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University
of Louisville
Executive Summary
Objectives of the Study
The University of Louisville retained PricewaterhouseCoopers LLP to conduct
a Benchmark Staff Compensation study. The objectives for conducting the
study were the following:
- Work with the University of Louisville to develop workable, usable
recommendations regarding the new compensation program with minimal
disruption to the ongoing operational activities of the organization;
- Develop a formalized total compensation strategy and philosophy to
support the University's strategic objectives;
- Assess the internal equity of the University's current staff salary
structure;
- Collect and analyze comparable pay data from published surveys; ·
Provide best practices information on the performance management program;
and,
- Design a best practices approach for the compensation program that
aligns with the University's total compensation strategy.
Findings
Job Evaluation
PwC developed a point-factor job evaluation approach to assist the University
in measuring all jobs in a consistent way according to a standardized
set of compensable factors.
Market Assessment
The market competitive assessment indicates that the University's
base salaries are 11.7% behind the competitive targeted market, which
in this case is the 50th percentile.
When employees are brought to the proposed predicted salary, the University's
base salaries will be 92.76% of the competitive targeted market.
Salary Structure
On average the current salary structures lagged the market by approximately
14.5%.
Based on the job evaluation and market assessment, PwC developed a revised
point factor job evaluation system for the University of Louisville.
Cost of Implementation
To bring all employees to the proposed minimum of the proposed salary
structure would cost the University $596,315.
This cost assumes implementation is done the first year. Four hundred
fifty-three (453) employees are proposed to receive a below minimum adjustment.
This entails 201 professional/administrative staff and 252 classified
staff.
To bring all employees to their predicted salary within the salary range
would cost the University $2,654,744. This assumes implementation is done
in the first year.
One thousand seventy seven (1,077) employees are proposed to receive
a predicted salary adjustment. This entails 512 professional/administrative
staff and 565 classified staff.
Recommendations
- Adopt a compensation philosophy that aligns with the overarching
business strategy that reflects a market target at the 50th percentile.
- Adopt the proposed 9-grade salary structure using control midpoints,
which target the appropriate compensation philosophy as proposed in
the previous recommendation.
- Implement the proposed job evaluation program.
- Adjust all employees below the proposed minimums to the structure
minimums at a cost of $596,315.
- Adjust employees to their predicted salaries at a cost of $2,654,744.
- Facilitate the completion of the Position Information Questionnaire
for all positions.
- Develop a communications strategy to educate employees on compensation
program components.
- Adopt the Salary Administration Guidelines that represent a best
practices approach to salary administration.
- Conduct a benchmark audit similar to the one undertaken every three
to five years.
- Adopt the "best practices" recommendations for the Performance Appraisal
System.
- Adopt a merit matrix which links an employee's performance to the
pay increase to assist in rewarding and retaining high performers.
- Review the number of HR staff to ensure the department can meet the
needs of their customers and administer the compensation program.
- Conduct annual pay equity analyses to ensure that equity is maintained
after the proposed salary structure is instituted.
- Institute a review of decisions on salaries for new hires by in-house
staff familiar with the pay equity analysis to ensure that these new
salaries meet the equity standards.
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