The compensation program for classified state employees must be designed to recruit, retain, and motivate a quality workforce for the purpose of providing efficient and effective services to the citizens of North Dakota. For purposes of this section, “compensation” is defined as base salary and related fringe benefits.

The compensation program must:

1.    Provide a competitive employee compensation package based on job content evaluation, internal equity, and external competitiveness balanced by the state’s fiscal conditions.

2.    Be based on principles of fairness and equity.

3.    Include a consistent compensation policy which allows for multiple pay structures to address varying occupational specialties.

4.    Set the external competitiveness target for salary range midpoints at a competitive level of relevant labor markets. For purposes of this section, “relevant labor markets” is defined as the labor markets from which the state attracts employees in similar positions and the labor markets to which the state loses employees in similar positions.

5.    Include a process for providing compensation adjustments that considers a combination of factors, including achievement of performance objectives or results, competency determinations, recognition of changes in job content, and acquisition and application of advanced skills or knowledge.

6.    Provide funding for compensation adjustments based on the dollar amounts determined necessary to provide competitive compensation in accordance with the state’s compensation philosophy. Funding for compensation adjustments may not be provided as a statewide percentage increase attributable to all employees nor as part of a statewide pool of funds designated for addressing equity issues.

7.    Consider the needs of the state as an employer and the tax effect on North Dakota citizens.

The office of management and budget shall develop and consistently administer the compensation program for classified state employees and ensure that state agencies adhere to the components of the state’s compensation philosophy. The office of management and budget shall regularly conduct compensation comparisons to ensure that the state’s compensation levels are competitive with relevant labor markets. Any salary information collected from private businesses for the purpose of conducting compensation comparisons is exempt from public disclosure. Records naming private businesses from which salary information is collected are open.

The legislative assembly recognizes the importance of providing annual compensation adjustments to employees based on performance and equity to maintain the market competitiveness of the compensation system.