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A Biennial Report on the State's Position Classification Plan

August 2010

Report Number 10-708

Overall Conclusion

The majority of salary ranges in the State's Position Classification Plan (Plan) are competitive when compared with similar positions in the public and private sector. The State Classification Team within the State Auditor's Office reviewed salary ranges for 421 benchmark positions and determined that 77.5 percent of those positions had salary ranges that were competitive with the market. This is an increase from fiscal year 2008, when 54.5 percent of benchmark positions had salary ranges that were competitive with the market.

It is important to note that this report focuses on the structure of the Plan, which is only one component of the total compensation package that state employees receive. A state employee's total compensation package includes not only salary and wages, but also health benefits and other items that are less tangible than pay but are equally important, such as flexible work schedules and training and career opportunities.

The Plan provides the salary structure for 154,209 full-time classified employees within the State (excluding employees at higher education institutions and legislative agencies). This structure establishes salary ranges for positions and allows agencies to classify and pay individuals appropriately for the work they perform. In situations in which the salary ranges are no longer competitive or equitable, changes may be needed to the Plan. Without these changes, state agencies may face an increased risk of turnover and the inability to compete for and retain qualified employees.

Texas Government Code, Chapter 654, requires the State Auditor's Office's State Classification Team to review the Plan prior to each legislative session and determine the Plan's competitiveness. To review positions, the State Classification Team conducts a market analysis of benchmark positions to determine (1) the average pay, or "going rate," in the market and (2) whether state job classifications and corresponding salary ranges are competitive.

The analysis the State Classification Team conducted indicates that modifying individual job classifications in the Plan would address positions with salary ranges that are behind the market, provide additional job classifications for state agencies to use, and update other job titles and positions in the Plan. The recommended changes include (see Table 3 on page 10 for additional information):

- Reallocating 53 job classifications to a higher salary group.

- Adding 51 job classifications to the Plan.

- Making other technical updates and changes, such as title changes and deletions.

The minimum estimated cost to state agencies of implementing these changes would be approximately $1.1 million in each year of the 2012-2013 biennium. If the Legislature adopts these recommendations, state agencies will be required to implement them. As a result, agencies may wish to consider requesting legislative assistance with funding to address these changes. Although this report covers only recommended changes to the salary structure, state agencies are responsible for determining individual employees' salaries and, therefore, may incur additional costs to cover salary adjustments that exceed the minimum recommended changes.

Contact the SAO about this report.

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