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Attachment 3 COMPENSATION POLICY REVIEW AND ANALYSIS In reviewing the County's current `step' compensation system, due to the large number of steps and prior practices `Level 31' of each salary range was the designated highest step at which many new employees were hired in at. Employees typically move through their salary grade at a more rapid pace early in their career as opposed to the latter stages of their employment with an organization or community. This occurs because employees are typically hired by an organization at the minimum or near the minimum of their pay grade because they lack certain knowledge, skills, and abilities that an employee who has been with an organization for eight(8)to ten(10)years may have obtained through training and immersion in the work force and community. Consequently, the mid-point of an employee's salary range is recognized as the `market rate' at which employees have gained the knowledge, skills, and abilities to perform at a level to commensurate with those of their more experienced peers. For that reason, many communities and organizations typically experience a more rapid growth in employee salaries toward the mid-point of the salary range during the first eight (8) to ten (10) years of employment as the organization recognizes the employees' growth in their job. As a result, employees often progress at a slower rate of salary growth once they have reached the mid-point of their salary grade and until their retirement. Because of this we would suggest that the County hire in at the minimum of the newly adopted pay schedule and develop a formal policy that establishes a goal of having employees reach the mid-point of their salary grade during the initial eight(8)to ten (10)year period of their employment with the County. This could be achieved by utilizing current and well defined criteria tied to longevity and/or recognized annual salary increases based upon the employees continued progress in mastering established job criteria. By recognizing employees' service in a range of 2% to 3% annually over the initial eight (8) to ten (10) year period of employment and then adjusting annual service based increases into an acceptable range for the duration of the employee's career,which is typically considered to be twenty-five (25)years such a policy is achievable in a well-managed community such as Cabarrus County Another challenge faced by many communities is how and where to place a new employee within the organization if they bring a level of experience in excess of the minimum salary required. Some communities handle this issue by ignoring the past experience a candidate brings to a position and hiring the applicant in at the minimum level of pay. This is an effective practice for hiring individuals who are seeking employment from organizations who may be less competitive in pay than the hiring locality and will receive an increase in pay, even at the minimum of the salary range to which they are assigned in their new locality. In many localities experience is recognized as an asset and newly hired employees are hired at a rate greater than the minimum of the assigned pay grade. Through established policy some localities allow flexibility in hiring `into the range' based upon the candidate's experience.An example of this policy application is that if a department head requests hiring amployee above the starting salary, the starting salary/rate may be increased up to five percent(5%)above the minimum entry rate upon approval of the Department Director, if an applicant has demonstrated education and experience related to the position for which they are being hired. In Cabarrus County any salary/rate requested above fifteen percent(15%) of the minimum level of pay must be approved by the County Manager upon consultation with the Director of Human Resources and must consider the applicant's prior level of education and experience in excess of the minimum requirements for the position and how they relate to the job for which the applicant is being hired which provides additional discretion on the part of the department head and should be maintained as the practice appears to be working well for the County. A second example provides a more defined system of recognition of prior education and experience and recognizes applicant's prior education and experience in relationship to the job. Under this system recognition of prior years of service may be on a direct or proportionate basis to place staff up to the mid- point of the salary range or at a greater level, dependent upon the locality and the position. A typical Attachment number 2\n F-5 Page 96