News from Milford
One of the sites that I have permanently bookmarked is BlogNetNews for New Hampshire. Simplistically, it is a blog aggregator - it watches over a number of bloggers that are located in New Hampshire (including this blog and GraniteGrok).
One other blog appears there that both Doug and I look into from time to time, and that is Jim Dannis's blog. Jim is a Selectman from Milford, and is using his blog similar to how Doug and I are running this one - commenting on what is going on in town. Specifically, as he is a Selectman, he is trying to open up his Town's political goings on as we are trying to here.
I saw that Jim had a post on 2007 Salary Survey, so of COURSE I had to look. While it did not turn out to be an actual study as I had done, I did leave a couple of comments (to the effect of what was going on here). To say that it generated a few more comments is an understatement. With the permission of Jim, I am going to abstract out those comments that I want to discuss further.
Note: not all of the comments from Jim's post will make it to here, and it may take a little bit for me to comment on the ones that I wish to....pls be patient!
The proposed 2007 town budget has a 4% across-the-board pay raise for all non-union employees. The selectmen were told Tuesday night that the reason for 4% is to “match” the new union contracts that are up for town approval in March.
Is 4% a typical raise in Milford for the coming year?
Please post any information you have on 2007 pay raises for our region.
Is your company giving a 4% raise to everyone for 2007? Higher? Lower?
Have you heard what the “big” Milford employers, or the smaller local businesses, are giving for raises?
How about regional employers where you or people you know may work?
Do you know the raises our surrounding towns are giving to their town employees?
How about the state, for state workers?
To kick it off, I checked the pay raises for Federal government employees. The base Federal pay raise is in the 1.8% range, with adjustments for different regions of the country. Federal employees in New Hampshire will get a 2.53% raise. I read that our soldiers in Iraq are getting a 2.2% pay raise.
I also checked increases for retirees. For retirees who are relying on Social Security, the 2007 COLA adjustment is 3.3%. For retirees in the NH pension system, the current COLA adjustment is 1% (made in July 2006, next one is July 2007).
To be clear, the objective here is not to argue against the 4% number. Although I don’t really understand it, I am told we are locked into this because of what was agreed with the unions.
My objective is to see if there is another number that is more representative of the average pay raise for Milford taxpayers, and then use that for the “base” increase. If the average Milford pay raise is lower than 4% (which is my guess), then perhaps that number can be used for the 2007 “across-the-board increase” for town employees. The excess money (the difference between, say, a 3% base raise and the 4% compensation pool) could then be used for a performance pay program.
So once again, for avoidance of doubt, I am not at this point suggesting any change in the 4% pay pool now in the budget, but I am looking at whether the base pay increase should be set at a lower number with the rest of the money used for performance pay.
Thanks in advance for helping!
Jim
Although I have not studied the pay rates of the State, are you sure that they are "low"? I'm asking not to start an argument, but I am wondering where your source data is from? THanks!Jim,
Nearly all state workers are paid under the contract that the State Employees Association has with the State. Historically, raises, when they occur, are low. The last one was 2%. The fee required by the union to all state employees, both union and non (except those positions protected by powerful people) wash out most employee's raises.
But, its not all a sob story. The State provides employees with an option for 100% paid health insurance. Plus, retirement, holidays, etc.-all the benefits that most municipalities provide to their employees.
So, although the pay rate is very low compared to most communities, the total benefit package is very good.
+NS
Jim, I am a waitress in Milford and I am not getting ANY raise. I would be happy if I even got the 1 per cent you said. Thank you for your time.
Dear NS:
Thanks for the post and for the information.
Your point supports a way of thinking I am hoping we will come to at some point at the board of selectmen.
We should look at "the total package" -- salary plus benefits - in order to make good, fair decisions for town employees and taxpayers.
It will be very difficult to appraise the overall benefits, especially health care insurance. I have not yet found a single place that will tell more than just percentages - e.g., 95% paid by the Town, 5% by the employee. ONe needs to see the absolute numbers of what the policies (single, family, HMO, PPO, etc) cost the taxpayer vs the employee.
Here's an example. The cost to Milford taxpayers for the health insurance benefit for town employees, after taking into account employee contributions, is roughly $8,500 per employee. Our 2007 budget package says that the projected increase in the health insurance premium, as currently estimated by Primex, is 26%.
Hopefully we'll be able to negotiate this down or bid it around and do better, but let's stick with 26% just as an example. 26% of $8,500 is $2,200. So, if the town ends up having to pay a 26% increase in the premium, it is financially the same (in terms of looking at the cost of the "total package") as giving the average town employee an additional $2,200 raise. If the average employee is paid $50,000 in salary, the $2,200 increased cost of health insurance is, by itself, equivalent to a 4.4% raise.
Hey Jim! Want to come talk to our School Board? They don't seem to want to agree with your reasoning. They migrated from a plan that the employees were contributing to (an indemnity plan) to one that was cheaper. Problem is that they decided to not charge the employees, thus about doubling the cost to the taxpayers.....
I just read online about how the City of Boston is starting to approach its budget. They are looking at "total packages", and assessing salary increases and increases in the costs of benefits and looking at the total increase as a single number. I believe that's a better way to think about compensation, and a better way to budget.
Thanks, Jim
I know you like to use round numbers, but I'm guessing "average town employee" doesn't earn $50,000 as a base salary.
Dear 7:25:
Thanks for the post.
I am guessing you won't like the direction this takes, but let me explain my numbers.
I used $50,000 as a round number with the knowledge that it REDUCES the percentage effect of the hypothetical $2,200 increase in per employee net health insurance costs. In other words, I was bending over backwards to keep the headline number (total comp and benefits in the example) at an increase of no more than 10%.
To take you up on your point, let's plug $40,000 as the average wage. $2,200 on $40,000 is 5.5%. Add 4% for the across-the-board raise, and even a modest amount for pension increases and other benefit increases tips us over the 10% line.
Let me emphasize again I am hopeful we can do better than the 26% preliminary indication for the health premium increase. That would move the numbers in the example down.
Thanks, Jim
Jim, I work on commission. I sell cars. While I actually got a 6% raise this year, I make more selling pricier models.
I don't think going to this pay structure would be realistic, I don't want town employees trying to convince my wife she needs a new car!
More seriously, commission, you will likely say is incentive pay. While I agree, I don't think you could really look at someone like the Police Chief and say: hmmm, did this person do a good job, a great job, or a bad job.
I disagree! Every job should have a set of metrics by which performance can be measured. In the case of the Police Chief, one could review the performance of the entire department. I'm not going to suggest metrics here, but measurements are important. One cannot manage what one cannot measure.
You're performance is selling cars. More importantly, selling as many and as expensive a car that you can. When you succeed, you benefit. I have no problem with any one getting negotiated incentive pay as long as (in this case), the taxpayer is getting a good deal.
My guess is that just about everyone is doing a fine job.
The cold truth is not everyone does, or can, do the same level of proficiency as "the best". By definition, most people are average to good. Another way of thinking of it is "Best" is walking on water, all the time.
Get rid of people who aren't. That's my biggest incentive to perform.
Not at first. Counseling / training works a lot of the time, and often the cause is wrong expectations from one side or another. If that fails, then it may be best to part ways.
And that swimming pool my kids keep bugging me about.
Sorry I couldn't be of more help.
We here in Gilford just eliminate the idea of a COLA...now Town employees are on a merit based pay system (just like the private sector). Further, since the merit system is not fully funded (i.e., not everyone can get the full amount), dept. heads will have to really make decisions as to who deserves what kind of raise....just like in the private sector.
-Skip
GraniteGrok.com
GilfordGrok.com
Nice... Sarcasm can be enjoyable to read, but only when done right.Let's just model our govt off of Gilford. I've been reading about their progressive style in the New York Times lately. Getting better reviews than Da Vinci Code.
Skip:
How do you feel about the curved grading system? That's what you seem to be using in Gilford. 20 students take a test. 1 gets a 99, 1 gets a 97, and everyone else gets a 98. In your system, one gets an F (no raise) one gets an A (good raise) and everyone else gets a C (standard of living raise).
I've never been a fan of it in school. First, your premise is off base - you are trying to say that there are only A level employees. In the real world, that is hardly ever true - just because one can meet all of the duties and responsibilities of a position does not make one an A employee. That level of output / productivity is average. To get to the next level, one has to be able to exceed the duties of the position often to be superior, and all of the time would be excellent.
I've been an employee and I have been an employer. When you become the latter, you quickly review how you categorize how well (or not) people are doing the jobs you expect. Good managers also go through this transition - at any point in time, they should be able to give their upper level management a complete ranking of their employees.
By definition, not everyone can be number 1.
How do you sleep at night?
Actually, very well. The most important thing is that people realize that NO one is entitled to a job. No one is entitled to a raise just because they show up for work (although, if everyone else around them isn't, that just might be the kicker for a raise).
As long as the criteria for evaluation are clear (i.e., the rules are known by all and are clear), there should not be a problem.
I am totally against this stupid idea.
What, that one has to EARN a raise, that it has to be more than just adequately doing your job?
At least Jim has a baseline in his proposal. Let me guess, the person in your town who runs the understaffed dept. (because you are too cheap to hire an extra person) has to work 60 hours to get the job done gets the big raise right? No doubt they are still underpaid (at 60 hours a week) and everyone else suffers because they get their work done in the alotted 40 hours.
I see that you have searched for a cliff and jumped off......
The operative word is not "cheap:, it is "productivity". All business owners and managers want employees that perform beyond the minimum duties of their position. Those owners and managers (private or public sector) that would do what you outline above would either be out of business soon (from excessive turnover) or removed (unless protected by "powerful" people).
Some people WILL work the 60 hours to get the raise - some people call that "hungry". I'd rather see someone working smarter and accomplishing the same amount of work in 40 hours, but hey, that would be their decision. If you look at higher paid jobs (think corporate lawyer, for instance, tyring to make partner, or a commissioned sales guy (see above)), they will put in a lot more hours than someone just punching a clock (ususally). That will add up to higher productivity levels and should be compensated as such.
These are people salaries (used to provide for their families) we are talking about.
Look, I've worked in the private sector for over 35 years....and NEVER have I expected that I was going to be "taken care of". I work my time, and I expect to be compensated for it. Nothing more, nothing less. No one is entitled to a job - I've worked for and been laid off from Honeywell Information Systems, Wang Labs, and Digital Equipment as they died. It quickly abuses you of any notion of entitlement.
If someone doesn't like their compensation, no one is forcing them to stay....time for a job search. The only person that is responsible for you and your family IS your.....not your employer. Once that is realized, the world opens up (if you want it).
Why would you not fund the line item with enough money in case SURPRISE!!! everyone is doing their job well?
If it was fully funded, then it would be a COLA.
See above - not everyone is going to perform their job to a superior or excellent level by definition. If indeed that you are convinced that you manage a group of people who are all EXCELLENT, then one of two things is amiss. Either you do have such a group (and then it is your job as manager to fight as hard as you can for larger part of the pot) or the metrics for the position(s) are set wrong.
You make an analogy to the real world. Where I work you get a standard of living increase and merit plays a role in how much more you get.
Just a question - private or public sector? I tend to believe the latter, as most private businesses of size stopped giving out COLAS a while ago. They made sense when inflation was high, but since that specter has been subdued (for the most part), the emphasis is rewarding productivity (both in team and individual evaluations).
Read carefully- your work determines how much more you get, your work fighting against everyone else's.
Agreed.
By the way, I dodn't think Wal-Mart gave raises, congrats.
Irrelevant to this discussion.
Please worry about GILford not MILford.
I do worry about Gilford. But this is the blogosphere, where everyone has an opinion about anything and everywhere....get used to it.
Jim,
Does your dog Skippy have a web site? Can he really type?
Ah yes, I was expecting this. If this is the best you have, it's not much. Just another weak Ad. Hom. outburst.....sigh....I'd hoped for better.....
Interesting thoughts on COLA, coming from a border collie.
Woof! Frankly, I'd rather be a sheepdog - after all, I'm trying to protect the taxpayers from the wolves that would spend their money - other peoples' money.
Jim:
I don't have a problem with the last paragragh of your post, as long as there are enough funds to pay everyone the 4% (in the unlikely case that everyone is a top performer.)
Good observation.
It makes you wonder if Gilford values the hard worker, or the unproductive employee who doesn't get a raise.
If a worker is a hard worker, and is exceeding expectations, then they should get most if not the entire raise possible - thus is, by definition, valued. The unproductive employee that does not meet expectations should not get a raise, and by that definition, is not valued.
Put it this way: if you were the employer and you had two employees as you state, which would you value more? Remember, the money for raises comes out of your pocket (just as in the public sector, it comes out of the taxpayer's pocket).
Are you willing to tell me that you would compensate both equally? If so, IMHO, that is poor management skills. Cold hearted, but true.
Skip: Maybe you need to get rid of the people who aren't excellent and do a better job selecting job candidates.
I do not work for the Town; I am only an elected official. I do neither job hiring or evaluation. I have, however, done such as both a manager and as an employer. And I will admit, hiring even good candidates is not an easy task. One can pass the interview with flying colors and still bomb out in the actual position.
PS Does your school system use merit pay only? Didn't think so.
No, they don't. I wish they would. There are some very good teachers in our school system - I wish that the teachers union would allow for merit based pay so that they could be compensated better and faster than those teachers that are not as capabile. Instead, COLAS are built into the contract, but that is another discussion.
In the private sector I work in, you get fair compensation for doing great work, if you don't do great work you don't have a job.
This is my point, exactly! The emphasis is GREAT, and not just on ADEQUATE.
(I guess Gilford has a different philosophy.)
Hmmm, looks like I've stirred up a bit of debate here! I'll respond to the comments / questions tonite. Jim, may I cross link your post and comments here to my blogs at GilfordGrok and GraniteGrok. Heck, we may even talk about this on our radio show tomorrow!
-Skip
(member of the Gilford Budget Committee, keeping taxpayer interests foremost)
Dear Skip --
Thanks for the discussion, and feel free to cross-link (as if I know what that is!).
Please also put up a comment with a link to your blog, so people can jump over to you for more. I don't know how to do that in a comment. Maybe that's a cross-link?
If you have any other salary survey data from other towns, would love to have it.
Thanks, Jim
=================================================================
To get to the blogs that Doug and I run:
http://www.granitegrok.com/
http://www.gilfordgrok.com/
To see the salary survey study I did in ranking Gilford against the other 32 towns in NH with a similar population (5-10K) and similar town positions go to GilfordGrok and click on the Statistics category.
The results when I compiled the stats, to be honest, were startling. I would suggest that all towns do the same.
-Skip
Dear 2:18:
Thanks for the post.
Interesting idea.
Of course, now that we know inflation is 1-1.5% less in Amherst, we should maybe use the salary numbers there?
More seriously: the 3.5% never did manage to get much local content into it. It started off at 3.0%-3.5% based on national and regional numbers, got salami-ed up to 3.5% very quickly, and never got benchmarked against any good local salary survey (we don't have one).
So, I am hoping to get some sharper numbers to benchmark the proposed across-the-board raise. Remember, this is not about cutting back on the 4%; at this point it is about allocating the 4% between across-the-board raises and performance pay.
I am hoping we'll get some posts (anonymous of course) talking about the 2007 wage adjustments at Hitchener's, Hendrix, Alene, Shaw's, Market Basket and some of the smaller businesses in town, as well as the Nashua area and 128/495 area businesses where a lot of Milford people work.
Happy New Year! Jim