you have two employees in equal positions and pay prior to the plan, and one is promoted
before the plan and one after, the one promoted after will be paid 5% more. Even worse,
you may have a person with less time than the other end up making more.
4. Ordinance dictated Market Study and Recommendations – although there is an ordinance
requiring a market study and recommendations for changes in salaries every two years,
without implementation of the market study findings, there is no value to employees.
5. Implement HR’s Plan without re-calculating from the Date of Hire – means that you are
compounding the errors of the past. Only by going back to the date of hire and recalculating each employee can all city employees be re-aligned and placed into their
correct salaries. Adding 3% to the current salaries, just gives more to those who got more
and less to those who were shorted in past pay plans. Again, showing how HR’s plan is
unfair and inequitable to city employees.
6. Market Value Analysis – HR’s plan uses different market value analysis methods for
general employees and public safety employees. Public safety would use the top three
entry salaries (locally) and general employees would use the market rate of all Hampton
Roads cities then only adjust salaries if they were below a 3% difference. Again, this
different treatment for public safety and general employees shows that HR’s plan is not
fair and equitable to all city employees.
7. Open Ranges and Reaching the Maximum – in HR’s plan, they state that by having open
ranges they will alleviate the “maxing” out condition, but most City Employees want to
be able to reach their maximum pay. It is the only way to receive the most pay for their
retirement. A small portion of the employees complain when they reach the maximum
and do not receive an increase when others do; this is an educational issue. In reality, it is
most beneficial to the employee to reach their maximum, and then gain increases as
market value is adjusted or City Council approves discretionary increases such as general
increases or cost of living adjustments, which increase all employees including those at
the maximum.
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Chesapeake City Employee Pay Plan
The Plan for FAIR & EQUITABLE Pay for ALL City Employees!
In HR’s presentation, it was stated that if implemented, no city employee would
be at the maximum. If a current 40 year employee would not be at their maximum, who
would be or would it be just another plan that promises an unattainable maximum? Yet
when we computed some actual employees using HR’s plan, we did find some employees
at the lowest pay grades that will be at maximum pay and would receive nothing if HR’s
plan was implemented (see the examples on the last pages).
8. 40 Pay Grades – in HR’s presentation, it was stated that the City only needed 40 pay
grades at a 5% separation as the bottom 10 pay grades could be eliminated. HR’s
proposed salary schedule spans from pay grade 10 starting at $20,499 to pay grade 50
starting at $144,313. However, there are 33 job classifications that fall below pay grade
10 in HR’s plan, even with a 3% increase. By raising all of these job classifications to
HR’s proposed pay grade 10, HR’s has immediately compressed all pay grades from
current pay grade 10 and below into one pay grade. Although different than years of
service compression, job classification compression is similarly detrimental as makes the
salary of employees with more skilled duties/tasks and with greater responsibility exactly
the same as those with lesser duties, tasks and responsibilities. As an example of how this
causes compression, it will make two levels of the same type of work fall under the same
pay grade (Housekeeper I and Housekeeper II) and place both an aide and their leader
under the same pay grade (Recreation Aide and Recreation Leader).
9. Implementation and Tier of Employees hired after 1/1/07 – this is not necessary. The
fiscal year is from July 1 to June 30. Normally, starting pay is not split in the middle of
the year and employees hired in June still get increases in July. No where else do we
address a half year’s compression as an issue. So why, other than just to save a very small
amount of money, would you cut those employees out of 1.5%?
10. Compression Adjustment Scale – in HR’s plan, some one year separations are given a
difference of about 4 dollars a paycheck (before taxes are taken out). Other one year
separations are given 1 to 2 dollars a paycheck, again before taxes. Under the Chesapeake
City Employee Pay Plan, separation between steps are reasonable differences (i.e. each
step in our pay grade 24 (starting pay of $25,414) has more than $23 per paycheck
difference, before taxes and at pay grade 48 (starting pay of $45,966) the difference
between steps is more than $42 per paycheck, before taxes).
11. Performance Bonus – actually when presenting the Chesapeake City Employee Pay Plan,
we offered a similar idea of a bonus for employees that excelled above other employees,
but elected to offer it as a separate program (as it should be part of the evaluation process
as a performance incentive program, not part of a pay plan). However, HR’s version
would at least need to be re-thought. HR’s plan states the bonus is for “exceptional
performance,” but only requires a “solid performance” on the employee’s last annual
evaluation. That is contradictory and not aligned with the goal of rewarding exceptional
employee performance.
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Chesapeake City Employee Pay Plan
The Plan for FAIR & EQUITABLE Pay for ALL City Employees!
Also, HR’s plan is very restrictive on the number of employees that can receive a
bonus, which means that inevitably deserving employees will not receive a bonus and it
will be more likely for favoritism to come into play. Additionally, grievances or legal
action could result if an employee with a higher annual evaluation score does not get the
bonus and a lower scoring employee does receive a bonus (i.e. an employee with a 4.25
annual evaluation score is given a bonus, but an employee with a 4.55 annual evaluation
score is not given a bonus).
12. Pay Grades, Compression and Actual Costs for HR’s Plan – one of the most
disconcerting issues with HR’s plan is the placement of job classifications into their
proposed pay grade schedule. Because it was not mentioned in HR’s presentation, we
asked how job classes would be placed into HR’s proposed pay grade schedule. We were
advised that the current job classification’s pay grade and the new pay grade would be the
same. HR’s plan rearranges job classifications into salary ranges without regard for
market value or comparisons to duties, tasks and responsibilities. But most disturbing,
HR’s plan would create the worst compression we have ever had in our City. In examples
that are shown on the last pages, it illustrates actual employees with as much as 16 years
of service will be compressed under HR’s plan into a salary that is exactly the same or
within a few dollars of a new employee, but there are likely to be employees with even
longer years of service that will be compressed to (or close to) the minimum pay in HR’s
plan. Additionally, HR’s plan would cost several million dollars more than they have
estimated, based on placing approximately half of the City’s general employees at HR’s
proposed new pay grades’ starting salary (see examples on last pages).
For more than 20 years, city employees have expressed concerns and were discontent with
the various pay plans that offered no real means of projecting minimum future salaries, allowed
compression, treated general employees differently than public safety employees, did not
actively address market value and competitive salaries, and other issues as stated throughout the
Chesapeake City Employee Pay Plan. It took having the city employees themselves to submit a
pay plan addressing these issues before the City took any substantial action. However, in
reviewing the pay plan presented by the Acting City Manager and the Department of Human
Resources, we have found that their plan is almost the same as the one we currently use offering
unknown possible future increases, promising similar market studies and recommendations
without real guarantees to adjust salaries to market value levels and looking at compression as a
minor issue worth only a few dollars a paycheck. As shown above, their plan does not adequately
address many of the issues that are of great concern to the city employees and, if their plan is
approved, the city employees will undoubtedly return on this issue.
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Chesapeake City Employee Pay Plan
The Plan for FAIR & EQUITABLE Pay for ALL City Employees!
Examples of HR’s Plan
Two Examples of Actual City Employees that would be at their Pay Grades Maximums under
HR’s plan:
#1
Current Pay Grade = 10
Current Salary = $31,773
Years of Service = 27
HR’s Plan Pay Grade = 10 Maximum Salary = $31,773
Notes: This employee would already be at their maximum salary before the proposed 3%
increase or the compression adjustment.
#2
Current Pay Grade = 12
Current Salary = $34,366
Years of Service = 34
HR’s Plan Pay Grade = 12 Maximum Salary = $35,030
Notes: This employee would be above their maximum salary with only a 2% increase ($35,053)
and no compression adjustment.
A few Examples of Actual City Employees that would be Compressed under HR’s plan:
#1
Current Pay Grade = 22
Current Salary = $34,803
Years of Service = 16
HR’s Plan Pay Grade = 22 Minimum Salary = $36,813
Notes: With a 3% increase and a $725 compression adjustment ($36,572), this employee would
still be below HR’s proposed salary for their pay grade placing them at the same starting pay as a
new employee and everyone else in HR’s plan being compressed back to the minimum salary in
pay grade 22.
#2
Current Pay Grade = 36
Current Salary = $63,862
Years of Service = 14
HR’s Plan Pay Grade = 36 Minimum Salary = $72,888
Notes: With a 3% increase and a $725 compression adjustment ($66,503), this employee would
still be below HR’s proposed salary for their pay grade placing them at the same starting pay as a
new employee and everyone else in HR’s plan being compressed back to the minimum salary in
pay grade 36.
#3
Current Pay Grade = 26
Current Salary = $42,811
Years of Service = 13
HR’s Plan Pay Grade = 26 Minimum Salary = $44,747
Notes: With a 3% increase and a $725 compression adjustment ($44,820), this employee would
still be below HR’s proposed salary for their pay grade placing them at the same starting pay as a
new employee and everyone else in HR’s plan being compressed back to the minimum salary in
pay grade 26.
#4
Current Pay Grade = 32
Current Salary = $53,013
Years of Service = 9
HR’s Plan Pay Grade = 32 Minimum Salary = $59,965
Notes: With a 3% increase and a $725 compression adjustment ($55,303), this employee would
still be below HR’s proposed salary for their pay grade placing them at the same starting pay as a
new employee and everyone else in HR’s plan being compressed back to the minimum salary in
pay grade 32.
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Chesapeake City Employee Pay Plan
The Plan for FAIR & EQUITABLE Pay for ALL City Employees!
Because HR’s plan moves the minimum salaries of pay grades to much higher amounts,
the less time an employee has with the City the more likely they will gain a dramatic increase as
they are placed at their pay grades new minimum salary. Here some examples of how we believe
this will result in costing millions more than HR’s plan has listed:
Pay Grade 15 current min. salary = $24,940 HR’s min. salary = $26,162 Difference = $1,222
Pay Grade 20 current min. salary = $30,343 HR’s min. salary = $33,391 Difference = $3,048
Pay Grade 25 current min. salary = $36,918 HR’s min. salary = $42,616 Difference = $5,698
Pay Grade 30 current min. salary = $44,917 HR’s min. salary = $54,390 Difference = $9,473
Pay Grade 35 current min. salary = $54,648 HR’s min. salary = $69,417 Difference = $14,869
Pay Grade 40 current min. salary = $66,488 HR’s min. salary = $88,595 Difference = $22,107
Pay Grade 45 current min. salary = $80,892 HR’s min. salary = $113,073 Difference = $32,181
As shown in a previous example, a 16 year employee was placed into the minimum
salary. How many more would have to be placed at starting pay causing both compression and
unjustifiable increases? Without access to more information, it is impossible for use to estimate
how many employees would receive salary increases greater than 3% as they are placed into a
higher starting salary, but we believe it to be a substantial number of employees and that it would
incur cost much greater than shown in HR’s plan.
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