Equity Increase 'Frequently Asked Questions'
Background:
An independent study commissioned by the Office of the President in 2005 found that base salaries at UC are somewhat lower than salaries paid in the market place. In order to attract and retain a highly qualified work force, the Regents have developed a 10 year plan to move UC salaries closer to the market. The Regents have provided a small amount of funding to address campus salary lags. FY 2006-07 is the second year of that program.
UC Berkeley’s Compensation Unit conducted further research and provided recommendations for base-building salary increases for employees in jobs with the biggest market gaps, high turnover rates and recruitment and retention difficulties.
1. How did the campus determine which employees will receive equity increases?
The 2006 equity increase process is based on market salary comparisons (where available) and internal salary comparisons, turnover rates, and information from campus departments on recruiting and retention challenges.
2. Who is eligible for these equity increases?
The equity increases are being applied to non-represented career staff employees covered by Personnel Policies for Staff Members (PPSM) in jobs that have significant market gaps and high turnover rates.
Additional employee criteria for those selected for equity increases:
- Are in career appointments
- Have Satisfactory or better performance (performance rating of 3 or higher as documented in the most recent merit review)
- Were hired July 1, 2006 or earlier
Note: Salaries for employees covered by bargaining agreements (union contracts) are determined through the bargaining process; therefore, these represented employees are not included in this equity program.
3. How are employees selected?
In August 2005, the Chancellor’s Cabinet determined that the equity process should follow a data-driven approach. That approach worked well last year and we are continuing to follow it this year, with some slight modifications. Based on the data, three groups of employees are eligible for equity increases:
- Group 1: Employees in job titles that have a clear link to market data. Where possible, market data from reputable salary surveys (from public, private and educational institutions) were used to identify jobs that have the biggest salary gaps compared to the external market. Two additional components used in determining which jobs to address are the turnover rate and difficulty in recruiting for the job.
- Group 2: Employees in “generic” job titles, such as administrative analysts, programmer/analysts, and management services officers. These generic jobs are difficult to compare to market because other employers do not use the same titles and it is not easy to obtain market salary information for these positions. Therefore, these jobs were reviewed by comparing the base salary of employees relative to the average salary for that job on campus.
- Group 3: At the discretion of each Vice Chancellor, a third group of employees may be eligible to receive equity increases based on severe market lag and/or retention issues that were not readily identified through the initial equity review process described above. Because funding for this group is limited, these recommendations must be accompanied by clear justification and will be reviewed by the Control Unit Administrator in consultation with the Compensation Unit.
4. How will equity increases for individual employees be determined?
- For employees in Group 1, with designated titles where market information indicates that the campus average has significant salary lags and retention and recruitment difficulty:
- Most employees whose salary is below the job title’s campus average (that is deemed below the external market) may be eligible for equity increases of up to 5.5%
- Most employees whose salary is above the campus average for the job title by no more than 10% may be eligible for equity increases of up to 3.5%
- Most employees whose salary is more than 10% above the average salary for the title will not receive a salary increase at this time, as their salaries are most likely very close to market rates.
- Employees in Group 2, in generic job families of administrative analyst, programmer/analyst, management services officer and related generic job titles that are difficult to compare to market:
- Most employees whose salary is less than 87.5% of the average salary for the generic title may receive equity increases to place their salaries at approximately 87.5% of the average salary for the job
- Increases for these employees will be at least 1% but no more than 12% of the employee’s current salary
- Employees in Group 3: Department managers may propose equity increases for employees where they believe there to be a serious salary equity issue. Such an equity issue may be proposed based upon:
- Market data not easily available to the Compensation unit
- Demonstrated retention problems (e.g., written outside offer)
- Equity issues with other employees
- Salary compression between subordinates and supervisors, requiring an equity increase to maintain a reasonable salary differential
- Recent hires based upon market that have created equities in relation to longer term, more senior, satisfactory (or better) employees.
5. Can departments change the recommended equity increase for their employees?
Departments may provide a lower level equity increase, or no increase, based on clear criteria that might include one or more of the following:
- the employee received an equity increase within the past year that helped to significantly reduce an identified equity problem
- the employee was promoted or reclassified within the last year and provided an appropriate salary increase at that time
- the proposed equity increase would create other equity issues (e.g., with represented employees, or with other employees who have similar levels of responsibility but different kinds of work)
- the equity increase would create a salary compaction problem with higher level employees’
- the employee’s performance is rated less than satisfactory (thus no increase)
6. Why were employees in the generic job titles brought to 87.5% of the average for the job?
Based on the limited funding UC Berkeley received to begin to address base salary equity issues, 87.5% of the average salary of identified job titles was the figure which allowed UC Berkeley to provide equity increases to identified employees and to remain within the allocated funds.
7. What will happen to the extra central funds if a recommended increase is reduced?
Equity dollars that are not used entirely by departments for groups 1 and 2 will remain in the control unit and will be available for group 3 recommendations.
8. How are the equity increases being funded?
The Regents have provided funding for this program equal to one-half of one percent (0.5%) of non-represented staff on permanently budgeted state-funded (19900) salaries. The Chancellor is providing an equivalent 0.5% for permanently budgeted salaries on the other central funds (Registration Fees Fund 20000, Opportunity Funds 07427, Off-the-Top Funds 69750). Departments must provide the funding for equity increases for non-centrally funded employees and employees on temporary funding.
9. Are employees whose positions are not permanently budgeted and/or not on central funds eligible for equity increases?
Yes. Employees in targeted titles should receive the same level equity increase regardless of funding source.
10. How will increases be funded for positions that are not on central sources?
Increases for positions not funded by state or other central funds (including registration fees, off-the-top, and opportunity funds) must be funded from department sources.
11. Can the amount of the increases be based on a department’s ability to fund the increase, especially if the department is mainly on non-central funds?
Departments will be expected to fund recommended equity increases so employees on non-central fund sources are not penalized with smaller increases than their centrally funded peers.
12. Will titles that received equity increases last year be eligible for them again this year?
If positions continue to show significant lags to the market and continue to show recruitment and retention difficulty, they would be eligible for equity increases again this year. That would not be surprising, as many titles with the most serious lags, e.g., of more than 20%, were provided equity increases averaging only 5%; the lag would be reduced but it is very likely they would continue to be significantly behind the external market.
13. When will the increases be effective?
These increases are effective October 1, 2006. Equity increases entered into HRMS by Thursday, March 22 (positive time reporting by Tuesday, March 15, to meet timesheet deadlines) will appear in employees’ paychecks of April 1.
14. How many employees will receive equity increases?
Approximately 500 employees across the campus have been recommended to receive these equity increases.