Explanatory Comment on Pay Adjustments Provided by Local Governments and State Agencies in Fiscal Year 2002-2003
(This analysis addresses information provided by survey participants in response to the Pay Structure Questionnaire included in the survey)
I. Comparison with Defined Government Peers:
Council materials contain a document listing members of this group, as selected by Council in 1999 for use in salary comparison reports. Council materials also contain a chart showing pay actions taken by each of the survey respondents since last July.
II. Pay Practices: Municipalities and Counties
The municipalities and counties in this group have continued the practice of single annual adjustments to pay; although several have implemented these decisions throughout the year on the employee’s anniversary date. To the best of our knowledge, no municipality or county currently makes any additional adjustments to pay ranges or employee salaries at other times during the year.
III. Pay Practices: The University of North Carolina and UNC Health Care System
These two organizations are the largest area employers represented in the survey group, and therefore their actions carry significant weight in the local labor market. While both these organizations are considered to be state agencies, they are different from each other and from other state agencies in two important ways:
a. The UNC Health Care System, through legislation passed in November 1998 has autonomy from the State Personnel Act on compensation. The Board of Directors of the UNC Health Care System is authorized to approve compensation programs which are not subject to the State Personnel Act
The Health Care System has operated within this autonomy to implement a new Compensation system and a new Performance Evaluation system in 2002. These programs allow for pay increases at any time during the calendar year, allow more than one increase per employee per year and may include equity adjustments, market-change adjustments, retention offers, or other actions. The organization has also added an annual Performance Bonus program for senior and upper middle-management positions.
b. The University of North Carolina at Chapel Hill, while still subject to the State Personnel Act and under the control of the Legislature for across-the-board pay increases to faculty and staff, has a number of autonomous pay programs. These allow pay increases to individuals and to groups of employees in specific jobs without review at the State level. These increases occur throughout the calendar year, and may be based on :
1. Reclassification of one job or a specific group of jobs. As a part of the reclassification, the jobs are regraded and the employees may receive a pay increase up to a defined limit. These may range from 1-2% to 20% or greater, depending on the basis for the job change. These decisions may affect as many as 200 or more positions at one time. They may be based on either job change or market change of the jobs affected.
2. In-range pay adjustment: granted to one employee or a specific group of employees who have been identified as qualified under the terms defined for the increase.
3. Equity adjustments: this type of pay increase is granted to a group of employees in a single job class and may be based on a decision to hire or promote a specific employee to a higher pay level. The other increases are made to insure “equity” for equally-qualified persons in the work unit or department who were hired at a lower amount.
4. Promotional increase: This occurs when an employee is promoted to a higher-level position and may range from 5% up to the maximum of the range for the higher job
5. Retention Increases: This occurs when an employee who has received an external job offer is extended a “counter-offer” to encourage him/her to remain. This increase may vary, up to and including the maximum of the pay range.
C. Finally, it is important to note that both the University and the UNC Health Care System allow managers to hire new employees in at any point in the pay range, up to and including the maximum, if funds are available. This may result in one employee in a job class receiving pay that is as much as 50% more than another in the same job class. (Ideally, these two employees would have significantly different experience and qualifications.)
IV. Pay Practices, Trends and Movement in the Local Private Sector Market
Information provided the Capitol Associated Industries market survey indicates that for this region, consisting of the Alamance, Wake, Durham and Orange counties area, salaries have increased by an amount ranging from 3.7% for nonexempt jobs ( these are comparable to the Town jobs in ranges 25-34),an average of 4.1 % for Salaried/Exempt jobs ( these are comparable to Town jobs in ranges 35-44) and an average of 4.4% for Executive jobs ( these are comparable to Town jobs in ranges 45-53) over the last year.
Projected increases by area employers indicate this trend will continue in the upcoming year, with estimates that pay increases for Non-exempt jobs will be 3.7%, Salary/Exempt jobs will be increased by 4.2%, and Executive jobs will change by 4.5%.