Southlake adopts compensation philosophy

Posted Monday, Aug. 12, 2013  comments  Print Reprints
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Southlake Staff By The Numbers Average Tenure: 8 years Promotion Rate: 32 percent Diversity Rate: 22 percent Average Age: 38 Source: City of Southlake

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The City of Southlake plans to replace its compensation system with a merit-based plan to increase salaries.

For the past four years, the city was unable to fund pay increases because of a rigid step-based system.

“The real reason we looked at a study was because the plan we had in place had basically been suspended,” said Stacey Black, Human Resources director. “The plan we had in place just wasn’t working for us.”

The old plan, which was implemented six years ago, had tenure-based steps where employees’ salaries increased 3 percent annually. A downturn in the economy forced the suspension of those increases in 2009.

A new hybrid system of base salary and merit adjustments will be used for two to three years to acquaint staff to a merit-based system.

Instead of automatic increases, supervisors and staffers will learn how to implement a method where performance is key.

“I like the fact of not doing this on tenure,” Mayor John Terrell said. “Performance is clearly what we’re striving for.”

Other changes aim to keep Southlake competitive among neighboring cities. The new plan expands the competitive labor pool from 12 cities to 18 and looks to pay above the average among those competitors at the 60th percentile, meaning 40 percent of the market pays more, and 60 percent pays less.

The expanded pool includes larger and more eastern cities, including Plano, Arlington and McKinney.

Black said the city estimates to have an 8 percent turnover rate at the end of the fiscal year in September. The current average market turnover is 7.25%.

Black said 60% of employees who left the city said compensation was the primary reason.

One exit interview comment was, “The initial base salary is good but there is nothing setup for the future as far as a compensation plan.”

Councilman Brandon Bledsoe said a merit-based system is the way to go, but said not to expect results immediately.

“I would be willing to bet that turnover won’t change right away the way we got it because some people are going to expect increases when maybe they shouldn’t have,” he said.

City staff will propose implementation when it presents the budget this month. One of the goals is to bring 50 staff members to the new minimum pay range at an estimated cost of $145,000.

Dustin L. Dangli, 817-390-7770 Twitter: @dustindangli

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