TO: Policy Committee

FROM: Richard A. Crofts, Commissioner

SUBJECT: Salary Administration Guidelines

DATE: June 26, 2001

As you finalize your recommendations for FY 2002 operating budgets, you need to base your planning for the administration of salary increases on these guidelines that we discussed at the last meeting of the Policy Committee.

Level of increases. As you know, the State pay plan as passed by the Legislature included a 4% increase for State employees but provided the university system only about half of that amount. That shortfall contributed to the setting of tuition increases for FY 2002 and FY 2003. It is also clear that achieving the 4% level of increases will be a challenge on all of our campuses. However, as we all know, salaries for all employee groups of the university system are well below are peers whether measured regionally or by using states similar in per capita income to Montana. We advocated strongly for the pay plan with the executive and legislative branches and I believe we owe our employees our very best efforts to award salary increases commensurate with the pay plan. Because we are involved in salary negotiation with 22 separate unions, we also must be careful to recognize and acknowledge that salary is a subject of collective bargaining.

Effective dates. House Bill 13 provided 50% of the funding for the pay plan for the equivalent of about two-thirds of FY 2002. The guideline, therefore, is for implementation of FY 2002 salary increases on November 1, 2001.

Pool for mid-year adjustments. We have tried in recent years to eliminate the need for mid-year adjustments of salaries, but experience has taught us that some such adjustments may be necessary to meet institutional needs or objectives such as retaining employees or responding to salary inequities. In order to manage this situation with more flexibility for the campuses, I will ask each campus that anticipates the need for mid-year adjustments to set aside a small pool of money out of the 4% pay plan increase as a reserve to fund these mid-year increases. Money in the reserve not spent during the year would be passed forward to increase the pool available for increases in FY 2003. Mid-year increases will still need to be brought forward through the Commissioner for approval by the Board of Regents, but the need for scrutiny on equity and fairness issues among the campuses will be lessened. If you do not choose to establish such a pool, I will not support mid-year increases. I anticipate that most of the mid-year adjustments would be due to market or equity adjustments.

Exceptions of the 4% salary increase pool. As in the past, you will have the opportunity to make a case that special circumstances require some addition to the salary increase pool. These will have to be approved by the Commissioner on a case-by-case basis, well in advance of the deadlines for the September mailing to the Board of Regents. I assume that these cases would be justified on the basis of market or equity adjustments and I do not anticipate making large numbers of exceptions.

The Montana Achievement Project. The Board of Regents and the Office of the Commissioner are strongly committed to progress in implementing the Montana Achievement Project, including the use of that process in awarding salary increases. Significant progress in that regard will depend upon our negotiations with MPEA. We have reached tentative agreement with MPEA and we can now proceed toward across the board implementation. For planning purposes you should know that successful negotiations on this point will have impact on your administration of salary increases, especially for classified employees.

Procedures. Classified salary increases will be administered in accord with settlements with our various unions. For classified employees not represented by a union, the MPEA settlement will provide our guidelines for implementation. Sue Hill will be working with your Human Resource staff on these issues.

Salary increases for faculty represented by unions will be administered in accordance with the negotiated contracts.

Recommendations on salary increases for those on professional and administrative contracts and for faculty at campuses where they are not represented by unions, will come to the Board of Regents for approval at the September meeting. We will provide you a reporting format so that the Commissioners Office and the Regents can be comfortable that the salary increases recommended are consistent with these guidelines.

Pay for performance. The Board of Regents are fully supportive of the principle of pay for performance. It is assumed that recommended salary increases will include merit as a significant element of the determination, subject to any limits imposed through a collective bargaining process.

 

cc: Board of Regents

OCHE Staff