In 2017 the city hired the Keystone Compensation Group to complete a full compensation study of full-time, non-union positions. (Similar reviews were done on union positions during the last bargaining period, and the city finished a similar part-time analysis earlier this year.)

The primary purpose of the 2017 study was threefold:
• Ensure that our compensation was competitive in the market.
• Have an independent evaluation to ensure that our classification structure was fair and equitable.
• Ensure our classification and compensation system was “zeroed in” so that we can manage our classification more transparently and actively in the future.

This study primarily focused on creating and updating all job descriptions to ensure internal uniformity among the organization. Using those updated job descriptions, the consultant scored all positions, which then was used to review for “internal equity” and prevent wage compression. (Internal equity means paying positions based on how they function within the organization – equal being equal – and is scrutinized by the state to ensure conformity.) Each position’s score was then reviewed to determine where the job falls on the wage scale.

The scoring/pointing system used is based on multiple factors to include the amount of education and knowledge required for the position, level of responsibility and accountability, complexity and mental effort, the level of contact and interpersonal communications and the normal working environment. It is important to note that all positions are judged equally based on the criteria and then placed with positions that function similarly in the organization. There is no picking and choosing where a particular job falls. It belongs where the pointing system determines it goes.

It is important to remember that City Council has a long-standing desire that pay ranges and overall compensation should fall generally in the middle of our comparable cities. As such, the middle was set as the goal (100%) for all analysis.

This year, Keystone was hired to perform an analysis primarily focusing on our market comparisons, since the previous study was primarily geared to “pointing” jobs and internal placement/equity. Staff initial assumptions were that there wasn’t a need to deconstruct and re-point as the system was relatively recently modified (5 years), and just an external view was needed. The goal was to remain competitive in the market to have the city continue to attract and retain talent.

The study has several findings that were positive and required no further action. These included that the average ratio of pay that an employee received to what they could be making in our system was 96.5%. In essence that means that employees do tend to stay with the city once employed. The longer an employee stays with the city = the higher their pay will be.

It also noted that pay with the market median was 98.6%. In other words, pay is at 98.6% of the middle of comparable cities – with some variations among particular jobs. As stated above, 100% would have us fall in the exact middle of comparable cities.

However, when looking at the maximum pay for each pay grade (salary range), Shakopee fell below the market average of comparable cites at 95%. Or in other words, 5% below the middle. This result isn’t necessarily unwarranted as it had been 5 years since the prior study. However, it does need to be addressed so is does not compound year after year. This requires an adjustment to bring our pay ranges closer to the middle (average).

This is more complicated than just making the individual adjustments to the top pay grades. Several issues must be taken into consideration. The first, is that to just change the maximum pay in each pay grade would create a large variance in the step progression for each individual pay grade. The steps all have a unique percentage progression to them, and like a spider web, they are all interconnected to a degree. For example, if a grade has six steps and the progression from each step is 3.4%. Trying to adjust only the top step (step 6), would affect every other step and create an uneven step progression. Therefore, a uniform amount needs to be applied to the entire pay plan. As such, staff is proposing to add a 2% market rate adjustment to all positions that when coupled with the 2.5% COLA will bring us close to the 5% disparity noted above. This has been made part of the 2023 budget proposal.

The results of the study also revealed sixteen (16) positions that initially appeared to be paid less competitively than the market. This required staff to further study these positions both internally and externally to ensure that internal equity among positions in Shakopee was maintained. As that process was started, Administration determined that only looking at a select few of the positions could provide concerns of bias. As such, staff re-evaluated and re-pointed all non-union positions, in essence double checking the efforts of the consultant’s 2017 work and verifying its validity in 2022.

Upon completion of this process, staff did a further review to ensure market compatibility and once again compared Shakopee job descriptions of those positions that were to be recommended for change to those in our comparable market group to verify a functional similarity.

As part of this subsequent process, staff determined that some of the positions initially thought to be under the market were due to data that was not comparable. In other words, a similar title does not necessarily mean a similar job. This could be due to an organization’s structure (different layers in their hierarchy), unique titles, differing job duties, responsibilities or reporting structure. This led to several different jobs in different cities with the same titles – with wide differences in responsibility and therefore pay ranges.

Based upon the multiple-step analysis the following 11 positions were found to be out of line:

Department Position Title Adjustment
PD Code Compliance Specialist $2,580
PD Police Chief $5,730
Recreation Aquatics Specialist $2,120
Facilities Facility Maint. Worker (3) $2,810
Fire Fire Chief $6,180
Finance Accounting Specialist (Clerk) $3,340
Clerk Deputy City Clerk $3,340
Clerk City Clerk $2,480
IT IT Director $3,230
Admin Communications Manager $4,320
Admin Human Resources Director $1,300

In essence, staff is proposing both a 2% market rate adjustment for all non-union full-time employees, and additional adjustment to the 11 positions noted above. These results have been determined through the latest Keystone Compensation Program Study, verified by internal staff, and are included in the proposed 2023 non-union pay plan which has been incorporated into the current proposed 2023 budget.

The actual budget impacts for the adjustments are as follows. A 2% Market Rate Adjustment for full-time non-union employees is $223,000. The 11 positions that will require grade changes adds an additional $52,410 for a total of $275,410 which has budgeted for implementation in the 2023 Preliminary Budget

2% Market Rate Adjustment for full-time non-union employees -$223,000

11 Positions with Grade Changes - $52,410

Total = $275,410 which has been budgeted for implementation in the 2023 Preliminary Budget