Total Compensation Survey - Methodology

Methodology

Different Methods Used to Survey Public and Private Sectors

Public Agencies Surveyed

Occupations Surveyed (“Benchmark Classes”)

Total Compensation Data Collected

Salary Data

Leading or Lagging Other Employers

Time Period Covered by Survey

TABLE 1

TABLE 2

Different Methods Used to Survey Public and Private Sectors

For the public sector component of this survey, DPA contracted with Cooperative Personnel Services (CPS), a joint powers human resources consulting organization, to collect data from other public sector employers in California using “benchmark classes” identified by DPA for this survey. The response rate to CPS was a remarkably high 98 percent. A copy of the survey instrument is included with this report as Exhibit A.

For the private sector, DPA extracted data from reports compiled by five professional survey organizations. We aggregated the data to preserve the confidentiality of responding employers. Such published surveys are widely used by human resources professionals in developing employee compensation programs. They are considered reliable indicators of salaries paid for specific occupations in the private sector, although they have limited value for measuring benefits for specific job classifications.

Previous | Top | Next

Public Agencies Surveyed

Sixty-five public employers in California were surveyed. Collectively, they employ a substantial majority of public employees in California and represent the public sector labor market in which the State of California operates and competes.

The participants were selected to ensure an adequate number of survey respondents, to include the major public employers in California, and to cover the geographic areas where most State employees are located. Surveyed employers were assigned to one of five regions. Table 1 lists the employers by region.

The cities of Elk Grove, Santa Barbara, and Yuba City, and the County of San Luis Obispo did not respond to the request to participate in the survey.

TABLE 1

Previous | Top | Next

Occupations Surveyed (“Benchmark Classes”)

Before the survey began, DPA identified 34 journey-level classes and 7 executive- and managerial-level positions used by the State of California, for a total of 41 benchmark classes. These classes are representative of the broad array of occupations used by the State.

The classes we chose have typical benchmark qualities: they’re easily described, tied to other classifications in the job “family” and, in general, are readily found in the labor market. We loosely grouped them into six general occupational areas:

• Administrative and Office
• Medical and Related
• Engineering and Scientific
• Trades and Support Services
• Safety
• Executive and Managerial

Table 2 lists the 41 benchmark classes in the survey and the number of public sector matches found for each benchmark.

Although CPS was able to match several of the benchmark classes used by the public sector employers it surveyed, DPA was less successful matching these benchmarks to the private sector data. For our comparisons to be useful, we elected to use the published private sector data only when we had a reasonable degree of confidence the responsibilities of the private sector job were comparable to the State’s benchmark. We deemed a job comparable when 48 or more employers reported data for it. If fewer than 48 employers reported data, DPA was not confident of the job match and did not consider the data sufficiently valid.1

Of the 41 benchmark classes, we found valid private sector matches for 20.

Supervisory classifications and peace officer/firefighter classes were not included in this survey for several reasons: It’s often difficult to match supervisory classes due to differences in employer size, organizational structure, and supervisory responsibilities. Compensation for supervisors is often determined by internal salary relationships within an organization’s structure, rather than by outside comparisons. Pay structures of employers also vary significantly, particularly in the private sector. In addition, the timeframe and budget for this project limited the number of benchmark classes we could include. We also were concerned that additional benchmarks may have discouraged public employers from participating in the survey, reducing our response rate.

TABLE 2

Peace officer and firefighter classes were not included because they tend to have different pay structures and retirement programs, so data collection instruments must be tailored to these occupations. (It should be noted that Government Code section 19827 requires DPA to survey selected police officer jurisdictions annually. DPA prepares a separate police officer compensation survey each year to comply with this mandate.)

Previous | Top | Next

Total Compensation Data Collected

Deciding what data to collect for this survey to measure “total compensation” revolved around the following considerations:

• What are the employer’s significant costs for employee compensation?
• What are the significant factors influencing employees’ employment decisions?

Based on these considerations, we included the following elements in our “total compensation” comparisons:

• Base monthly salary
• Employer contributions to employee health, dental, and vision benefits2
• Employer pickup of employee retirement contribution3
• Employer deferred compensation contributions
• Longevity pay, education pay, incentive/bonus pay, recruitment and retention pay4
• Employer Social Security contributions

In addition to the data elements listed above, we also collected information on paid leave practices and cost-of-living adjustments (COLAs).

The employer data for this survey is not weighted by the number of incumbents in the benchmark in each jurisdiction. Incumbent data is not readily available and requires a significant amount of work and staff resources to develop. In addition, requesting the information necessary to weight the data would have imposed too much work on the employers asked to participate, potentially reducing the response rate.

Previous | Top | Next

Salary Data

For each benchmark class, we compared the maximum base salary and total compensation data for the State to the median of the maximum base salary and total compensation data reported by the public sector respondents.5

Private sector salary information used in this project comes with limitations. Salaries in the private sector may not have salary ranges comparable to the State’s, nor any established maximum, which is typical for the State. In addition, bonuses and incentive pay programs are typically not reported by private firms in a manner that makes the information useful for comparisons.

Therefore, the private sector salaries we report represent the median of the salaries from the various surveys (when 48 or more employers reported data, as described above).

Previous | Top | Next

Leading or Lagging Other Employers

Where the State of California leads other employers, we show the percentage as a positive (+) number. Where the State lags, we show the percentage as a negative (-) number. In the case of a lag, the percentage shown represents the percentage by which the State compensation would have to be increased to equal the survey median data level.

Previous | Top | Next

Time Period Covered by Survey

Respondents in the public sector were asked to provide compensation data for January 2006. Data was collected from mid-January through mid-March. The private sector data comes from published survey reports that used 2005 data.

Previous | Top | Next

FOOTNOTES

1 - Forty-eight employers provided a statistically large enough sample of jobs. A natural break occurred in the employer data between 48 and the next lower number of employers.

2 - No comparison is made with respect to either the “value” or “comparability” of the health-related plans provided by the jurisdictions surveyed.

3 - The survey comparisons do not reflect private employers’ contributions to defined contribution retirement plans., nor public employer contributions to defined benefit retirement plans. The element that is included in the public sector comparisons is the portion of the employee’s contribution that gets paid by the employer. DPA’s future surveys will include the employer’s retirement contribution, as it reflects an employer cost of employee compensation.

4 - The State provides several recruitment and retention differentials, many based on geographic location. For this survey’s calculations, we only included differentials that all incumbents in a benchmark class receive.

5 - In State service, employees automatically move to the top of their classification’s salary range with satisfactory performance. Therefore, the maximum salary represents the State’s “market rate.” In the private sector, there often is no maximum rate for a particular job and employees ordinarily move to the market rate, typically the median salary for the job.

Updated October 7, 2010 at 2:26 PM.