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

2. 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

3. 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

4. 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

5. 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

6. 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

7. 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

8. 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
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
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

9. What does the data look like?
CUPA-HR:
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10. 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

11. Future Issues
Funding
Implementation
Merit Pay
Compensation Task Force

12. 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