Inside Iowa State

March 30, 2007

Council ties salary increase proposal to Consumer Price Index

by Anne Krapfl

The P&S Council based its recommendation for an FY08 salary increase policy for P&S employees on the Consumer Price Index (CPI) for the Midwest Region, Urban, for last year. In 2006, this CPI grew 2.44 percent.

In past years, the council has asked for minimum salary increases of one-third of the anticipated average salary increase or, more recently, a percentage of an employee's pay grade midpoint.

"We've been studying the CPIs for a number of years in relation to salary adjustments, cost-of-living increases and employees' actual buying power," said Virgil Schmitt, a council representative for ISU Extension and co-chair of the council's compensation and benefits committee, which drafted the recommendation. "We really feel that any employee with a satisfactory performance evaluation should be kept whole, so we decided to go in a different direction and recommend this."

Keeping employees "whole," he explained, is a minimum salary increase that at least matches inflation. With past salary policies, Schmitt noted that sometimes the message employees receive is, "We appreciate so much what you do that we won't let your buying power erode by more than two-thirds of the CPI." In effect, he said, some salary increases have had a punitive feel to them.

The council recommends that P&S employees who receive a performance evaluation of satisfactory or better receive a minimum of the CPI figure, or 2.44 percent. It also recommends that:

Any remaining salary increase funds be used to address exemplary performance, market and equity issues.

If state funding doesn't cover the minimum request, university-wide reallocations be used to fund the balance.

Schmitt emphasized the importance of additional funds "to reward the stars" and of the university developing and implementing a performance appraisal system for all employees.

"From what we hear, some departments do performance expectations and evaluations really well and it's helter-skelter for others," Schmitt said.

Finally, the council recommends that the minimums and maximums in each grade of the P&S salary matrix be increased by the CPI, or 2.44 percent.

"We really feel that any employee with a satisfactory performance evaluation should be kept whole, so we decided to go in a different direction and recommend this."

Virgil Schmitt