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

2. Background Overview

3. 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

4. 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

5. Project Overview

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

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

8. a) Current Compensation

9. Base Salary5,893,634 69.7 Sp. Contract Services935,640 11.0 Housing822,000 9.7 Social Security379,737 4.5 Health198,669 2.3 Retirement175,583 2.0 Life40,073 0.4 8,445,336100.0 $ % a) Current Compensation Budget - F/Y10

10. Instructional Affairs2,660,647 44.4 Administration1,752,563 29.3 Student Services954,917 16.9 CRE519,610 9.7 Presidents Office100,776 2.7 5,988,513 100.0 $ % a) Current Compensation Departments - as at 4/7/10

11. National2,788,258 47.6 Pohnpei1,044,568 17.4 Chuuk789,416 13.2 Kosrae577,552 9.6 Yap518,761 8.7 FMI269,958 4.5 5,988,513100.0 $ % a) Current Compensation Campuses - as at 4/7/10

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

13. 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

14. 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

15. 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

16. 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

17. Instructional Affairs202,313 89.0 Administration21,674 9.5 Student Services1,816 0.8 CRE1,730 0.7 227,533 100.0 $ % a) Current Compensation Special Service Contracts

18. b) Job Evaluation

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

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

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

22. 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

23. 147 Positions Evaluated b) Job Evaluation Results

24. Range Max Range Min 1600 - 198 - Job Evaluation Points Average Median 638 - 589 - b) Job Evaluation Results

25. c) Regression Analysis

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

27. 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

28. 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

29. COM-FSM c) Regression Analysis

30. Regression Analysis COM-FSM

31. Regression Analysis Student Services Instructional Affairs Administration Services CRE

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

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

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

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

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

37. 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

38. 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

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

40. 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

41. 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.

42. 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

43. 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

44. FMI Extension Center

45. 1. What are the current FSM goals and objectives in Fisheries development? 2. Recertification as required buy STCW 95 3. FSM goals and objectives in training maritime and fisheries personnel 4. How much are you willing to pay per student? 5. FMI facilities to prepare for the Guam build-up? 6. What is the role of the FSM National Government in recruiting and job placement? 7. What are other options for this type of training? Outsourcing to other institutions or partnership with other maritime schools. FMI Extension Center

46. 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

47. - 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

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

49. 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)

50. - 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)

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

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

53. Obtaining and analyzing market compensation data Stage 2 Compensation Structuring

54. Market Data - Sources

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

56. a) National Faculty Survey 2007 - 2008 (CUPA) b) Community College Faculty Survey 2007 - 2008 (CUPA) c) Mid Level Admin & Professional Survey 2007 - 2008 (CUPA) d) Administrative Compensation Survey 2007 - 2008 (CUPA) 2. U.S. Comparisons (GCC Report) Market Data - Sources

57. Regional Market Percentiles 5 th - 95 th Market Data

58. Regression Analysis COM-FSM

59. Regression Analysis PCC COM-FSM GCC CMI ASCC

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

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

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

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

64. 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

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

66. Structural Adjustment Cost

67. 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%)

68. 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)

69. 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%)

70. 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)

71. 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%)

72. 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)

73. 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%)

74. 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)

75. 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%)

76. 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)

77. Note : the transition to a more competitive market position may take over a number of years e.g. FY11 - 10 th market percentile FY12 - 15 th market percentile FY13 - 20 th market percentile FY14 - 25 th market percentile Option 1

78. Note : the transition to a more competitive market position may take over a number of years e.g. FY11 - 10 th market percentile FY12 - standard increment FY13 - 15 th market percentile FY14 - standard increment Option 2

79. COM-FSM (full-time employees)No% Base Salary Increase Administration Employees < 10th Market Percentile215.830,803 Administration Employees > 10th Market Percentile10629.27,886 Instructional Affairs Employees < 10th Market Percentile133.614,274 Instructional Affairs Employees > 10th Market Percentile11832.512,427 Student Services Employees < 10th Market Percentile61.73,903 Student Services Employees > 10th Market Percentile6317.44,572 CRE Employees < 10th Market Percentile20.6342 CRE Employees > 10th Market Percentile308.32,541 Presidents Office Employees < 10th Market Percentile10.32,977 Presidents Office Employees > 10th Market Percentile30.8266 TOTAL363100.079,991 Target a Specific Group for an Initial Adjustment e.g. Option 3

80. Stage 3 : Implementation

81. New Pay Schedule Options Stage 3 : Implementation

82. 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$19,587 4.1%B$14,534$15,443$16,351$17,260$18,168$18,895$19,621$20,348 4.6%C$15,133$16,079$17,024$17,970$18,916$19,673$20,429$21,186 5.1%D$15,840$16,830$17,820$18,810$19,800$20,592$21,384$22,176 5.8%E$16,656$17,697$18,738$19,779$20,820$21,653$22,486$23,318 (Traditional Approach)

83. Pay Schedule Option (New Approach)

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

85. Transition Process to New Compensation Model Stage 3 : Implementation

86. Competitor’s Approach

87. 600 JE Points 500 JE Points Competitor’s Approach

88. 600 JE Points (20 Positions) 500 JE Points Competitor’s Approach

89. 600 JE Points (20 Positions) e.g. Grade K (Step 1) 500 JE Points Competitor’s Approach

90. 600 JE Points (20 Positions) e.g. Grade K (Step 1) 500 JE Points 505 JE Points 595 JE Points Competitor’s Approach

91. 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

92. Our Approach

93. 600 JE Points (20 Positions) 500 JE Points Our Approach

94. 600 JE Points (20 Positions) 500 JE Points 505 JE Points 595 JE Points Our Approach

95. 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

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

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

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

99. Implementation (Step 1)

106. 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)

111. Conversion Process Example

112. e.g : Position X

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

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

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

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

121. $29,756 (Grade G, Step 6, Sub-Step B) - Range Max $25,630 (Grade G, Step 2, Sub-Step C) - Range Min Implementation Range

122. 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

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

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

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

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

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

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

129. 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

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

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

132. 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

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

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

135. Integrated Performance Management System

136. Review Performance PayTraining Work Planning Integrated Performance Management System

137. 10 + Steps 7 - 9 Steps 1 - 6 Steps Performance Management e.g. Guam Community College e.g. GCC under previous compensation model - 24 months - 18 months - 12 months

138. 10 + Steps 7 - 9 Steps 1 - 6 Steps Old Compensation Model - 24 months - 18 months - 12 months New Model Everyone will be reviewed annually Performance Management e.g. Guam Community College

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

140. 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

141. Performance Management

145. Thank You / Questions