March 8, 2006

Introduction

This memorandum provides a set of guidelines and principles for the fiscal year 2006-2007 compensation strategy that is being recommended to the Board of Regents. This memorandum also incorporates, in Attachment A, the salary investment guidelines for this second year of competitive funds for Faculty and P&A. These principles and recommended strategies are intended to provide guidance to units as they prepare salary plans for their individual budgets. Final approval of compensation levels and allocations by the Board of Regents will occur in June. The budget is scheduled to be reviewed at the May 11, 2006 meeting of the Board and is expected to be acted on at the June 8, 2006 meeting.

The principles outlined in this memorandum apply to:

• Faculty in the 94XX series, (but not including UMD or Crookston faculty represented by UEA)
• Academic professional and administrative staff (97XX, 96XX, 93XX)
• Graduate assistants and others in the 95XX series

Overall Funding Framework for the Compensation Plan

President Bruininks, supported by the Board of Regents, continues to support a management philosophy that focuses on decentralized and shared authority, accountability, and responsibility for the academic directions and investment strategies of the University. This philosophy is supported under the new institutional budget model by the allocation of revenues and costs to campuses, colleges, and other units. Consistent with this philosophy, the decision making process and funding sources for the 2006-2007 compensation plan, which must address merit and market issues, will be the responsibility of local units. Support units have received allocation letters and should manage the 2006-2007 compensation plan within the parameters of those allocations.

The average percentage increase to be distributed to base salaries should be at least 3% of faculty and academic personnel base salaries, based on merit calculations.

Principles to be Observed in the Identification and Distribution of Funds for 2006-2007 for Faculty and Academic Professional and Administrative Staff Salary Increases

• The need to improve the competitiveness of faculty and staff salaries relative to the various markets in which we compete remains a primary principle of the University's compensation strategy
• Chancellors, vice presidents, and deans, with sufficient resources to meet budgeted obligations and commitments, may budget in excess of the general 3% increase for faculty and academic staff. These additional funds must be used to address documented challenges of market competitiveness (e.g. compensation inflation in a field considerably higher than that for average faculty). Approval for a well-documented plan to add extra funding to a unit's compensation budget must be received by the appropriate senior vice president before such awards can be communicated to individuals. Senior administrators are also expected to consult with their faculty and P & A staff groups about the choices that must be made to provide such additional unit funding. Additional unit funds added to the general 3% budgeted for salary may be distributed as recurring base adjustments, non-recurring adjustments, or a combination of both.
• A dean, vice president, provost, or chancellor may hold a portion of the funds budgeted for salary for distribution during the year rather than assigning all funds at the beginning of 2006-2007. Such funds must be distributed no later than October 31, 2006 and are intended to support salary considerations related to current faculty and P&A staff.
• In all cases, unit procedures for determining increases must be consistent with existing Faculty Compensation Policy and Academic Professional and Administrative Staff Compensation Policy.
• The merit review process is to be carried out in a timely fashion and increases should be reflected in the new base pay rates for 2006-2007.
• All increases to faculty and P & A base salaries, for individuals not covered by collective bargaining agreements, will be based on merit/market competitiveness; allocations are not to be distributed in an across-the-board fashion either in equal dollar increments or equal percentage increments to individuals.
• University policy requires annual performance evaluations of all academic personnel as the means of assessing meritorious performance. Supervisory and administrative staff have special responsibilities for implementing our equal opportunity commitment in all aspects of the work environment, including the evaluation of personnel performance. Units are encouraged to record the dates of all completed performance reviews in the PeopleSoft system.
• No minimum or maximum increases for individuals are mandated.

Salary Plans

Senior vice presidents will notify their respective units of the appropriate turnaround date for submission of a one-page plan outlining their unit’s compensation strategy.

All plans must include the following components:

• The average percentage increase to be distributed to base salaries. In general, this should be at least 3% of faculty and academic personnel base salaries. These increases must be based on a merit evaluation and are not to be “across the board” increases.
• Any extraordinary market competitiveness situation that would argue for delivering a higher percentage increase to one or more subgroups of faculty or other academic personnel within the unit. These should include appropriate supporting data and documentation.
• Inclusion of appropriate supporting data/documentation for conditions described in section #2.
• The nature of the consultation process with faculty and P & A staff that was followed in arriving at the compensation strategy.

Promotional Salary Increases

Faculty

In no case shall the increase to base salary for those receiving promotions and or tenure be less than the amounts shown below:

Awarding of promotion for regular faculty: Standard recurring increases for promotion and/or tenure to be added to the annual base salary are the following:

• Assistant Professor without tenure to Associate Professor with tenure - $2250
• Assistant Professor with tenure to Associate Professor with tenure - $2250
• Associate Professor without tenure to Associate Professor with tenure - $2250
• Associate Professor without tenure to Professor with tenure - $3000
• Associate Professor with tenure to Professor with tenure - $3000

Awarding of promotion for non-regular faculty (e.g., appointment types such as A, U, I, K, J): units may, at their discretion, award promotional increases in accord with past practice in the respective units provided that such increases do not exceed those proposed above for regular faculty.

Academic Professional and Administrative Staff

In no case shall the increase to base salary for those receiving promotions and or continuous appointment be less than the amounts shown below:

• Awarding of continuous appointment for academic professionals: the standard increase is $2250. (Note: if a promotion accompanies the continuous appointment, the total increase is still $2250.)
• Awarding of promotion for academic professionals or academic administrators: the standard award is $1500 for approved promotions (e.g., from "Associate Librarian" to "Librarian").

Retention Offers

The approval of the appropriate chancellor, senior vice president or president is required when making retention offers. In addition, notification of a retention offer must be provided to the Office of Human Resources if it involves an increase in salary. Units must fund retention offers; no additional central funds will be available for this purpose.

Graduate Assistants and Other 95XX Titles

Local units are responsible for generating a 3% pool of funds to support increases to graduate assistant salaries for all those paid above the base and for those paid from non-centrally allocated funds. Increases in rates for continuing graduate assistants and other 95XX classes should be made on the basis of criteria established by the graduate or professional training program. Individual performance should be a major determinant but other criteria may be considered as well.

Undergraduate Research and Teaching Assistants

Units may choose to offer a recurring across-the-board increase of 3% to Undergraduate Research and Teaching Assistants. Individual units/departments are encouraged to pay one of the hourly rates listed on the 2006-2007 Academic Floors, Fixed Ranges and Fixed Rates table. However, units/departments are not required to pay the stated hourly rates. It is the responsibility of the unit/department to establish written rationale and consistent criteria for different pay rates. Units/departments may assign a rate of pay that differs from the stated hourly rates after considering criteria such as the nature/complexity of the duties assigned; level of responsibility assigned; the individual's related work and academic experience; academic progress and excellence; quality, and/or quantity of work.

Note

Salary floors for academic employees for 2006-2007 are available online. Note that these floors are most particularly relevant to newly hired academic employees.

Non-recurring increases, in whatever form, shall be explicitly documented to the affected individual using the standardized language.

The standardized template language for non-recurring increases, Academic Floors, Fixed Ranges and Fixed Rates document, and this memo will be available at a later date on the Human Resources web site.

Attachments

Attachment A: Competitive Funds Guidelines

Standard Template Language for Salary Increases