City of Toronto Logo Decision Letter

 



Employee and Labour Relations Committee


Meeting No. 9   Contact Kelly McCarthy, Committee Administrator
Meeting Date Friday, October 18, 2013
  Phone 416-392-4666
Start Time 1:00 PM
  E-mail elrc@toronto.ca
Location Committee Room 1, City Hall
  Chair   Councillor Norman Kelly  

EL9.6 

ACTION

Amended 

 

Ward:All 

Non-Union Employee Compensation
Committee Decision

The Employee and Labour Relations Committee recommends to the Executive Committee that:

 

1.         City Council approve, effective January 1, 2014, the continuation of the performance review levels, target allocations and revised performance financial rewards for the non-union compensation policy and performance management program as recommended in the report (October 4, 2013) from the City Manager and the Executive Director, Human Resources, and summarized in Table 1 below:

 

Table 1: Performance Review Levels, Target Allocations and Financial Rewards

 

Performance

Review Levels

Performance

Target Allocations

Performance

Financial Rewards

Unsatisfactory

Up to 3% of

staff complement

0%

Meets Most but Not All Expectations and/or Developmental

Up to 10%

of staff complement

1%

Meets Expectations

70% of

staff complement

2.5%

Exceeds Expectations

Up to 20%

of staff complement

5.0%

 

2.         City Council approve, effective January 1, 2014, implementation of adjustments to the salary ranges, for grades 1 to 11, by reducing the width of the salary ranges below the salary range maximums from 24% to 17.5%; and for grades 12 to 16, by reducing the width of the salary ranges below the salary range maximums from 15% to 12.5%, as recommended in the report (October 4, 2013) from the City Manager and the Executive Director, Human Resources.

 

3.         City Council appprove, effective January 2014, the continuation of the merit performance-based re-earnable lump sum component of the non-union compensation policy and performance management program for employees who are at the top of their salary range.

 

4.         City Council authorize the appropriate City officials to take the necessary action to give effect to the foregoing recommendations.

Decision Advice and Other Information

The Employee and Labour Relations  Committee requested the City Manager and the Executive Director of Human Resources to report back to the Employee and Labour Relations Committee on the Performance Review Levels, Performance Target Allocations and Performance Financial Rewards by Division.

Origin
(October 4, 2013) Report from the City Manager and the Executive Director, Human Resources
Summary

City Council on July 11, 12 and 13, 2012, adopted Item EX21.18 regarding Non-Union Employee Compensation that required a review and reporting back, prior to the end of 2013, with further recommendations to the Employee and Labour Relations Committee.  This report provides recommendations to approve:

 

1.         continuing the non-union compensation system and performance management program including the performance review levels,  target allocations and revised performance financial rewards recommended in this report, in order to ensure an ongoing progressive performance culture that effectively rewards employees meeting or exceeding performance expectations;

 

2.         reducing the width (min to max span) of the salary ranges: for grades 1 to 11, by reducing the width of the salary ranges below the salary range maximums from 24% to 17.5%; and for grades 12 to 16, by reducing the width of the salary ranges below the salary range maximums from 15% to 12.5%, as recommended within this report i.e. the minimums would be adjusted and the maximums would remain unchanged; and

 

3.         continuing of the merit performance-based re-earnable lump sum component of the compensation plan for employees who are at the top of their salary range.

 

The City's current compensation plan for non-union and management employees is lagging and change is required to address recruitment and retention competitiveness challenges.  The City goal is to be a best practices high performing organization that provides optimal programs and services to the residents and businesses of the City of Toronto.  Retaining and attracting high performing employees is critical to achieving this objective and is dependent upon ensuring that the City of Toronto has in place a comprehensive compensation and performance reward program for its non-union and management employees.  The HayGroup's 2011-2012 review supports this Report's recommendations and are aligned with prevailing compensation best practices intended to ensure a modern, affordable and competitive compensation policy is in place.

Financial Impact

The projected additional net cost of the recommended 2014 revised performance financial rewards percentages are approximately $3M more that the cost of the 2013 performance financial rewards.  However, compared with the total net cost of the performance financial rewards that were in place in 2012 (i.e. $12M) under the former Non-union Compensation Plan (1999-2012) that had performance financial rewards with no target allocations, the projected net cost of the recommended revised 2014 performance financial rewards with target allocations are $0.3M less (i.e. $11.7M).    In addition, the net cost of reducing the width of the salary ranges is an estimated one-time net base cost of approximately $902,171. The City Divisions shall absorb these one-time net base costs within their 2014 budgets.

 

The Deputy City Manager and Chief Financial Officer has reviewed this report and agrees with the financial impact information. 

Background Information
(October 4, 2013) Report with Appendix A, from the City Manager and the Executive Director, Human Resources on Non-Union Employee Compensation
(http://www.toronto.ca/legdocs/mmis/2013/el/bgrd/backgroundfile-62494.pdf)