Basic Questions

Why are we conducting this study?

Senate Bill 439 (signed 4/1/15) requires, among several actions, that for classified employees, a uniform system of classification be maintained and a compensation study be conducted. The bill requires us to have a job classification system with pay ranges that are tied to the market.

This bill provides us with an opportunity to update our current job classification and pay system, which is outdated in both data and methodology.

What is the purpose of this study?

We are conducting this study in order to create a more equitable structure both within and across our institutions. This will also help us to better align with what other institutions are paying for similar jobs so that we can attract, retain and reward our people.

How is the compensation study being conducted?

The study has been divided into three phases.

Phase 1:

  • Collect and review relevant organization data, information and documentation.
  • Conduct interviews with organization leaders and key stakeholders to understand perspectives, concerns and expectations for the program.

Phase 2:

  • Identify key benchmark jobs.
  • Identify positioning of each element of pay vs. market, and positioning of total pay vs. market.
  • Develop salary structure using results of market pricing.
  • Assign jobs to the salary structure, review and finalize.
  • Develop salary administration guidelines to ensure consistent approach to pay.

Phase 3:

  • Prepare overview of recommended philosophy, program, structure and guidelines for review and endorsement by key stakeholders.
  • Present recommendations to higher education organization leaders and to key stakeholders for feedback, revising as necessary.
  • Finalize philosophy and program details based on stakeholder input.

What is the timing for this project?

Results of the market study and recommendations for a new salary structure with pay ranges were presented to the Legislative Oversight Commission on Education Accountability (LOCEA) in January 2016. Recommendations for policies and the implementation of these policies will be made in 2016.

Who is conducting the study?

The State Legislature requires that an external professional review the classification methodology and compensation program every five years. WVHEPC and CTCS are partnering with Mercer, a global human capital consulting firm to conduct this study. Mercer is evaluating our current classification system and reviewing pay structures relative to the market, and the recommendations will be presented to LOCEA.

What will happen as a result of the study?

Possible changes to the compensation and classification program may arise based on results of the study; however, the main purpose of the study is to ensure consistency and uniformity across the systems. We will have a more accurate picture of how classified employees are paid and enable our institutions to use the dollars they have now by removing the restrictions from the current compensation program.

What is a salary structure and what will the new methodology include?

The salary structure provides the framework for the program, and pay guidelines outline how the program will be managed.

Examples of guidelines to be developed include:

  • Using a salary range appropriately
  • Starting salaries
  • Impact of performance on compensation
  • Promotions, transfers and demotions
  • Titling standards
  • Part-time compensation
  • Temporary assignments
  • Taking on permanent additional duties
  • Salary increase guidelines/matrix
  • Program maintenance, including:
    • Benchmark methodology
    • Monitoring market changes
    • Updating the salary structure

How often do pay structures need to be reviewed?

Legislation requires that we review our pay structures every five years, based on available funding.

Why is the current methodology being reviewed?

It is best practice to review your compensation program periodically. The State Legislature also requires that an external (or third party) professional services firm review the classification methodology and compensation program every five years. The current point-factor methodology in place is no longer the best practice in compensation management as more effective methodologies have been developed in recent years.

Our current system encourages artificial levels of jobs that are not aligned to the market. Misalignment to market prevents accurate representation of competitiveness. This, in turn, affects recruitment and retention efforts.

What other organizations do we benchmark against?

When comparing jobs in the systems to the market, it is important to understand the scope of the job responsibilities and that the competitive landscape for each job may differ. Mercer conducted stakeholder meetings with representatives from each of the 23 organizations in the HEPC CTCS systems, as well as with ACCE leadership in order to build an understanding of the competitive landscape for the jobs in each organization. This was done prior to determining the jobs for benchmarking.

Some jobs:

  • Compete locally with other local employers
  • Are higher education specific
  • Are more regional or even national
  • Differ among institutions within the systems

What information will be shared as a result of this study?

There is an acceptable level of transparency relative to pay structures, which is available as a public institution. Once the study has been completed, all employees will have equal access to information that can be disclosed, such as job structure, your position within a pay range, class specifics and salary administration guidelines. Our goal is to remain transparent throughout this entire process. We will continue to share information and updates with you as they become available.

What will the structure look like going forward?

The preliminary findings of the market study have resulted in a recommendation for a new salary structure by Mercer consultants and have been vetted by the Commission and Council. The new pay structure consists of 12 pay grades with a range spread of 60 percent from the range minimum to range maximum. The midpoints of the new pay grade were set at the market rates found in this study.

What will change as a result of this study?

  • Job classification process: How we determine the classification of a job may change as a result of the mandated review. We will look at job responsibilities, reporting relationships and other key factors and develop guidelines to determine how any jobs that need to be added will fit into the structure. Tools will help determine levels, and there will be clearer governance on managing positions.
  • Pay structure relative to market: With the addition of market pricing software, we will be able to provide greater consistency when making compensation decisions.

As a result of the study, how many jobs were found to be below market?

Of the 4,988 classified staff in the higher education system, 904 were found to be below the new range minimums, and 571 were found to be above the new range maximums.

What are the implications of these findings?

The total cost to bring these employees up to the new minimum is approximately $1.77 million. Best practice suggests that this does not have to happen immediately but can be rolled out incrementally over a period of three to five years as budgetary restrictions allow.

Will my pay change as a result of this study?

SB 439 specifically states that no employee will lose any compensation as a result of this study. The way that employees are compensated going forward may change as we move to the concept of ‘pay within range’ as an institution.

What’s not changing as a result of this study?

Job responsibilities and reporting relationships will not change. The study is looking at jobs, not people. Daily responsibilities of individual employees, as well as reporting relationships, will not be affected.

Will my job title change as a result of this study?

As we work through this study, we may find that the same job across multiple organizations has been given multiple titles. We will be working to clean up job titles across organization, and titles may change as a result of this.

What are the next steps?

  • Allow institutions time to vet the slotting of their employees.
  • Provide regular updates about the project to employees and constituents through this website.
  • Create a formal compensation philosophy.
  • Approve a salary structure based on compensation philosophy and finalize with HR leaders from all institutions.
  • Analyze classification methodology and ensure evaluated jobs align with their respective labor markets.
  • Implement JDExperts job description management software as the repository for job information for all state higher education organizations.
  • Review job descriptions and develop overarching WVHEPC job descriptions for institutions to use. If these overarching descriptions need to be altered at the institution level, institutions will be able to create their own descriptions and upload them to JDExperts.
  • Review benchmark and non-benchmark jobs slotted to the structure, making adjustments as needed.
  • Develop guidelines and train institutional human resources officers and managers who may administer pay.
  • Implement ePRISM, labor market pricing software, to update the statewide salary structure. This software will be available to institutions for market pricing jobs for faculty and non-classified employee categories.
  • Revise system classification and compensation rules.

Who can I contact with questions?

Please contact your local CHRO with any questions that you may have.


FAQs

The minimum and maximum are set at what percentage of midpoint?

The structure is designed with a 60 percent range width and a 16 percent progression between grade midpoints.

What adjustments, if any, were made to the midpoint (market)?

No adjustments were made to the midpoint. We used the market rates.

Is market set at the 50th percentile?

The midpoints for the salary structure were developed based on the market 50th percentile. The market varies and cannot be ‘set’.

Do midpoints vary for exempt vs non-exempt? By job families? Or by any segmentation at all?

Midpoints do not vary by exemption status, job families or segmentation.

What is the anticipated progression from entry to market for new employees?

This will be determined by the salary administration guidelines that are developed. A standard process for placing new hires in a range will also be addressed in the guidelines.

What is the range spread within a pay grade?

It is anticipated that the spread will be 60 percent within each pay grade.

Did you look at where all the schools are now before arriving at where the new minimums should be set?

No, the minimums were set based on the market data and overall compensation levels. The market was determined by size of institution and student enrollment, types of degrees offered, location of school, level of research, etc.

What factors will determine how employees progress through a range?

There will be guidelines in place that will assist CHROs and managers in determining how employees will progress through the range.

What is the cost to bring all classified employees to the new minimums?

The total cost to bring these employees up to the new minimum is approximately $1.77 million.

How many employees are above current market rates?

Of the 4,988 classified staff in the higher education system, 571 were found to be above the new range maximums.

How many employees are below current market rates?

Of the 4,988 classified staff in the higher education system, 904 were found to be below the new range minimums. Once all employees are brought to the minimum, they will be within the market range, and their pay will be considered to be market competitive. As we review the job descriptions and assignment to new pay grades, these numbers may fluctuate slightly.

How many pay grades will there be? How will the new pay grades correspond with what we currently have?

The preliminary findings of the market study have resulted in a recommendation for a new salary structure by Mercer consultants. Vetted by the Commission and Council, the new pay structure consists of 12 pay grades with a range spread of 60 percent from the range minimum to range maximum. The midpoints of the new pay grade are set at the market rates found in this study. There is no correlation between the new pay grades and what we currently have. The new grades are based on market information.

Will job titles change?

As we work through this study, we may find that the same job across multiple organizations has been given multiple titles. We will be working to clean up job titles across organizations, and titles may change as a result of this.

What determines where an employee gets placed within a range in the new structure?

A job’s initial placement in a grade is based on the job’s responsibilities and job description. The job is then placed in a range within that grade. This placement is based on the job’s current salary. The salary guidelines will determine the pay grade for new jobs moving forward (i.e. new hires, promotions, etc.).

When is this work being done?

This work will take place next year.

When will new rules and policies be written to implement the new system?

We are currently working to develop new rules and policies which will be outlined in the salary administration guidelines. They will be communicated once finalized.

What types of projects related to the market study are the CHROs working on?

CHROs are currently working to review the proposed structures for accuracy. They will also be working to review job descriptions, ensuring that they are updated and consistent across the organizations. Additionally, they are meeting with HEPC to discuss individual institutions’ specific jobs and their placement within the structure.

CHROs will also receive training on the new market pricing software, ePRISM, so that they will be able to identify market ranges within their specific institutions.

What types of flexibilities will the institutions have in classification and compensation in the new system?

With the new system, the temptation to reclassify jobs as a way to give pay increases should be eliminated. Individual employee compensation can be managed within the pay range without creating unnecessary levels of job titles. This will help ensure the system remains uniform and that job titles are used consistently across higher education institutions.

What surveys were used in the market study? What types of industries are represented in these particular surveys?

Surveys from Mercer, Towers Watson and the Bureau of Labor Statistics (BLS) were used in the market study. College and University Professional Association (CUPA) surveys were used for jobs specific and exclusive to higher education (i.e. Admissions Officer). All industries are represented in the surveys.

Were our benefits considered as part of our compensation for purpose of the market study?

No, benefits were not included in this study.

Did Mercer find geographical differences in the market for any areas of the State?

Mercer used a regional data cut to represent the region within which these institutions compete for talent. Where national data was utilized (due to data availability), a geographic differential was applied to reflect variation relative to national figures as found in the Economic Research Institute’s Geographic Assessor. While there were a handful of instances/specific jobs where one area (namely Southern WV) was lower than others, there was no consistent theme to justify different geographical differentials in addition to or different from the state differential of negative eight percent.

How will internal equity be maintained?

The salary administration guidelines will address internal equity.

Did the market show different levels of jobs existing in the market? (i.e., Secretary, Admin. Sec. and Admin. Sec. Sr.)

The current system allows for the creation of more levels within the same job than what is reflected in the market. For example, the current system includes three different levels of an HR Assistant. Meanwhile, the market provides one level of an HR Assistant because it does not distinguish to this granular degree. In situations such as this, an organization can distinguish levels by differentiating pay and utilizing the full range of the set pay grade.

I’m in a job with a generic title (such as Project Coordinator), how was my job matched in the market?

Generic titles were matched to the market based on actual job responsibilities.

How are the current experience equivalencies going to be dealt with in the new system?

Experience equivalencies are not uniform for all job titles. Additionally, the determination of experience equivalencies is determined at the institution level. There are currently no plans to develop a uniform guideline that sets equivalencies at the systems level.

What types of training will be available and who will be trained?

Human resources employees and managerial/leadership level positions involved in compensation management at each institution will be trained. Classification and compensation committee members will also be trained. HEPC will provide classification and compensation specific courses suitable for obtaining and renewing certifications for individuals working in Human Resources at HEPC and CTCS institutions. HEPC will always be available for support, and technology providers will also be available for questions.

What are the next steps? What is the timeline for implementation? What approvals are necessary prior to implementation?

  • Allow institutions time to vet the slotting of their employees.
  • Provide regular updates about the project to employees and constituents through this website.
  • Create a formal compensation philosophy.
  • Approve a salary structure based on compensation philosophy and finalize with HR leaders from all institutions.
  • Analyze classification methodology and ensure evaluated jobs align with their respective labor markets.
  • Implement JDExperts job description management software as the repository for job information for all state higher education organizations.
  • Review job descriptions and develop overarching WVHEPC job descriptions for institutions to use. If these overarching descriptions need to be altered at the institution level, institutions will be able to create their own descriptions and upload them to JDExperts.
  • Review benchmark and non-benchmark jobs slotted to the structure, making adjustments as needed.
  • Develop guidelines and train institutional human resources officers and managers who may administer pay.
  • Implement ePRISM, a labor market pricing software, to update the statewide salary structure. This software will be available to institutions for market pricing jobs for faculty and non-classified employee categories.
  • Revise system classification and compensation rules.

The Vice Chancellor and HEPC/CTCS leadership are working with the legislative representatives to plan for approval and implementation of the new system. Currently, implementation will depend on a modification of WV Code. The actual date for implementation will depend on completion of the steps listed above, the State of West Virginia’s budget situation, and passage of legislation. At this time, it is anticipated that implementation may be as early as July 2017.


Definitions

Best practices: A set of guidelines or ideas that represent the most effective course of action

Classified employee: For purposes of this study, classified employees can include non-faculty and non-executive employees.

Job Classification system: A job classification system is developed to create a fair and consistent method of determining a job’s position within all jobs in the system.

Compensation program: A philosophy that drives and governs an organization’s decisions regarding how they pay their employees

ePRISM: A comprehensive compensation management, modeling and planning tool that enables organizations to evaluate data, develop strategies and execute compensation programs

HRTMS: A job description management tool that acts as both a hub and source for all compensation-related data

Job title: The name for an individual’s job or position, as recognized by the organization

Market: The competitive market for benchmarking includes higher education and similarly situated companies, institution and organization comparisons, depending upon the specific job responsibilities. Similarly situated companies take into consideration geography, organization size and complexity, recognizing that the job responsibilities for certain jobs is affected by these factors.

Market pricing: Market pricing provides a range of values to inform about current market practice. As part of this study, we will be market pricing jobs and not the skills of the people currently in the jobs. Individual performance, experience, and background can impact pay position.

Pay range: Pay is managed through pay ranges, which are defined for each grade in each job family. The pay range reflects the pay that is expected for the full range of proficiency.

Salary/pay structure: An important component of a compensation program that helps to ensure consistent and competitive pay both within the organization and in the external market

Salary progression: An individual’s pay will progress with reference to their proficiency (relative to the requirements of their job) and the competitiveness of their pay.


Documents