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Anaheim, CA 92805
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CITY COUNCIL AGENDA REPORT
City of Anaheim
HUMAN RESOURCES DEPARTMENT
DATE: AUGUST 15, 2023
FROM: HUMAN RESOURCES DEPARTMENT
SUBJECT: PROFESSIONAL SERVICES AGREEMENT FOR CITYWIDE
CLASSIFICATION AND COMPENSATION STUDY
ATTACHMENT (Y/N): YES ITEM # 18
GOVERNMENT CODE § 84308 APPLIES: YES
RECOMMENDATION:
That the City Council, by Motion, approve an Agreement (“Agreement”) with The Segal Company (Western States), Inc. (“Segal”) to conduct a citywide classification and compensation study, in an amount not to exceed $525,000, and authorize the Human Resources Director or designee, on behalf of the City, to execute the Agreement and related documents, and take the necessary actions to implement and administer the Agreement.
DISCUSSION:
In compliance with the provisions of the Anaheim Municipal Code, the City of Anaheim maintains a personnel system comprised in part by a position classification plan and a plan of compensation. The position classification plan is the organization’s process for grouping jobs in common classifications based on similarities in duties, responsibilities, scope, complexity and job requirements. The current position classification plans contains more than 600 unique classifications, covering the positions in which approximately 2,000 full-time and 1,025 part-time employees serve the City. Each classification has a unique written class specification outlining details of the job, the essential job functions, minimum qualifications and working conditions for the classification. These specifications not only inform the employees of the nature of their responsibilities and the type of work they may be assigned but also ensure the City appropriately identifies common characteristics among classifications, legal requirements, and specific safety concerns.
Each classification is assigned to a salary range as approved by the Anaheim City Council through ratification of collective bargaining agreements or resolution. These salary ranges along with other forms of compensation make up the City’s plan of compensation. Base pay for employees is set within the range for the classification in which they serve. To meet the objectives of attracting the best and most competent persons to serve the City and to ensure that positions with similar duties and responsibilities are compensated on a Professional Services Agreement for Citywide Classification and Compensation Study August 15, 2023
uniform basis, the City must from time to time analyze the plan of compensation for internal equity and external competitiveness.
As a result of evolution of the scope and focus of positions throughout the City, introduction of new classifications to address organizational needs, implementation of compensation changes made through the collective bargaining process, and impacts of conditions in the external job market, the City has a current need to conduct a comprehensive citywide classification and compensation study. A consultant study was last conducted 2016 and was limited in scope. Various bargaining unit or classification specific studies are conducted on an ongoing basis by staff. While these studies are an important part of maintaining the position classification plan and a plan of compensation, ensuring citywide consistency and the ability to make informed decisions regarding future organizational needs and compensation strategies requires review of the plans on a citywide basis.
The purpose of the proposed study is to assess the current classification and compensation system and practices across the City and all bargaining units and to determine appropriate strategies to ensure that the City consistently maintains (1) the ability to successfully recruit and retain a talented and highly qualified workforce, (2) a safe, productive work environment with high employee engagement, and (3) compensation practices that achieve internal equity and external competitiveness.
On April 21, 2023, the Human Resources Department issued a Request for Proposal. The in-depth scope of work included the following key components:
1. Planning Phase: Develop and propose a communication plan for stakeholders to make transparent the process and methodology for gathering information and outreach on project milestones.
2. Classification Study Phase:
a. Recommend classification specification format and content; b. Update of all existing job descriptions for relevancy and accuracy of distinguishing characteristics, essential functions, working conditions, and minimum qualification standards, as well as appropriateness of designation under the Fair Labor Standards Act;
c. Establish career paths/ladders and appropriate benchmark classifications; and
d. Identify best practices for maintenance of the classification system.
3. Compensation Study Phase:
a. Provide recommendations for changes to City compensation system and total compensation philosophies to address competitive labor market concerns, salary compaction/compression, and resources for ongoing system maintenance;
b. Develop compensation strategies to withstand minimum wage increases while maintaining appropriate pay differentials;
c. Prepare a plan for the ongoing internal administration and maintenance of the recommended compensation plan.
Professional Services Agreement for Citywide Classification and Compensation Study August 15, 2023
The City received seven proposals from consultants based throughout the country. Five of the proposals were deemed highly competitive and the proposing firms were invited to interview with the City. The City’s interview panel included representatives from the Human Resources, Police, and Convention, Sports & Entertainment departments.
Collective bargaining units were afforded the opportunity to review all proposal and submit feedback and suggested questions prior to the interview panel process.
Segal emerged from the process as the most qualified consultant in this specialized field of work. Segal provided similar services for public sector organizations in 42 states, including many throughout California. Each member of the project team has an extensive track record of successfully advising public sector clients in the classification and compensation arena. A thorough reference check provided consistent positive remarks on deliverables with many repeat clients.
The estimated timeline for completing the project is up to 12 months. The project timeline factors in consideration for the cooperative effort of gathering accurate information from employees in each job classifications. The timeline leverages strategic advantages of sequencing the classification phase prior to the compensation phase in order to ensure the most relevant market analysis. The timeline also includes the opportunity to effectively engage with stakeholders (e.g., City Council, executive team, employees, and labor organizations) on critical project milestones.
The Human Resources Department will assemble a project committee to work in partnership with Segal. The classification and compensation study will require the cooperation of all City employees to ensure timely completion of the project.
IMPACT ON BUDGET:
The adopted budget for Fiscal Year (FY) 2023/24 includes appropriations for one-time service enhancements to include a comprehensive classification and compensation study.
Sufficient appropriation for this Agreement is made in the FY 2023/24 General Fund Budget.
Respectfully submitted,
Gretchen R. Beatty
Human Resources Deputy Director
Attachment:
1. Agreement between the City of Anaheim and The Segal Company (Western States), Inc.