Town Hall Presentation January 9-10, 2002 Curtis Powell Vice President for Human Resources The Division of Human Resources and William M. Mercer, Incorporated.

Town Hall Town Hall PresentationPresentation

January 9-10, 2002January 9-10, 2002

Curtis PowellVice President for Human Resources

The Division of Human Resources The Division of Human Resources and William M. Mercer, Incorporatedand William M. Mercer, Incorporated

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Today’s Town Hall ObjectivesToday’s Town Hall Objectives

1.1. Meet the Project TeamMeet the Project Team

2.2. Discuss why Rensselaer launched this initiativeDiscuss why Rensselaer launched this initiative

3.3. Discuss why Mercer was selectedDiscuss why Mercer was selected

4.4. Review the Project PlanReview the Project Plan

5.5. Show our progress to dateShow our progress to date

6.6. Discuss what this means to youDiscuss what this means to you

7.7. Answer questionsAnswer questions

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Objective #1:Objective #1:

Meet the Project TeamMeet the Project Team

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The Project TeamThe Project Team

Curtis PowellCurtis Powell RensselaerRensselaerVP, Division of Human ResourcesVP, Division of Human Resources

Anne BilynskyAnne Bilynsky RensselaerRensselaerManager, CompensationManager, Compensation

Kathy McNamaraKathy McNamara RensselaerRensselaerHR Specialist HR Specialist

Kimberly KeatingKimberly Keating MercerMercerSenior ConsultantSenior Consultant

Dr. Andrew KleinDr. Andrew Klein MercerMercerHigher Education Practice LeaderHigher Education Practice Leader

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Objective #2:Objective #2:

Discuss why Rensselaer launched this initiativeDiscuss why Rensselaer launched this initiative

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Where We Want to BeWhere We Want to Be

Develop a total compensation system that will guide the design, implementation, and administration of your compensation program(s). It will ensure that job performance, compensation levels, and training programs are aligned with the Rensselaer Plan and your Division’s/School’s Performance Plan.

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Developing the Total Compensation SystemDeveloping the Total Compensation System

In partnership with Mercer, Rensselaer will develop the In partnership with Mercer, Rensselaer will develop the following:following:

Compensation Philosophy & Strategy

Staff CompensationProgram

Faculty CompensationProgram

Variable PayProgram

Implementation Process & Supporting Communication

& Training Materials

The Rensselaer Plan

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Objective #3:Objective #3:

Discuss why Mercer was selectedDiscuss why Mercer was selected

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William M. Mercer, IncorporatedWilliam M. Mercer, Incorporated

Mercer consultants:Mercer consultants: Offer years of experience and have developed and Offer years of experience and have developed and

implemented compensation systems in higher implemented compensation systems in higher education.education.

Have access to vast data resources:Have access to vast data resources: World’s largest human resource consulting firm, with World’s largest human resource consulting firm, with

annual revenue of approximately $2.0 billionannual revenue of approximately $2.0 billion More than 13,000 employeesMore than 13,000 employees 136 cities136 cities 40 countries40 countries

Will work as a team with the Division of HR to Will work as a team with the Division of HR to design the best program for Rensselaerdesign the best program for Rensselaer

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Objective #4:Objective #4:

Review our Project PlanReview our Project Plan

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STEP 1 - Compensation Philosophy and Strategy Development

STEP 2a - Faculty and Staff Base Pay and Compensation Program Design

Begin project; start to learn issues, philosophy, business and strategic plan

Develop compensation philosophy and strategy and communication strategy; identify benchmark jobs

Interviews leadership to understand expectations, gain perspective, ascertain desired outcomes

Develop, test and finalize slotting methodology for non-benchmark staff jobs

Develop base pay structure scenarios for staff jobs and competitive ranges for faculty jobs

Conduct competitive market assessment of base and total cash compensation for 250 benchmark staff and faculty jobs

Project PlanProject Plan

STEP 2b - Variable Plan Design

Develop plan; design straw model; rewrite reaction models

Develop variable pay program goals, culture issues, and funding limits

Build plan documents for program; review costing to ensure affordability

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STEP 3 - Program Costing

Cost program alternatives, finalize approved designs

Place non-benchmark faculty and staff in grades based on job evaluation and career ladder structure

STEP 4 - Recommendations for Implementation

Obtain President’s approval to proceed

Present recommendations to the President and Members of the President’s Cabinet

STEP 5 - Training STEP 6 - Implementation - July 2002

Develop and implement compensation policies and procedures and administrative guidelines

Identify internal adjustments and finalize titling standards

Begin training supervisors and informing faculty and staff of new program

Begin Implementation

•Structure

•Titles

•Career ladders

Project PlanProject Plan

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Objective #5:Objective #5:

Show our progress to dateShow our progress to date

– ResearchResearch

– What we learnedWhat we learned

– StatusStatus

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ResearchResearch

Findings are based on information gathered through:Findings are based on information gathered through:

Meetings with President Jackson, key leadership, Meetings with President Jackson, key leadership, faculty and staff faculty and staff

Analysis of faculty and staff compensation data and Analysis of faculty and staff compensation data and the external marketplacethe external marketplace

Review of Rensselaer’s communications, internal Review of Rensselaer’s communications, internal published materials, and manualspublished materials, and manuals

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ResearchResearch

Review of individual performance management tools Review of individual performance management tools and/or job descriptions across the Instituteand/or job descriptions across the Institute

Working sessions and focus groups with staff and Working sessions and focus groups with staff and faculty representatives at Troy and Hartfordfaculty representatives at Troy and Hartford

Division presentationsDivision presentations

Analysis of best practices in higher education, not-Analysis of best practices in higher education, not-for-profit, and for-profit organizationsfor-profit, and for-profit organizations

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What we learned. . . What we learned. . .

There are inconsistent messages about what is important.

Study Finding # 2Study Finding # 1

There is no Institute-wide, systematic approach for administering staff compensation. A number of “systems” have been developed across the campus on an ad-hoc basis.

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What we learned. . . What we learned. . .

The faculty have established titles and career movement criteria that correspond to pay. A benchmarking study will assess current practices.

Study Finding # 4Study Finding # 3

Career paths are not well defined for most staff job families.

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What we learned. . . What we learned. . .

The performance standards for faculty and performance management tools for staff are still being integrated into the total compensation system.

Study Finding # 6

Inconsistent job titling is creating internal equity issues.

Study Finding # 5

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What we learned. . . What we learned. . .

There is a prevailing view that most people are underpaid. Based on a preliminary staff assessment, 80% of staff are within the competitive range of their position.

Study Finding # 7

Rensselaer does not have a systematic way to attract and retain world-class faculty.

Study Finding # 8

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StatusStatus

Classification

Competitive Labor Market Research*

Management, Professional, Information Technology Top 25 National Universities

Not-For-Profit

For-Profit

Athletics Rensselaer Custom Survey

Administrative Support Local/Regional Not-For-Profit

Local/Regional For-Profit

Faculty and Research Staff Top 25 National Universities Top 25 Engineering Schools

We have preliminarily defined our target markets as We have preliminarily defined our target markets as follows:follows:

* Geographic differentials calibrate the data for Troy and Hartford

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StatusStatus

We are in the process of finalizing the following ladders:We are in the process of finalizing the following ladders:

Management Career LadderManagement Career Ladder

Professional Career LadderProfessional Career Ladder

Information Technology Career LadderInformation Technology Career Ladder

Administrative Support Career LadderAdministrative Support Career Ladder

Research/Scientific Career LadderResearch/Scientific Career Ladder

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StatusStatus

Illustrative Career Ladder – Administrative Support

Level 1 Level II Level III Level IV

Duties are highly routine and predictable. Procedures and processes are well defined. Non-routine problems are referred to supervisors or seniors. Employee demonstrates basic working knowledge of computers, software, and office equipment sufficient to do e-mail data entry, Internet searches, answer calls, send faxes, make copies, etc.

Duties may cover a variety of areas of responsibility. Employee works with general supervision and may have to assess the “best” solution and make a judgment among prescribed alternatives. Problems outside available guidelines and choices are referred to a supervisor. Uses more advanced word-processing skills to type, edit, format, and produce documents in ready-to-release form. Uses spreadsheet skills to do calculations, data sorts, specialized reports, information tracking and data manipulation. May use other department-specific software, in support of assigned responsibilities.

Employee may provide technical and process leadership to a work group and may train new staff. Serves as senior resource based on years of experience and/or in-depth training. Works independently on tasks. When problems require additional input for solution, the employee seeks that from the professional staff defining and assigning the work. Uses full “office suite” of software with skill. Knows RPI and department processes and procedures well enough to be a resource for others. Unusually complex or out-of-the-ordinary work is done at this level.

Much like a Level III, but the work has a higher impact because it is done for a Dean or an Officer of RPI. May oversee other assistants providing training or assisting in performance reviews and selection. May oversee projects involving several assistants. Strong knowledge of department, division and RPI processes and procedures, serving as a key resource on these issues for other support staff as well as professional staff. Serves as a principal “face to the public” for the Dean/Officer and the University. Problems can be non-routine. There is latitude to find workable solutions, and this may require creative solutions within the guidelines of established policy and procedures.

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Immediate Next StepsImmediate Next Steps

Finalize staff career ladders Finalize staff career ladders

Complete the development of staff pay structuresComplete the development of staff pay structures

Refine staff titlesRefine staff titles

Continue/complete faculty external market Continue/complete faculty external market analysisanalysis

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Objective #6:Objective #6:

Discuss what this means to youDiscuss what this means to you

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The New Rensselaer Total Compensation SystemThe New Rensselaer Total Compensation System

Salaries are going to be managed within a Salaries are going to be managed within a system. Every position will be placed in a salary system. Every position will be placed in a salary grade with a defined minimum and maximum.grade with a defined minimum and maximum.

The salary system will be based on analysis of The salary system will be based on analysis of the external marketplace and an assessment of the external marketplace and an assessment of the unique value system at Rensselaer.the unique value system at Rensselaer.

Defined career paths will help staff map out their Defined career paths will help staff map out their career strategies.career strategies.

FairnessFairness

CompetitivenessCompetitiveness

Career OpportunitiesCareer Opportunities

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The New Rensselaer Total Compensation SystemThe New Rensselaer Total Compensation System

Titles will be revised to reflect the new Titles will be revised to reflect the new system and to ensure that they are system and to ensure that they are consistent across the Institute.consistent across the Institute.

Regulatory ComplianceRegulatory Compliance Labor regulations require that with a Labor regulations require that with a

new/revised program of pay and rewards we new/revised program of pay and rewards we conduct an audit to ensure continued conduct an audit to ensure continued compliance.compliance.

Title ConsistencyTitle Consistency

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Objective #7:Objective #7:

Answer questionsAnswer questions

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Questions & Answers Questions & Answers