Compensation System: FAQ's

 

Q:  Why is there a need for an effective compensation system?
A:  An effective compensation system provides the University the ability to attract, retain, and compensate employees who are part of the classification system in a fair, consistent, and equitable manner. An effective compensation system reduces internal pay inequities and ineffective pay practices.


Q:  What was the basis for the design of the compensation system? 
A:  The pay grades and structure of the compensation system are based on market data which reflects the external and internal value of University jobs.


Q:  What positions are in the classification system?
A:  Positions in pay grades 25 through 36 are in the classification system. Faculty and employees covered by collective bargaining agreements, Post Doctoral Researchers, Post Doctoral Fellows, Limited Term Researchers, students, and miscellaneous wage employees are not included in the classification system.


Q:  What does market and market pricing mean?
A:  Market pricing is the process of reviewing published survey data to determine the competitive salary rate paid for similar benchmark jobs at other organizations.  Market refers to an external group of employers and organizations used to determine competitive salary data.


Q:  What types of markets are used for salary reviews?
A:  The University of Delaware uses both general industry and higher education markets to determine competitive salaries. For some positions, only higher education data is used.  In other instances, only general industry is used.  In many cases hybrid data (both general industry and higher education) is utilized.  The Office Institutional Research, in consultation with the Sr. Leadership, defines our peer and aspirant peer group for higher education.


Q:  What is a benchmark job?
A:  Benchmark jobs are job classifications that are common in the labor market, have a clear and consistent definition for purposes of comparison, and for which reliable salary survey data is available.  Benchmark jobs used for the development of the University compensation plan are representative of each job function and pay level, and had multiple sources of data available.  Typically, benchmark jobs are populated by a significant number of individuals, both within the University and in the labor market.   


Q:  Is market data available to review for a specific job?
A:  The majority of survey data is purchased from organizations that conduct the surveys and is therefore, proprietary data to that organization.  When purchasing the information from them, we
are restricted in how we use and share the information.


Q:  Are there separate compensation structures for exempt and non-exempt employees?
A:  There is one salary structure for both exempt and non-exempt employees with the same pay opportunity for both.


Q:  Is there a difference in pay opportunity if you are exempt versus non-exempt?
A:  The annual compensation for exempt and non-exempt employees in the same grade is identical, but non-exempt employees must document their time and are paid overtime for hours worked beyond 40 in a week.


Q:  Why are select IT and Development position added to the Select Market Structure?
A:  During a market competitiveness review, it became clear that some IT and Development jobs were paid at a premium for peer jobs (e.g. a Director in IT or Development is paid significantly higher in the market than, for example, a Director of HR or Marketing).  To maintain the grouping of like jobs (e.g. Directors) into a group of grades, a parallel structure was created.  Utilizing a parallel structure allows HR to monitor the market for these jobs and adjust it appropriately without affecting the core structure.


Q:  What is FLSA classification, and how is it determined?
A: The Fair Labor Standards Act (FLSA) is a federal law that requires employers to pay covered non-exempt employees at least the federal minimal wage and overtime pay for all hours worked over 40 in a workweek.  For a position to be exempt from the FLSA, the employer must demonstrate that it falls within one of the specific exemptions.  Decisions on whether a position is exempt from the FLSA do not reflect a valuation of the employee.  The University is in the process of finalizing an FLSA exemption worksheet which explains the process in additional detail.


Q:  Are there pay guidelines on topics such as managing promotions, voluntary and involuntary demotions, job changes, new hires, and movement through the range?
A:  Yes, pay guidelines are currently listed on the Classification & Compensation web site.


Q:  There were titles that previously had four to five levels and now some only two.  Why is this the case?
A:  It was often difficult to distinguish job duties and responsibilities between multiple levels. The consolidation of some of these grades and titles corrects this by providing clearer distinctions between the levels.


Q:  Should employees and managers continue to update job descriptions?
A:  Yes. The University of Delaware wishes to maintain up-to-date and accurate job descriptions for all positions to ensure a shared understanding of job responsibilities.  At a minimum, job descriptions should be updated every three to five years or more often if the job requirements shift significantly.


Q:  My salary is above the maximum for my grade.  Will my salary be reduced? 
A:  No. Effective July 1, 2015, base salaries will not be increased for any employee with a salary that is equal to or greater than the maximum of their salary grade until future adjustments to the salary structure result in a salary grade maximum that is greater than the current salary. Salary increases resulting from employee merit will be made in the form of an “over-the-grade maximum” payment in lieu of an increase to their base salary. These payments are issued as supplements and are not permanently added to base salary.


Q:  How will the compensation structure be maintained in future years? How often will a comprehensive market review be completed?
A:  HR will review the structure annually based upon market trends, and adjust it accordingly. Comprehensive market reviews generally occur every 3-5 years, or as needed based upon changes in the marketplace