Compensation and Classification Redesign Project -
The Case for Change
Both internal campus reviews and external consultant reports conclude the Compensation and Classification Redesign should:
- Help the University recruit, develop and retain talent
- Provide a more market competitive salary structure
- Recognize and reward individual performance
The current system is not always market competitive
The current compensation and classification system for non-organized professional and scientific personnel is over thirty years old. While it has served the campus well during this time, much has changed in the way work is performed and in the market for labor, as it impacts the recruitment and retention of staff.
The system was last modified in 1985, when the comparable worth provision was amended into Iowa law. The current system is primarily focused on internal equity between like job classifications, with little consideration of external market factors.
Market factors have historically been addressed through advanced starting rates, counter offers to retain individuals with competing job offers, and extended ranges for certain classifications when necessary for retention. The number of these “exceptions” has expanded in recent years as salary market competition has intensified.
The current system does not adequately help the University recruit, develop, and retain talent, especially in competitive markets.
The Iowa Promise articulates the University goal to recruit and retain a high quality staff to support the strategic goals and overall mission of the University. A 2005 review of the Compensation and Classification unit highlighted a number of concerns from University employers about their difficulties with recruiting and retaining staff in a market competitive environment.
Furthermore, concerns have been expressed through the University Staff Council about the compensation system from the employee perspective, including concerns about market competitiveness, progression within the salary ranges, and the overlap of the merit system into the lower and mid level professional pay ranges.
The culmination of these concerns led to the initiative to hire an external consultant to conduct an analysis of our current system and make recommendations for improvement.
Buck Consultant’s report recommends: more consideration of markets, more of a focus on individual performance, and an improved system
The consultant report echoes the case for change articulated in the campus concerns outlined above. It speaks to the changing nature of the University to be more market competitive overall: examples including market competition for students, employees, funding, patients, housing options, etc. These market forces may be different in both direction and intensity at any given point in time for different units of the University, requiring more flexibility and responsiveness on the part of the University to meet the unit goals and needs.
Similarly, the compensation system needs to be more flexible and responsive in order to meet the strategic goals of individual units and the University as a whole. As reflected in the Iowa Promise, the goal of the compensation system is to support the recruitment and retention of staff members with the talent necessary to achieve strategic goals.
The consultant report also makes a case for change related to two specific elements of our current job classification system. The first is to change the job evaluation system used to assign job classifications to pay grades. The current system is outdated, overly complex (with 36 factors), and not well understood by campus constituents. Nor does it emphasize the skills that are important in how work is performed today, such as the growing use of interdisciplinary work teams, expanded uses of technology, emphases on process, customers, and innovation skills, or simply the ability to include other emerging skills that may become important for future success.
An effective classification tool can be much simpler and may only require the evaluation of 5-7 distinct factors for each job. The consultants believe that such a system can continue to be effective in recognizing the comparable worth of male and female dominated jobs.
The second change is in regard to the use of broadly defined job classification titles. The report notes that 25% of the professional and scientific staff are currently in one of five “generic” job classifications, such Program Associate and Program Assistant. The difficulties arising from these broad classifications are difficulties in recruitment of qualified staff, the maintenance of internal equity, the inability to determine market competitiveness with similar positions outside the University, and ambiguity in regard to career identity and progression. The report recommends a more job specific approach to job classification based upon skill, effort and responsibility.
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