Revising the Staff Salary Increase Program: The Plan

Categories: Compensation, Staffing

Between June and December of 2010, the SRC and the Wage & Salary committee met regularly to consider how best to administer the funds available each year for staff raises. Our discussions focused on 1) finding a way of moving more staff members toward the midpoint or target of their salary ranges and 2) establishing a fair and effective method of rewarding strong work performance (merit pay).

The first objective grows out of the College’s stated goal of paying staff in the top 20% of the market for their jobs. Years ago, this goal was expressed through the benchmark system, which explicitly linked the growth of salaries to the 80th percentile in the market. In 2006, the College modified its compensation structures by grouping similar positions in bands and levels, each one with its own salary range. The ranges were constructed around midpoints, which Human Resources derived from a market analysis of the jobs included in the band/level. In these analyses, HR identified the 80th percentile salaries for the jobs in the band/level, added the salaries together, and then averaged them to determine the midpoint of the range. Then they dipped down 20 to 25% to set the minimum salary and ratcheted up 20 to 25% to set the maximum.

The midpoints are meant to serve as targets. Though they do not correlate precisely with the 80th percentile salary that a given job would command in the market (local, regional, or national). Rather, they represent the salary that an accomplished employee should expect to make at mid career.

When the SRC and Wage & Salary reviewed the spectrum of staff salaries, it discovered that 808 employees were at or below the midpoint of their salary ranges; 366 were between the midpoint and the maximum; and 118 were at the maximum. (Note that these 1292 employees also include part-time workers). In order to move more employees in the lower half of the salary range toward the midpoint, the committee realized that it would need to find a way of redistributing the funds going to the top of range. For instance, while we identify maximum salaries in our ranges, we do not enforce those maximums. Because annual raises are structured as percentage increases on individual salaries, staff at the top of the ranges receive a significant portion of the dollars available in the pool for raises.

To address this situation, the SRC and Wage & Salary proposed the following changes, which President Liebowitz has approved.

  • Annual  increases will be calculated on the midpoint salary, meaning that all staff members in the same band/level will receive the same raise in terms of dollars.  This shift will enable staff to make greater progress toward the target the College has established for staff (that is, salaries in the top 20%) of the market. This change will also slow the growth of salaries for staff between the midpoint and the maximum.
  • Maximum salaries will be capped. Employees at the top of the salary range will be eligible for annual increases; however, these increases will be distributed as single sum payments (at the beginning of the fiscal year) and will not be incorporated in the base salary. It is important to note that single sum payments will count toward the College’s retirement plan.  Two caveats are worth stressing here. One is that maximum salaries are at or near the 100% of the market for a given position. The other is that HR conducts regular reviews of salary ranges, and when the market for a particular job evolves upward, HR will adjust the ranges (the minimum, midpoint, and maximum) accordingly.

With regard to merit pay, committee also recommended that salary increases be given in three levels:

  • A percentage increase will be given to staff who “consistently meet expectations” (we expect that 75% of the staff would fall into this category).
  • A higher percentage increase will be given to staff who “significantly exceed expectations” (approximately 25% of the staff).
  • A bonus will be given to 5% of the staff for exemplary work. These employees would also receive the higher percentage increase for significantly exceeding expectations. Bonuses will be awarded through a nomination process that the Vice Presidents will oversee. Bonuses will not be incorporated in base salaries.
  • All percentage increases will be calculated on the midpoint.

The percentage breakdowns that will guide our annual increase program–75% who consistently meet expectations, and 25% who significantly exceed expectations–are not arbitrary. Rather, they are based on the data available from years of performance evaluations.

In following up on President Liebowitz’s charge, the SRC and Wage & Salary committee worked to develop a plan that balances several institutional priorities and seems fair. We also understand that the success of this plan will depend on an effective evaluation system and salary ranges that are accurately tied to the market. To make sure we get both of these items right, we have decided to roll this compensation plan out in two phases. You can read about the implementation process in my next post.

Again, if you have questions or just want to weigh in, you may use the comments section.  Or, if you prefer, you may email questions to me at vpadmin@middlebury.edu.

62 Responses to Revising the Staff Salary Increase Program: The Plan

  1. Anonymous says:

    Will the faculty raises also be tied to midpoint ranges for their ranks and will their salaries face the same caps? If the college is interested in fairness, faculty and staff should be treated the same, especially since increases in the cost of living have a disproportionately higher impact on staff who make less.

    • Anonymous says:

      well said!!!

    • Tim Spears says:

      The faculty and staff compensation programs have always been administered differently, just as their review and performance management structures are very different. The faculty salary system is also under discussion and there may be changes there as well. But faculty ranks are not divided into bands and levels, so there is no minimum/maximum range, and we do not calculate any midpoint/target. We already achieve the same effect within the faculty system by giving higher percentage increases to the lower-salaried ranks, and lower percentage increases to those at the top of the salary ranges. There is no need to cap faculty salaries because we already reduce the annual percentage increase for our highest paid full professors. Also, given where our faculty salaries are compared to our peers, the cap (which is tied to the market) would rarely, if ever, be reached by Middlebury full professors.

      The new staff compensation plan does not affect the total dollars allocated to the overall staff pool–it just redistributes the money among the staff. Similarly, the proposed faculty compensation changes would not affect the total dollars allocated to the faculty pool. So changes in the faculty area do not affect staff in any case.

    • Anonymous says:

      Thanks Tim for answering my question about faculty salaries. I understand their are big differences between our band system and their ranks system – its the principles that matter most here. It’s nice to know the college has been rewarding our junior faculty with higher percentage raises, which seems similar to the goal of the new staff system of midpoint raises, thus answering my concern there. However, you state: “There is no need to cap faculty salaries because we already reduce the annual percentage increase for our highest paid full professors.” Then why cap staff salaries if those at the top of our bands are also getting reduced increases? Staff who are capped will lose salary over time due to inflation (I don’t think people have much faith that adjusting to the market every so often will keep up with inflation). Let’s find a way to modify the new plan to give those at the top of their bands a modest cost of living increase so they can maintain where they are and feel rewarded for so many years of dedicated work. I won’t be affected for many many years but this still concerns me. The plan needs to be fair and provide incentives to everyone, especially considering that with fewer staff work loads and expectations are higher.

  2. Anonymous says:

    I personally find it disturbing and demoralizing to have the College enforce caps on individual salaries and face the possibility of working the rest of ones career without at least a cost of living raise annually. Long time employees who have been and continue to be strong performers should not be treated this way. Are we trying to socialize the compensation program? Are the single sum payments to those who are at the max for their band going to increase year to year? If not then fixed salary X plus fixed single sum payment Y always will equal the same and over time there will be no percentage increase for those in this situation. However the cost of goods and services will always continue to increase. This does not seem to bode well for inspiring the employee base to excel in my opinion, especially the long time employees who have given so much on behalf of the College.

    • Anonymous says:

      Ditto. And as health/dental benefits rise, those of us at the top over the max will actually see less in our BW paychecks. Doesn’t seem right to me. Maybe you freeze the cost of benefits for those in this category – the 108 at the max or over.

    • Sandy LeGault says:

      I agree. I applaud Middlebury’s efforts to provide a livable wage for everyone, but regret that it’s being done on the backs of long-time staff, who used to feel that their experience and commitment were valued. I know so many people who are working harder than ever to make the staff reductions work, often by working uncompensated overtime because they feel an obligation to Middlebury students, to their colleagues, to the whole enterprise. We all have our tales of woe from the last couple of years. Getting a smaller raise, even no raise, in a given year wouldn’t feel great, but I think most of us could swallow it, given to the state of the economy. But, if I’m understanding it correctly, the new system is erecting a brick wall; permanently capping salaries is too much. I feel as though I’ve just been invited to phone it in for the rest of my working life at Middlebury. Where’s the incentive?

    • Timothy Spears says:

      A important part of this program (as I note above) is the ongoing evaluation of bands/levels so that as the market price for jobs increases the salary ranges will shift and maximum salaries will go up. This ongoing review is aimed at making sure our salary ranges do not remain stagnant, but are instead appropriately tied to the market. It’s also worth noting that people at the top of the range are earning salaries that would place them at the high end of the market outside of Middlebury College.

      • Sandy LeGault says:

        That’s really beside the point (my point) and not comforting at all.

      • Anonymous says:

        I have reservations that HR would be constantly adjusting upward each band/level annually. In fact it seems some bands/levels may actually decrease based on the market occasionally. And I don’t understand why it is a bad thing or wrong that people at the top range here would be at the top range elsewhere.

    • Anonymous says:

      For the majority of us sitting below the midpoint of our bands (many of whom are working their butts off) the old strategy of only rewarding longevity is extremely frustrating and feels quite demoralizing. After a decade of working at the college I have just bumped along the bottom of my bands’ salary ranges even while getting great performance reviews — while longer-serving staff have pulled down much bigger salaries with much larger raises on top. While it would be great if we could all make a lot more, it especially sucks to be at the bottom of the heap here and see very little reward for hard work. Remember, most of us aren’t at the top.

      • Anonymous says:

        I’m not sure where you derive the concept that past behavior was rewarding longevity in the staff? In my considerable time here at Middlebury raises have been percentage based, with slight variations in said percentages based on a supervisor’s rating and evaluation. As we know everyone tends to live to their means so why shouldn’t it be fair that everyone gets a similar percentage increase to deal with the increasing costs in their household? Isn’t that precisely the base calculation for the raise pool as stated and if averages in performance are similar across levels should cover all the costs?

        In my opinion the ideal raise program would give each functional area their finite percentage of the raise pool dollars. Then let them assign this based on their management’s input and performance reviews locally. I don’t think anyone’s looking to make “a lot more” as you state but just keep pace with the rising costs we all face.

  3. Jess Isler says:

    Can you please clarify: is the 5% exemplary bonus a possibility for 5% of all staff or for 5% of 25% of staff? e.g. for a hypothetical 1000 staff members, would 50 (5%) out of 1000 be eligible for exemplary bonuses or 12.5 (5% of 25%) out of 1000 be eligible? Many thanks for clarifying!

  4. Tim Spears says:

    The bonus for exemplary work is available for 5% of the entire staff. Anyone who gets a bonus would also be included among the 25% of the staff who receive the % based merit increase.

  5. Anonymous says:

    In your review of the revised compensation process, was any input considered for those staff members in the single category and its capability of meeting a cost of living base? It is most definitely more of a significant financial challenge for those of us who maintain single status, as opposed to the benefit of a two-person income for a household. It is a continual struggle to meet financial ends with an income of one salary, even with a mid-level staff position. There may be legal constraints of which I am unaware of in this regard, but it is a worthwhile investigation to assist those on their own.

  6. Anonymous says:

    There were discussions when the bands and levels were first implemented that there could be adjustments, and possibly new levels created, but I have heard nothing about this happening. Could this still happen?

    What happens if the market analysis pricing go down? What then?

    In most cases there is no reason to have the discussion of faculty salaries vs. staff salaries. (Other than when it comes the horrible example that was shown on the screen in the staff meetings.) We are talking about staff salaries that could be capped at either $32,622 or $37,942 or 45,236 or 51,241 or 56,984 while living in the expensive State of Vermont. The Staff that I know take a lot of pride in their jobs and do it very well. (And should get at least a yearly increase in their paychecks throughout the year.) Many members of the Staff could (and do) work their entire career here. The very people that are outside working under extreme weather conditions day in and day out. Along with the ones who work hard each day inside to make things run smoothly for faculty, students, guests, community members, and other staff members. And the plan is to cap their salary after working here for a certain number of years.
    This plan doesn’t take into consideration the amount of time saved that an experienced staff member gives to their job and/or the knowledge of the College. And how quickly they can answer questions asked of them to assist others, which in turn gets other jobs done more efficiently.

    Earlier in the blog Tim Spears wrote:
    “It’s also worth noting that people at the top of the range are earning salaries that would place them at the high end of the market outside of Middlebury College.”

    Is this comment here to suggest that Middlebury College recommends or is encouraging staff to find other jobs outside the College after they have been here for a period of time?

    The proposed Staff Salary Compensation plan needs some adjustments: No lump sums payments. Staff increases needs to be added to their base pay each year. Everyone should get an increase in their bi-weekly paycheck.

  7. Anonymous says:

    Maybe I’m naive but with the markets basically recovered and our investment strategy hopefully modified to reduce our risk and exposure to future downturns the endowment must be doing very well. In addition many long-time highly paid staff have departed in the last two years due to the various reduction programs. Why not just increase the overall raise pool and give the remaining staff their anticipated increases and let everyone feel good about the sacrifices that have been made during the very serious but extremely rare economic downturn?

  8. Anonymous says:

    I guess I am quite confused as to why Middlebury needs to make staff compensation so convoluted.

    Why can’t we just allocate each budget administrator a set amount of funds to award raises to their staff based on their performance review? Shouldn’t this be part of the responsibilities of the Administrators that we entrust to manage the colleges funds?

    If raises are tied so closely to the ranges within bands then where is the incentive for staff to provide exceptional service to thier constituient base?

    I am disappointed to see that the administration seems to not value the staff that has been here for a long period of time and has a wealth of knowledge and experience. I believe by implementing such a program will force people to look elsewhere for employment and Middlebury, which has already lost many seasoned staff, will lose even more. And our institutional knowledge and strength, that we get from that knowledge, will effect the College in a very negative way.

    Longevity and loyalty should be rewarded not discounted as this new policy seems to do.

  9. Timothy Spears says:

    We talked at length about the pros and cons of capping maximum salaries during our deliberations on SRC/Wage & Salary. And these discussions, like some of the comments here, focused on the importance of equity/fairness—not just for people earning maximum salaries, but for the entire staff. How then to ensure that we have a salary increase program that serves the needs of all staff, who make important contributions to the College and who have worked especially hard in the last two years? This increase plan is not about diverting money from the staff salary pool to save the College money; it’s about trying to find the fairest way of distributing the finite dollars available for raises for all staff.

    Currently, the majority of staff (808) are at or below the midpoint. Because a disproportionate number of dollars from the pool for raises goes to those whose salaries are above the midpoint or at the maximum, it takes longer for staff below the midpoint to reach this target. This runs counter to one of our objectives to place a greater number of staff in the top 20% of the market for their jobs. Statistically, at least, this plan benefits a majority of the staff.

    No compensation program will ever be perfect. But SRC/Wage and Salary has worked hard to find a solution that is as fair as possible to all staff–relative though that standard of fairness may seem to some.

    • Anonymous says:

      I don’t understand how this is equitable to all. If you are at the maximum of the band, you will only get a lump sum payment and your income base salary does not change. And if your band does not increase the next year, once again you will not receive an increase only a lump sum payment.Your income will remain the same. Unfortunately the cost of living usually increases, but for those at the maximum they are basically left out in the cold. Seems unfair to me.

    • Anonymous says:

      I have been reading the current compensation plan that is posted on the HR site and find it distressing that we appear to be moving in a very different direction than the guidelines we currently have stated in our compensation program:

      In order to be a market leader we will manage our College’s Staff Compensation Program to ensure that it:

    • Anonymous says:

      Was there anyone on the committee who is at the max of their range so they could discuss from the perspective of someone in that situation?

  10. Anonymous says:

    Just curious where does this finite number come from? Why isn’t the raise pool determined by the current staff’s total salary dollars multiplied by the agreed upon raise percentage?

  11. Timothy Spears says:

    It is. The raise pool is determined by the calculation you describe above: total compensation multiplied by a percentage ultimately approved by the Board of Trustees (as part of the annual budget). The result yields the the finite number I mention above.

  12. Anonymous says:

    With all due respect to our experienced colleagues and everyone here concerned about yearly cost of living increases; who do we suppose is having a harder time keeping up with cost of living or even making ends meet–those at the top of their salary ranges, or those at or below the midpoints? The few folks at the top should consider their position–that of relative privilege–and consider the fact that the majority of staff members somehow manage to make ends meet with less. The disappointment voiced here regarding how these changes will affect a minority of staff at the very top lacks perspective and reeks of entitlement. Salaries and wages are only a part of our compensation. We’re all fortunate to count ourselves employed, not to mention free from any personal increases for our health and welfare benefit contributions for the fourth consecutive year. In a period of years where millions lost jobs, health insurance costs rose, and retirement matches and other benefits programs were reduced or entirely cut, there is much for which we all should be thankful.

  13. Anonymous says:

    The plan to treat members of the staff differently based on their pay (largely due to their longevity) appears to be a divisive one and that’s unfortunate. It seems clear that annual cash payments are not the same as annual cash increases, your base salary never or would rarely change. That base salary information is used in many financial calculations and would remain largely stagnant later in ones career. I don’t think many of the staff in this situation feel they reek of entitlement as was mentioned elsewhere. More likely they just want to plan for their post retirement financial future and be treated the same as their co-workers as has always been the case here.

    If the feeling of the SRC is that lower paid staff members in our bands are priced incorrectly (factoring in time of service, etc.) and need to reach the 80 percentile of salaries faster than maybe institutional funds should be allocated for that apart from the increase funds.

    I think everyone on the staff is very thankful for their job and wants both the College and his or her colleagues to do well. I just don’t think a program that makes it seem that in order for one staff member to advance another needs to be treated differently is the way to go.

  14. Eric says:

    But in terms of raises, how else to address what is perceived to be being treated differently than what SRC proposes IF the College truly wants to bring up lower paid employees and resources are finite? Put another way, even if there were far more resources, those at the College longer and therefore with higher salaries would always consume far more dollars of the salary pool no matter the size of the pool each year. That is, if a person earns $50,000 and another earns $30,000 — same band and same job, but one person has been around for many more years, the impact of have the same percentage increases would mean far more dollar increases for the two workers. A 4% increase on the first salary is $2,000 for the next year, and for the second salary, $1,200. A $800 difference even though same job and same percentage raise. Over time, that means the gap in salaries between the two workers widens and widens. Even if raises were 6% higher, the situation continues and even more so, so it is not simply a matter of more money to the pool.

    If the $50,000 salary represents the maximum, meaning it is at the top of the market for that job, why should those extra $800 (between the $1200 raise and $2000) raise go to an employee who is ALREADY at the top of his or her band (according to the market) instead of helping the other worker, in the same job, get to the 80th percentile for the job faster?

    If the goal of bringing the lower paid worker within each band closer to the target (80th percentile), then there is no way to do this, other than offer lower percentages, but the same dollar increases to the staff with the higher salary, and/or, if the higher paid staff member is at the top of the pay band, then to cap that staff member until the job’s maximum changes within the market.

    Staff Council reported that fewer than 1/6 of staff is above the 80th percentile, 5/6 below, and so this approach to allocating College salary $$ will help more workers than the previous approach, and who knows, maybe most of the high achievers are in the 5/6 group of staff.

    • Anonymous says:

      A couple of points to make here:

      If you are taking about an increase (or lump sum) for those in the same band, then are no more differences in how much you make in the amounts of the increase because the raise % is being taken from the midpoint range in the bands. Correct?

      And let’s not forget that for those who make more do contribute more to their healthcare. So that cost is bi-weekly is more taken out of their paychecks.

      I don’t think it’s a problem to have everyone’s raise percentage come from the midpoint of their bands. But why is it necessary to have a cap on STAFF’s salaries? That’s like hitting the people at their max twice!!

      • Anonymous says:

        Agreed and lets not forget for the past few years no one that makes over 50K got a raise and were fine with that to help others. But now this…

  15. Anonymous says:

    I was under the impression everyone would just get 4% (the example) of the midpoint of their particular band/level. Just add it to base pay instead of a lump sum. So by defualt it is a higher percentage raise for the lower end just by that fact.

  16. Anonymous says:

    From the current Staff Compensation Program details. I guess while not a contract was expecting it to be honored.

    http://www.middlebury.edu/media/view/40271/original/StaffCompensationProgramOverview.pdf

    Salary Ranges

    Each Career Band and Career Level has a Salary Range minimum, midpoint, and maximum. These Salary Ranges were developed based on the College’s placement of jobs within a Band and Level and the annual market compensation levels for those jobs. The salary ranges are typically broad to accommodate the varying jobs within each Band.
    No employee will generally be paid below the minimum salary for the Career Band or Career Level for his/her job. Salaries will be managed within the job’s Band and Level in which it is placed. It is important to emphasize, however, that Middlebury College will not “cap” or “freeze” salary increases even though an individual reaches the top of a salary range (whether in a Band or Level). There may be situations where a staff member is paid at an annual salary that exceeds the maximum of the Career Band or Level. Staff will continue to be eligible for merit increases once they have reached the maximum of their Band or Level.

  17. Anonymous says:

    It seems unnecessary to me to cap salaries below certain thresholds. A single parent can be at the tip top of her band after many years of consistent good work and still qualify for Dr. Dynasaur and WIC. How much will allowing those salaries to go beyond 25% of the median really hurt the College?

  18. Joey says:

    Good point! Maybe Old Chapel could calculate how many staffers under a threshold of say $35,000, are at the max. Mr Spears?

  19. Wayne Darling says:

    As the MCSC President I represent staff on the Staff Resources Committee (SRC). Early in the academic year SRC and the Wage and Salary Committee began discussing options for revising the way raises are to be determined. All options presented for consideration were consistent with underlying principles for the new plan. The basic principles included: 1. bringing those employees below the middle of their pay level to the middle faster than the old plan. 2. Enforcing the salary caps that were defined when the Bands and Levels pay structure was created. 3. Rewarding merit. 4. Promote fairness.
    During the process I found answers to a number of questions. I was comfortable with some of the answers and uncomfortable with others. These are personal opinions and reflect my thoughts on the plan.
    Some of my questions follow:
    How will raises be calculated? They will be determined by the midpoint of a pay level.
    What is the midpoint of a pay level? It is the dollar amount half way between the minimum amount and the maximum amount of a pay level.
    What is a pay level? About three years ago the last pay structure change went into effect. As part of that change all Middlebury College staff members were grouped according to jobs requiring similar skills and responsibilities, and then market research determined pay ranges for each group.
    If pay levels have been around so long why don’t I know more about them? They were not as important in the past. With the old pay structure raises were calculated on each individual wage and caps were not enforced. Now that the midpoint of each pay level will be used to calculate how much everyone in that level will get for as raise the pay ranges are very important. They also include a maximum level and those above the maximum will no longer have their raises added to what they make. There are 118 members of the staff currently at or above the maximum for their pay level. There are separate rules for this group which will cause them to experience the greatest reductions in their incomes of all members of staff.
    How do I determine my pay level? You need to know your band and level like operations 2 or specialist 3 or manager 1. Then look it up on this chart. Pay Ranges
    How do I determine my band and level? The departments on this link are in alphabetical order. Find your department on the chart and locate your job Bands and levels by department
    How will that change things? Those earning less than the midpoint of a pay level will see the greatest benefit from the new structure. Since they will have their raises calculated using the midpoint and that is a larger number than their personal income, they will receive bigger raises with the new structure than they would receive with the old. For example someone earning $16,000 in a level with a $15,000 minimum and a $30,000 maximum would have their raise calculated on the midpoint of $22,500. A 3% raise in the old structure would have been $480. A 3% raise in the new plan would be $675.
    Those above the midpoint and below the maximum of a pay level will receive smaller raises with the new structure than they would with old.
    Those above the maximum of their pay level will experience a significant change. The new structure will cause reductions in their raises, not allow their base pay to get any bigger and most likely reduce the amount they can buy with the new limits placed on their income. As an example if one were in a pay level with a $15,000 minimum and a $30,000 maximum, the midpoint would be $22,500. If this person were earning $35,000 dollars last year, their 2% raise during the worst economic downturn in 90 years would have been $700.00. With the new structure in place in 2012 a 2% raise, calculated on the midpoint of $22,500, will be $450.00. Additionally that $450.00 will be paid as a lump sum and will not be added to the employee’s base. That means that when it comes time for raises in 2013 that employee will still have a base pay of $35,000, not $35,450. The plan will allow raises to be added to the base salary if the market value of the job becomes greater than $35,000. During my lifetime inflation has seemed a constant and the mechanism for increases in the value of jobs more static. If this proves true in the future, the purchasing power of those capped will be eroded. They probably will not be able to buy as much with a cap on what they earn.
    How does the plan reward merit? It pays more to those identified by a reworked performance evaluation structure.
    How are people chosen? Employees are nominated for merit by their supervisors and approved by Vice Presidents of the college. Those whose work significantly exceeds expectations (historically 25% of the staff) will receive additional pay.
    How much more will they receive? The example presented by V.P. Tim Spears in the open meetings indicated that 0.8% of the midpoint of an employee’s pay level could represent the additional pay for that 25% of staff whose efforts significantly exceed expectations. In my examples above of an employee in a pay level with the midpoint of $22,500 that would equal .8% of $22,500 or $180.00 of additional pay.
    An additional bonus will be given to 5% of the staff for exemplary work. This should represent significantly more money (I estimate $800.00 to $1000.00) for the small number of workers who receive it.
    How well does this plan succeed?
    1. It does move those below the midpoint of their pay levels to that level faster than the old plan.
    2. By not allowing those above their salary cap to add future raises to their income base it stops the growth of salaries beyond their caps.
    3. There are features that reward merit.
    4. The fairness of the plan I leave to each individual to judge. It helps some (those below the midpoint). It diminishes ones raise more the further one is above the midpoint. And it will impact those above the maximum for their pay level in a way that feels punitive to some.
    5. Note the following paraphrased responses I have received so far from staff at or above their maximum:
    • What happens to employees like me who were placed in a different job and had no control over the bench marks? What about those employees who have been here for 25 years? There seems to be no compensation for those people who are committed to Middlebury College.

    • I am glad to work for the college and have done so for 20 years. These changes will not allow me to keep pace with inflation. I love the college but I don’t feel good about the inability of the administration to demonstrate appreciation for my efforts and commitment.

    • This is outrageous. I have worked for the college for twenty years and am now earning a decent living and was looking forward to more years of the same. They just think they can CENSORED and I’ll have to like it. What is the incentive to keep doing good work? I can tell you I have additional certifications and training that the college uses every day and they don’t pay me for that knowledge. I don’t have a career path in my department. There is no place for me to move. What do they expect me to do?

    • I have worked for the college for 25 years and I have always been proud to be a part of this organization. I have worked hard and am a dedicated employee. I have assumed additional duties as my department lost people and the work load did not change. I was glad to pick up the slack. This change will mean I will lose ground. I can continue to make it for now, but if the next medical cost increase is passed on to me, I will have difficulty keeping up with my expenses.

    • I have worked for the college over twenty years and this is what they do to me to show their respect for dedication This IS CENSORED !! This hurts me, this hurts my family. I went to MC and have worked here and never felt fully appreciated, now I am hurt and offended by the callous way I am being treated.

    • As part of the staff consolidation I was asked to move to a job below my old pay level and was allowed to take my old salary with me. Now I will be over the maximum and will lose money. How is this fair?

    Most of these comments come from dedicated, long term employees. What I fear I failed to communicate in my interpretations is the pain, sad resignation or indignity of their emotional responses to the social injustice they perceive.
    Wayne S. Darling
    President MCSC

    • Anonymous says:

      Wayne – First off thank you for the very open and honest post and I see they elected the right guy President of Staff Council! A couple questions and comments.

      First – What is the driver behind and where did this underlying principle come from: “bringing those employees below the middle of their pay level to the middle faster than the old plan”. It seems that if you are just staring your career you do need to prove yourself and pay your dues in a sense. I’m not sure how this principle was formed and the logical rationale behind it?

      Second – To this principle: “ Enforcing the salary caps that were defined when the Bands and Levels pay structure was created” . All I will add is this is the current compensation program says (even emphasizes) this: “No employee will generally be paid below the minimum salary for the Career Band or Career Level for his/her job. Salaries will be managed within the job’s Band and Level in which it is placed. It is important to emphasize, however, that Middlebury College will not “cap” or “freeze” salary increases even though an individual reaches the top of a salary range (whether in a Band or Level). There may be situations where a staff member is paid at an annual salary that exceeds the maximum of the Career Band or Level. Staff will continue to be eligible for merit increases once they have reached the maximum of their Band or Level”.

  20. Arabella says:

    If an employee at or above the top of their pay range is designated among the 25% who “significantly exceed expectation”, will their fractionally larger %-age increase also be given in a lump-sum? Or in those situations, could it be added to their base pay?

    Also, the number of staff in each situation (808 at or below midpoint, etc.) seems really, really off. You state that the total of 1292 employees in the three categories includes part-time staff. Perhaps I’m in an unusual work situation, but the vast majority of my colleagues are full-time. In fact, 88% of LIS staff are benefits-eligible full-time. If there are 1292 staff members, extrapolating LIS’s full-time percentage means that there would be more than 1100 full-time employees! Yet we know there are only about 850 FTE total. Let’s say LIS is an outlier in terms of % of staff who are full-time, and go with 66%. 66% of 1292 is 861 – still more full-time employees than we have FTE, and that assumes one in three employees is part-time, which just doesn’t sound right. Please confirm your numbers regarding how many employees are in each situation before implementing this policy.

  21. Wayne Darling says:

    The drivers behind the move to accelerate employees to the midpoint more quickly included interest in rewarding and retaining new hires by redirecting what was considered to be a disproportionately heavy amount of the raise pool from those above the midpoint to those below. This relates to fairness also. By calculating raises on ones personal income those above the midpoint continue to move away from those below at an increasing rate. By freeing up some of the money dedicated to those senior members of staff more was to be available to reward merit and accelerate those lower down the pay scale.

    The current compensation plan to which you refer is changed. The portion about not enforcing caps will be removed when the second phase of the changes occurs next year. Caps will be enforced by not adding the lump sum, one-time payments to the base of those at or above the maximum for their pay levels.

    I am sorry my links to Pay Ranges and Bands and Levels do not seem to work, I’m a blogging novice. The information is available on the Human Resources site at: http://www.middlebury.edu/offices/business/hr/staffandfaculty/compensation

    Wayne Darling

    • Anonymous says:

      Wayne,
      Could you please explain the rational for the “capping” of salaries? If the goal is to get more staff to the midpoint and the pay ranges are set and all staff will receive the raise based on the midpoint pay range,regardless of what their current salary is, then what is the benefit of capping salaries at the max? Just because some employees may be over that max doesn’t mean that the pay ranges will change….so why cap the salaries at all?

      Above Mr. Spears stated that these changes were not a cost saving measure for the College, but this will be a major savings for the College, won’t it?

      Please bear in mind, that I am not one of the 100+ staff that will be affected by this capping, but feel very strongly that this is wrong for two reasons:
      1.Eventually the majority of staff will hit the maximum.

      2. We should reward all of our employees for their service and according to your comments above this is to reward and retain new hires. Unfortunately that sends a very clear message that the older employees are not valued and I would hope the college values ALL of their employees.

    • Timothy Spears says:

      If you go up to my original post and clink on the link contained in the following phrase–
      “similar positions in bands and levels, each one with its own salary range”–you will be taken to the HR website where you can find information about the ranges/bands/levels.

  22. Wayne Darling says:

    The plan is to redirect a limited pool of funds, not save money. The college will not save money, it plans to direct more of the money for raises toward recognition of merit and to those below the midpoint by pegging raises to the midpoint and using part of the raise pool to pay more to those recognized for doing a better job.

    Raises used to be calculated on one’s personal income. Those getting paid more got bigger raises, those getting paid less got smaller raises.

    In the future everyone in a level will get the same raise if they meet expectations and everyone in the level whose work significantly exceeds expectations will get a larger raise. The larger raise will also be figured on the midpoint so all those who receive the larger raise will receive the same amount.

    For example in a level with a $22,500 midpoint, if 2.8% represents the increase for those who meet expectations, those people would receive $630.00. In the same level, those whose efforts were considered to significantly exceed expectations might receive 3.6 % of the midpoint of $22,500 or $810.00. All members of this level would receive either $630.00 for meeting expectations or $810.00 if their worked significantly exceeded expectations.

    5% of staff will receive an additional bonus for doing exemplary work.

    Providing ones job is properly placed in a level and the pay ranges associated with the level accurately reflect the market value for what a person does, those at or above the cap for their level are earning more for what they do than they could earn doing the same job anywhere else. The college no longer feels it is fair to expand the gap between what those above their cap earn here compared to what they could earn elsewhere doing the same job. As a result these employees will not be allowed to add their lump sum, one-time raises to their base pay. It is this feature with which I take issue. Those whose earnings are capped in this way will lose as inflation erodes their buying power.

    The redirection of funds from those above the midpoint to those below the midpoint accomplishes the objective of slowing down the income growth of those above the cap. All 118 of those above the cap deserve to have their situation carefully evaluated. Hopefully the year before phase two is implemented will allow for that evaluation and adjustments will be made to those in an inappropriate level or those who moved to a lower level to accommodate job consolidation. The changes state review is an objective, and the year long delay before full implementation has been planned to execute this review. Each one of the 118 represents a different story. If the system is to prove truly fair it is crucial for this group to receive a careful review. Minimally, I think they should all be assured that their incomes will be allowed to keep pace with inflation.

    • Anonymous says:

      Can either you or Tim please explain the rational for capping salaries? This question is still outstanding.Since all will receive the same amount of raise why the need to cap salaries?

      Also as to cost savings, I agree, in the initial year of implementation, there will be no cost saving for the College , but in future years there certainly will be.

      Thanks

    • Anonymous says:

      Just to be clear there will be money savings in this plan and it compounds the longer it goes on. For the example below all the staff not at the max starts with $4,000,000 million base salary dollars and those at the max $500,000. Then we calculated out the salary increases and raise pool based on a fixed 3% raise percentage over a ten year period with the new and current policies. A very simple example but hope it does get the point across. Of course these are all fictitious numbers and the real numbers are much larger than those used in this example.

      Year 1 ($4,000,000.00+$500,000.00)*3%=$135,000 total raise pool ($120,000 to staff below max) ($15,000 to staff at max)

      Year 2 new ($4,120,000+$500,000)*3%= $138,600 raise pool ($123,600 to staff below max) ($15,000 to staff at max)
      Year 2 current ($4,120,000+$501,500)*3%=$139,050 raise pool ($123,600 to staff below max)($15,045 to staff at max)

      Year 3 new ($4,243,600+$500,000)*3%=$142,308 raise pool ($127,308 to staff below max) ($15,000 to staff at max)
      Year 3 current ($4,243,600+$516,545)*3%=$142,804 raise pool ($127,308 to staff below max) ($15,496 to staff at max)

      Year 4 new ($4,370,908+$500,000)*3%=$146,127 raise pool ($131,127 to staff below max) ($15,000 to staff at max)
      Year 4 current ($4,370,908+$532,041)*3%=$147,088 raise pool ($131,127 to staff below max) ($15,961 to staff at max)

      Year 5 new ($4,502,035+$500,000)*3%=$150,061 raise pool ($135,061 to to staff below max) ($15,000 to staff at max)
      Year 5 current ($4,502,035+$548,002)*3%=$151,510 raise pool ($135,061 to staff below max) ($16,440 to staff at max)

      Year 6 new ($4,637,096+$500,000)*3%=$154,112 raise pool ($139,112 to staff below max) ($15,000 to staff at max)
      Year 6 current ($4,637,096+$564,442)*3%=$156,046 raise pool ($139,112 to staff below max) ($16,933 to staff at max)

      Year 7 new ($4,776,208+$500,000)*3%=$158,286 raise pool ($143,286 to staff below max) ($15,000 to staff at max)
      Year 7 current ($4,776,208+$581,375)*3%=$160,727 raise pool ($143,286 to staff below max) ($17,441 to staff at max)

      Year 8 new ($4,919,494+$500,000)*3%=$162,584 raise pool ($147,584 to staff below max) ($15,000 to staff at max)
      Year 8 current ($4,919,494+$598,816)*3%=$165,549 raise pool ($147,584 to staff below max) ($17,964 to staff at max)

      Year 9 new ($5,067,078+$500,000)*3%=$167,012 raise pool ($152,012 to staff below max) ($15,000 to staff at max)
      Year 9 current ($5,067,078+$616,780)*3%=$170,515 raise pool ($152,012 to staff below max) ($18,503 to staff at max)

      Year 10 new ($5,219,090+$500,000)*3%=$171,572 raise pool ($156,572 to staff below max) ($15,000 to staff at max)
      Year 10 current ($5,219,090+$635,283)*3%=$175,631 raise pool ($156,572 to staff below max) ($19,058 to staff at max)

  23. Tim Spears says:

    I discuss the rationale for capping maximum salaries in my first two posts on this subject (you can navigate to them using the list of “recent posts” on the right). Basically, we are aiming to reallocate dollars to staff at the lower end of the salary ranges (people who have not yet reached the midpoint or target of their ranges).

  24. Anonymous says:

    “Basically, we are aiming to reallocate dollars to staff at the lower end of the salary ranges (people who have not yet reached the midpoint or target of their ranges).”

    I understand that point, but why the need to cap salaries to be able to accomplish that goal, if everyone is getting the same amount for a raise regardless of their salary? That is what has not been explained clearly.

  25. Wayne Darling says:

    Anonymous,

    Regarding why the need to cap salaries, I have not seen any data indicating why that would be needed. It is this feature of the new policy that causes my greatest concern because I believe this is the feature that will cause those who experience it to loose income as inflation erodes their purchasing power.

    I am encouraged to see Tim’s post that during the year before the full implementation of the new plan, the expectation is that adjustments will be made to the Pay Ranges and jobs positions’ within Bands and Levels that should protect those in lower earning brackets from experiencing caps.

    Wayne

  26. Arabella says:

    A word about “process”. As an MCSC rep, I have heard from more than one of my colleagues that the statement above:

    “To address this situation, the SRC and Wage & Salary proposed the following changes, which President Liebowitz has approved.”

    made it sound like this was all a done deal before any feedback from staff members not serving on the committees was sought. I, for one, appreciate the administration’s willingness to reconsider capping maxes of the lower job levels – it was not at all clear from the first post that there was any ‘negotiation room’ on this.

    Any further details on how exactly the upcoming year-plus review process will work would be appreciated.

  27. Anonymous says:

    i am curious about how this process will effect female employees here at the college. Currently females make up roughly 36% of all cooks, yet they make up a whooping 55% of the lowest paid cooks and a paltry 0% of the highest paid cooks. There are no female chefs and no female 1st cooks. many of these women have been here for many years and the banding and capping process seems to have the possibility of placing another “ceiling” on female culinary employees and their ability to move upward in dining services. Is this inequity common throughout all departments or is it only so grossly evident in dining services?

    • Anonymous says:

      Hmmm. Interesting.

      Here’s an example from LIS – When Barbara Doyle-Wilch first became Dean of LIS, one of her points of pride was appointing non-Librarian (i.e., folks who do not have Master’s degrees in Library Science or the equivalent) staff members to managerial positions on the “Library side” of LIS.

      Four such persons were appointed; three were men. This, despite the fact that the overwhelming majority of “Library side” staff were and are women.

      Now, post-ERP/VSP (and with a different Dean), there are three non-MLS managers; two are men, one is a woman. Of these, the men’s jobs are in either the Specialist or the Management bands; the woman’s is slotted in Operations 4.

      Hmmm. Interesting.

      • Anonymous says:

        No, not interesting!

        Insinuating that the gender of the employees in these three positions is relevant to this discussion, and thereby insinuating potential gender-based discrimination is disingenuous at best, since the differences in banding could be explained by looking at the respective job descriptions, work responsibilities, and number of people being managed.

  28. Anonymous says:

    Some thoughts:
    1. Thank you Tim for creating this opportunity to discuss this; the challenge I see in sharing options in this forum is that although we have a good amount of information about the process, most of us are not compensation experts (this writer included). So our opinions are put forth (and good questions asked) from where we sit, which is without complete knowledge or information – but our own perspective none the less.
    2. There seems to be a lot of “us and them” language here as if the Administration has set out to personally offend staff – especially “long time dedicated” staff. I don’t believe that this is the case (lest we forget all of the work and effort that went in to avoiding layoffs – not a perfect process, but in my mind better than getting “pink slip”). I believe that longevity should be appreciated and recognized, but I don’t think that guarantees me extra pay.
    3. It is my understanding that when the compensation program was revised a few years back – the enforcing of maximums was left as unfinished work. In reading through the literature on our website on our compensation program I ask “why have ranges and maximums if you are not going to use them? isn’t that part of the system?”
    4. That led me to ask – is this type of compensation system a standard practice? (Again I am no expert – but I do know how to get information on the web)Very quickly I found that MIT does just that – they have a band structure with min/mid/max and they enforce caps offering a lump sum payment to those at or over. Here is the address: http://web.mit.edu/hr/compensation/forms/supplement_b.pdf
    It took me 5 minutes to find, I did not search anymore because I have many other things to do…but it helped put things in perspective for me. Hope others find it helpful. Thanks…

    • Anonymous says:

      I don’t think anyone is looking for extra pay for their longevity at all. They merely want to keep pace with inflation with the exact same raise and methodology as their co-workers. Even the MIT policy referenced is not as black and white as the proposed one here and states:
      “Should the department determine that it is appropriate for an employee to receive his/her merit to base, an increase for the individual currently at or above the maximum of the salary range may not exceed the merit pool amount, as determined in the current fiscal year.”

      • Anonymous says:

        I think a person who is at or above the max is in fact not currently treated the same as other coworkers who are below the midpoint. I think that they are getting an advantage in that they enjoy a salary that is likely above what the market would pay for a similar job elsewhere, they have more ability to keep up with rising costs and if they have been above the max for a long time they have been accumulating income at a much faster rate than below the midpoint coworkers. If the market shifts for a person who is at at or above the max, then they rightfully should get a range shift and continue to enjoy raises to their base. But if they are above the max and their position does not warrant that level of a pay rate based on the market (perhaps having done a similar job for many years and having their pay increases compound) then I don’t think that their base should grow.

  29. Anonymous says:

    I wonder how many of the 366 staff between the midpoint and max are within 3%, 5%, or 10% of the max? If the raise this year is 3% how many more will be added to the 118 already at the max?

  30. Anonymous says:

    While many of us truly appreciate and respect all the hard work and good intentions of both the new program and the avoidance of layoffs, we also have some concerns about this new process. This list represents some of what’s been voiced:

    • While we’ve been told that the 25% figure is based on past practice, setting it as an actual cap places a whole different (and consequently negative) emphasis and limitation on the ability to honor performance that exceeds expectations.
    • Since it’s been a few years since we had the opportunity to make recommendations for merit pay raises, this 25% figure represents a figure associated with a work environment that no longer exists.
    • It seems especially challenging to artificially impose a limit to the number who can be recognized as having “exceeded expectations” when we’ve all—the administration included—spent the last several months acknowledging and appreciating that so many staff have worked above and beyond, as we continue to meet the challenge and resolve the workload redistribution needs as a result of the significant number of staff positions lost.
    • Accordingly, the 25% figure is inappropriate as it represents a time before our “new norm,” as the administration is so apt now to refer to both our current and future climate and conditions.
    • What is intended to be a form of positive recognition is now becoming overly divisive as we determine who can be one of the select few from among our respective departments whose names have approval by the VPs to meet the 25% limit—never mind the pressure and select the top 5% within the overall approved 25%!
    • What do supervisors say to employees when asked directly if the supervisor thought the employee exceeded performance expectations? And if the answer is yes and the supervisor nominated the employee but then the supervisor’s supervisor and/or VP refused that nomination, how do supervisors explain the situation to employees in a way that safeguards the trust and relationship between employee and supervisor, without putting blame on a higher level supervisor and/or VP?
    • How will supervisors respond to the question, if posed, asking what would “exceeding expectations” look like in our department, if the immediate supervisor is not the one who determines this?
    • Even with the best of intentions, VPs cannot know all the employees that report up through them. What if VPs value different functional areas over others?
    • It seemed a little odd in a recent announcement to reference that our potential raise pool is twice the CPI when in our group meetings so much emphasis was placed upon the fact that we do not and have not ever determined raises by using CPI.

    Our work of establishing the “new norm” is not done. What other modes of acknowledgment, encouragement, and recognition can we use as we all continue to rise to the challenge of meeting the needs of “the new norm?”

    Unfortunately, it seems as though what was originally intended as a positive affirmation of an employee’s hard work is quickly becoming so negative. How frustrating, too, that in some ways this is “much ado about nothing,” in that the actual dollar amounts of the rewards may not even cover the increases in our taxes!

  31. Tim Spears says:

    Staff has been very clear in recent years that they prefer a compensation program that rewards excellent work–otherwise known as “merit pay.” So SRC/Wage & Salary spent a great deal of time in its deliberations identifying a salary increase program that rewards better-than-good work (work that in the current language “significantly exceeds expectations”).

    I gather from this comment that the poster believes that 25% is too low, that we should be open to rewarding a higher percentage of staff for excellent work. The problem with that scenario, though, is that the larger the percentage the smaller the increase. FYI, we did discuss the possibility of giving the same percentage increase to all staff, but abandoned that idea given the staff’s expressed desire for merit pay. In any case, this is a good forum to suggest a better system, so please share your ideas.

    As for VP involvement in the evaluation process, all VPs will be looking to their direct reports to manage the evaluations in their areas and to stay within the agreed-upon 25% in identifying staff whose work significantly exceeds expectations.

    Finally, we have traditionally referred to CPI in our increase letters, so it seems appropriate to maintain that benchmark in our current discussions.

  32. Anonymous says:

    I cannot fathom the rationale behind this program at all. It is doing nothing but causing bad morale and forcing both long term staff and some new hires close to the max to consider other options. Why it is OK to give the “standard” annual raise to most staff but not some of the most experienced. Everyone will get the same amount, it is not based on a percentage of one’s salary, and patience is going to be hard to come by…

  33. Anonymous says:

    Anyone that’s ever worked a job in their life knows that “merit” pay doesn’t work. Because the fact of the matter is that “merit” is highly subjective, and typically judged by someone who has no idea about the scope of your work. “Merit” is nothing more than the ability to brown-nose your bosses.

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