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Councilors tighten compensation plan

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Study finds no basis for the “LA factor”

By Roger Snodgrass

Councilors seized on findings of an employee compensation report Tuesday to eliminate the “Los Alamos Factor,” the cost of living premium thought to have an arbitrary influence in boosting the income of county employees.

Although there were questions about how that could be accomplished, it was one of several disapproving whacks that the Los Alamos County Council gave to the county compensation system in a motion accepting a Market Pricing Study by consultant Fox Lawson and Associates (FLA).

Only Councilor Vincent Chiravalle voted against the motion, but he said that was because he felt it didn’t go far enough to end outright a practice of paying lump sum bonuses to high-performing employees who have reached the top of their pay grades and are no longer eligible for raises.

“This councilor is ready to decide tonight. No lump sum payments, I can’t support it.”

The motion by Councilor Ralph Phelps passed 6-1, with an amendment by Council Vice Chair Sharon Stover that called only for staff-suggested “options” for the so-called “red circle” employees who might receive the bonuses.

Four employees were awarded the extra payments last year.

“Do you want to pay for performance or not?” said Tony Mortillaro, county administrator. “There’s no right or wrong, just what you think people should receive if you’re paying for performance.”

The market pricing study highlighted a number of discrepancies and potential inefficiencies in the compensation system, while calling for a compensation philosophy to guide decisions toward some adjustments and internal realignments.

Officials of FLA led the presentation with county Human Resources Manager Sharyl Hofer.

Among the findings:

FLA recommended that the “Los Alamos Factor” not be used to justify paying at the 75th percentile because of cost-of-living concerns and the practice of hiring the best employees. The 75th percentile is half-way between the average and the top of the market.

Council Chair Michael Wismer asked FLA President Bruce Lawson to explain the problem with the “LA Factor.”

“We can’t replicate it,” Lawson said. “There’s no documentation on where it came from, how it was built and what the assumptions were. If you can’t replicate it you have a problem.

In place of the “factor,” the study recommended using a geographic adjustment based on a comprehensive survey known as ERI.

LAC’s salary range midpoints were found to be 7 percent above “the average range midpoint of the market.”

“Every percent is a third of a million bucks in the budget,” Gibson said. “We want to pay fairly but the question is what is fairly, both to the employees and the taxpayers.”

Nine benchmarks or related jobs were recommended for an upgrade, but all others were found currently to be within the recommended range of plus or minus 10 percent of the market.

The study also suggested that the county has too many different job titles.

“How much difference makes a difference?” Lawson asked.

In reaching a resolution on the study, county staff and the Personnel Board had recommended approval of the 13 recommendations in the study, but there were differences of opinion about how quickly anything could be accomplished, whether it could be done internally or require more consultants and more studies.

“When this calls for budget, so far there’s nothing in the budget for FY11,” County Administrator Anthony Mortillaro said. “We don’t have anyone on staff.”

If another consultant’s contract were awarded, he added, “You may have a different consultant who has a different philosophy.”