Compensation program design
University compensation program primary components
The compensation program is designed around two primary components: (1) market-based salary ranges and (2) pay for performance. These two components work in concert to build an HR Plan that supports VCU’s Great Place Initiative. Each component of the compensation program is identified in detail below.
University job structure
The university job structure consists of 21 Functional Job Families. Each job family incorporates university-established jobs that span from operational, technical and administrative support jobs, through several levels of professional jobs, to management and executive leadership. The university job structure is established, reviewed, evaluated, and maintained by VCU HR. The established job families are:
- Academic and Faculty Affairs
- Athletics and Recreational Sports
- Auxiliary Business Services
- Community Engagement and Outreach
- Environmental Safety and Risk Management
- Facilities Management
- Financial Services
- General Administration
- Health Sciences
- Human Resources
- Information Technology
- Legal, Audit, and Compliance
- Library Services
- Museums and Fine Arts
- Parking and Transportation
- Procurement Services
- Public Safety and Security
- Student Services
Salary survey sources
VCU’s peer group for compensation changes over time as the strategic initiatives of the university are updated. VCU participates in and receives salary data from survey sources that include:
- Other national, similarly or slightly higher ranked universities in the comparable field as designated by Carnegie Classification System
- National and regional salary surveys
- All profit and nonprofit organizations in metropolitan Richmond
Utilizing compa-ratio for analysis
The formula commonly used by compensation professionals to assess the competitiveness of an employee’s pay level involves calculating a comparative ratio (compa-ratio). A compa-ratio is calculated as the employee’s current salary divided by the current market rate (the midepoint of the market range). Compa-ratios may be calculated at the individual position or organizational level. A compa-ratio of 1.00 or 100% means that the salary is at the market rate -- the midpoint for the salary range. A ratio of 0.75 means that the salary is 75% of the market rate for the position. A compa-ratio of 1.15 or 115% means the salary is 15% above the market rate for the position.
A job family, also referred to as a functional family, is a grouping of related jobs in a functional area (i.e. Finance, IT, Research) using benchmark job titles found in the general labor market. Job titles are used to further distinguish the levels of competencies, also referred to as knowledge, skills, and abilities (KSAs) and other factors, expected to successfully perform a job.
A job is a compilation of duties and responsibilities that one would expect to perform at any given level of knowledge, skills, and experience. Each job is assigned a job title and an associated market-based salary range that provides the minimum and maximum expected pay.
A job summary outlines the nature and scope of the job, typical responsibilities, and core functions of the job, such as operational support or executive leadership. Job summaries also provide the link to statistical reporting associated with federal Standard Occupational Codes (SOCs). The job summary is utilized in recruiting, pay equity analysis, performance management, and similar HR analyses.
The majority of individual jobs are designed with a base job and a senior job. Base jobs and senior jobs are comprised of three levels each, defined further below creating a job series. Through the formal process of career development, individuals can progress across the salary range and also up the job levels through maturity in the career and attainment of additional knowledge, skills and education.
Base jobs and senior jobs consist of three job levels which assist in proper salary range placement. The job level is intended to be driven by the job content, scope and level of experience required to successfully perform the job. As the level increases, there is an associated increase in the level of complexity within the work and a broadening in scope and responsibility. The job level is driven by the relevant knowledge, experience, and performance of the individual who holds the job. The three job levels are:
Level 1: Individuals in Level 1 typically possess basic knowledge, skills and performance ability and typically perform less complex tasks while learning relevant concepts and best practices on-the-job.
Level 2: Individuals in Level 2 typically possess expanded ability to effectively manage more complex tasks, as well as expanded knowledge within the applicable functional area. Individuals in Level 2 demonstrate a developed understanding and appropriate application of fundamental concepts relative to the job content.
Level 3: Individuals in Level 3 typically possess extensive related experience and rely heavily on experience and sound judgment to complete tasks. Level 3 employees may lead projects of critical importance and typically possess a broad and comprehensive degree of working knowledge in the field. May also be a recognized expert in the field relative to the job content.
The compensation plan design utilizes a market pricing strategy to determine the relative value of jobs. Market pricing is a process by which an organization gathers and analyzes external salary data to assist in determining the relative value of jobs in the external market. This approach aids in ensuring competitive salary ranges based on pay for comparable jobs in the relevant market.
Each university job title is assigned a market-based salary range within the job structure. The assigned salary range is developed by linking the scope of the recruitment area (local, regional or national) to the pertinent salary data reflecting salary information from other institutions of higher education and private-sector employers (as applicable). The market-based salary ranges are published in support of the university’s goal of transparent compensation administration.
The compensation plan design utilizes wide market-based salary ranges for compensation administration that allow for significant salary growth as one's skill and contribution grows. The midpoint of the market range is referred to as the 50th percentile in the relevant market. The range is then extended from the mid-point, or 50th percentile, down to a beginning rate, referenced in the Plan as the minimum of the range, and up to a high rate, referenced to in the Plan as the maximum. The market-based salary ranges are maintained and updated periodically by VCU HR.
The compensation plan design supports career and personal development through movement across and up the salary ranges through Career Paths. Movement across the salary range is accomplished in four stages defined as emerging, proficient, accomplished and expert. Career paths provide opportunities for employees to advance through their careers by moving across the four stages and up the three job levels as they gain competencies and experience.
- Emerging: Applies basic KSAs to perform the necessary responsibilities while developing new specialized KSAs; may need guided supervision; has no or limited experience and tasks can be learned on the job; limited decision-making required
- Proficient: Applies learned KSAs to a variety of tasks and projects; performs focused assignments that require prior experience; may need minimal guidance in addressing situations that are not routine
- Accomplished: Performs broad and/or focused assignments requiring significant experience or specialist training in a particular area; works under minimal supervision; applies KSAs to enhancing strategies and procedures; recognized by peers as a resource; problem solving requires analysis of unique issues/problems without precedent or structure
- Expert: Applies KSAs to multiple components; leading knowledge and skill across units or in leading multiple assignments/projects; demonstrates knowledge of trends in field; serves as leader and/or expert in role; provides coaching to others; applies KSAs to creating, developing, implementing, and enhancing strategies and procedures; has strategic focus.
Jobs are matched to standard jobs found with other employers (benchmark jobs) in the appropriate salary survey identified with the input and assistance from managers. The salary survey/market data is compiled and utilized in the administration of VCU’s market pricing strategy, to include creation of job families and development of the pay structure for the university.