Department: County Administration
Department Head/Elected Official: Diana Ramirez, County Administrator
Regular or Supplemental RCA: Regular RCA
Type of Request: Financial Authorization
Project ID (if applicable): N/A
Vendor/Entity Legal Name (if applicable): N/A
MWDBE Contracted Goal (if applicable): N/A
MWDBE Current Participation (if applicable): N/A
Justification for 0% MWDBE Participation Goal: N/A - Goal not applicable to request
Request Summary (Agenda Caption):
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Request for discussion and possible action, including funding and timing decisions, on the executive pay study from Korn Ferry for the 16 department heads that report to OCA and the Fire Marshal.
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Background and Discussion:
On March 26, 2024, Commissioners Court directed the County Administrator to work with HRRM to contract for a compensation study of 16 department heads that report to OCA and the Fire Marshal. Commissioners Court required the study to be completed and presented to Court no later than June 2024, which greatly compressed the usual timeline for a compensation study.
HRRM engaged Korn Ferry, which developed a compensation framework to ensure fairness and equity within Harris County’s executive leadership positions and market competitiveness. The framework did not consider the value of the County’s benefits package. The attached presentation by Korn Ferry explains the methodology used.
Expected Impact:
The compensation study, if approved by Commissioners Court, will align department heads in an executive pay scale that assesses the relative magnitude of the job (or “job size”) based on three things: knowledge, problem-solving, and accountability, and compares these to executive roles of similar materiality from a wide assortment of public and private organizations.
The most impactful part of the Commissioners Court’s decision relates to the market competitiveness the Court chooses. Current executive pay is at approximately the 25th percentile of the market (as determined by Korn Ferry), with a few exceptions at or near the 50th percentile. Selecting the 25th percentile option will result in a small budgetary impact but continued disparities among department heads recommended to be placed on the same pay levels. Moving to the 50th percentile of the market will result in a larger budgetary impact but achieve pay equity among the department heads included in the study and make Harris County more competitive in its recruitment and retention of executive staff.
The Commissioners Court’s decision on executive pay will likely set employee expectations for the comprehensive pay equity study that is expected to begin in the August/September timeframe and cover all remaining County employees. OCA and HRRM cannot currently identify an order of magnitude of budgetary impact for bringing all County employees to the 25th or 50th percentile of the market, given several factors: Commissioners Court set a minimum wage of $15/hour several years ago and all non-law enforcement positions received a 7% COLA this fiscal year (with law enforcement positions realizing a higher COLA). Please note that OMB has set aside ongoing funding as part of the FY 2025 budget planning process to provide Commissioners Court the ability to implement the pay study beginning in FY 2025.
OCA Recommendations:
1. OCA recommends Commissioners Court approve the following framework components developed by Korn Ferry:
a. pay levels 21-26
b. pay ranges for levels 21-25 based on either:
i. the 50th percentile of the market as assessed by Korn Ferry or
ii. the 25th percentile of the market as assessed by Korn Ferry
c. pay level assignments for each department head studied
d. the salary derived for each department head studied at the pay range approved by Court under (1)(b) above (either 50th percentile or 25th percentile of the market) and based on Korn Ferry’s review of each incumbents’ experience and tenure as well as the scope of their work based on number of staff and budget size
2. There are three main implementation timeframes for these compensation changes for Commissioners Court to consider, especially in light of the later timeframe for completion of the Countywide pay study:
a. Implement effective the next available pay period (July 13, 2024) (with a prorated fiscal impact in FY 2024 of approximately $200,000 plus benefits at the 50th percentile).
b. Implement effective September 21, 2024 (the first pay period paid in FY25) (at an estimated annualized impact of approximately $865,000 plus benefits at the 50th percentile).
c. Implement effective with the first implementation of the pay equity study for all county employees which is still in active procurement; this is likely to occur in approximately 6-9 months.
Please refer to the OMB Fiscal Note for more detailed budget figures.
OCA plans to work with HRRM to develop a performance evaluation process for all department heads reporting to OCA to be brought back to Commissioners Court by December 2024 for review and possible approval.
Alternative Options:
Commissioners Court may decline to implement the compensation study or may choose to change the pay recommendations for individual department heads in the study. While this is the Commissioners Court’s prerogative, it will set aside the data-driven work conducted by Korn Ferry and compromises the integrity of the framework in favor of an ad hoc compensation strategy, which continues the pay disparity that the County’s executive leadership has been faced with until now.
Alignment with Goal(s):
_ Justice and Safety
_ Economic Opportunity
_ Housing
_ Public Health
_ Transportation
_ Flooding
_ Environment
X Governance and Customer Service
Prior Court Action (if any):
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Date |
Agenda Item # |
Action Taken |
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March 26, 2024 |
633 |
Commissioners Court approved a request by the Office of County Administration on (a) job classifications and associated pay for the following department heads: Public Library, Pollution Control, Pretrial Services, Domestic Relations Office, and Office of Management and Budget related to pay equity issues, and (b) contracting for the conduct of a job evaluation for each department head reporting to the County Administrator. |
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January 30, 2024 |
383 |
Commissioners Court provided the County Administrator with direction related to compensation for one OCA-reporting department head. |
Location:
Address (if applicable): N/A
Precinct(s): Countywide
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Anticipated Court Date: June 25, 2024
Anticipated Implementation Date (if different from Court date):
Emergency/Disaster Recovery Note: Not an emergency, disaster, or COVID-19 related item
Contact(s) name, title, department: Diana Ramirez, County Administrator, Office of County Administration
Attachments (if applicable): Presentation from Korn Ferry