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

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

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

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

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

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

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 101.25% of the market rate Compensation Task Force

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

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

Email Questions/Comments comptaskforce@uidaho.edu