The City of St. Albert pays many of its non-unionized workers more than its hiring policy requires, suggests a compensation review commissioned by the city.
The city aims for its pay levels to be at the 60th percentile when compared to a group of nine other public sector organizations. However, research by a consultant shows that, for a sampling of 12 job categories, the city paid higher than the 60th percentile for 11 of the jobs chosen. The highest discrepancy was for a job category that would be worth a little more than $90,000 if paid at the 60th percentile. St. Albert’s maximum pay for that job category is $104,456 — 15.7 per cent or $14,000 more.
Coun. Cam MacKay was concerned to see such a gap between policy and reality.
“That’s not a problem if we’ve got a good reason for it. Are we having trouble attracting people in one area? Are we getting a lot better calibre of people?” he said. “It seems odd to me that you could be so far off the mark.”
Herb King of the Hay Group noted in his presentation to council that St. Albert is generally within 10 per cent of its target and the dollar difference between percentiles is often relatively small.
“There’s nothing like absolute accuracy in all of this. We feel that within plus or minus 10 per cent is a reasonable tolerance,” he said.
When analyzing St. Albert’s pay levels, the Hay Group compared city data with information from a broader cross-section of public sector organizations across Canada.
This is an important distinction from the way the city does its comparisons, said city manager Bill Holtby.
“In our comparisons, we are exactly on the 60th percentile,” he said. “I believe [the report comparison] needs to be taken with a grain of salt.”
One of the Hay Group’s 11 recommendations is that the city adopt a broader comparison group of its own, because benchmarking against nine other organizations is using a “very small statistical sample.”
“With a very small statistical sample you can have problems and we believe perhaps you are encountering some problems,” King said.
The group also recommends a review of the 60th percentile policy.
Overall, the Hay report was favourable about St. Albert’s compensation policies and practices.
“The City of St. Albert has a good compensation program without any major gaps and while we make a number of recommendations, their intent is to make a reasonably good system even stronger,” the report states.
Despite its mostly positive tone, the report brought forward several concerns that the city must work on, said Mayor Nolan Crouse.
“I think there’s a lot of work to do,” he said.
The biggest issue to Crouse is the apparent gap between the city’s actual pay and the 60th percentile target.
“There’s probably a lot of money in that,” he said.
Council accepted the report as information and will await a follow-up plan from city manager Bill Holtby to address the recommendations in the Hay report.
Holtby’s plan will also address other areas of concern the city has identified, such as overtime costs, a structure that is viewed as overly hierarchical in some areas, and policies around leaves of absence and vacation.
He’ll evaluate the potential for forming a standing committee on compensation to review wages and benefits.
In compiling its report, the Hay Group did more than 20 interviews with city councillors, managers and the human resources department.
The report says the consultants detected a desire within the city organization to more strongly link pay with job performance, but that the corporate culture isn’t suitable for a bonus system, partly because much of the work is done in teams. The report recommends that the city bring back and formalize an employee recognition program that has been largely dormant for several years.
Continuing to provide pay increases during a recession was an issue raised during the interviews, the report says.
