Loyola University Maryland

Office of Human Resources

Compensation Study

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Loyola University Maryland engaged Sibson Consulting to help the institution achieve three objectives:

  • Understand the fairness and competitiveness of Loyola’s staff and administrator compensation and benefits,
  • Re-design the existing program so that the program can be sustainable and equitable for the future, and
  • Recommend a budget plan to appropriately realign Loyola’s staff and administrator pay over time

Rationale for Change

In an effort to have a revised compensation program that is fair, competitive, and sustainable, Loyola University has undertaken an internal transformation on key items:

  • Job descriptions. Consistent, updated, accurate job descriptions that describe what employees are doing within their respective roles
  • Relevant markets. Revised comparison markets by functional area and employee level that more accurately capture the compensation paid at the types of organizations from which Loyola recruits employees
  • Market-based structure. Salary structure that is based on a balance between defined, specific comparison markets and internal factors as compared to the internal and general market focus of the prior structure
  • Revised pay guidelines. Key principles that help managers and leaders administer compensation in a disciplined way to ensure that compensation of employees across the University is managed fairly and consistently

Sibson and Loyola Project Overview:  Major Work Steps

From January 2015 to today:

Strategy
Organization
Assessment
Implementation
Understand current compensation strategy Develop job description template
Identify comparison markets for assessment
Hold salary review meetings with AVPs/VPs
Review data and materials Hold job description review meetings
Conduct market assessment
Identify employee and cost implications
Conduct leadership interviews Revise job descriptions
Develop salary structure and assign jobs
Revise pay guidelines
Develop draft compensation philosophy
Finalize job descriptions
Conduct pay equity study
Draft implementation strategy

Comparison Market Used for Compensation Study 

Higher Education Criteria for Market Assessment

Higher education comparison market was established based upon the following criteria:

  • Undergraduate Full Time Enrollment/Equivalent: 1,966 – 7,864 (1/2X to 2X Loyola)
  • Total Expenses: $91,232,180 – $364,928,718 (1/2X to 2X Loyola)
  • Institution Type: Public or Private Baccalaureate Colleges (excluding Associate's) and higher Carnegie Classification
  • Degree of Urbanization: Excludes rural and remote areas

After a review with Senior Leadership, comparison market list modified with the following criteria:

  • Added institutions in the Baltimore/DC corridor
  • Added “aspirant” institutions
  • Added other AJCU institutions
  • Removed institutions with less than or near a graduation rate of 50% (institutions in the Baltimore/DC corridor in this category were not removed)

View the Higher Education Comparison Market

Results

Given the market assessment results, Sibson worked with Loyola HR to make revisions to its salary structure and assign jobs to the appropriate grades within the structure. In late 2015, Loyola HR met with AVPs/VPs to review individual employee salaries to determine if they are in the appropriate quartile within their job’s grade.

Salary Structure Design Process

Loyola’s proposed salary structure balances both market and internal factors

  • Market emphasis. Developed structure using market assessment results. Grouped benchmark jobs (i.e., jobs with market data) into grades based on their similarity of market median data points
  • Internal benchmarking. Assigned non-benchmark jobs to the structure based on their similarity to benchmark jobs in terms of scope of responsibilities, knowledge, skills, and experience, and impact of role
  • Validation of job assignments. Met with functional leaders to review job assignments to ensure appropriate internal relationships, and revised grade designations as appropriate
  • Salary review conversations. Met with functional leaders to review potential salary adjustments based on latest performance rating and years of service in role. These adjustments bring employee salaries to the minimum of the appropriate quartile within the grade. Note: not all employees will have an adjustment

Pay Equity Summary of Findings

Sibson Consulting performed a pay equity analysis on staff jobs at Loyola University Maryland using the proposed salaries and grades under the new salary structure

  • Overall.  No inequities were found using analyses that correct for existing differences in grade, service years, and performance, between men and woman, minorities and non-minorities, and older and younger employees on pay
  • Gender, Ethnicity, and Age.  Gender, ethnicity, and age effects were statistically non-significant and of small effect sizes. Therefore, we conclude no biases exist in the application of compensation.

Implementation Strategy

Institutions often are unable to absorb the cost implications of a revised structure in one year. On average, institutions spread out these expenditures over a 3 to 5 year time period, depending on the magnitude of costs and financial climate of the institution. 

Implementation Steps Details Time Period
Step 1: Bring to grade minimum, if below Bring salaries to grade minimum, if below July 1, 2016 effective date
Red circle salaries above grade maximum
Step 2: Bring to Minimum of Recommended Quartile, If Below Bring salaries which are most egregiously away from their quartile, to the quartile minimum TBD
Relieve significant compression caused by salary adjustments
Red circle salaries above grade maximum
Bring all remaining salaries to their quartile minimum, if below
Relieve any remaining compression caused by salary adjustments
Red circle salaries above grade maximum
Step 3: Bring to Appropriate Placement Within Recommended Quartile TBD TBD

Definitions:

  • Red Circle: Salaries above grade maximum. Employees who are eligible for a merit increase but who are already compensated above the maximum may receive a lump-sum payment in lieu of a merit increase at the discretion of the President’s Cabinet. Lump-sum payments will not exceed the available merit increase and do not change an employee’s base salary. This practice will continue until the employee’s salary falls within the salary structure, as a result of structure aging.
  • Quartile: the middle number between the smallest number and the median of the data set.

Considerations for Individual Pay Decisions

When making compensation decisions, senior leaders need to identify the appropriate balance between the external and internal role values.

Compensation Level Considerations

Market data helped to inform the re-design of the University’s salary structure, and reflected salary levels within the agreed-upon comparison markets 

However, market data only provide a reference point for compensation decisions. The data do not represent the definitive answer as to how Loyola should compensate its employees

Consideration needs to be given to factors such as: performance against role expectations, applicability of employee skill-sets and experiences to Loyola’s unique realities, internal equity, role criticality, talent scarcity/roles that are difficult to hire or replace, etc.

Key Pay Guideline Changes

Policies for managing compensation provide managers and employees with a framework and key principles for how compensation is administered.

Pay Guideline Details on Change
Compensation Philosophy Statements on how compensation aligns with the mission and values of the University
Identification of relevant comparison markets and pay positioning
Alignment with market-based compensation
Manager Responsibilities Responsible for outlining job duties and expectations clearly, and updating job descriptions to reflect any changes throughout the year
Partnership with HR to ensure appropriate compensation analyses are performed
Red Circle Salaries Above Grade Max
Salaries exceeding the grade maximum will be red circled
Salaries above grade maximum. Employees who are eligible for a merit increase but who are already compensated above the maximum may receive a lump-sum payment in lieu of a merit increase at the discretion of the President’s Cabinet. Lump-sum payments will not exceed the available merit increase and do not change an employee’s base salary. This practice will continue until the employee’s salary falls within the salary structure, as a result of structure aging.
Over time, an employee’s salary may fall back within the structure as the salary structure is adjusted upward given market movement
Interim Pay/Acting Pay Employees asked to take on significant additional responsibilities on a temporary basis (6 months or less) will receive interim pay (~5%-10% base salary increase for duration of assignment)
Employees asked to assume the full set of responsibilities from an equal or higher-level position in place of current position for a minimum period of 6 months will receive acting pay (i.e., equitable pay based on current market data)

Ongoing Maintenance of Salary Structure

After the structure is put in place, effective July 1, 2016, there are several ways to ensure that the structure remains current and equitable in between the years when a comprehensive study is undertaken.

Salary Structure Aging

Use proposed structure aging percentages from published compensation surveys to age structure annually, with budget permitting

Salaries Within Grade Range

Hold Vice Presidents, HR, and managers accountable for ensuring employee salaries are within the assigned grade range of job

New Hire Job Placement

  • If a job does not exist: Develop job description, market price position, and assign job to grade based on market assessment results with consideration for internal factors of similar roles (scope, skillsets/experience, complexity, etc.)
  • If job currently exists: Assign role to same grade as employees in the same job