Wauwatosa committee gets an update on compensation study

Posted on February 27, 2013 • Posted in News Articles

An update on a new city compensation plan from a consultant left Employee Relations Committee members with something to think about, and an assignment: “Stay the course in terms of what you’re doing, but redouble your efforts in management and strategic planning.”

Charles Carlson, of Carlson Dettman Consulting, began his study in December and this week spent time interviewing department heads, collecting their perspectives on pay and job anomalies and asking them to assess their capacity to measure and manage a pay-for-performance plan.

He said he came away “impressed with the quality and diversity of talent of the department heads.”

Three questions

Carlson, who earlier had collected questionnaires from employees on the tasks involved in specific jobs, had three questions for committee members:

  1. What is the larger market in which the city competes for talent?
  2. How does the city want to be seen in that market – as a high payer, or a low payer, or something in between?
  3. And, what kind of pay structure does the city want to have; in other words, how are raises allotted?

Carlson said that as managers retire, the city should consider where it will seek new talent. He suggested it may be beyond the state border.

Illinois is a vast talent pool that the city has already drawn from, he said, adding that he would collect pay data on cities there similar in size to Wauwatosa.

The post collective-bargaining world has created an atmosphere of fear for many public employees; some believe their pay will be cut. But Carlson is firm on that point: “We won’t make a recommendation that reduces anybody’s pay.”

Still, he said, the system must be transformed, and what is called for is some kind of pay-for-performance model that is not dissimilar to a private sector model.

“We really want to have performance-based pay, but we’re really saying what we don’t want is pay for nonperformance,” Carlson said.

Three models

He outlined three models, or ways of understanding, public employment and pay.

  1. One is based on tenure: “If we hire you, and you don’t mess up, you probably can stay here forever.”
  2. A second he called “meritocracy”: “We only hire the best, and we only keep the best.” Essentially, employment is secure provided the employee meet a very high level of performance.
  3. And, finally, he outlined a “tournament” understanding of pay: there is a fixed sum of money available, and employees compete for it.

Of these, he suggested, a meritocracy method was healthiest. He said a meritocracy system of rewards could be, for example, a system whereby “If we save (or achieve) X, we will share Y with the employees.”

Three assignments

To set a pay structure, the city has to “lay a foundation” by determining its market – who it competes with and where it wants to position itself in that market.

It also has to come up with a system to manage and measure performance. And, finally, building on the other two, it has to figure out a pay system.

He cited examples where pay did not necessarily mean money. It could be time off, flexible scheduling, or other kinds of rewards.

He said the hardest element of the three was the second: developing a system of measuring and managing performance.

He asked committee members and Human Resources Director Beth Aldana to “focus on measurement,” and said he’d be back at the end of March.

Reposted from WauwatosaNOW