Market Rate-Based Compensation Compensation Task Force Wes Matthews August 29, 2016 Compensation Task Force

Our Approach Transparency Timeline Compensation Task Force Process/solutions discussed with the supervisors Results communicated to employees Timeline CTF has been meeting through the summer The intention: Bulk (if not all) of the work in time for the next CEC Compensation Task Force

Overview What is a market rate? What is market rate-based compensation? Why should we use market rates as a foundation for determining salaries? How do we identify our market? What does the market data look like? The path to the market rate & beyond. Compensation Task Force

What is a market rate? A market rate is statistical average of the wages paid for various types of work. Usually the data also contains information regarding entry and experienced levels of pay. Such statistics are determined annually through salary surveys conducted by the government and private entities Compensation Task Force

What is market rate-based compensation? With the market rates, we have a foundation to use when determining appropriate salaries. What it means: We have something tangible and credible; it’s not based on opinion. What it doesn’t mean: We have something that’s perfect and never changes. Not an instant “fix” Compensation Task Force

Why use market rates? Recruit and retain Discover the standard for “fair” Pay charts are usually built by using market rates, however, they can be limiting (i.e., only 11 midpoints to choose from) This approach makes an attempt to determine an individual market rate for each position rather than limiting the midpoints to only a dozen or so. Compensation Task Force

What is our market? The market is the area in which we compete for employees Could be geographic To that end, our initial step is to consider the average salaries paid in Idaho and the bordering states: Washington, Oregon, Nevada, Utah, Wyoming, and Montana (and Colorado). Bureau of Labor Statistics Could be based on our institution High Research Carnegie classification in the western United States College and University Professional Association (CUPA) Compensation Task Force

What does the data look like? Government/BLS data: Idaho Occupational Employment & Wage - May 2015 (Released June 2016) Panhandle of Idaho nonmetropolitan area Includes: Benewah, Bonner, Boundary, Clearwater, Idaho, Latah, Lewis and Shoshone counties Source: Idaho Department of Labor, Communications & Research; *Major SOC groups in bold. SOC Code Occupation Title Employment Entry Wage Midpoint (Median) Average (Mean) Middle Range Hourly Annual 43-0000 Office and Administrative Support Occupations 6,084 $9.83 $20,440 $14.09 $29,300 $14.99 $31,190 $11.07 $23,020 $17.89 $37,210 43-1011 First-Line Supervisors of Office and Administrative Support Workers 308 $14.86 $30,900 $20.39 $42,410 $21.29 $44,280 $16.34 $33,990 $24.44 $50,840 Compensation Task Force

What does the data look like? CUPA-HR: Compensation Task Force

Path to the market rate and beyond Having a foundation for salary recommendations is only the beginning. The CTF is also working to provide a systematic approach based on “compa-ratio” to better determine what an individual’s salary should be. It’s not enough to know the market rate; we must have a plan for getting employees to the market rate and beyond. Compensation Task Force

Future Issues Funding Implementation Merit Pay Compensation Task Force

Conclusion Markets and Market Rates The market data itself A plan for using the data for competitive pay and pay equity Q&A Compensation Taskforce