University of Houston-Downtown
Job Classification and Compensation
Program Documentation Manual
August 2006
Table of Contents
Section 1
Project Objectives and Worksteps
Section 2
Proposed Compensation Philosophy
Section 3
Communications
Section 4
Position Analysis
Section 5
External Analysis - Market Pricing
Section 6
Salary Grades and Ranges
Section 7
Job Hierarchy and Target Pay Range Assignment
Section 8
Impact of Salary Structure
Section 9
Recommendations for Implementation and the Ongoing Maintenance of
the Classification and Compensation Program
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8
11
13
15
20
23
25
27
Table of Contents Cont’d
Appendix I
Project Guidance Team
Appendix II
Compensation and Classification Program: What it means to you
Appendix III
Position Description Questionnaire
Appendix IV
Market Survey Sources
Appendix V
Salary Structure Non-IT Positions
Appendix VI
Salary Structure IT Positions
Appendix VII
Job Evaluation Methodology
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40
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51
52
53
54
SECTION 1
PROJECT OBJECTIVES AND WORKSTEPS
3
Section 1
Project Objectives and Worksteps
OBJECTIVES
The University of Houston-Downtown (“UHD”) recognizes that a critical link in achieving sustained performance
improvement, achieving best results, and selecting and retaining the best people can be accomplished with a
focused and committed workforce who is motivated by a strategic, meaningful, rewarding and viable classification
and compensation program. In an effort to achieve this link, the UHD classification and compensation program
must address the pay equity for all positions internally and relative to the marketplace, maintain an objective job
evaluation system and consistently apply standard procedure(s) for pay administration across all departments.
UHD made a commitment in March 2006 to study its classification and compensation practices for all employees as
they relate to both external competitiveness and internal equity. With assistance from Deloitte Consulting, a
classification and compensation program was developed for all positions that embraces the following
characteristics:
–
Establishes and reinforces an effective link between UHD’s strategy, organizational demands, work
expectations, individual needs and compensation;
–
Attracts, retains and motivates the “best and the brightest” employees;
–
Reflects UHD’s unique organizational culture, mission, values and pay philosophy;
–
Provides an equitable and rewarding pay program for all employees;
–
Is in compliance with the Fair Labor Standards Act (“FLSA”), Americans with Disabilities Act (“ADA”),
and related legislation;
–
Provides a consistent method of valuing jobs across departments within UHD;
–
Is easily communicated by the UHD leadership and is understood by all employees;
4
Section 1
Project Objectives and Worksteps
OBJECTIVES Cont’d
–
Provides a foundation for future innovative human resource management approaches and strategies;
–
Maintains cost effectiveness;
–
Provides appropriate and competitive ranges of opportunity with respect to base pay for each position;
and
–
Establishes consistency in policies and procedures for managing and administering compensation
between departments.
WORKSTEPS
Based on discussions between Deloitte Consulting and the UHD leadership team regarding the characteristics
listed above, a market-based whole job approach for all positions was recommended. This method of job
evaluation allowed UHD to use competitive market information as a foundation for its pay program while measuring
specific compensable job factors for objective internal pay comparisons. The following worksteps were used during
this project to attain the stated and desired classification and compensation program characteristics:
–
Orient UHD leadership team including the President, his Executive Council and the Employment
Service and Operations (“ESO”) team;
–
Confirm objectives, scope, process, methodology and work steps;
–
Collect background data;
5
Section 1
Project Objectives and Worksteps
WORKSTEPS Cont’d
–
Develop and implement communication strategy;
–
Present general employee sessions to introduce the study and address questions, issues and
concerns;
–
Conduct “key stakeholders” interviews;
–
Develop a written compensation philosophy statement;
–
Select salary survey sources from the Deloitte Consulting library;
–
Review and format employee database files;
–
Analyze positions, titles, and organizational structure;
–
Develop, administer, collect and organize Position Description Questionnaires (PDQ) for all the UHD
positions;
–
Develop and administer separate form for supervisors (SPDQ) to provide feedback and comments on
completed subordinate PDQ;
–
Read and analyze PDQs and supervisor feedback to determine benchmark sample;
–
Combine and edit job titles based on job requirements listed in PDQ and input from ESO team and
UHD department heads;
6
Section 1
Project Objectives and Worksteps
WORKSTEPS Cont’d
–
Develop job descriptions for each job at UHD;
–
Conduct competitive market analysis for benchmark jobs;
–
Develop recommended pay structure based on market data;
–
Conduct Job Value Matrix (“JVM”) approach to reconcile internal/external equity including “slotting” of
non-benchmark jobs with the ESO team and UHD department heads;
–
Reconcile and review job slotting to ensure campus-wide equity for each job with further input from
ESO team and UHD department heads;
–
Finalize job slotting and send each manager a list of their incumbents including new job title, proposed
grade, minimum and midpoint of the grade;
–
Review comments from managers;
–
Generate cost impact report(s) of all employees with below minimum costs for each job;
–
Develop recommended salary administration policies and procedures;
–
Present results and recommendations to the President, Executive Council, Department Heads, and
employees; and
–
Develop Documentation Manual.
7
SECTION 2
PROPOSED COMPENSATION PHILOSOPHY
8
Section 2
Proposed Compensation Philosophy
The compensation philosophy of UHD supports the need for outstanding talent to provide the exemplary level of
service, creativity, knowledge, business savvy, and leadership to fulfil its mission and setting a standard of
excellence in virtually every facet of higher education.
KEY OBJECTIVES
–
Provide a total compensation program flexible enough to adjust to changing economic conditions and
to individual needs;
–
Provide a competitive and affordable level of compensation for their highly qualified, motivated and
diverse workforce in exchange for expected levels of performance and results;
–
Maintain fair, consistent and equitable total compensation practices in alignment with UHD’s core
values and mission;
–
Attract, retain, and motivate highly qualified and effective individuals;
–
Foster individual development, loyalty, and team work;
–
Encourage a career-long commitment to UHD;
–
Establish compensation program policies, procedures and guidelines that are consistent with the
judicious expenditure of funds entrusted to UHD; and
–
Ensure accountability for compliance with University of Houston System’s Board of Regents rules and
regulations and State of Texas statutory requirements.
9
Section 2
Proposed Compensation Philosophy
PROGRAM PRINCIPLES
–
Provide an equitable system of job evaluation and classification covering all non-faculty, non-police
positions at UHD to properly reflect internal relationships;
–
Provide a pay program which is fully competitive in the market for all employees based on appropriate
public and private sector employers with whom UHD competes for talent;
–
Provide a fair, non-discriminatory and compliant pay program with all federal and state laws and
regulations;
–
Recognize the positive contributions of our dedicated employees who consistently provide the best
value added performance and results for all that we serve;
–
Monitor and evaluate continuously all facets of the compensation program to ensure awareness and
sensitivity to relevant market fluctuation(s) and/or movement;
–
Establish written policies, procedures, and guidelines for managing and administering pay in a
consistent and equitable manner throughout UHD;
–
Communicate the total compensation program to all employees to ensure understanding of general
administrations principles, specific pay policies and practices, and the process used to determine job
classification and individual pay;
–
Provide appropriate ranges in a salary structure which encourages individuals to attain the skills and
knowledge necessary to increase their value to UHD, both on an individual basis and as a participant
on a work team; and
–
Emphasize and recognize the importance of exemplary work performance and reward it using merit
pay programs and/or other forms of formal recognition including non-cash rewards.
10
SECTION 3
COMMUNICATIONS
11
Section 3
Communications
Communications regarding the classification and compensation program were an essential part of the entire
process. The UHD ESO team, in collaboration and cooperation with Deloitte Consulting, were diligent in their
efforts to keep UHD employees informed on the status of the project, addressing their questions, issues and
concerns directly and encouraging employee involvement throughout the duration of the project. Communication
included memoranda; scheduled meetings with the UHD ESO team to keep them abreast of all work steps and
project-related information and to encourage their involvement on project management decisions; open employee
meetings to inform employees of the objectives of the study, answer questions, and listen to any thoughts or
comments with respect to the current UHD classification and compensation program; key stakeholder interviews;
pre- and post-study meetings with department heads for information sharing and reporting; and PDQ and
supervisor questionnaire (SPDQ) administration.
In addition, Deloitte Consulting drafted an employee communication brochure entitled University of HoustonDowntown’s Classification and Compensation Program: What It Means to You. The purpose is to provide a copy of
this brochure to each UHD employee and thereby provide a thorough overview of the classification and
compensation program.
12
SECTION 4
POSITION ANALYSIS
13
Section 4
Position Analysis
The task of analyzing each UHD non-faculty position was comprised of a process which included: a requirement
for all UHD employees to complete a PDQ designed to obtain general information related to the primary purpose,
duties and responsibilities, qualifications, and specifications for their position. Upon completion, the PDQs were
emailed directly to Deloitte Consulting for review. All UHD supervisors were encouraged to complete a supervisor
PDQ (SPDQ) that reviewed the PDQs of their subordinates to ensure consistent and accurate responses. All
SPDQs were also sent directly to Deloitte Consulting via email. The PDQs were used primarily for preparing job
descriptions, editing and standardizing job titles and selecting benchmark jobs. The PDQs were not used to
evaluate a person’s worth in the position, place he or she in a pay range and/or evaluate their performance in a
position.
14
SECTION 5
EXTERNAL ANALYSIS - MARKET PRICING
15
Section 5
External Analysis – Market Pricing
In addition to assessing the current pay, Deloitte Consulting conducted a competitive market analysis of the
established benchmark jobs. The market analysis of UHD’s base salary compensation levels involved comparisons
with similar jobs in the public and private sector (including non-profit organizations as well as for-profit companies).
The comparisons were drawn on the following basis:
–
Utilizing the PDQs completed by UHD employees and input from the UHD ESO team when necessary,
UHD jobs were compared to summary job descriptions in relevant commercially published surveys.
–
Market comparables were made for 122 jobs out of 242 jobs within UHD; these benchmark jobs were
representative of all departments and levels within UHD.
–
The market analysis included data from 17 recently conducted and commercially published salary
surveys. Market data was adjusted by an annual salary market index of 3.3% from the survey
effective date to July 1, 2006.
16
Section 5
External Analysis – Market Pricing
–
Jobs were analyzed with a local, regional, or national market focus depending on relevant scope
factors which effectively defined the market for a specific job. A rule of thumb is to determine where
UHD typically recruits from to fill a job vacancy and conversely where UHD typically loses people to in
the market. These scope factors considered in the market comparisons, for example, include the
following: local, regional, national, industry (e.g., colleges/universities), budget/revenue size and/or forprofit/not-for-profit companies, etc.
During the Job Value MatrixTM (“JVM”) sessions the ESO team, including UHD department heads, had the
opportunity to discuss any anomalies in their organization and/or with certain jobs during the scheduled meetings.
Explanations of the market analysis reports and discussions regarding matches were provided when necessary.
Deloitte Consulting and the ESO team reconciled the JVM results across UHD to ensure campus-wide equity.
Further input from UHD department heads was sought out in some instances. The final recommendation was sent
out to UHD department heads for their review. Deloitte Consulting then presented the study findings with the
minimum cost impact to the UHD President for final approval and implementation.
17
Section 5
External Analysis – Market Pricing
When comparing an individual employee’s position versus the market median or UHD’s overall average versus the
market, a few points should be considered prior to drawing conclusions:
–
Length of time the employee(s) has held the position: Typically, a new employee has not had a
chance to assume all the responsibilities of the position. As the employee grows in the job, pay
increases will enhance pay and pay progression, thereby, moving the employee closer to the market
median over a reasonable amount of time (typically 3 to 5 years) depending on the nature and level of
the job.
–
Previous employee(s) work experience: Typically, employees with previous applicable work
experience will be paid further in the range than less experienced employees depending on the
amount and quality of work experience.
–
Employee(s) job performance: Typically, job performance will determine how fast and how far
employees move through their ranges. Length of time an employee has held a position, previous
employee work experience, and job performance are not mutually exclusive of each other in
determining range penetration for an employee.
18
Section 5
External Analysis – Market Pricing
–
Overall compa-ratio: For the purposes of this report, this statistic expresses the relationship of the
average incumbent pay to the midpoint of the salary range. The average incumbent pay has been
adjusted for those employees who fell below the minimum of their new salary grade. When creating a
salary structure, the midpoint of the salary range typically represents the market median; therefore,
the compa-ratio indicates how correlated an organization's salaries are to the market. The average
compa-ratio for UHD is approximately 89%. Most organizations strive for a compa-ratio of 100%,
which would indicate they are highly correlated to the market. Having a compa-ratio less than 100%
would therefore illustrate that UHD is paying on average 11% below the market median. Typically, a
more tenured workforce will tend to have a higher compa-ratio (often above 100%) than a workforce
with a shorter service history at the organization. In addition, compa-ratios vary according to how long
an individual has been in the job, previous work experience and job performance. The
appropriateness of UHD’s market position for a job should be determined by the competitiveness of
the overall total compensation package of UHD including benefits and even intangible rewards (e.g.,
amiable work environments, opportunities for advancement, etc.).
19
SECTION 6
SALARY GRADES AND RANGES
20
Section 6
Salary Grades and Ranges
Using the external market data collected for the benchmark positions, two pay structures were developed for all
non-faculty, non-police UHD positions: Non-IT staff positions and IT staff positions.
MINIMUM
The minimum salary rate that is normally paid to a employee who is beginning the
duties of the job and meets the minimum requirements of the job. Represents the
typical marketplace “entry” rate.
MIDPOINT
The rate which should be targeted for UHD employees who are fully qualified and
consistently perform the responsibilities of the position at a satisfactory performance
level. Represents the competitive “going rate” in the marketplace for a fully
competent employee.
MAXIMUM
The maximum salary rate that should normally be paid to very experienced UHD
employees whose performance consistently exceeds expected results of the job
over the duration of the classification and compensation program UHD has adopted.
21
Section 6
Salary Grades and Ranges
CLASSIFIED SALARY STRUCTURE
The recommended salary structure for non-IT staff positions includes 25 pay grades. The width of each grade (i.e.,
typically referred to as “pay range” or “pay spread”) is the “spread” from the minimum to the maximum of the range.
The pay range begins at 35% for those jobs in Grade 10 and increases to 65% for jobs in Grade 34. The
recommended salary structure for IT staff includes 17 pay grades with a range spread at the bottom of 45% and
65% at the top.
Range spreads vary based on promotional opportunities and the level and sophistication of skills required for a
given employee population. The ranges for each individual employee are calibrated to fluctuate based on the
recommended grade for the employee’s job, the number of days per year and the hours per day the employee
works.
Entry level positions that require skills that are quickly mastered usually have narrower pay ranges than supervisory
or managerial or higher-level technical positions. Additionally, individuals in lower-level positions typically have a
greater number of opportunities over time to be promoted to higher level positions.
Senior-level positions typically require a longer learning curve and often have less structured jobs resulting in
greater individual performance differences and variability among job responsibility. Therefore, range spreads for
senior-level positions are generally wider to provide for more pay opportunity for individual “career growth”.
In addition to the range width, a salary structure contains midpoint differentials. Midpoint differentials refer to the
percentage between pay-grade midpoints. The midpoint differential for the non-IT staff salary structure is 9% on
average between grades and 10% on average for the IT salary structure, which is a reasonable average differential
between grades that will alleviate potential compression issues.
22
SECTION 7
JOB HIERARCHY
AND TARGET PAY RANGE ASSIGNMENT
23
Section 7
Job Hierarchy and Target Pay Range Assignment
Deloitte Consulting set up an initial matrix hierarchy (ranking) using only the information derived from the market
analysis. The market median was computed for each benchmark job and this market median determined the initial
grade assignment by slotting it to the closest structure midpoint. For those jobs with no market data available (nonbenchmark jobs), the UHD department head was asked to slot the job using their knowledge of specific job factors
(scope of responsibility and accountability, required skill sets and general qualifications, supervisory responsibility,
etc.) and value to UHD in relation to other jobs in the organization hierarchy. Any hierarchical differences that
existed between the market and internal values were reconciled by the ESO team with assistance provided as
needed by Deloitte Consulting.
The ESO team, with Deloitte Consulting, confirmed and reconciled the assigned grades across all departments.
The final approval came from the ESO team on all jobs and the grades in which they were placed. This JVM
process of reconciling differences between the external market and internal relationships, is critical to an effective
job evaluation system.
After reviewing all recommended pay range assignments and reconciling any differences that existed across the
entire organization and considering all proposed grades from the ESO team, the resulting pay range assignment for
each job represented a salary range (i.e., pay potential) that reflected the ESO team and UHD department head’s
assessment of its worth (i.e., job value).
24
SECTION 8
IMPACT OF SALARY STRUCTURE
25
Section 8
Impact of Salary Structure
Once all jobs received a recommended grade assignment, the immediate cost impact of those assignments in
the salary structure was analyzed. Typically, the most immediate cost of implementing a compensation program
is adjusting those employees’ salaries that fell below the minimum of their assigned salary range in the proposed
structure.
As illustrated in the graph below 104 positions or 25% of UHD employees fell below the minimum of their salary
grade.
Position in Range
Number of Incumbents Below Minimum
Number of Incumbents in 1st Quartile
Number of Incumbents in 2nd Quartile
Number of Incumbents in 3rd Quartile
Number of Incumbents in 4th Quartile
Number of Incumbents Above Maximum
# of Non-IT Staff
77
126
93
34
10
5
# of IT Staff
27
34
4
-
Total Staff
104
160
97
34
10
5
%
25%
39%
24%
8%
3%
2%
The cost of adjusting those employees to the minimum was approximately $269,045, which is approximately a 1.7%
increase over the current base salary of $15,970,005. In addition, it was found that 2% (5 employees) were currently
paid above the maximum of the assigned salary range amounting to $27,552.
Non-IT Staff to Minimum
IT Staff to Minimum
Total Cost to Minimum
Cost to Minimum
% of Total Cost
$200,748
75%
$68,297
25%
$269,045
26
SECTION 9
RECOMMENDATIONS FOR IMPLEMENTATION
AND THE ONGOING MAINTENANCE OF
THE CLASSIFICATION AND COMPENSATION PROGRAM
27
Section 9
Recommendations for Implementation and the Ongoing Maintenance of
the Classification and Compensation Program
Ongoing maintenance of the Classification and Compensation Program is critical to the effective “life” of the
program. At a minimum, we recommend that UHD commit to the following administrative procedures and policy
guidelines:
ADMINISTRATIVE PROCEDURES:
•
Develop an appropriate communication strategy addressing all employees that briefly explains the outcome of
the Classification and Compensation Study and UHD’s strategy for implementation of the new program.
•
Develop a formal strategy for making appropriate salary adjustments over a specified period of time (e.g., six
months, one year, or longer) beginning with those individuals who are currently paid below the minimum of their
salary range.
•
Develop a formal strategy to be followed for those individuals who are paid above the maximum of their salary
range.
•
Because UHD’s salary ranges are based upon current competitive salaries, UHD should keep abreast of any
changes in the markets for which UHD competes for talent. We recommend that UHD review salaries in the
market for a sample of jobs (30-40%) once each year. These jobs should be “benchmark” jobs or those that are
easily found in published survey sources and representative of all levels within UHD.
28
Section 9
Recommendations for Implementation and the Ongoing Maintenance of
the Classification and Compensation Program
For the most part, we recommend that these benchmark jobs remain the same from year to year in order to obtain
the best perception of salary movement trends in the marketplace. This annual review may be done by UHD with
or without the assistance of Deloitte Consulting.
•
UHD should make recommendations, as appropriate, with respect to salary structure adjustments to ensure the
competitiveness of the salary program. Most organizations who monitor the competitive marketplace for salary
movement (e.g., referencing WorldatWork and/or conducting ongoing benchmark analysis) will recommend
adjustments to their own salary ranges annually or every two years. Any recommendations, however, should
consider both UHD’s current pay strategy relative to the market and ability to afford any adjustments to individual
salaries that might be suggested by a change in salary ranges.
•
Develop and implement formal, written policies and procedures for job evaluation classification and salary
administration.
•
Provide initial and ongoing supervisory training with respect to the policies and procedures for the salary
administration program to all supervisors.
29
Section 9
Recommendations for Implementation and the Ongoing Maintenance of
the Classification and Compensation Program
POLICY GUIDELINES
Plan Implementation
All personnel employed by UHD should be assigned to a position which corresponds directly to the established
salary structure. The rate of paydays or 2,080 hours in a fiscal year for the schedule is depicted in annual terms to
establish a common and standard reference point, i.e., 2,080 hours or 260 days. Formulas should be applied
consistently in calculating either annual salary or hourly rates which deviate from those standard rates, i.e., working
less than 260 days or 2,080 hours in a contract year.
–
Maximum or Above Maximum of Range: Any personnel at or above the maximum of their
respective pay grade should receive no pay increase added to base pay until such time that the
maximum of that pay grade is adjusted upward and the salary structure reflects such change.
Employees at the maximum or over the maximum of their salary grade could be eligible to receive an
annual lump sum payment based on merit (i.e., not added to current pay) until such time that the
salary falls within the pay range.
–
Within the Pay Range: All personnel who fall within the pay range for their respective job should be
placed within the range, which has been adopted and incorporated into the salary structure.
–
Below Minimum of the Pay Range: All personnel will be within the pay range of an assigned grade;
no personnel should be paid below the minimum of their respective job grade as prescribed by the
proposed salary structure unless the individual(s) is an anomaly and/or noted exception.
30
Section 9
Recommendations for Implementation and the Ongoing Maintenance of
the Classification and Compensation Program
Advancement
UHD employees will have the opportunity to advance within their pay grade based on tenure in their position and/or
at UHD. Advancement can also be based on having a minimum of average performance rating on file.
Promotion
Any UHD employee appointed to a new position in a job at a higher grade should receive a pay increase which is
either equivalent to the minimum of the new pay grade or seven (7) percent above the individual’s present salary,
whichever is higher. (Note: This pay increase is subject to the financial resources to pay such an increase).
Employees should successfully complete the probationary period for their respective new position, i.e., six (6)
months for hourly employees (non-exempt) or twelve (12) months for salaried employees (exempt). If for any
reason employees are transferred back to their former position or a similar position within the same grade as their
former position during the probationary period, salaries should be immediately reduced to the amount earned prior
to promotion.
31
Section 9
Recommendations for Implementation and the Ongoing
Maintenance of the Classification and Compensation Program
Hiring
All individuals who are new UHD employees and whose knowledge, skills, abilities, and experience meet the
minimum requirements of the job should be hired at the minimum of the salary grade for the job for which they are
being hired. However, an employee may be hired at a higher starting salary based on years of directly related and
documented work experience, not to exceed the mid-point for the respective position, provided the salary doesn’t
exceed that of an incumbent in the same position within the same department. Related work experience should be
credited with three (3) percent for each year of relevant experience up to five (5) years or fifteen (15) percent of the
minimum of the assigned pay grade.
Any exception for a new employee’s salary must be based upon the recommendation of the UHD department head,
and approval by ESO and the University President. The primary determinant for any exception should be based on
a combination of the following: 1) demonstrated and documented need to fill a job; 2) the sense of urgency to fill
such a job; 3) the availability of qualified individuals with the required level of skills, knowledge, experience and
competence; 4) the documented competitive market pay required to attract and retain a person under these
exceptional circumstances; and 5) the importance of maintaining internal equity based on current incumbent(s)
years of related work experience as compared to that of new employee. It is the intent of UHD that newly hired
employees (within the guidelines of exception or otherwise) will not receive more favorable treatment than existing
UHD employees.
32
Section 9
Recommendations for Implementation and the Ongoing
Maintenance of the Classification and Compensation Program
Rehiring
Former UHD employees rehired within one year into a position with the same grade as the one previously held
should be placed within a pay grade of the current salary structure nearest to their previous salary, provided UHD
requires the level of skill, knowledge, experience and/or competency a former employee brings to the job. In no
case should a new salary of a rehired employee be above their former salary unless there has been incremental
change to the current salary schedule, or the rehired employee has acquired new licensing, certification(s), and/or
education that provide a value-added to the position; and under no circumstances should the new salary exceed
the maximum of the grade.
Former employees rehired after one year’s absence or rehired for a position in a different salary grade should be
treated as new employees, i.e., paid up to the midpoint of the range for the position for which they are hired.
33
Section 9
Recommendations for Implementation and the Ongoing
Maintenance of the Classification and Compensation Program
Job Re-Evaluation and Reclassification
When a job is reclassified to a higher pay grade because a re-evaluation indicates the major duties and
responsibilities have increased significantly, the employee may be placed at the minimum of the new pay grade or
receive a four (4) percent pay increase above the employee’s current salary, whichever is higher. If such a reevaluation is effective with the beginning of a compensation year, the employee should first be placed in his/her
new grade before granting the yearly increase commensurate with the old pay grade. An employee should not be
paid less than the grade minimum or more than the grade maximum when a re-evaluation increases a position’s
grade.
When an employee’s position is reclassified to a lower grade because a re-evaluation indicates reduced duties
(e.g., due to a program cutback), a salary adjustment may occur to ensure compliance with UHD’s compensation
plan. If the employee’s salary is above the maximum of the new grade, no annual salary increments should be
granted until the maximum for the grade is increased.
Once an individual has been appropriately placed in his or her new grade, increments will proceed under the UHD
compensation program advancement rules.
34
Section 9
Recommendations for Implementation and the Ongoing Maintenance of
the Classification and Compensation Program
Involuntary Transfer
When an employee is given an involuntary transfer to a position with a lower grade or same grade (e.g., staff
reduction due to a program cutback), a salary adjustment may occur to ensure compliance with UHD’s
compensation plan. If the employee’s salary is above the maximum of the new grade, no annual merit salary
increments should be granted until the maximum for the grade is increased. If the individual’s salary has not
reached the maximum of the new category, increases should be granted that conform to the compensation
management (i.e., range penetration) guidelines until the grade maximum is attained.
Voluntary Transfer to a Lower Grade
If employees are transferred at their own request, or at UHD’s request, to a position with a lower grade, a salary
adjustment may occur to ensure compliance with UHD’s compensation plan. An employee’s pay will remain the
same for the remainder of the compensation period assuming the employee’s pay falls within the pay range of the
lower grade associated with the transfer. However, under no circumstances will any transfer or move to a lower
grade exceed the maximum pay for that job.
35
Section 9
Recommendations for Implementation and the Ongoing Maintenance of
the Classification and Compensation Program
Interim Job Appointment
Employees appointed to the acting capacity of a supervisor or other management position may be given a salary
adjustment for the period of the assignment to the position. The adjustment for the interim job appointment is
between 5% and 7% of the salary of the appointee, as recommended by hiring manager and approved by Manager
of Compensation. NOTE: This adjustment is subject to the financial resources to make such an adjustment. NonExempt positions may be eligible for interim appointment on a case by case basis, as approved by the Manager of
Compensation.
New Positions
With regard to new positions, a job description should be prepared and the position should be evaluated and
assigned to a salary grade by Employment Services and Operations and before the position is advertised, an
employment offer is tendered or a salary is established. The appropriate Department Head/Director responsible for
the new position should offer recommendations to Employment Services and Operations for his/her disposition
and/or action.
Positions under consideration should be evaluated in accordance with the appropriate position evaluation plan (i.e.,
Job Value Matrix) and the results of the evaluation should be compared with previously evaluated jobs to ensure
internal equity. That is, these new jobs should be slotted into the current structure based on the level and scope of
responsibility, duties performed and the value in relation to other jobs in the hierarchy. In addition, new positions
should be benchmarked to the market if applicable to assist in the salary grade assignment of the new job.
36
Section 9
Recommendations for Implementation and the Ongoing Maintenance of
the Classification and Compensation Program
Nonexempt Employee Pay
UHD non-exempt employees will be paid one and one-half times their regular hourly rate of pay for all hours
worked in excess of 40 hours in a work week, depending upon schedules assigned. When financial resources do
not allow for one and one-half pay, non-exempt employees may be compensated with one and one-half
compensatory time off.
Exempt Employee Pay
Exempt employees are not eligible for overtime pay as outlined in the Fair Labor Standards Act.
Exceptions to this policy will be recognized for exempt personnel in certain job classifications. Instances that may
lead to compensation for overtime hours include: (a) to remain competitive in labor market; and (b) working out of
job classification in order to provide staff coverage.
The Vice President for Employment Services and Operations, in coordination with the Department Head/Director,
must approve exempt positions authorized for payment of (straight time) overtime.
Exempt employees eligible to receive payment for overtime will be paid in accordance with UHD’s approved
schedule.
37
Appendices
38
Appendix I
Project Guidance Team
Ivonne Montalbano
Vice President for Employment Services and Operations
Tomas Turrubiates
Manager of Compensation
39
Appendix II
Compensation and Classification Program: What It Means To You
University of Houston-Downtown
COMPENSATION AND CLASSIFICATION PROGRAM
What It Means To You
Prepared by:
Deloitte Consulting, LLP
333 Clay Street
Suite 2300
Houston, Texas 77002
(713) 982-2000
40
Appendix II
Compensation and Classification Program: What It Means To You
All employees contribute to the success of the University of Houston-Downtown (“UHD”). The collective efforts of
you and your fellow employees determine the quality of services we provide to our students and community.
We recognize the two-way commitment necessary to fulfill our goals. We have an obligation to provide you fair
compensation that is based on your experience, the complexity of your position, and the salary and wages
budgeted by UHD and approved by the UHS Board of Regents. Your obligations to UHD include effective
performance in your position and demonstration of our philosophy to set a standard of excellence in virtually every
facet of higher education.
The wages/salaries you receive are based on an objectively determined and fairly administered compensation and
classification program wherein you can be assured that you are receiving pay that is competitive and fair for your
position.
The key to the success of the Compensation and Classification Program (“Program”) is a clear understanding of
how it is designed and how it works.
The purpose of this brochure is to provide you with an overview of UHD’s Compensation and Classification
Program-- what it is and what it means to you.
41
Appendix II
Compensation and Classification Program: What It Means To You
Program Objectives
At UHD, we believe in paying what a position is worth and rewarding employees for experience and work-related
performance. UHD realizes that our future success depends heavily on your ability to grow and develop within
UHD and be rewarded with a fair salary in relation to your experience, commitment, contribution, and value of the
position.
We designed the Program around characteristics that will make it operate effectively on a continuing basis.
Internally Equitable: The Program provides salary ranges for all positions that fairly reflect the value of each
position, relative to all other positions at UHD.
Externally Competitive: So that we can continue to attract highly qualified personnel available, our salary ranges
will be competitive with similar positions in other higher education institutions, not-for-profit organizations in the
public sector, as well as the private sector.
Continuous and Flexible: The Program will respond to changes in the work marketplace; provide for the
evaluation of new position specifications as they are created; and be easily administered.
Personally Motivating: The Program provides opportunities for recognizing and rewarding experience,
contribution, and commitment.
42
Appendix II
Compensation and Classification Program: What It Means To You
How the Program Works
Here is how the Compensation and Classification Program works.
JOB
DOCUMENTATION
Positions are formally described to obtain a clear understanding of what each
position is expected to accomplish.
MARKET
PRICING
Pay for comparable positions in other not-for-profit organizations in the public
sector as well as relevant private sector organizations is determined through
surveys and market analysis.
JOB
EVALUATION
GRADES/SALARY
RANGES
PAY
INCREASES
Each position is evaluated using a dynamic position value matrix and “slotting”
system to determine the value of the position in relation to all other positions at
UHD.
Positions with similar levels of responsibilities are assigned a competitive pay
grade and salary range, each salary range has a pay grade designated for it…
... and pay increases are determined by shifts in the market rates and the impact
on the salary structure and UHD salary and wages budget.
43
Appendix II
Compensation and Classification Program: What It Means To You
Position Documentation
The first step in designing a pay program is to obtain a clear understanding of what each position is expected to
accomplish. This is done by completing written descriptions (position specifications) for each position. The position
specifications list the qualifications (training, education, experience and the like) required to obtain the position, as
well as the position duties and responsibilities involved in its performance (what you are expected to do). Each
position is expected to accomplish specific end results and position descriptions provide a record of the most
important facts about the position.
Because of their importance, position specifications are updated as needed. In this way, you can be sure that the
descriptions, as well as the evaluation and salary range developed from it, are current and accurately reflect the
worth of your position to UHD.
It is important to keep in mind that only positions are analyzed, not people.
Market Pricing
Making sure that the levels of pay at UHD are comparable to other higher education institutions, not-for-profit
organizations, as well as the public and private sector requires a thorough analysis of what other organizations pay.
Since UHD uses position specifications that are consistent with the position descriptions used by other
organizations, it is possible to compare directly for many of our positions.
44
Appendix II
Compensation and Classification Program: What It Means To You
Market Pricing Cont’d
Best practices suggest that organizations utilize several salary surveys – locally, regionally, and nationally – to
determine how much other organizations are paying. Because UHD wants to compare positions accurately, we
selected surveys that best represent where our potential employees are likely to be hired. For example, UHD could
use local surveys for those positions that may be filled in the general Houston area. Regional surveys could be
used for those positions where we must look beyond our immediate geographical area. National surveys could be
used for positions where UHD must extend a search even further. By taking the surveys and applying sound
judgment, UHD can accurately “market price” a position and reflect the so-called “going rate” or market average for
a fully competent person to fill a position at UHD.
To make sure our policy remains current, it is recommended that market information be reviewed at least annually.
In this way, we can be certain that UHD remains competitive in the marketplace.
45
Appendix II
Compensation and Classification Program: What It Means To You
Evaluating Positions
–
Determine the value of each position
–
Show the relationship of one position to another
–
Assign each position a pay grade reflecting the position’s value
The position evaluation system used to analyze each position is the same process used by thousands of
organizations throughout the country and around the world. And since each position is evaluated using this same
process, you can be assured that our positions are accurately and fairly given a value based on the same criteria.
It’s important to remember that, in this stage of the program, no attempt is made to evaluate the person in
the position or that person’s performance. We consider only the position itself, as defined by its position
specification.
46
Appendix II
Compensation and Classification Program: What It Means To You
Grades/Salary Ranges
After positions are evaluated and a market average is determined, they are assigned a salary range in the salary
structure to reflect the position’s value to UHD and external pay practices. The structure consists of salary grades
and ranges of pay opportunity with a minimum and maximum established around a midpoint. Each pay grade range
provides sufficient room and opportunity to recognize competency, performance, and amount of experience.
MINIMUM
The minimum salary rate that normally would be paid to a member of UHD staff who is
beginning the duties of the position and meets the minimum requirements of the position.
Represents the typical marketplace “entry” rate.
MIDPOINT
The rate which should be targeted for employees who are fully qualified to perform the
responsibilities of the position at a satisfactory performance level. Represents the
competitive “going rate” in the marketplace for a fully qualified employee.
MAXIMUM
The Maximum is the highest level of pay for a job within this grade. Employees may not be
paid at a base rate above this amount, nor receive any merit increases resulting in a rate
of pay above this amount. Employees who have extensive work experience, are highly
competent professionally, and may have a significant number of years of experience are
generally paid between the Midpoint and the Maximum of the pay range.
Remember that the salary range is based on the characteristics of the position and not the skills of the
person holding that position. When necessary, our salary ranges are adjusted to reflect changes in the
marketplace.
47
Appendix II
Compensation and Classification Program: What It Means To You
Summary
UHD’s Compensation and Classification Program is designed to make sure you are paid fairly and competitively.
Our Program also provides for your salary to grow as you grow and perform in your position.
As positions change, new positions are added or competitive conditions change, the Program will take these factors
into account so that you and all employees will continue to be paid on a fair and equitable basis.
48
Appendix III
Position Description Questionnaire*
49
Appendix III
Position Description Questionnaire*
* For a full set of this PDQ, please visit the Compensation/Performance link found on the ESO website.
Appendix IV
Market Survey Sources
Publisher
Survey Name
ERI
Salary Assessor
ERI
Executive Compensation
Mercer 2005
Finance, Accounting, and Legal
Mercer 2005
Human Resource Management
Mercer 2005
Information Technology
Mercer 2005
Logistics and Supply Chain
Mercer 2005
Metropolitan Benchmark
Mercer 2005
Marketing and Communications
CUPA 2005-06
MidLevel Compensation Survey
CUPA 2005-06
Administrative Compensation Survey
Watson Wyatt 2005/06
Hospital and Health Care
Watson Wyatt 2005/06
Middle Management
Watson Wyatt 2005/06
Professional
Watson Wyatt 2005/06
Office Personnel
Watson Wyatt 2005/06
Supervisory Management
Watson Wyatt 2005/06
Technical & Skilled Trades
Watson Wyatt 2005/06
Top Management
World at Work
Salary Planning Survey
51
Appendix V
Salary Structure – Non-IT Positions
Grade
34
33
32
31
30
29
28
27
26
25
24
23
22
21
20
19
18
17
16
15
14
13
12
11
10
Minimum
97,909
87,418
79,553
71,669
64,567
59,309
53,917
49,016
44,560
40,509
37,563
34,461
31,616
29,005
27,154
25,142
23,280
22,004
20,565
19,220
17,962
16,945
16,326
15,549
$14,809
1st Quartile
113,819
101,624
91,486
82,420
74,252
67,464
61,331
55,755
50,687
46,079
42,258
38,769
35,568
32,631
30,208
27,971
25,899
24,205
22,621
21,141
19,758
18,640
17,755
16,909
$16,104
Midpoint
129,729
115,829
103,419
93,170
83,937
75,619
68,745
62,495
56,814
51,649
46,954
43,077
39,520
36,257
33,263
30,799
28,518
26,405
24,678
23,063
21,555
20,335
19,184
18,270
$17,400
3rd Quartile
145,639
130,035
115,352
103,921
93,622
83,774
76,158
69,235
62,941
57,219
51,649
47,384
43,472
39,882
36,318
33,628
31,137
28,606
26,734
24,985
23,351
22,029
20,612
19,631
$18,696
Maximum
161,549
144,240
127,285
114,671
103,307
91,929
83,572
75,974
69,068
62,789
56,344
51,692
47,424
43,508
39,373
36,456
33,756
30,806
28,791
26,907
25,147
23,724
22,041
20,991
$19,991
52
Appendix VI
Salary Structure – IT Positions
Grade
61
60
59
58
57
56
55
54
53
52
51
50
49
48
47
46
45
Minimum
104,273
93,101
84,724
76,328
68,764
63,164
57,422
52,202
47,456
43,142
40,004
36,701
33,671
30,891
28,918
26,776
$24,793
1st Quartile
121,217
108,229
97,433
87,777
79,079
71,849
65,318
59,380
53,981
49,074
45,005
41,289
37,880
34,752
32,172
29,789
$27,582
Midpoint
138,161
123,358
110,141
99,226
89,393
80,534
73,213
66,557
60,507
55,006
50,006
45,877
42,089
38,613
35,425
32,801
$30,371
3rd Quartile
155,106
138,487
122,850
110,676
99,708
89,219
81,109
73,735
67,032
60,938
55,006
50,464
46,297
42,475
38,678
35,813
$33,161
53
Maximum
172,050
153,616
135,559
122,125
110,022
97,905
89,004
80,913
73,557
66,870
60,007
55,052
50,506
46,336
41,932
38,826
$35,950
Appendix VII
Job Evaluation Methodology
Deloitte Consulting’s Job Value MatrixTM (JVM) approach to job evaluation is a dynamic process used
to reconcile any differences between external job values and internal relationships that are unique to
the organization. This process places a premium on extensive analysis of external market conditions
(external equity) and combines that analysis with a structured whole job evaluation of internal job
relationships. The objective and process associated with the JVM approach is to determine a dollar
investment value (typically expressed as a salary grade and associated range) for every job in the
organization that reflects both external market conditions (i.e., pay competitiveness) and the
organization’s internal valuing system.
This Deloitte Consulting facilitated meeting involves top management in a process of job slotting
using proprietary and specially designed slotting boards and moveable position titles. The result of
JVM will be a job worth hierarchy that will be used in establishing an evaluation model. This will
become the "target" set of job values that the organization should support. This step is critical to the
overall success of the pay delivery system. It brings together both market and internal pay
relationships and provides critical guidance in establishing accurate and effective pay structures.
Additionally, Deloitte Consulting can develop a statistical job evaluation model regressed to the
external marketplace and internal hierarchy established as a result of the JVM exercise. This pointfactor type model would serve as a guide to future job slotting.
Salary
Grades
Job Value Matrix
Benchmark Job
Job Code
Mkt Med/Incumbent
Avg Base
Job Title
Salary Grade
Non -Benchmark Job
Job Code
/Incumb ent
Avg Base
Job Title
Salary Grade
54