Staff compensation program phase 2
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Staff Compensation Program – Phase 2. Internal Equity Adjustments October 2005. Today’s Agenda. Background Information Methodology Process Implementation. Staff Employment Value Strategy. Salary levels that are competitive with Lehigh’s competition in the marketplace

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Staff Compensation Program – Phase 2

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Staff compensation program phase 2

Staff Compensation Program – Phase 2

Internal Equity Adjustments

October 2005


Today s agenda

Today’s Agenda

  • Background Information

  • Methodology

  • Process

  • Implementation


Staff employment value strategy

Staff Employment Value Strategy

  • Salary levels that are competitive with Lehigh’s competition in the marketplace

  • Cash based rewards for performance

  • Benefits that are equitable and competitive

  • Career opportunities for employees

  • Professional development that is aligned with department goals and University’s strategic plan

  • Work that is interesting and engaging

  • Affiliation with a nationally recognized university


Staff compensation program phase 2

Our Timeline

2004

2005

2006

2007

  • Develop Staff Compensation Program

  • Implement Market Referenced Job Evaluation Program (1/1/05)

  • Develop process to address internal equity concerns

  • Develop Job Family Accountability and Skill Guides

  • Establish Job Family Career Development Resource Guides

  • January Equity Adjustments

  • Complete Job Family Accountability and Skill Guides

  • Complete Job Family Career Development Resource Guides

  • Begin comprehensive benefits allocation review

  • Begin alignment of training and staff development with SEVS

  • January Equity Adjustments

  • Performance Management

  • Complete alignment of training and staff development with SEVS

  • Complete comprehensive benefits allocation review


Staff compensation program

Staff Compensation Program

  • Phase 1 – External Equity

    Assign positions to salary grades that mirror the pay rates found in the job families and labor markets in which Lehigh competes

  • Phase 2 – Internal Equity

    Determine appropriate position in range for individual staff members


Market referenced program

Market Referenced Program

The market for each job family determines the salary grade, and knowledge, skills, experience, and performance determine position in range.

Job Role, Responsibilities and Skill Requirements

Knowledge, Skills, Experience and Performance

Salary Grade

Position in Range

RecommendedBase Salary

+

=


Determining position in range

Determining Position in Range

What factors contribute to a recommendation of position in range?

Knowledge, Skills, Experience

Performance

Overall Measure

Individual Measure

Position in Range

+

=


Possible approaches

Possible Approaches

  • Set targets based on years of service – or years in position

  • Set targets based on performance appraisal ratings for the current year – or the last five years

  • Set targets based on individual competencies

  • Etc.


Back to the bank

Back to the Bank --

Compare 2 Customer Service Managers (CSM) –

Who should earn more?


Based on hire date

Based on Hire Date --

Who should earn more?


Based on position history

Based on Position History

Who should earn more?


Based on the 2004 appraisal

Based on the 2004 Appraisal

Who should earn more?


Based on 5 years of performance

Based on 5 years of Performance --

Who should earn more?

?


Who should earn more

Who should earn more?

?


And what about

And, what about?

  • Individual competencies

  • Educational background

  • Total work experience before the bank

  • Etc.


What criteria are valid

What criteria are valid?


Lehigh s criteria

Lehigh’s Criteria

  • Time in Position and Classification

  • Performance history as supported by merit increases rather than appraisal rating


How to set the targets

How to set the targets?

  • Fixed percentages or dollar amounts for each year in the position and classification

  • Ranges of salary targets for each year in the position and classification

  • Fixed percentages or dollar amounts for relative merit adjustments


And what are those amounts

And what are those amounts?

How should we determine the percentages or dollar amounts?

What should they be based on?


Building a model

Building a Model

The equity model was developed in consultation with University leadership over the spring and summer. We needed answers to these two questions:

  • What do we want to accomplish with the equity adjustments?

  • Where will we find the appropriate salary values to use in building the model?


Our goal

Our Goal –

To define an appropriate salary for each staff member based on time in role and individual performance


Our salary change measures

Our salary change measures:

Lehigh’s actual staff salary budget history since 1989.


An example back to the bank

An Example – Back to the Bank


New salary program at the bank

New Salary Program at the Bank

Effective January 1, 2005:

  • CSM positions assigned to Grade 3A

  • Salary range for Grade 3A: $30,000 to $48,000

  • Jane and Sue have salaries increased to the range minimum of $30,000


Setting salary targets for csms

Setting salary targets for CSMs

The bank will use their own salary budget history over the last 5 years to determine appropriate salary targets for the Customer Service Managers.


The bank s salary budget history

The Bank’s Salary Budget History


The bank s salary growth

The Bank’s Salary Growth


Moving through a range

Minimum

Maximum

Moving through a range

2002

At Minimum

Minimum

Maximum

2003

2% over minimum

Minimum

Maximum

2004

3.53% over minimum

Minimum

Maximum

2005

5.6% over minimum

Average salary of all Grade 3A employees hired in 2002


The 2002 hiring class

The 2002 Hiring Class


Target for 2002 hiring class

Target for 2002 Hiring Class


Developing salary targets for all

Developing Salary Targets for All

Assume Salary Grade Minimum of $30,000


Targets for sue and jane

Targets for Sue and Jane

Assume Salary Grade Minimum of $30,000

Target for Sue

Target for Jane


What a target represents

What a Target Represents

The salary target represents the average salary that would be paid to all individuals in the salary grade who were hired in the same year.

It does not represent the salary that each individual employee should earn.


Determining salaries

Determining Salaries

Jane and Sue both paid $30,000 at 1/1/05

  • Step 1 – Targets from HR

    • Target for Sue = $30,600 (+/-) for performance

    • Target for Jane = $32,790 (+/-) for performance

  • Step 2 – Salary Determined by Branch Manager

    • Salary for Sue = $30,300

    • Salary for Jane = $33,500


Setting salary targets at lehigh

Setting Salary Targets at Lehigh

Applying the Bank Example


Our goal1

Our Goal –

To define an appropriate salary for each staff member based on time in role and individual performance


Our salary change measures1

Our salary change measures:

Lehigh’s actual staff salary budget history since 1989.


Setting the targets

Setting the Targets

Targets for individual staff member salaries are determined based on:

  • Length of time in position and classification

  • Actual potential for salary growth since assuming that position and classification


Setting the salaries

Setting the Salaries

Department Heads and Stem Leadership will set actual salaries. They will consider:

  • Targets provided by HR

  • Employee performance history as evidenced by actual merit increases received


The process at lehigh

The Process at Lehigh

  • Confirmation of position and classification dates by supervisors and staff

  • Development of targets by HR

  • Determination of salaries by area leadership and department heads

  • Communication of salary changes to staff


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