Template revised January 10, 2019.
COMMISSION
AGENDA MEMORANDUM
Item No.
8e
ACTION ITEM
Date of Meeting
December 8, 2020
DATE: November 17, 2020
TO: Stephen P. Metruck, Executive Director
FROM: Tammy Woodard, Director HR – Total Rewards
Ann McClellan, Total Rewards Manager
SUBJECT: Consulting Services for Non-Represented Compensation Program Review
Amount of this request:
$450,000
Total estimated project cost:
$450,000
ACTION REQUESTED
Request Commission Authorization for the Executive Director to execute a contract not-to-
exceed $450,000 for consulting services to support a comprehensive review of the Port’s current
compensation program for non-represented employees. The review will assess what works well
and what can be improved, recommend program improvements and a schedule for making them,
and assist the Port in developing and implementing new or updated compensation program
elements. This will be a three-year contract.
EXECUTIVE SUMMARY
The Port’s current compensation program includes the pay structure with 45 pay grades and
associated pay ranges, the point-factor job evaluation (JE) program, the market pricing program,
the Pay for Performance program that rewards employee’s performance, and a set of policies
and guidelines for establishing pay levels and increases to employees’ base pay. To identify
options for improving the Port’s compensation program we need to retain a consultant to
conduct a comprehensive review of the current program and understand what we have, what
drove decisions leading to the current program, what is different today from decisions about the
program were made, and how the differences may suggest different compensation program
elements.
JUSTIFICATION
The Port’s Non-represented Compensation Program has not undergone a comprehensive review
in more than 20 years. Human Resources staff has updated aspects of the compensation
program to align with changing needs at the Port; however, it has been many years since a
comprehensive review was conducted. To attract and retain employees with the skills and
abilities necessary for the Port to fulfill its mission the Port must offer a competitive Total
Rewards Package. With the evolving labor market, changes in pay regulations, and how both
COMMISSION AGENDA – Action Item No. _8e___ Page 2 of 5
Meeting Date: December 8, 2020
Template revised June 27, 2019 (Diversity in Contracting).
public and private employers determine pay for their employees, the Port needs to assess the
non-represented Compensation Program and determine where updates are needed or will be
beneficial. This review is necessary to ensure the Port’s Compensation Program for non-
represented employees will be strategically aligned with Port priorities, remains compliant and
competitive into the future, and effectively supports retention and attraction of the employee
talent the Port requires.
Diversity in Contracting
The Diversity in Contracting analysis determined that no goals were appropriate as the project
does not lend itself to subcontractors. With this project work in each successive step will build
on work in the prior step and consistency with the consultant from step to step will be far more
efficient, and thus less expensive, with a single consultant. A project of this breadth will require
a consultant with considerable experience supporting similar work and it is possible that the
consultant ultimately selected to support the project could be a small business or a WMBE
business.
DETAILS
This project will be completed in phases. The first phase is for the selected consultant to
understand the Port’s current Compensation Program for non-represented employees. The
second phase is for the consultant to understand the perspective of the Compensation Program’s
stakeholders. During the third phase the consultant will bring the results of the first two phases
together and incorporate their understanding of options and best practices for Compensation
Programs at organizations similar to the Port. This information will be presented to the Port’s
project team along with recommendations on what changes to make to the current program and
the sequence and timeline for making the changes. The fourth and final phase will be to
implement the agreed upon changes to the Compensation program. Details of each phase of the
project are detailed below.
Scope of Work
1. Understand the Port’s current non-represented Compensation Program. This includes how a
new employee’s starting pay is determined as well as how employees’ pay progresses via
performance increases, promotional increases, and other pay adjustments (including Equity
Adjustments and Retention Adjustments). It also includes the methodology for determining
pay grades, and the number of grades, as well as pay ranges, and the width of the ranges.
How pay ranges are adjusted, how jobs are assigned to the pay grades, and all other plans
and programs related to pay for non-represented employees are also part of compensation
program.
Understanding the Port’s current program also includes understanding the Port’s Total
Rewards and Pay Philosophies that guide the Program, as well as the history of work that led
to the current program.
COMMISSION AGENDA – Action Item No. _8e___ Page 3 of 5
Meeting Date: December 8, 2020
Template revised June 27, 2019 (Diversity in Contracting).
2. Assess stakeholder perspectives on the current Compensation Program, including
perspectives of leaders (managers, directors, executives), employees (in general) and Human
Resources staff who direct, manage, administer and utilize the current program. Assessing
stakeholder perspectives will include identifying aspects of the program that work well and
don’t work well, aspects that are a source of frustration and that are easy and efficient to use,
aspects that are well understood and those that are not.
Assessing perspectives of stakeholders also includes understanding what is possible and what
is not possible from an administration perspective. It also includes assessing perspectives
keeping the Total Rewards and Compensation Philosophies in mind.
3. Prepare recommendations for updating, adding, deleting, and maintaining components of
the current Compensation Program. The recommendations will include a suggested
sequence, schedule and timeline for the recommended changes to the Compensation
Program. All areas of the current non-represented pay program will be reviewed for potential
enhancements including, but not limited to:
• The pay range structure including the number pay grades and width of the pay ranges,
the mid-point progression, etc.
• The way the pay range structure is reviewed and updated, including the frequency of
the review.
• The way jobs are evaluated or assigned to pay grades.
• Ways for defining, reviewing and maintaining pay equity, ways for defining and
applying promotional increases, options for ensuring pay remains market
competitive, and options for adjusting pay on a regular basis. Options for aligning pay
on a regular basis may be, or may not be, aligned with performance evaluations.
4. Following consultation with the Port, and agreement on which changes (updates, additions
and deletions) will be made to the Port’s Compensation Program for non-represented
employees and the sequencing and timeframe for the changes; establish project plans and
timelines for making changes. Also, recommend, and provide requested support for, a
communication strategy, plan, and timeline for sharing the plans and timeline for updated
the Compensation Program with Port employees.
ALTERNATIVES AND IMPLICATIONS CONSIDERED
Alternative 1 –Maintain our current compensation program elements.
Cost Implications: This alternative has no additional financial cost to the Port.
Pros:
(1) This alternative has no additional financial cost.
COMMISSION AGENDA – Action Item No. _8e___ Page 4 of 5
Meeting Date: December 8, 2020
Template revised June 27, 2019 (Diversity in Contracting).
Cons:
(1) This will not address the feedback and concerns we’ve received from Port leaders and
employees.
(2) We cannot be assured that our current compensation methods, which have been in place
for more than two decades, are the most appropriate and efficient way to ensure internal
alignment, external competitiveness and compliance with applicable laws and regulations
including pay equity legislation and internal equity goals.
This is not the recommended alternative.
Alternative 2 – Conduct the review of the current compensation program elements in-house.
Cost Implications: This alternative has no additional financial cost to the Port.
Pros:
(1) This alternative has no additional financial cost.
(2) Could provide development opportunities for existing staff.
Cons:
(1) Adding a project this large and complex to existing workloads will severely impact ongoing
(day-to-day and unscheduled priority) work and our ability to provide an acceptable level
of customer service on compensation and other total rewards related topics.
(2) Current staff does not have the necessary breadth of knowledge and experience about
different compensation programs and which ones work most effectively in which
situations.
This is not the recommended alternative.
Alternative 3 – Retain a consultant to conduct a comprehensive review of the current
compensation program and recommend improvements and enhancements.
Cost Implications: The estimated cost is $450,000 dispersed over a three-year contract.
Pros:
(1) Having a consultant lead this work will bring expertise and experience with multiple
organizations and multiple types of programs to the project.
(2) Utilizing a consultant will help ensure we are able to thoroughly consider multiple options.
This additional perspective will increase the likelihood that we will identify the best
compensation program components for the Port’s program.
(3) A consultant will help to ensure we have programs that support effective compliance with
statutory requirements including those addressing pay equity.
(4) A consultant will bring someone from outside the organization into the project to help
ensure an objective assessment of the current program as well as possible changes and
help guide the process of determining what changes will most effectively meet the Port’s
needs, including equity, diversity and inclusion goals.
Cons:
(1) Port staff time will be required to work closely with consultants to provide information
and coordinate support during the project.
COMMISSION AGENDA – Action Item No. _8e___ Page 5 of 5
Meeting Date: December 8, 2020
Template revised June 27, 2019 (Diversity in Contracting).
This is the recommended alternative.
FINANCIAL IMPLICATIONS
Annual Budget Status and Source of Funds
$150,000 is included in the 2021 HR Department budget for phases 1, 2, 3 and potentially a small
amount of phase 4 work. The majority of phase 4 work will take place in 2022 with the final
updates being implemented in 2023.
ATTACHMENTS TO THIS REQUEST
None.
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS
None.
