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HomeMy WebLinkAboutADMIN-8-89 TOWN OF NEWCASTLE d`� Ir4t,• A r SSC REPORT File Res. #� - _----_-_-- By-Law # METING: General Purpose and Administration Committee DATE: April 17 1989 REPORT #: ADMIN. 8-89 FILE #: SUBJECT: PAY EQUITY AND INTERNAL EQUITABLE COMPENSATION REVIEW RECOMMENDATIONS: It is respectfully recommended that the following recommendations be approved FORTHWITH: 1. THAT the Town's Evaluation Committee's Report ADMIN. 8 - 89 be received; 2. THAT the consulting firm of Robert McDowall and Associates be engaged to undertake the Pay Equity and Internal Equitable Compensation Review for Town staff in accordance with Attachments #2 - #3 to Report ADMIN. 8 - 89; 3. THAT the cost of the Review outlined in Recommendation #2 not exceed $40,000; 4. THAT the Town's Evaluation Committee with the assistance of the Town's Labour Relations Consultant be authorized to take all the necessary steps to implement the above recommendations; and 5. THAT the consulting firms which provided proposals to the Town be thanked for their submissions and interest. 1101 JQ]MI0. ` /) - 89 PACE 2 REPORT: I. ' 1.1 In 1988, the Province of Ontario enacted the Pay Equity Act which is applicable to both public and private oentnc employers with at least lO employees. In this regard, the previous Council made an initial commitment* during its 1988 budget process for purposes of funding a pay equity study for the Town's employees to be undertaken in 1989. The matter was referred to the Evaluation Committee to solicit consultant submissions in this regard. 1.2 Basically, the Act has two goals: a) to address gender-based pay discrimination and b) to eliminate that part of the wage gap that may be due to the undervaluing of women's work. Under the Act, employers are obliged to pay men and women the wages for work that may be different but of equal or comparable value. The Act applies to full-time and permanent part-time employees in the type of organization indicated above. 1.3 Job value and compensation comparisons are to be made within the establishment, between oIaaoeo which are generally 60 per cent female and those which are 70 per cent male. The method of comparison used to determine job value is optional, as long as the system obooeu relies on the four criteria of skill, effort, responsibility, and working conditions. Of course, the comparison method most be free of gender bias. It places special emphasis on internal equity rather than relying ooIeIv on market rates. 1.4 The Pay Equity Act expects compliance from employers in Ontario and requires that a pay equity plan for each employee group (i.e. inside union, outside union, and the non-union group) must be posted in January of 1990. 1.5 For the unionized group, the 9twmz and the bargaining agent will negotiate the job comparison system and the pay equity plan for each bargaining unit. Once the employer and the bargaining agent have agreed on a pay equity plan, the f?Ioo will be posted in the work place as indicated above and automatically considered to be approved. * The 1988 budget included an initial allocation of $20^000 for purposes of undertaking a Pay Equity Study for the Town's employees. This money, which is being held in reserve, together with a similar allocation approved in the I989 budget will provide the necessary funding to mMT lete the study. � N.DM .8 - 89 Page 3 1.6 For the non-union group, employees have 90 days after the mandatory posting date to submit complaints to the employer about a pay equity oIau° No more than seven days after the 00 day posting period has ended, employers moat display a notice stating whether the BIau has been changed. Any changes to the plan must then be posted. If employees object to the pay equity plan, they have a further 30 days to file a complaint with the Pay Equity Commission. If no objection is filed with the cx»uuniaoiou after this review period, the plan is considered to be approved. 1.7 Employers moot start to make pay adjustments on or before the mandatory pay adjustment date (January I, I990) . However, these adjustments can be phased in over time. An organization must devote at least one per cent of its previous year's total payroll to make pay adjustments. The 9ovvo would be required to achieve pay equity within five years of the first wage adjustment date. The payout can be made in the [bzm of salaries and wages, benefits or both. In short, the concept is ambitious and translating it into reality is a formidable task. 1.8 During the deliberations with the previous Council, it was felt that the process of dealing with pay equity should provide for an internally equitable salary structure which reflects the relative value of each position to the organization as a whole. The need for compensation comparisons of jobs of a similar kind pursuant to a general neutral evaluation plan has been taken into account and included in the pccyxoaaI call prepared by the Evaluation Committee. 2. Proposals Received 2.1 On the basis of a proposal oaII (refer to Attachment #I) to five leading firms in the area of pay equity, four firm Dc(pmaaIo were received from the following: a) Norman D. Willis and Associates Limited (g30r000) ; b> Robert y0zZk)waII and Associates ($35,000) o) Stevenson Kellog Ernst and Whinney ($33,000) and d) Touche Ross ($41,000) 9ybeoe submissions are available in the Administrator's Office for perusal. * The costs provided by each consultant to undertake the required work excludes expenses with the exception f the cost submitted by nouooItaut (n) . 1103 ' ADMIN. ' 8 - 89 Page 4 2.2 Each of the four pcoIx>oala was reviewed in detail by members of the Town's Evaluation Committee and the Town's Labour Relations Consultant, Mc. Gordon Weir. Specifically, each of the proposals was examined from the point of view of the following: (i) emeczeooe of the firm both with the public oeobVc and pay equity in Ontario; (ii) qualifications of individuals to work on the study; (iii) understanding of the task at hand as proposed by the Town; (iv) study cost; (v) implementation of study results, and (vi) sensitivity in approach to the task. Albeit, the above criteria tend to be of a subjective nature, they tend to be useful for comparative Dozgnaea. 2.3 Although all of the submissions to a certain extent meet the DcnEoaed requirements, aspects of certain pcolxooaIo better address the needs of the municipality. Specifically, reference is made to proposals b) and d) listed above. Although consultant c) has undertaken some work in the past on behalf of the Town for non-union employees, the company's recent proposal offers a very standard type of approach, virtually identical to the previous exercise pertaining to job evaluation for establishing the relative ranking of 'obs for gay purposes. Notwithstanding that consultant a) has very limited Ontario experience, the DzcpooaI provided by this firm tends to rely considerably on the Town's staff time. This seems to be reflected in the overall cost of the study quoted by this firm. 2.4 Following the detailed review of the Evaluation Committee, it was determined and is recommended that the firm of Robert McDowall and Associates be engaged for purposes of undertaking the necessary work on behalf of the Town. This is based on a results-oriented approach which: (i) provides for an evaluation system that meets the requirements of the Pay Equity Act; (ii) provides for a review of internal equity: (iii) develops and implements a job evaluation Bcooeoo; (iv) provides a process to document all evaluations for future use; (v) provides for a system through which the Town can maintain its job evaluation, salary survey and compensation systems for non-union and ouloo staff in the future to eoaoze fair and equitable Bay; (vi) provides for the preparation b descriptions for all job classes. ADMIN. 8 - 89 Page 5 Accordingly, the study will deal with both pay equity and internal employment equity. 2.5 The work plan to be followed by the consultant is provided in Attachment #2 to this report. 2.6 Further clarification was obtained from the consultant and provided as Attachment #3 to this report. 3. Issue of Library Staff 3.1 During this process of calling for proposals, staff was approached by Library staff for purposes of inclusion in the Town's study on pay equity. After considerable review and on the advice of the Town's Labour Relations Consultant, it is respectfully submitted that the Library Board be considered as a separate employer and that Library staff not be considered as Town employees. This approach is generally consistent with approaches taken in other municipalities due to prohibitive costs. 1 . of the above i respectfully submitted by the Evaluation Committee. Marie Hubbard, Lawrence E. Kotseff Mayor Chief Administrative f icer Marie Marano, Jo�16 h P. Caruana t Treasurer Director of Community Services I i i 1105 CORPORATION OF THE TOWN OF NEWCASTLE ATTACHMENT #1 40 TEMPERANCE S7REET BOWMANVILLE, ONiARK) L1C3A6 TELEPHONE 623-3379 _- September 30 1988 Re: Pay Equity Our municipality is in the process of addressing the requirements of the Pay Equity Act recently enacted by the Province of Ontario. In this regard, we are inviting your firm to submit a proposal related to the development and implementation of a pay equity program to each of the three affected groups in the Town pursuant to the employer' s obligations under the above-mentioned legislation. The Town ' s organization presently consists of 135 full-time and 75 part-time employees and we would request that in your proposal the preparation and development of job descriptions be included for these employees . Within the existing organizational framework there are approximately 60 job classes. There are two separate bargaining units plus one non-unionized employee group. The consultant will be required to conduct compensation comparisons of jobs of a similar kind pursuant to a gender neutral evaluation plan. In addition, the consultant will be required to assist in the implementation of pay equity compensation adjustments. I would appreciate if you would advise of any additional information you may require regarding this invitation and respond with a proposal together with costs to conduct the study by October 21 1988. Also, I would mention that the Newcastle Library which consists of a separate employer under the existing collective agreements has expressed some interest in being involved during the above process. In this regard, I would suggest that you contact Ms . Barbara Baker, Chief Librarian directly at 623 7322 . This aspect should be treated and costed on its own from the Town ' s perspective through a separate quotation to their proposal . i 1106 i September 30 1988 I look forward to the receipt of a proposal from your firm in the near future. In the meantime, if there are any questions regarding the above, please do not hesitate to contact me. Yours truly, LEK:nof Lawrence E. Kotseff Chief Administrative Officer i I i 1107 Ms. Anne Marie Turnbull Touche Ross & Co. 5740 Yonge Street North York, Ontario M2N 6L7 Mr. Lloyd R. Fleming Robert McDowall & Associates Management Consultants Suite 218 350 King Street East Hamilton, Ontario L8N 3Y3 Mr. Donald L. King Stevenson Kellogg Ernst & Whiney 2300 Yonge Street Toronto, Ontario M4P 1G2 Mr. Norman D. Willis Norman D. Willis & Associates Ltd. 1400 Madison Building 4960 Yonge Street Toronto, Ontario M2N 6K1 Mr, Lion J. Sharzer Personnel Management Associates Inc . 128 Base Line Road East London, Ontario M6C 2N8 I 1108 ATTACHMENT #2 `k IV. WORK PROGRAM - NON-UNION EMPLOYEES >, In this work program, we outline the steps to be taken and the use of our compensation tools. In the appendices of this proposal, we detail the estimated consulting days, including preparation time, required to complete each phase and the steps necessary. This will assist in understanding our role and the resulting fee budget. Although we know from previous experience that the described work program is effective , the Chief Administrative Officer is encouraged to discuss it with us. Our consulting team is open to suggestions, and ready to make any alteration to ensure that the best results are achieved. our work program is broken into three phases, described below. A. PHASE I - UNDERTAKE ORIENTATION, COMMUNICATIONS AND COLLECTION OF JOB DATA AND NEGOTIATE AN EVALUATION PLAN ACCEPTABLE TO THE TOWN OF NEWCASTLE B. PHASE II - DETERMINE RANK ORDER FOR ALL NON-UNION JOBS USING JOB EVALUATION C. PHASE III - PREPARE PAY EQUITY PLANS AND FINAL REPORT, COST IMPACTS AND COMMUNICATE FINDINGS These phases are described in detail in this section. 3p A. PHASE I - UNDERTAKE ORIENTATION, COMMUNICATIONS AND COLLECTION OF JOB DATA AND NEGOTIATE AN EVALUATION PLAN . ,, ACCEPTABLE TO THE TOWN OF NEWCASTLE ,,tom The acceptance of the results of Pay Equity and {' Compensation studies by both Council and employees is generally determined by their understanding of the process used as well as the direct participation by em 6g. p 10 yees in the study. Therefore, we consider this rs: vital to the success of the total assignment. This phase concentrates ori communication and Parti 'pation. 1 Robert McDowall£�Assocrntrs 109 Management Consnitanfs Ltd. 8 Although we outline the work plan of the study with the union in another section, we introduce Pay Equity and meet with union executives in this phase. The step-by-step outline of this phase is shown in Appendix I of this proposal. I 1. Step 1. Planning Meeting with the Chief Administrative Officer We will meet with the Chief Administrative Officer to determine any changes to this work plan as well as to discuss approaches and steps in dealing with the Pay Equity Plan for the union. Our entire project team will attend this meeting. Deadlines will be established, dates for staff meetings and a union executive determined and questions and concerns discussed. 2 . Step 2 . Orientation and Explanatory Meetings with Department Heads and Perhaps Council We will meet with Department Heads in one meeting to explain the study. This meeting will also cover questions and concerns commonly raised by employees in such studies, so that the Department Heads can deal with these questions and concerns on an individual basis, should the need arise. Council may wish a presentation concerning this project and the Pay Equity Act, so that they may more fully understand the implications and affect on Newcastle. If a presentation is requested, we will meet with Council in this step. 3 . Step 3 . Meeting with the Executive of the C U P E Unions In these meetings, we will discuss Pay Equity and explain the legislated as well as optional roles for the union in the process. We will answer questions and suggest how they can be most effective with their members. Hopefully these will be non-confrontational meetings. We will ask for and hopefully gain their support and co- operation in the Pay Equity study since this study, by its very nature is both fair and equitable. 1 1 10 RoltertMcDowall&Associates re h7m Nonent Q111.111/tants Ltd. d 9 4 . Step 4 . Explanatory Meetings With Management and Non-Union Staff At meetings with all staff affected by the study, we will explain the approach and processes that we will use. In such studies, it is vital that employees understand how salaries for their respective jobs will be determined. We know that their pay will be fair and equitable, but it also must be perceived by employees as fair and equitable . This step also reduces the expectations that everyone will get a raise. Four meetings will be held with approximately 25 employees at each. At these meetings, we will explain the study and answer questions. We will distribute and explain our Job Information Questionnaire (see Step 5, next page) . Subsequent to these meetings, each employee will personally complete his/her own Job Information Questionnaire, have it approved by his/her supervisor and return it, by the due date, to the Personnel Department. 5. Step 5. Review Completed Questionnaires In this step we will review the completed Job Information Questionnaires and interview Department Heads for clarification purposes. We will require the assistance of staff in the office of the Chief Administrative Officer to ensure that completed Job Information Questionnaires are collected and to follow up where necessary. 6 . Step 6. Availability to all Staff It is critical that all employees and union e;:ecutives have access to the Consultants to answer questions or alleviate fears. To meet this need, we have allowed one-half day for this purpose in addition to the other times we will be woavailable on Town premises. It has been our experience that this accessibility greatly adds to the credibility of the results of the study and 01 provides confidence to union executives. 1 1 1 1 Robert McDowall&Associates A1n tagemen?0 sullnrrts Ltd. 12 Recommendations concerning implementation and methods of communication of the results of the study to all employees affected. Methods of maintaining the system in the future to ensure continued fair and equitable pay. This includes: - methods of determining pay for new or changed responsibilities for current jobs, - methods of ensuring continued Pay Equity, - methods of determining pay for new jobs, and - methods of maintaining the salary structure in the future. 1 A copy of the Pay Equity Plan developed for this employee group for posting in the work place, as required by the Act. Our work plan includes a presentation to a Council Committee and Council. Following approval by Council, we will present and discuss the final report with Department Heads. D. PAY EQUITY IN THE TOWN'S C.U.P.E. BARGAINING UNITS The work plan and Consultant's role, in implementing Pay Equity with the Town' s bargaining unit depends a great deal on discussions with the union. As these discussions progress, we will work with the Chief Administrative Officer to develop appropriate work plans and determine the most cost effective use of consultant time. Since these work plans, except for the initial communications as outlined in Phase I are not yet fully established, nor will they be for some time, it is difficult to estimate accurately the amount of consultant time that will be required for this aspect of implementing Pay Equity in the Town of Newcastle. Therefore, for each aspect of the study for the bargaining unit, we have estimated a minimum and maximum number of consulting days, that, based on our experience are realistic. 1 1 1 Robert McDowall&Associates Mmmgement Consultants Lid. r ! 10 At the end of this phase, the following will have been accomplished: ♦ Consultants, staff and perhaps Council will be oriented to the assignment. ♦ Staff affected by the study will know and understand the process. ♦ Staff will have participated in the study by providing job information in the completed questionnaires and, in all cases, through interviews. ♦ Job information will be collected and complete. B. PHASE II - DETERMINE RANK ORDER FOR ALL NON-UNION JOBS USING JOB EVALUATION In this phase, the value of each job is determined. To do this, we will use the McDowall Associates Job Evaluation Plan. The step-by-step plan for this phase is shown in Appendix II. 1. Step 1. Consultant to Evaluate All Jobs All jobs will be evaluated by the Consultant. The Consultant will evaluate all non-union jobs using the McDowall Associates Universal Job Evaluation Plan. In other assignments we have utilized the j committee approach in which a committee consisting of Senior Management, usually the C.A.O. , several Department Heads, with the Consultant acting as chair for the evaluation meetings. This approach has proven to be particularly acceptable for the following reasons: I ♦ Experience has shown that a Committee produces fair and equitable results. i i 1 12Robert McDowall&Associates Alm agement Consultants Ltd. I 11 1 Since Department Heads are part of the Committee , they each provide further information on the jobs in their respective departments. The results of Committee evaluations are more acceptable to the staff whose jobs are affected by the study than only the findings of consultants or computers evaluating the jobs. Experience has shown that there are far fewer "appeals" or complaints of the evaluation results when a Committee evaluates. The use of a Committee permits maximum participation in the evaluation process. The Committee should evaluate new and changed jobs in the future to ensure the continuing fair and objective evaluation of jobs. This ensures that several staff are trained to maintain pay programs. 2 . Step 2 . and Step 3 . - Prepare and Review Ladder Chart In these steps, the Consultants will prepare a "ladder chart" of salary grades of jobs of similar value based on the results of the evaluation process. This chart will be reviewed and amended, as necessary, by the full Evaluation Committee. At the end of this meeting there must be a consensus on the final ladder chart. At the end of this phase, the Town of Newcastle will have a ladder chart based on job value. C. PHASE III - PREPARE PAY EQUITY PLANS AND FINAL REPORT, COST IMPACTS AND COMMUNICATE FINDINGS In this phase, we developand present our Pay Equity report which will identify: Adjustments required by the Pay Equity Act. ., + Special requirements for pay adjustments based on the Pay Equity Act. 1113 Robcrt McDowall&Associatcs ` Marmgenuent Consultants l.tl. 13 In keeping with the approach to the union studies, our work plan for the bargaining units will include: Negotiations with the bargaining units to determine: - method of job comparison (evaluation) - process for evaluating jobs - involvement of the union - appeal process - union approvals - Pay Equity plan implementation - Cross-bargaining unit comparisons (where applicable under the Pay Equity Act) Chairing, if requested, joint Union-Management Job Evaluation Committees. Preparation of Pay Equity Plan documents for the bargaining units - as required by the Pay Equity Act. Our estimate of consulting time for the bargaining unit is as follows: i i i I I I 1 115 Robert McDowall£Associates � Mnnngement Consultants Ltd. ` $ CORPORATION OF THE TOWN OF NEWCASTLE ATTACHMENT #3 n 40 TEMPERANCE STREET BOWMANVILLE, ONTARIO LiC3A6 TELEPHONE 623.3379 February 13 1989 Mr. Robert McDowall Robert McDowall & Associates Management Consultants Ltd. Suite 218 350 King Street East Hamilton, Ontario 18N 3Y3 Dear Mr. McDowall: Re: Pay Equity Proposal - Union and Non-Union I would like to take this opportunity to confirm our telephone conversation of February 8th 1989 wherein you provided further clarification regarding the above noted matter. Further to Section VII A & 8 on page 18 of your proposal which indicates professional fees and expenses related to your proposal, it is our understanding that your firm will also provide job descriptions for approximately 60 - 70 job classes at a cost of $6,000. As you indicated, job descriptions will be prepared basically from the fact sheets compiled during the exercise with some interviewing and clarification where required. I will be providing this additional information to our review committee with respect to the Pay Equity proposals received to date for purposes of recommending one firm to undertake the work to Council . I will be in touch with you as soon as this review takes place. If you have any questions in the meantime, please do not hesitate to contact me. Yours truly, LEK:nof Lawrenc otseff, Chief Admi strative Officer cc: Members of the Evaluation Committee � Gordon Weir, Labour Consultant 1116