Compension and Benefits Study a Disappointment

by William Dowd 10/6/12

On Tuesday, September 18, the FinCom and Selectmen received a report from Stone Consulting, the consulting firm the Town hired to evaluate the Town’s compensation and benefits program.

Interestingly, as delayed as the study is – 6 months and 11 days to be exact, the best thing that could be said for it right now is that it is incomplete. But what did we hear on the 18th?

But what did we hear on the 18th?

1. The meeting opened with a revelation from the Consultant that since the highway and water employees have initiated the process of forming a union, those jobs were omitted from the Compensation Table review. Neither the FinCom nor the Selectmen either elaborated on this announcement or probed to obtain the foundation for such exclusion despite the fact that the RFP for the study included all positions – non-union and union.

2. With no supporting data, we were told that the market is made up of those Towns that pay “well” like Ashland, Maynard, Northborough and Sharon, and those that pay “less” like Bellingham, Grafton, North Reading, Pembroke, Swampscott, Uxbridge and Wrentham. An unlabeled and unsupported line chart alleged a parallel relationship between the lines of central tendency for Holliston’s pay rates and the “market” showing Holliston’s rates as lower than market. Some in the room concluded from this that Holliston is paying lower than the market. Without the data, such conclusions are at least premature.

3. Despite having been briefed by the FinCom on its discomfort with the current five- step time based pay structure in the current compensation table, the consultant proposed a 10 step structure. Ten years for an employee to be paid “the going rate” for the job, and each of those ten delivering a base pay increase on top of any other general wage increase – erroneously referred to as “cost of living” raise.

4. There was no data to support the Step 10 rates for the jobs in the structure. Step 10 was reported as “the going rate” in the market.

5. There was no mention in the report of using any performance data in moving up the pay steps.

6. There was no data relative to the comparable pay rates of these jobs in the wider job market. Comparing only to municipal positions may be convenient, but it misses the fundamental fact that most of the small number of jobs reported on are not municipal specific positions. They are clerical and administrative support jobs that are in wide use among area employers. Why should the Town’s pay rates be determined solely on a comparison of what other towns pay? Both the taxpayers and the employees should be assured of competitive pay and benefits – total compensation.

7. Speaking of Total Compensation – that large portion of the study was only grazed during the meeting while looking at comparable benefit practices among area towns. There is much more to do on this subject.

8. The Consultant reported that they had reviewed the pay of the “management” group: department heads and senior professionals. The Consultant also reported that the work was beyond the scope of the RFP. Again, neither the FinCom nor the Selectmen corrected that erroneous assertion. The RFP clearly includes all non-union employees.

9. The proposed management pay structure, while a bit more modern than was proposed for the support positions, also had no supporting data for the recommended “midpoints” or market value of the jobs. The report did suggest that the Town look into using some performance management tool to manage the base pay for these positions, but stopped short of either recommending one or describing how it would work.

10. Without really explaining it clearly, the report suggests that the Town make up in base pay for the fact that employees in Holliston pay more for health insurance than employees in surrounding towns. No evidence was supplied to show how the Towns that pay more for health insurance make up for it with lower base pay levels.

As a resident who was asked to agree to postponement of two articles on the May 2011 Town Meeting Warrant pending completion of this study, I am completely frustrated. I made a good faith decision to hold off on pressing for some obvious changes and in return, I expected a timely and high quality analysis to guide us. Right now we have neither, and it appears that whatever we do get won’t come until much later this year.

Despite numerous previous experiences with being falsely assured by commitments to a diligent “study”, I suppressed my cynicism and gave the FinCom and Selectmen the benefit of the doubt. But now, for the sake of the $35 million we spend every year on pay and benefits, for the sake of the taxpayers facing $45 million in unfunded retiree health insurance benefits, and for the sake of the employees looking for a fair deal, the FinCom and the Selectmen need to get engaged in this project, ensure adherence to the RFP they distributed, and bring it to a solid conclusion.
 

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