10 Position ClassificationCITYOF
690 City Center Drive
PO Box 147
Minnesota 55317
Phone
952.937.1900
General Fax
952.937.5739
Fax
952.937.9152
Building Department Fax
952.934.2524
Web Site
www. ci. chanhassen, mn. us
MEMORANDUM
TO:
FROM:
Mayor and City Council
Todd Gerhardt, Acting City Manager
DATE: June 20, 2001
SUB J:
Modification to Position Classification and Compensation Plan
The City of Chanhassen has operated under a Position Classification and Pay
Compensation Plan for many years. This plan recognizes employee performance and
provides incentive for development of each employee's potential (see Attachment #1).
This program has allowed employees to gain valuable experience in their positions and
also to see a percentage increase in base salary if they took on new responsibilities,
learned new skills and were productive.
The issue with the current plan is for those positions who have base salaries above 100%
of the midpoint. For example, under our current plan an employee at 105% of their
midpoint qualifies for a 3.5% cost of living adjustment to their base salary, and then in
July could see another 2% base salary adjustment. The 5.5% increase in base salary
causes their salary to be 2% higher than the metro average (midpoint) each year. The
"cube" allows an employee to go as high as 30% above the metro average (midpoint).
Staff is recommending modifying "the cube" (see Attachment #2) to a "Merit Pay Step
Method." The amount of increases received by an employee is still governed by two
factors; performance and comparable salaries for similar positions. The method to
administer merit pay adjustments for the year will be as follows:
Cost of Living
Adjustment (January)
Effective Salary as a
Percent of the
Midpoint
July 1 (annually)
Step Increase
July 1 (annually)
Lump Sum
Merit Pay
Will be determined by
the Minnesota
Department of Economic
Security Research and
Statistics using the
Minneapolis/St. Paul
CIP-U
100%+ --- 0 to 2%*
90%-99% 0 to 3%** 0 to 2%*
80%-89% 0 to 3%** 0 to 2%*
70%-79% 0 to 3%** 0 to 2%*
Mayor and City Council
June 20, 2001
Page 2
Instructions for Use:
1. Locate employee's percent of midpoint.
2. Follow across to determine "potential" salary adjustment and cost of living adjustment based on
performance and comparable salaries for similar positions.
* Lump sum merit pay increases will be given to employees based on identifiable improvement in
performance, supported by the recommendation of the immediate supervisor.
Step increases will be given to employees who are under 100% of the midpoint and have shown
meaningful improvement. This increase allows for employees hired within the lower quartile to
see accelerated base salary adjustments when he or she meets the normal requirements for the
position based on performance, education, and experience required for the position.
RECOMMENDATION
Staff recommends approval of the modification to the Position Classification and Pay Compensation Plan
as presented.
ATTACHMENT
o
Position Classification and Pay Compensation Plan
"The Cube"
g:~adminXtgXmerit pay.doc
- - POSITION CLASSIRCATION PLAN
In 1982, the Chanhassen City Council adopted a 'Position Classification and Compensation Program"
governing the responsibilities and compensation for all positions of the City. That Plan must be funded
as a part of each years annual budget· The amount of increase received by an employee is governed by
two factors - pedorrnance and comparable salaries for similar positions. These factors are graphically
illustrated within the 'cube', which is adjusted yearly to reflect current economic conditions. The follow-
ing cube has been established and resulting salary increases included within this year.
RECOMMENDED SALARY INCREASE GUIDE
Effective Jannuary 1,1998
Instructions for Use
1. Locate performance rating column.
2. Locate position in range row.
3. Box where the two intercept contains
the guidelines for merit salary increase
action. :
Thus, an e~npioyee rated 'B' whose salary is between 90% and
100% o! the salary range may receive a merit increase
of from 2% to 3% of the midpoint, if 6 months have
elapsed since the previous increase, and the increase
does not result in a new salary in excess of 100%
of the midpoint.
Note: As time interval increases, be sure to
use the larger percentage, i.e. rating = B;
salary as a percent of midpoint = 85%;
tim~ [nt~rv&l = 6 months - Use 4% to 6%,
not 2% to 3%. Also note that the
increase shown Shall generally 12 Months
apply at mid-year and does not
relate to general range increases
that may occur at the first of 1-2%
the year.
18 Months 6-9 Months
4. Percentage shown are to be applied to
midpoint of sa(ary range.
5. Months shown reflect the minimum time
interval required since previous saJary action.
6. Ceiling Shows limit of salary opportunity
allowed by performance rating.
Over Maximum
' 130%
12-18 Months
1-2%
' 120%
12-18 Months 12 Montl~s
1-2% 1-2%
110%
12 Months 12 Months
1-2% 1-2%
100%
6-9 Months 6 Months
12 Months
0% 1-2% 2-3% 3-4%
12 Months 6 Months 6 Months 3 M~nttts
90%
0% 0% 1-2% 2-3% 2-3%
·
· _ ~ ~.. 80%
E D C B A
Individual Performance ' Ceiling
A copy of the 'Position Classification and Compensation Program' is available at City Hall
or the Chanhassen Library.
De
Procedure for Establishing Salary Adjustments
The responsibility for initiating a salary adjustment recommendation is
delegated to the immediate supervisor. Ail recommendations must be
approved by the department head before referral to the City Manager for
review and approval. All department head reviews, including goals to be
accomplished in the next year, are to be submitted to the City Council
prior to first of year cost of living adjustments being made.
The City Manager shall be responsible for administering and approving
salary adjustments under this plan.