Compensation in the NC CareerBanding System

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Compensation in the NC Career-Banding System

• Setting Statewide Market Rates
• for a market-focused pay philosophy

May 31, 2006
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Objectives
Understand

• North Carolinas Pay Philosophy

• How the graded classes make up the structure of
  the banded classes

• Methodology and standards for market pricing

• How the benchmarked classes are market priced

• Establishing statewide market rates

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Key principles of our
NCs Compensation Philosophy
market focused philosophy . . .
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NCs Compensation Philosophy
Competitive Pay will reinforce high standardsand
positively impact the states ability to

• Recruit, retain and develop a qualified,
  motivated, and diverse workforce

• Promote proven successful work behaviors

• Emphasize competencies and demonstrated
  proficiency on the job

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Compensation Philosophy, contd

• Salaries should be within the contributing market
  guidelines for those employees who regularly
  exhibit successful work behavior at the
  contributing level determined for the class and
  that are consistent with achieving the goals and
  mission of the organization, as measured by the
  states competency measurement system.

• Contributing Reference Rate (CRR) a
  market-based reference rate that reflects
  appropriate market pay for demonstrated
  contributing competencies. Initially set
  half-way between the Minimum and Journey rates.

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Compensation Philosophy, contd

• Salaries should be within the journey market
  guidelines for those employees who regularly
  exhibit successful work behavior at the journey
  level determined for the class and that are
  consistent with achieving the goals and mission
  of the organization, as measured by the states
  competency measurement system.

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Compensation Philosophy, contd

• Salaries should be within the advanced market
  guidelines for those employees who regularly
  exhibit successful work behavior at the advanced
  level determined for the class and that are
  consistent with achieving the goals and mission
  of the organization, as measured by the states
  competency measurement system.

• Advanced Reference Rate (ARR) a market-based
  reference rate that reflects appropriate market
  pay for demonstrated advanced competencies.
  Initially set half-way between the Journey and
  Maximum rates.

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Compensation Philosophy, contd

• At Market an employees pay is considered to be
  at market if it is within 10 ( or ) of the
  market rate for the competency level that they
  have attained and demonstrated.
• Employees who are progressing toward the next
  competency level may exceed the 10 halo.

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Compensation Philosophy
Goals

• Promote a career development plan that provides
  multiple career paths, removes barriers to
  advancement, and supports the mission of the
  agency/university.

• Encourage the development of competencies
  (knowledge, skills and behaviors).

• Encourage and reward employees who exhibit
  excellent performance and motivate them to
  perform at their best.

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Background Information

• The Crosswalk from

Grades to Bands . . .
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6,000 Classes into 10 Job Families

• Administrative Managerial
• Office Support
• Information Technology
• Law Enforcement and Public Safety
• Information and Education
• Human Services

• Medical and Health
• Institutional Services
• Operations and Skilled Trades
• Engineering and Architecture
• Natural Resources and Scientific

Subject example used throughout this training
module
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Job Family Structure
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Job Family Structure, contd
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Job Family Structure, contd
A group of banded classifications that,
collectively, represents the full range of work
performed from entry level to the management
level in a field of work or occupational area.

• The food services job family branch includes all
  of the classes in the graded system that share
  similar functions, competencies and training and
  experience.

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From Grades to Bands
Banding the Food Services Classes

• where employees are generally new to the job or
  job responsibilities, to . . .

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From Grades to Bands, contd
Banding the Food Services Classes
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From Grades to Bands, contd
Banding the Food Services Classes
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From Grades to Bands, contd
Banding the Food Services Classes
Food Services Banded Class Series

• A total of thirty-seven (37) graded
  classes were rolled up into three (3) banded
  classes, which make up the Food Services Banded
  Class Series of the Food Services Branch, of the
  Institutional Services Job Family.

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Benchmark Classes
There is a further break-down of competency
leveling within each banded class, for which a
benchmark class is identified. This identified
benchmark is the starting point for the labor
market study process.
Identified Benchmark Classes
Class used as example throughout this module
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Setting Statewide Market Rates

• The Process .

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Where We Find Market Data
The OSP Compensation Library houses many of the
major nationally published surveys as well as
many local surveys. Agencies and
Universities help support the library
financially.
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Where We Find Market Data, contd
In-House Survey Instrument to collect
competitors market data
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Market Pricing

• Our Methodology Standards

• Define the scope of our labor market

• Local

• National

• Statewide

• International

• Regional

• Specific Competitors

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Market Pricing
Our Methodology Standards, contd

• Identify the appropriate Industry
  Recruitment Pool

• Government
• Local Municipalities
• Southeastern States
• Contiguous States to NC

• Private Sector
• For a critical skills job
• Specific to Health Care
• Engineers

Usually a combination of industry types will
provide a better cross section of firms and
results in a fair market pay representation.
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Market Pricing
Our Methodology Standards, contd

• Market data must be no older than 2 years and
  aged to a common date.

• Best matches are those with thumbnail
  descriptions and Training Education standards.

• Source of data must include our market scope
  (regional, statewide, contiguous states, or
  national where appropriate).

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Market Pricing
Our Methodology Standards, contd

• Company average, minimum and maximum are standard
  statistics

• A minimum of five (5) providers of data

• Matches are made to the benchmark classes and
  must be a 75 or higher job match

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Market Pricing
Our Methodology Standards, contd
There are a total of five (5) rates set from the
market study

• Minimum

• Journey

• Maximum

CRR
ARR

• Contributing (CRR) a market-based reference
  rate that reflects appropriate market pay for
  demonstrated contributing competencies.
  Initially set half-way between the Minimum and
  Journey rates.

• Advanced (ARR) a market-based reference rate
  that reflects appropriate market pay for
  demonstrated advanced competencies. Initially
  set half-way between the Journey and Maximum
  rates.

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Bringing It Together . . .
Benchmarked Classes Market
Pricing
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Collecting Survey Information
Survey data is collected in the OSP
Compensation Survey Database. This database is a
repository of all survey sources and pertinent
statistical information used to set the market
rates for all career-banded classes in the NC CB
system.
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Benchmark Classes
Identified Benchmark Classes
The identified benchmark classes for each level
of work in a banded class, or banded class
series, is the starting point for the labor
market study process.
Class used as example throughout this module
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Benchmarked Classes Market
Pricing
The chosen benchmark jobs serve as anchor points
that are representative of all three levels of
work found in each banded class. Market data
is collected for each benchmark.
Benchmark Classes
Non-Supervisory Level - Contributing
l Journey
High-Level - Advanced
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Market Data

• The job matches made for each benchmark class are
  reviewed with the OSP Job Family Coordinator and
  the CB Transition Team to agree upon the
  strength of the matches -

• are they equal to, weaker or stronger than OSPs
  class,
• how heavily to weight those not equal to NCs
  class, or to not use the match at all.
• job titles alone cannot be used to make job
  matches.
• the Transition Team includes Occupational
  Experts to assist in this task

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Market Analysis Data Entry Worksheet
Survey data for each of the three levels for
each benchmark class are collected and entered
into the survey database. The data is
weighted, aged to a common target date if more
than six (6) months old and a composite rate
is automatically generated.
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Market Data Analysis

• Survey data collected in the Compensation Survey
  Database are used to set the three initial rates
  for the new banded class

• The composite average for the Non-supervisory
  Level jobs is used as the class Minimum rate

• The composite average for the Mid-Level jobs is
  used to set the Journey rate.

• The composite average for the High-Level jobs is
  used to set the Maximum for the class.

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Market Survey Results
Food Service Technician Banded Class
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Market Rate Analyzer Tool
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Market Rate Analyzer Tool
Rates for the Food Service Series
These are the three anchor points generated from
the market study, for all three levels of work
within the Food Service Branch of the
Institutional Services Job Family
Build the rate
(Rates are sample data only)
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Market Rate Analyzer Tool
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Market Rate Analyzer Tool

• Judgment is used to smooth the rates, based on
  factors such as the integrity of the survey data,
  hence the weighting of the data, differentials in
  existing salary grades, and existing employee
  salaries.

• These adjusted rates and differential statistics
  will be reviewed with the Transition Team, Job
  Family Coordinator and Management.

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How a Complete Banded Series Pay Line Might
Look
.
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Other Tools Analysis
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Other Tools Analysis
Employee statistics from all the graded classes
included in the band, which help to determine the
viability of the new rates, are generated in this
tool, such as

• The highest and lowest salaries at each level
• The band range compared to the graded salary
  range
• The of employees at market (/- 10 of market
  rate), below market or above market
• The female and male in the class
• Class break-down analysis (other demographics)
• Estimated cost analysis to bring all employees
  falling belowthe market rate to at least within
  10 of the market rate

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Approval Publication of Rates

• Comp Rep. will share this report with Steering
  Committee and State Personnel Director.

• Once rates are approved, including approval of
  the band ranges by the State Personnel
  Commission, the Career-Banding Manager
  willnotify the HRIS Manager of the approved
  rates to be published in PMIS.

• Notification will be sent out to agencies
  anduniversities that rates are approved for use.

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Approval Publication of Rates
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Approval Publication of Rates
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Approval Publication of Rates
The North Carolina Career-Banding Pay Plan can be
found on the Compensation Program web page, of
the Office of State Personnels web site. It is
listed under Current Salary Information.
http//www.osp.state.nc.us/CompWebSite/Compensatio
n_Web_Site.html
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Compensation in the NC Career-Banding System
. . .and that is how Statewide Market
Rates are established in North Carolinas
Career-Banding Program . . . .