1. Compensation Philosophy & Goals Philosophy: –Competitive Pay with Markets in which we compete (Local, Regional, National) ‏ –Competitive Pay with Market Average –Market Average = Vanderbilt Range Midpoint Goals: –Flexible –Accurate –Proactive –Well communicated –Easy to understand

2. Performance Ratings Distributions Rounded Performance Evaluation Rating 2008 Count 2008 Percentage 1 10.0% 2 900.8% 3 360431.6% 4 487942.8% 5 283124.8% Total 11405100.0% 2008 distribution similar to prior years

3. 2008 Proposed Merit Increases Percentages

4. 2008-2009 Annual Increase Program Ratings (Range)% Inc. 5 (4.5 - 5.0) = 4.75% 4 (3.8 - 4.4) = 3.50% 3 (3.0 - 3.7) = 3.00% Annual pay increases this year will be based on individual performance –Applied to individual current rates of pay –May result in partial or full lump sum payment Performance based lump sum payments eligible for retirement contributions and match

5. Total Compensation BENEFITS Insurance & Retirement Paid Time Off Tuition Spending Accounts Pay for Performance Success Sharing Performance Evaluation PERFORMANCE DEVELOPMENT Recognition & Rewards

6. Creating Organizational Alignment Alignment of goals creates momentum to achieve results… Leader Goals Individual Goals