Hubinger Merriam Hay

The Minnesota Department of Management and Budget (MMB)is responsible for managing the state's finances, payroll, human resources, and employee insurance. They also provide systems for daily business operations, information access, and analysis. The agency serves the Governor, the Legislature, over 100 state government entities, and a workforce of 57,000 employees. Its annual general fund operating budget is approximately $44 million. The Minnesota Office of State Procurement, which oversees state purchases and contracts, is a division of the Minnesota Department of Administration. 

public employee contract wage insurance cost percentage against budget base

Minnesota's state employee contracts, negotiated through collective bargaining agreements, generally include a combination of across-the-board wage increases and performance or step-based increases. For example, a recent contract featured a 5.5% raise in Fiscal Year 2024 and a 4.4% increase starting July 2025, . Additionally, over half of the state government workforce could be eligible for a 3.5% step increase, based on years of service, each calendar year. These increases, when combined, could translate into a 17% raise over the biennium for some unionized employees. 

The cost of employee benefits, including health insurance, is a significant part of the overall compensation package for public employees in Minnesota. However, the exact percentage of the state budget base allocated to insurance costs is not readily available in the provided search results. Data from the Bureau of Labor Statistics indicates that benefits constitute 38% of the average state and local government worker's total compensation, with wages making up the remaining 62%. Another source suggests that health insurance specifically accounts for 7.67% of state and local government workers' compensation. 

Rising healthcare costs are a concern, even impacting Minnesota school districts where rapidly rising employee insurance costs are consuming a larger share of state per-pupil funding increases. Efforts have been made in recent contract negotiations to mitigate these costs for employees, with unions reporting that they blocked changes that would have significantly raised out-of-pocket insurance costs for their members. 

It is important to note that the "Hubinger Number" and "Merriam Number," mentioned in the context of the Minnesota Management and Budget, are specific metrics used in some compensation plan estimations. The Hubinger Number represents the Biennial New Money as a percentage of the Biennial Base at the start of a fiscal year, while the Merriam Number represents the growth in the Biennial Base over the term of a contract. 

compensation plan estimation referring to hay study

In Minnesota state employee compensation plan estimations, the Hay system is used as a job evaluation system. It helps to achieve proportionality and equity in employee compensation by assigning a numerical "Hay rating" to most state jobs. This system is also used by many private and public employers. 

Important Points about the Hay System in Minnesota:

    • Job Evaluation: The Hay system provides a structured framework for evaluating the complexity and responsibilities of different state jobs.

    • Proportionality and Equity: The numerical rating from the Hay system helps determine appropriate compensation levels for different positions, aiming for internal equity within the state government workforce.

    • Comparison to Private Sector: While the Hay system is also used in the private sector, there are notable differences in compensation levels. Data from employers using the system nationally shows that private sector salaries are often significantly higher than state salaries for upper-level managerial and professional positions with similar Hay ratings. 

Note: The search results also mention "Hayes' studies" in different contexts, such as analyzing pay equity for physicians or predicting the time to complete online studies. However, in the context of Minnesota state employee compensation, the term "Hay system" refers to the specific job evaluation methodology used by the state. 

explain difference between job evaluation methods and metrics modeling appropriate compensation for waged public employees

In setting appropriate compensation for waged public employees, job evaluation methods and metrics modeling play distinct but complementary roles. 

Job evaluation methods

Job evaluation methods focus on establishing the internal worth or value of different jobs within an organization, leading to a hierarchy of jobs and pay grades. The goal is to ensure fair and equitable compensation based on objective criteria related to the job itself, not the individual performing it. 

Common job evaluation methods include:

    • Hay System: Widely used, including in Minnesota, it evaluates jobs based on "Know-How," "Problem Solving," and "Accountability," assigning points to each factor.

    • Point-Factor Method: Similar to the Hay System, it assigns numerical values to various job factors like skills, experience, and responsibility to determine a job's overall value.

    • Job Classification/Grade System: This method categorizes jobs into predefined grades or classes based on job characteristics, with each grade having a specific salary range.

    • Job Ranking: Involves ordering jobs from highest to lowest in terms of their perceived value or importance to the organization.

    • Factor Comparison: A combination of ranking and point methods that compares jobs on specific factors and assigns monetary values based on market data. 

These methods help build the foundation for a fair compensation structure by ensuring that jobs with similar responsibilities and requirements are compensated similarly, addressing internal equity concerns. 

Metrics modeling

Metrics modeling uses quantitative data and analysis to determine how compensation practices align with organizational goals and market conditions. It helps optimize pay structures, monitor effectiveness, and ensure compliance with regulations. 

Key compensation metrics include: 

    • Market Competitiveness: Measures how an organization's compensation levels compare to external benchmarks and competitors.

    • Pay Equity: Analyzes compensation fairness, focusing on disparities based on factors like gender, race, or other protected characteristics.

    • Compensation Cost Ratio: Determines the total cost of compensation as a percentage of revenue or operating expenses.

    • Target Percentile: Indicates the desired market position for salaries (e.g., aiming for the 50th or 75th percentile of the market).

    • Compa-Ratio: Compares an individual's salary to the midpoint of their salary range or the market average, indicating whether they are paid above or below the average.

    • Salary Range Penetration: Shows where an individual's salary falls within their designated pay range, considering the entire range, not just the midpoint.

    • Total Cost of Workforce (TCOW): Encompasses all expenses related to employees, including salaries, benefits, and related costs.

    • Turnover Rate: Helps assess the effectiveness of compensation in retaining employees, especially high performers.

    • Geographic Differentials: Accounts for cost of living differences when setting compensation across different locations. 

Metrics modeling considers external market pressures, budget constraints, performance goals, and pay equity objectives to develop and refine compensation strategies, going beyond the internal hierarchy established by job evaluation. It helps determine what to pay to attract and retain the right talent given market conditions and financial goals, as well as what to pay for a job based on its value to the organization. 

in careers doing public service jobs, why does it seem employment contract holds internal hierarchy preservation a more significant concern than any external reality measure critical to preserving integrity and stability for workers?

In public service, there's a strong emphasis on maintaining internal hierarchy and consistency in employment contracts due to a combination of factors related to fairness, governance, and the nature of government work

Why Internal Hierarchy Preservation is Important:

    • Fairness and Equity: A consistent pay structure, based on job evaluation, helps ensure employees in similar roles with comparable responsibilities receive similar compensation, fostering a sense of fairness and equity within the organization.

    • Preventing Political Patronage: Civil service protections, often linked to established job structures and hierarchies, aim to reduce political influence in employment decisions, prioritizing qualifications and performance over political connections.

    • Supporting Public Trust: Fair and transparent compensation practices contribute to public trust in government. A clear structure helps justify compensation decisions and reduces the perception of favoritism or corruption.

    • Predictability and Stability: A structured system provides employees with a predictable career path and compensation structure, which can enhance job security and reduce anxiety, particularly important in the public sector.

    • Simplifying Decisions: Clear pay ranges and job grades within a hierarchical structure make compensation decisions more straightforward, minimizing inconsistencies and facilitating negotiations. 

Why External Market Concerns Might Seem Less Prominent:

    • Limited Profit Motive: Unlike private companies driven by profit margins, public sector organizations have a different mission – to provide public services. While recruitment and retention are important, the pressure to match market salaries at all levels might be less intense.

    • Emphasis on Public Service Value: Public sector jobs are often seen as serving a greater good, attracting individuals motivated by public service rather than purely market-driven compensation.

    • Budgetary Constraints: Public budgets face limitations that require careful allocation of resources, which can impact the ability to match private sector salaries, especially for high-demand positions. 

The Challenge:

It's important to recognize that a balance between internal equity and external market factors is crucial for effective public sector human resources management. Neglecting market competitiveness can lead to difficulties attracting and retaining skilled employees, potentially impacting the quality of public services. On the other hand, focusing solely on market rates without considering internal equity can create internal dissatisfaction and resentment, undermining morale and potentially leading to staff turnover. 

Conclusion:

While the emphasis on internal hierarchy preservation in public service employment contracts might sometimes appear to overshadow external market considerations, it stems from the unique nature of government work and its focus on fairness, transparency, and civil service protections. However, successful public sector compensation systems strive to balance internal equity with market competitiveness to ensure the attraction and retention of qualified individuals necessary for effective public service delivery. 

Is it possible, unless very careful when doing balanced comparisons between jobs across different levels of of government, across same or similar roles but at various levels below and above state or federal, county or city, or comparing cross-nationally, that when a pay scheme divides pay grids of workers by classes and units, white/pink/blue collar, this might increase corruption, graft and waste?

Yes, there is a risk that dividing public sector jobs into categories like "white collar," "pink collar," and "blue collar," and structuring pay schemes accordingly, could potentially contribute to corruption, graft, and waste, especially when comparing across different levels of government or internationally. 

Here's why this risk exists:

    • Perpetuating Perceived Inequalities: Social perceptions and historical biases associated with "white collar" (professional, managerial) versus "blue collar" (manual labor) jobs, while inaccurate and detrimental, can create a sense of unfairness and resentment among different employee groups. When pay grids exacerbate these perceived inequalities, it can lead to demotivation and reduced morale among those who feel undervalued.

    • Fueling Corrupt Behavior: Research suggests that wage inequality within the public sector can impact the effectiveness of anti-corruption measures. In settings with significant wage disparities, increasing the wages of some public officials could potentially increase corruption, while it might decrease corruption in more equitable environments.

    • Creating Opportunities for Abuse: When there are rigid divisions between job classes and units, opportunities for conflicts of interest, misuse of information, and favoritism in hiring can emerge. Appointments to "higher-status" or better-compensated positions within a hierarchical system could become vulnerable to patronage and political influence, potentially diverting funds and resources.

    • Undermining Meritocracy: If pay schemes are heavily influenced by these traditional class divisions, it can undermine the principle of meritocracy, where individuals are rewarded for skills and performance rather than their job category. This can lead to a less motivated and capable workforce, impacting the quality and efficiency of public services.

    • Challenges in Cross-Jurisdictional Comparisons: Comparing compensation across different levels of government (e.g., federal vs. state vs. local) or internationally is inherently complex. Varying job classification systems, economic conditions, cost of living, and benefit packages make direct comparisons difficult and prone to misinterpretation. Such comparisons, if not done carefully and with appropriate consideration of all relevant factors, can exacerbate perceptions of unfairness and fuel discontent.

    • Incentivizing Unethical Behavior: When low salaries in certain job categories create financial pressure, particularly in environments with weak monitoring and accountability systems, individuals may be more likely to engage in corrupt activities to supplement their income. 

In summary, while job classification and pay grids are necessary for structuring public sector employment, a rigid adherence to traditional class-based divisions and insufficient attention to internal equity and external market realities can create conditions that are more conducive to corruption, graft, and waste. Transparent and well-designed compensation systems that balance internal fairness, market competitiveness, and accountability are critical to preventing such outcomes and promoting public trust. 

Is it possible that trust levels in public service, regarding those paid for government employment, could fall so low, generate such dark contempt, hostility, resentment, envy and animus that emotions run away, patience and when forbearance hits a limit of human grace, some feel violent behaviors can become justified?

Yes, it is possible for public trust in government employment, and perceptions of those paid with public funds, to deteriorate to such an extent that it fosters feelings of anger, resentment, and a justification of violence

While the search results primarily discuss workplace violence targeting public officials, they also acknowledge that such incidents stem from a complex mix of personal, psychological, and social factors. These attacks often occur in a climate of increased threats and harassment against public officials at all levels of government. Research has also highlighted a concerning trend of rising political violence targeting government figures in recent years, including in Minnesota. Some research suggests that increased disenchantment and perceived lack of representation can lead to individuals justifying violent acts in the hope of bringing about change. 

Factors Contributing to Low Trust and Hostility:

    • Perceived Corruption and Waste: When the public perceives government leaders and officials as corrupt, self-serving, or wasteful of public funds, it can erode trust and generate resentment.

    • Lack of Accountability and Transparency: If the public feels that government institutions are opaque and not held accountable, it can further fuel distrust and anger.

    • Unfairness and Inequality: Perceived wage disparities and a lack of fairness in the compensation of public employees can contribute to feelings of resentment among different groups of employees and the public.

    • Political Polarization and Misinformation: Intense political polarization and the spread of misinformation and disinformation can exacerbate negative perceptions of government and contribute to a climate of hostility and distrust. 

It is important to emphasize that while frustration and anger can be understandable responses to perceived failings in government, violence against public employees is never justified and poses a serious threat to the functioning of democratic institutions. 

Building and maintaining public trust in government and its employees requires addressing concerns about fairness, accountability, transparency, and effective communication about the value and impact of public service. Efforts to reduce political polarization and foster respectful dialogue can also contribute to a more positive environment for both public servants and the citizens they serve.