The statement of compensation philosophy is intended to provide a broad framework for the City Council, management, employees and the citizens in order to understand and guide decisions that affect pay.  It is designed to reflect the importance public employees play in the delivery of services and programs to the community; that compensation is a clear measure of that importance; and that there is fair and equitable treatment of all employees, regardless of race, gender, or disability, and in accordance with EEO/AA goals.  In addition, the statement establishes the commitment and necessity to maintain comparability with jurisdictions that are most likely to affect recruitment and retention of employees

The intent of the compensation philosophy is to maintain a competitive compensation program in order to attract, retain, and motivate qualified employees.  To that end, the following principles govern compensation programs:

• Pay programs are intended to be competitive at a minimum with the average pay of  comparator organizations in the primary labor market.  The primary labor market is currently defined as the Counties of Arlington, Fairfax, Prince William, Montgomery and Prince George’s.
• From time-to-time, the City may recommend that other comparators should be used (e.g., Commonwealth of Virginia, agencies of the Federal government, or private sector employers or industry groups) where information from the primary labor market is considered insufficient to attract/retain specific positions or classification groups.
• In all instances, for benchmark jobs, information for an assessment of pay competitiveness will be ascertained through reliably published compensation survey data.
• Every two years, the City will conduct a market study of benchmark positions to determine the organization's competitive posture, and propose a plan of action.  The City will ensure benchmarking is in compliance with Collective Bargaining Agreements. The City may determine if a classification needs review in the interim.
• If an average salary falls below market averages to the extent that attracting and retaining qualified employees may be jeopardized, the City will propose action necessary to align the position or classification with the competitive marketplace for implementation in the next fiscal year or sooner, if financially feasible.

Annually, the City Manager will recommend a budget for general salary adjustments that is based upon:

• Overall competitive posture of the organization.
• Market rate adjustments.
• Comparator organizations in the primary labor market.
•  Financial affordability

The City will promulgate pay scales for all employees that will provide information on salary increases that an employee may expect from year-to-year if performing satisfactorily.  In the public safety classifications, the pay scale schedules will differ from the general employee classifications.

For City employees, the annual increases in base salaries from year to year will be based on meeting established performance standards.  In all cases, employees will know performance expectations to advance in-grade and career development opportunities to advance to another grade. 

The specific schedules will be competitive at 100% (Approved by City Council – Item #12 dated 12-13-06) of the average pay levels for the relevant labor market, and will be adjusted whenever necessary to maintain market competitiveness. 

Salary increases from the pay scale are a function of performance-merit.  Such increases are recognition of performance that meets and exceeds expectations.  Merit increases are not automatic. 

All employees should be made aware that such increases are recognition of performance that meets and exceeds expectations.  Performance standards and supervisory evaluations should stress that merit increases are not automatic. 

The City will develop a structure to provide salary increases to recognize the attainment of career levels and developmental milestones that assure that the City’s career positions are paid comparable with those in the primary labor market.  Such a structure enables existing employees in career jobs within the City to receive pay increases in addition to merit, and enables the City to target its pay to those employees who grow in skill and capability.

An objective of compensation is to encourage and support advanced study, education and degree attainment for job-related courses and programs.  The City will prepare and disseminate procedures for applying for and receiving education and tuition assistance, including the academic grades or measures necessary for an employee to be reimbursed and the type of course work that is authorized.  The amount to be budgeted for this program will be the average of the budgets for the primary comparator jurisdictions.  (A.R. 6-16, Employee Educational Tuition Assistance Program, was recently updated.)

It is also the intent of the compensation philosophy to provide financial incentives for extraordinary and exemplary performance in two categories.  First, with the recommendation of the City Manager and the approval of the City Council, an employee may be given a taxable cash award ranging from $1000 to $10,000.  Such awards are to be given only in those instances where performance or contributions are deemed unique, truly extraordinary, and significantly beneficial to the City.  

Second, there should be a program for rewarding employees at any time who demonstrate exemplary performance significantly beyond job expectations.  Taxable cash awards in this category may be given to a maximum of $500, with typical awards being between $100 and $250.  The City Manager should recommend a specific budget allocation to be made available for awards in this category, with procedures for determining selection of incentive awards. 

In either category, these awards are one-time cash awards and should not be considered increases in base salary or benefits.

Nothing in this compensation philosophy statement should be construed as a required benefit in the event that the City experiences a decline in revenue or revenue growth lower than the projected increase in expenses.  “Revenue” is currently defined as the two largest components of operating revenue: the real property tax base and the projected total personal property tax base.  As with all budget decisions, merit increases, market rate adjustments and funds for other employee benefits are subject to annual appropriation.