Presentation to Chuuk Campus Compensation & Benefits Study Results of Stages One & Two September 2010 College of Micronesia-FSM

Background Overview

COM’s current compensation model has four classifications of employees : Classified, Professional, Management and Faculty. Since their adoption in 1996 the classifications have not been adjusted to reflect appropriate labor markets and relevant economic standards. Background Overview

In brief, the study is to address the following areas: a) accurate classifications and compensation b) sustainable and competitive pay schedules c) incentive program(s) linking directly to pay schedules d) investigate duplicate and nonessential services Background Overview

Project Overview

Stage 2 : External Analysis Stage 1 : Internal Analysis (including Streamlining Supp. Projects : Performance Management Stage 3 : Implementation Project Overview Committee Results / Instructional Master Plan)

a) Current Compensation b) Job Evaluation c) Regression Analysis (Internal) Stage One : Internal Analysis d) Job Audit / Streamlining Results

a) Current Compensation

Base Salary5,893, Sp. Contract Services935, Housing822, Social Security379, Health198, Retirement175, Life40, ,445, $ % a) Current Compensation Budget - F/Y10

Instructional Affairs2,660, Administration1,752, Student Services954, CRE519, Presidents Office100, ,988, $ % a) Current Compensation Departments - as at 4/7/10

National2,788, Pohnpei1,044, Chuuk789, Kosrae577, Yap518, FMI269, ,988, $ % a) Current Compensation Campuses - as at 4/7/10

Sp. Service Contracts - Budget (F/Y09)864,198 Sp. Service Contracts - Budget (F/Y10)935,640 $ a) Current Compensation Special Service Contracts

Sp. Service Contracts - Budget (F/Y09)864,198 Sp. Service Contracts - Budget (F/Y10)935,640 Sp. Service Contracts - YTD (F/Y10) - six months782,179 $ a) Current Compensation Special Service Contracts

Sp. Service Contracts - Budget (F/Y09)864,198 Sp. Service Contracts - Budget (F/Y10)935,640 Sp. Service Contracts - YTD (F/Y10) - six months782,179 Sp. Service Contracts - YTD less UB & TSP695,048 $ a) Current Compensation Special Service Contracts

Sp. Service Contracts - Budget (F/Y09)864,198 Sp. Service Contracts - Budget (F/Y10)935,640 Sp. Service Contracts - YTD (F/Y10) - six months782,179 Sp. Service Contracts - YTD less UB & TSP695,048 $ a) Current Compensation Special Service Contracts

Sp. Service Contracts - Budget (F/Y09)864,198 Sp. Service Contracts - Budget (F/Y10)935,640 Sp. Service Contracts - YTD (F/Y10) - six months782,179 Sp. Service Contracts held by full-time employees (29%)227,533 $ a) Current Compensation Special Service Contracts

Instructional Affairs202, Administration21, Student Services1, CRE1, , $ % a) Current Compensation Special Service Contracts

b) Job Evaluation

Job evaluation is a process that re-examines the internal equity of all positions based on job size b) Job Evaluation

It achieves this by assessing the ‘job size’ of individual positions within an organization using a number of measurement factors b) Job Evaluation

Each factor provides a point value with their sum representing the total “points” value of the job b) Job Evaluation

Education Experience Complexity Scope of Work Problem Solving Supervision Received Work Environment Physical Demands Authority Exercised Results of Decisions Contacts Sup. & Man. Resp. b) Job Evaluation Criteria

147 Positions Evaluated b) Job Evaluation Results

Range Max Range Min Job Evaluation Points Average Median b) Job Evaluation Results

c) Regression Analysis

Company Regression Analysis (Base Salary) c) Regression Analysis Exponential Regression e.g. Position X = 450 JE points

Company Regression Analysis (Base Salary) c) Regression Analysis Exponential Regression e.g. Position X = 450 JE points Plot the base salary of all employees with the job title of Position X against 450 JE points

Company Regression Analysis (Base Salary) c) Regression Analysis Exponential Regression e.g. Position X = 450 JE points Plot the base salary of all employees with the job title of Position X against 450 JE points

COM-FSM c) Regression Analysis

Regression Analysis COM-FSM

Regression Analysis Student Services Instructional Affairs Administration Services CRE

Regression Analysis FMI Campus Chuuk Campus Pohnpei Campus National Campus Yap Campus Kosrae Campus

Regression Analysis Food Services Maintenance Bookstore Accounting Information Technology Human Resources IRPO Dev. & Comm. Relations

Regression Analysis LRC Agriculture Maths & Science Education Hotel Management Vocational Education Business Academic Programs Social Science Language & Literature

Regression Analysis Peer Counseling SSSP FAO Sports & Recreation ARO Student Life Counseling Dispensary (Plots Only)

d) Job Audit / Streamlining Results This stage also provided the ideal opportunity to collectively review the organizational structure of the College.

The focus here was : a) to investigate duplicate and non-essential services b) to integrate results with the work being undertaken by the College’s Streamlining Committee d) Job Audit / Streamlining Results

e) Cost Reduction / Management a) Stakeholder Management d) Master Plan(s) c.f. Instructional Programs f) Performance Management d) Job Audit Results Key issues that need to be addressed : c) Centralization of Supp. Services (where possible) b) Optimization of Regional Campuses

Management Structure Current Vice President Administration President Vice President Stud. Services Vice President CRE Vice President Inst. Affairs Exec. Director Land Grant

Management Structure Current Campus Director Pohnpei Campus Director Chuuk Campus Director Kosrae Campus Director Yap Campus Director FMI Vice President Administration President Vice President Stud. Services Vice President CRE Vice President Inst. Affairs Exec. Director Land Grant

Management Structure Current Campus Director Pohnpei Campus Director Chuuk Campus Director Kosrae Campus Director Yap Campus Director FMI Vice President Administration President Vice President Stud. Services Vice President CRE Vice President Inst. Affairs Exec. Director Land Grant Programs & Supp. Services CRE Co-ord.S.S. Co-ord.Inst. Co-ord.

Management Structure Proposed Ext. C. Director Pohnpei Ext. C. Director Chuuk Ext. C. Director Kosrae Ext. C. Director Yap Ext. C. Director FMI ? Vice President Administration President Vice President Stud. Services Vice President CRE Vice President Inst. Affairs Exec. Director Land Grant

Management Structure Proposed Vice President Administration President Vice President Stud. Services Vice President CRE Vice President Inst. Affairs Exec. Director Land Grant Programs & Supp. Services CRE Co-ord.Inst. Co-ord. Ext. C. Director Pohnpei Ext. C. Director Chuuk Ext. C. Director Kosrae Ext. C. Director Yap Ext. C. Director FMI ? Nat. Directors

Chuuk Extension Center

Program/ServicesProsConsRecommendationComments Carpentry & Cabinet Making Small business opportunities. Support for capacity building. Equipment on the Ground Maintain as a cohort Cohort AA in Teacher PrepDemand is high for certification Resources - having enough faculty to deliver the courses Maintain Strategic scheduling of courses needed. First priority for distance learning CA in Agriculture & Food Tech On going agriculture. CRE has staff to support the program. We have space now CRE space needs to be relocated to center Keep at CC CA in Secretarial Science There is a large work sector that needs training/retraining. Potential for adult education development Keep at CCCohort

Chuuk Extension Center Program/ServicesProsConsRecommendationComments Development Ed. Achieving College Excellence (ACE) There is always a need for Dev Education. Pell eligible High demand on resources Keep at CC CA in Law Enforcement There is a need. Professional Dev. Career Ladder Limited teaching faculty Keep at CC as a cohort Cohort Short Term TrainingThere is a high demand Additional funding Keep at CC Sector Dev Grants possible. Center Dir. to be proactive Public HealthCapacity building. Potential for PDP AHEC funding Keep at CC as a cohort Cohort NursingDemand and the need is there. National priority Potential for PDP AHEC Funding. Keep at CC as a cohort and strategic scheduling Cohort High school graduates to National Campus

Chuuk Extension Center Program/ServicesProsConsRecommendationComments Community Health Assistant Program/Health Worker On-going training/retraining need. Sector Dev. Grants? Change in State plan focus for Dispensary staffing Keep as PDP Cohort Dispensary worker TRIO ProgramsAdded value to our services. Indirect cost Soft moneyMaintain at CC UB Do we have any plans if soft money runs out? Financial AidMaintain 1Centralized services Admissions & Records 1 x personnel for Admissions & Financial Aid Centralized services Counseling/Tutoring/Advising 2 x counselors for counseling, tutoring, advising, peer counseling Business Office Recreation/Activities Dispensary

Chuuk Extension Center Program/ServicesProsConsRecommendationComments Library Resources are on the ground. Essential for supporting our curriculum programs Keep at CC Needs to be expanded to meet student enrollment and needs. Collection should reflect program offerings Bookstore Place duties under the Fiscal Officer Hire a part time clerk to help the fiscal officer TYC in Teacher PrepThere is a need. Potential for DL delivery Limited teaching faculty and course load for existing faculty Keep at CC as a cohort Cohort, strategic scheduling, CA in Trial CounselorThere is an on going need. Potential for PDP Limited teaching faculty. Relies on lawyers in the workforce Maintain at CC as a cohort Cohort CA in BookkeepingPotential for PDP. There is an on going need Program maybe outdatedKeep at CC Graduation rate is low

Chuuk Extension Center Program/ServicesProsConsRecommendationComments CA in Building MaintenanceThere is a high demand on and off island. Potential for PDP Limited teaching faculty Keep at CCHigh demand Proactive recruitment Apprenticeship ProgramPotential for PDPGet it off the groundGet something started as requested

e) Cost Reduction / Management a) Stakeholder Management d) Master Plan(s) c.f. Instructional Programs f) Performance Management c) Centralization of Supp. Services (where possible) b) Optimization of Regional Campuses Summary of Key Issues

- increased confidence in COM-FSM Stakeholder Management - development of partnership(s) c.f. industry - closer relationships / improved communication - collective needs assessment /continuous improvement - greater student focus / preparation / opportunities / jobs - business development / vocational awareness / education

- centralized support services (where possible) Extension Centers - increased enrollment / increased revenue - improved operational efficiency - wider curriculum (academic / voc. programs) - optimization of infrastructure / resources

Centralized Support Services - consistency of service delivery (current) - improved operational efficiency - optimization of resources - coordinated development of new services - timely procurement / delivery of resource materials (special focus)

- integrated approach to program development / delivery Master Plan(s) (in particular Instructional Master Plan) - balanced mix of quality academic and voc. programs - Instructional / Information Tech. / Infrastructure - collective needs assessment /continuous improvement - enhanced program evaluation / assessment / delivery - improved performance management (faculty)

Cost Reduction / Management - improved fiscal management - improved operational efficiency - optimization of resources - improved budgeting process

- greater accountability / managed expectations Performance Management - enhanced work planning - provision of constructive feedback mechanism - link to performance pay - link to training and development

Obtaining and analyzing market compensation data Stage 2 Compensation Structuring

Market Data - Sources

1. Regional Comparisons Guam Community College Palau Community College College of the Marshall Islands American Samoa Community College Northern Marianas College (unable to participate)

a) National Faculty Survey (CUPA) b) Community College Faculty Survey (CUPA) c) Mid Level Admin & Professional Survey (CUPA) d) Administrative Compensation Survey (CUPA) 2. U.S. Comparisons (GCC Report) Market Data - Sources

Regional Market Percentiles 5 th - 95 th Market Data

Regression Analysis COM-FSM

Regression Analysis PCC COM-FSM GCC CMI ASCC

Regression Analysis PCCCOM-FSM GCC CMI ASCC 50th 25th 5th 75th 95th

Regression Analysis 50th 25th 5th 75th 95th 15th 10th 5th

Regression Analysis 50th 25th 5th 75th 95th

Regression Analysis 50th 25th 5th 75th 95th

In developing a revised compensation model : KEY QUESTION Where in the market “should we / can we” position the College to be more externally competitive i.e. in attracting and retaining employees ? Stage 2 Compensation Structuring

Regression Analysis 50th 25th 5th 75th 95th

Structural Adjustment Cost

Current Base Salary Total Increase to 10 th Market Percentile New Base Salary Total Estimated Adjustment Cost (10 th Market Percentile - Region) $ 5,988,513 $ 79,991 $ 6,068,504 Current Total Compensation Increase to 10 th Market Percentile New Total Compensation $ 7,630,563 $ 101,925 $ 7,732,488 (1.3%)

Number of Employees (< 10 th ) Total Full-Time Employees Number of Employees (> 10 th ) 43 (11.8%) 320 (88.2%) 363 (100.0%) Estimated Adjustment (10 th Market Percentile - Region)

Current Base Salary Total Increase to 20 th Market Percentile New Base Salary Total Estimated Adjustment Cost (20 th Market Percentile - Region) $ 5,988,513 $ 204,272 $ 6,192,785 Current Total Compensation Increase to 20 th Market Percentile New Total Compensation $ 7,630,563 $ 260,283 $ 7,890,847 (3.4%)

Number of Employees (< 20 th ) Total Full-Time Employees Number of Employees (> 20 th ) 103 (28.4%) 260 (71.6%) 363 (100.0%) Estimated Adjustment (20 th Market Percentile - Region)

Current Base Salary Total Increase to 30 th Market Percentile New Base Salary Total Estimated Adjustment Cost (30 th Market Percentile - Region) $ 5,988,513 $ 464,105 $ 6,452,618 Current Total Compensation Increase to 30 th Market Percentile New Total Compensation $ 7,630,563 $ 591,363 $ 8,221,926 (7.7%)

Number of Employees (< 30 th ) Total Full-Time Employees Number of Employees (> 30 th ) 185 (51.0%) 178 (49.0%) 363 (100.0%) Estimated Adjustment (30 th Market Percentile - Region)

Current Base Salary Total Increase to 40 th Market Percentile New Base Salary Total Estimated Adjustment Cost (40 th Market Percentile - Region) $ 5,988,513 $ 871,158 $ 6,859,671 Current Total Compensation Increase to 40 th Market Percentile New Total Compensation $ 7,630,563 $ 1,110,030 $ 8,740,593 (14.5%)

Number of Employees (< 40 th ) Total Full-Time Employees Number of Employees (> 40 th ) 243 (66.9%) 120 (33.1%) 363 (100.0%) Estimated Adjustment (40 th Market Percentile - Region)

Current Base Salary Total Increase to 50 th Market Percentile New Base Salary Total Estimated Adjustment Cost (50 th Market Percentile - Region) $ 5,988,513 $ 1,400,322 $ 7,388,835 Current Total Compensation Increase to 50 th Market Percentile New Total Compensation $ 7,630,563 $ 1,784,290 $ 9,414,853 (23.3%)

Number of Employees (< 50 th ) Total Full-Time Employees Number of Employees (> 50 th ) 303 (83.5%) 60 (16.5%) 363 (100.0%) Estimated Adjustment (50 th Market Percentile - Region)

Note : the transition to a more competitive market position may take over a number of years e.g. FY th market percentile FY th market percentile FY th market percentile FY th market percentile Option 1

Note : the transition to a more competitive market position may take over a number of years e.g. FY th market percentile FY12 - standard increment FY th market percentile FY14 - standard increment Option 2

COM-FSM (full-time employees)No% Base Salary Increase Administration Employees < 10th Market Percentile ,803 Administration Employees > 10th Market Percentile ,886 Instructional Affairs Employees < 10th Market Percentile ,274 Instructional Affairs Employees > 10th Market Percentile ,427 Student Services Employees < 10th Market Percentile61.73,903 Student Services Employees > 10th Market Percentile ,572 CRE Employees < 10th Market Percentile CRE Employees > 10th Market Percentile308.32,541 Presidents Office Employees < 10th Market Percentile10.32,977 Presidents Office Employees > 10th Market Percentile TOTAL ,991 Target a Specific Group for an Initial Adjustment e.g. Option 3

Stage 3 : Implementation

New Pay Schedule Options Stage 3 : Implementation

Pay Schedule Option 6.2%5.8%5.5%5.2%4.0%3.8%3.7%3.5% GradeStep 1Step 2Step 3Step 4Step 5Step 6Step 7Step 8 3.8%A$13,990$14,865$15,739$16.614$17,488$18,188$18,887$19, %B$14,534$15,443$16,351$17,260$18,168$18,895$19,621$20, %C$15,133$16,079$17,024$17,970$18,916$19,673$20,429$21, %D$15,840$16,830$17,820$18,810$19,800$20,592$21,384$22, %E$16,656$17,697$18,738$19,779$20,820$21,653$22,486$23,318 (Traditional Approach)

Pay Schedule Option (New Approach)

Every employee would have a : grade, step and sub-step e.g. Employee X Grade I, Step 6, Sub-step B Pay Schedule Options

Transition Process to New Compensation Model Stage 3 : Implementation

Competitor’s Approach

600 JE Points 500 JE Points Competitor’s Approach

600 JE Points (20 Positions) 500 JE Points Competitor’s Approach

600 JE Points (20 Positions) e.g. Grade K (Step 1) 500 JE Points Competitor’s Approach

600 JE Points (20 Positions) e.g. Grade K (Step 1) 500 JE Points 505 JE Points 595 JE Points Competitor’s Approach

600 JE Points (20 Positions) e.g. Grade K (Step 1) 500 JE Points 505 JE Points 595 JE Points 605 JE Points e.g. Grade L (Step 1) Competitor’s Approach 700 JE Points

Our Approach

600 JE Points (20 Positions) 500 JE Points Our Approach

600 JE Points (20 Positions) 500 JE Points 505 JE Points 595 JE Points Our Approach

600 JE Points (20 Positions) 500 JE Points 505 JE Points 595 JE Pointse.g. Grade K (Step 5) e.g. Grade K (Step 2) Our Approach

Let’s look at the mechanics of this process (Two Step Process) Our Approach

Step 1 - Identification of an implementation range Step 2 - Migrate all employees into the new model Our Approach

Regression Analysis 50th 25th 5th 75th 95th

Implementation (Step 1)

We next identify a base salary value (for each position) that we can then transpose to the new pay schedule in order to identify the upper end of an implementation range We do this by initially identifying the midpoint Implementation (Step 1)

Conversion Process Example

e.g : Position X

We transpose $29,995 to the new Pay Schedule e.g : Position X

Using the new Pay Schedule identify the closest base salary sub-step (on the lower side) e.g : Position X

Note : this forms the high end of the implementation range (25 th Market Percentile) e.g : Position X

The low end of the implementation range is 16 sub-steps from the high end e.g : Position X

$29,756 (Grade G, Step 6, Sub-Step B) - Range Max $25,630 (Grade G, Step 2, Sub-Step C) - Range Min Implementation Range

Now that we have an implementation range for each unique position the final step is to migrate all employees into the new compensation model Implementation

1. Performance8 Points50% 2. Education5 Points31% 3. Experience3 Points19% TOTAL16 Points100% Implementation Criteria

1. Performance8 Points50% 2. Education5 Points31% 3. Experience3 Points19% TOTAL16 Points100% This corresponds to the implementation range Implementation Criteria

1. Performance9 Points8 Points 2. Education4 Points 3. Experience3 Points TOTAL16 Points15 Points Employee e.g : Position X

Finally, in comparing this to the employee’s current salary there are two scenarios : Score of 15 = $29,461

e.g : Position X Score of 15 = $29,461 1.Where the employee’s current base salary is below this amount

e.g : Position X Score of 15 = $29,461 Emp X : Current Base Salary = $26,000

e.g : Position X Score of 15 = $29,461 Emp X : Current Base Salary = $26,000 Emp X : New Base Salary = $29,461 (13% inc) Grade G, 6, A

2.Where the employee’s current base salary is above this amount Score of 15 = $29,461 e.g : Position X

Emp X : Current Base Salary = $31,500 Score of 15 = $29,461

e.g : Position X Emp X : Current Base Salary = $31,500 Score of 15 = $29,461 Emp X : New Base Salary = $31,586 (0.3% inc) Grade G, 7, D

Stage 2 : External Analysis Stage 1 : Internal Analysis Supp. Projects : Performance Management / (optional) Development of Pay Incentives Stage 3 : Implementation Typical Project Overview

Stage 2 : External Analysis Stage 1 : Internal Analysis Supp. Projects : Performance Management / (optional) Development of Pay Incentives Stage 3 : Implementation Typical Project Overview

Integrated Performance Management System

Review Performance PayTraining Work Planning Integrated Performance Management System

10 + Steps Steps Steps Performance Management e.g. Guam Community College e.g. GCC under previous compensation model - 24 months - 18 months - 12 months

10 + Steps Steps Steps Old Compensation Model - 24 months - 18 months - 12 months New Model Everyone will be reviewed annually Performance Management e.g. Guam Community College

Three new performance management tools are being implemented : a) Academic Administrators b) Faculty c) Staff (classified positions) Performance Management e.g. Guam Community College

One of the benefits of the new pay schedule is that a performance range is made available i.e. as a performance incentive on an annual basis Performance Management e.g. Guam Community College

Performance Management

Thank You / Questions