A Classification Study of Exempt Positions
Report Number 08-708
The State would benefit from restructuring the process by which state agencies' chief executive officers (executive officers) are compensated and evaluated in order to attract and retain high-quality chief administrators. A revised process should include expanding and increasing salary ranges for executive officers; annually reviewing individual pay based upon demonstrated performance, experience, and skill; and annually evaluating executive officers' success in reaching defined performance standards. These changes would increase the State's ability to recruit and motivate high-performing, qualified, senior-level professionals to manage and direct state agencies.
The State Auditor's Office's State Classification Team reviewed 84 executive officer salaries and found that the salaries for these positions are, on average, 27 percent behind similar professional positions in the market. Current salary ranges are not sufficient to provide competitive salary rates for executive officer positions. These lower-than-market pay rates have contributed to pay compression between the salaries of exempt state executive officers and those of classified employees. Pay compression exists when the pay of a subordinate comes close to (or at times exceeds) the pay of a direct supervisor.
Although the State provides a comprehensive benefits package to employees and multiple tools to recruit and retain employees, some incentives such as merit or performance awards do not exist for exempt executive officer positions. All of these factors may limit the State's ability to attract and retain high caliber, qualified executive officers.
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