Compensation Programs for Minnesota Government Agencies

State laws require all public sector jurisdictions to eliminate gender-based compensation inequities. To comply with these laws, agencies are expected to use credible job evaluation systems, market analysis methodologies, and salary administration policies that demonstrate internal equity. In addition, tax payers and elected officials continue to press for changing the way tax dollars are spent and expect more services without increasing taxes.

This dynamic environment makes it necessary for leadership to evaluate their compensation programs for compliance while ensuring their ability to attract and retain qualified employees.

Keystone’s review process has earned a solid record of success for municipal Minnesota government agencies. Our first step is to work with leaderships to discuss important questions to help formulate a compensation strategy. This strategy guides the various compensation analytics we use to calibrate or redesign the compensation programs. We then use our findings to create plans and tools to sustain the new program internally.

The following framework example details the steps Keystone recently used to review a client compensation program:

Public Sector Compensation Framework


While each project may take a different path our process relies on the following core pillars to ensure successful program implementation:

  1. Collect input from key stakeholders to be used to establish a compensation program strategy and objectives. Compensation strategies typically have four important pillars:
    1. Clear definition for the market for talent. Who we compete with in the marketplace?
    2. Where do we intend to position our compensation program relative to the market? Aligning our program with the market (median, or something else).
    3. What we intend to pay for? What will our program recognize? Seniority, performance, or others.
    4. How we administer pay: step progression, merit increases, general COLA increase, other vehicles.
  2. Ensure that job documentation is current and accurate to evaluate and benchmark jobs.
  3. Benchmark jobs and prepare the analytics to better understand the current state and generate ideas for the new compensation program
  4. Evaluate jobs to ensure internal equity based on job functions and requirements to qualify for the job.
  5. Redesign or update pay ranges based on the established pay strategy, market pay practices, and internal job evaluation.
  6. Ensure compliance with the Minnesota Local Government Pay Equity Act. This involves preparing regression analysis and testing of the salary structure design with an eye on pay equity compliance.
  7. Develop salary administration guidelines and communication tools.
  8. Train managers on pay program administration.
  9. Communicate the new program to the governing board or council.

Contact us to start the conversation on how Keystone can guide your compensation program.

Share This