Each year, a review of the City’s current Classification and Pay Plan is conducted to ensure that it remains competitive, allowing the City to achieve its stated budget goal of being able to “attract and retain the best employees available through maintaining competitive pay and fringe benefit programs.”  Part of the annual review includes salary comparisons between selected Brentwood positions and those of several other relevant Tennessee governments.

Prior to the adoption of the FY 2017 Operating Budget, staff advised the Board of Commissioners that it would be beneficial to conduct a more comprehensive review of the entire pay plan than normally performed. This recommendation was based primarily on the rising level of employee turnover in recent years, especially with new employees in the first three to five years of employment and challenges competing for highly qualified employees in the labor market.    As a result, authorization was obtained to select a professional compensation consultant to analyze the City's pay practices and recommend improvements to ensure our competitive position in the labor market and ability to attract and retain the necessary talent to provide quality services to Brentwood citizens.

Burris, Thompson & Associates, a leading Tennessee based compensation consulting firm with extensive experience with governmental entities, was engaged by the City of Brentwood for this project.  The scope of services focused on individual job review and analysis, plan design and structure, organizational comparisons in the labor market, and the City’s relative position to those comparisons. 

Details of the salary study project including parameters, assumptions, methodology, findings and recommendations were presented to the Board of Commissioners in March, 2017.  Results of the salary study and recommendations for modifications to the current Classification and Pay Plan are summarized below.

PARAMETERS

City of Brentwood management, with input from Burris, Thompson & Associates, selected a group of 14 benchmark public sector employers that are representative of the competitive labor market for the City of Brentwood. The benchmark employers were selected on the basis of comparable demographics and/or proximity to Brentwood. Salary data was obtained from these employers using a survey format.  

Because the City of Brentwood also competes with general business and industry for employees for many City jobs, market data from general business and industry for jobs similar to those at the City of Brentwood were compiled from the Economic Research Institute (ERI) Salary Assessor (September 2016 database using data for the Nashville area).

In regard to staffing, the City of Brentwood has traditionally maintained a relatively lean organization with a long-standing philosophy of “doing more with less” while providing high levels of customer service to Brentwood residents and other stakeholders.  Management determined that targeting an above average market position is necessary to attract and retain top level employees necessary to meet these high standards of performance in the most cost effective manner.  For this reason, it was determined that targeting the 75th percentile of the market was appropriate. (Twenty-five percent of employees in the labor market are paid above this rate and 75% are paid below this rate.)  Positioning the mid-point of city pay grades over time to be consistent with the 75th percentile of the market would allow the City to be competitive in attracting and retaining the most knowledgeable and skilled employees.
 

METHODOLOGY

A Market Rate was determined for each City of Brentwood job from the survey data by calculating the average of:

• The 75th percentile rate of the data from the 14 benchmark cities and utilities, and

• The 75th percentile rate from the ERI database for general business and industry (if applicable – public safety and a few other jobs have no close private sector employer counterparts.)

To assess the competitiveness of the City’s current pay structure, a Structure Market Index was calculated by dividing each job’s current pay range midpoint for the Pay Grade to which the job has been assigned by the Market Rate for the job.  While this varies by department, overall, the current City of Brentwood pay ranges are at approximately 90% of the 75th percentile market target. 

A Salary Market Index was also determined for each City of Brentwood employee by dividing the employee’s current salary by the Market Rate for the employee’s job. Overall, City of Brentwood salaries are currently at approximately 95% of the City’s desired market target, or approximately 5% below the desired market target.

Based upon the results of the pay plan analysis, staff is recommending the following:

1. Retain the City of Brentwood current pay structure of 16 pay grades.  Based on analysis of the market data, it is recommended that the entire pay plan and all pay ranges be increased by 8.7% to position the City at the 75th percentile – pay range midpoints will then approximate the 75th percentile of the labor market.   With this adjustment to the entire pay structure, the rates of pay for approximately 40 recently hired employees will need to be adjusted up to the new minimum of their assigned pay range. The total cost of this adjustment is estimated at $69,000.
    
2. Maintain the current assignment of jobs to pay grades unless the market rate for a job was significantly lower than the proposed pay range midpoint.  For several jobs, the current pay ranges were significantly below market and it is recommended that these jobs be moved to the next higher pay grade to more closely align pay range midpoints to the 75th percentile. These proposed job reclassifications are cost neutral because there are no salary adjustments as a result of these reclassifications.   Jobs proposed for reclassification are as follows:
    

3. Staff is recommending approval of a 4% merit increase for all eligible employees, effective with the first full pay period in FY 2018 (July 10, 2017).  Eligibility will be based on current pay practices.  Individual amounts will be based on performance and may be prorated from the time of last step increase.  Employees with less than six months of service or in their initial step progression period will not be eligible for this merit increase.
    
4. To ensure individual rates of pay are aligned with job tenure and address pay compression issues resulting from adjusting the entire pay plan as described in number 1 above, pay range targets based on time in job were defined.   If an employee’s salary after the merit increase proposed above (for budgeting purposes 4% is assumed for all) is not at least at the pay range target, then the employee’s salary will be adjusted to the pay range target.  There are 46 employees that are projected to receive this additional adjustment with an estimated total cost of $49,083. Pay range targets were defined as follows:
    

TOTAL COST PROJECTIONS

The sum of all pay adjustments (to minimums for 40 employees, 4% merit increases for all eligible employees, and additional adjustments to Pay Range Market Targets for 46 employees) is $731,810. 

Including impact of FICA and TCRS contributions, total cost to the City of the proposed salary increases is as follows:

RELATED COMPENSATION PLAN CHANGES

1. Non-certified police officer and firefighter recruits with no prior experience will be hired at the start rate of a newly created Recruit position in Group D-PSR.  Both positions will be eligible for a 5% merit-step increase after one year of satisfactory service.  Police officer recruits only will be eligible for an additional 5% increase after 18 months.  Both positions will be reclassified to Group E-PS after 24 months of satisfactory service.
    
2. New maintenance worker employees are currently eligible for rate adjustments after six and 12 months.  This practice was implemented to accelerate their earnings in Pay Group B.  Effective with the approval of the changes above, maintenance worker positions will only be eligible for an “end of probation” raise of up to 5%, after the satisfactory completion of six months of service, the same as all other non-public safety employees.  The practice of providing a 12-month adjustment will be discontinued.   They will then follow the normal annual pay increase process available to all full-time employees. 

Attached for your review are the current FY 2017 Classification and Pay Plan and the proposed FY 2018 Classification and Pay Plan. Please contact the Human Resources Director with any questions.