Submitted to the C&B Committee for comment: March 6, 2003
Submitted to the Executive Committee for comment: March 17, 2003
Submitted to the C&B Committee for revisions: March 21, 2003
Submitted to the C&B Committee: April 2, 2003
Submitted to the P&S Council: April 2, 2003
Summary : The enclosed motion supports leveling horizontal and vertical inflationary inequities in the
P&S Pay Matrix via a time-phased adjustment to the P&S Pay Matrix and employee salaries. Further, the motion calls for inclusion of inflationary metrics in the Department of Human Resource Services’ Annual
Report on Professional and Scientific Salaries.
Contents : Page
Motion Rationale
Table 1, Gross and Inflation Adjusted Changes to P&S Pay Matrix from FY1994 to FY2003
Table 2, Gross and Inflation Adjusted Changes to the Merit Pay Schedule from FY1994 to FY2003 2
Proposed Actions 3
2
2
Pay Matrix Adjustment
Example Inflationary Adjustment
Table 3, Proposed Changes for P&S Salaries and Pay Matrix for FY2004
3
3
3
Table 4, Aggregate salary increase for FY2004
Table 5, Proposed FY2004 P&S Pay Matrix
Reporting Inflationary Metrics
Appendix
4
5
4
4
Respectfully submitted by the Compensation & Benefits Committee

As seen in Table 1 below, Midwest Regional Consumer Price Index (CPI)† data from the US Department of Labor,
Bureau of Labor Statistics, indicates that salary ranges for grades P14 and lower have not kept pace with inflationary pressures. Meanwhile, salary ranges for higher grades have matched or surpassed inflation. This trend is also shown in the appendix, Chart 1.
Table 1, Gross and Inflation Adjusted Changes to P&S Pay Matrix from FY1994 to FY2003 1
Grade % Change in
Grade Minimum from
FY94 to FY03
% Change in
Grade Maximum from
FY94 to FY03
CPI Adjusted % Change in Grade Minimum from
FY94 to FY03
CPI Adjusted % Change in Grade Maximum from
FY94 to FY03
P11
P12
P13
P14
P15
P16
P17
P18
21%
21%
22%
23%
25%
27%
28%
30%
21%
21%
23%
24%
26%
29%
30%
33%
-3.0%
-2.9%
-1.8%
-0.7%
0.5%
2.9%
4.1%
6.4%
-3.2%
-2.8%
-1.2%
0.3%
1.9%
4.7%
6.2%
9.0%
P19
P20
Average:
33%
36%
27%
Midwest CPI for FY 1994
Midwest CPI for FY 2003 (to date)
141.8
175.9
36%
N/A
27%
8.8%
12.4%
2.7%
11.7%
N/A
3.0%
The above data is displayed in the Appendix, Chart 1.
Percent Change 24.0% CPI data is displayed in the Apendix Charts 2 & 3.
1 CPI Data from US Dept. of Labor Bureau of Labor Statistics (www.bls.gov)
Much of the disparity in growth is due to non-uniform changes made to the P&S Pay Matrix in FY1999, where the lowest grade(s) moved 2% and the top grade(s) moved 15%, as shown in the Appendix Charts 2 & 3. Still, P&S
Pay Matrix growth for the 1995, 1996, 1997, 2000 and 2001 fiscal years lagged behind inflation, with respect to grade minimums. Grade maximum followed suit with the exception of FY2000. In contrast, as seen in Table 2, over the same period Merit grade endpoints have out-paced inflationary pressures average of 15 and 20 percent, respectively. Only P&S pay grades P19 and P20 have shown double-digit growth over the same time frame.
Table 2, Gross and Inflation Adjusted Changes to the Merit Pay Schedule 2 from FY1994 to FY2003
Grade % Change in Grade
Minimum
FY94 to FY03
35%
% Change in
Grade Maximum from
FY94 to FY03
43%
43%
58%
55%
51%
47%
43%
42%
42%
CPI Adjusted % Change in Grade Minimum from
FY94 to FY03
11%
10%
28%
25%
21%
20%
16%
15%
12%
12%
12%
11%
11%
10%
13%
14%
CPI Adjusted % Change in Grade Maximum from
FY94 to FY03
19% 1
2
3
4
10
11
12
13
7
8
5
6
9
14
15
16
35%
52%
49%
45%
44%
40%
40%
36%
36%
36%
36%
35%
35%
37%
38%
43%
42%
41%
41%
42%
42%
41%
17
18
37%
37%
40%
39%
13%
13%
16%
15%
Average: 39% 44% 15% 20%
2 Comparison based on Non-organized Merit Pay Matrix for the FY1994 and FY2003 Regent Merit System Pay Plan.
19%
34%
31%
26%
23%
19%
18%
18%
19%
18%
17%
16%
18%
18%
17%
Recommendations for the FY04 P&S Pay Matrix Page 2 of 6 , Revision 5, March 26, 2003

Pay Matrix Adjustment
The P&S Council recommends that the inflationary inequities that have evolved in the last 10 years be eliminated horizontally and vertically across the P&S Pay Matrix.
Acknowledging the possibility of insufficient funding to eliminate the inflationary inequities via a singular matrix and salary adjustments, and to enable motion on all pay grade extremes, the P&S Council recommends that
University administration develop a time-phased inflationary inequity adjustment plan. This time-phased plan would eliminate inequities horizontally and vertically across the matrix. Salary increases should correspond to the pay matrix adjustment for that grade, and additional consideration should be given to employees whose salary have not kept pace with pay matrix adjustments since FY1994. The recommended time period for this plan is three fiscal years commencing with the 2004 fiscal year.
Example Inflationary Adjustment
As an example, an aggressive two-year inflationary adjustment schedule is illustrated:
Fiscal Year 2004 : P&S Pay Matrix and employee salaries would be adjusted values as indicated in Table 3. As shown, the proposed adjustments would bring grades P11 through 15 in line with an average salary growth of 1% above inflation .
Table 3, Proposed Changes for P&S Salaries and Pay Matrix for FY2004 3
Grade
P11
P12
P13
P14
P15
P16
P17
P18
P19
P20
% Change Proposed for
Grade Minimum
5.9%
5.8%
4.9%
3.9%
2.9%
1.0%
0.1%
0.0%
0.0%
0.0%
% Change Proposed for
Grade Maximum
6.1%
5.7%
4.4%
3.1%
1.8%
0.0%
0.0%
0.0%
0.0%
N/A
2.3%
CPI Adjusted % Change in Grade Minimum from
FY94 to FY04 (projected)
1.0%
1.0%
1.0%
1.0%
1.0%
1.0%
1.0%
3.3%
5.7%
9.2%
CPI Adjusted % Change in Grade Maximum from
FY94 to FY04 (projected)
1.0%
1.0%
1.0%
1.0%
1.0%
1.5%
3.1%
5.8%
8.6%
N/A
Average 2.5%
Midwest CPI for FY 1994 141.8
Midwest CPI for FY 2004
Percent Change
180.4 (projected)
27.2% (projected)
3
CPI for 2004 is projected at 180.4, representing a 2.54% rise in consumer prices.
2.5% 2.7%
The above data is displayed in the attachment Chart 4.
These adjustments will ensure that most salaries of employees in the P11-15 grades are on par with inflationary pressures. However, further adjustments will be necessary for some satisfactorily-performing employees whose salary growth rate have been lower than the overall rate for the pay matrix (salary compression). Employees in this situation should be given additional consideration in allocating salary increases. As shown in Table 3, the cost for implementing this strategy should be approximately 2.8% of the P&S salary base.
Recommendations for the FY04 P&S Pay Matrix Page 3 of 6 , Revision 5, March 26, 2003

Table 4, Aggregate salary increase for FY2004
Pay Grade Incumbents 4
P11
P12
P13
P14
P15
P16
P17
P18
P19
P20
Column Sum:
215
232
109
26
28
2250
133
102
476
409
520
Average Increase
6.0%
5.8%
4.6%
3.5%
2.4%
0.5%
0.0%
0.0%
0.0%
0.0%
4 Incumbent numbers for February 2003, provided by HRS.
Weighted Average:
Weighted Factor
8.0
5.9
22.0
14.3
12.3
1.1
0.1
0.0
0.0
0.0
64.195
2.8%
If the above changes were effected the P&S Pay Matrix for 2004 would then exist as shown below in Table 5:
Table 5, Proposed FY2004 P&S Pay Matrix
P16
P17
P18
P19
P20
Pay Grade
P11
P12
P13
P14
P15
Minimum
$ 27,323.00
$ 29,191.00
$ 31,598.00
$ 34,532.00
$ 38,139.00
$ 42,567.00
$ 48,002.00
$ 55,662.00
$ 65,225.00
$ 77,865.00
Hiring Range
First third
$ 30,044.00
$ 32,232.00
$ 35,016.00
$ 38,415.00
$ 42,591.00
$ 52,679.00
$ 60,459.00
$ 70,726.00
$ 83,549.00
Midpoint
$ 35,486.00
$ 38,315.00
$ 41,851.00
$ 46,180.00
$ 51,494.00
$ 57,947.00
$ 66,703.00
$ 78,258.00
$ 92,711.00
Maximum
$ 43,650.00
$ 47,439.00
$ 52,105.00
$ 57,829.00
$ 64,849.00
$ 73,752.00
$ 85,433.00
$ 100,853.00
$ 120,198.00
Fiscal Year 2005 : The remaining inflationary inequities, from grades P16-20, would be eliminated across the P&S
Pay Matrix. The final matrix and salary adjustments would be made such that all grades are surpassing inflation uniformly, by no less than 1%.
No projection for the 2005 CPI was made. Therefore a projected 2005 P&S Pay Matrix is not presented herein.
Reporting Inflationary Metrics
Inflationary metrics, such as the CPI or Midwest Regional CPI, should be incorporated into the Department of
Human Resource Services’ FY2004 “Annual Report on Professional and Scientific Salaries”, and subsequent reports. The metrics should include data covering a minimum of five years; a discussion of the inflationary impact on the P&S Pay Matrix should be included.
†The CPI represents changes in prices of consumer goods and services purchased. The CPI is the most widely used measure of inflation. The CPI and its components are used to adjust other economic series for price change and to translate these series into inflation-free dollars. Over 2 million workers are covered by collective bargaining agreements where wages are tied to the CPI.
The index affects the income of almost 80 million people as a result of statutory action for Social Security, military, Federal
Civil Service, and food stamp benefits recipients. Some private firms and individuals use the CPI to keep rents, royalties, alimony payments and child support payments in line with changing prices. Since 1985, the CPI has been used to adjust the
Federal income tax structure to prevent inflation-induced increases in taxes.
Recommendations for the FY04 P&S Pay Matrix Page 4 of 6 , Revision 5, March 26, 2003

Chart 1: CPI Adjusted P&S Pay Matrix Growth, FY94 to FY03
14.0%
Grade Minimum
Grade Maximum
12.0%
10.0%
8.0%
6.0%
4.0%
2.0%
0.0%
-2.0%
-4.0%
P11 P12 P13 P14 P15 P16
Pay Grades
P17 P18 P19 P20
Recommendations for the FY04 P&S Pay Matrix Page 5 of 6 , Revision 5, March 26, 2003

5.0%
4.0%
3.0%
2.0%
1.0%
0.0%
Chart 4: CPI Adjusted P&S Pay Matrix Growth, FY94 to FY04
10.0%
Grade Minimum
Grade Maximum
9.0%
8.0%
7.0%
6.0%
P11 P12 P13 P14 P15 P16
Pay Grades
P17 P18 P19 P20
Recommendations for the FY04 P&S Pay Matrix Page 6 of 6 , Revision 5, March 26, 2003