Final Report

Executive Summary

In this report, the University Compensation Committee responds to four charges provided by President Michael Nietzel. The report’s introduction provides the committee’s working philosophy and also the assumptions that shaped our recommendations. Any compensation plan that is adopted should demonstrate the high value the University holds for its employees, and in conjunction with other human resource strategies, should contribute to workplace conditions that support employees at all levels of the university in meeting or exceeding performance standards.

Section 1 is a response to the committee’s first charge: “To what degree should merit and equity be used in assigning salary increments?” The committee recommends a performance-based pay system to be implemented through the use of a Compensation Matrix that incorporates both performance-based pay and standards of equity into a single administrative process. Using the matrix, cost-center heads would have discretionary authority to reward merit and address equity concerns in a systematic way. Pay increases would be based on: 1) the amount of the University’s annual budget assigned to pay increases for that year; 2) an individual’s position within their pay range; and 3) individual performance evaluation results.

Section 2 responds to the second charge: “What kind of evaluation system needs to be in place to accompany the move to a merit- and equity-based system?” The committee recognizes that good and fair measurement of performance is essential in any performance-based pay plan and believes that the performance of all employees, including administrators, should be evaluated. Our recommendation for faculty evaluation builds on processes that are already in place, with untenured faculty, including lecturers, evaluated annually and tenured faculty biennially. For annual evaluation of staff, the committee recommends the refinement and eventual use of an evaluation tool that has been developed in-house, with interim use of the existing evaluation form provided by Human Resources. The committee also recommends that the University provide training for the University community in conducting sound performance evaluations.

Section 3 addresses the third charge: “What policy should be used for determining the salary for administrators’ return to faculty?” In general, the committee recommends that faculty members who have held one or more administrative positions continuously for three full academic years or more should return with a 9-month faculty salary of no less than 9/11 of their 12-month administrative salary.

Section 4 addresses the fourth charge: “How can the classified system (step and grade) be integrated into a move to a merit-based system? What would the processes and timeline be for such a change?” The committee recommends the existing step-and-grade compensation system for all classified employees be abandoned effective July 1, 2006 and that staff compensation be migrated in three broad phases to the Compensation Matrix approach. Proposed timelines, which are intended to provide a smooth transition to the new plan, are outlined in detail.

The Compensation Committee recognizes that these recommendations, if adopted, will require a significant culture shift for Missouri State University. The committee members do believe that adoption of a performance-based compensation plan would move the University in a direction that is in the best overall interest of the University and its employees.