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M Compensation & Salary Policy 2008

M Compensation & Salary Policy 2008. Management Forum Presentation November 3, 2008 Lynne Gervais, Associate Vice-Principal Human Resources. Background. M group vital to McGill’s operations, key player in growth and development of McGill as a World Class Institution

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M Compensation & Salary Policy 2008

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  1. M Compensation & Salary Policy 2008 Management Forum Presentation November 3, 2008 Lynne Gervais, Associate Vice-Principal Human Resources

  2. Background • M group vital to McGill’s operations, key player in growth and development of McGill as a World Class Institution • Desire to align Human Resource practices with “Best Practices”. • Commitment made to management and professional staff in December 2007 to review the current M Compensation framework

  3. Main Issues • Current M salary structure not systematically benchmarked since the implementation of the Pay Equity Program in 2002 • Current structure lacks flexibility to adapt to market conditions for attraction and retention of key talent • Pay scales are narrow; salary progression is slow and a promotion is needed in order to obtain a significant salary increase • Does not allow for sufficient recognition of individual contribution • No clear market reference point to validate competitiveness

  4. Current Benchmark Excercise • Two (2) consulting companies were selected to conduct this benchmarking exercise: • Normandin-Beaudry : Mercer, Watson Wyatt, Hewitt • The Hay Group

  5. Conclusions • Levels 1 & 2 (grades 5 & below) • McGill’s salaries are overall competitive • Levels 3 & 4 (grades 6 & above) • McGill’s salaries are generally less competitive • SAF positions: • The maxima of McGill’s current salary scale is in line with the median salary of our reference market ; • Actual salaries are on average 5% lower than market median Note: This study was conducted only on base salaries, and does not take into account the other components of the total rewards (benefits, holidays, etc.) offering of the University

  6. Way Forward- Best Practices

  7. Best Practices :Salary Benchmarks Current Practice Going Forward • Private Industry data in addition to Public and Para Public • Based on Local & National reference Market • Focus on external market as well as internal references • Para Public & Public Sectors primarily • Yet we recruit from a range of sectors including Private Industry • Local Markets- Montreal • Yet we occasionally recruit within the Province and other provinces in Canada • Internal Equity focus • Yet best practices indicate focus should be both external & internal

  8. Best practices: Salary Scale Wider ranges for each grade; allows for: Growth in the role; Increased complexity, scope; Correct positioning of roles based on market. Target Pay as a main reference point Based on the market; Slope Increase Between all grades; Recognizes the complexity of roles

  9. Movement in Salary Ranges • Capacity to pay • Growth in the role • Acquiring additional competencies, skills, qualifications • Achieving/exceeding objectives; • Greater impact on the institution • Unusual market pressure – example, retention of hot skills i.e. C.A.’s now, IT during Y2K

  10. Revised M Salary Structure

  11. What changes? • Introduction of Target Pay as main reference point for competitive pay. Based on McGill Competitive market . • Three Zones • Min Target Max • Zone 1, Zone 2, Zone 3 • Increase in the difference between min & max to provide more movement within each salary range at all levels. • Increasing slope between target pay points to reflect increasing complexity Now Effective December 1 • 2 reference points : • Minimum and Maximum; Market reference point not clear • Single Zone: • Min Max • Narrow scales- little or no room to move ; pay compression; red circle situations resulting in lump sum payments. • Linear slope between pay grades

  12. Current Structure

  13. New Structure

  14. New Salary Scale

  15. Salary Management The range associated with each grade is divided into three zones Target 100% $Min $$$Job Max • New incumbents.. • Recent promotion… • Acquiring new skills… • Meeting most requirements • Meets all requirements… • Sustained achievements… • Possesses key competencies, both technical and behavioral Zone 1 Development/Transition Zone 3- Exception Zone 2 – Target (95-110%) • Significantly exceeds requirements consistently… • Possesses high demand skills… • Recognized as an expert in their field The division of each grade into 3 zones provides increased flexibility and enables the University to place a fair value on the competencies, responsibilities and contribution of each employee

  16. Outcomes • Ensure McGill’s competitive salary positioning on the broader reference market • Reinforce the link between contribution and rewards • Support employee growth & development • Foster accountability/ownership at local managerial level

  17. Next Steps • Develop competency framework for each job family • Technical competencies & behavioral competencies for each role in each job family • Review current salary policies and define specific criteria for moving within and between the ranges in new structure • Develop specific merit guidelines to support the implementation of the salary policy

  18. 3-year Salary Policy

  19. McGill vs. Market practiceTotal Budgets (2002/2007) • Salary Freeze in 1995 • Catch-up exercise begun in 2001 • New “M” Compensation Structure implemented in 2002

  20. Approved Budgets- 3 Year Salary Policy • 2008: 3% • 2% minimum increase for all employees meeting requirements of job • 1% additional budget given to each unit to recognize leading performance • 2009: 3% • 1% minimum increase for all employees meeting requirements of job • 2% additional budget given to each unit to recognize leading performance • 2010: 3.5% • % of minimum increase and performance increase to be defined

  21. Performance levels • Performance Categories—4 levels LEVEL OF PERFORMANCEMINIMUM INCREASE • Leading 2% + • Strong 2%-3% • Building Consistency 0-2% • Immediate Improvement Required 0%

  22. Performance Definitions Leading Consistently outstanding performanceexceeds expectations Strong Solid performance and consistently meets job requirements Building Consistency Performance does not consistently meet job requirements Requires Immediate Improvement Performance consistently fails to meet job requirements

  23. Questions / Comments

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