February 5, 2008

To: Chancellors, Provost, Vice Presidents, Vice Provosts, and Twin Cities Campus Deans

From: E. Thomas Sullivan, Senior Vice President for Academic Affairs and Provost, Julius E. Davis Chair in Law; Carol Carrier, Vice President for Human Resources

Subject: Principles and strategies for salary adjustments for faculty (94XX) not covered by collective bargaining agreements, academic professional and administrative staff (97XX, 96XX, 93XX) and graduate assistants and other 95XX student employees

Attachment: Deadlines for submitting compensation strategy

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We're writing to provide you with the fiscal year 2008-09 compensation strategy that we are recommending to the Board of Regents. Please use the principles outlined in this memo to guide your unit in preparing this year's budget and salary plan. Our budget recommendation is scheduled to be reviewed by the Board of Regents at its April 10-11, 2008, meeting and approved by the Board of Regents at its May 13-14, 2008, meeting.

Employees affected by the information in this memo include:

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

Framework for Your Compensation Plan

President Bruininks and the Board of Regents support a management philosophy of decentralized and shared responsibility for the academic and investment strategies of the University. Our institutional budget model adheres to this philosophy by distributing revenues and costs among the U's units. Consequently, the decision-making process and funding options for this year'scompensation plan are placed within your unit.

Your compensation plan must address merit and market issues, and it must be developed in the context of projected levels of state allocation, tuition, and your unit's other revenue sources. Some units have already been told what their state allocation is. Their compensation plan should reflect the parameters set by those allocations. For those units awaiting final allocation decisions, the cost of compensation is one factor that will be considered in making those decisions. Final allocation decisions will be communicated in early April.

The overall average base salary increase for your unit's faculty and academic employees should be no less than 3.25 percent. Increases must be based on merit.

Guiding Principles for Faculty and P&A Salary Increases

• A key tenet of the University's compensation strategy is to improve the market competitiveness of faculty and staff salaries.
• Chancellors, vice presidents, and deans may choose to exceed a 3.25 percent increase to their salary pool for faculty and P&A staff if their budgets permit it. Increases in excess of 3.25 percent must address documented market competitiveness challenges (for example, compensation inflation in a field considerably higher than that for average faculty).
  
• Before notifying employees of additional salary increases, your senior vice president must approve the increase, and such approvals must be based on well-documented rationale. 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.
• Proposed increases above the general 3.25 percent increase 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 salary-increase funds for distribution later in the fiscal year. Such funds must be distributed no later than October 31, and they must be budgeted for current faculty and P&A staff salaries.
• Your unit's procedures for determining salary increases must comply with the University's faculty compensation policy and the academic professional and administrative staff compensation policy.
• Your unit's merit review process should be timely and increases should be reflected in the new base pay rates for 2008-09.
• All base salary increases for faculty and P&A employees not covered by a collective bargaining agreement must be based on merit and market competitiveness. Salary increases may not be distributed across-the-board in equal dollar increments or equal percentage increments.
• University policy requires annual written performance evaluations for all academic employees. Supervisors and administrators have a special responsibility for implementing our commitment to equal opportunity in all aspects of the workplace, including performance reviews. Each unit is requested to record the dates of all completed performance reviews in PeopleSoft. The Administration will be utilizing this data to report to the Board of Regents regarding the units that have completed annual performance reviews.
  
• The University does not mandate minimum or maximum salary increases for individual employees.

Total Compensation Statements

Beginning this spring, every employee will receive a Total Compensation Statement that accounts for the value of the salary plus the non-salary compensation and benefits the University provides. Total compensation statements are part of an ongoing conversation we're having with the University community about the many features and benefits of working here.

As you are presenting salary adjustments to your employees over the coming months, please stress that the University provides a comprehensive package of compensation and benefits. This package far exceeds their annual salaries. Benefits like health insurance, retirement, awards and bonuses, vacation pay, and the Regent's Scholarship Program add value to each employee's overall compensation package, and help the University to compete in the job market.

Salary Plans

Attachment A lists the deadline for submitting a one-page plan that outlines your unit's compensation strategy. It also identifies the person to whom your submission should be sent. Your compensation plan should include the following components:

• Your unit's average percentage salary increase for faculty and P&A employees In general, this increase should be at least 3.25 percent. Increases must be merit based, not across-the-board.
• A description of any extraordinary market competition that requires overall increases in excess of the average
• Data-driven documentation of market competition that requires higher percentage increases
• A description of the consultation process with faculty and P&A staff that your unit followed in arriving at its compensation strategy

Promotional Salary Increases

Note: These amounts are increased annually to reflect inflation using the Higher Education Price Index

Faculty

Base salary increases for those receiving promotions or tenure may not be less than the amounts shown below:

Base salary additions for promotions or tenure for regular faculty

• Assistant professor without tenure to associate professor with tenure - $2500
• Assistant professor with tenure to associate professor with tenure - $2500
• Associate professor without tenure to associate professor with tenure - $2500
• Associate professor without tenure to professor with tenure - $3300
• Associate professor with tenure to professor with tenure - $3300

Promotions for non-regular faculty (for example, appointment types A, U, I, K, J)

• Promotional increases are awarded at your unit's discretion. Increases must accord with your unit's past practices, but may not exceed the increases regular faculty receive.

P&A Staff

Base salary increases for those receiving promotions or continuous appointments may not be less than the amounts shown below:

Base salary additions for continuous appointments awarded to P&A employees

• The standard increase is $2500. If a promotion accompanies the continuous appointment, the total increase still may not exceed $2500.

Base salary additions for promotions for P&A employees

• The standard award is $1700 for approved promotions (for example, from “associate librarian” to “librarian”).

Retention Offers

Retention offers require the approval of a chancellor, senior vice president, or the president. Additionally, if the offer includes a salary increase, the University's Office of Human Resources must also be notified. Your unit must fund its retention offers; no additional central funds are available for this purpose.

Graduate Assistants and Other 95XX Titles

Salary increases for graduate assistants and other 95XX classes should be based on criteria established by the graduate or professional training program. Individual performance should be a major determinant, but your unit may also consider other criteria.

Undergraduate Research and Teaching Assistants

Your unit may choose to offer a recurring, across-the-board increase of 3.25 percent to undergraduate research and teaching assistants. We encourage—but do not require—your unit to pay one of the hourly rates listed on the 2008-09 academic floors, fixed ranges, and fixed rates table.

Your unit should establish written rationale and consistent criteria for different pay rates for undergraduate research and teaching assistants. Pay rates may differ from the University's suggested hourly rates after your unit considers job-related criteria such as the nature and complexity of the work, the position's level of responsibility, the incumbent's work and academic experience, and general job performance.

Note

Salary floors for academic employees for 2008-09 have been increased. 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.

Attachments

• Attachment A: Compensation Strategy Submission Deadlines
• Academic Salary Floors 2008-2009
• Standard Template Language for Salary Increases