As we near the end of the year, the minds of many public employees turn to their pay. The City makes pay adjustments for its employees in January. We are busy right now figuring out just what those adjustments are going to be. We will grant a cost-of-living-adjustment (COLA) and, if earned, what we call a “market adjustment”.
The purpose of the COLA is to keep employees as close to whole as we can considering inflationary increases in the general economy. The purpose of the market adjustment can be either to keep the wages of certain skilled employees close to their private sector counterparts or to reward an employee for a particularly excellent year of performance. Both adjustments are expressed as a percentage of the employee’s current base pay.
We require that all management personnel have pay increases linked to their performances reviews. The performance reviews are being completed during the month of December. Managers must have positive performance reviews to receive regular annual increases in pay. For non-management employees, their reviews are completed on the annivesary of their first date of employment. For those employees that are in a union bargaining group, their wages are governed by the collective bargaining agreement.
Public employee pay is a difficult balance. We want to pay our employees a fair wage for a fair day’s labor. We want to be sure that we are paying at or close to the market wage for the skill that we are buying/renting from the employee. We do not want to pay too much, or too little. We must take into account the political pressures to keep taxes and fees low, while also considering the personnel costs we incur of a constant employee turnover if we do not maintain a stable system for compensating our employees.
Our strategy in Eden Prairie is to try and hire the best and most productive people we can hire. We hire off the top instead of the middle or the bottom. We pay our employees well, compared to other city governments, and we expect superior performance from them. For the most part, we get it. When we don’t, we take care of the matter by counseling, training, or severing the relationship.
I think that our human resource management strategy is right on the money. We pay well for above market talent and we aren’t afraid to demand above market performance. It’s fair and a good bargain, in my judgment, for Eden Prairie citizens.
