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Financial Bulletin #31
To: Campus Community
From: Peter Likins and George H. Davis
We are here announcing a policy shift related to compensation.
The policy shift is driven by the reality that our salary gap estimated by Arizona Board of Regents methodology results in a total distance-from-market for all categories of employees at UA of $64.3 million. This distance from market affects our competitiveness as an AAU institution, accelerates the departure of key personnel, and weakens the university and its capacity to serve students, the research enterprise, and the state. Reducing the gap is essential to financial and institutional stability.
To this end, we are instituting the discipline of annually dedicating a portion of new funding to salaries for classified staff, faculty, and other appointed personnel. An annual adjustment using internal funds and distributed each January will supplement state appropriated salary packages, which have historically been provided by the state in recognition of increased productivity, cost of living, and market analysis. The January distribution will consist of UA funds made available centrally, to which may be added funds derived from sources within the individual budget unit (e.g., college funds). When a new salary package is made available through the state, its distribution may or may not be integrated into the January distributions, depending upon state guidelines and overall timing constraints.
By establishing an annual practice of salary adjustment through internal funds, we expect to reduce significantly the number of off-cycle salary increases during the course of any year, thus creating a more systematic process for the distributions. A benefit of the new practice is mitigating against inequities and compressions that can too frequently arise when adjustments are made case by case throughout the fiscal year.
Our specific plan is this: In November, $296K (annualized amount, including
ERE) will be invested in regrading approximately 374 classified staff titles, with the result that the minimum hiring standard increases from $8.20 to $8.50 per hour for career classified career staff, and other grades will become more competitive. Then, starting January 2004, $4,806,000 (annualized amount, including ERE) will be invested in salary increases for classified staff, faculty, and other appointed personnel. These November and January allocations both include direct payroll and required fringe benefit costs. These funds are the result of decisions made through the All-Funds Budget process during spring 2003.
The January 2004 central package is small, and if it were to be spread across-the-board the impact would not be what is intended. We emphasize the need to make differential adjustments based on merit and market competitiveness. There will be a two-phase process for allocating funds to budget units.
Phase I
- Based on recommendations from UA Human Resources, the president and executive vice president will allocate funds for regrading of certain
classified staff grades that most suffer from market instability.
- The president and executive vice president will allocate the
remainder to vice presidential budget units according to the percentage of
state and local salaries in each vice presidential area.
- Using shared governance processes, each vice president will create
distribution plans for his/her major budget units.
- Vice presidents and deans will be given guidelines for analysis and
dispersal.
- The primary criteria for distribution as recommended by the
University Compensation Advisory Team is merit and market competitiveness.
Phase II
- Using shared governance, vice presidents and deans will develop
proposals for how funds will be allocated.
- Adjustments made through vice presidents or deans own sources of revenue other than state or locally budgeted personal services must include ERE provided by the budget unit itself.
- Comparable adjustments are encouraged for employees paid on auxiliary and sponsored accounts, based on availability of funds.
- The appropriate executive (vice president or president) will approve
the plans. Approved decisions on January allocations of vice presidents and
deans are final.
Additional details and instructions regarding timeline and eligibility will
be provided to deans and vice presidents within the next week.
In the midst of very challenging financial times, we are trying hard to
make progress toward achieving salary competitiveness. The work and advice of the Finance Committee, UCAT, SPBAC, and Academic Council have been essential in making this policy change a reality. We believe that this will allow us to step forward with confidence that our compensation program will be improved and will more effectively address the realities of the marketplace and fairness.
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© 2005, Arizona Board of Regents
University of Arizona | University Services Building, 888 N. Euclid Avenue, Room 114, Tucson, AZ 85721-0158
520.621.3662 (phone) | 520.621.9098 (fax) | Page last updated June 12, 2007
