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PG-44 Employee Compensation and Classification Plan

Policy: PG-44
Subject: Employee Compensation and Classification Plan

Approval Date: 05/13/88
Revision Date: 06/22/94; 09/15/2000; 06/4/2015

PURPOSE:
To outline the policy, philosophy, and strategy for administering the University's Compensation and Classification Plan.

PHILOSOPHY: The University's compensation philosophy recognizes our employee's value and their contribution to successfully accomplishing the goals and objectives as outlined in the MSU Strategic Plan with its Vision, and Core Values. The compensation system will strive to pay at the current market value of a position based on the skills, knowledge and abilities required of a fully, competent incumbent while being grounded in the economic realities of the University budget. An individual’s compensation within a pay range will be expected to vary based upon the individual’s performance and experience in the position. The compensation system will be objective and non-discriminatory in theory, application, and practice. The University will reward its employees based on their merit and performance toward achieving the University’s goals and objectives through annual personnel evaluation systems for faculty and for staff employees.

COMPENSATION STRATEGY:  
  • The University will recruit personnel from relevant labor markets, whether those are local, statewide, regional or national.
  • The compensation system must be flexible enough to ensure that the University is able to recruit and retain a highly qualified faculty and staff workforce, while providing the structure necessary to effectively manage the overall compensation program.
  • The University will compensate its employees in the most equitable and competitive manner possible within the confines of its budget based on the skills, knowledge and abilities required of a fully competent incumbent. The University will utilize annual salary surveys for the purpose of adjusting grade level position ranges per the identified relevant job markets.
  • The compensation system will evaluate external equity to determine the relative marketplace value of every University position directly comparable to similar positions in comparable higher education institutions, factored for general economic variances and adjusted to reflect the local economic marketplace.
  • The compensation system will evaluate internal equity to determine the relative worth of each position in the University when comparing the required level of position competencies, formal training and experience, responsibility and accountability of one position to another, and arranging all positions in a formal grading structure.
  • The staff job titles are established to reflect the type of work performed while also having an appropriate linkage to common titling practices in the educational marketplace. Consistency of titling across the University is important to ensuring that titles are not over- or understated. The use of a working title may be used to more accurately describe a job where it is externally necessary.
  • Pay ranges will be established using survey data wherever possible with experienced market/median indicating the market value for the position. Pay ranges for faculty positions will be based on survey data from faculty holding a common academic rank within a common academic discipline.
  • The experienced market of the pay range typically describes an individual having seven years of experience in that particular position for staff or eight years of experience in an academic rank for faculty.
  • Progression through the pay range is based on performance. While experience and growth in the job may influence a person's movement in the first few years in the job, performance will be the key driver in dictating long-term salary growth.
  • Annual employee evaluations shall be based on performance as measured by the accomplishments of stated University and professional goals and objectives. A common staff evaluation system is used for all exempt and non-exempt staff. Faculty Evaluation Plans are maintained within an academic department or college.
  • Salaries of new employees will be established within the limits of the system and reflective of the incumbent’s experience in the new position. Salaries should never be below the minimum of the grade level and should not be over the experienced market of the grade level/pay range, in order to properly apply the values of the system. Exceptions to the recommended starting salary can only be obtained with written justification and approval by the appropriate Vice President/Provost. Any starting salaries over the experienced market must be done with written justification and approved by the Vice President/Provost and the President.
 
ADMINISTRATION OF THE PLAN:
The Board of Regents authorizes the President to administer the Plan. All faculty and staff appointments shall be in accordance with the Employee Job Classification and Compensation Plan.

MANAGEMENT RIGHTS AND RESPONSIBILITIES:

The Board of Regents may amend the Employee Job Classification and Compensation Plan in response to budgetary constraints, changes in State and Federal law or regulations, and/or based upon any financial exigency which may affect the University's ability to appropriately respond to internally- or externally-imposed fiscal restraints. The Office of Human Resources is responsible for designing and maintaining the Staff Job Classification and Compensation Plan.

PROCEDURES:
Current information regarding the operating parameters of the compensation system, to include procedures, position ranges and other relevant information will be available through the Office of Human Resources.

RESTRICTED FUND EMPLOYMENT:
Restricted fund employees are those employees hired in positions for projects funded from external sources. Project directors shall use the University's pay schedules and compensation system when developing budgets for such projects. The University does not assume any obligation to supplement wages or salaries of externally funded employees who are not compensated at levels established in this policy. In keeping with the University’s compensation philosophy, the University encourages equity for all employees regardless of funding source.

TEMPORARY PART-TIME EMPLOYMENT:
Temporary and part-time appointments, as defined in Personnel Policy PG-3 shall receive a pay rate of at least the Federal minimum wage. Part-time appointments for retirees of Kentucky Teachers’ Retirement System (KTRS) or the Kentucky Employees’ Retirement System (KERS) will comply with any and all restrictions set forth by the KTRS, KERS, and any applicable Kentucky Revises Statutes.