Introduction to Sibson Market
Assessment and Development of
UTC Compensation Plan
December 12, 2011
Sibson Compensation & Benefit
Benchmarking
In March 2010, Interim President Jan Simek launched the
Compensation Advisory Board (CAB) to help guide the
University’s compensation philosophy, structure and
programs.
At the CAB’s direction, a market assessment was
conducted in July 2011 by a nationally recognized HR
consulting firm - Sibson Consulting - to identify gaps in
pay and benefits offered to faculty and staff.
2
The University of Tennessee engaged Sibson
Consulting to:
Conduct an objective benchmarking of faculty, staff and
administration compensation and benefits to the
appropriate markets
Perform a variance analysis comparing University
salaries and benefits to the comparison markets
3
Summary of UT System Compensation Findings
1. Market Competitiveness
•
•
While some entities have conducted some compensation benchmarking, the majority of perceptions are based on
anecdotal information and most entities are not certain what the results of the competitive assessment will be
However, most entities expected that some of their jobs are currently paid below market
2. Lack of Annual Increase
•
•
The lack of an annual increase in recent years was frequently mentioned by focus group participants and many
indicated that it had placed compensation behind the market
Some entities want to distribute any increase budget available this year evenly across the employee population, while
others want to use some of the budget to reward performance
3. Compression
•
Many entities indicated that new employees are hired at market rates, which is often at or above the pay levels of
current employees
•
While the institutions often have no choice but to hire at market rates, there is some concern about potential
inequities and compression among compensation levels of new and current employees
4. Comparison Markets
•
•
Specific institutions for compensation comparison markets differed by entity as well as somewhat by school and
discipline. However, most entities mentioned institutions that were similar in type and size as well as proximity to UT
For non-higher education jobs, most entities indicated that they competed with local and regional employers in their
area
5. Pay Positioning
•
Most entities indicated that the market median or 50th percentile was an appropriate measure of market
competitiveness for the competitive assessment
4
UT Chattanooga Findings
Attracting and Retaining Talent
 UT Chattanooga generally does not have trouble attracting faculty because many come for the
location
o Quality of life & partnerships with local industry and government that help attract faculty.
o Future challenges attracting and retaining faculty as the economy improves.
o Difficulty adding faculty to keep up with growing enrollment may hurt retention.
o Lecturers’ pay is low relative to market.
 The University has a greater struggle attracting and retaining non-exempt and professional
staff including IT staff, skilled trades, and administrative support
o IT employees will often receive training from the University and then leave
o Administrative support employees are able to leave and find higher compensation
elsewhere
o New companies in the area, as well as a large local community college, hire staff away
from UTC
 Benefits are helpful for attracting and retaining faculty and staff. However, participants noted
that the benefits no longer provide the same value as they once did, especially with recent
changes to the medical plan
o Longevity pay is positive
o Education assistance benefit helps attract and retain
o Retirement benefits help with retention more so than attraction
The work culture and general friendly attitude of employees also promotes retention
5
UT Chattanooga Findings continued
Compensation Comparison Markets and Pay Positioning
 Opinions on the appropriate comparison institutions for faculty differs, as different disciplines are
stronger at different places
o Institutions from the Southern Regional Education Board (SREB) were generally accepted as a
fair comparison group
o Both category 2 and category 3 institutions were mentioned as appropriate for salary
comparison. UTC is classified as category 3
 The appropriate comparison market for non-exempt staff is any industry within the local area. For
mid-level professional staff, the appropriate market is any industry within the region
Compensation Challenges
 New employees, especially faculty, are often brought in at market salary which may be higher than
current employees. While participants indicated that UTC must often pay market rates in order to
hire new employees, there is concern about salary compression.
 Staff compensation policies limit flexibility for managing compensation
o Restriction to 8% above the range minimum for hiring non-exempt staff.
o Limit in non-exempt promotions/reclassifications to difference in pay grade minimums.
o If an employee leaves a position, the compensation for the new hire returns to the original
amount, which is often too low.
6
Identifying the Appropriate Compensation Comparison Markets
 An appropriate compensation comparison market is based on identifying institutions and/or
organizations that UT recruits talent from, loses talent to, or competes with for talent.
 Each UT campus developed unique comparison markets that align with the talent pool or labor
market for the entities and jobs at UT. While the specific comparison markets differ by entity, the
same common principles guide the comparison markets for all entities
Comparison Market Characteristics Assessment
Type of Role
Similar Size
and Type
Geographic
Location
Higher
Education
Recommended UT Comparison Markets
 Institutions of similar type and size for higher education specific jobs
(e.g., Vice Chancellor Student Affairs)
 Institutions of similar type and size and national not for profit employers
for jobs also found in general industry (e.g., Chief Information Officer)
Senior
Administrators
 Institutions of similar type and size
Faculty
 Institutions of similar type and size for higher education specific jobs
(e.g., Admissions Counselor)
 Institutions of similar type and size and general industry employers in
the South for jobs found in general industry (e.g., Accountant)
Mid-Level
Professionals
 Local area general industry employers
Non-Exempt Staff
Very Important
Somewhat Important
Not Important
Since benefits are common across all types of jobs within the system, the comparison market for
benefits does not vary by job and is common across the entities.
7
UTC Higher Education Comparison Market
For Faculty and Exempt Staff:
• SREB Category 2 Institutions: Four-year institutions
awarding at least 30 doctoral degrees that are distributed
among at least 5 CIP categories (2-digit classification).
• SREB Category 3 Institutions: Four-year institutions
awarding at least 100 master's, education specialist, postmaster's, or doctoral degrees with master's, education
specialist, and post-master's degrees distributed among at
least 10 CIP categories (2-digit classification)
• Additional top 5 comparison institutions from the Huron
Peer Group
8
Aggregate Benchmarking Results (Faculty):
By Rank
#
Incumbents1
% Benchmarked2
Aggregate Annual
UT Salary ($000)
Aggregate Market
Median ($000)
UT Salary as % of
Market Median
Assistant Professor
80
92%
$4,391
$4,641
95%
Associate Professor
94
90%
$6,097
$6,617
92%
Professor
143
92%
$12,220
$12,794
96%
TOTAL
319
69%
$22,809
$24,170
94%
Rank
•
•
•
1
2
In aggregate, faculty are paid within the competitive range of the market at 94%
Professors, the rank with the greatest number of faculty members, are paid slightly
below the market median in aggregate (96%)
Associate Professors are paid further below the market median in aggregate (92%)
Only includes data for incumbents in benchmarked jobs. Benchmarked incumbents represent approximately 70% of
all regular faculty. Ranks with less than five benchmarked incumbents not shown but are included in total.
Number of incumbents in benchmarked jobs/ranks as a percent of incumbents provided in census. Reliable
discipline-specific CUPA-HR market data does not exist for Lecturers/Adjunct Faculty.
9
Distribution of Competitiveness to Market Median (Faculty):
By Rank1
Percent of Incumbents
UTC as % of
Market
Median
95%
92%
96%
94%
4%
2%
9%
6%
66%
71%
28%
25%
24%
Associate Professor
(N=94)
Professor
(N=143)
All Ranks
(N=319)
70%
81%
15%
Assistant Professor
(N=80)
< 85% of Market Median
85 – 115% of Market Median
> 115% of Market Median
 Within all ranks, the majority of individual faculty salaries fall within the competitive range, which is defined as +/- 15 percent of
market median
 In some cases, faculty salaries fall above or below the competitive range, which may be appropriate. Salary variances at the
individual level can often be attributed to factors including, but not limited to: time in rank, scholarship, performance,
contribution to the institution
1
Only includes data for incumbents in benchmarked jobs. Ranks with less than five benchmarked
incumbents not shown but are included in total. Percentages may not sum to 100% due to rounding.
10
Aggregate Benchmarking Results (Staff):
By Reporting Entity1
#
Incumbents1
% Benchmarked2
Aggregate Annual
UT Salary ($000)
Aggregate Survey
Median ($000)
UT Salary as % of
Survey Median
Academic Administration
17
100%
$930
$1,024
91%
Business and Finance
14
78%
$708
$837
85%
College of Business Administration
5
100%
$227
$303
75%
College of Health Education &
Professional Studies
10
83%
$468
$587
80%
College of Engineering & Computer
Science
11
92%
$831
$852
97%
Enrollment Services
10
100%
$367
$429
86%
Facilities
42
82%
$866
$1,114
78%
Law Enforcement
13
93%
$418
$558
75%
Lupton Library
10
100%
$372
$448
83%
Office of Information Technology
19
83%
$791
$1,097
72%
Student Housing
16
89%
$477
$596
80%
University Advancement
9
100%
$500
$530
94%
UTC (other units)
76
100%
$2,300
$3,578
64%
TOTAL
263
91%
$10,019
$12,900
78%
Reporting Entity

In aggregate, staff compensation falls significantly below the market median at 78%

Staff compensation in the following reporting entities is significantly below the market median: COBA, Facilities, Law
Enforcement, OIT

Compensation in the College of Engineering & Computer Science and in University Advancement is only slightly below the
market median
1
2
Only includes data for incumbents in benchmarked jobs. Benchmarked incumbents represent approximately 40% of all regular staff.
Reporting entities with less than five benchmarked incumbents not shown but are included in total.
Number of incumbents in benchmarked jobs/ranks as a percent of incumbents provided in census.
11
Distribution of Competitiveness to Market Median (Staff):
By Reporting Entity1
UTC as % of
Market
Median
91%
85%
75%
80%
97%
86%
18%
20%
78%
75%
83%
19%
72%
21%
80%
13%
94%
11%
64%
78%
1%
5%
27%
Percent of Incumbents
36%
50%
60%
65%
56%
80%
64%
100%
81%
80%
79%
95%
88%
72%
64%
50%
40%
35%
Academic
Admin
(N=17)
Business and College of Bus
Finance
Admin
(N=14)
(N=5)
CHEPS
(N=10)
18%
20%
College of
Engineering
Enrollment
Services
(N=11)
(N=10)
< 85% of Market Median
Facilities
(N=42)
Police
33%
Lupton Library
(N=13)
85 – 115% of Market Median
(N=10)
OIT
Student
Housing
(N=19)
(N=16)
University
UTC (other) All Reporting
Advancement
Entities
(N=9)
(N=76)
(N=263)
> 115% of Market Median

Sibson considers pay to be competitive when it falls between 85% – 115% of the market median. Individual pay above or
below this range may be appropriate based on individual experience, skills, and performance

The majority of staff in the following reporting entities are paid within the competitive range: Academic Administration,
College of Engineering & Computer Science, Enrollment Services, Lupton Library, and University Advancement

The majority of staff in all other reporting entities are paid below the competitive range
1
Only includes data for incumbents in benchmarked jobs. Reporting entities with less than five benchmarked
incumbents not shown but are included in total. Percentages may not sum to 100% due to rounding.
12
Estimate of Cost
Sibson has calculated estimated costs based on both market results for
benchmark jobs and also extrapolated cost for jobs that were not
benchmarks. On an annualized basis for UTC the estimated cost to bring
incumbent salaries to average of:
 85% of the market median = ~ $4 MM
 The market median = ~ $10.4MM
13
UTC Compensation Analysis Team:
•
•
•
•
•
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•
•
•
•
•
Vicki Steinberg, Faculty Senate
Gavin Townsend, Faculty Senate Budget and Economic Status Committee
Verbie Prevost, UT CAB
Dick Gruetzemacher, Institutional Research
Tyler Forrest, Budget Office
Danny Grant, Budget Office
Deborah Hyde, Business Manager, Academic Affairs
Dan Webb, Human Resources
Phillip Johnson, Human Resources
Kelly Griffin, ERC
Jean Dake, ESC
Vanasia Parks, Associate Vice Chancellor, Business and Finance
14
Compensation Analysis Team Objectives
 Analyze Sibson data to assess current state of compensation among all
categories of faculty and staff at UTC
 Through a transparent and collaborative approach, identify compensation
issues, compensable factors and a general framework to describe realistic
and equitable future state for compensation of UTC faculty and staff.
 Compile and analyze other data associated with the acquisition and
retention of faculty and staff at UTC as part of the process of identifying
compensation issues and informing institutional strategies for acquiring
and retaining talent necessary to meet UTC strategic objectives.
 Using Sibson market data and other sources of information assess
distribution of salaries by considering various compensable factors such as
years of service with the University, years of service in particular position,
performance, education, experience (at UTC and prior), certifications, etc.
 Develop a recommendation to the Chancellor for a multi- year
compensation plan.
15
Analyze Faculty Salaries
Work Team
•
•
•
•
•
•
•
•
Gavin Townsend, Faculty Senate Budget and Economic Status Committee (Team Lead)
Verbie Prevost, CAB Representative
Dick Gruetzemacher, Institutional Research (or designee)
Deborah Hyde, Business Manager, Academic Affairs
Dan Webb, Human Resources
Phillip Johnson, Human Resources
Additional members from Faculty Senate Budget and Economic Status Committee
Library faculty representative
 Thoroughly evaluate Sibson data, identifying anomalies and supplementing with additional
data as appropriate.
 Consider salary distribution by rank, discipline, and other compensable factors (merit,
service as department head, etc.)
 Determine relationship of faculty salaries to market.
 Identify compensation issues for faculty positions.
 Develop recommendations to address issues identified, providing equitable framework for
recruitment, retention, and motivation of excellent faculty consistent with strategic
objectives of University.
16
Analyze Staff Salaries
Work Team
•
•
•
•
•
•
•
Dan Webb, Human Resources
Dick Gruetzemacher, Institutional Research (or delegate)
Tyler Forrest, Budget Office
Phillip Johnson, Human Resources
Kelly Griffin, ERC
Jean Dake, ESC
Additional representatives from ERC/ESC, nominated by ERC and ESC chairs
 Thoroughly evaluate Sibson data, identifying anomalies and supplementing with additional data
as appropriate.
 Analyze salary distribution by relevant staff job groupings: job families, EEO categories, pay
grade, FLSA category (exempt/non-exempt).
 Analyze salary distribution by relevant compensable factors: years University service, experience
(UTC and prior), performance, CPS or other certifications, degrees, etc.
 Determine relationship of staff salaries to market.
 Evaluate internal salary equity relative to similarly situated positions.
 Identify compensation issues for staff positions.
 Develop recommendations to address issues identified, providing equitable framework for
recruitment, retention, and motivation of excellent staff consistent with strategic objectives of
University.
17
Analyze Acquisition/Retention Data
Work Team
•
•
•
•
•
Deborah Hyde, Business Manager, Academic Affairs
Tyler Forrest, Budget Office
Dan Webb, Human Resources
Phillip Johnson, Human Resources
Laure Rodebaugh, Human Resources
 Review acquisition (hiring) data (time-to fill, diversity and
quality of candidate pools, turn down of offers, etc.);
analyze to see what impact this has on market gaps.
 Review of retention (termination) data; analyze to see
what impact this has on market gaps.
 Make recommendations to rectify deficiencies.
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UTC Compensation Planning Group
(Tentative membership)
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Deborah Arfken, Strategic Planning Officer
Richard Brown, CAB Chair
Chuck Cantrell (or designee), University Relations
Jean Dake, ESC
John Delaney (or designee), Student Development
Terry Denniston, Chief of Staff
Danny Grant, Budget Director
Kelly Griffin, ERC
Dick Gruetzemacher, Institutional Research
Rick Hart (or designee), Athletics
Deborah Hyde, Business Manager, Academic Affairs
Phil Oldham (or designee), Academic Affairs
Vanasia Parks, Associate VC for Business and Finance
Verbie Prevost, UT CAB
Bryan Samuel, Diversity Officer (ex officio)
Vicki Steinberg, Faculty Senate
Gavin Townsend, Faculty Senate Budget and Economic Status Committee
•
Dan Webb, Human Resources
19
Proposed Time Frame
Oct-11
HRO meets with Executive Team to
discuss Sibson Methodology and
Report
Nov-11
Dec-11
Jan-12
Feb-12
Mar-12
Apr-12
May-12
Jun-12
10/12/11
CBO & HR Develop Committee for
Data Analysis and
Recommendations
Committee Members review Sibson
Data with CAB representatives
10/31/11
Compensation Analysis Team (CAT)
evaluates data, with input from subteams
Campus CAB Visit
12/12/11
Work Teams evaluate faculty/staff
salary data
Work Team compiles and analyses
acquisition and retention data
Development of Compensation Plan
Recommendations by CAT, based on
input from work teams
Presentation of CAT findings and
recommendations to Compensation
Planning Group and UPRAC
Revisions and Refinements to
Compensation Plan; Final Plan
approved by Executive Team
Presentation by Chancellor to Board
of Trustees
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Where are we now?
Faculty*:
Professor:
96% of Market Median Overall; 25% below 85%
Associate Professor: 92% of Market Median Overall; 28% below 85%
Assistant Professor: 95% of Market Median Overall; 15% below 85%
Lecturer:
84% of Market Median Overall; 62% below 85%
Staff*:
Exempt staff:
79% of Market Median Overall
Non-Exempt staff: 76% of Market Median Overall
*All values are pre-July 1 and do not reflect ATB, Equity, or Performance Increases
21
What have we done so far?
Faculty Promotion:
 Since 2000, faculty member receives a 10% raise for each increase in rank.
Faculty Equity Adjustments:
 Several faculty equity plans have been implemented in past 10 years to address
compression and other equity issues.
 Substantial equity adjustment pool of 1% in fiscal year 2008
 2010 Faculty equity plan attempted to raise faculty salaries to a target of 85% of the
median of SREB3 & SREB2 universities.
 2011 Faculty equity plan produced average adjustment of $1,800
Foundation Professorship “roll-over”:
 Professorships funded by UC Foundation transferred to E&G funding annually.
Standard staff adjustments:
 CPS
 Degree awards
Staff job audits (system-wide and campus)
Staff equity plans:
 Total of 5 Staff Equity Plans in past 10 years to move exempt and non-exempt staff closer
to market value.
22
Equity Plan Methodology
2009-10 Allocation Plan
A pool of $490,814 was allocated to address some of the most serious compensation issues related to internal
and external salary equity and salary compression. 226 faculty and staff members received salary adjustments.
Staff Plan:
 Current salary for each staff member was compared to estimated Market Value appropriate for particular
position.
Salary used for comparison excluded adjustments based on CPS or degree awards, as well as 2007 merit
increases.
 Market comparisons:
Exempt staff:
• CUPA-HR survey data: Job content compared to the position descriptions from 2008/2009 CUPA-HR staff
surveys, using SREB 2 and 3 Groups used as basis of comparison.
• For positions without reasonable match to surveyed positions, an estimation of Market Value was used
based on regression formula derived from Hay ratings for positions having solid survey matches.
Non-exempt staff: Pay grade midpoint was used as basis of Market comparison in those cases where reliable
local or regional market data was not available.
 Salary targets: ascending market targets based on years Regular Continuous Service.
Faculty Plan:
 Current salary for each faculty member was compared with Market Value associated with rank and discipline.
 Market comparisons:
• CUPA-HR survey data: By rank and discipline from 2008/2009 CUPA-HR National Faculty Salary Study.
• SREB 2 and 3 Groups used as basis of comparison.
 Salary targets:
• 85% of mean salary for rank and discipline for full time, tenure track faculty
• $28,500 minimum established for UTC Lecturers.
(2011 Plan has raised minimum Lecturer salary to $31,000)
23
Challenges (Where do we go from here?):
Developing comprehensive compensation plan that enables University to attract, retain,
develop and motivate talented individuals to achieve strategic objectives.
Defining, identifying, and validating compensable factors and appropriate weight in
compensation system:
oYears of relevant experience (UTC and prior employment)
oRelevant education and training
oJob-related certifications (CPS and others)
oMarket value
oJob size/type (staff: pay grade and job family; faculty: rank and discipline)
oPerformance
oOthers?
Defining hiring range for faculty and staff positions based on appropriate market
position. (What is market competitive rate at which we can acquire talent for various
positions?)
Developing and uniformly implementing effective and equitable performance
management and assessment system for faculty and staff.
Developing consistent standards/procedures for promotions and career ladders as
appropriate for job family.
Succession Planning
Salary Compression and inequities
Funding for Compensation Plan
Local market competition: Volkswagen and others
24
Budget – Compensation Plan Alignment
Expenditures
Year 3
Year 5
Assessment
Assessment
2013-14
2014-15
2015-16
2016-17
2012-13
Cost Going Forward
Program Support
Strategic Planning Initiatives
Compensation Plan
Total
-
-
-
-
-
-
-
-
-
-
Revenues
State Appropriations
Special State Allocations (Compensation Pools)
Tuition & Fees (and Differential)
Advancement (Gifts & Fundraising)
Grants & Contracts
Auxiliary Enterprises
Internal Reallocations
Specialized Fees
Total
Finance Work Team (In collaboration with UPRAC)
•
•
•
•
•
•
Gavin Townsend, Faculty Senate Budget and Economic Status Committee (or designee)
Dick Gruetzemacher, Institutional Research
Tyler Forrest, Budget Office
Danny Grant, Budget Office
Deborah Hyde, Business Manager, Academic Affairs
Dan Webb, Human Resources
25
Compensation Resources Strategies:
•
•
•
•
•
•
•
•
•
•
•
Additional State Appropriations
Tuition and Fees---Differential Fees Planning
Enrollment Growth Revenues
New THEC Funding Model Support
Alternative Revenues----Grants, Contracts,
Development/Fundraising, Gifts
Retirement Incentives and other Incentive Models to
Supplement Compensation
37 ½ Hours’ Work Week
Move 12 month Faculty to 9 months with Grant support for 3
months
Program Review and Reduction for Reallocations
Workplace Culture: Child Care Services via contract
Partnership
Free Parking
26
NEXT STEPS
Strong Transparency and Communications Plan
Engage Stakeholders
Work with UPRAC and UTC Strategic Plan
Develop a Multi-Year Strategy with a 5 year
Assessment benchmark
Comprehensive Compensation Plan including:
o Cost of Living
o Equity/Compression
o Merit/Performance
o Market-based
o Targeted Emphasis on Selected Units
27
Closing
Chancellor’s Comments
Questions/Discussion
28