Classification and Compensation

Class & Comp image

The Classification and Compensation Section plans, creates, monitors, maintains, and revises the State's classification and compensation programs. The Section performs significant analysis of workforce changes and labor market trends to organize and define different types of work and to determine state employee compensation and benefits. To better attract, retain, develop, and motivate a high-performing, diverse workforce, the Office of State Human Resources is conducting the Statewide Compensation System Project. The goal of the project is to create a modern and streamlined system for state government that is market-responsive and equitable.

Statewide Compensation System Project

The Statewide Compensation System Project began in 2013 to consolidate the State’s current two primary compensation systems: graded and banded. The current system is inconsistent, so the project will create a modern and streamlined compensation system for state government that is market-responsive and equitable. OSHR is working to reduce the number of state job classifications from over 2,000 to under 1,000. This new system will more accurately identify job classifications and group them in a more meaningful and logical way.

The Planning and Design phases ended in June 2015, and we are now in the Implementation phase with a targeted implementation date of June 1, 2016.

The implementation team has purchased two technology tools for the development, implementation, and ongoing maintenance of the new system. A market analysis tool (MarketPay) was purchased to help survey the job market and use that information to inform the going rate for job pricing. A position description writing tool (PeopleAdmin) was also purchased to assist in the collection and analysis of position information.

What does this mean? How will this new Project and the tools purchased help state employees?

  • Having a streamlined system will mean that we will more accurately be able to follow market trends in pay.
  • Bringing our jobs up to market pay means that we will more effectively compete with the private sector for highly trained and skilled talent.

Although there will be some implementation work for all employees on the front end of this project, going forward all positions will be:

  • Collected in one central repository
  • Consistently classified and paid across state agencies making it easy for supervisors to create a job posting for a vacancy or employees to transfer between agencies
  • Ready for alignment with the new performance management system

In the coming months, you will be asked to write and/or enter job description information into the PeopleAdmin tool. Employees may be asked to help review and/or write their own job description. Supervisors will have to ensure all of their staff descriptions are entered accurately into the system as well as review and/or write their own descriptions. These tasks will streamline a process that has been largely paper-based in the past. Further details on this position description collection process will be communicated through agency HR offices in the coming weeks and months.

Yes, there is much work to be done in 2015 but it is with an eye toward a much-improved classification and compensation system for the state’s workforce in 2016 and beyond.

Frequently Asked Questions

Why is the Office of State Human Resources conducting the compensation project?

Senate Bill 402, the Appropriations Act of 2013, directed the Office of State Human Resources to conduct the Statewide Compensation System Project. The purpose of this project is to create a modern and streamlined compensation system for state government. This system needs to be market-responsive, equitable, fair and it also needs to value employee performance.

What were the requirements of the legislation, Senate Bill 402?

The Appropriations Act of 2013 required that results of the study be reported to select members of the legislature and the Fiscal Research Division by May 1, 2014. Below you will see the initial results, recommendations and expected deliverables that were reported.

What has the project determined about the current compensation system?

Some of the key findings of the project are:

  • Employees are currently classified and compensated under two different systems, graded and banded, neither of which is ideal.
  • Managing the two systems is cumbersome.
  • Several years of salary restrictions have created some equity issues within and between the two systems.
  • The current systems are not properly aligned with the labor market.

What are the primary findings of the project?

It is clear that there is a need for one contemporary, consolidated compensation system with one set of governing policies. Three key principles should guide the state’s compensation system:

  • Market Responsiveness. Compensation should be competitive with relevant labor markets.
  • Equitable and Affordable Compensation. Maintain fiscal responsibility and align pay and classification internally.
  • Pay for Performance. Recognize and reward employee performance.

What has been done so far?

The Planning phase for the Project took place between August 2013 and July 2014, followed by a Design phase from August to December 2014. Some of the key deliverables from the initial phases included:

  • Development of a “Compensation Vision” for the State
  • Creation of a new job classification framework
  • Implementation of a market analysis tool (MarketPay) for internal maintenance of market survey information, job pricing, compensation structure modeling and costing
  • Initiation of a position description writing tool (PeopleAdmin) for collection and analysis of position information and tracking workflow in the classification process

What are the next steps?

The Implementation phase began in January 2015, and the goal is to complete the project in June 2016. Implementation will mean moving all state agency positions and employees – graded and banded – to newly developed classifications within one consolidated and market-based structure. To reach that goal, the following will occur over the course of the year:

  • Collection of position description information from all state agencies using the PeopleAdmin tool
  • Analysis of position descriptions by occupational experts at OSHR and in agencies
  • Validation of the new classification structure based on position description information
  • Review and approval of the new classifications, compensation structure and policy revisions by the State Human Resources Commission
  • Market pricing of jobs in the new classification structure
  • Allocation of positions into the new structure
  • Implementation of structural changes and position/employee transitions to the new system in BEACON

I am a state employee. What do I have to do?

You may be asked to write or review your own position description. You may also be asked to participate in a focus group of other employees who perform work similar to what you do. Regardless, you will be notified of your new classification and level in the new compensation structure at the appropriate time.

I supervise state employees. What do I have to do?

As is the case with your employees, you may be asked to write or review your employees’ descriptions and/or participate in a focus group. As a manager, you are responsible for making sure that your employees’ position descriptions are current and accurate.

Will my salary change?

It is anticipated that most employees’ salaries will NOT change as a result of this project. Some employees’ salaries may be adjusted in order to transition to the new compensation structure to ensure that no employees are paid below the minimum salary rates in the new structure. Other salary adjustments for certain employees in jobs that are considered to be “below market” may occur later as funding allows.

How will my performance affect my pay?

OSHR is currently implementing our new statewide Performance Management System – NC Valuing Individual Performance (NCVIP) – in addition to finalizing the development of the new Compensation System. A dynamic Performance Management System is critical to the effective management of work and delivery of business objectives, whether it is tied to pay or not. It is hoped that performance will eventually be linked with pay as an additional mechanism for employees to receive adjustments within their assigned level. However, this will ultimately be dependent on (1) funding and (2) validation and calibration of the Performance Management System in order to assure that it is functioning as intended. This is not expected to occur upon implementation of the new Compensation System, or for at least two performance cycles after implementation.

I have more questions. Who should I call?

Your agency HR office will be providing additional information to employees over the next several months as we prepare to transition to the new system. Please contact your HR office with any questions you may have.

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