New P&S pay and classification system may wait for Workday
Revamped classification and pay structures for professional and scientific staff, the result of an in-depth review that began last summer, might not be implemented until Workday is active in mid-2019.
Though the rollout date isn't certain yet, the new market-based system for P&S staff may come online in concert with the Workday enterprise software system, Emma Mallarino Houghton, compensation and classification director, said last week. Workday's human capital management, financial and payroll platforms are expected to go live July 1, 2019, the implementation team announced earlier this month.
It's still possible that the new system created by the classification/compensation review will be introduced as early as October, as initially planned, Mallarino Houghton said at a seminar hosted by the P&S Council. But given the training requirements for the new structures and their potential integration with Workday, it makes sense to marry the rollouts, she said.
University human resources has a website devoted to the review project. There's a form on the site for submitting questions. The P&S Council seminars held on the review project in October and last week are available on Learn@ISU.
The review began in June when P&S employees were asked to describe their job duties as well as the experience and education their positions should require -- an assessment about 75 percent of workers completed. The project team, working with Aon Consulting, is using information from those surveys and follow-up inquiries to create job classifications organized in families of similar occupations. The goal is for the classification of a position to encompass at least 70 percent of the job's actual duties and requirements, Mallarino Houghton said.
There are more than 460 current classifications for P&S positions, and they haven't been systematically reviewed since 1993, Mallarino Houghton said in a previous update on the review process last fall. There were about 3,100 P&S workers at Iowa State as of the October 2017 payroll, according to university data, nearly equal to the combined number of faculty and merit staff.
The reclassification process won't cause major changes to organizational charts, but it will make promotion paths clearer and salaries more objective, she said. Position classifications will be tied to benchmark jobs, both in the private sector and at universities the size of Iowa State, to establish market-value salary ranges. Using that market pricing, classifications will be slotted into salary grades that track closely with what other companies and institutions actually pay employees.
Consider the program coordinator II classification, which can include jobs as varied as human resources, physical therapy and IT, Mallarino Houghton said. Those fields have widely different markets but are lumped together on the existing salary matrix.
"You should be able to look at the pay grade and trust that's your market," she said.
Here are a few other highlights from Mallarino Houghton's March 13 presentation:
Will my pay change?
If it does, it won't happen quickly. The new structure will be a valuable tool for supervisors in the future, but the money devoted to salaries is subject to budget considerations and administrative priorities. Likewise, Mallarino Houghton said she doesn't know if some workers could see cuts, though that is typically a rare outcome in a classification/compensation review.
"Upon implementation of this project, it's not a windfall of cash. Where you are is where you are. If the pay grade moved, and now you're high or low, it is what it is. It's a rectification over time," Mallarino Houghton said.
It's possible that employees whose salaries fall below the minimum for their positions once the new pay grades are set could be brought up to the minimum immediately, but it depends on the budget, she said. When the University of Iowa moved to market-based P&S pay about eight years ago, it needed to spread out those increases over three years, she said.
How are you comparing me?
Some high-level jobs are being benchmarked on a national basis, but most of them will be compared to regional and local employers. Despite the "hodge-podge nature" of some P&S positions, the project team has been able to find benchmarks for all jobs so far, Mallarino Houghton said. In some instances, they have consulted with supervisors and colleagues at Iowa for additional input.
Specifics of the comparisons won't be released, she said, noting that benchmarking is "an art."
"It's a process where you can get too many cooks," she said. "We'd be evaluating benchmarks for years on end."
Why is market-based pay better?
One of the benefits is the equity it can deliver. Hiring managers working with a market pay system shouldn't have to ask a job candidate what they currently earn, Mallarino Houghton said. Especially for women and people of color, a history of lower salaries can be an impediment to fair pay, she said.
"What we should be evaluating is the years of experience, the education and what that person brings to the table," she said.
For the same reason, she said a market-based approach may mean eliminating the "first third" policy, which requires special approval for hiring a new employee at a salary that pays more than the lowest one-third of the pay range for their classification -- a policy Mallarino Houghton believes hurts recruitment and retention.
Benchmarking to the market also allows for regular and accurate updates to pay ranges, she said.