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Compensation

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Introduction and Rationale

In accordance with the mission and values of the University, Indiana State University will offer employees a comprehensive program including direct compensation, benefits, career opportunities and a positive culture and work environment. The University intends to maintain a program that is fair and competitive without regard to race, color, religion, gender, age, national origin, sexual orientation, the presence of a disability, or political affiliation.

Purpose and Objectives

The purpose of the compensation philosophy and supporting strategies is to establish a foundation for a compensation program that reflects:

The relationships among positions within the University as measured by market factors and internal equity considerations.
The principles of an equitable compensation program.
The competitive pay policy position for the University as compared against defined external markets.

Compensation Mission Statement

Because of the importance of equitable and competitive compensation to the University and its employees, the Board of Trustees and President have established a compensation program that will attain the following:

  1. External Competitiveness to provide a pay range for each position that will enable the University to attract and retain the level of talent required to achieve University goals while assuring that the jobs are valued to reflect the applicable markets as defined by the University.
  2. Internal Equity to ensure that each job has been fairly and objectively evaluated and placed within the pay hierarchy based on how it relates to other jobs within the University community.
  3. Growth and Development to recognize employees for their dedication as well as individual efforts through a variety of rewards while providing access to training and development to enhance opportunities for possible career advancement within the University.
  4. Effective and Timely Administration to ensure that salary decisions and actions are rendered in a consistent and fair manner while operating within appropriate parameters.
  5. Sustainable Wages to ensure that individuals are paid a living wage that allows them to meet their basic needs in today's economy.
  6. Adaptability to Change to provide a plan that is capable of recognizing changes in job design and external market influences through:
    • revision of job descriptions and evaluations where job content has substantially changed;
    • periodic review of positions in relation to the market and internal equity factors;
    • at least every five years an external review of pay ranges in relation to market trends to stay abreast of changing market conditions with the goal of remaining competitive with the University's defined markets.

Guiding Principles

  1. The University will maintain a compensation program that is competitive with other regional and national employers and comparable colleges within the University's defined recruiting markets. The University goal is to be positioned at 90% of the median of the market for institutions of comparable classification and size and in conjunction with the local and regional general industry markets for which Indiana State University competes for talent.
  2. In view of the diversity of jobs within the University community, it is recognized that a single recruiting market does not exist. Therefore, for purposes of defining the "market", the following guidelines will apply:
    • For management/executive positions, peer institutions of comparable classification and size covering the nation and/or broad geographic region will serve as the market.
    • For professional and administrative staff, peer institutions and general industry employers within the geographic region, where applicable, will serve as the market.
    • For non-exempt staff, general industry employers within the local and regional areas will serve as the market.
  3. The pay grade for positions within the salary structure will be primarily determined as follows:
    • As a principle, market compensation data for benchmark jobs will establish the framework for determining a particular job's grade assignment.
    • The market will drive how the pay ranges will be set with each position assigned to a grade in accordance with external market data, where available, and/or internal equity with similar jobs.
  4. Upper and lower salary limits will exist for each position through established pay ranges.
    • University employees will be paid at least the published minimum of the pay range for their given position level within the salary structure. Starting salary placement within the range will be dictated by the individual's credentials in terms of education, prior related experience, and special skills that may be needed for the job.
    • Salaries may not exceed the maximum of the range established for the position. However, the pay ranges will be periodically adjusted to keep pace with the market so that opportunities for future salary growth may continue to occur in conjunction with range movement. Should the range maximum be reduced as a result of this process an employee's salary will not be lowered.
  5. The University recognizes the importance for employees to develop within their jobs and enhance their career growth through promotional opportunities. Salary growth may therefore be influenced by a number of factors:
    • Pay increase adjustments within the range based on service and performance with the University. Funding for pay increases will be determined by market factors and the budget.
    • Pay increase adjustments associated with increased responsibilities that result in job movement to a different grade.
    • Recognition of professional development, and or increasing credentials relevant to their position.
    • Special recognition awards for individual or team contributions in the form of a cash bonus or non-monetary award. Such awards would be associated with a special project, program or function to recognize extraordinary contribution, which can be measured and documented.
  6. The University will communicate compensation policies and procedures to all employees in a manner that will enable them to understand how the compensation program operates, the means by which it is maintained and updated in the future, and how it will affect them individually.
  7. The University will openly communicate the following information about the compensation program to employees and supervisors:
    • Personal base salary information;
    • The minimum and maximum of the salary range to which the job is assigned;
    • Compensation program policies (including job descriptions) for non-faculty personnel;
    • The University's defined recruiting markets.

Salary Administrative Guidelines

Purpose:
One of the major factors in assuring that the Total Rewards Program is effective is the maintenance of consistent procedures in the administration of the compensation plan. Therefore, ISU will establish guidelines for the routine day to day compensation decisions.

Procedures:

  1. Market Adjustments:
    • Market Adjustments are a mechanism through which starting salaries are adjusted for recruiting purposes.
    • The amount of adjustment will vary as to the ability of the university to budget the dollars necessary to stay competitive with the market.
    • Adjustments in salary will at least reflect the movement of staff to the minimum of the new market range.
    • When possible adjustments will be made for staff below the midpoint in order to maintain equity and minimize the issues of compression.
  2. Hiring Rates of Pay:
    • An individual that meets the education and experience required by the job description will normally start at the minimum of the assigned salary grade. However if the range has not been moved to be competitive with the market the starting salary may be set within the first quartile of the range with consultation with Human Resources.
    • An individual that has experience beyond that required for the position may receive credit for past experience. Experience that is directly related to the position for which the individual is being hired will be weighted more than experience that is not directly related. For nonexempt employees this will normally be no higher than 10% above the base of the range. If it is an exempt position the hiring rate will not be higher than the Midpoint of the assigned salary range.
    • Any requests for exception will be made to the Compensation and Benefits Director who will review based on equity considerations within the classifications and pay ranges in consultation with the Executive Director of Human Resources.
  3. Promotions:
    • An employee who receives a promotion to a job in a higher salary range will receive an increase in pay up to 10% of the new range midpoint, or the amount necessary to bring his/her salary to the minimum rate of the new salary range.
    • An employee who has been moved more than one range may receive an increase of up to 15% of the range midpoint or to the minimum rate of the new salary range whichever is greater.
    • Promotion increases may vary from the above due to the pay relationship among the employee and persons occupying identical and similar jobs, and his/her immediate supervisor.
    • An employee receiving a promotion to a non-exempt position will be evaluated on his/her performance ninety (90) days after the promotion.
    • An employee receiving a promotion to an exempt position will be evaluated on his/her performance six (6) months after the promotion.
  4. Demotions:
    • Voluntary Demotion:
      • If an employee voluntarily requests an assignment to a job in a lower salary range, and the university determines there is a clear benefit to the demotion, the employee's pay will be reduced by the amount necessary to ensure his/her relationship to the midpoint in the lower range is the same as the current relationship to the midpoint in the initial range.
      • If the organization determines there is no clear organizational benefit to the employee's demotion, his/her pay will be reduced by an amount, which places it between the minimum and midpoint rate of the new range.
    • Non-voluntary Demotion:
      • When an employee is non-voluntarily demoted to a job in a lower salary range for performance-related reasons, his/her pay will be reduced by an amount, which places it between the minimum and midpoint rate of the new range. The exact amount of the reduction will be determined by the appropriate management person. However if there is a benefit to the university as a result of the qualifications of the employee they may be placed higher in the range if it can be justified. This is done on a case by case basis.
      • When an employee is non-voluntarily demoted to a job in a lower salary range, and the demotion does not involve performance-related issues, the employee's treatment will vary depending upon his/her qualifications for the new job. If fully qualified for the job in the lower salary range, he/she will continue to receive the same pay or pay equal to the maximum value of the lower range, whichever is lower. However, if he/she is not fully qualified for the job in the lower salary his/her pay will be reduced by an amount, which places it between the minimum and midpoint rate of the lower range.
  5. Transfers (lateral moves):
    • When an employee moves from one job classification to another job classification that is compensated in the same salary range, there normally is no pay adjustment. Unless it can be demonstrated that it is a clear benefit to the university, for an adjustment based on the expertise of the employee. This would be determined on a case by case basis in discussion with Human Resources.