Final Report of the Joint Committee

to Design a Professional Salary System

February, 1996

CONTENTS

INTRODUCTION AND COMMITTEE RECOMMENDATIONS

The Joint Committee recommends that the job evaluation system described herein be thoroughly reviewed and discussed by the University community, including employees in the bargaining unit, supervisors of these positions, human resource staff, and managers/administrators. This thorough review is necessary to ensure that the system is well understood and to assess its effectiveness in evaluating the broad range of professional positions in the bargaining unit.

The Joint Committee has reviewed the results of applying the job evaluation system to approximately 350 unit positions. Based on our knowledge of the positions, we are reasonably confident that the system results in appropriate salary range relationships among positions. A review by the wider University community may increase our confidence in this system and may also raise questions which lead to modifications or fine tuning of the system.

The Committee believes that the system provides a much needed tool for comparing jobs and represents a major step forward in basing salary levels on job responsibilities and requirements. The presence of a job evaluation system will assist managers in determining appropriate salary ranges for new or changed positions. Further, a job evaluation system will help ensure that salary relationships are equitable and are perceived as equitable. For these reasons the Joint Committee recommends that the professional salary system be adopted. Once a salary system is implemented, it will evolve and become an even stronger tool as the University gains experience in the use of this compensation model.

I. BACKGROUND

The Committee's charge was delineated in Article 7, Sections A.2 through A.7, of the collective bargaining agreement between the University and UMPSA: "The Joint Committee established to study salaries of unit members and persons in titles leading to inclusion in the unit shall continue its work. The Committee shall select a consultant who will work with the Committee to design a point-factor system consistent with criteria established by the Joint Committee and to evaluate all positions in the bargaining unit on that system."

The Committee was also charged with issuing a final report, including the estimated cost of implementing the recommended point-factor job evaluation system. Under the provisions of the Agreement either party may request negotiations regarding implementation of the Committee's recommendations.

The Problem

The University and UMPSA agree that salaries should be determined by job responsibilities, value of the position in the hiring market within which the University recruits, credentials required for the position, and length of service. The lack of a consistent manner of determining salaries results in uncertainty about whether there are gender inequities and/or inequities between campuses. There is also a concern that salaries are influenced unduly by the department's relative wealth or the department's influence on campus decision makers. In addition, the current method of using internal and external comparisons to establish an appropriate salary is very time consuming and results in only an approximate comparison of positions. The University needs a way to compare dissimilar jobs based on consistent job-related criteria and to incorporate information from the external market.

Previous Joint Committee Work

Based on the work of that group the parties agreed in 1987 to hire a consultant organization to "research and recommend one or more alternative methods of determining salaries of professional unit members." Specifically, the consultant could identify salary inequities and market factors which affected salaries. Any resulting system to establish salaries based on skills, abilities, and responsibilities would be subject to negotiation.

The Committee selected Hubbard and Revo-Cohen, Inc. of Reston, Virginia to conduct a "policy capturing" study. As the final report of Hubbard and Revo-Cohen explained "The purpose of a policy-capturing study is to determine, through a rigorous statistical analysis, the implicit compensation policy in effect in a given organization. The usefulness of this type of study lies in the resulting compensation model, which reveals which demographic and job content characteristics are rewarded (through compensation) in actual practice." (Final Report, September 27, 1988, page 1)

The major findings of the study were:

1. The three primary predictors of pay for UMPSA bargaining unit positions were education, experience required, and longevity. Job content factors, on the other hand, were sometimes significant predictors of pay, but typically accounted for much less when compared to the three primary predictors.

2. Some job-content characteristics were negatively related to pay. These included physical demands, supervising students or volunteers, and working on call.

3. Age was positively related to pay. This was not unexpected and occurs in most organizations.

4. Females were on average paid less than males, even when job content was held constant. At the University of Maine there was an interaction between gender and experience, meaning that women received less benefit (in salary) for additional experience than men did.

5. The unique effect of the campus of employment accounted for only about 1% of the variation in salaries. This means that most variation can be explained by job content or demographic variables, rather than by the campus.

In February 1989 the parties agreed that the Committee should continue its work. The Committee issued a progress report which identified characteristics essential to a salary system for the bargaining unit. Such a salary system should:

1. result in salaries that are internally equitable and are perceived as equitable;

2. have a mechanism to incorporate market factors;

3. be capable of evaluating an array of diverse jobs;

4. be capable of evaluating professional work;

5. be more flexible than the wageband and step system used for University classified employees;

6. maintain some autonomy of campuses or units of the system;

7. be well documented, including accurate job descriptions and pay policies;

8. keep additional paperwork to the minimum necessary.

The Committee also identified several universities which members believed had well accepted salary systems and studied those systems further.

The Current Project

The Committee issued a request for proposals in May 1990. Proposals were invited and received from four firms. Based on the proposals and presentations to the Committee, the Wyatt Company was selected.

(The Wyatt Company has since become Watson Wyatt Worldwide. For this report the firm is referred to as Wyatt.)

Wyatt is an international consulting firm with a regional office in Wellesley Hills, Massachusetts. The scope of work in Wyatt's proposal included:

1. selecting compensable factors;

2. gathering information about all positions in the unit;

3. incorporating market salary information about selected benchmark jobs;

4. developing a software system to determine an appropriate point value which is then used to assign each job to a salary range;

5. obtaining information for accurate, complete job descriptions.

Wyatt's involvement in the project began in the fall of 1990. The project experienced delays due to its scope and other demands on Committee members who were expected to complete several large tasks including design, field testing, administration and review of the results of a survey of all unit members. In particular, the job evaluation process using Wyatt's software (WyCOMP^TM) was considerably more time intensive than anticipated. In light of staff reductions at several campuses it became impossible for Committee members to devote the time necessary to complete the study within the original schedule. Therefore, during the summer of 1994, the Committee reluctantly decided to reduce the scope of work in order to complete the project. Consequently, this report is based on evaluation of a representative sample of the jobs in the UMPSA unit.

II. PROJECT DESIGN OVERVIEW

Taskforce Organization

Communications - communicate the Committee's activities to the University community and facilitate communication between task forces and within the full Committee;

Benchmark - select benchmark positions (a sample of bargaining unit positions representing the diversity of positions in the unit) and review salaries for similar positions outside the University;

Questionnaire/Job Description Design - design the questionnaire and the format for job descriptions;

Questionnaire Completion - design and oversee the process of completing questionnaires by unit members and supervisors and resolve differences in responses between employees and supervisors;

Statistical - review the consultants' statistical work and conduct a detailed review of benchmark questionnaires where responses appeared to be inconsistent with the answers expected;

Administrative - develop and recommend policies and procedures for administering the salary system.

Each task force was composed of an equal number of UMPSA and University representatives. Each Committee member served on several task forces. A list of task force members is included in Appendix 2.

Questionnaire To Collect Job Content Information

The final questionnaire had two sections. Part 1 was a narrative section that generated information about a position's general purpose and responsibilities. Part 2 was a closed-end section to collect information on specific "compensable factors," characteristics of the position which are used to predict its value in the statistical model (see Section III for further discussion of compensable factors, as well as overall questionnaire design and administration).

Initial drafts of the questionnaire were designed by the Questionnaire Design Task Force and reviewed by the full Committee. Focus groups were then held at each campus so that employees could review the questionnaire for clarity, ease of completion and relevancy to their positions. Over one hundred employees participated in these sessions. Initial focus group results indicated that 73% of employees felt that the questionnaire described 70% or more of their jobs. Based upon this feedback, the questionnaire was redrafted and finalized.

Benchmark Positions

The selected benchmark positions represent all campuses, varying levels of supervision and salary, and different job families (see Section IV). It was important that benchmarks represent the diversity of positions in the unit. With close to 900 professional position titles, approximately 167 positions were selected as benchmarks. Some of those were later removed because of difficulties in interpreting questionnaire responses. The final statistical model was built using 154 benchmarks.

Wyatt used twelve salary surveys to conduct a market analysis of benchmark positions. The selected surveys included both regional and national data from higher education and other markets. Task Force members reviewed job descriptions in the surveys to determine whether the positions were similar enough to the benchmarks to make meaningful comparisons. Two values were then established for each benchmark position. The first was the "internal" value - the salary of the University employee currently in that position. The second was the "external" value - the average salary for that position in the market.

The next step in the design of the salary system was to establish a ranking structure that could be used to convert salaries and survey rates into an arithmetic scale. Market values adjusted to reflect apparent University pay practices (see below) were used for positions that could be matched to market data; internal values were used for the positions for which market data did not exist. Using these values, the positions were ordered in a benchmark hierarchy.

Benchmark Positions and the Market

The survey sources were mixed but, per Wyatt, not unlike the sources used by other academic clients. Wyatt advised the Committee the benchmark sample was 15% off (below) market. Wyatt advised this figure should be used only with the understanding that different market comparison groups are used for different benchmark positions. That is, the comparison group may be national, and/or educational [specific to local, regional, or national] and/or cross industry.

The 15% below market figure is for the benchmark positions overall. Individual positions and job families ranged from above the Estimated Market Value to more than 15% below. This figure can be used only as a general indicator of the market position for University professional positions at that point in time.

The committee notes, as a comparison of this figure to faculty salaries, that UMS fiscal year 1995 salaries for full time instructional faculty at all UMS campus, reported to the AAUP for their annual survey of faculty compensation, was $42,647. With the 4% retroactive increase to July of 1994 salaries the average was aged to $44,353. The AAUP published data in the September 1, 1995 Chronicle of Higher Education Almanac indicating the average salary for full time faculty in all public institutions except those without academic ranks was $49,050. This figure represents data from 2,227 institutions and is adjusted to a standard nine-month work year. The average salary of UMS full time faculty is 10.6% below the AAUP national average.

The University has not articulated a specific market strategy for professional positions. Should salaries roughly equal a national or regional median or a specified percentage of the median? Should comparisons be primarily to higher education or to public sector employees? What should be the process in determining this strategy? The University needs to address this issue.

Statistical Model for Evaluating Jobs

The statistical model, or equation, developed by Wyatt was based on questionnaire data and the hierarchy ranking of benchmark jobs. By using the equation, a value can be assigned to a position based on the characteristics of the job (as determined by questionnaire responses). The statistical model for evaluating jobs is described in Section VI.

Software For Evaluation of Non-Benchmark Positions

The Joint Committee initially anticipated that once the software was developed, Committee members would then evaluate all non-benchmark positions. The evaluation process is facilitated by the software but still requires a review of each questionnaire by someone familiar with the model. The software prompts a review of responses which seem inconsistent with other responses or with responses of employees in similar positions. This effort required much more time than was originally anticipated. Consequently, the Committee decided to evaluate approximately 400 positions, including the benchmarks. The consultant concurred that this was an adequate number on which to base an assessment of the model.

Administrative Procedures

Cost of Implementation

III. QUESTIONNAIRE DESIGN AND ADMINISTRATION

A factor approach to job evaluation has several advantages: the selection of a variety of factors allows accurate job evaluation of the full range of UMPSA unit positions; the flexibility exists to select factors appropriate to University professional jobs; a mathematical model can be developed using the factor approach that limits subjectivity in setting salaries. The factors used in this project are further described in Section VI.

After a lengthy process of testing a draft job questionnaire with focus groups of employees and supervisors at all campuses, the Questionnaire Design Task Force developed the final Job Description and Questionnaire For Professional Jobs (Appendix 3). In November of 1990, all employees in professional unit positions were invited to attend special campus meetings where they received a questionnaire, instructions for completing the questionnaire ( Appendix 4) and information about the job evaluation process. Direct supervisors of employees in the UMPSA unit were also invited to attend. Over forty meetings were conducted across the University system during November and December. All employees who did not attend a meeting were mailed a questionnaire packet.

Employees were responsible for completing the questionnaire in draft format and then forwarding it to their supervisor for review. In those instances where the supervisor would have suggested a different response, the supervisor noted the discrepancy on a separate response sheet. The employee and the supervisor were encouraged to meet and, when possible, agree on each response.

As questionnaires were returned, the Questionnaire Completion Task Force reviewed responses where there still was disagreement between the supervisor and the employee. Using the job description information and, when necessary, consulting with the supervisor and/or employee, a final response was prepared.

The climate of fiscal uncertainty at the time the questionnaires were distributed may have affected the completion rate. Questionnaires were mailed just before the first of several de-appropriations. Employees were concerned about the future of their positions and the impact of budget cuts. The final questionnaire completion rate was 97 percent.

IV. JOB FAMILIES

In addition to the position title and department, the Committee needed a way to quickly and objectively distinguish among positions falling into various functional areas. It was also important to have a method to compare related jobs across the campuses.

The Questionnaire Completion Task Force reviewed professional positions and identified groupings, or "job families" that combined positions with similar objectives. The job family may reflect either the nature of the work performed or the constituent group served. The actual level and scope of position responsibilities may vary significantly within any job family.

Positions are assigned to a job family based primarily on duties, not title or department. When a position falls into more than one job family, it is assigned where the preponderance of duties fall. If there is still doubt about proper placement based on duties, an effort is made to group positions reporting to the same vice president or director.

By using job families, the Committee made sure that the benchmark group included a representative sample of professional jobs. The ability to quickly identify related positions also helps identify possible opportunities for career advancement.

A brief description of each job family appears in Appendix 5. The job families have been identified as:

V. JOB DESCRIPTIONS

Job descriptions for professional employees, except at the University of Southern Maine, are developed by the hiring department. They often lack information about specific duties and expectations. Consequently, it is very difficult to use existing job descriptions to evaluate jobs on different factors. The recommended job evaluation system will produce detailed job descriptions that are integral to the maintenance of a professional salary system.

The job questionnaire developed for this project requested a brief statement of the position's primary function and a listing of duties. Employees submitted either a formal job description or a written explanation to clarify their answers to questionnaire responses. These job descriptions may not have been reviewed or approved beyond the employee's department or division. The Committee recognizes that these job descriptions need further review and possible modification.

The recommended job evaluation system has the capability to combine specific duties on job descriptions with statements generated from questionnaire responses. For instance, the response to Question 7 ("How available is the information needed to complete assignments and/or solve problems in your job?") might appear in a job description as "Information needed to complete assignments and/or solve problems is incomplete and additional information is difficult to find." A response to Question 25 ("What is your job's requirement for carrying out and/or developing policy, methods and procedures?") might be stated "Employee explains established policies, methods and procedures to others."

The Americans with Disabilities Act (ADA) requires employers to identify essential and marginal job functions. Essential functions of the job are the fundamental duties that the employee must be able to perform, with or without reasonable accommodations. The job descriptions generated by WyCOMP do not distinguish between essential and marginal functions. This will have to be done separately.

A sample position description and computerized job description statements for questionnaire responses appear in Appendix 14.

VI. STATISTICAL MODEL

Developing a Hierarchy

In addition to carefully reviewing the way in which market data affected the hierarchy, the Statistical Task Force scrutinized questionnaire data to determine if responses accurately reflected position characteristics and questions were interpreted consistently by employees and supervisors. Most disagreements between employee and supervisor were resolved before the questionnaire was returned. The few remaining disagreements were resolved by task force members, when necessary calling the respondents directly.

The Statistical Task Force reviewed graphic plots and listings of responses for questionnaires of employees holding benchmark jobs. Specific questionnaire responses which fell outside the identifiable trend (i.e., differed markedly from others in the same job family or at a similar level of responsibility) were identified and investigated.

Regression Analysis

The final statistical model explains 60% of the variation in salaries (R2 = .60). The standard error is 110, which means that, on average, the difference between a position's value based on the hierarchy and its value based on questionnaire data differ by 110 points. The correlation between the market line and the regression line is .77. According to Wyatt, these results are acceptable but not as strong as some other models have achieved. The weaker statistical results in our model may reflect a lack of good market matches for some positions, as well as the different values attributed to the same job by various campuses and departments.

During the process of refining the statistical model a number of questions on the original questionnaire were not used. A specific question would be eliminated for one or more of several reasons: it did not significantly contribute to explaining the differences among unit positions; employees and supervisors seemed to have interpreted the question differently; the response appeared to reflect the manner in which the employee did the job, rather than underlying job characteristics.

Several positions were dropped as benchmarks (and later evaluated as non-benchmarks) because they did not fit the model well; either they were poorly placed in the hierarchy, there were problems with the responses, or the characteristics of the position were not measured well by the market or the questionnaire.

Identifying Factors

It is important to remember that the weights used in the model are determined statistically. They do not reflect judgements about how much a question or factor should contribute to the point value and resulting salary range. The weights are those which most accurately predict the market hierarchy, i.e. the way in which these positions are valued in the hiring market. Furthermore, relationships among questions and factors affect the weights. The weight of each question and factor in the full model is not a reflection of the importance of that item standing alone.

The job evaluation program is supported using Wyatt's WyCOMP software. WyCOMP is a PC-based package which integrates market data, salary structure design, salary planning and job evaluation. Once the University of Maine System model was loaded into WyCOMP, questionnaire responses for the non-benchmark positions were entered into the data base and the point value for each position was determined.

WyCOMP software guides the job evaluation process by identifying responses which are inconsistent with general response patterns. The evaluator is easily able to check the job description and make comparisons with other positions in the same job family.

VII. SALARY STRUCTURE

Overview

The WyCOMP software was designed to generate a point value for each position rather than a market currency value for the job. Using points rather than salary allows the salary structure dollar amounts to be adjusted as market conditions change while point values remain constant. This should result in a model that can be maintained most efficiently while still being sensitive to changes in the market.

The point value generated from the job evaluation process places a job within one of several salary grades, each with an associated minimum, midpoint, and maximum salary assigned to the grade. The point value determines the salary grade, but does NOT determine the salary directly. The actual salary within the grade for the job is determined at the campus using criteria such as the employee's qualifications and experience, the responsibilities of the position relative to other positions within the same grade, employee performance level, external market factors, and internal equity.

Point Value vs. Estimated Market Value

The relationship of point value to currency value was set by Wyatt as follows: 100 points is equivalent to $10,000; for each additional 100 points, the MMV increases by 10%. This is illustrated in the following table:

The point factor weights were then calculated in such a way as to result in a point value for each position that was related as closely as possible to the MMV for the job using these relationships.

The complete dependent variable structure used to create the statistical model built into the WyCOMP software is listed in Appendix 7.

Developing The Salary Structure

The Wyatt Company recommended and the Task Force accepted a 50% range spread. This 50% spread was based on survey data Wyatt obtained at the time from a comprehensive salary budget survey with over 2,000 participants. Fifty percent was the prevailing range spread.

The dollar amounts to be assigned to the minimum and maximum of a grade are based on the midpoint. The minimum is the midpoint divided by 1.25. The maximum is the midpoint plus the difference between the midpoint and minimum (maximum = midpoint + [midpoint - minimum]). This results in a grade in which the range spread is exactly 50% of the minimum salary for the grade.

Wyatt then used the benchmark data to present the Administrative Task Force with two alternative salary structures, using 7% and 10% midpoint progressions, respectively. Both options used 50% range spreads. The benchmark positions were arrayed by point values to see where the jobs fell under each option. The distribution of benchmarks by sex and campus for each option were also displayed.

The Final Product

Estimated market values (EMV rather than MMV), current as of January, 1991, were then used to assign preliminary minimum, midpoint, and maximum salaries to each grade.

The Wyatt Company strongly recommended that we not alter the form of the salary structure. The 50% range width is commonly established for professional jobs and is needed to reflect a variety of local pay differences. The salary structure was designed on regional and national data. The wider range reflected differences in local market rates. Wyatt suggested that if further control of the salary range is needed, practices such as target pay zones within the range might be created based upon established criteria such as seniority, performance, or other factors.

The number of grades, the salary spread within grades, and the minimum and maximum salaries for each grade may change over time. Such changes, for example, may be made to accommodate new market data about existing or newly created unit positions. Wyatt recommended a competitive analysis of salary ranges be done every 2-3 years.

The Administrative Task Force and the full Committee carefully considered the possibility of having salary range differentials between campuses. Those favoring such differentials cited differences among the campuses in missions and salary setting practices, as well as considerable differences in the hiring and cost of living markets within which each campus operates.

Wyatt advised the Committee that local geographic differentials were not typically used in professional salary structures (although differentials were used sometimes in entry level jobs). The Administrative Task Force determined that the campuses usually recruited statewide or nationally. Campus differences in position responsibilities such as decision making autonomy, reporting relationships, budget size, and variety of duties (specialists versus generalists) are already built into the job evaluation model. The Committee has not recommended the incorporation of differentials in the salary structure.

The Administrative Task Force also discussed the procedure for determining an individual employee's salary within a salary grade. This decision will be made at the campus using criteria such as the employee's qualifications and experience, the responsibilities of this position relative to other positions within the same grade, external market factors, and internal (inter and intra campus) equity.

It is important to note that the dollar amounts to be assigned to each grade must be finalized before implementation. The initial salary structure uses salary data from 1990 and earlier that was aged to early 1991. Wyatt strongly urges that a market review be conducted, and the salary ranges updated to reflect 1995/96 salary rates.

The salary structure recommended by the Joint Salary Study Committee appears in Appendix 7.

VIII. NON-BENCHMARK EVALUATION

Training Evaluators

The job evaluation process was also much more time consuming than Committee members and consultants had anticipated. In order to move the project forward it was necessary to reduce the scope of this activity. The Committee concluded that it was not necessary to have all positions evaluated in order to judge how well the model worked.

Committee pairs were trained by Wyatt to use WyCOMP software. Pairs received a Software Users Guide describing the evaluation process, and Questionnaire Interpretation Guidelines developed by the Statistical Task Force. The Guidelines described the intended interpretation of questions which were not interpreted consistently by employees. In addition to the technical training about how to use the software, all pairs evaluated certain jobs to assure that decisions were made properly and consistently by all teams. The Questionnaire Interpretation Guidelines are noted in Appendix 10.

Seven pairs of Committee members were assigned to evaluate unit positions by campus. Three pairs concentrated on jobs at the University of Maine. Two pairs worked on USM positions. One pair evaluated jobs at the Augusta and Farmington campuses. The last pair took the assigned jobs from Fort Kent, Presque Isle, Machias, and the System Office. (The Education Network of Maine was not a separate entity at the time data were collected. Positions which were at that time assigned to the University of Maine at Augusta (UMA) were evaluated as part of UMA.)

Job Evaluation Process

Next, the evaluator reviews the questions which are most objective, i.e. the "verifiable" data. Examples include minimum education and experience required, license or certification required, and number of employees supervised. These items can usually be verified from the job description, the evaluator's own knowledge, or consultation with the employee or supervisor.

WyCOMP uses responses to these verifiable questions to flag other responses that should be reviewed (the flagging feature is called the "Electronic Devil's Advocate" or EDA). Consequently, it is essential that verifiable items are reviewed first. If any changes are made to these items, the software recalculates the position's point value before proceeding.

The WyCOMP Software Users' Guide describes the EDA and its use as follows:

The EDA is a series of checking equations that highlight "suspect" questionnaire responses. By using the benchmark jobs' questionnaire data, equations were developed which will estimate certain questionnaire responses based upon the response to questions used in the EDA. These questions are usually quantitative in nature, or likely to be verifiable.

Having identified those responses which have been flagged as Hi or Lo by the EDA, the user can go back into the questionnaire screens and review the raw data for the unusual responses. If it is apparent that inappropriate responses exist, correct them. Once you have done this for each highlighted response, recalculate the job grade to see what the effect was, and then return to the EDA screen to check if any responses are still flagged.

It is important to remember that the EDA is only a checking mechanism prompting you to review the questionnaire responses for accuracy, Even if a questionnaire response has been "flagged" as Hi or Lo, this does not necessarily mean that the data is inaccurate. In this instance, the EDA is prompting you that the response is atypical of the benchmark sample. If there is a reasonable explanation as to why a response is out of the range of expected responses, then it is entirely appropriate to leave the response as is.

Appendix 8 lists both benchmark and non-benchmark jobs evaluated by campus, job family, and gender.

IX. SALARY ADMINISTRATION

Procedures have been developed for the following areas: development of the position description; evaluation of the job; determination of the appropriate salary grade for the job; placement of the job at a specific salary within the grade; and annual review of the position description. If there have been significant changes in duties, the process is repeated with a new evaluation of the job through the completion of the Questionnaire for Professional Jobs.

These procedures cover new hires and transfers, both voluntary and involuntary. Reclassification procedures when duties have been added or deleted to a position are discussed. Treatment of stipends is also included, as are policies for software and database access and maintenance.

The administrative procedures delineate policies for salary administration and the determination of individual salaries within a salary range. Employee salaries placed near the minimum usually reflect employees new to the position or the University, who meet minimum qualifications but may not have preferred qualifications. Employee salaries near the middle of the range usually reflect employees who have mastered the basic intent of the job and are performing the duties of the job at a satisfactory level. Employee salaries placed near the maximum indicate long term or highly experienced employees who perform the duties of the job at a consistently high performance level.

The Committee recommends that the University and UMPSA establish a joint committee to periodically review the salary program. The Committee should meet at least annually. Salary ranges should be reviewed annually and the entire program should be reviewed every five to ten years, or at that time when the system does not produce totally credible results, or when there is significant change in work design (e.g., team based work structures), or the University pay philosophy substantially changes.

X. RESULTS OF THE MODEL

Distribution of Positions by Salary Grade

Distribution by Job Family

This table shows that for all job families except Child Care and Life Sciences, positions are distributed across the salary grades. All Child Care positions are in grade 3 or 4, and 83% of the Life Sciences Research positions are in grade 3 or 4. Looking at the job families other than Child Care, Life Sciences Research, and Research Other (which contains only one position), the percentage of positions in the first four salary grades (the lower half of the grades) varies from 14% to 83%.

Distribution of Grades by Campus

The distribution of job grades across campuses is summarized below. The full table appears in Appendix 12.

When the smaller campuses are combined the percentage distribution is as follows:

Distribution of Positions by Gender of Incumbent Employee

The Committee recognizes that the percent of positions within a grade by gender, as shown below, could be an area of concern because of the higher percentage of males in the higher level grades. However, the Committee also notes that the data for this model (353 employees) is 1991 data. Substantial turnover has occurred since 1991, and salaries of continuing incumbents have changed, so that data for the unit as it exists in 1995 might be quite different. A problem may exist and the Committee recommends careful monitoring of these statistics (after implementation) to appropriately address any problem identified.

The distribution by gender of the incumbent employee is summarized below. The full table is in Appendix 13.

Progressions Within Job Families

The Committee reviewed the distribution of positions within job families. The factors cited above made it difficult to assess whether the model works well in differentiating jobs with different levels of responsibility within a job family. There are instances where jobs with somewhat different levels of responsibility are assigned to the same salary grade. This is expected, since each salary grade represents a range of point values.

Further review of salary grades for job progressions will be an important aspect of the review of this project by unit members, supervisors, and University administrators.

XI. IMPLEMENTATION PROCESS

In reviewing the results of the model, all parties need to look at results by job family and campus and at progressions within job family. The Committee has reviewed the results, but a full review requires the input of those who know the most about each job. At the same time, all those involved in the review will need to bear in mind that the data reflects positions as they were in 1990 or early 1991 when the questionnaires were completed. The review is intended to determine whether the model is an effective tool for evaluating positions, not whether the results for any individual job are appropriate as the job now exists.

The charge of the Joint Committee was to design a system and to make recommendations to the University and UMPSA. Those recommendations are subject to negotiation between UMPSA and the University. Following the review described above, the parties will need to initiate such negotiations.

If the negotiations result in adopting the job evaluation system, there is much work to be done for the initial implementation and for ongoing operation of the system. The system can be implemented only if there is adequate funding for any resulting changes in salaries and for operating the system in the future. Costs of implementation are discussed in Section XII.

Perhaps the largest task to be undertaken is the collection of current job information about all positions in the bargaining unit and evaluation of all positions using WYCOMP. Because the position information was collected in 1990 and 1991, we know that much of it is no longer accurate. This has been a period of great change within the University due to funding cuts and the associated downsizing. There has been significant turnover in the unit since 1991. Approximately 54% of the current unit members have been hired by the University since January 1991. Even had there not been significant turnover, this project evaluated only 353 positions. The bargaining unit currently encompasses over 900 positions.

Each employee will need to complete a questionnaire, each employee's supervisor will need to review the questionnaire, and staff trained to use the software will need to devote approximately one hour per job to complete the evaluation. In addition to the enormous amount of staff time this effort will require, there will be costs associated with printing questionnaires and data entry.

Before the current information is collected, the questionnaire needs to be reviewed. Some items need to be clarified, based on questions and responses to the questionnaire process. Some items may be deleted from the questionnaire because they are not used in the statistical model. Or, as an alternative, some questionnaire items may not be used in the model but may be included in the questionnaire and be useful for other purposes (e.g., job descriptions).

Job descriptions will need to be developed or revised and approved. There are currently job descriptions for most unit positions, but there is not a consistent format across the System. The WYCOMP system assists in formatting job descriptions, but the listing of responsibilities for each position will be done by employees and supervisors and approved by campus administrators. The resulting job descriptions will be extremely valuable for other personnel processes such as performance appraisal, recruiting, professional development, and consideration of reasonable accommodations.

Once the salary system is in place, it will need to be maintained. There will be a need for periodic collection of market data, revisions to the questionnaire, review of the salary structure, and the ongoing work of evaluating jobs -- both new and changed positions. The maintenance of the system is discussed in the Administrative Procedures and in Section XII, Costing.

XII. COSTING

Part A

Minimum WYCOMP/MULTICOMP performance needs an IBM PC AT (e.g., 80286 based computer) with DOS 3.1 or later version; 550K bytes of free memory ( the amount of memory available after DOS and any other resident programs are loaded); high performance (laser preferable) printer capable of printing 158 columns in the compressed mode; EGA/VGA display adapter and a quality monitor (color preferred); and 5-10 megabytes of disk storage for program files.

No campus reported not having the necessary hardware to support WYCOMP/MULTICOMP. UMM needs to increase RAM to 8 MB at a cost of approximately $200.

SUB-TOTAL $200

The Wyatt Company advised that as of 9/95 customer customized training costs for WYCOMP/MULTICOMP operation was $200 per hour for one consultant and $350 per hour for 2 consultants.

8 people trained in Boston at Wyatt during a two day period (Travel by University automobiles)

[Note: If Wyatt can provide training at our campus location, this subtotal may decrease]

Training Costs $2,800 per day for 2 days $5,600

Housing/ meals for two days/ one night for 8 participants $1,040

Mileage for two vehicles $ 250

SUB-TOTAL $6,890

1500 questionnaires (materials, production) - $2,100 to produce questionnaires from our camera ready original.

Telephone technical support from Wyatt - $1,125 for one year

Staff to coordinate by campus the updated questionnaire completion, and evaluation of UMPSA jobs:

2 Professional Project Coordinators for up to one year duration @ $ 25,000 base salary plus 20% benefits add on $60,000

2 classified support personnel for data entry and clerical support @ $9 per hour (plus 20% benefits add on) full time for up to one year duration $45,000

Travel to the campuses by the above to implement the program - $4,000

Cost of market survey data to update the current WyCOMP market data base. This would involve visits by University personnel to the Boston Wyatt library to access and retrieve market data resources.

$ 1,500 per year

SUB-TOTAL $113,725

Telephone technical support for WYCOMP from Wyatt $1,125 per year

Market data revisions from Wyatt $ 750 per year

(market revisions every second year)

Note: The question of need for additional staff to maintain the program was not resolved by the committee. No dollar amount was entered in the costing figures. This job evaluation program represents a major new function for campus and system human resource departments. Adequate staff time to administer the program is critical to maintaining the integrity of the system. Costs of implementing and administering the system are an investment in managing compensation for a large group of employees.

SUB-TOTAL $1,875 per year

Sub-total II = $ 6,890

Sub-total III = $113,725

Sub-total IV = $ 1,875

TOTAL $122,690 for Part A costing

Part B

For estimating the costs of placing current employees in the salary grades the Committee used the following methodology. All salary data used in the alternative calculations were full time fiscal year equivalents for each Unit employee. The salaries for the grades are based on the dollar amounts assigned to grades in the 7% progression model. These dollar amounts may change if new market data is incorporated and/or if UMS establishes a targeted pay strategy. The 353 jobs which were evaluated in the study were first placed in the salary grade as determined under each alternative. The salary costs were then increased to include the costs of employee benefits which are related directly to salary (Social Security, retirement, long term disability, and life insurance). The Committee calculates the average benefit add on to the salary base to be approximately 19%. This salary cost including benefits was then was aged to September 1995 salaries. (This aging represents changes in University salaries since 1991. The Committee notes that the actual external job market may have increased 4% per year in this period.) The aging process consisted of multiplying the salary figure by 3.5% (representing the 3.5% across-the-board increase which was effective July 1, 1992) and then that product by 4.0% (reflecting the increase which was effective July 1, 1994). Finally this product was multiplied by 2.6855 (the multiplier computed from the ratio of 353 sampled evaluated positions in 1991 to the 948 positions in the unit as of September 1, 1995.

Alternative 1

This alternative would be positive as the costs would be spread out after implementation and would likely be part of the overall cost of University operations. The costs of implementation might be on the hiring department rather than coming from funding from central sources. However, this alternative might create inequities that the departments could not address only through internal funding. This alternative might have an adverse impact on morale and employee relations, because it would create a dual system of compensation based on current salaries for current Unit members and the newly implemented system salary slotting for new hires.

Alternative 2A

Alternative number 2A would bring all current Unit members to the minimum of their appropriate salary grade. Employees already above the minimum of their appropriate grade would remain at their current salary. The total salary base cost for this alternative, for 353 unit member evaluated jobs, in 1991 salary dollars was $629,307. This converts to $748,300 with the benefits add on. When this figure is aged to September 1995 salaries, the resulting amount is $809,900. When this product was multiplied by 2.6855 to reflect the full unit, the total approximate cost for the bring to minimum alternative is $2.2 million.

Alternative 2B

These bring to minimum alternatives (2A and 2B) would be positive in that all affected Unit members would be brought to the minimum of the appropriate grades for their positions. 2B allows pool funds to be used to bring employee to salary levels above the minimum of the grade based on set criteria.The alternative(s) would be negative in that a disparity would exist within the grades depending on the number of employees brought to the minimum of a grade and those employees in the same grade with existing salaries well above the minimum for the grade, and the availability and equitable distribution of pool funds. Alternative 2B with the pool distribution process would need some type of review process built in for employees who did not feel they received an appropriate salary.

Alternative 3

This alternative would be positive because all Unit members would be treated the same as to relationship of salary to grade. It would be negative because there is lack of hierarchy relationship among the positions and employees within the grade. Bringing all employees to the maximum rate would negate the guidelines for placement within the range for all current employees and would leave no room for later advancement within the range. The cost is also likely to be prohibitive.

Alternative 4

This alternative would be positive in that appropriate Unit members would be treated the same as to relationship of salary to grade. It would be negative because there is a lack of hierarchy relationship among the positions and employees within the grade. Salary grades are designed to allow for differentiation within the grade based on a number of factors described in the Administrative Procedures (Appendix 9).

Alternative 5

The total salary base cost for this alternative, for 353 unit member evaluated jobs, in 1991 salary dollars was $1.2 million. Using the same process as in alternative number 2, the total approximate cost for this seniority driven alternative would be $4.1 million.

Another model developed by the Committee placed employees with less than three years seniority at the 25th percentile, those with three years but less than seven years seniority at the midpoint, and those with seven or more years seniority at the 75th percentile. The cost to implement this alternative would be $2.2 million for the 353 evaluated jobs. With benefits, aging to 1995, and application to the full unit, the cost would be $7.6 million.

Either model of this alternative would be positive in that seniority criteria would be equally applied as to placement within the range. It would be negative in treating seniority as the sole criterion for placement within the range.

It should be noted that when considering this alternative, data indicated that Unit employees have relatively low average years of service. June 1995 data indicates that 16.6% of the Unit employees had less than one year of service with the University, and 24.4% of Unit employees had less than one year of service in the title they held. A May 1995 report showed that 46.2% of the Unit employees had 3 years or less service, 62.9% of the Unit employees had 5 years or less of service, and about 75% of Unit employees had 9 years or less of service.

General Applications to Costing Estimates

Note: The Network version of the full report entitled Final Report of the Joint Committee to Design a Professional Salary System does not contain the full appendices cited within the report text. Readers can view the appendices in the hard copies of the full report located in the campus Office of Human Resources and the campus library on each campus.