Inside Iowa State

June 12, 2008

Proposed compensation plan to Regents June 12

by Anne Krapfl

Iowa State will distribute $16.6 million in the next fiscal year for salary and benefits increases for faculty and staff. Approximately $0.5 million comes from a central reallocation; the rest is Iowa State's portion of the state salary bill appropriated in May by Iowa legislators. Colleges and units, with approval at the vice president level, may reallocate additional funds to improve salary increases.

The $16.6 million figure includes $3.5 million that university leaders propose to use for targeted increases to faculty and professional and scientific (P&S) salaries. And $2.9 million of the total reflects the employer's share of cost increases for employee health and dental benefits. University leaders also accepted the recommendation from a benefits subcommittee to add a dental insurance benefit for graduate students, at a cost of $300,000.

The proposed compensation plan will be presented to the Board of Regents, State of Iowa, at its June 12 meeting in Ames. If approved, the changes take effect for the year that begins July 1, and all new salary dollars will be allocated on that date. A year ago, university leaders held some new salary dollars and awarded them as special needs arose during the year.

"One of the university's highest priorities is to ensure that our faculty and staff are compensated at a level that is competitive -- both among our peer universities and in the marketplace," said president Gregory Geoffroy. "Our goal with this proposal is to maximize compensation increases with a mix of new state dollars and reallocated funds within college and administrative units."

The compensation policy applies to all ISU employees, regardless of the funding source for their salaries.

Targeted salary increases

This is the second year the proposed compensation plan includes salary funds that will be targeted to departments and individuals in high-priority areas and those that are severely below market. For faculty, this pool is $2.9 million, for P&S staff, it's $600,000. Deans and directors applied for these dollars for their units in a competitive process that began in mid-May and wrapped up June 6.

About half of the special faculty pool, or $1.55 million, was distributed to targeted departments whose average faculty salaries are furthest from the average among peer universities. Every college received a minimum of $100,000, said Ellen Rasmussen, associate vice president for budget and planning. Some of the units receiving additional dollars include statistics, the life sciences, College of Business, civil and construction engineering, chemistry, and physics and astronomy, she said. By June 20, all units have to submit to Rasmussen a summary of how these departmental allocations were applied to individual faculty members.

The rest of the special faculty salary pool, or $1.35 million, was distributed to about 225 individual faculty members, Rasmussen said.

Rasmussen said the first $62,000 of the special P&S salary pool funded all requests for additional salary dollars to correct salary disparity between P&S and merit employees within units, particularly P&S supervisors earning less than the merit employees they supervise. She said the rest of the special funds were awarded to address individual instances of market inequity. Examples of this could include:

• An employee earning less than people doing the same work in the (external) market from which ISU attracts applicants
• An employee with considerable years of satisfactory service whose salary hasn't reached the mid-point of his or her pay range
• An employee in a specific classification who earns notably less than others in that classification elsewhere on campus

Rasmussen said targeted salary funds were distributed to about 150 P&S employees in a wide range of positions.

"We let [deans, directors] tell us where the need was greatest. They had to provide the data to support their requests," she said.

Annual salary increases

Salary increases for Merit employees are determined by the collective bargaining agreement between the state of Iowa and AFSCME (American Federation of State, County and Municipal Employees).

According to the current contract, Merit employees will receive a 3.0 percent salary increase on July 1. On an employee's review date during FY09, each will receive a 4.5 percent increase, up to the maximum of his or her pay grade. Employees at their pay grade maximums prior to their review dates will not receive a second increase.

Salary increases for faculty and P&S employees should reflect the individual's annual performance review, and differentiation among individuals is expected, according to compensation policy memos last month from Geoffroy and executive vice president and provost Elizabeth Hoffman. The policy doesn't specify a target for the average salary increase. Rasmussen said that by July 1 she expects to have received the data that will allow her to share:

• The average of all individual salary increases for faculty and P&S staff (combined and each employee group separately) by college or major administrative unit
• How frequently a salary increase range (for example, 3.01-4.0 percent) was awarded

Policy highlights

Following are highlights of the proposed compensation policy for faculty and for P&S staff:

Faculty

• Faculty who aren't meeting performance expectations should receive minimal or no salary increase.
• Faculty who meet performance expectations should receive a salary increase in accordance with the Faculty Handbook. Increases should be based on merit, equity and market considerations.
• Within units, reallocations for salary increases based on equity and market conditions are encouraged, with reporting to the appropriate vice president.
• Salary increases for promotion (to associate, full, Distinguished and University Professor; and to senior lecturer/clinician) are pre-determined and can't substitute for a merit-, equity- or market-based salary increase.

P&S

• P&S employees who aren't meeting performance expectations should receive minimal or no salary increase.
• P&S employees who meet performance expectations should receive a salary increase based on merit, equity and market considerations.
• Within units, reallocations for salary increases based on equity and market conditions are encouraged, with reporting to the appropriate vice president.
• The pay grade maximums in the P&S pay matrix will increase 3.0 percent. The minimums will remain the same.

Rasmussen said the recommendations of the P&S compensation study by the Towers Perrin firm still are being discussed, so those recommendations were not incorporated into this year's salary policy.

FY09 compensation* increases: a breakout

Faculty
Promotion increases	$0.3 million
Annual increases	$5.6 million
Special salary pool	$2.9 million
P&S staff
Annual increases	$3.4 million
Special salary pool	$0.6 million
Merit staff (includes supervisory/confidential)
Annual increases	$2.8 million
Graduate assistants
Annual increases	$0.7 million
Add dental insurance benefit	$0.3 million
TOTAL	$16.6 million

*with the exception of the graduate dental benefit, all figures reflect salaries and benefits

"One of the university's highest priorities is to ensure that our faculty and staff are compensated at a level that is competitive -- both among our peer universities and in the marketplace. Our goal with this proposal is to maximize compensation increases with a mix of new state dollars and reallocated funds within college and administrative units."

President Gregory Geoffroy