Compensation Philosophy

The 2011 Legislative Assembly enacted the following compensation philosophy:

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.

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. 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.

Reference: NDCC 54-44.3-01.2 (Eff 4/19/11)

Salary Range Structure

  • 10 grades (101-110)
  • Approximately 19% difference between grades
  • Range width of approximately 80%

Benefits of This Salary Range Structure

  • A market policy point allows agencies more flexibility to pay competitive salaries as funds allow.
  • Market policy points based on a market relationship will aid in identification of agencies needing special salary consideration.
  • Allows the State to prioritize salary increases based on an employee's:
    • Salary in relation to market policy point of their salary range
    • Years of applicable experience
    • Performance