Inside Iowa State

June 7, 2007

FY08 salary policy goes to regents next week

by Anne Krapfl

Iowa State will use $6.25 million of new state appropriations in the next year to boost the market competitiveness of faculty and P&S salaries in targeted areas. These funds are in addition to $12.5 million in state funds that will be distributed in annual salary increases. This proposed compensation policy, if approved by the Board of Regents, State of Iowa, next week, will take effect for the year that begins July 1.

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

"One of our highest priorities is to ensure that faculty and staff are compensated at a level that is competitive with similar positions in the marketplace and especially at our peer universities," said president Gregory Geoffroy. "State leaders responded generously to the regents' funding requests this spring, and I'm very pleased there's new budget money to support our proposed compensation policy."

Targeting priority areas

For the last four weeks, deans and other administrative leaders have participated in a competitive process to receive special salary pool dollars for specific units and individuals. Of the $6.25 million, $5 million will be used for faculty compensation (salaries and benefits), $1.25 million for P&S employees.

Slightly less than half of the faculty pool dollars were allocated last week to "highest priority" academic departments facing the most significant challenges with faculty salary competitiveness. These include areas such as chemistry, materials science and engineering, statistics and the life sciences. Every college received funding, said Ellen Rasmussen, associate vice president for budget and planning. The remaining dollars will be used to improve the salaries of individual faculty members -- regardless of department -- whose salaries aren't competitive with the marketplace for faculty of their distinction. Some of these dollars will be allocated on July 1, and the rest allocated on Jan. 1, 2008. Decisions regarding the July 1 allocations were to be completed this week.

Geoffroy noted that the regents want to improve Iowa State's faculty salary ranking among its peer universities (currently last) by three spots each of three consecutive years.

"We're in a very good situation this first year to make some progress on the relative competitiveness of our faculty salaries," he said. "The unknown at this point is what salary increases our peer institutions are awarding. So, it will be several months before we know with some certainty how we have advanced."

The P&S pool dollars will be used primarily to remedy two salary issues:

• Salaries that are consistently and significantly below the marketplace, particularly in areas such as information technology, purchasing and student counseling.
• P&S employees who are paid less than the Merit employees they supervise.

Similar to the faculty pool dollars, a yet-undetermined portion of the P&S pool dollars will be allocated on July 1, with the remainder available to address hiring or retention issues that arise during the rest of the fiscal year. Decisions regarding the July 1 allocations were to be completed this week.

Annual salary increases

A minimum of 3.0 percent is the targeted average increase to faculty and P&S salaries for the new fiscal year. Averages will be calculated for major administrative and academic units, and differentiation among individual salary increases is expected, according to compensation policy memos last month from Geoffroy and executive vice president and provost Elizabeth Hoffman.

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 new contract, Merit employees will receive a 3.0 percent salary increase on July 1. On an employee's anniversary date during FY08, 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 anniversary dates will not receive a second increase.

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 of at least one-third of the general salary increase, according to language in the Faculty Handbook. Increases should be based on merit, equity and market considerations.
• 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.
• The average faculty salary increase across any major unit should equal or exceed 3.0 percent.

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.
• The pay grade minimums and maximums in the P&S pay matrix will increase 2.5 percent. Additional salary dollars will be allocated to make sure all employees' salaries are at their pay grade new minimum. These increases can't substitute for the merit-, equity- or market-based increases.
• The average P&S salary increase across any major unit should equal or exceed 3.0 percent.

FY08 compensation increases: a breakout

Faculty
Annual increases	$6 million
Special salary pool	$5 million
Previous retention commitments	$2 million

P&S staff
Annual increases	$3.5 million
Special salary pool	$1.25 million

Merit staff

$2.5 million

Grad assistants

$0.5 million

TOTAL

$20.75 million

"We're in a very good situation this first year to make some progress on the relative competitiveness of our faculty salaries. The unknown at this point is what salary increases our peer institutions are awarding. So, it will be several months before we know with some certainty how we have advanced."

Gregory Geoffroy