We Need to Get Compensation Right

We Need to Get Compensation Right
Excerpt from 7.16.14 Town Newsletter
by Addison Councilmember Chris DeFrancisco

During our July 8th Council meeting . . .  Item R7 dealt with our town’s compensation philosophy.  The town went to great lengths to make sure every council member was fully informed in preparation for this vote.  We hired a third party compensation consultant,  formed a compensation committee that included employees of various departments of the Town and spent a great deal of time attempting to put together a philosophy that was  sustainable, affordable and fair to all those concerned.

A survey of 11 competitive cities was conducted by our consultant to determine the competitiveness level of the Town’s adopted pay ranges and actual salaries. The following are the results:

“The survey results for Police Officer and Firefighter/Paramedic were similar; the Town’s current hiring rate for both jobs is 11% below average starting pay found among the comparator cities.  The town starts below market and remains below market at the measured intervals of 2 years, 5 years and 10 years.  By year five, Addison trails market actual average by more than 15% for Firefighters and 17% for Police Officers.”

“The pace of actual salary adjustments (speed or number of years in which an employee reaches top of pay range) for Police and Fire in Addison fall noticeably below market averages.  Addison’s pay range width between Minimum and Maximum for firefighters and police officers are much wider than market average, resulting in too low hiring values and too-long of time required to reach top of range.“

The survey also found some similar issues with non-safety positions, or in other words all the other departments in our town.  Specifically, the survey showed that our ranges are wider than the market average resulting in too-low hiring values and too long of time required to reach top of range.

Included on the July 8th council meeting agenda was a compensation philosophy supported by the City Manager that contained the following, essentially taken from the Town’s 2013/2014 Budget Book:

Addison addresses employee compensation through a merit and market pay plan.  The purpose of the plan is three fold: to encourage excellence in service by tying salary increases to job performance rather than tenure; to reward employees for their efforts and job performance; and to remain competitive with other Metroplex cities in regards to employee compensation.

The City Manager proposed five elements to administer the policy, one of which was to annually budget “for market and merit compensation that is fair, both internally and externally, and in a way that is financially sustainable,” with market being defined as “the average (50th percentile) of our comparative cities.”  Another element stated that “successfully performing employees” would have “the opportunity and ability to reach the adopted pay range midpoint within 5 years and reach the top of the adopted pay range within 10 years.”  The Council voted this plan down, 5-2, with Mayor Meier and Council Members Moore, Clemens, Heape and Carpenter voting against it, and Council Members DeFrancisco and Arfsten voting for it.

The compensation philosophy adopted by council does not specifically provide for evaluation of proposed merit based compensation with respect to our neighboring, competitive cities.  Each of these cities has a long term compensation plan.

Why is getting compensation right so important? Our consultant shared the following Addison Police Department trend with us:

Addison Police Department

Years of Experience          Number of Officers

0 to 3                                                17

3 to 5                                                 2

5 to 7                                                 1

7 to 10                                               9

10 to 15                                             6

15+                                                    9

As this chart illustrates, we do a great job of recruiting qualified officers but we just aren’t keeping them, in part, at least, due to compensation. We train them well and they are leaving. It cost our town about $80,000 to get a new recruit through the police academy and on to our streets.  This is why we need to get compensation right.

Speaking of hiring and retaining the best the clip below is a must see!  The story illustrates the incredible bravery, compassion and dedication of the Addison firefighters who protect our community. They broke into a vehicle engulfed in flames and went the extra mile to save a dog that was not breathing. We are extremely proud of the Addison Fire Department and honored to share this story of heroism with our citizens.  Check out one of the numerous news pieces about this rescue, click here.