1. Compensation Study Preliminary Results Presented by: CBIZ Human Capital Services January 11, 2016

2. 2 Introduction CBIZ Human Capital Services ● Priya Kapila, CCP, SPHR Senior Manager, Compensation Consulting

3. 3 Introduction What we want to accomplish today: Review the compensation study methodology Discuss the preliminary project results Present recommendations and next steps Answer your questions

4. 4 Introduction The District has asked CBIZ to review current practices and recommend improvements related to: Job classifications and descriptions Current compensation compared to market Internal equity assessments Compensation policies and procedures

5. 5 Methodology

6. 6 Project Steps 1.Planning Meetings 2.Job Evaluation 3.Compensation Analysis 4.Salary Schedule Development 5.Benefits Cost Analysis 6.Policy Review and Recommendations

7. 7 Job Evaluation ● Job descriptions and job analysis questionnaires (JAQs) were evaluated to identify: –Essential Functions –Duties and Responsibilities ● Job descriptions, not titles, were used to ensure correct matches to the market.

8. 8 Job Evaluation ● Job Classification and Description Updates –Title consolidation and separation –Title revision to better reflect job roles and create consistency throughout the District –Review organizational hierarchy and clarify career paths –Establish consistency and employment law compliance

9. 9 Compensation Analysis What is market pricing? Valuation of pay for the District’s jobs in the external labor markets. Key considerations when determining labor markets: –Location oSt. Joseph, Missouri oRegion oNation –Industry oSchool districts oBroad spectrum of employers –Size oRevenue/Operating budget oNumber of employees oNumber of students

10. Compensation Analysis Blue Springs* Center* Independence* Kansas City* Lee’s Summit* Liberty* North Kansas City Park Hill* Platte County* Raymore-Peculiar* Raytown* Smithville* 10 Custom Survey – Peer Districts * Survey participant

11. Compensation Analysis 11 Enrollment Students: Administrator Students: Teacher Tax Rate Current Expenditures (Millions) Total Expenditures (Millions) Blue Springs14,425223165.13136.226178.205 Center2,613153115.9331.86339.116 Independence15,067251164.43134.441180.806 Kansas City15,258172135.27208.334251.505 Lee’s Summit17,834241155.26173.602250.078 Liberty12,023261155.35108.732145.167 North Kansas City19,853276145.23189.579274.445 Park Hill10,921223154.95113.791154.172 Platte County3,964195143.8936.31047.583 Raymore-Peculiar6,033213153.7550.90064.113 Raytown9,102184145.1582.701110.708 Smithville2,560206163.4421.84025.733 St. Joseph11,871229134.28103.671135.710

12. 12 Compensation Analysis ● Market Benchmark –50 th percentile: Also known as the median; this is the middle point of the market. By definition, half of organizations pay more and half pay less. A majority of organizations follow a compensation philosophy that strives to pay employees at the median. –An objective of the project was to align salary range midpoints with the market 50 th percentile. This is typically the point at which pay for fully-functioning, satisfactorily-performing employees is targeted.

13. 13 Compensation Analysis ● Definitions –Base Salary: The annual fixed rate that an individual is paid for performing a job. –Employee Benefits: Non-cash compensation provided to an employee. Benefits reviewed include: Paid leave (e.g., holidays, vacation, sick, etc.) Medically-related benefits (e.g., health insurance, dental insurance, vision insurance, short- and long-term disability insurance, life insurance, etc.) Retirement plan benefits Other common benefits (e.g., education cost reimbursement, specialized training and development, etc.) –Total Compensation: The sum of base salary and benefits.

14. 14 Compensation Analysis ● Definitions – 25 th percentile: The point at which 75% of organizations pay more and 25% pay less. – 50 th percentile: The point at which half of organizations pay more and half pay less. – 75 th percentile: The point at which only 25% of organizations pay more and 75% pay less. – Compa-ratio: An employee’s current salary divided by the midpoint of the salary range.

15. 15 Salary Range Development New salary schedules and ranges were developed in order to best reflect: –Market-competitive pay levels for District jobs –Job classifications and functions –Organizational hierarchy Two salary schedule approaches are presented for the District’s consideration: –Blended open range and step schedules for teaching-related staff only –Comprehensive step schedules

16. 16 Salary Range Development Example Title: Job XYZ Market Median: $35,450 GradeMinimumMidpointMaximum 1$24,778$30,972$37,166 2$27,398$35,618$43,837 3$31,508$40,960$50,413

17. 17 Benefits Cost Analysis ● The cost of the District’s employee benefits package will be compared to market-competitive data. –For medical and medically-related benefits, it is most accurate to utilize a fixed cost per employee to estimate the cost incurred –For other benefits, including paid time off and retirement, a percent of the incumbent’s base salary is the most appropriate metric ● Total compensation will also compared to the market.

18. 18 Preliminary Results

19. 19 Results – Salary Actual Annual Base Salary Compared to Market 50 th Percentile Base Salary

20. Below Salary Range Minimum Blended Schedule Approach Adjustments Step Schedule Approach Adjustments Number of Employees 451522997 Total Amount ($)2,117,7841,032,4953,761,899 Total Amount as a % of Payroll 3.3%1.6%5.8% Results – Salary 20 ● Comparative Salary Analysis – Many employees fall within the proposed salary ranges for their jobs. – The average overall compa-ratio is approximately 92%, indicating that employees, in general, receive salaries below the market 50 th percentile.

21. 21 Results – Benefits Benefit Categories Market-Competitive Benefits DataActual Benefits Costs Average Annual Dollars/ Employee Percent of Payroll Average Annual Dollars/ Employee Percent of Payroll Medical and Medically-Related Payments $6,87812.7%$7,71719.5% Retirement and Savings$7,51012.0%$4,51911.4% Miscellaneous Benefit Pay$8401.6%$00.0%

22. 22 Results – Stipends and Extra Duty Pay

23. Results – Total Compensation 23 ● Comparative Total Compensation Analysis – On average, employee salaries are slightly below the market median, while benefits are well aligned with market. – As a result, the competitiveness of total compensation falls between that of salaries and benefits. The average compa- ratio is approximately 94%.

24. 24 Recommendations and Next Steps

25. 25 Recommendations ● Review and adopt the proposed market-based salary schedules. ● Implementation of the compensation plan should occur uniformly across all positions. While different implementation scenarios may recognize budget constraints, partial or sporadic implementation can result in pay equity issues. ● Update schedules annually. ● Perform a comprehensive market review every 3 to 5 years to ensure that the salary ranges remain market- competitive. ● Periodically assess benefits offerings to ensure that the employer cost is market-competitive and fiscally sound and that the benefits provided by the District are of value to the employees.

26. 26 Next Steps 1.Review the compensation results, determine the preferred salary schedule approach and identify any final revisions due to internal equity and unique District considerations. 2.Finalize project deliverables.

27. Questions?