Total Compensation Review
Supporting our recruitment and retention goals by maintaining market competitiveness with peer institutions and labor markets.
Elements of the Review
- Faculty salaries
- Staff salaries
- Executive (officers and senior administrators) salaries
- Internal pay equity
All UA employees have received a letter that provides their market salary comparison
and findings of the benefits review. See the results of the study, or the executive summary.
Review the PowerPoint and FAQs below, or visit the individual project pages for more information:
Additional Resources for Supervisors:
- Total Compensation Review Webinar for Supervisors - DOWNLOAD SLIDES AS PDF
Compensation Study General FAQs
Because we do value our employees, the objective of the adjustment was to bring them up to a competitive salary structure. Our research tells us that a competitive salary structure in higher education is +/- 10% of the market median. By achieving 90% of the market median, we ensure consistency and equity while remaining competitive. It also comes down to what we can afford. It is well documented that we have a $25 million budget shortfall to overcome this year with more in the future.
Staff reduction was never the intended mechanism to fund the adjustment. Funding the adjustment was a line item in the fiscal year 2020 budget approved by the Board of Regents. After beginning the market study and committing to correct our salary structure, we received word of the substantial cut from the legislature. So, in the end, yes, jobs will be eliminated to fund many of our priorities to include the compensation adjustment.
Yes. We simply cannot be successful in our mission without maintaining a quality workforce. It is very difficult to maintain a quality workforce without a competitive total compensation package-- the competition for talented professionals is substantial. Unless we act now, our talent will eventually erode and it will be even harder to get caught up.
There were errors in administering the adjustment. Some errors were the byproduct of data in our databases, some were missteps in planning and execution. In a project of this magnitude, with the complexities stated above, we anticipated there would be errors. Indeed there have been. Even with best practices, an organization our size should expect as much as 20% initial defects. We are currently addressing these errors one by one as we learn of them. If you suspect there is an error, please contact your supervisor and firstname.lastname@example.org or 907-450-8200.
The market study considered market placement independent of individual performance and competency. Leaders always have the discretion to submit a merit request such as an in-grade adjustment or bonus to recognize an employee for performance excellence. In consultation with stakeholders, we will be looking at ways to consider these factors in the future.
In hindsight, more time should have been afforded for leaders and supervisors to review the employee job information and calculations. Also useful would have been a very clear description of how adjustments were calculated so that leaders could easily audit them and corrections could be made before they were delivered to employees.
There is great value in these messages coming directly from a person’s supervisor. Well informed supervisors could have clarified many policy and procedure elements with employees and helped to reduce confusion. Additionally, we might have caught some errors before employees were notified. This is certainly an area to adjust going forward.
We cannot accommodate the whole increase for employees close to retirement. Such a practice would be cost prohibitive and, more importantly, discriminatory treatment based on age.
Yes, if you are receiving an adjustment you will be placed on the closest step to your new salary amount.
All university staff, faculty, and executives received a letter, mailed in June, which provided details of the study and employees' specific results in comparison to the higher education market and other relevant labor markets. University employees that are currently below 90% of the market median will be brought up to 90% over the next three years (FY20, FY21, FY22). Groups that were not included in the current study include temporary employees, adjuncts and Local 6070 employees.
If you are in the same position, a compensation increase equal to 1/3 of the amount required to increase to 90% of the market median will go into effect on October 28, 2019, and be reflected in your November 22 paycheck. By December 20, 2019, you will also receive a lump sum for retroactive payment back to July 1, 2019.
If you are in a different position since July 2, your position will be evaluated on a case-by-case basis. Your current salary will be evaluated to determine if it is at least 90% of the market median. If not, the salary adjustment will be the total amount to reach 90% of the median divided by three, reflecting the three-year implementation. By December 20, 2019, you will receive a lump sum (amount salary increased to 90% of the market divided by three) for retroactive payment of your current position since the date the position was held in FY20.
No, the project will be completed in phases. This first phase provided a baseline market compared to the higher education salaries. The next phase will include developing a compensation philosophy and implementing policy and regulation updates to reflect the new compensation philosophy. It may also include guidelines for placement of new hires and considerations for current employees such as length of service, performance, and professional experience.
No, but your current position is being evaluated and market adjustments will be applied as appropriate. If you are below 90% of the market median in your current position, you will receive a notification with more information.
The data for this initial market study is accurate to the best of our knowledge. If you believe your study result to be in error, talk to your supervisor. Validated concerns will be addressed in the next year’s study, but will not result in a market adjustment this fiscal year.
Represented faculty were mailed letters through the UNAC union office in mid May. Individual letters containing the results of the market study were mailed June 17 to non-represented faculty, staff, and other union members.
General Counsel is working with Human Resources to determine what data can be legally shared. Once the review is completed, legally allowable data will be available.
An affected employee-specific communication plan is being developed. Those employees will be contacted as soon as possible, following the initial review stage of the pay equity analysis.
Salary schedules are not different for administrative positions in departments or in central offices. Similar staff positions are being evaluated together in the market study.
Leadership has identified the need to conduct a total compensation analysis and a pay equity review of faculty, staff, and executives for competitiveness, equity and retention.
All five of the projects within this portfolio are to assess current state and placement within the market, in order to provide a framework in which UA can determine compensation methodology going forward.
Advisory committee members are expected to disseminate project status information to their constituents, as well as provide feedback on the findings as the project reports are drafted/completed.
Lockton, Quatt and Gallagher are consulting firms hired by University leadership to assist with the UA compensation, benefits and pay equity projects. They are all global providers of human resource solutions and have extensive experience working with higher education institutions.
For staff and executives, position descriptions for each classification are reviewed against industry appropriate compensation surveys. They are considered a good match if the descriptors align to at least 70 percent of the market median. For those positions that do not have a market match, they are assessed individually and compared to internal positions with similar duties and responsibility.
For faculty, industry Classification of Instructional Programs (CIP) for each discipline are compared to national faculty compensation surveys.
Each review utilizes system-wide peers, as well as each university’s individual peers.
The objective in developing each peer group was to ensure that, on the whole, each peer group included a representative cohort of comparable public (and/or private for lower division) institutions based on:
- Carnegie Classification
- Operating Budget
- Student Enrollment
- Faculty FTE
A best practice model for sustaining market parity after this initial staff compensation market analysis is complete will be part of the recommendations from the vendor. Sustainability is a key long-term goal.
The university’s goal, over time, is for all employees to be paid within a consistent salary structure. Going forward, compensation guidelines will be established and followed. Salaries will not be reduced as a result of this project.
No. The project focus is on classification and compensation of benefits-eligible positions.
Both vendors handling the staff and faculty compensation market reviews are utilizing
the geographic assessment by ERI (Economic Research Institute). The ERI provides
analysis based on a proprietary algorithm that utilizes thousands of survey data points
from across the country in order to price labor across the US, including remote and
rural locations. Read more about the ERI Methodology HERE.
"Cost of living” refers to the costs to a consumer in a specific geographic area. It reflects the price of food, housing, groceries, transportation, education, taxes and entertainment. A true cost of living indicator would accurately measure changes over time in the total amount of money required in order to maintain a specified standard of living. Cost of living is dictated by the local demand for and supply of goods and services.
“Cost of labor” refers to the difference in pay or labor market for a job from one location to another. The cost of labor is what a particular geographic market offers as the “going rate” or compensation for its jobs and reflects the local demand for and supply of labor.
Because the source sampling is so limited, the vendors do not plan to use individual businesses to compare for geographic differential. Additional review of Alaska-centric compensation surveys will be reviewed to validate the ERI geographic assessment.
There will be multiple groups against which compensation will be compared. In order to perform regression analysis, there needs to be at least 40 incumbents. For populations of comparable positions smaller than 40, a manual assessment and comparison is done. There will be analyses performed at different levels (department, campus, system) for each of the projects.
The salary structure will be based on ranges, which will be applied to all current
and future UA positions. The ranges will account for differing skill levels and experience.
The compensation structure will be a simple, easy to understand framework to ensure
appropriate, competitive, and equitable salaries, and allow for flexibility, when
Initial drafts of the market analysis, compensation structures, benefits peer comparisons, and pay equity study are anticipated to be reviewed by senior leadership by the end of December. As the initial analysis is being completed, continue to send salary adjustment requests to the appropriate Human Resources office for review.