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- Presented by:
- Human Resources Department
- January 18, 2006
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- Five Key Focus Areas
- Public Safety, Economic Development, Quality of Life, Staff
Accountability and the Trinity River Project
- Staff Accountability requires a Self-Assessment of Human Capital
- All human capital policies and practices should be designed,
implemented, and assessed by the standard of how well they help the
organization pursue its shared vision
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- Integrate human capital strategies with the organization’s core business
practices.
- Recruit, hire, develop, and retain employees with skills to accomplish
the mission.
- Compensate appropriately to attract, motivate, and retain.
- Review Workplace Environment—part-time work, flextime, safe workplaces,
fitness center, parking facilities, child or elder care policies,
subsidies for mass transit?
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- Other Considerations:
- Human Capital Analysis should be ongoing;
- The organization should constantly measure the effectiveness of human
capital policies and practices;
- Measuring policies and practices related to Human Capital requires
multiple levels of statistical data;
- Employee input and subject matter expert input is essential to the
design and implementation of human capital policies and practices.
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- What is “Total Compensation”?
- Why is Total Compensation Important?
- Key Indicators, Trends and News Articles.
- Benchmarking national trends of organizations with a competitive edge.
- Process to review City’s Total Compensation package.
- Issues involving Attendance Incentive Leave (AIL).
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- All elements of pay or reward given to an employee for work or services
rendered;
- Total Compensation is composed of the following elements:
- Wages, Paid Leave, Retirement, Health Care, Incentives and other
Benefits.
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- Wages
- base salary
- overtime
- merit pay
- performance incentive pay
- special pay (EMS certification,
- HAZMAT, education incentive,
- graduation incentive, patrol)
- assignment pay (interim assignment, language, shift)
- Paid Leave
- sick
- vacation
- holidays
- compensatory
- death in family
- court
- Retirement
- defined benefit plan (pension plan)
- 401/457k deferred compensation (Voluntary)
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- A competitive Total Compensation Package prepares an organization to
attract, recruit, motivate and retain qualified employees;
- An organization must consider local, state & national compensation
issues and benchmark against
other major employers.
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- County puts off longevity-pay talk
- “Commissioners to wait until budget season to discuss ending
benefit”
November 23, 2005 - By ED HOUSEWRIGHT / The Dallas Morning News
- Job forecast brightest in years
- “Economy's growth, shortage of
skilled workers are sparking gains, hiring experts say”
January 1, 2006 - By
SUSAN KREIMER / Special Contributor to News / The Dallas Morning
reports
- That's Outrageous!: Just Sick of It
- “How you (City of Dallas) are rewarding government employees millions
of dollars they didn't earn.”
- December 2005 - By Michael Crowley / Readers Digest
- “Police Departments, Their Ranks of Officers Thin, Offer Bonuses,
Bounties and More.”
- December 28, 2005. The New York Times.
- “Taxpayers can’t afford public sector benefits”
- November 2, 2005. Pittsburgh
Tribune-Review
- “The Next Retirement Time Bomb”
- December 22, 2005. The New York
Times.
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- Work/life balance issues such as flexible schedules and telecommuting
are valued by employees nearing retirement and young workers beginning
their careers
- Traditional pay plans are most common for employers (base pay is
determined by job performed, rather than competency-based pay)
- Health insurance is the most important benefit to the majority of
employees (Employee Benefits Research Institute’s 2004 study, Aon
Consults 2004 United States@Work)
- The aging workforce drives interest in phased retirement, retiree
healthcare issues, and concern over retiree financial security
(corporate pension changes, reliability of Social Security)
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- Aon Consulting FORUM (5/2005, Loyalty Institute Article)
- What benefits do employees value in the US?
- Medical insurance ranked first
- Paid vacation time and holidays rank second
- Retirement savings plans and employer-paid pension plans rank third
and fourth
- Mercer HR Consulting LLC survey shows many employers enhance total
rewards packages (Mercer HR, press release, 7/2005)
- variable pay like signing bonuses, spot cash awards, and project
milestone awards
- non-monetary recognition awards continue to top the chart
- BuckConsultants, an ACS company (9/2005, Health Care is Biggest Business
Cost Concern…)
- Key findings of survey
- 60% of respondents ranked health care as their first or second
greatest business cost concern
- Organizations reporting success in controlling health care costs tend
to:
- Employ health risk assessments
- Wellness programs
- Employee education
- Systems that track employees’ health-related behavior changes
- Providing incentives to adopt healthy lifestyles
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- SAM’s Club introduces affordable health insurance solution nationwide (CNNMoney.com,
12/30/2005, BENTONVILLE, Ark. [PRNewswire])
- Joining with Extend Benefits Group LLC to provide individual health
insurance plans
- Baylor Health Care System (Baylor Health Care System website 1/2006)
- Baylor spends over 50% of its patient care revenues on employees'
salaries and benefits?
- The Costco Challenge: An Alternative to Wal-Martization?
- (By Moira Herbst July 6, 2005Costco)
- (Costco) Chief Financial Officer Richard Galanti explained: “From day
one, we’ve run the company with the philosophy that if we pay better
than average, provide a salary people can live on, have a positive
environment and good benefits, we’ll be able to hire better people,
they’ll stay longer and be more efficient.”
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- A competitive Total Compensation package is key to attracting &
retaining skilled employees.
- City plans to review the City’s Total Compensation Package.
- Taskforce of private and public sector compensation experts plus
representatives from the Employee/Retiree Benefit Committee.
- 60-120 day review of all aspects of the City’s total compensation
package to include benchmarking and measuring effectiveness toward
recruiting and retaining an appropriate workforce.
- Staff support will be provided by Human Resources and the City
Attorney’s Office.
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- Evaluate the history of Total
Compensation for the City of Dallas;
- Review all legal considerations regarding Total Compensation;
- Assess existing pay plans,
benefits, incentives and cost to maintain the current structure;
- Study workforce statistics (aging workforce and pending retirements within the City);
- Identify Subject Matter Experts (SME’s) to Benchmark Data that compares
with the City of Dallas’ Total Compensation;
- Assist in the development of a Total Compensation philosophy, and
assess the current package’s effectiveness in supporting that
philosophy;
- The Task Force shall make recommendations to the City Manager within
120 days congruent with the “Price of Government” budget process.
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- Member Organizations
- AT&T
- Dean Foods
- TD Industries
- TXU Electric Delivery
- Texas Instruments
- Public sector representative
- Employee/Retiree Benefits Committee representative
- Other representatives from companies identified as Best Places to Work
have been approached about participating
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- In 2003 the City contracted with The Hay Group to evaluate the City’s
Total Compensation Plan.
- Review indicated that:
- City of Dallas employer-paid benefits are at the 25% percentile
- 75% of all surveyed employers offer better employer-paid benefits
- In 2004 Dallas Employees’ Retirement Fund Study Committee was appointed
to develop recommendations regarding the civilian pension fund.
- The Study Committee recommended that the City:
- Maintain the current benefits offered by ERF
- Maintain the cost-sharing ratio between City & employee
- Increase City & employee contributions
- Automatic future adjustments to contribution levels based on actuarial
studies
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- Federal and State laws
- Wages and special pay
- Fair Labor Standards Act
- Equal Pay Act
- Age Discrimination in Employment Act
- Texas Local Government Code
- Protected medical leave
- Texas Local Government Code
- Family and Medical Leave Act
- Unemployment
- Federal Unemployment Tax ACT
- Texas Compensation Unemployment Act
- Workers’ Compensation
- Texas Workers’ Compensation Act
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- Health care & other benefits
- Texas Local Government Code
- Health Insurance Portability and Accountability Act (HIPAA)
- Consolidated Omnibus Budget Reconciliation Act (COBRA)
- Revenue Act
- Retirement Equity Act (Protects spousal beneficiaries.)
- Tax Reform Act
- Older Worker’s Benefit Protection Act
- Uniformed Services Employment and Reemployment Rights Act (USERRA)
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- City Charter
- Chapter II, Section 1., (35) & (36)
- Make provision for the care and sustenance of police, fire, and all
officers and employees who:
- Become disabled while in service of City [e.g. disability pension]
- Become incapacitated due to age or infirmity [e.g. retirement, health
care, sick leave]
- Become incapacitated due to longevity of service alone [e.g.
retirement]
- Provide aid and relief of widows, minor children and dependents
- Create funds for above purposes
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- City Charter (cont’d)
- Chapter XVI, Section 14.— Adoption of Personnel System and
establishment of rules and regulations, including
- Description of employment positions
- Methods of determining merit and fitness
- Hours of work, attendance, provisions for sick leave and vacation
leave
- Equitable pay scales
- City Personnel Rules
- Health and life benefits
- Paid and unpaid leave
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- Gender
- Female 30.7%
- Male 69.3%
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- Employees Years of Service (Average) 13.3 years
- Administrative Support/Officials/Clerical 11.5
- Officials and Administrators 16.2
- Paraprofessionals 11.3
- Professionals 11.3
- Protective Service Workers (Includes Uniformed) 15.8
- Service-Maintenance 8.8
- Service Skilled Workers 13.3
- Technicians 14.7
- Average Age 43.8 (age)
- Average Annual Salary $46,951
- Average Hourly Rate of Pay $21.87
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- Turnover as of 12/01/05:
- Civilian
- Due to retirement 2.28%
- Other reasons 10.79%
- Total 13.08%
- Police
- Due to retirement 1.79%
- Other reasons 2.98%
- Total 4.78%
- Fire
- Due to retirement 2.26%
- Other reasons 1.43%
- Total 3.69%
- Total Citywide: 9.80%
- Retirement Eligible as of 10/01/05:
- Civilian: 11%
- Uniformed: 44%
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- What is Attendance Incentive Leave (AIL)?
- An incentive program that awards additional vacation time to employees
who do not use sick leave;
- Authorized by the Personnel Rules:
- “In addition to vacation leave earned under this section, an employee
may earn vacation leave under incentive programs approved by the city
manager and adopted by the city council. If total vacation leave entitlement
exceeds the maximum limitation of Subsection (d) as a result of
vacation earned under an incentive program, further vacation accrual
will cease until vacation leave is taken sufficient to reduce the total
accrual below the maximum allowed.
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- Program administration covered by Administrative Directive 3-39 (attached
in Appendix 2);
- Eligibility: all permanent
employees who have completed one year of employment;
- Employees who do not use sick leave during a quarter earn an additional
vacation day.
- When an employee has 4 consecutive quarters without sick leave, an additional
2 vacation days are awarded.
- Upon award of the 2 extra days OR the use of sick leave, the year
starts over and 4 consecutive quarters are required to earn the extra
days.
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- Implemented 1/1/86 — 4 days per year
- Initiated as a strategy to decrease employee sick leave usage
- Original program allowed employees to earn partial days of incentive
leave based on partial sick leave usage
- Maximum award of 8 hours per quarter (4 days per year) for zero sick
leave usage;
- Revised in 2001— Potential for 6 days per year
- Changes by DPD lawsuit settlement
- Eligibility extended to uniformed fire & civilians without
appropriate Council authorization
- Maximum award of 1 day per quarter plus 2 extra days (6 days per year)
- No awards made for partial sick leave usage
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- AIL achieved original objective to reduce sick leave usage
- Previous City studies* indicate:
- A 2004 ICMA Study revealed that the COD had the lowest sick leave usage
per 1,000 hours worked***
- Average usage among 37 jurisdictions surveyed is 30 days.
- COD Average usage per year: 3.8
days of sick leave
- 30% of all COD employees use zero sick leave
- City’s rate of unscheduled absence lower than national average**
- * Calendar 2003 data from 10/5/04 briefing on sick leave
- ** Commerce Clearing House Unscheduled Absenteeism survey
- *** ICMA Center for Performance Management (Human Resources Report)
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- No council authorization for existing program for civilian and fire
uniformed employees
- No cap on accumulation of AIL award; all other forms of leave have caps
- Legal issues with application of AIL (executive session required)
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- 8,004 employees (64%) earned AIL in July 04-June 05
- Average number of extra vacation days earned (July 04-June 05) due to
AIL program:
- Civilians: 3.15
- Fire Uniformed: 3.64
- Police Uniformed: 3.2
- 1,568 employees have “over the max” vacation days due to AIL earned
- In 04-05, 3 employees who terminated were paid a total of $21,704 in
“over the max” vacation hours
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- Amend Personnel Rules to gain official Council approval for program
- Establish a maximum accumulation for Attendance Incentive Leave
- Vacation and sick leave have accumulation limit
- Track AIL separately from vacation leave
- Allows monitoring of use and maximum accumulation
- Examine application of incentive relative to Family Medical Leave
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- Civilian Employees
- eligible to retire as of October 1, 2005
- Current
Headcount
7,718
- 30+ years of
svc
172
- 60+ years of
age
328
- Rule of
78
359
- Total
859
- 11.12% eligible
- There are an additional 1,222 civilian (15.8%) employees with 20-29
years of service eligible to retire with a reduced monthly pension
(penalty).
- Uniformed Employees
- eligible to retire as of October
1, 2005
- Current
Headcount
4,598
- Age 50 with 5
yrs 94
- Age 45 with 5
yrs 241
- 20 years of
svc 1689
- Total 2,024
- 44% eligible
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- Employees maintain current vacation balances
- Future AIL earnings will be tracked and capped separately
- Employees taking approved leave may choose whether to use vacation or
attendance incentive leave
- City Auditor’s Office has previously identified potential savings of
$807,408 by changing Attendance Incentive Leave program*
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Notes
