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April 9, 2010
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
Due Date: April 23, 2010 (See Attachments A and B)
We write to provide you with the fiscal year 2010-11 compensation strategy for academic employees (i.e., faculty and P&As) that will be recommended to the Board of Regents in early June and acted on by the Board in late June. Please use the principles and parameters outlined in this memo to guide your unit in preparing the 2010-11 salary plan.
Employees affected by the selected information in this memo include:
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 university’s units. Consequently, the decision-making process and funding options for this year’s compensation plan are placed within your unit.
The University strives to support compensation principles for its faculty and staff that attract and retain talent, reward performance, and promote fairness, internal equity, and transparency. This year’s pay plan for academic employees aligns with these stated principles while recognizing that budget constraints call for unprecedented flexibility. The President has determined that compensation increases based on merit and market are a priority for FY2011 to help us maintain competitiveness. This plan calls for the merit increase pool to equal 2%, but with a delay in delivery of these increases until the pay period beginning January 3, 2011 to assist with the budget challenge.
In addition, this year’s plan calls for a one-time 1.15% reduction in annual salary for academic employees. (This reduction excludes those in the 95xx series). Senior administrators will be required to take a reduction of 2.3%, or twice the reduction taken by other academic employees.
This year, due to the significant financial stress and differentiated financial capacities, there may be campuses, colleges or administrative support units that cannot meet the expectations of delivering a recurring 2% pool. In these cases and following consultation with their faculty and P&A staff (see “Faculty Compensation Policy” and “Compensation for Academic Professional and Administrative Employees”), such units may propose an alternative, based on a demonstrated compelling need, to the parameters presented above for their academic employees. The senior vice president or president to whom the unit reports has the authority to approve the alternative plan.
The University has declared a state of financial stringency under the terms of the Faculty Regulations Concerning Tenure, Section 4.5 (pdf). To accommodate the need to implement balanced budgets for FY2011, academic employees (93xx, 94xx, 96xx, 97xx) will take a 1.15% temporary reduction in pay against all sources that make up their salaries for this year, including any increases to these salaries awarded for purposes of promotion and tenure, retention, merit or equity, or special awards delivered to the base at any time during this year. All savings produced by the temporary reduction in pay will remain at the campus, college or administrative support unit level, to assist in managing budgets during this challenging period. It is intended that such savings, retained in the campus, college, or administrative support unit, will reduce job loss necessary to meet budget targets. (Note: In the School of Medicine, the 1.15% temporary reduction in pay applies to both the x and y components of University compensation.)
Senior administrators at the deans’ level and above and assistant vice president and above will take a temporary reduction in pay of 2.3%.
All student workers at the undergraduate, graduate, and professionals-in-training (95xx) levels are exempt from the temporary reduction in pay.
To further assist in the budget reduction goal, the University will close all campuses for one week during the late December holiday season. This closing will produce not only labor cost savings but energy/utility savings as well. Dates of the closure for the respective campuses are shown here:
Certain services and areas of work at the University cannot close down for these three days due to the nature of work performed (e.g., research animal care or some clinics). The appropriate responsible administrator (e.g., chancellor, dean, or vice president), will determine those units which may or must remain open during the closure period. Civil Service and bargaining unit employees required to work during this closure will need to schedule their three furlough days at an alternative time. For P&A and faculty, the three closure days do not constitute extra paid vacation days; instead, academic and professional employees should consult with their supervisors or responsible administrators regarding how aspects of the employee’s duties and responsibilities might be accomplished through working at home, using technology, etc. For those who wish to work on campus or at their worksite, access to buildings will be similar to other times of office closure, such as Thanksgiving, although many buildings will be slightly colder than usual.
The University also encourages academic and other employees to sign up for voluntary unpaid days (up to a maximum of ten). Because some employees may welcome taking days off for personal use, subject to the approval of the appropriate supervisor or manager, these requests are encouraged and would contribute to further savings within the unit. There is no expectation that employees must volunteer for furlough days. Leaders and supervisors/managers should not communicate orally or in writing an expectation that volunteering for extra furlough days is necessary. The scheduling of such days must be mutually agreed upon between employees and their supervisors. The voluntary furlough approach does not eliminate other policies that allow employees, with supervisor approval, to reduce their time. Unpaid leaves of absence, the RECESS program, and the phased retirement programs remain in effect as options.
An FAQ has been launched at http://www1.umn.edu/ohr/economyandu/qanda/index.html to clarify and provide further information regarding details related to this year’s pay plan as well as the University closure, including access to buildings, worksites, and parking. This site should be checked frequently as it will continue to be updated as questions arise and new information becomes available regarding this unusual pay year.
Attachment A lists the deadline for submitting a brief plan that outlines your unit’s compensation strategy. It also identifies the person to whom your submission should be sent. Attachment B is a template to use in reporting your unit’s compensation plan. Your compensation plan should include the following:
Brief Statement of the overall compensation strategy, including:
These increases must be delivered at the beginning of the fiscal year, or appointment and need not be delayed until January. (Note: These amounts are increased annually to reflect inflation using the Higher Education Price Index)
Base salary increases for those receiving promotions or tenure may not be less than the amounts shown below (however, these amounts represent the minimum prior to the application of the 1.15% reduction):
Base salary additions for promotions or tenure for regular faculty
Promotions for non-regular faculty (for example, appointment types A, U, I, K, J)
These increases may be delivered at the time of year normally delivered and need not be delayed until January. Base salary increases for those receiving promotions or continuous appointments may not be less than the amounts shown below (however, these amounts represent the minimum prior to the application of the 1.15% reduction):
Base salary additions for continuous appointments awarded to P&A employees
Base salary additions for promotions for P&A employees
Retention offers require the approval of the appropriate chancellor, senior vice president, or the president. Additionally, if the offer includes a salary increase, the Office of Human Resources (OHR) must also be notified. Your unit may fund its retention offers from the 2% compensation pool; no additional central funds are available for this purpose. Increases related to retention need not be delayed until January.
Units may offer their established special award programs that involve financial awards, assuming they have the funding to do so.
Salary increases for graduate assistants and other 95xx classes should be based on criteria established by the graduate or professional training program. Individual performance may be a major determinant, but your unit may also consider other criteria.
All student workers at the undergraduate, graduate and professionals-in-training levels are exempt from the mandatory reduction and/or furlough plan.
Your unit may choose to offer a recurring, across-the-board increase of 2% to undergraduate research and teaching assistants. We encourage—but do not require—your unit to pay one of the hourly rates listed on the 2010-11 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.
All student workers at the undergraduate, graduate, and professionals-in-training levels are exempt from the mandatory reduction and/or furlough plan.
Salary floors for academic employees for 2010-11 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.