É«É«À²

Presented below are questions and answers about É«É«À² Michigan University's ongoing staff compensation system project. Additional information about the project is available at Compensation Project.

Compensation structure and job evaluation process

How was the new salary structure developed?

The structure is market based. After receiving job content tools from employees as well as feedback from supervisors, Aon Hewitt, the national consulting firm working with É«É«À² on the effort, benchmarked campus jobs against those found in the private sector, as well as those found elsewhere in higher education. They worked with É«É«À² executives and directors to accomplish that part of the work. More than 30 market surveys were used to arrive at comparable market pay grades. Those surveys ranged from national higher education surveys to discipline-specific surveys for such professional areas as information technology, health care, office and business support, and logistics and supplies. "Competitive market" definitions for different job groups at the University ranged from regional or national surveys for areas like development and student affairs to local and regional surveys for those in such areas as information technology, allied health and business and finance. Local market surveys were used for clerical and administrative support positions. Once market figures were determined, É«É«À² executive officials and directors reviewed the results for their respective areas.

What services were used to benchmark jobs for market value? What service or survey was used to benchmark my position?

Aon Hewitt, the firm working with É«É«À² on this effort, used more than 30 different market surveys to benchmark É«É«À² jobs. They are listed at Compensation Surveys Included in 2014 Market Study. Those market studies fall into four major categories—higher education, not for profit, general industry and health care. Within those categories, those studies are broken down geographically into local, local/regional and regional/national.

How engaged were the executive officials in the job evaluation review process? Were the vice presidents really interested in the placements and did they really take time to review them?

Detailed feedback from executive officials was a hallmark of the job evaluation review process. The individual meetings that took place over four days in late February and early March were followed by a series of larger group meetings in which several questions were raised by executive officials that are still being discussed and resolved.

Based upon my current grade, how do I know in which grade my position will be placed in the new system?

Aon Hewitt developed the new compensation structure based upon the market and made initial placements into the new structure based upon information gathered from the job content tools. There is no direct correlation between placement in one of 13 grades in the existing compensation system and placement in one of the 10 broader categories of the new system. Consequently, individual employees will only know their position's placement in the new system when they receive formal written communication.

When will I know where my position is in the new structure and what my salary will be in the new system?

All employees in the Staff Compensation System will receive letters sent to their home address in May that will outline job title, pay grade and salary effective July 1, 2015.

How does the new pay structure affect most staff?

Under the old structure, 93 percent of staff members fell into Grades 11-19. Those grades offered a salary range of $21,802 to $89,900. In the new structure, almost the same percentage of staff--92 percent--are covered by Grades C-H and the salary range for those grades is higher and offers more opportunity for salary increases. The salary range for Grades C-H is  $29,600 to $105,200.

What if I disagree with the level and title assigned to my position? Is there an appeal process?

Because there was such a high level of input by employees and supervisors submitting and reviewing job content tools and multiple levels of review by directors and executives in the job placements and evaluations, there will not be an appeal process once the job information is shared with employees. However, once the new compensation system is fully implemented, a new job reevaluation process will be launched that will provide a formal mechanism through which job content will be analyzed to determine proper titles and placements in the structure. With vice-presidential authorization, this job evaluation review process will be the appropriate venue for addressing current placements as well as future changes to jobs.

How does the pay structure impact the performance review process?

There is no relationship. Performance review was outside the scope of this project, but the desire to have an improved performance review process was clearly communicated by staff members during the Staff Compensation Project. Staff and supervisors should continue to use the existing performance management process detailed at Performance Management.

Job titles

Will titles change as a result of this work?

Yes, many titles will change since job evaluations revealed new sets of skills and responsibilities involved with many roles. In addition, there were inconsistencies across the campus over what some titles meant and what level of impact and responsibility those titles represented. Part of the Compensation Project commitment was to realign titles and definitions with the market and with managerial responsibilities.

Some 65 percent of Staff Compensation System employees will have new titles that are consistent with similar positions across campus and in the marketplace.

Pay guidelines

When do the new compensation rates take effect?

New compensation rates take effect with the start of the 2015-16 fiscal year. Any salary changes that are the result of placement in the new structure will be reflected in the first paychecks reflecting work performed on July 1 and after. The exact paycheck dates will vary for hourly and salaried employees.

Will anyone see a salary decrease?

No. There is a commitment to the principle that no one will see a decrease in salary. It may be, however, that the job evaluation places a position in a category for which the person in that position currently is paid at a level that exceeds the maximum pay guideline. 

If my salary is above the maximum for my position's new grade, will I still be eligible for any across-the-board salary increases awarded?

A small number of people will be in a position in which their pay rate is greater than the maximum of their position’s new grade. First and foremost, it should be noted that those employees will not see any reduction in pay. However, these employees will not receive future increases to base pay in their current role (unless the range for the pay grade is adjusted in the future to reflect market changes). In the future, employees whose pay is over the maximum of the grade may be eligible for a lump sum payment rather than a base pay increase—to be determined annually by the senior leadership team. 

Will the new system have merit based raises? Will the new system have salary progression towards the mid-point? Is there money to get everyone to market value? If not then what formula will be used to distribute the money that is available?

Those are questions that can be answered only after all of the job slottings are finalized and the administration is able to thoroughly analyze the budget impact of the new structure and make decisions about next steps in the process. The structure lays out guidelines and goals around which future decisions on staff salaries can be made.

What is the "Base Pay Plan" as mentioned in Staff Compensation Study, November 2014 (presentation by Aon Hewitt)?

Base pay plan simply refers to an individual's salary or rate of pay, as opposed to any type of commission, bonus or award used in rare instances. The vast majority of staff compensation system employees have only base pay.

How many people will actually receive a pay increase as a result of the Staff Compensation Project?

Here's a look at the pay changes by the numbers. A total of 355 people--27 percent of those in the staff compensation system--had salaries that fell below the minimum of their new pay grade and will receive pay increases to put them in the pay range of their new grade. The average amount of those increases is $3,952. About 70 percent of those receiving pay increases are in pay grades C, D and E in the new salary structure.

A total of 37 people have pay rates above the maximum for their new grade. They will not see a decrease of any kind, but their status may impact the way they receive future pay increases. The people in this situation were fairly evenly distributed across new pay grades A through H.

71 percent of staff already fall within the pay range of their new pay grade. That confirms they are in a market competitive range and in a grade with higher pay opportunities.

Next steps

How will the University manage the roll-out costs?  How do individual departments handle increased personnel costs?

While institutions sometimes use as much as three years to phase in such a campuswide adjustment, É«É«À² has committed to ensure that on July 1, everyone is at a pay rate that falls within the range of their new pay grades. The one-time cost to cover those increases will become part of the 2015-16 budget. The transition will not entail any additional budget stress on individual departments for personnel covered by Fund 11.

How will É«É«À² maintain the new structure so that it stays in alignment with the market?

The current conversation involves a desire to re-engage Aon Hewitt in 18 months to 3 years to reevaluate and update the market. We know that the market will have moved by then, and market rates for individual jobs will have changed as well, but at different rates. The structure will have to be re-calibrated to the market.

Will Human Resources be updating job descriptions for the new compensation system?

Once the new compensation system is fully launched in July, Human Resources will begin the process of updating job descriptions and making them available to the campus community.

What are the next immediate steps?

Implementation of the new pay structure is ready for the July 1 target date. A number of attendant parts of the project are now underway, and other projects have been triggered by information gathered or observations made during the Staff Compensation Project.

• A set of administrative guidelines is being developed to guide the campus through such areas as hiring parameters, movement within a pay grade and job re-evaluations.

• Two new cross-functional committees--committees of peers--are being constituted and will be trained to carry out reviews of job changes in the Staff Compensation System

• A "working title" process will allow informal use of some titles that fall outside the Staff Compensation System. Such titles will require vice presidential signoff.

• An FLSA (Fair Labor Standards Act) audit has been recommended to see if people are appropriately planed in exempt or nonexempt status. 

• An annual compensation statement will be reprised for employees. The statement will include current pay and a list of all benefits and their value so that each individual knows the value of his or her total compensation package.

• A study of senior administrative officer compensation, the first in more than a decade, also has been recommended.

Transition period

What happens to positions now in the process of being reevaluated?

All reevaluations using the current system will stop on May 1. Those supervisors overseeing such job reevaluations are urged to work closely with their HR representative to make sure there is adequate time to complete all steps in the process before May 1.

My department has a vacant or new position to fill. How do we handle that during the transition?

Anyone hired before July 1, must be brought in under the current pay structure. Hiring departments should work closely with their HR representative to ensure the position is also placed into the new system. Placement for existing but vacant positions has been part of the work completed in recent weeks.

Other questions about the staff compensation project

Our office is short staffed, and I've been working part or all of another job. How is that reality factored into the new pay scale and market benchmarks?

First of all, it's important to remember that this project is about compensation—not staffing. Both are complex issues and it is not possible to combine them into one overarching solution. If the addition of new and more complex duties is a permanent one and those new skill sets were reflected in your job content tool, those additional duties may push your position into a grade that reflects a higher level of pay. But again, the skills and responsibilities for each job are being benchmarked against market surveys.

Will the new system have career paths? Will the new system make it easier to fire someone? Are benefits going to be impacted in the new system?

It's important to note that this effort—the É«É«À² Staff Compensation Project—is about compensation only. It is not about staffing, professional development opportunities or a variety of other important elements of the University's Human Resources functions. 

Where can I find the compensation consultant presentations from Nov. 5, 2014, and May 19, 2015?

The presentation slides are located in the resources section at Compensation Project.

Why were town hall meetings held before employees received their formal notification of pay grade, job title and pay?

The town hall meetings were purposely designed to prepare staff members and supervisors for the communications they were about to receive. The idea was to give people a thorough understanding of the new pay structure and how it was developed before they received official notice of the impact that structure has on their personal situation. The sessions were intended to answer high-level questions about the process, impact and path forward. Once staff members have their personal pay statements, specific questions about that impact should becomes a personal conversation with a supervisor or HR representative rather than a town hall topic.

In addition, many supervisors who themselves are part of the staff compensation system, are likely to receive questions from those they supervise, so the meeting was set up to give everyone involved at every level an opportunity to pose questions about the process, the results and the internal and external factors that influenced decisions made about pay grade, pay and job titles.

Will there be another town hall after employees have their personal information?

None is scheduled. If an issue is identified that cannot be addressed through venues like this Web page or through personal conversations, it might be necessary, but every effort will be made to ensure staff questions about the new structure are answered immediately. This questions and answers Web page will be updated as needed.

How can I access the job content tool that I submitted last fall?  How do I see any comments that my supervisor may have added?

Our process to gather job content tools and send them to Aon Hewitt did not provide a formal step to share supervisors’ comments with employees.  However, many supervisors chose to share their comments with employees by copying them on their submission email.  The easiest and quickest way to see this information would be to simply ask your supervisor for a copy of what they submitted. 

Where can I find additional information on the compensation project?

Please visit Compensation Project.