Staff Compensation Program Manager Training May 21 – 22, 2012 Today’s Agenda Content Timing Overview of Compensation Program Re-Design 15 min Compensation Program Details 20 min Implementation of Compensation Program 10 min Manager’s Role in Implementation 15 min Frequently Asked Questions and Practice Exercise 30 min 1 Overview of Staff Compensation Program Re-Design 2 Why Focus on Compensation? Georgia College’s Compensation Program Re-Design ensures the institution remains an employer of choice through: Alignment of pay with the philosophy and goals of GC The recruitment and retention of top talent Recognition of employee contributions to their jobs Pay aligned to our competitive market Internal equity in pay among our employees The University is committed to providing employees with market competitive pay and opportunities to grow and develop within our institution. 3 Overview of the Staff Compensation Program Old Compensation Program Outdated pay system ‒ Last system update in 2005 ‒ Last comprehensive staff compensation analysis in 2001 ‒ Inaccurate job descriptions Continued concerns around: ‒ Inconsistent administration of pay ‒ Pay compression ‒ Misalignment of pay to the external market ‒ Internal inequity ‒ Pay may not be linked to individual contributions ‒ Limited career progression opportunities New Compensation Program Competitive, market-based structure Policies for pay administration to ensure: ‒ Fairness and consistency across the institution ‒ Ongoing maintenance of program Foundation for future HR initiatives ‒ Performance management ‒ Career progression Increased communication and transparency 4 Outcomes of the New Program Key outcomes of the new program include: Current & Accurate Job Descriptions: Documentation of key responsibilities, skills, education, and experience requirements for the job Compensation Philosophy: Description of the role of pay and GC’s expectations for the management of pay in attracting, retaining, and rewarding employees at the University Comparison Markets: Development of comparison markets for market data comparisons by broad employee level groupings Compensation Structure: Management of compensation through market-based salary grade ranges Compensation Policies: Policies for managing compensation at the University to help ensure internal equity and consistent application of the program The final materials for the items above will be available in June on the Human Resources website (http://www.gcsu.edu/equity/payupdates.htm). 5 Project Phases The objectives were accomplished through the following four phases: Phase 1: Compensation Philosophy Phase 2: Market Assessment August – November 2011 Survey on current compensation program perspectives Key stakeholder and committee interviews November 2011 – January 2012 Assessment of GC pay against market Phase 4: Program Implementation and Training May – June 2012 January– May 2012 Approach and process for New pay structure for market assessment exempt and nonexempt employees Detailed market pricing analysis Compensation philosophy development, including comparison markets to be used in market assessment Phase 3: Salary Structure and Salary Administration Guidelines Development Validation and finalization of structure and job assignments with leadership Salary administration guidelines development Implementation plan, including training and ongoing communications Finalized salary adjustments Manager and Employee Training sessions Full implementation of the new compensation program will occur on July 1, 2012. 6 Staff Compensation Program Details 7 Compensation Philosophy Vision for the Staff Compensation Program The program1 is intended to provide competitive, fair, and equitable salaries in order to attract, retain, and engage highly qualified administrators and staff without regard to race, color, religion, sex, sexual orientation, national origin, age, disability, veteran status, or any other legally protected status. The principles of this program are intended to cover all non-faculty jobs.2 How The Vision Will be Realized Program Model GC’s staff compensation program will be designed to provide organization and structure to the way in which salaries are administered, while allowing for sufficient flexibility to meet the needs of the University. To this end, GC will: Provide pay opportunities/ranges that: ‒ Are based on job responsibilities (not individuals) ‒ Are competitive within the markets in which the College competes for talent ‒ Promote internal equity across the institution Consider the institution’s financial resources Recognize and compensate expertise, sustained contributions, and performance Manage salaries for all divisions and schools using the same program and guiding principles 1 2 Pay components of the compensation philosophy are contingent upon the financial resources of the institution. Non-Faculty Jobs: All GC jobs in which the individual’s administrative, non-teaching responsibilities represent at least 50% of full-time effort. 8 Compensation Philosophy continued Pay Components Base salary will be the primary method of compensating individuals at GC. It will reflect the value of the job in the market, the role in the University, and the capabilities and contributions of the individual Any other additional pay, when permitted, may be granted in accordance with established guidelines Other benefits such as tuition remission, health and retirement plans, and work environment will continue to be essential components of the compensation strategy at GC, as a complement to competitive salaries Internal/External Valuation GC will consider both the external competitiveness and internal valuation of jobs. The program will use market data as a reference for creating the salary structure and salary ranges. Pay will be competitive in aggregate Benchmarking to comparison markets will inform salary ranges, and will be used as a reference for determining salaries for individuals Each school will strive to maintain internal equity across the institution. This is defined as providing similar compensation opportunities for similarly situated administrators and staff (i.e., jobs with similar market values in the same job family will be assigned to the same salary grade; administrators and staff with similar expertise, experience, and performance will be paid similarly) 9 Compensation Philosophy continued Link to Performance The structure will help support and facilitate a linkage between compensation, career development, and performance management The University intends to support a culture of performance and reward individuals accordingly ‒ Individual base salaries will be managed within the salary range for the job and will consider the skills, knowledge, experience, and performance of the incumbent ‒ Salary increases should be determined by the degree to which each individual contributes to GC, department, or area goals depending on the job, and demonstrates excellence in handling their job responsibilities, as documented in the performance evaluation process ‒ Salary increases and opportunities for advancement will not be an entitlement and will be subject to the institution’s fiscal conditions ‒ Position and job descriptions will be reviewed and updated as necessary to ensure clear, mutual understanding of responsibilities and performance standards Communication/Openness GC will ensure understanding of the compensation program through open, clear, and accessible communication to staff The link between job performance, goal achievement, and salary increases will be clearly communicated to all employees Managers will be trained and held accountable for effectively planning, managing, coaching and evaluating the performance of their staff, as well as creating a positive work environment that supports growth and staff development 10 Compensation Philosophy continued Management of the Program Cabinet Members Communicates openly, regularly, and clearly with the University community on all compensation related matters Revises, endorses, and proposes programs in consultation with other stakeholders at the University Sets and communicates institutional strategy, objectives, and operational goals to the University Sets the standard for performance planning, coaching and feedback, and holds their direct/indirect reports accountable for the same Human Resources Collaborates with managers and supervisors to set appropriate salaries Collects market data and assesses pay competitiveness Provides managers and supervisors with tools and resources needed to make compensation decisions for their staff (market data, hiring ranges, federal/state laws, etc.) Designs, develops, and maintains the compensation program, including pay guidelines, and ensures consistency of application Communicates the pay and performance management program and ensures understanding by staff and administrators Regularly monitors the effectiveness of the compensation program and practices, and its continued competitiveness Managers and Supervisors Understands job responsibilities and requirements of jobs in their area of responsibility and gives clear indication of the career path for direct reports Maintains accurate and current job descriptions Develops and maintains open and trusting relationships with their staff, and with colleagues across the institution Recommends and implements performance expectations, provides clear and helpful feedback, and evaluates performance Communicates openly with their staff about compensation topics Leads by example Becomes familiar with principles of compensation and salary administration guidelines in preparation for potentially playing a larger role in salary administration The program will be maintained by: ‒ Monitoring the market on a regular basis ‒ Regular updates to the salary structure to reflect market influences ‒ Regular reviews of salaries to ensure internal equity 11 Compensation Philosophy continued COMPARISON MARKETS Job Category Type of Employer(s) Other Criteria Used Location Senior Administrators (Directors and above) For higher education specific jobs: Public and Range around private, 4-year Master’s (Large) & operating budget, Doctoral/Research institutions faculty FTE, and student FTE For cross-industry jobs: Blend of general industry and not-for-profit organizations; functionally relevant markets for jobs/job families will be used National Professionals (Independent Contributors and Managers) For higher education specific jobs: Public and Range around private, 4-year Masters (Small, Medium, Large), operating budget Doctoral, and Research-Intensive institutions Southeast region; Georgia Entry Level Exempt Non-exempt (office support, technical, trades, etc.) For cross-industry jobs: Blend of general industry and not-for-profit organizations; functionally relevant markets for jobs/job families will be used Blend of general industry and not-for-profit organizations; functionally relevant markets for jobs/job families will be used All organizations Central Georgia; Baldwin County 12 Compensation Program Development Process The development of the compensation program followed best practice within Higher Education. Understanding Job Content and Job Matching Used updated job descriptions to match GC jobs against competitive market data Based matching on job content, requirements, scope of accountability, and institutional size Matched to survey description if 70% of job content was aligned Analyzing the Market Collected national, local, higher education, and general industry data Collected 25th, 50th, and 75th percentile market data Used only quality credible sources of data Reviewed matches with HR and Vice Presidents Building the Salary Structure Developed structure with: 13 salary grades Competitive salary ranges Wide range spreads to allow for growth within a job Placed benchmarked jobs by market value and internal relationships; placed non-benchmark jobs by internal relationships Validated job assignments to grades with Vice Presidents Developing Policies Developed new policies to: Help ensure fair and consistent salary administration Establish competitive and equitable salaries Reward performance and support career growth 13 Georgia College’s Compensation Structure ($000) Salary grades overlap to allow for flexibility to pay for a range of individual skills, experience, and performance within each grade The width of the grade, often referred to as “range spread,” increases as the variation in experience, skills, and competitive pay for the jobs in the grade increases The salary grade helps maintain competitiveness with the external market and ensures internal equity among compensation for jobs and individuals at the University Grade Minimum Midpoint Maximum 13 $84.7 $116.5 $148.2 12 $67.8 $93.2 $118.6 11 $60.9 $77.7 $94.4 10 $54.1 $67.6 $81.2 9 $47.0 $58.8 $70.5 8 $40.9 $51.1 $61.4 7 $36.2 $44.4 $52.5 6 $31.5 $38.6 $45.7 5 $27.4 $33.6 $39.7 4 $23.8 $29.2 $34.5 3 $20.7 $25.4 $30.0 2 $19.3 $23.1 $27.0 1 $17.5 $21.0 $24.5 14 The New Compensation Policies Compensation policies address a variety of situations. Help Ensure Fair and Equitable Administration of Salaries Reward Performance and Support Career Growth Paying within the grade Promotion Starting salaries Transfers Annual salary increases Temporary assignments/ interim appointments FLSA Maintaining the program New compensation policies will be found on the GCHR website in June. 15 Management of Pay within the New Structure An individual’s grade, skills, experience, and performance determine the actual salary for the job. Role, Responsibilities, and Skill Requirements Grade + Knowledge, Skills, Experience, and Performance + Location in Grade = Pay Opportunity = Recommended Base Salary 16 Implementation of Compensation Program 17 Moving to the New Structure This is an entirely new program ‒ As part of the implementation, no one will get a pay decrease ‒ There is no direct relationship between current grades and new grades Employee Impact ‒ February 1st (completed): Select employees whose salaries significantly lagged the pay for their job in the external market received increases ‒ August 1st: Employees whose pay are below the grade minimum will be brought to the minimum ‒ Employees will continue to be eligible for annual merit increases as part of the compensation program 18 Implementation Details Implementation New Individual Employee Letters: Distributed June 2012 Contents include: ‒ New salary grade and range ‒ Salary adjustments (if applicable) ‒ Title changes (if applicable) Managers will distribute the individual employee letters. Following the distribution of the letters, GC HR encourages managers to have one-on-one meetings with employees to review the contents and discuss any questions 19 Re-Evaluation Schedule The table below describes key dates and actions for a job re-evaluation. Fall Semester Spring Semester Action July 1 January 6 Fully processed re-evaluation form submitted to HR August 8 February 28 Supervisor notified of the classification determination by HR August 15 March 5 Deadline to appeal classification determination September 5 April 30 Appeal decisions complete and department notified of decision October 1 July 1 Effective date for any re-evaluation 20 Manager’s Role in Implementation 21 Managers are Critical to the Program’s Success YOUR RESPONSIBILITIES AS A MANAGER/SUPERVISOR What you should know How and why the program was developed The program’s objectives and key messages Compensation policies and how to use them Understand and Support the Program Follow Compensation Policies Help Your Employees Understand the Program Compensation Policies will be available online soon What you should do Use the salary policies in consultation with Human Resources to determine appropriate hiring salaries and to manage salaries appropriately Keep job descriptions current for your employees Stay informed about the policies How you should communicate Be positive about the program Answer employees questions openly and honestly Research any questions you are uncertain about Enlist HR’s help 22 Manager Tools and Resources for Implementation Today’s presentation Employee Information Session presentation (sessions to be held June 4th and 5th) Manager script – “Do Say This, Don’t Say That” Manager FAQs – As the trainings are complete, Human Resources will compile all the questions and distribute an updated FAQ for you prior to the distribution of the employees letters Human Resources website Human Resources—call or email classcomp@gcsu.edu if you have questions 23 Manager Script Do Say This, Don’t Say That Don’t Say That Do Say This The University is using this study to find cost savings and is planning to decrease salaries Your salary will not decrease as a result of the implementation of the new program The University is using this study to get rid of jobs The new structure is based on solid, current salary market data I don’t trust the market data, I’m not sure where they got the information from Job descriptions and market matches were reviewed several times to ensure accuracy This outside consulting firm does not understand our jobs If you are receiving an adjustment, your pay is currently significantly lagging against the market and/or below the grade minimum for your job This new program makes me angry too! This program is entirely new and has no direct relationship to the old system Future salary adjustments may be made to address internal equity concerns and performance 24 Example Manager File The table below is an example of the file you will be reviewing with HR. It outlines the compensation information of your direct reports. Adjustments Based On Full-Time Equivalent (FTE) Status ($000) New Structure ($000) Department Actual Salary ($000) Grade Min Mid Max Amt Below Grade Min Amt Above Grade Max 2012 Salary (Actual Salary + Amount Below Min) Admin & Ops Division Financial Services $43.0 7 $36.2 $44.4 $52.5 $0.0 $0.0 $43.0 Administrative 2000 Emily Anderson Assistant I Admin & Ops Division Financial Services $25.5 5 $27.4 $33.6 $39.7 $1.9 $0.0 $27.4 3000 Mary Brown Payroll Manager Admin & Ops Division Financial Services $65.0 8 $40.9 $51.1 $61.4 $0.0 $3.6 $65.0 4000 Mike Taylor Accounting Clerk Admin & Ops Division Financial Services $30.5 4 $23.8 $29.2 $34.5 $0.0 $0.0 $30.5 5000 Lauren Gordon Cashier Admin & Ops Division Financial Services $20.5 1 $17.5 $21.0 $24.5 $0.0 $0.0 $20.5 $1.9 $3.6 $186.4 EE ID Name 1000 John Smith Job Title Accountant II Manager (David Hoffman) Total: Division 25 Frequently Asked Questions 26 Frequently Asked Questions Q. How many salary grades are there? A. There are thirteen broad salary ranges. This information will be available on the GCHR website in June. Q. How was I assigned to my new grade? What considerations were taken into account? A. Information related to jobs, not individuals, was obtained through current job descriptions. Information about job content, job requirements and scope of accountability was compared to the same job information from several surveys sources. The results of this process were approved by Vice Presidents. Q. I do not think that I was assigned to the right grade. What can I do? A. Every effort was made to objectively obtain relevant market data for GC jobs and to match those jobs to the survey jobs. Benchmark jobs were placed in a grade based on market value and internal relationships, while non-benchmark jobs were placed in a grade by internal relationships. The grade placement of all jobs was validated by Vice Presidents. All grade level determinations are final. 27 Frequently Asked Questions continued Q. How can I find out what grade my job is and if I will receive an increase? A. All employees will be notified of their grade and salary adjustment (if applicable) in a letter that they will receive from their managers in June. Your department head or manager will also be able to advise you of the salary grade and adjustment (if applicable) or you may contact the Human Resources Office for this information. Q. How can I progress to a higher grade or how can I increase my salary? A. Employees continue to be encouraged to apply for promotional opportunities when they occur. Qualifying for a job in a higher salary grade, which provides for a significantly broader role, will generally be recognized by a salary increase. Annual merit increases also allow employees to increase their salary while remaining in their current grade. Q. Will titles change as part of this study? A. Titles for most jobs will not change. Titles for a small group of jobs will change based on a review of the updated job descriptions and recent department re-organizations. 28 Frequently Asked Questions continued Q. Who from the University was part of the development of this program? A. The President, President’s Cabinet, Compensation Study Committee, and HR Project Team. Please see website for further details on participants of each group. Q. Will survey data for job matches be shared with incumbents? A. No, the survey data is confidential. The survey data was used, and will continue to be used appropriately by GCHR to determine market level pay for our employees. Q. How often will the market levels be reviewed? A. Human Resources will conduct regular market reviews and make adjustments to salary grade ranges as necessary. 29 Practice Exercise Please pair up with a colleague and follow the steps below: 1. Have one person be the employee and one be the manager 2. The employee will ask a question to the manager about this new compensation program 3. The manager attempts to answer the question 4. Repeat exercise for the next 10 minutes 5. At the end of the 10 minutes, share the questions and any successes or difficulty in answering the questions with the whole group. This discussion will help inform revisions to the FAQs 30 Additional Questions or Comments? 31