EXECUTIVE SUMMARY





Update on Total Rewards Strategy





Progress update for the County’s Strategic Plan objective and strategy to develop a total rewards strategic plan.






Tucker, White, Suyes, Gerome


AGENDA DATE:                       ITEM NUMBER:

June 2, 2004


ACTION:                                    INFORMATION:    




     ACTION:                               INFORMATION:   X










At the June 26, 2003 meeting, the Board of Supervisors directed staff to begin the review -of a total rewards strategy so that our compensation and performance systems are aligned with our high performance strategy.    To achieve the strategic goal and objective listed below, , our human resources systems must reward, motivate, and sustain customer service focused behaviors.  To develop and implement a total rewards strategy to support that goal, our current compensation and performance management systems must be reviewed, employees’ perceptions about current systems must be assessed, and changes that would support our pay and performance philosophy must be evaluated.    This report provides an update on the development of the Total Rewards Strategy.


 The School Division decided not to participate in the development of a total rewards strategy at this time.  




4.1 Provide effective, responsive and courteous service to our customers

Strategic Objective 4.1.3:  By June 2005, the County will be recognized as a quality place of employment with a workforce of employees who continuously provide high quality, customer-focused service to its citizens.




An RFP for consulting services was issued in July.  Five bids were received and evaluated based on defined criteria (direct related experience of staff that would be assigned to this project and experience with public sector, ability to build relationships and facilitate communication, cost, and availability to begin the project).  After thorough review, reference checking and interviews with a cross departmental team, Segal Consultants were selected.


A cross-departmental team was formed in January. (Attachment #1 indicates team members) The team has met over the past months and as part of the process of evaluating options, the following steps occurred:



Key issues that have been identified are as follows:


·         The current system does not adequately provide mechanisms for rewarding employees;

·         The current system does not adequately link  performance and compensation;

·         The potential for recognition and rewards are limited;

·         The current merit pay system is confusing to staff understood and does not allow for adequate differentiation among performance levels;

·         A strength of the current system is that the pay ranges and benefits are market competitive.


As the team designs the total rewards strategy, these issues are considered and each aspect is reviewed in terms of the ability to support the strategic goal of providing customer-focused service delivery, the value to employees, and the budgetary implications. As employee input is critical to the success in designing a total rewards program, a survey will be distributed to all employees and focus groups will be conducted in June.  In July, the team will meet to review that feedback and incorporate into the plan design. 


The team has evaluated the following total rewards programs (see Attachment #2 for more detail):


  1. Ad-hoc Cash Recognition: Bonuses awarded to individuals or teams for extraordinary performance.
  2. Ad-hoc Non-Cash Recognition: Rewards such as plaques, gift certificates, time off, awarded to individuals or teams for extraordinary performance.
  3. Skill and Competency Differentials: Stipends for employees who attain  job-related skills, such as licensing, certifications, or completion of formalized training.
  4. Broadbanding:   A compensation and classification system that provides greater flexibility for career and skill development by grouping jobs into wide pay bands. 
  5. Merit Pay:  Considering options to replace the current merit formula.
  6. Gainsharing:  Distributing cost savings that are generated by employees/teams back to those employees/teams.


Based on this evaluation, the team identified priorities and recommends a phased approach to implementation.  Recommendations will be presented to the Board in August with targeted implementation dates as follows:


        Recognition program (cash, non-cash) – Mid FY04/05 or FY 05/06

        Skill and competency differentials –  FY05/06 .

        Broadbanding – FY 06/07 (possible pilot in FY05/06 ).

        Merit Pay - FY 06/07 .

        Gainsharing-team agreed that this not a priority for Albemarle County at this time.


For the Total Reward Strategy to be successful, managers and employees will need to understand these programs, so clear, consistent communication and comprehensive training will occur on an ongoing basis.   Based on the targeted implementation dates for the total rewards programs, managers will be provided the flexibility to reward and value excellent performance and customer service identified in the County’s strategic objective.




This report is provided for the Board’s information and does not require any action at this time.  A recommendation for the Total Rewards Strategy will be presented to the Board in August.


View Attachment 1

View Attachment 2

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