Date: May 4, 2007

MEMORANDUM

TO:         Deans, Directors, and Departmental Executive Officers

FROM:    Michael J. Hogan, Executive Vice President and Provost
              Douglas K. True, Senior Vice President

RE:          2007-2008 Salary Program

DATE:    May 4, 2007

Instructions for implementing the 2007-08 Salary Program are attached.  The program is based upon collective bargaining agreements as well as appropriations and policies anticipated from the state and from the Board of Regents.  Legislative action on appropriations will provide the Board of Regents $25 million recurring General Fund revenue to offset current non-recurring appropriations and tuition surcharges and for strategic operating initiatives and enhancements. Additionally, approximately $40 million in appropriation increases is being provided for salaries.

The FY08 University of Iowa General Education Fund revenue budget assumes a 5.2% tuition rate increase for residents and 7% increase for non-residents, selected professional school tuition supplements, and a 5% increase in indirect cost recoveries. The Board of Regents has required a further reallocation of at least 1% of the General Education Fund budget, approximately $5.1 million.

The decisions you are making now should be based on the guidelines in this document.  Colleges and divisions may provide additional guidelines. The results of the process are not considered final until the Board of Regents approves our final budget at its June 13 meeting.  The budget and salary application instructions will be available on the Budget Development web page May 11.  The electronic budget and salary file will be distributed to administrative offices on May 11.  Electronic budget and salary entries are due to the Budget Office May 29. Colleges or divisions with employees holding joint appointments in other colleges and divisions should coordinate with the appropriate Budget Officer as early as possible as not to delay an administrative area’s ability to finalize their budget decisions.

Faculty

The FY08 General Education Fund budget includes support for a 4.5% faculty salary increment on July 1, 2007 and a 2.0% faculty salary increment on January 1, 2008.  Achieving more competitive faculty salaries remains The University of Iowa’s top academic budget priority in FY08.  As noted in previous communications, The University of Iowa’s average salaries for full-time tenured and tenure-track faculty, in all departments except clinical medicine, fell to the bottom of our Regent approved peer group as the result of the budget difficulties the state and University faced in the early part of this decade.  Our current projections indicate that, coupled with the FY06 and FY07 increments, the two faculty salary pay increments that are part of this FY08 salary policy could push the average salary for full-time tenured and tenure-track faculty, in all departments except clinical medicine, to the median of the peer group (6 of 11 institutions).  The actual progress that is made will depend not only on UI’s salary increases but on the increases that our peer institutions provide their faculty. However, given what we know about their upcoming efforts, we do stand a solid chance of getting into the 6th position.

The Provost will again make differential allocations of General Fund faculty salary increments to the colleges in FY08.  The Provost will notify colleges of these differentials and targeted increases in a separate communication.  The differentials will be based on revenue, expense, and faculty salary comparisons made by the Office of the Provost.  Collegiate faculty salary targets apply to all funding sources unless there are written guidelines from outside sponsors prohibiting this level of increase.

Colleges are expected to address faculty merit, equity, promotion, competitive offers, and other salary needs with their incremental funding.  All collegiate salary increment plans must be approved by the Provost before final implementation.

Other faculty compensation plans already approved by the Board of Regents including Medicine-Clinical, Medicine-Basic Sciences, Dentistry, and Pharmacy remain in effect.  These colleges must submit a summary of FY07 salary actions under these plans to the Provost by May 31, 2007.

Colleges must fund the following increments for faculty within the salary policy:

1.   Salary increases based upon individual contribution/performance.

2.   Promotions (tenure and clinical tracks) at the following levels:

Assistant to Associate Professor         $2500

Associate to Full Professor                 $3500

Promotion increments are in addition to a performance increment and any other salary adjustment authorized for the promoted faculty member.  The Provost’s Office will send each college a list of faculty who should receive the promotion increment.

3. Special pay adjustments in response to market pressures, compression, and comparable worth/pay equity concerns, as well as other special needs.

Written justifications for individual faculty salary increments outside a 0% to 10% range must be submitted for prior approval to the Associate Provost for Faculty, Susan Johnson.

Non-Union Professional & Scientific (P&S) Staff

Funds equal to 4.5% of non-union P&S staff salaries plus fringe benefit costs will be allocated to General Education Fund supported budgetary units.  The average salary increase policy for non-union P&S staff salaries for each college, vice president unit, and other major administrative units is between 4.5% and 6.0%, regardless of source of funds, unless prior agreement for a different policy target is reached with Susan Buckley, Associate Vice President and Director of Human Resources.  The salary increments to individual staff should be distributed on the basis of performance.  Units must also compensate for promotion and reclassification, make progress in resolving issues relating to comparable worth/pay equity concerns, compression problems, market adjustments or other special needs consistent with guidelines provided below under item 2.  The University administration encourages units to reallocate to meet P&S staff salary requirements whenever that is possible.

Colleges and divisions are encouraged to use the P&S research FY06 and the P&S general FY07 salary benchmarking survey results, as well as other peer benchmarks, as points of reference in determining salary increases.  Senior Human Resource Representatives in each college and division are familiar with these surveys and can assist you in interpreting their implication for individual employees.

Colleges and other units must fund the following increments for non-union P&S staff within the salary policy:

 

1. Salary increases based on individual contribution/performance.

2. Reclassifications (see Attachment C, item 3).  Reclassifications effective on July 1 will be included in the July 1 salary policy.  Reclassifications effective after July 1, 2007, will not be included in the July 1, 2007, salary policy.
   
   Colleges and other units may fund special pay adjustments in response to market pressures, compression, comparable worth/pay equity concerns, as well as other special needs outside the average org salary policy (4.5% - 6.0%) with prior approval from Central Human Resources.  In these cases, colleges and major administrative units must also report their all-inclusive overall average.

Written justifications for individual P&S staff salary increments outside a 1% to 10% range must be submitted for prior approval to the Associate Vice President and Director of Human Resources, Susan Buckley.

Additional Information

Attachment A provides detailed information on wage adjustments for unionized staff.

Attachment B lists the fringe pool rates for FY08.

Attachment C provides the general salary increase guidelines.

Attachment D provides the P&S salary schedule for FY08.

This information can be accessed at http://www.uiowa.edu/hr/salary/index.html