Topic Area: Compensation

Topic Area: Compensation

• Why are we doing a Staff Compensation Study? 

  Recruiting and retaining talented employees is essential to the University meeting its mission. To help our employees have satisfying careers, Pacific is committed to reviewing salaries and wages to ensure they are competitive and that our pay practices are fair and consistently applied.
  
  This study will allow us to determine how our wage rates compare to the external markets. The study will ultimately result in a single staff compensation system for the entire university. It will give us the data necessary to address compensation improvements over the next five years.  We anticipate completing the study in July 2017. It is important to note that the findings of this study will not result in sizable pay increases for all of our employees.  Given the timing of our budget process, we may not see an impact until 2018 for some employees

• What kind of system are we moving to? 

  We currently have a classification/compensation system in Stockton and Sacramento that is factor based (see our section on job classification under manager resources) and is loosely tied to the marketplace.  San Francisco has no classification system and just uses individual market data for its positions.  We are moving toward a blended market-based and factor-based system. The cost of labor in the relevant market primarily drives the groupings of positions and establishes the pay grades.  Ongoing maintenance of the system is factor-based with periodic reviews of the cost of labor in the marketplace.
  
  

• Which positions are included in the study? 

  All non-union staff positions will be included in the study and in the new compensation system. Teamster positions in Stockton will be surveyed to help inform compensation negotiations in future years.
  
  

• What are the goals for the study? 

  The goals for the study include:

  1. Develop a compensation philosophy
  2. Develop a University-wide strategic total compensation plan
  3. Develop one compensation system for non-union staff throughout the university consistent with our "one university" approach
  4. Conduct a market study for wages and benefits
  5. Refine the salary table
  6. Develop fair, understandable and consistently applied pay practices across the university which also comply with applicable laws
• What is a “benchmark” job? 

  Benchmark jobs are those that have a substantial portion of their work that is comparable to positions found at other higher education institutions or other organizations. These are the jobs for comparison to the market.  
  
  

• What about the non-benchmark jobs? 

  HR will slot non-benchmark jobs to the benchmarked jobs using job value factors we currently use.  Once grouped, a classification title will be assigned to that group.  Individual positions may retain their current working title for advertising, resumes, the directory etc.
  
  

• What is a classification title? 

  This is a mostly behind-the-scenes internal title of a group of position performing reasonably similar work at about the same level.  The classification title is primarily used for internal tracking, external reporting purposes and compliance.  Classification titles often are not descriptive of each position within that classification.  That is why working titles make sense to use. The How and Why of Classification Titles in a Compensation System
  
  

• What is a working title? 

  A working title is the current most familiar working title.  It is used for identifying the role and relative placement of a position within a division or the University.  Working titles have no bearing on classification or compensation decisions.
  
  

• What is meant by compensation? 

  Compensation refers to the monetary rewards earned by workers.  Many people think of compensation as salaries or hourly wages but it truly encompasses the fringe benefit package including health benefits, retirement benefits, paid time off, the employer's contribution to taxes and much more.
  
  

• Will this compensation study factor in non-salary benefits? 

  We are surveying fringe benefits to give us an opportunity to evaluate our total compensation package.   Considering non-salary benefits like retirement, health benefits, leave accruals and tuition benefits does play a role in the University's decision on how close to "market" we want to be with our wage rates.  
  
  

• To which business or universities do we compare our salaries during the compensation study? 

  Labor markets vary by level of position. In short, the breakdown is as follows:
  
  Higher-level administrators (not VP's and up)

  »  Higher Education (National): A national comparison market group of peer higher education institutions with similar organizational attributes that are sourced nationally

  »  General Industry (National): A national market of organizations of comparable size from all industries

  Directors and Senior Professionals; Mid-Level Professionals and Management; Entry-Level Exempt Positions

  »  Higher Education (National): A national comparison market group of peer higher education institutions with similar organizational attributes that are sourced nationally

  »  General Industry (Regional): A regional market (i.e., West Coast) of organizations from all industries

  Non-exempt Staff

  »  Higher Education (National): A national comparison market group of peer higher education institutions with similar organizational attributes that are sourced nationally but adjusted for local cost of labor

  »  General Industry (Local): A local market of all organizations  

  The identified schools for the higher education market are relatively closely matched to us primarily by budget size and enrollment.  We use published, credible salary surveys to gather market data. 

• What could happen if jobs are found to be below market or above market? 

  Very Important Point - the market data is aggregated and a trend line is applied to the data to smooth the progression (midpoint of the salary range) from one grade to the next.  This is a fancy way of saying that a single job's relationship to the market (either above or below) is not the final deciding factor for the pay range of that position.  
  
  

• Will I be reclassified or get more money? 

  Classification titles will be assigned to the new groupings of positions.  These groupings will be placed in a particular "pay grade" similar to what we now have for Stockton and Sacramento.  That grade will have a pay range determined by the Cabinet. 
  
  Individual incumbents will not have their pay changed because of this system update unless their pay rates are below the new minimums of the pay grade.  Do not anticipate major compensation changes in 2017 because of this study.

  A key benefit of this project is that we will have the data necessary to address compensation-related issues and develop a long-term compensation plan consistent with our compensation philosophy.

• Will my pay go down? 

  No.  If an employee's salary is below the minimum of the new range, it may be increased to the minimum immediately.  This is an open decision point right now.  It will be determined prior to implementation.
  
  

• What if my pay is above the maximum of a pay grade? 

  Leadership will discuss this in July.  No decision has been made yet other than salaries will not be reduced.
  
  

• What is salary compression? 

  Salary compression occurs in a number of ways.  One common cause is a new employee earning close to or more than a long-term employee doing similar work, or an employee making close to what their supervisor makes.  Another cause is not having the funding to move employees through a salary range or the salary range changing at about the same rate the employees move through it.  This causes the same situation described above.
  
  There are a number of solutions to salary compression.  These studies will point these out to us.  Please know that they do matter because these are the most common "internal equity" problems.  It is likely that the University will have multiple issues to address with limited compensation dollars so we will have to prioritize the fixes. 

• Will the salary range for my position change due to this study? 

  Very likely yes.   Nobody will see a pay reduction because of this study.  Later in the process, university leadership will discuss what to do if an individual's salary is below the minimum of the new range or above the maximum.  
  
  

• What is a compensation philosophy? 

  A compensation philosophy is simply a formal statement documenting the company's position about employee compensation.  It documents pay strategy and essentially explains the "why" behind employee pay.  It can also create a framework for consistency. A well-designed compensation philosophy supports the organization's strategic plan and initiatives, business goals, competitive outlook, operating objectives, and compensation and total reward strategies.