m compensation & salary policy 2008
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M Compensation & Salary Policy 2008
Management Forum PresentationNovember 3, 2008
Lynne Gervais, Associate Vice-Principal Human Resources
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BackgroundM group vital to McGill’s operations, key
player in growth and development of McGill as a World Class Institution
Desire to align Human Resource practices with “Best Practices”.
Commitment made to management and professional staff in December 2007 to review the current M Compensation framework
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Main IssuesCurrent M salary structure not systematically
benchmarked since the implementation of the Pay Equity Program in 2002
Current structure lacks flexibility to adapt to market conditions for attraction and retention of key talent
Pay scales are narrow; salary progression is slow and a promotion is needed in order to obtain a significant salary increase
Does not allow for sufficient recognition of individual contribution
No clear market reference point to validate competitiveness
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Current Benchmark Excercise Two (2) consulting companies were selected to conduct this benchmarking exercise:
Normandin-Beaudry : Mercer, Watson Wyatt, Hewitt
The Hay Group
Role Profiles Surveyed Market Reference Type of Survey
1. SAF (4 role profiles) G13 Universities + Concordia University + 4 main English CEGEPS (Dawson, Vanier, John Abbott, Champlain)
Closed
2. All other job families (17 role profiles)
LOG, FIN, PER, COM, ADM, IST
All industries + Not for profit
Standard published surveys- Greater Montreal data, National data- Non profit, National data all industries
ConclusionsLevels 1 & 2 (grades 5 & below)
McGill’s salaries are overall competitive
Levels 3 & 4 (grades 6 & above)
McGill’s salaries are generally less competitive
SAF positions:
The maxima of McGill’s current salary scale is in line with the median salary of our reference market ;
Actual salaries are on average 5% lower than market median
Note:
This study was conducted only on base salaries, and does not take into account the other components of the total rewards (benefits, holidays, etc.) offering of the University
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Way Forward- Best Practices
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Best Practices :Salary Benchmarks Current Practice Going Forward
Para Public & Public Sectors primarily Yet we recruit from a range
of sectors including Private Industry
Local Markets- Montreal Yet we occasionally recruit
within the Province and other provinces in Canada
Internal Equity focus Yet best practices indicate
focus should be both external & internal
Private Industry data in addition to Public and Para Public
Based on Local & National reference Market
Focus on external market as well as internal references
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Wider ranges for each grade; allows for:
Growth in the role; Increased complexity, scope;Correct positioning of roles based on
market.Target Pay as a main reference point
Based on the market;Slope Increase
Between all grades;Recognizes the complexity of roles
Best practices: Salary Scale
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Movement in Salary Ranges
Capacity to pay
Growth in the role
Acquiring additional competencies, skills, qualifications
Achieving/exceeding objectives;
Greater impact on the institution
Unusual market pressure – example, retention of hot skills i.e. C.A.’s now, IT during Y2K
Revised M Salary Structure
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What changes?Now Effective December 1
2 reference points : Minimum and Maximum;
Market reference point not clear
Single Zone: Min Max
Narrow scales- little or no room to move ; pay compression; red circle situations resulting in lump sum payments.
Linear slope between pay grades
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Introduction of Target Pay as main reference point for competitive pay. Based on McGill Competitive market .
Three Zones Min Target Max Zone 1, Zone 2, Zone
3
Increase in the difference between min & max to provide more movement within each salary range at all levels.
Increasing slope between target pay points to reflect increasing complexity
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Current Structure
2 3 4 5 6 7 8 9 10 11$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
$90,000
$100,000
$110,000
$120,000
$130,000
$140,000
$150,000
Grade
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New Structure
2 3 4 5 6 7 8 9 10 11$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
$90,000
$100,000
$110,000
$120,000
$130,000
$140,000
$150,000
$160,000
$170,000
$180,000
$190,000
$200,000
Zone 3Zone 2Zone 1Target
Grade
New Salary Scale
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Level Grade Zone 1 Zone 2 Zone 3 Market Median
Min Mid Max
1 34,900$ 43,600$ 52,200$ 2 38,400$ 48,000$ 57,700$ 47,000$ 3 42,200$ 52,800$ 63,400$ 4 46,500$ 58,100$ 75,500$ 58,000$ 5 51,100$ 63,900$ 83,100$ 6 53,900$ 71,900$ 93,500$ 7 60,700$ 80,900$ 105,200$ 78,000$ 8 68,300$ 91,000$ 118,300$ 9 76,800$ 102,400$ 143,400$ 10 86,400$ 115,200$ 161,300$ 110,000$ 11 97,200$ 129,600$ 181,400$
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3
4
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New incumbents..
Recent promotion…
Acquiring new skills…
Meeting most requirements
Meets all requirements…
Sustained achievements…
Possesses key competencies, both technical and behavioral
Significantly exceeds requirements consistently…
Possesses high demand skills…
Recognized as an expert in their field
Zone 2 – Target (95-110%)Zone 1 Development/Transition Zone 3- Exception
$Min
$$$Job Max
Salary ManagementThe range associated with each grade is divided into three zones
Target
100%
The division of each grade into 3 zones provides increased flexibility and enables the University to place a fair value on the competencies, responsibilities and contribution of each employee
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OutcomesEnsure McGill’s competitive salary positioning
on the broader reference market
Reinforce the link between contribution and rewards
Support employee growth & development
Foster accountability/ownership at local managerial level
Next StepsDevelop competency framework for each job
family Technical competencies & behavioral competencies
for each role in each job family
Review current salary policies and define specific criteria for moving within and between the ranges in new structure
Develop specific merit guidelines to support the implementation of the salary policy
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3-year Salary Policy
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McGill vs. Market practiceTotal Budgets (2002/2007)
Salary Freeze in 1995 Catch-up exercise begun in 2001 New “M” Compensation Structure implemented in 2002
Actual
Year 2002 2003 2004 2005 2006 2007 2008
CPI 2.2% 2.8% 1.8% 2.2% 2.0% 2.2% ????
Market Avg. Increase* 3.5% to 4% 3.5% to 4% 3.5% 3.5% 3.5% 3.5% 3.5%
McGill Budget 5% ** 4.5% 4.5% 4.5% 4.5% 2.5% 3.0%
* Source: Conference Board of Canada. Aggregate national & local (Québec) data for all industries, as well as public, para-public and not-for-profit organizations.
Average increase = overall increase budget, including scale increase, across the board, progressions, merit.
** 2002 included the 2nd and final phases of a catch-up exercise begun in 2001 to compensate for freezes and lower budgets in previous years.
Note: The University uses the annual CPI of previous December as a reference when determining salary policy
Approved Budgets- 3 Year Salary Policy2008: 3%
2% minimum increase for all employees meeting requirements of job
1% additional budget given to each unit to recognize leading performance
2009: 3% 1% minimum increase for all employees meeting requirements of
job 2% additional budget given to each unit to recognize leading
performance
2010: 3.5% % of minimum increase and performance increase to be defined
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Performance levelsPerformance Categories—4 levels
LEVEL OF PERFORMANCE MINIMUM INCREASE
1. Leading 2% +
2. Strong 2%-3%
3. Building Consistency 0-2%
4. Immediate Improvement Required 0%
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Performance Definitions Leading Consistently outstanding performance exceeds expectations
Strong
Solid performance and consistently meets job requirements
Building Consistency
Performance does not consistently meet job requirements
Requires Immediate Improvement
Performance consistently fails to meet job requirements
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Questions / Comments
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