1. Path to the Market Rate & Beyond
Compensation Task Force
Wes Matthews
August 29, 2016
Compensation Task Force

2. Overview Need for a path Systematic approach to the market rate
Moving beyond the market rate
Implementation
Compensation Task Force

3. Need for a Path We have the market rate and it is a moving target
How do we progress on purpose to the market rate?
Working with the Compensation Task Force
Create minimum compa-ratios
Set a goal to reach the market rate in 8 years
Set values for progress
Previous experience
Education beyond requirement
Longevity with the University
Experience in the position
Compensation Task Force

4. The Path to the Market Rate
Minimum CR% of 80%
If data indicates a higher entry level then we use the higher level
Most entry levels are 7X% of the average salary/market rate
Increase CR% by 2.5% each year
1.25% for longevity/time in service (TIS)
1.25% for experience/time in position (TIP)
Progress more quickly
1.25% for a year of previous experience
2.50% for education exceeding the required level
Compensation Task Force

5. Examples of the Path New hire (Sally) Next year(Sally)
Minimum CR% of 80%
Bachelor’s degree (Associate’s required) adds 2.5%
Four years of previous experience adds 5%
Sally’s starting salary is 87.5% of the market rate
Next year(Sally)
Has a CR% of 87.5%
One year of TIS adds 1.25%
One year of TIP adds 1.25%
Sally’s CR% for the next year is 90% of the market rate
Remember: The market rate is different in year two; probably increased
Compensation Task Force

6. Moving Beyond the Market Rate
Once at 100%
CR% increase for longevity/experience changes to .625% per year
More room available for merit pay
Compensation Task Force

7. Example of Moving Beyond the Market Rate
Sally reaches 100% of the market rate
One year of continued TIS adds .625%
One year of continued TIP adds .625%
Sally’s CR% is now % of the market rate
Compensation Task Force

8. Other considerations/Implementation
Maximum CR%
Paradigm shift for maintaining base pay equity
Merit pay
Run the numbers for all current employees to establish target salaries
Based on the result, develop a plan to ensure that every employee reaches their target salary.
Compensation Task Force

9. Summary The path to market rate Moving beyond the market rate
Plan to reach market rate in 8 years
Minimum compa-ratio
Value for education, previous experience, UI and position experience
Moving beyond the market rate
Value for UI and position experience
More to come
Compensation Task Force

10. Email Questions/Comments