Why can t I hire a secretary at $75,000?

Transcription

1 Why can t I hire a secretary at $75,000? Market based salary guidelines for recruiters and hiring managers Sara Chelette, PHR Compensation Manager University of Houston

2 Risks of Poor Salary Decisions Legal Risks Equal Pay Act Americans with Disabilities Act Title VII Lilly Ledbetter OFCCP FLSA Other Risks High turnover Inequity Difficult to compete for talent Low employee morale Poor performance

3 Advantages of Proper Salary Administration Competitive in the talent market Market value Standardized rates Efficient Performance driven Controls costs Straightforward Compliant Meet requirements Avoid legal actions Equitable Reduces turnover Employee satisfaction

4 How do we help the manager understand and use compensation data to determine an appropriate hiring rate?

5 Structure!

6 Agenda Background Salary Structure Compensation Philosophy Hiring Guidelines Career Ladders Results

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8 The Problem Out of date program Distorted pay structure Inequity across similar jobs Lack of cost control

9 The Project 2006 Partnered with outside consultant 2007 Market study of all staff jobs 2008 Created structure and program elements 2009 Implemented market based compensation program

10 The Solution 80% of staff jobs matched to market Balanced pay ranges Career ladders Salary guidelines REWARD (Towers Watson)

11 Salary Structure

12 Three Structures Research Staff Information Technology Staff All other Staff

13 University of Houston FY 2012 Salary Structure UH Staff Standard Hiring Range Pay Grade Minimum Annual 1st Quartile Annual Midpoint Annual 3rd Quartile Annual Maximum Annual Spread Mid Diff , , , , , % 15% , , , , , % 15% , , , , , % 15% , , , , , % 15% , , , , , % 15% , , , , , % 15% , , , , , % 15% , , , , , % 15% , , , , , % 15% , , , , , % 15% , , , , , % 15% , , , , , % 15% , , , , , % 15% , , , , , % 15% , , , , , % 15% , , , , , % Grades 101 through 105 are FLSA Non-Exempt only.

14 Balanced Midpoints 15% apart Scaled range widths Narrow entry level grades 45% wide Wider director level grades 70% wide Broad-band Research Staff structure

15 Jobs All regular staff jobs except executives Grades assigned by Market value Linked to comparable job Career ladders

16 Compensation Philosophy

17 The University of Houston Total Compensation Package consists of salary and many monetary and nonmonetary benefits. The actual value of UH benefits varies from 20% to 35% above salary depending on the options an employee chooses. UHHR Compensation is committed to providing a total compensation program to attract and retain talented employees. Accordingly, jobs are assigned to the pay ranges using the midpoint that is closest to 90% of the market value.

18 Hiring Guidelines

19 Basic Premise Market value is the going rate for an employee in that job at that level for approximately five years

20 Standard Hiring Range Departments have the authority to make hiring decisions without prior HR approval for hiring rates up to the midpoint based upon the following guidelines

21 Hiring Guideline All candidates must have at least the minimum qualifications listed on the job description

22 Quantify Education High school Associate s degree Technical school Bachelor s degree Master s degree Doctorate, PhD or other Terminal degree = Zero = 2 years = 2 years = 4 years = 2 more years = 2 years each

23 Quantify Experience Full Time directly related experience Part Time directly related experience counted at 50% (i.e. 2 years of part-time work experience = 1 year.)

24 Example Sally is the final candidate for your financial coordinator position. Financial Coordinator requires a Bachelor s degree and one year of experience (4 + 1 = 5) Sally has a BA in Accounting and 6 years of financial coordinator experience (4 + 6 = 10) Sally has a total of 10 years, which is 5 years beyond the minimum requirements

25 Hiring Guideline Hire most qualified candidates near the 1st Quartile of the pay range

26 Hiring Guideline Choose a hiring rate near the Minimum for candidates who Have minimal experience and/or education Require significant training

27 Hiring Guideline Choose a hiring rate in the 2 nd Quartile for candidates who Have above average experience and/or education Require little to no training

28 Hiring Guideline Hiring rates above Midpoint require at least five years at that level above the job minimum qualifications Hiring rates within the 3rd Quartile require HR and Assistant/Associate Vice President prior approval

29 Hiring Guideline Hiring rates within the 4th Quartile require HR and Vice President prior approval and receive additional scrutiny To qualify for a 4th quartile rate, candidates must significantly exceed the minimum qualifications, often by 15 to 20 years

30 Example Sally is the final candidate for your financial coordinator position. Financial Coordinator requires a Bachelor s degree and one year of experience (4 + 1 = 5) Sally has a BA in Accounting and 6 years of financial coordinator experience (4 + 6 = 10) Sally has a total of 10 years, which is 5 years beyond the minimum requirements Recommend a hiring rate at midpoint

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32 Career Ladders Clearly defined ladders By job sub-family Entry level Professional Lower level management Excluding mid & upper level management

33 Career Ladder Example Job Title Job Code Pay Grade/FLSA Hiring Range Exec Administrative Assistant D5H4 109/Ex 40,102 to 45,656 Administrative Assistant D5H8 108/Ex 34,860 to 39,686 Executive Secretary D4F2 107/NE 30,326 to 34,507 Secretary 2 D4F5 106/NE 26,894 to 30,284 Secretary 1 D4F6 105/NE 23,379 to 26,332 Receptionist D4F8 104/NE 20,342 to 22,900

34 Career Ladders Career ladder promotions Non-competitive Result in the employee s current position changing to the next job on the career ladder Only one step on the ladder Strict criteria

35 Career Ladder Criteria #1 Employee must be in the current job for at least one year

36 Career Ladder Criteria #2 The duties and responsibilities of the new job must be assigned to the employee on or before the date of the promotion

37 Career Ladder Criteria #3 Employee must meet all of the qualifications for the new job (using the same quantification rules as the hiring guidelines)

38 Career Ladder Criteria #4 Performance contributions to the department or university must be clearly documented

39 Career Ladder Criteria #5 Promotional increase must follow the hiring guidelines

40 Career Ladder Process Department submits a memo Documenting each of the criteria Compensation verifies that all criteria are met and approves the transaction Skips the reclassification request process Streamlined Less documentation

41 Results Staff salaries are distributed in a bell curve centered near the grade midpoints and average salaries are right at the market target

42 Results Midpoint to Market

43 Results Reduced Turnover Percent Turnover FY08 FY09 FY10 FY11

44 Results Compensation works directly with employment Monitor hire and promotion rates HR works with college and division administrators Communicate guidelines to the hiring managers Assistance with monitoring hiring rates

45 Results Balanced up to date salary structures Total compensation philosophy Standardized hiring guidelines Career ladders and promotions Fair and equitable pay Higher employee satisfaction

46 Special thanks to Cassidy Wise (age 12) for special effects and graphics

47 Questions?

48 The University of Houston, Texas' premier metropolitan research and teaching institution, is home to more than 40 research centers and institutes and sponsors more than 300 partnerships with corporate, civic, and governmental entities. UH, the most diverse research university in the country, stands at the forefront of education, research, and service with more than 39,800 students.