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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?

?



And what about
And, what about?

  • Individual competencies

  • Educational background

  • Total work experience before the bank

  • Etc.



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.



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.




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




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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