Compensation Study – Phase 4 Implementation of New Compensation Program

In accordance with the mission and strategy of the University of Houston, HR Compensation is revising policies and procedures to ensure that employee compensation is administered fairly and consistently.

History –

UH's old pay structure (built in 1995) had been distorted and stretched over the past few years. Due to budget constraints, the grade maximums were increased without moving the minimums or midpoints. This stretching essentially froze the hiring range while continuing to allow merit increases for employees above or near the maximum. These distorted ranges did not control equity within a grade or a career ladder. For example, a Financial Assistant 2 salary could easily be higher than a Financial Coordinator 1 salary.

In 2006, UH partnered with Deloitte Consulting to conduct a market study of all UH staff jobs. This two year project was completed in phases:

• Phase one was the benchmark process to review UH jobs compared to market. For every staff job, we identified a comparable job in the local or regional market. Take secretary for example: Secretary jobs are found in many industries and UH recruits secretaries from the general Houston metro area along with these other industries. The market-based process compares our secretary pay rates to average pay rates of secretaries in the Houston metro area. We then use this information to validate our pay range for that job.
• Phase two was the comparison and analysis of our current pay plans to market. The amount of time spent planning and developing a thorough market pricing methodology is always worth it, because it greatly improves the validity of the market-based pay structure. A new salary range structure was developed by Deloitte aligned to the Houston metro market. A market-based job classification system was recommended because of its simplicity and straightforward approach. The new structure will make the midpoint of the pay range the “going rate” for jobs and will allow for clear controls on salary levels.
• Phase three was the development of a new compensation program, including policies, strategies and processes. The new program also includes a total compensation philosophy which will assist the university in achieving its goal to attract, retain, motivate and reward a highly competent workforce.
• Phase four is the implementation of the new compensation program. During implementation, we will provide training and tool-kits to assist departments with the new compensation program.  We will be communicating to the staff through newsletter articles and public information sessions.
• Phase five will be the implementation of individualized Total Rewards Statements.  The Total Rewards Statement in PASS will provide individual compensation, benefits and training value summaries.  This tool will provide better communication of the value and benefits of working at UH.