Trustees hear report on 2002-03 compensation budget

COLUMBUS -- In an effort to help close the gap that has developed between Ohio State’s faculty, staff and graduate associate salaries and the salaries offered by benchmark institutions, trustees voted on May 3 to approve a compensation resolution allowing the University to distribute a salary budget in the range of 4.5 percent for fiscal year 2003.

This action supports the compensation initiative of providing increases of up to 1 percent above market. Faculty and staff salary increases at benchmark institutions are expected to average approximately 3.5 percent for the upcoming budget cycle.

“This is the first year in our plan to provide salary budgets of up to 1 percent above comparable institutions. We hope that within the next several years, Ohio State will again be offering competitive salaries,” said Edward J. Ray, executive vice president and provost.
In anticipation of trustees’ approval, Ray distributed a guidance document on April 8 to vice presidents, deans and chairs to assist them with making salary decisions.

Because pay raises last year were minimal, Ray’s guidelines encouraged administrators to take into account faculty and staff performance over a two-year period when determining pay increases in their units. He also encouraged administrators to give added consideration to lower-paid employees who were affected most dramatically by two years of fixed cost increases for health and other benefits.

The memo advised administrators to consider merit as the primary determinant for pay decisions, as merit is an appropriate balance of performance, market competitiveness and internal equity.

In keeping with the decentralized budget environment, each college and administrative unit has been approved to provide no lower than a 4 percent budget dedicated to compensation.

Individuals performing well whose salaries are behind the market average by a representative amount in their unit should receive a compensation increase of at least 3.5 percent, but individuals with salaries closer to the market may receive less.

Financial support for graduate associates also is significantly behind the University’s benchmarks. Ohio State is in the second year of a three-year plan to contribute more financial support in the form of healthcare subsidies to GAs, and units are expected to provide those positions with stipend increases on a par with faculty and staff salary increases.

Other key points to the compensation budget include:

• Budget pools for administrators, faculty, unclassified, classified staff and graduate associates must remain separate, but units may differentiate these budget pools with supporting rationale. The differentiation must not exceed 0.5 percent from the college/unit average, except with approval of the provost.

• Faculty being promoted will receive 6 percent centrally, in addition to at least an average percentage merit increase from the unit.

• All faculty and staff, regardless of hire date or probationary status, are eligible, however, units are encouraged to delay salary increases for staff members until they successfully complete probation.

• External grant-funded areas are given flexibility to use available increase funds.
• One-time cash payments — to reward outstanding performance, retain individuals with salaries significantly behind market, or to aid the lowest-paid individuals affected disproportionately by rising health care costs — can be made in amounts up to $2,500, or 5 percent of an individual’s annual base rate.

The guidance document, outlining the salary budget process, is available online at http://oaa.ohio-state.edu/speeches/salary-budget.html.