MuskogeePhoenix.com, Muskogee, OK

Local News

November 2, 2013

SUNDAY EXTRA: Data for city job review questioned

Councilors ask how comparable cities were selected for study

City councilors delayed action on a request to approve the findings and recommendations of a reclassification and compensation study for non-uniform employees because of questions about market comparisons.

The 18-month project was part of an effort to reclassify jobs and realign compensation schedules to make the city of Muskogee a more attractive employer. It has been 20 to 30 years since the previous comprehensive study, an exercise that human resource professionals say should be completed every five to 10 years.

Michael Bates, who oversaw the project as the city’s labor relations manager, said the object of the study was “to properly define the components of accountability ... and problem solving ... of each job” along with the knowledge base required. In a memo to city councilors, Bates said the study’s focus “is not on individual performance, personality or traits of the individual ... but on the job itself.”

But city councilors focused mostly last week on the compensation schedule, which could cost about $900,000 to raise non-uniform employees to the median of comparable markets and more to sustain that level. Councilors pressed a consultant for information about the entities used to establish the median — or market level — pay-grade charts.

Ward II Councilor James Gulley said caution must be exercised with such comparisons to ensure fairness and accuracy. He said factors such as sales tax revenue and demographics should be included in the calculations.

“So many times we compare ourselves with Edmond or other cities with income levels and other factors that are quite a bit different than what we have here in Muskogee,” Gulley said. “You want to make sure you are paying wages that are comparable to other cities, but when you choose those cities you want to be comparing oranges to oranges.”

Thomas Zorn, a senior consultant with the Hay Group, which conducted the study, said the market comparisons for which Gulley and other councilors are looking would be cost prohibitive. Finding comparable organizations or markets based upon those factors would require “custom surveys” to acquire information and the creation of a “new database,” he said.

“What I consider council members may envision the big consulting firms should be using would be ideal, but the reality is that kind of comparison isn’t possible without conducting custom surveys,” Zorn said. “That could be done, but you would have to go out and collect all this other information and essentially create a new database — the cost of that is kind of crazy.”

The comparative markets used to establish the proposed compensation schedule resulting from the study were gleaned from a database compiled by the Hay Group. Zorn described the proprietary material as a “living and breathing database of information that is constantly changing as new information is added.”

The consulting group essentially identified comparable markets or organizations by filtering the information compiled for the database by geography and sector, he said.

The 30 to 40 organizations ultimately used for comparison purposes to establish the proposed pay grade recommendations for the city’s non-sworn employees are governmental entities within Oklahoma and its contiguous states. Zorn said no demographics or other such factors were taken into consideration.

Bates said that although the comparative organizations used to establish the recommended compensation schedule may not meet councilors’ expectations, he believes the depth and breadth of the Hay Group’s database “erases some of those concerns.”

“The public-sector market he used involved about 3,000 incumbents, which is a broad sweep of information,” Bates said. “When you use that size of a database, it kind of erases some of those issues such as local incomes, location or revenue streams.”

Bates said another factor that should be considered when determining whether the recommended compensation schedule is appropriate for Muskogee is the ranges included in the pay grade scales. Those ranges provide choices that councilors can use when setting policy, such as establishing a schedule based upon the median or at some point either above or below that midpoint value based upon the factors Zorn identified such as recruiting.

The Hay Group study found that more than 75 percent of workers in the identified comparative markets earn higher wages than the city’s non-uniform employees for comparable work. Raising Muskogee’s non-uniform employees’ pay to the median would cost about $900,000 or about $90,000 a year to raise their pay to half the median, or the 25th percentile.

Interim City Manager Roy Tucker said revenue for any pay raises that might be considered during the coming months could come through increased sales tax collections resulting from economic development, lost revenue recovered from sales leakage to other markets, or rate increases.

“Once we are able to get salaries to the market objective set by the council, the city of Muskogee becomes more aptly able to compete in the marketplace,” Tucker said. That would help the city “recruit the best and brightest future employees and, most importantly, to retain the remarkable employees we have.”

Zorn said in order to achieve that goal, it is a better practice to identify the markets from which potential workers are being recruited and those where departing employees are going. That is what an employer must do “to remain competitive,” he said.

Reach D.E. Smoot at (918) 684-2901 or dsmoot@muskogeephoenix.com.

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