Salary Management Process
Improvements to Salary Management Process Reduce Complexity, Improve Transparency
By Walter Garcia, TM-II for Patrol 24 at Woodland Park, Pueblo Maintenance Section 4, Region 2, cross-training program participant with the CDOT Office of Communications
September 26, 2014
Overview
Salary Cap and Position Change Management are two subjects that are hard to write and read about; however, after the challenges that came about after boundary shifts over this past year, those two subjects took center stage. When the employees were absorbed from Region 6 into the new Region 1, their salaries did not follow. To say that the situation pointed to a challenge would be an understatement.
“Historically, [the Colorado Department of Transportation] (CDOT) has transferred budget with all positions, vacant or full,” noted Scott Richrath, CDOT Chief Financial Officer who is also the primary sponsor for this Lean process. “In an environment of restricted salary cap growth for the entire department matched with significant changes to the structure of the organization, moving positions requires a more thoughtful process and approach.”
The goals for this new process were as follows:
Outline how the CDOT salary cap for each Fiscal Year will be established
Explain and delineate salary cap management procedures
Clarify the ways on how to add, transfer or create FTE position, within salary cap constraints
Establish transparent criteria and implement a logical process for granting salary cap relief
Maintenance workshop
What did CDOT do?
As of September 1, 2014, CDOT had 3,315 Full Time Equivalent (FTE) positions. Each appointing authority receives an allotted amount of money annually to fund employee salaries, as well as a reserve amount for overtime and incentive pay. However, a cap or limit is placed on each FTE salary.
CDOT conceived and instituted a salary cap as a way to ensure proper financial management of employee’s salaries and positions; however, during the boundary changes, in fiscal year 2014, it was found that there were no documented or efficient processes established for creating, transferring, reclassifying, and reallocating positions. The regions that absorbednew positions did not receive any increase in their budgets for the newly acquired personnel; therefore, the regions had to exceed their caps to pay those employees and in doing so those regions exceeded their yearly budgets for personnel and operations.
“This has been an evolving process that has presented challenges, as well as learning opportunities,” noted Leah Ware, Salary Cap project lead. “As a result of the challenges that the boundary changes presented, the Lean team was tasked with creating and communicating standardized directives, and policies on cap budgeting, as well as for FTE changes, transfers and creations.”
In order to find a solution, Richrath organized a Lean team and tasked them with creating and implementing guideline policies and step-by-step procedures for a new Salary Cap Management and Position Change Process.
The purposes that dictate how and why CDOT has moved toward this new management process includes adhering to the commitment of not expanding the size of state government. Other major considerations include:
Increased support from the private sector, through partnerships and joint efforts to improve our state highways;
The expectation for CDOT to evolve with changing demands and to align existing resources to best meet new priorities;
Affording CDOT the opportunity to realign resources, invest in employee improving skills, and recruitment; and
Increase CDOT’s ability to utilize best manage processes for the department and public needs, as well as alter position duties as need demands dictate.
In conjunction with outlining a process for improving efficiency, step-by-step procedures were created in order to streamline these communications and apply the Lean team’s recommended procedures. This four step procedure is as follows:
Establishment and Distribution of CDOT Salary Cap
Ensures proper financial management of employee salaries by expenditures, not FTE numbers
Salary Cap Management
Reports a more accurate cost total for payroll expenditures to the Governor's Office
Maintains the salary buffer, which keeps total fiscal year salary expenses from the cap to within 0.5%
Procedures for adding a Full Time Equivalent Position within the salary cap
Salary Cap Relief
Create a standardized cap relief form
Appointing authorities can request more funding for their cap. The prerequisite for this is when the financial need of an imperative project exceeds the cap and may threaten a reduction of vital services if not met
Testing Phase and Anticipated Induction
The Lean team is currently testing their new processes on different scenarios. “The Lean team’s recommendations are currently being implemented,” said Ware, “We are running through scenarios to determine how best to implement these new processes. Draft policies have also been created and are in place as a guideline and will be updated once the most effective and efficient scenario is selected.”
The Lean team’s time and effort identified the areas in need of improvement, developed recommendations and solutions, and are currently in the implementation testing process. “We anticipate having something in place, and approved by the Appointing Authorities, this fall,” said Gary Vansuch, CDOT Director of Process Improvement and the Project Mentor. “We are rolling information out by Division, so as of August 27, 2014, the Division of Accounting & Finance (DAF) has given their approval, and now we are having the Division of Administrative Services (DAS) review the information.”
Key Players
Scott Richrath, Chief Financial Officer, Primary Sponsor
Maria Sobota, Financial Management & Budget, Sponsor Coalition
Heidi Humphreys, Director of Division of Administrative Services, Sponsor Coalition
Mariusz Dewicki, Information Technology/SAP, Sponsor Coalition
Gary Vansuch, Director of Process Improvement, Mentor
Matt Bjroge, Accounting & Finance/Payroll, Project Team
Amanda Parkhurst-Strout, Human Resources, Project Team
Amy Huang, Accounting, Project Team
Pat Girten, Financial Management & Budget, Project Team
John Collins, Accounting, Project Team
Piper Frode, Accounting, Project Team
Dee Perry, Accounting, Project Team
Leah Ware, Division of Transportation Development, Project Lead