Total Compensation Review 2018
At the direction of the UA President, UA Human Resources is leading a total compensation review to better understand our market competitiveness for salary and benefits to optimize internal equity, retention and recruitment.
PROJECT UPDATE Oct. 24: A summary of the proposed budget request for the legislature, to fund compensation adjustments, is available for your information. This information will be presented during the FY20 budget discussion at the November Board of Regents meeting, and the board will be asked for its approval. Learn more HERE.
Elements of the review:
We are reviewing the following components of our compensation plan related to market:
- Faculty salaries
- Staff salaries
- Executive (officers and senior administrators) salaries
In addition, we are reviewing internal pay equity.
Compensation Guiding Principles
- As a mission focused institution, the university’s emphasis as an employer is on recruiting, retaining and developing people who embrace the mission; the compensation system supports the mission and is not a deterrent or distraction to our employees’ contributions to the mission.
- The compensation system will uphold the university’s role in the state as a leading employer. As an employer, the university strives to be:
- Competitive: Offering market-driven salary and benefits programs
- Consistent: Providing a dependable framework for compensating employees in a fair and equitable manner
- Creative: Within the confines of its budget, offering a flexible and inspired suite of benefits to support employee engagement and productivity
- Collaborative: Working with our employees to ensure our compensation and benefit programs meet their needs and interests
An employee value proposition answers the question, "Why would the people we need want to join, do their best work here, and stay?"
Compensation Study FAQs
NEW FAQs January 2019
Will staff be able to review the specific results of this study as it relates to their position (i.e. you are in the median range, under, above, etc.)?
General Counsel is working with Human Resources to determine what data can be legally shared. Once the review is completed, legally allowable data will be available.
What is the communication plan to let those who are impacted by the equity study know the outcome of the review?
An affected employee-specific communication plan is being developed. Those employees will be contacted as soon as possible, following the initial review stage of the pay equity analysis.
Are department salaries being compared with central office salaries? If so, aren’t there big differences in pay between the two?
Salary schedules are not different for administrative positions in departments or in central offices. Similar staff positions are being evaluated together in the market study.
How is cost-of-living included in the analysis of salary/compensation? Will the results of the cost of labor and cost of living analysis be shared with the UA community?
Both cost of labor and cost of living are being reviewed in the market analysis. Information on the results will be incorporated into the presentation of outcomes.
Alaska has the highest healthcare costs in the nation. Is the cost of healthcare specifically considered in this study?
Yes, a comprehensive benefit analysis was recently completed which included UA's healthcare plan.
How does our compensation compare to other jobs in Alaska? It is unfair to compare my job to a colleague in the lower 48 when their cost of living is 30-40% less than my current location.
The market analysis was conducted for faculty, staff and executives using comparable national education data. However, we continue to review the cost of labor and the cost of living in Alaska to understand our competitiveness within the state as well. The cost of living compares costs associated with living in Alaska. The cost of labor compares peer positions within your location of work in Alaska.
How do I, as an employee, determine what my Standard Occupational Code (SOC) is for my job so that I can compare to national averages published in 2017, by the Bureau of Labor Statistics? How do I know if my SOC is accurate and up to date based on the job position defined in Banner?
In the market analysis, we compared UA positions to similar positions with higher education focused surveys to retrieve the national data. We did not utilize the Bureau of Labor Statistics information. If you would like to know your Standard Occupational Code (SOC), you can contact your regional human resources department.
Can you include how many salaries are used at each MAU and in each faculty category (asst., assoc., full) to calculate averages?
When reviewing the market analysis at least five data points (peer positions within the same CIP code and rank) in a survey were needed to compare salaries. More than five peers were identified for each campus. In the analysis, median, not average, was used.
Where do adjunct professors fit into this scenario? Is the intent to include them in any subsequent salary adjustments?
The compensation structure for adjuncts is very different from other salary structures at UA and thus was not within the scope of this study. However, this does not mean that the UA adjunct salary structure may not be reviewed in the future.
UAA is a research and graduate degree-granting institution with millions in external awards yet it is listed as a 4-year campus. What is the appropriate category for UAA?
UAA and UAS are considered Master's Institutions. UAF is considered a Doctoral Institution.
Will gender be included as a variable? What is UA's current gender gap and will it be assessed again at the end of this exercise?
Gender is included as a variable in the pay equity analysis along with other factors such as age, race, etc. Once the pay equity analysis is completed, a process will be established to identify and negate possible future inequities.
Compensation Study FAQs
Why is this project being done?
Leadership has identified the need to conduct a total compensation analysis and a pay equity review of faculty, staff, and executives for competitiveness, equity and retention.
What is the project timeline?
What are the scope constraints of this portfolio of projects?
All five of the projects within this portfolio are to assess current state and placement within the market, in order to provide a framework in which UA can determine compensation methodology going forward.
Who is involved in this project?
UA Human Resources, with an internal working group of experts and an advisory committee made up of faculty, staff, and executives for communication and input and outside consultants; Lockton, Quatt, and Gallagher. Project Leads: Keli McGee, CHRO, Tara Ferguson, Director of Compensation, and Heather Arana, Compensation Analyst.
How were the participants selected for the advisory and working groups? What are the expectations for the advisory committee members?
Based on recommendations from leadership and HR, the advisory and working groups were chosen to provide guidance from diverse perspectives to the project from a variety of units on campus.
Advisory committee members are expected to disseminate project status information to their constituents, as well as provide feedback on the findings as the project reports are drafted/completed.
Who are Lockton, Quatt, and Gallagher?
Lockton, Quatt and Gallagher are consulting firms hired by University leadership to assist with the UA compensation, benefits and pay equity projects. They are all global providers of human resource solutions and have extensive experience working with higher education institutions.
What is the distinction between salary, compensation, and total compensation?
Base salary and compensation are synonymous terms. Total compensation incorporates both base salary and benefits. This portfolio of projects is assessing total compensation for all benefits-eligible employees.
How do you define market competitiveness?
How are market median comparisons determined?
For staff and executives, position descriptions for each classification are reviewed against industry appropriate compensation surveys. They are considered a good match if the descriptors align to at least 70 percent of the market median. For those positions that do not have a market match, they are assessed individually and compared to internal positions with similar duties and responsibility.
For faculty, industry Classification of Instructional Programs (CIP) for each discipline are compared to national faculty compensation surveys.
Each review utilizes system-wide peers, as well as each university’s individual peers.
How were peers identified for each campus?
The objective in developing each peer group was to ensure that, on the whole, each peer group included a representative cohort of comparable public (and/or private for lower division) institutions based on:
- Carnegie Classification
- Operating Budget
- Student Enrollment
- Faculty FTE
Who are the peers for each campus?
See the attached spreadsheet for peer institutions. EXCEL FILE
How will the university sustainably maintain market parity for staff after the initial market analysis?
A best practice model for sustaining market parity after this initial staff compensation market analysis is complete will be part of the recommendations from the vendor. Sustainability is a key long-term goal.
What will happen to my salary as a result of this review?
The university’s goal, over time, is for all employees to be paid within a consistent salary structure. Going forward, compensation guidelines will be established and followed. Salaries will not be reduced as a result of this project.
Is the intent to eliminate positions?
No. The project focus is on classification and compensation of benefits-eligible positions.
How is Geographic Differential being decided by the vendors performing the market analysis for staff and faculty?
Both vendors handling the staff and faculty compensation market reviews are utilizing the geographic assessment by ERI (Economic Research Institute). The ERI provides analysis based on a proprietary algorithm that utilizes thousands of survey data points from across the country in order to price labor across the US, including remote and rural locations. Read more about the ERI Methodology HERE.
What is the difference between "Cost of Living" and "Cost of Labor"?
"Cost of living” refers to the costs to a consumer in a specific geographic area. It reflects the price of food, housing, groceries, transportation, education, taxes and entertainment. A true cost of living indicator would accurately measure changes over time in the total amount of money required in order to maintain a specified standard of living. Cost of living is dictated by the local demand for and supply of goods and services.
“Cost of labor” refers to the difference in pay or labor market for a job from one location to another. The cost of labor is what a particular geographic market offers as the “going rate” or compensation for its jobs and reflects the local demand for and supply of labor.
Would we perform our own geographical analysis using local businesses, such as banks, in rural communities?
Because the source sampling is so limited, the vendors do not plan to use individual businesses to compare for geographic differential. Additional review of Alaska-centric compensation surveys will be reviewed to validate the ERI geographic assessment.
At what level is compensation compared (department, campus, system)?
There will be multiple groups against which compensation will be compared. In order to perform regression analysis, there needs to be at least 40 incumbents. For populations of comparable positions smaller than 40, a manual assessment and comparison is done. There will be analyses performed at different levels (department, campus, system) for each of the projects.
What will the resulting salary structure look like?
The salary structure will be based on ranges, which will be applied to all current and future UA positions. The ranges will account for differing skill levels and experience. The compensation structure will be a simple, easy to understand framework to ensure appropriate, competitive, and equitable salaries, and allow for flexibility, when appropriate.
When will the market analysis and pay equity review be completed?
Initial drafts of the market analysis, compensation structures, benefits peer comparisons, and pay equity study are anticipated to be reviewed by senior leadership by the end of December. As the initial analysis is being completed, continue to send salary adjustment requests to the appropriate Human Resources office for review.
Do you have additional questions? Please use this form to submit potential FAQ topics. https://goo.gl/forms/0HOrTzVKpkQKHsld2