staff compensation plan - baylor university · 3 section 3: overview of the compensation program...

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STAFF COMPENSATION PLAN

Initial Plan Date: 7/01/2002 Revised Effective Date: 8/3/2009 Last Review Date: 9/24/2010

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Table of Contents

Section 1: Introduction ........................................................................................... 1

Section 2: Compensation Philosophy/Strategy ...................................................... 2

A. How We Define Our Market ........................................................................ 2

B. Pay-for-Performance ................................................................................... 2

Section 3: Overview of the Compensation Program .............................................. 3

A. Market-Based Pay Band Schedule ............................................................. 3

B. Job Descriptions .......................................................................................... 4

C. Job Titles ..................................................................................................... 4

Section 4: Program Administration Roles and Responsibilities ............................. 5

A. University Leadership (The President and Executive Council) ................... 5

B. Human Resources ...................................................................................... 5

C. Supervisors ................................................................................................. 6

D. Staff ............................................................................................................. 6

Section 5: Managing Pay within a Band ................................................................ 7

Section 6: Pay Guidelines ...................................................................................... 8

A. Paying within the Band ................................................................................ 8

B. Compensation for Part-Time Staff .............................................................. 8

C. Hiring Rate .................................................................................................. 8

D. Degrees and Certifications .......................................................................... 8

E. Merit Increases .......................................................................................... 10

F. Supplemental and Interim Pay .................................................................. 10

G. Off-Cycle Pay Increases ........................................................................... 12

H. Pay Band Adjustment Guidelines ............................................................. 13

I. Temporary Staff Employment ..................................................................... 21

J. Benchmarking Reviews ............................................................................. 21

K. Fair Labor Standards Act .......................................................................... 22

Section 7: Maintaining the Compensation Program ............................................ 23

A. Equity and Market Adjustments ................................................................ 23

Section 8: Benchmarking Standards .................................................................... 24

A. Prepare and Collect Information ............................................................... 24

B. Identify the Appropriate Comparison Market ............................................ 25

C. Select the Appropriate Data Sources ....................................................... 25

D. Match Baylor’s Job to the Survey Jobs ..................................................... 26

E. Analyze the Data ....................................................................................... 30

F. Internal Benchmarking .............................................................................. 31

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Section 1: Introduction

This manual is intended to describe the Staff Compensation Program at Baylor University and pay guidelines to ensure that the program is managed, in accordance with the strategic objectives and the availability of financial resources of the university, Baylor University will endeavor to develop competitive pay practices.

This manual has been prepared to serve as a practical guide on compensation policies and practices. While Baylor University intends to lend stability to policies and practices, Human Resources and University Leadership reserve the right to modify them at any time with or without notice.

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Section 2: Compensation Philosophy/Strategy

A. How We Define Our Market

The University is a complex organization with a wide variety of jobs. We compete for staff talent in a number of markets. Our intention is to benchmark jobs to the markets that best reflect our recruiting practices. For example, we recruit for some positions among local Waco-area employers, regardless of industry. On the other hand, the market for most higher education-specific jobs would be institutions with similar characteristics to Baylor University. The staff compensation program markets are shown in Appendix 1.

B. Pay-for-Performance

The University is committed to paying for performance, and our compensation and performance management programs have been designed in support of this principle. The annual performance appraisal process is integrated with the compensation program to provide performance-based merit increases.

The mission of Baylor University is to educate men and women for worldwide leadership and service by integrating academic excellence and Christian commitment within a caring community.

“Staff at Baylor University are afforded opportunities for personal and professional development by engaging in rewarding and challenging work. Equitable and competitive recognition of staff members is necessary to attract and retain the talent that will make valuable contributions to the mission of Baylor University.”

- John J. Whelan, JD, Associate Vice President for Human Resources

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Section 3: Overview of the Compensation Program

The overall design of the staff compensation program is simple: market value based on job content and roles determine the pay band, and the skills, knowledge, experience, and performance of the incumbent determines an individual’s pay level within the pay band.

A. Market-Based Pay Band Schedule

The Pay Band Schedule consists of 16 pay bands for all staff positions. The program is market-based, which means that:

Pay bands are based on a detailed analysis of market pay levels for Baylor jobs, and

Jobs are assigned pay bands based primarily on their market values

Since the program is market-based, it is essential that the University collect and use only accurate, current and valid data. The data used to develop the pay bands was collected from pay surveys conducted annually by reputable survey companies, including the College and University Professional Association for Human Resources (CUPA-HR). Human Resources (HR) reviews the pay schedule regularly using these data sources as well as others and will update the pay schedule as necessary to maintain competitiveness.

Generally, HR will not use data from other sources unless the methodology and approach can be validated. This means that data from magazines, the Internet, and most other widely distributed media will not be considered by HR in determining a job’s pay band or an individual’s pay level.

Market Assessment Based on Job Role,

Responsibilities and Skill

Requirements

BandPosition

within a BandRecommended

Base SalaryPay Band Position within a Pay Band

RecommendedBase Pay

Individual Assessment Based on Knowledge, Skills, Experience, and

Performance

+ =

determines determines

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B. Job Descriptions

Since jobs are assigned to pay bands based on their content, role and responsibilities, it is important that job descriptions be current, accurate and complete. Job descriptions describe the essential functions of a job and are used for a number of important purposes, including:

Benchmarking: to assist in determining the competitive pay for the job, to ensure jobs are assigned to the appropriate pay bands and classified appropriately under the FLSA.

Internal Equity: to assist in assuring comparable pay opportunities for comparable jobs.

Performance Appraisals: to ensure that the staff member and supervisor have a clear, shared understanding of the job’s essential functions.

Recruiting: to ensure that the job posting accurately reflects the job’s essential functions in order to identify the most appropriately qualified candidates and to provide new staff with a clear understanding of the job.

Dispute Resolution: to assist in resolving legal and other staff member relations issues that may involve issues related to job responsibilities.

All job descriptions must be written in the Baylor University format. Staff should work with their supervisor and HR to develop job descriptions.

C. Job Titles

A job title should clearly and accurately describe the job roles and responsibilities. In order to ensure that titles are appropriate descriptors and to ensure consistency across the University, job titles should be reviewed and approved by the appropriate divisional Vice President and HR prior to their use.

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Section 4: Program Administration Roles and Responsibilities

University Leadership, HR, supervisors and staff all have roles to play in maintaining the staff compensation program and ensuring that the program is managed appropriately.

A. University Leadership (The President and Executive Council) University Leadership is responsible for endorsing the compensation strategy and ensuring that pay practices at the University align with the strategy and sound compensation principles. University Leadership will review and approve any substantive program modifications.

B. Human Resources

The Human Resources Department serves as a partner and resource to University Leadership and supervisors. Specifically, HR has several important roles and responsibilities in managing compensation:

Communicate the program and pay guidelines to help supervisors understand all aspects of the compensation program

Provide information, data, and advice on pay levels, band assignments, policies, and practices

Provide expert guidance, perspective, and support to help supervisors understand how appropriate pay decisions are made, and assist supervisors in developing pay recommendations

Review compensation to identify and address any significant variations in practices both within and among departments/divisions at the University

Assign jobs to pay bands for University Leadership review and approval

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C. Supervisors

Supervisors play a critical role in managing the compensation program because they provide important job and staff member information to HR, and collaborate with HR in making pay decisions. They are the first line of communication with staff.

Supervisors have the following responsibilities:

Work with HR to determine appropriate hiring rates and pay increases

Recommend merit increases consistent with University guidelines, market factors, budget constraints, and approval processes

Ensure that their staff understands the compensation program and the link to performance appraisals

Provide open, honest, and timely feedback to their staff on compensation issues, answering both specific and general questions about pay

Work with their staff to keep job descriptions current and accurate

Use HR as a resource to ensure that they understand the compensation program and communicate it appropriately

The University expects that supervisors will be open and honest about the pay program and pay guidelines with their staff. Supervisors should promote this openness without disclosing specific pay.

D. Staff

While staff are not responsible for making or recommending pay decisions or actively managing the compensation program, they do have other important responsibilities:

Understand the compensation program by using the resources Baylor makes available (e.g., written materials, orientation sessions)

Discuss questions or concerns with their supervisor and/or HR

Work with their supervisor to keep their job description updated, as changes occur

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Section 5: Managing Pay within a Band

If the bands are wide enough, they provide appropriate pay for staff with a variety of skills, knowledge, experience and performance levels. Pay decisions will be made using the following model:

New to job and field, has little or no direct, related prior experience

On steep learning curve, building both skills and knowledge as well as ability to handle job responsibilities

Performs some/most job responsibilities with increasing effectiveness

Possesses all/most of the basic knowledge and skill requirements, but may need to build upon them through experience

May still be learning some aspects of job or developing expertise to handle them more independently and effectively

Consistently exhibits many or most desired competencies to perform job successfully

Performs all aspects of job effectively and independently

Experienced in the job and possesses required knowledge and skills

Consistently exhibits desired competencies to perform job successfully

Seasoned and proficient at building job responsibilities

Expert in all job criteria

Has broad and deep knowledge of own area as well as related areas

Depth and breadth of experience, specialized skills, perspectives, and significant value to Baylor

Serves as expert resource and/or role model/mentor to others in similar jobs or to other areas of the University

Performance will determine progression within the level.

Paying for the Job

(based on external market)

Paying for the

Individual (based on

performance and skill)

Skilled and Experienced

Minimum Market Value Maximum

Less Skilled and Experienced

Highly Skilled and Experienced

¼ ¾

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Section 6: Pay Guidelines

A. Paying within the Band

The compensation program’s pay bands are wide enough to accommodate a variety of experience and performance levels, and all staff can expect to be paid within the pay range associated with their job’s band. There may be rare instances where a pay above the band maximum may be appropriate, but this must be reviewed and approved by the appropriate divisional Vice President and HR.

No one will be paid below the band minimum, unless their performance and skills do not meet the minimum standards for their job. In this case, the supervisor will work with the staff member to improve skills and/or performance. Once acceptable skills and performance have been achieved and sustained for an agreed upon period of time, the staff member’s pay will be raised to minimum.

B. Compensation for Part-Time Staff

Pay for part-time staff is managed under the same guidelines as for regular full-time staff, with the salary being pro-rated to reflect the reduced work schedule pay.

C. Hiring Rate

The hiring rate of pay for a new staff member to Baylor University will be set by reviewing the candidate’s qualifications for the job as compared to the definitions for pay bands (See Section 5 of this guide). This will ensure a new staff member begins their job with an appropriate pay based on their skills, knowledge, and experience.

D. Degrees and Certifications

The department head in consultation with HR will determine the applicability of education or certification that is in addition to the minimum qualifications of the position. Note: This consultation typically occurs prior to submission of the BearQuest project or through the approval steps of the BearQuest project, as preferred by the department head.

No adjustment will be made if the education or certification is deemed inapplicable. A staff member may receive only one increase for a degree per position. The increase is contingent upon the availability of budgeted University funds. If University funds are not available, departmental funds may be used.

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Degrees

Maximum adjustment according to education required by the job description:

Education Obtained by Staff Member

High School Education Required

Associate Degree

Required

Bachelor’s Degree

Required

Master’s Degree

Required

Doctoral Degree

Required High School Education -- -- -- -- -- Associate’s 5% or -- -- -- -- Bachelor’s 5% 5% -- -- -- Master’s -- -- 5% -- -- Doctoral -- -- -- 5% --

occurs prior to

Professional Certifications

A professional certification that allows an increase of responsibility or authority brings added value to the position and that is obtained after prolonged study may qualify for an adjustment of 3%. A certification that simply recognizes the completion of a program (i.e., during a three day workshop) or certifies a level of job knowledge does not qualify for an adjustment. Review Process for Adjustment in Salary for a Degree or Certifications:

Once a staff member receives a degree or certification, they must notify their supervisor; and

Provide a copy of the degree or certification to HR, for the staff member’s file

The department head or supervisor must submit a request into BearQuest for the staff member to receive the increase; and

Justification on how the degree is applicable to the staff member’s current position should be attached to BearQuest

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E. Merit Increases

Baylor University intends to reward staff for their contributions to the University. The most common reward approach is through performance-based merit increases.

Each year the University will analyze financial data, as well as external indicators relative to pay increases (e.g. CUPA-HR survey), and if appropriate, approve a merit increase budget. While the amount is generally expressed as a percentage of payroll, this amount is not necessarily what each individual staff member will receive.

Merit increases are intended to reward staff for performance that contributes to both the individual department’s goals as well as the University’s overall goals. A careful and thorough assessment of each staff member’s performance through the performance appraisal process should be conducted before an increase recommendation is developed. HR will provide annual merit increase information to assist supervisors, as well as performance management tools and processes.

The university’s policy is to not pay above the maximum of the range; however, lump sum increases may be granted where performance exceeds expectations. A lump sum increase may be granted when a staff member’s pay rate is at or near the maximum of the pay band, and the desired percentage increase will cause the pay rate to exceed the maximum of the pay band.

Generally, if merit and lump sum increases are authorized, they will be distributed effective on established dates.

F. Supplemental and Interim Pay

Exempt Staff

An exempt staff member, by nature of their position, is considered to be available for work assignments without additional compensation at times other than their regularly scheduled hours and appointments. The University does provide extra compensation to exempt staff when it is in the University's interest to utilize the services of exempt staff for extra and non-continuous assignments that meet the guideline for supplemental pay.

Non-Exempt Staff

A request for a non-exempt staff member’s participation in a project that involves additional hours of work for another University department (and not their assigned department), must be submitted on a Temporary Personnel Budget Action request; using the Employment Management System (EMS) via the BearQuest system. A non-exempt staff member must have prior approval by their assigned supervisor or department head to participate in the project. Additional work performed in the non-exempt staff member's department should be reported in Web Time Entry for overtime calculation purposes.

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Guidelines for supplemental pay The duties to be performed should be clearly differentiated from the types of duties the

individual normally performs in their job description.

Normally, the duties should not be performed on a continuing basis. The work should not be performed during the regular work schedule of the individual, nor should it in any way impair the ability of the staff member to carry out their regular responsibilities.

An Interim Assignment in which an individual is assigned (in writing) to a different position (either in the same pay band or in a higher band) on a temporary basis where there is a vacancy. See Interim Assignment Section for more information.

If additional duties performed are teaching duties, no more than two 3-credit courses (or their

equivalent) may be taught in an academic year. (See Staff Teaching Baylor Courses BU-PP 034).

Typically, the work should not be performed for the supervisor/department head for whom

the staff member regularly works. Exceptions to this include when extraordinary effort is required of the staff member for project work that is in addition to or outside of one's normal scope of responsibilities such as consulting, research, writing or analysis.

A staff member's participation in a project that involves extra compensation from another

University's department should have prior approval for the participation and the amount of extra compensation from the staff member's supervisor or department head and divisional Vice President.

Supplemental pay may be used for the payment of taxable benefits for both exempt and non-exempt staff members (e.g., cell phones, car stipends, home offices, sign on bonuses, incentive pay, honorary awards, etc.).

Interim Assignment

The individual will be held accountable for the scope of the interim role that is identified by HR and their supervisor at the time of the Interim Assignment. HR and the manager overseeing the interim role will determine the potential compensation, as follows:

Interim Assignment to a position in the same pay band – If the interim position has the same pay potential as the individual’s own position, they may be eligible for supplemental pay equal to 5-15% of their base pay, depending on the degree of complexity and/or importance of the additional work (e.g., same budget, personnel, organizational decision making authority as the previous person in that role).

Interim assignment to a position in a higher pay band – Since the interim position has a higher base pay potential than the individual’s own position, an individual taking on such an appointment would be eligible for supplemental pay which is determined under the University’s promotional guidelines, as if the individual were being promoted to this position, and remaining in effect until the Interim Assignment is completed.

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At the end of a qualified interim role, individual pay will return to the original base pay and will be increased by the same percentage amounts that the individual received through merit payments during the interim role. An individual memorandum will be given to the faculty or staff member outlining this arrangement.

No changes to base pay will be retroactive.

Method and timing of pay for Supplemental Pay (including Interim Assignments)

Complete a Supplemental Pay request using the Employment Management System (EMS) via

the BearQuest system.

G. Off-Cycle Pay Increases

Discretionary increases in base pay are performance-based increases that occur at any time during the year, other than the normal increase cycle. There may be other times, however, when a pay increase may be appropriate. If a supervisor wishes to provide an off-cycle increase, they should discuss the increase with the divisional Vice President and HR to determine if the pay increase is justified, compatible with the market, and consistent with the University’s pay guidelines.

The supervisor is encouraged to document the rationale that led to the granting of an off-cycle pay increase. A copy of this document must be sent through the Employment Management System (EMS) via the BearQuest system. Requests for off-cycle pay increases may need to be reviewed and approved by a Review Committee that meets throughout the year.

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H. Pay Band Adjustment Guidelines

Expanded Responsibilities in a Current Job

From time to time a job may be assigned additional duties that do not materially change the job and, therefore, do not result in a pay band change. When this occurs, a pay adjustment for the individual within the existing pay band may be appropriate based on the staff member’s skills, knowledge, experience, and performance.

When determining an appropriate increase, HR and supervisors will collaborate to determine the appropriate increase, with the approval of the divisional Vice President.

Moving to a Job in the Same Pay Band

A staff member can advance by taking a new job in the same pay band. This enables an individual to become more versatile and more broadly skilled, contributes to his/her value to the University, and may eventually lead to promotion to a job in a higher job pay band. While this type of transfer may or may not involve assuming greater responsibilities, Baylor wants to reward such diversification whenever appropriate.

HR and supervisors will collaborate to recommend a staff member’s pay within the pay band, based on the staff member’s skill, knowledge, experience, and performance. Since circumstances vary and each staff member has a different pay history, it is important to consider multiple factors when making pay decisions relating to pay adjustments. These factors include:

Degree of increase in responsibilities

Current level of performance compared to expectations

Current pay level relative to the pay band

Pay compared to peers within the pay band with similar skills, knowledge and competencies

Importance (and possible scarcity) of the role and the staff member’s skills to the University

Depth and breadth of the staff member’s skills

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Determining an appropriate in-band increase

Criteria Guideline for

Increase*

Responsibilities add noticeably to job requirements, and

New responsibilities are closely related to current responsibilities. 1-3%

Responsibilities add noticeably to job requirements.

New responsibilities are somewhat more complex than current responsibilities. 4-6%

Responsibilities add a major component to the job requirements.

New responsibilities are significantly more complex than current responsibilities. 7-9%

Criteria Assessment of Staff Member


Moderate Significant

Performance compared to expectation

Effective Exceptional

Current pay relative to pay range of pay band

High Low

Current pay relative to peers (with similar skills, knowledge, competencies, and experience)

High Low

Criticality of role/skills to Baylor Moderate Significant

Depth and breadth of skills and knowledge

Moderate High

Guideline Percentages for adjustments

Modest Increase

1-3%

Moderate Increase

4-6%

Significant Increase

7-9%

The potential increase percent should then be compared to the definitions for the pay band. The following pages show two examples of how this chart can be used. In all cases, equity adjustments are dependent upon available financial resources, and should consider internal equity.

* Human Resources will work with supervisors to determine actual increase amounts.

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Example 1

Assume Betty is currently in Pay Band 3 and is receiving an equity adjustment within Pay Band 3. She is a good performer, consistently performing at an above-expectation level; however, the depth and breadth of her skills are only somewhat above a moderate level. Her pay is relatively high compared to peers within the pay band. When this information is plotted on the chart, the pattern appears as follows:

Criteria Betty’s Assessment Results





Current pay relative to pay range of pay band

High Low

Current pay relative to peers (with similar skills, knowledge, competencies, and experience)

High Low



Moderate High


Modest Increase

1-3%

Moderate Increase

4-6%


7-9%

Since the pattern is skewed towards the middle range of the increase options, a 4-6% increase is appropriate for Betty.

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Example 2

Assume Bobby is currently in Pay Band 3 and is receiving an equity adjustment within Pay Band 3. His performance consistently exceeds expectations and the depth and breadth of his skills are very high. His pay is relatively low compared to peers within the pay band. When this information is plotted on the chart, the pattern appears as follows:

Criteria Sara’s Assessment Results





Current pay relative to pay range of new band

High Low

Current pay relative to new peers (with similar skills, knowledge, competencies, and experience)

High Low

Criticality of role/skills to Baylor



Moderate High


Modest Increase

1-3%

Moderate Increase

4-6%


7-9%

This pattern is clearly skewed towards the high range of the increase options. Bobby would be eligible for a significant increase, a 7-9% increase is appropriate for Bobby.

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Moving to a Job in a Lower Pay Band

It may at times be necessary to transfer a staff member to a position in a lower pay band. This most likely will occur as a result of a more appropriate fit between the person’s skills and the skills and competencies of a different job. The incumbent’s pay will remain the same for University actions (not related to performance), and reduced for voluntary transfers and demotions. The incumbent’s pay will be managed within the new pay band’s pay range. Moving to a Job in a Higher Pay Band

Advancing to a job in a higher pay band involves taking on significantly greater responsibilities. It may warrant an increase to recognize these additional responsibilities and to ensure that the staff member’s pay is consistent with the market value for the new job. (An exception would be if the staff member’s current pay is very high in the band for his/her current band.)

HR and supervisors will collaborate to recommend a staff member’s pay within the new pay band, based on the staff member’s skill, knowledge, experience, and performance. Since circumstances vary and each staff member has a different pay history, it is important to consider multiple factors when making pay decisions relating to promotions. These factors include:

Degree of increase in responsibilities.

Current level of performance compared to expectations.

Current pay level relative to the new pay band.

Pay compared to peers within the new pay band with similar skills, knowledge and competencies.

Importance (and possible scarcity) of the role and the staff member’s skills to the University.

Depth and breadth of the staff member’s skills.

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Determining an appropriate increase for moving to a higher band

To use this chart, read each criteria statement. Consider how each statement applies to the staff member and plot the assessment on the corresponding line. After plotting each of the four criteria, a pattern is likely to be evident. This pattern will help develop an appropriate increase recommendation.

Criteria Assessment of Staff Member






High Low


High Low



Moderate High


Modest Increase

1-5%

Moderate Increase

5-9%


8-18%

The potential increase percent should then be compared to the definitions for the new band and if necessary to better reflect the staff member’s contributions and capabilities for the new job.

The following pages show two examples of how this chart can be used. In all cases, promotional increases are dependent upon available financial resources, and should consider internal equity.

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Example 1

Assume Eric is currently in Pay Band 8 and is moving to a job in Pay Band 9. He is a good performer, consistently performing at an above-expectation level; however, the depth and breadth of his skills are only somewhat above a moderate level. His pay is relatively high compared to peers in the new band. When this information is plotted on the chart, the pattern appears as follows:

Criteria Eric’s Assessment Results






High Low


High Low



Moderate High


Modest Increase

1-5%

Moderate Increase

5-9%


8-18%

Since the pattern is skewed towards the middle range of the increase options, a 5-9% increase is appropriate for Eric.

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Example 2

Assume Sara is currently in Pay Band 8 and is moving to Pay Band 9. Her performance consistently exceeds expectations and the depth and breadth of her skills are very high. Her pay is relatively low compared to peers in the new band. When this information is plotted on the chart, the pattern appears as follows:

Criteria Sara’s Assessment Results






High Low


High Low

Criticality of role/skills to Baylor



Moderate High


Modest Increase

1-5%

Moderate Increase

5-9%


8-18%

This pattern is clearly skewed towards the high range of the increase options. Sara would be eligible for a significant increase, an 8-18% increase is appropriate for Sara.

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I. Temporary Staff Employment

From time to time it may be necessary for staff at Baylor University to either take on additional or different responsibilities temporarily. While all staff are expected to fill in for vacations and other short-term absences from time to time, in some circumstances additional compensation may be warranted. A supervisor initiating a Temporary Staff Employment in their area of responsibility must submit a request through the Employment Management System (EMS) via the BearQuest system.

HR will review the request to ensure that the compensation request is appropriate, to understand implications of the Temporary Staff Employment on the staffing and workload of the department and to identify any areas of concern related to the request. Please see Temporary Staff Employment Policy BU-PP 834 for additional information on temporary employment.

J. Benchmarking Reviews

Jobs are assigned to pay bands based on external and internal benchmarking. Since the basis for this decision is job content, significant changes in job content may warrant a review of the job and its benchmarking.

The following are examples of situations that may warrant re-benchmarking a job:

Department reorganization and job restructuring.

Addition of full-time staff reporting to the job.

Addition of new area(s) of responsibility.

Change in level of authority.

Small changes in a job do not influence market value and therefore would not warrant re-benchmarking (e.g., different software to handle same job responsibilities, procedural changes to existing work, responsibility for overseeing student workers). In addition, a job would not be re-benchmarked if the incumbent earns a degree or achieves another educational milestone, unless this results in changes in the job, responsibilities, level of authority, etc.

Generally, requests for job benchmarking should be made by the supervisor to whom the position reports, and not by individual staff. If a staff member believes that their job needs to be evaluated, he/she should discuss this with their supervisor.

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K. Fair Labor Standards Act

Exempt/Non-Exempt Status and Overtime Pay

Federal and state laws require that overtime must be paid for certain, but not all, jobs. The Federal law is the Fair Labor Standards Act. The term “exempt” refers to jobs that are excluded from these overtime requirements. This means that staff are not entitled to overtime pay if the job is “exempt” regardless of how many hours are worked.

The term “non-exempt” refers to jobs that are not exempt from legal overtime requirements. This means that staff in non-exempt jobs are entitled to overtime pay for all time worked beyond 40 hours in a week. In accordance with legal requirements, whether a job is classified as exempt or non-exempt depends on the content of the job. It does not depend on how the staff member (or the supervisor) wants the job to be classified. HR makes the final decision as to whether a job is exempt or non-exempt, based on an analysis of the job as compared to Federal regulations.

If a job is classified as non-exempt, staff are entitled to receive overtime compensation for each hour worked beyond 40 hours in a work week. The overtime rate of pay is 1½ times the regular hourly rate for each hour worked (not for each hour paid). Prior to working beyond the normally scheduled hours, staff should get approval from the supervisor.

In some instances, based on the needs of the department, some overtime may be a condition of employment or continued employment. In other situations, a job’s work schedule may be different from the typical University work week so that evening and weekend coverage can be provided without the University having to incur the expense of overtime pay. Supervisors are responsible for letting staff know the needs of the department and each staff member’s expected schedule.

If a staff member works in more than one job at the University, the supervisor should check with HR to determine the appropriate pay band and pay for the staff member.

Pay for All Time Worked (non-exempt staff only)

Federal and state laws require that staff in non-exempt jobs must be paid for all the time they work. Time worked in excess of 40 hours will be paid at an overtime rate. Staff who come to work early and begin working must record this time on the timesheet, and will be paid. In order to adhere to the budget, supervisors must inform staff in advance of restrictions in the number of overtime hours worked. Please see Work Hours / Schedules (BU-PP 802) and Overtime Pay (BU-PP 305) polices for additional information.

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Section 7: Maintaining the Compensation Program

The University will review market trends on an annual basis to determine whether pay in the market has moved and whether an adjustment to the pay band schedule is necessary.

HR will consult reputable data sources to develop a recommended structural increase and will present to University Leadership for approval. If an increase is approved, HR will update the pay schedule by the appropriate percentage (increasing each minimum, midpoint, and maximum by the approved percent).

Market and equity studies of each area in the University will be conducted periodically to ensure that the band assignment of individual jobs continue to provide competitive pay opportunities.

A. Equity and Market Adjustments

The HR department reviews market data and internal pay regularly. From time to time, it may be necessary and appropriate to adjust pay to recognize significant market changes or to establish/maintain internal equity.

“Market Adjustment” refers to an adjustment that is made to recognize changes in the competitive market pay for a job. Market adjustments are unlikely to occur often, because the pay band schedule is updated regularly to ensure continued competitiveness. Occasionally, however, unusual market circumstances may warrant an adjustment.

“Equity Adjustment” refers to an adjustment that is made to ensure that an individual staff member’s pay appropriately reflects their individual skills, knowledge, experience and performance. Equity adjustments may be made at the same time as the merit increase, but should be clearly communicated as such to the staff member to avoid confusion.

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Section 8: Benchmarking Standards

This section is intended to set consistent guidelines for benchmarking jobs to the market as well as internally.

This section is divided into the following:

A. Prepare and Collect Information

B. Identify the Appropriate Comparison Market

C. Select the Appropriate Data Sources

D. Match Baylor’s Job to the Survey Jobs

E. Analyze the Data

F. Conduct Internal Benchmarking

A. Prepare and Collect Information

Learn as much as possible about the department as well as the job before attempting to benchmark the job:

The organizational structure—reporting structure, supervisory responsibilities, peers reporting to same position, etc.

Role, responsibilities, primary accountabilities and skill/expertise requirements of the position.

Jobs that are related to or inter-dependent with the job being priced.

Expectations or situations that may make the job challenging or difficult to perform, or conversely, which may make the job easier or less difficult to perform.

Unique skills or background requirements.

Sources of job and department information include:

Organization charts

Job descriptions

Department/division supervisors and supervisors

Incumbent

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Determine why the job is being benchmarked.

If this is a new job… If this is an existing job…

Collect and review the job description

Understand why the job has been created

Identify any changes to other jobs in the area, to ensure internal equity

Learn about any unique situations that might affect the pricing, such as unique skills, unusual University requirements, hard-to-value job content, job crafted to suit a person

Collect and review the job description

Understand why the request for pricing is being made

– Job content change?

– Internal equity concerns?

– Concern over competitiveness?

– Change in the relationship with other jobs?

Check within the area and the broader University to see if the job matches other similar jobs internally. This is important to ensure consistency in how jobs are priced and also to ensure internal equity between staff in similar jobs.

NOTE: There must be a clear and current job description for each job being priced. This will ensure that HR has the information needed to price the job and to ensure agreement about job content. Without this understanding, disagreements about the benchmarking results are likely.

B. Identify the Appropriate Comparison Market

University leadership has defined the appropriate markets for jobs shown below, and has set the market median as the desired pay position:

EEO Codes (Appendix 4) Comparison Group Definition

Senior Administrators See comparison market list in Appendix 1

Executive Management See comparison market list in Appendix 1

Mid-Level Management See comparison market list in Appendix 1

Professional See comparison market list in Appendix 1

Paraprofessional / Technical See comparison market list in Appendix 1

Administrative Support See comparison market list in Appendix 1

Service and Skilled Workers See comparison market list in Appendix 1

C. Select the Appropriate Data Sources

Not all data is good data. There is a lot of information available, so the need to be vigilant about data quality has never been greater. This is particularly important in a market-based program. (See Appendix 3 for a current list of surveys that are used by Baylor University.

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Use data from reputable survey firms. If using industry and association surveys or unfamiliar surveys, look for the following to ensure that the methodology is sound and the results are valid:

– Industry, size and geographic breakdowns.

– List of participating organizations.

– Position descriptions for each survey job, not just titles.

– Reasonable sample size of both participants and incumbents.

– Base pay, incentives and total cash compensation results reported separately, as well as aggregated.

– Analysis displayed in median, average and percentiles.

– If possible, look at the data input form to see how clear it is; confusing forms may lead to inaccurate data being reported by participants.

Data from pay surveys in magazines or from the web generally does not meet Baylor’s quality standards for many reasons:

– Collection and/or analysis may not be valid, and at times maybe self-reported

– Jobs may be matched on title not content, and multiple levels in a job family maybe mixed together.

– Data often aggregates a wide range of organizations, many industries, many sizes, and many regions—thus mixing apples with oranges.

– Age of raw data is usually unknown; uncertain whether data is updated to common date.

– Sample size is often unknown, may be statistically inadequate.

– Averages are often used but one or two outliers can skew results, so averages are not true representations of market norms.

D. Match Baylor’s Job to the Survey Jobs

When matching the University’s job to the survey job:

Do not rely on titles—either for the Baylor job or for the survey job.

Review the primary purpose of the Baylor job, as well as the details of the job description.

Determine the job family in which it fits; e.g., Accounting and Finance, Information Technology, Public Safety, etc. (See Appendix 6 for a full list of job families)

Read the survey thumbnail descriptions for all jobs in the job family.

Identify the most appropriate match:

– Job matches are rarely perfect—use the 70% rule of thumb: If 70% of the job’s responsibilities are the same, then the job should be considered a match.

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Look at “Degree of Match” in surveys that provide it:

– Degree of match is a scale that participants use to convey whether their job is equal to, less than or greater than the survey job description.

– If degree varies significantly from “equal to” be cautious of data, unless it is confirmed by other sources.

– A “less than” or “greater than” designation may be helpful if your job is less than or greater than the survey description.

– If the job is significantly skewed to either “less than” or “more than,” then an adjustment to the data may be appropriate to normalize it.

Premiums or discounts may be applied to jobs to adjust for differences between the Baylor job and the survey job. This is called a Scope Adjustment. Use these adjustments cautiously and follow these guidelines.

Premium/ Discount Rationale

+ or - 5% Just noticeable difference between survey job and Baylor job

+ or - 10% Noticeable difference between survey job and Baylor job

Difference between non-supervisory job and first-level supervisor

+ or - 15% Obviously quite noticeable difference between survey job and Baylor job

Difference in level within function such as Supervisor versus Supervisor, or Supervisor versus Director

+ or - 20% Significant difference between survey job and Baylor job

Difference in level between management and senior management within the function, such as Director versus Associate Vice President versus Vice President

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“Layering” adjustments is not appropriate. Assume the job being priced is Budget Director and the Budget job family is as follows:

Budget Director Job being priced but no data is available

Budget Manager Two level difference between Budget Director and Senior Budget Analyst

Senior Budget Analyst

Data is available for this position

Budget Analyst

It is not acceptable to add two adjustments to the Senior Budget Analyst pay to “price” the Budget Director position.

If a job does not match a job in the surveys that reflect the University’s comparison markets, this job is called a “non-benchmark job” and will

be compared internally. See Section F: Internal Benchmarking.

Pricing Hybrid Jobs

A hybrid job is a job that has responsibilities in two different functional areas. For example, the following are hybrid jobs:

Vice President, Finance and Administration.

Manager, Compensation and Benefits.

The following are not hybrid jobs because they reflect a single job with responsibility for two functional areas:

Budget Analyst for Facilities and University Press.

Facilities Supervisor for Dormitories and Athletic Fields.

A hybrid job may be more complex than a single function job, depending upon the degree of similarity or difference between the separate functions and the nature of each function.

Some hybrid jobs are common in the market and are reflected in surveys (e.g., Vice President, Finance and Administration; Manager, Compensation and Benefits).

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Other hybrids are unique to the institution and are not found in surveys. In these cases:

Match survey data to the primary function of the position. Do not blend pay for single function jobs together to create price for multi-function job.

Since the incumbent in a hybrid job must be fully qualified to handle the primary single function, the pay must minimally be competitive with pay for the single function job. To attract and retain someone in a more complex role, an adjustment should be made to reflect the secondary responsibility.

Add a premium of 10%, 15%, or 20% depending on size and complexity of second function, as well as how the two functions combine to make up the complexity of the total job. Do not add premium for minor or occasional functions.

Illustration

Assume Baylor has a Compensation Analyst/Recruiter position. This is not a common job and is a good example for pricing hybrid jobs.

Example 1

Compensation Recruiting Situation Premium

70% of job 30% of job Progressive, complex compensation systems, responsible for program development, implementation, and communication, as well as administration

Responsible for recruiting for open positions:

Stable workforce primarily filling non-exempt

jobs from a plentiful labor market

10% applied to market pay for Compensation Analyst position

NOTE: In this case, the Compensation function is clearly the more difficult and complex of the two functions, while

Recruiting is important, but simple, and straightforward in this environment. The recruiting responsibilities make

the position “noticeably” different from traditional Compensation Analyst position.

Example 2

Compensation Recruiting Situation Premium

60% of job 40% of job Progressive, complex compensation systems, responsible for program development, implementation and communications, as well as administration

Responsible for recruiting for open positions at non-exempt, exempt professional level, and supervisor level:

Workforce is relatively volatile, scarce pool of

talent, some positions require high-level of

expertise and experience

15%, possibly 20% applied to market pay for Compensation Analyst

NOTE: The Recruiting function is significantly larger and more complex in this example. Recruiting in this environment

is difficult and requires creativity as well as significant time and effort to accomplish successfully.

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E. Analyze the Data

If possible, try to get more than one source for jobs that are not priced in CUPA-HR surveys.

Avoid using data reflecting only a small number of organizations or only a few incumbents. A small number of participants mean the data is heavily weighted by one organization’s pay philosophy and may not represent a broader market. A small number of incumbents would be heavily affected by individual pay, particularly outliers

There are three possible adjustments to be considered:

1. Scope Adjustment

Adjustment for difference in jobs between Baylor and the surveys. See the “Matching the Job” section.

2. Geographic Differential (NOTE: this would be used if regional/local data is not available)

Because of differences in the cost of living, some cities or states may have significantly higher or lower compensation levels. Applying a Geographic Differential allows you to adjust for differences in cost of living. For each raw data point, adjust, if necessary, for geographic differential.

For highly compensated positions a geographic differential is not essential.

3. Aged to a Common Date

Because it takes time to collect, analyze and report data, compensation surveys are not current as of the date a job is being priced. In addition, not all data sources have the same effective date. Therefore the data may need to be aged to a common date in some cases.

For each raw data point, age data from effective date of survey to common current date by the annual wage increase rate for higher education and job level/category.

Use WorldatWork, CUPA-HR, and SHRM as sources of annual wage increase rate.

Calculate aging factor as follows:

Increase Rate 12

x # Months From

Effective Date to Current Date

= Aging Factor

+ 1 = Percent

Adjustment

Example:

3.0% ÷ 12 = .25%

x 15 = 3.75% + 1 = 1.0375

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Collect the 25th percentile, 50th percentile, and 75th percentile pay to get the best view of market trends.

The median (50th percentile) of the data is the key reference point, since this is the University’s pay position and the pay schedule has been developed around this level. Generally, the percentiles represent the following:

– It represents (plus or minus 5% to 10%) the appropriate pay for someone is experienced in the job and has the skills and capabilities to handle the job duties effectively

– The 25th to 75th percentile range represents the range of pay that covers a variety of experience and skill levels – from the novice to the expert

– Actual pay decisions should be based on the pay range associated with the job’s pay band.

F. Internal Benchmarking

Many jobs at Baylor cannot be priced to the market, either because good data does not exist or because the job has been designed to meet a specific need at Baylor. Non-benchmark jobs can be assigned the pay band schedule by comparing them to benchmark jobs using a systematic process, shown on the following. (NOTE: the first line shows an example.)

Comparison Factors

Non-Benchmark

Job

Benchmark Job

Benchmark Band

Knowledge, Skills,

Specialized Training

Complexity of Job

Scope of Accountability

Total Comparison

Points

Recommended Band

Senior Accountant

Accountant 9 4 4 4 12 10

Legend for Comparison Factors

1 = Significantly Less 2 = Somewhat Less 3 = Similar 4 = Somewhat Greater 5 = Significantly Greater

GUIDELINES FOR DETERMINING BAND ASSIGNMENT

Total Comparison Points Relationship to Benchmark Suggested Initial Band Assignment

3 – 4 Significantly less than Further review/reconsider benchmark

5 – 7 Less than, but not significantly 1 band lower

8 – 10 Equal Same band

11 – 13 Greater than, but not significantly 1 band higher

14 – 15 Significantly greater than Further review/reconsider benchmark

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Appendix 1

COMPARISON MARKETS FOR PAY BENCHMARKING

EEO Codes Comparison Market Definition Executive Management National Professional National, Regional, and Local Waco Area Paraprofessional Technical Regional general industry for non-higher education jobs Administrative Support Local Waco area, general industry Services and Skilled Workers Local Waco area, general industry

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Appendix 2

Executive Management, Managerial and Professionals Level Comparisons

2009 USNWR Second 50:

American University (Washington, DC)

Auburn University (Auburn University, AL)

Baylor University (Waco, TX)

Boston University (Boston, MA)

Clark University (Worcester, MA)

Clemson University (Clemson, SC)

Colorado School of Mines (Golden, CO)

Drexel University (Philadelphia, PA)

Drexel University College of Medicine (Philadelphia, PA)

Fordham University (Bronx, NY)

George Washington University (Washington, DC)

Indiana University at Bloomington (Bloomington, IN)

Iowa State University (Ames, IA)

Marquette University (Milwaukee, WI)

Miami University (Oxford, OH)

Michigan State University (East Lansing, MI)

North Carolina State University (Raleigh, NC)

Northeastern University (Boston, MA)

Pepperdine University (Malibu, CA)

Purdue University Main Campus (West Lafayette, IN)

Purdue University System Summary (West Lafayette, IN)

Rutgers State University System Summary (New Brunswick, NJ)

Rutgers the State (New Brunswick, NJ)

Saint Louis University (Saint Louis, MO)

Southern Methodist University (Dallas, TX)

State University of New York at Binghamton (Binghamton, NY)

State University of New York at Stony Brook (Stony Brook, NY)

State University of New York College of Environmental Science

and Forestry (Syracuse, NY)

State University of New York System Summary (Albany, NY)

Stevens Institute of Technology (Hoboken, NJ)

Syracuse University Main Campus (Syracuse, NY)

Texas A&M University System (College Station, TX)

Ohio State University Main Campus (Columbus, OH)

Ohio State University System (Columbus, OH)

The University of Alabama (Tuscaloosa, AL)Tulane

University (New Orleans, LA)

University of Alabama System Office (Tuscaloosa, AL)

University of Alabama System (Tuscaloosa, AL)

University of Arizona (Tucson, AZ)

University of California-Riverside (Riverside, CA)

University of California-Santa Cruz (Santa Cruz, CA)

University of Colorado at Boulder (Boulder, CO)

University of Connecticut (Storrs, CT)

University of Delaware (Newark, DE)

University of Denver (Denver, CO)

University of Georgia (Athens, GA)

University of Iowa (Iowa City, IA)

University of Kansas Main Campus (Lawrence, KS)

University of Maryland College Park (College Park, MD)

University of Massachusetts (Amherst, MA)

University of Miami (Coral Gables, FL)

University of Minnesota-Twin Cities (Minneapolis, MN)

University of Nebraska - Lincoln (Lincoln, NE)

University of Pittsburgh (Pittsburgh, PA)

University of Pittsburgh System (Pittsburgh, PA)

University of Tulsa (Tulsa, OK)

University of Vermont (Burlington, VT)

Virginia Polytechnic Institute (Blacksburg, VA)

Worcester Polytechnic Institute (Worcester, MA)

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Appendix 3

CUPA-HR’s Administrative Compensation and Mid-Level Administration Surveys are the primary data sources for

benchmarking Baylor University staff positions.

Other reliable, reputable sources are surveys from:

Compensation Data Survey

Athletic Big 12 Survey

Athletic Division 1A Survey

Higher Education Information Technology Services (HEITS) Survey

Western Management

Watson Wyatt

For CUPA surveys:

The surveys do not include non-exempt positions, because these are typically priced locally, to general

industry.

The survey jobs tend to be the core higher education jobs, but finding data for multiple levels within a job

are rare

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Appendix 5

Baylor’s EEO Codes

EEO Codes – Are defined by the Equal Employment Opportunity Commission (EEOC) for required reporting. EEO codes are grouped together by similar skills sets and various job families 1. Executive Management:

Staff whose positions involve primary and major responsibilities for decision making and/or management of the university. These persons exercise discretion and independent judgment and usually direct the work of others. Staff with major responsibilities include: the president, vice presidents, general counsel,

athletic director, deans, department heads, associate/assistant directors and manager positions.

2. Professional:

Staff whose positions normally require either a college degree or comparable experience and entail high-level and diverse responsibilities.

3. Administrative Support:

Staff whose positions require clerical or secretarial duties; including staff responsible for internal and external communications, recording and retrieval of data or information, and other clerical work.

4. Paraprofessional/Technical:

Paraprofessional/Technical are staff whose positions require a combination of basic scientific knowledge and manual skill that can be obtained with a high school diploma plus additional technical education of the type offered in many technical institutes and junior colleges, or through equivalent on-the-job training.

5. Skilled Crafts:

Staff whose positions require specialized knowledge and skills acquired through on-the-job training, apprenticeship, or formal training/schooling.

6. Service/Maintenance:

Staff whose positions contribute to the safety and maintenance of campus life.

7. Temporary:

Staff who are employed in accordance with BU-PP 834 - Temporary Staff Employment.

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Appendix 6

Job Families

Academic Student Support

Accounting and Finance

Administrative Support

Athletics

Business Operations

Development

Event Management

Executive and Managerial

Executive Council

Health and Safety

Information Technology

Library, Museum, and Education

Marketing and Communications

Paraprofessional

Public Safety

Research and Grants

Skill and Service Workers

staff compensation plan - baylor university · 3 section 3: overview of the compensation program...

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