unm hospitals
DESCRIPTION
UNM Hospitals. New Employee Pay Plan Overview and Roll Out January 2004. What We Will Discuss. Background Of The Project The UNM Hospitals Pay Philosophy New Base Pay Plan The Rollout Plan What’s In It For You As A Leader The Communication Plan Your Role In Communication Questions - PowerPoint PPT PresentationTRANSCRIPT
UNM Hospitals
New Employee Pay PlanOverview and Roll Out
January 2004
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What We Will Discuss
Background Of The Project
The UNM Hospitals Pay Philosophy
New Base Pay Plan
The Rollout Plan What’s In It For You As A Leader
The Communication Plan
Your Role In Communication
Questions
Scenarios
Distribute Communication Tools – Copies Of: New Compensation Philosophy And Compensation Manual
Key Messages/Questions And Answers
This Presentation
Individual Employee Data Sheets
Department Summary Sheets
We know you are anxious to see the “numbers” for yourself and your staff . . .
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What We Will Discuss
Distribute Communication Tools – Copies Of: New Compensation Philosophy And Pay Policies
Key Messages/Questions And Answers
This Presentation
Individual Employee Data Sheets
Department Summary Sheets
. . .You will get the data for your direct reports at the end of our session today. Your manager will get information for your positionIt’s truly important that, for now, you focus on
the information we will be sharing in this session so that you can effectively interpret the data sheets and know what to do with the information. In that regard, we ask that you stay to receive these data sheets and we will commit to keeping this session on track and helpful for you
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Background Of The Project
UNM Hospitals Human Resources performed an assessment of our general and management pay programs over the past several months
As a result of our assessment
We redesigned our general and management pay plans to improve plan administration by:
Assuring development, implementation and utilization of consistent, effective policies related to pay
Developing broader organizational understanding and support for pay decisions
Expanding the databases to assure our competitive position in the relevant talent markets
Improving turnaround in responding to requests for market data and/or new hire pay offers
We developed a base pay philosophy for UNM Hospitals
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The UNM Hospitals Base Pay Philosophy
Our Pay PhilosophyWhat We Are Changing as a Result of this Philosophy
“UNM Hospitals can only meet its mission of care and achieve its strategic goals through the efforts and achievements of its employees.” Therefore, we must:
Reward employees for their performance with base salaries that are market competitive
UNM Hospitals will annually survey the market to ensure that salary ranges remain competitive
Annual pay adjustments will be based on market data for the healthcare industry, other relevant industries, and UNM Hospitals’ annual budgets
UNM Hospitals has redefined the pay process to ensure that pay decisions are: Based on job responsibilities (not
just titles)
Consistent within the organization from one department to the next
Equitable (recognizing employee years of experience1)
Our pay range midpoints are targeted at the 50th percentile of our competitive market
Our new salary structures are based on contemporary and competitive compensation practices
1Years of experience data were gathered up to 25 years; pay adjustments that result from this analysis can only be made for employees below the midpoint of their new pay grade.
New Base Pay Plan
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Key Objectives Of The New Base Pay Plan
Ensure base salaries are and remain market competitive
Establish a more consistent and equitable pay platform that ensures pay is based on current responsibilities as well as past experience
Streamline the number of pay ranges and tighten the overly wide range widths to improve administration of the base pay program
Provide pay managers with the structure to make market-based, economically sound pay decisions
Increase understanding of the plan and help managers address pay-related questions and issues
Important! No one will see a reduction in pay as a result of the new program
That said, we are making some equity adjustments (increases) for employees based on their years of experience. However, our budget will only allow us to adjust pay up to the new salary range midpoints. Further detail is provided later in this document
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We Used A Market-Based Method To Develop the New Pay Plan
1 2 3 4 5 6Understand
and Document UNM Hospitals
Desired Pay Philosophy
Identify Competitive Market(s)
Select Benchmark Positions
Match Benchmark Positions to Published
Survey Data and Analyze
Data
Build Pay Structure
Identify Appropriate Incumbent
Placement in New Pay Ranges
A design team consisting of UNM Hospitals Executive Directors, representing various business lines within the organization, provided guidance and input on new pay plans The members of the team are listed on the following page
Towers Perrin, a global human resources consulting firm, was retained to assist in the design and implementation of the new pay plan
Throughout the process, the Human Resources team reviewed each employee file to develop a profile of previous experience for each person
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Design Team
Name TitleBarbara Ohm ED Carrie Tingley Hospital
Cindy Paulsen Benefits Manager
Donna Lockridge ED Primary Care Commentary Outreach
Erin Doles ED Children's Hospital
Glen Jornigan ED Information Systems
Iris Cowles Director of Employee & Labor Relations
Jamie Silva-Steele ED Ambulatory Specialty Clinics/Bus. Ops
Jim Pendergast HR Administration
Judee Harrington ED Diagnostics
Kitty Fleschute AD Patient Financial Services
Mark Kistner ED Facility & Support
Nancy Purtell ED Behavioral Health
Rod Michael Budget Director
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Build Pay Structure
5Identify
Appropriate Incumbent
Placement in New Pay Ranges
Match Benchmark Positions to Published
Survey Data and Analyze
Data
Select Benchmark Positions
Identify Competitive Market(s)
Understand and Document UNMH Desired
Pay Philosophy
64321Build Pay Structure
5Identify
Appropriate Incumbent
Placement in New Pay Ranges
Match Benchmark Positions to Published
Survey Data and Analyze
Data
Select Benchmark Positions
Identify Competitive Market(s)
Understand and Document UNMH Desired
Pay Philosophy
64321
Understand and Document UNM Hospitals Desired Pay Philosophy
The design team drafted a preliminary compensation philosophy that:
Defined the competitive market for UNM Hospitals positions
Set a market target for pay that aligns pay for an employee who is mature in his or her job (approximately eight years of relevant experience) with the 50th percentile of the competitive market1 (as defined earlier)
Understandand DocumentUNM Hospitals
DesiredPay
Philosophy
1
1Years of experience data were gathered up to 25 years; pay adjustments that result from this analysis can only be made for employees below the midpoint of their new pay grade.
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Build Pay Structure
5Identify
Appropriate Incumbent
Placement in New Pay Ranges
Match Benchmark Positions to Published
Survey Data and Analyze
Data
Select Benchmark Positions
Identify Competitive Market(s)
Understand and Document UNMH Desired
Pay Philosophy
64321Build Pay Structure
5Identify
Appropriate Incumbent
Placement in New Pay Ranges
Match Benchmark Positions to Published
Survey Data and Analyze
Data
Select Benchmark Positions
Identify Competitive Market(s)
Understand and Document UNMH Desired
Pay Philosophy
64321
Identify Competitive Market(s)
The competitive market may vary from job to job and may include:
Other healthcare systems with similar net operating revenues
Other businesses within the healthcare industry (i.e., clinics)
Other industries within the region with whom UNM Hospitals competes for talent
A “competitive” base salary range has a midpoint that falls at the median (50th percentile) of the market
IdentifyCompetitive
Market(s)
2
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Build Pay Structure
5Identify
Appropriate Incumbent
Placement in New Pay Ranges
Match Benchmark Positions to Published
Survey Data and Analyze
Data
Select Benchmark Positions
Identify Competitive Market(s)
Understand and Document UNMH Desired
Pay Philosophy
64321Build Pay Structure
5Identify
Appropriate Incumbent
Placement in New Pay Ranges
Match Benchmark Positions to Published
Survey Data and Analyze
Data
Select Benchmark Positions
Identify Competitive Market(s)
Understand and Document UNMH Desired
Pay Philosophy
64321
Select Benchmark Positions
The design team selected “benchmark” positions which are defined as jobs that are:
Commonly found in other organizations
Functionally similar to jobs at UNM Hospitals
Generally included in credible published survey sources for which competitive market data can be gathered
In order to assure the validity and reliability of data, approximately 150 benchmark positions were selected that represent:
At least 60% or more of the incumbent staff
An array of pay levels, from highest to lowest
Positions within each job family
SelectBenchmarkPositions
3
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Build Pay Structure
5Identify
Appropriate Incumbent
Placement in New Pay Ranges
Match Benchmark Positions to Published
Survey Data and Analyze
Data
Select Benchmark Positions
Identify Competitive Market(s)
Understand and Document UNMH Desired
Pay Philosophy
64321Build Pay Structure
5Identify
Appropriate Incumbent
Placement in New Pay Ranges
Match Benchmark Positions to Published
Survey Data and Analyze
Data
Select Benchmark Positions
Identify Competitive Market(s)
Understand and Document UNMH Desired
Pay Philosophy
64321
Match Benchmark Positions to Published Survey Data and Analyze Data
Towers Perrin collected data at the 25th, 50th and 75th percentiles of the competitive market for each benchmark position
These data are from credible, reliable published survey sources, i.e.: The surveys are produced by unbiased third party firms that specialize in survey
data collection and tabulation
They include large numbers of participants
They provide job summaries of the jobs in the survey
The survey data can be “cut” several ways to compare by organization size, number of employees, and/or geographic location
MatchBenchmarkPositions toPublished
Survey Dataand Analyze
Data
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Build Pay Structure
5Identify
Appropriate Incumbent
Placement in New Pay Ranges
Match Benchmark Positions to Published
Survey Data and Analyze
Data
Select Benchmark Positions
Identify Competitive Market(s)
Understand and Document UNMH Desired
Pay Philosophy
64321Build Pay Structure
5Identify
Appropriate Incumbent
Placement in New Pay Ranges
Match Benchmark Positions to Published
Survey Data and Analyze
Data
Select Benchmark Positions
Identify Competitive Market(s)
Understand and Document UNMH Desired
Pay Philosophy
64321
Match Benchmark Positions to Published Survey Data and Analyze Data (continued)
The design team reviewed the results of the benchmark study to assure accuracy of job match
The following page displays the survey sources used for this analysis
MatchBenchmarkPositions toPublished
Survey Dataand Analyze
Data
4
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Survey SourcesYou’ll note that some survey data are from 2001-2002 as well as 2003
We have taken those data and added an additional 4% per year to bring all the information up to January 2004
This is called “aging” and we’ll talk more about it on the next slide
Hospital & Healthcare Compensation Service/John R. Zabka Associates, Inc.
- Hospital Salary and Benefits Report, 2002-2003
Management Science Association, Inc. (MSA)
- National Survey of Key Professional and Technical Jobs, 2001
Medical Group Management Association
- Management Compensation Survey: 2002 Report based on 2001 Data
Sullivan, Cotter and Associates, Inc.
- Survey of Manager and Executive Compensation in Hospitals and Healthcare Systems, 2001
Towers Perrin
- 2002 Middle Management and Professional Database
Warren Surveys
- The HMO Salary Survey - Spring, 2001
Watson Wyatt Data Services
- ECS Geographic Report on Middle Management Compensation, 2001/2002
- ECS Geographic Report on Office Personnel Compensation, 2001/2002
- ECS Geographic Report on Professional and Scientific Personnel Compensation, 2001/2002
- ECS Geographic Report on Technician and Skilled Trades Personnel Compensation, 2001/2002
- ECS Hospital and Health Care Management Compensation Report, 2001/2002
- ECS Hospital and Health Care Professional, Nursing and Allied Services Personnel Compensation Report, 2001/2002
- ECS Report on IT Personnel Compensation, 2001/2002
- ECS Report on Sales and Marketing Personnel Compensation, 2001/2002
- ECS Report on Top Management Compensation, 2001/2002
William M. Mercer, Incorporated
- Finance, Accounting and Legal Survey 2001
- Human Resource Management Compensation Survey, 2001
- Information Technology Personnel Compensation Survey, 2001
- Integrated Health Networks Compensation Survey, 2001
- Metropolitan Benchmark Compensation Survey - Southeast Region, 2001
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Example: Market Pricing WorksheetUNM Hospitals Market Pricing SpreadsheetLocation: Albuquerque, NM Hospital Scope (Net Revs.): 350 MILLIONUpdate Date: 1/1/2004
Update %: 4.0%
Position Title: ACCOUNTANT II EFF. #, or SURVEY N: PARAMETERS: Region, Size, etc. Average: BASE SALARY ($000) TOTAL CASH ($000)
SOURCE DATE % UPD. P PG. POSITION Co./Inc. (Revenue Dollars in Millions) Scope 25th %ile 50th %ile 75th %ileHospital RevenueECS Hosp Professional Mar-2002 1.0746 P 57 Accountant 177 All Hospitals Rev 150-450mm $255.0 37.7 40.2 44.7 HCs/Zabka Hospital May-2002 1.0676 P III-9 Accountant 319 All Hospitals Rev>150mm na 35.2 39.2 42.9
0.0000Hospital Revenue Average: 36.5 39.7 43.8
Hospital GeographicECS Hosp Professional Mar-2002 1.0746 P 58 Accountant 70 South Central Region $289.0 37.2 39.7 43.9 HCs/Zabka Hospital May-2002 1.0676 P I-11 Accountant 43 South Central Region na 39.6 41.3 50.5
0.0000Hospital Geographic Average: 38.4 40.5 47.2
Clinic
Warren HMO Feb-2001 1.1212 32 Staff Accountant 21 Mountain na 31.9 36.0 40.5 0.0000
Clinic Average: 31.9 36.0 40.5 Home CareHCS/Zabka Homecare Aug-2001 1.0994 III-8 Accountant 9 South Central$5-$10 mm na 39.1 40.4 42.3 HCS/Zabka Homecare Aug-2000 1.1434 III-8 Accountant 9 South Central$5-$10 mm na 38.0 38.8 40.0
0.0000Home Care Average: 38.6 39.6 41.1
Long-Term Care
Long-Term Care Average:General IndustryECS Prof & Sci Mar-2002 1.0746 P 300 Accountant, Level 2 42/184 South Central na 40.9 42.5 44.9
TP MMAPS Mar-2002 1.0746 p 286 Accountant II 18 South Central Region na 41.5 47.0 53.0 Mercer MBC Mar-2002 1.0746 P 1441 Accountant II 122/868 South Central na 39.3 44.1 50.4
General Industry Average: 40.6 44.5 49.4
Overall Average: 38.5 41.6 46.8
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Build Pay Structure
5Identify
Appropriate Incumbent
Placement in New Pay Ranges
Match Benchmark Positions to Published
Survey Data and Analyze
Data
Select Benchmark Positions
Identify Competitive Market(s)
Understand and Document UNMH Desired
Pay Philosophy
64321Build Pay Structure
5Identify
Appropriate Incumbent
Placement in New Pay Ranges
Match Benchmark Positions to Published
Survey Data and Analyze
Data
Select Benchmark Positions
Identify Competitive Market(s)
Understand and Document UNMH Desired
Pay Philosophy
64321
Build Pay Structure
Established preliminary range midpoints for each position
Based on the 50th percentile data This is not average pay These midpoints are market targets — half of the organizations in the
data pay less than the 50th percentile and half pay more By using the 50th percentile for the “middle” of the range, we can
create starting rates that are lower and appropriate to inexperienced new hires and maximum rates that are higher and appropriate for employees who are mature in their jobs1
Build PayStructure
5
1Years of experience data were gathered up to 25 years; pay adjustments that result from this analysis can only be made for employees below the midpoint of their new pay grade.
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Build Pay Structure (continued)
Established preliminary range midpoints for each position
Jobs that have similar salaries at the 50th percentile of the market are clustered into the same range
Their 50th percentile values are then averaged to create a preliminary range midpoint
As the entire structure is built, this average may be modified slightly to create appropriate differences between ranges
Final Midpoint For This Range
$10.45
Job 50th % Pay
X $10.50
Y $10.44
Z $10.38
Average = $10.44
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Build Pay Structure
5Identify
Appropriate Incumbent
Placement in New Pay Ranges
Match Benchmark Positions to Published
Survey Data and Analyze
Data
Select Benchmark Positions
Identify Competitive Market(s)
Understand and Document UNMH Desired
Pay Philosophy
64321Build Pay Structure
5Identify
Appropriate Incumbent
Placement in New Pay Ranges
Match Benchmark Positions to Published
Survey Data and Analyze
Data
Select Benchmark Positions
Identify Competitive Market(s)
Understand and Document UNMH Desired
Pay Philosophy
64321
Build Pay Structure (continued)
Developed pay ranges around the preliminary pay midpoints
UNM Hospitals has 17 pay ranges under the new management base pay plan 24 pay ranges under the new general base pay plan
Build PayStructure
5
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Build Pay Structure (continued)
Developed pay ranges around the preliminary midpoints
As a result of the averaging method and creating a final structure, the midpoints of some jobs are slightly higher or lower than the actual market target of the 50th percentile for that job
A structure that is narrow at the low end and wider at the top allows for:
● A more competitive position for entry level jobs
● More room to grow talent in professional jobs
● The opportunity to compete for
experienced staff
50th Percentile
Midpoint
Differences in midpoints should be
greater than the usual annual salary
increase
Midpoint
Midpoint
5 %
7 %45%
35%
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Build Pay Structure
5Identify
Appropriate Incumbent
Placement in New Pay Ranges
Match Benchmark Positions to Published
Survey Data and Analyze
Data
Select Benchmark Positions
Identify Competitive Market(s)
Understand and Document UNMH Desired
Pay Philosophy
64321Build Pay Structure
5Identify
Appropriate Incumbent
Placement in New Pay Ranges
Match Benchmark Positions to Published
Survey Data and Analyze
Data
Select Benchmark Positions
Identify Competitive Market(s)
Understand and Document UNMH Desired
Pay Philosophy
64321
Build Pay Structure (continued)
Build PayStructure
5
The new pay grade structure is detailed on the following page.
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Build Pay Structure1 (continued)General Salary Structure Management Salary Structure
Salary HOURLY
Grade Minimum Midpoint Maximum
10 $7.28 $8.48 $9.89
11 7.50 9.00 10.50
12 7.96 9.55 11.14
13 8.42 10.10 11.78
14 9.00 10.80 12.60
15 9.67 11.60 13.53
16 10.33 12.40 14.47
17 11.15 13.38 15.60
18 12.08 14.50 16.92
19 13.04 15.65 18.26
20 14.08 16.90 19.72
21 15.31 18.38 21.44
22 16.75 20.10 23.45
23 18.44 22.13 25.81
24 19.88 24.35 28.82
25 21.88 26.80 31.72
26 24.24 29.70 35.16
27 26.48 33.10 39.72
28 29.60 37.00 44.40
29 33.36 41.70 50.04
30 37.40 46.75 56.10
31 41.76 52.20 62.64
32 46.72 58.40 70.08
33 52.28 65.35 78.42
1General and management salary structures are identical except that the management salary grades begin at grade 17 of the general structure. In the payroll system, the general salary grades begin with the letter, “G,” and the management grades begin with the letter, “M.”
Management Salary Structure
Salary Hourly
Grade Minimum Midpoint Maximum
17 $11.15 $13.38 $15.60
18 12.08 14.50 16.92
19 13.04 15.65 18.26
20 14.08 16.90 19.72
21 15.31 18.38 21.44
22 16.75 20.10 23.45
23 18.44 22.13 25.81
24 19.88 24.35 28.82
25 21.88 26.80 31.72
26 24.24 29.70 35.16
27 26.48 33.10 39.72
28 29.60 37.00 44.40
29 33.36 41.70 50.04
30 37.40 46.75 56.10
31 41.76 52.20 62.64
32 46.72 58.40 70.0833 52.28 65.35 78.42
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Build Pay Structure
5Identify
Appropriate Incumbent
Placement in New Pay Ranges
Match Benchmark Positions to Published
Survey Data and Analyze
Data
Select Benchmark Positions
Identify Competitive Market(s)
Understand and Document UNMH Desired
Pay Philosophy
64321Build Pay Structure
5Identify
Appropriate Incumbent
Placement in New Pay Ranges
Match Benchmark Positions to Published
Survey Data and Analyze
Data
Select Benchmark Positions
Identify Competitive Market(s)
Understand and Document UNMH Desired
Pay Philosophy
64321
Build Pay Structure (continued)
Non-benchmark jobs were placed into the new pay structures based on internal evaluation and comparison using the following criteria:
Current pay range
Education/training requirements
Experience requirements
Historic relationships
Level of responsibility
Build PayStructure
5
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Build Pay Structure
5Identify
Appropriate Incumbent
Placement in New Pay Ranges
Match Benchmark Positions to Published
Survey Data and Analyze
Data
Select Benchmark Positions
Identify Competitive Market(s)
Understand and Document UNMH Desired
Pay Philosophy
64321Build Pay Structure
5Identify
Appropriate Incumbent
Placement in New Pay Ranges
Match Benchmark Positions to Published
Survey Data and Analyze
Data
Select Benchmark Positions
Identify Competitive Market(s)
Understand and Document UNMH Desired
Pay Philosophy
64321
Identify Appropriate Incumbent Placement in New Pay Ranges
Human Resources has developed experience data to determine where employees should be placed within their assigned pay ranges (parameters used are described on page 24)
These data were developed from resumes and applications in employee personnel files HR has endeavored to be as accurate as possible You will be asked to review their work
If you think HR has made a significant error in calculation, HR staff will work with you to address the issue
UNM Hospitals will not, however, make changes to the employee files (i.e., have employees provide updated resumes, etc.)
IdentifyAppropriateIncumbent
Placement inNew PayRanges
6
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Build Pay Structure
5Identify
Appropriate Incumbent
Placement in New Pay Ranges
Match Benchmark Positions to Published
Survey Data and Analyze
Data
Select Benchmark Positions
Identify Competitive Market(s)
Understand and Document UNMH Desired
Pay Philosophy
64321Build Pay Structure
5Identify
Appropriate Incumbent
Placement in New Pay Ranges
Match Benchmark Positions to Published
Survey Data and Analyze
Data
Select Benchmark Positions
Identify Competitive Market(s)
Understand and Document UNMH Desired
Pay Philosophy
64321
Identify Appropriate Incumbent Placement in New Pay Ranges (continued)
IdentifyAppropriateIncumbent
Placement inNew PayRanges
6
Entry Level
No experience beyond minimum required
Mature
Approximately 8 years of experience beyond minimum required
Veteran
Minimum Midpoint Maximum
Pay Range for Job1
1Years of experience data were gathered up to 25 years; pay adjustments that result from this analysis can only be made for employees below the midpoint of their new pay grade.
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Build Pay Structure
5Identify
Appropriate Incumbent
Placement in New Pay Ranges
Match Benchmark Positions to Published
Survey Data and Analyze
Data
Select Benchmark Positions
Identify Competitive Market(s)
Understand and Document UNMH Desired
Pay Philosophy
64321Build Pay Structure
5Identify
Appropriate Incumbent
Placement in New Pay Ranges
Match Benchmark Positions to Published
Survey Data and Analyze
Data
Select Benchmark Positions
Identify Competitive Market(s)
Understand and Document UNMH Desired
Pay Philosophy
64321
Identify Appropriate Incumbent Placement in New Pay Ranges (continued)
IdentifyAppropriateIncumbent
Placement inNew PayRanges
6
All employees whose pay falls below the new pay range minimums will have their pay adjusted to the new minimums
Within our financial constraints, we will adjust employee pay above the minimum based on experience This is called “decompression” Only some employees’ pay will require adjustment
In this first year, our budget will not allow us to do all the decompression we would like Using the assumption that employees with eight or more years of experience
should be at or near the midpoint of the new salary range, we have spread the available budget as follows . . .
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Identify Appropriate Incumbent Placement in New Pay Ranges (continued) All general and management pay plan employees’ files were evaluated
and their years of experience were calculated using the following parameters: Full-time direct experience at UNM Hospitals or another organization was
counted 1:1 Previous experience must be at least 80% comparable to the current
UNM Hospitals position Full-time indirect experience at UNM Hospitals or another organization was
counted 2:1 Previous experience must be 50%-80% comparable to the current UNM
Hospitals position Relevant experience at UNM Hospitals or another organization (25%-50%
comparable to the current UNM Hospitals position) was counted 4:1 and capped at 1 year
Both part time and casual pool experience at UNM Hospitals or another organization are calculated at half the applicable rate (i.e., if experience is direct, rather than 1:1 it was counted as 2:1)
The minimum years of experience requirement for each job were deducted from the total years of experience calculated
By applying the above parameters, we gathered total experience for each employee
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Identify Appropriate Incumbent Placement in New Pay Ranges (continued)Example:
Perry Towers is a Clinical Analyst who has worked in the position of Clinical Analyst at UNM Hospitals for five (5) years
Perry worked as a Clinical Analyst at Brand X Memorial for two (2) years
Prior to that, Perry was a Staff RN at Brand X for three (3) years
The minimum requirements for a Clinical Analyst at UNM Hospitals are:
At least 1 year of experience as a clinical analyst
At least two years of experience as a clinical professional (RN, Med Tech)
Perry has 7 years of direct experience as a Clinical Analyst. One year of this experience “opened the door” along with his prior experience as an RN
Therefore Perry is credited with 6 years of experience (7-1)
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Identify Appropriate Incumbent Placement in New Pay Ranges (continued) Total years of experience were gathered up to 25 years
We knew going into the project that we would have to limit decompression at some level of experience, so we erred on the side of gathering more rather than less experience data
We prepared several cost models using the experience data
We were only able to employ a model that adjusts to the midpoint of the new ranges for 8 years of experience
This methodology is consistent with market practice
It assures that all staff with at least 8 years of experience are at the median of the market or better
No methodology can totally eliminate compression
All organizations have limits to what they can pay – maximums of the pay ranges
If one employee has 30 years of experience and another has 35 years, they both may have reached the maximum
No pay plan can ever truly recognize loyalty – we as managers need to send messages that affirm our appreciation for employees’ efforts but acknowledge the limits we have for rewarding people through cash
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Identify Appropriate Incumbent Placement in New Pay Ranges (continued) Using the calculated years of experience, incumbents were then placed
appropriately in their respective salary grade
Costs were then determined using the incumbent’s current pay relative to their new salary grade and where, in that salary grade, they should be placed relative to the following parameters:
Everyone is brought to the minimum of their grade
4 years to the 1st quartile
Another 4 years to the midpoint (total = 8 years)
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Identify Appropriate Incumbent Placement in New Pay Ranges (continued) In year 1, the budget available for UNM Hospitals to implement the new
plans ($519,000) was first used to bring all of the incumbents below the minimum of their salary grade to the new salary grade minimum. After all of the incumbents were brought to the minimum, the
remaining amount was divided equally among all of those incumbents who were below the midpoint of their grade and needed an adjustment based on experience (unless the increase needed is less than or equal to $0.05).1
For example: If $100,000 was available and the true cost to decompress to the midpoint was $400,000, 1/4th (25%) is available. An incumbent requires $.60 per hour to be fully decompressed. In year one, we can get 1/4th of the way providing the incumbent $.15.
In year 2, the same method will be used as in year 1, except that there will be no cost to minimum and the salary structure will be updated in order to keep it competitive with market practice.
In year 3, the salary structure will be updated again, and UNM Hospitals will complete the transition.
1Years of experience data were gathered up to 25 years; pay adjustments that result from this analysis can only be made for employees below the midpoint of their new pay grade.
The Rollout Plan
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What’s In It For You As A Leader?
New base pay structures that are consistent across the organization and competitive in the market
Training for pay managers to help you effectively administer the new pay plan and make pay decisions
Open communications about UNM Hospitals’ pay plan
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Communication Plan
January 16All UNM Hospitals’ leadership will see this overview and be provided information specific to their staff
January 26 – February 6Pay managers meet one-on-one with employees to present the new plan
February 6Pay day with pay changes
February 6 - 20HR available to address any necessary changes
January 16 – 23 Leaders review data/correct
January 18Grade and pay changes effective
FebruaryJanuary
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Your Role Help ensure a successful implementation by:
Providing feedback today and throughout the process
Supporting this process with your employees Conduct one-on-one meetings (beginning next week) with General and
Management pay plan employees who report to you in order to communicate the new pay plan
Answer your employee’s questions using the scenario information we will provide you with in a few minutes
Share the employee’s profile sheet with the employee
Allowing the employee to keep the white copy
Having the employee sign the yellow copy (indicating only that they have seen it) and then return the yellow copy to Human Resources for placement in the employee’s personnel file
Keeping HR informed of employee feedback throughout the process
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Your Role (continued) Work with HR to make future pay decisions and maintain the new program
The new philosophy and compensation manual will help guide this effort
Participate in the scenario sessions after this presentation part of the program
Schedule one-on-one meetings with your employees
Use the communications tools you will be provided
New Compensation Philosophy And Compensation Manual
Key Messages/Questions And Answers
This Presentation