Employee Compensation & Benefits
A Letter to UT Faculty & Staff
June 26, 2000
The University of Texas at Austin
Dear Colleagues:
In this letter, I would like to outline for you the University's plans and actions in several areas relating to the compensation and overall well-being of employees at UT Austin. Over the past several weeks, you have surely seen or heard fragments of information about our compensation and benefits programs in 2000-2001, but you have not had enough information to assemble the whole picture, partly because that picture has continued to develop until just recently.
For the 2000-2001 budget year, beginning on September 1, the University is able to fund and mandate raise programs of 6% for classified staff and 4% for faculty and A&P staff. The pool for classified staff will be applied in three parts. First, those employees who are paid at an annual rate of $30,000 or lower will receive an increase of $50 per month to the annual rate. Second, the minimum and maximum of each classified salary range will be adjusted upward by 4%. Third, the remainder of the pool (about 75% of it) will be distributed to all classified employees on the basis of factors such as job performance, the need to relieve salary compression, or changes in duties.
In general, the commitments for 2000-2001 match those for 1999-2000, which began last September 1. Because individual units across the campus are able to dedicate some additional funds, the actual campuswide raise percentages normally exceed those mandated or funded centrally. For staff, the raise pool for 1999-2000 was actually 6.6% and for faculty, it was close to 6%.
This is the third year in a row that we have had a deliberate campus policy of making available a larger percentage raise pool for classified staff. We have adopted that policy in recognition of the special pressures that have been put on our staff by economic changes in the Austin area, and in recognition of the need for our units to be able to recruit and retain staff within the Austin employment market.
When the new budget is in place in September, we will have been able to increase overall salaries for classified staff by more than 12% over the past two years (1999- 2001). For faculty and A&P staff, the percentages are not quite as large, but for all employee groups we will have been able to manage raises over those years that exceed the national annual inflation rate of 3% and the national annual wage growth rate of 4%. In each of 1999-2000 and 2000-2001, we will have gained significant ground against our markets for all employee groups.
This era has seen a marked change from the preceding 10-year period, when the raise pool was less than 3% in four of the 10 years. The average annual increase over that period was significantly less than 3%.
Also, in 1998-1999 and 1999-2000 we brought minimum salaries for classified positions across the campus into better alignment with the Austin market, and in 2000-2001 we will be adjusting all minimums and maximums for classified salary ranges upward by 4%.
I share your disappointment that health care premiums have shown such growth for next year, and I know that this factor causes significant concern and stress. These changes come from the annual negotiation of health-care plans conducted by the UT System. They reflect cost changes that are taking place in the larger society. Similar effects are being felt by employees elsewhere. The growth in cost to employees seems to be even greater in the Texas A&M System, in programs serving the remainder of public higher education in Texas, and in programs serving other State agencies. I mention these comparisons not to minimize the impact of the changes, but to place our situation in a larger context, and to note that negotiators at the UT System were more successful than others at softening the blow.
To protect employees here at UT Austin to the greatest practical extent against these increases, we are placing the largest sums we can possibly afford into the raise program, and we are providing specifically that classified employees who are paid at an annual rate of $30,000 or lower will receive an increase of $50 per month before the bulk of the pool is distributed among all employees (including those at $30,000 and lower).
This week, the Office of Human Resources will begin conducting workshops for all managers on the campus concerning the management of this year's raise program. Also, we are accelerating the budgetary process leading to the assignment of salaries, so that classified employees will know their new salaries prior to the close of the insurance enrollment period. That period is being extended one additional week into early August. These changes will enable employees to make elections of insurance coverage with knowledge of their new situations for 2000-2001.
People have asked whether we might not be able to restore some benefits from institutional funds. There are technical and legal problems associated with doing that, because our benefits are based on UT System packages and policies. However, the more significant issue is in the application of resources. Because improved compensation has been our highest priority, we have put all of the money we could find into the raise programs. If we were to provide either new benefits or increased subsidies to benefits, the cost would have to be covered from the pool of funds now dedicated to salaries. Because each individual employee uses benefits in a way that is tailored to personal needs, there is no way to add subsidies so that there is a consistent value for all employees as great as simply receiving the funds in the form of salary.
Consequently, our policy is to put as much money as we can into the salaries of our employees. Many millions of dollars beyond those provided by the State have been dedicated to next year's salary program. As the law and other restrictions allow, we have drawn upon all sources, including tuition and fees paid by students and parents, and the income from gifts and endowments. (Quite a few faculty and staff salaries are paid from endowment earnings and gift funds, and those funds, where terms of the endowment or gift allows, have been applied to salary improvements.)
A point of confusion may exist over Comptroller Rylander's announcement in May that she was able to certify the availability of funds designated by the last Legislature for a 3% faculty pay raise. When our budget was formulated in March and April, we worked from the hope that this certification would be forthcoming, so these funds were already figured into our policies and process at that time. We are, of course, grateful for the Comptroller's action; without it we would have had to retreat from the program discussed here.
In addition to compensation, a great many other human resources issues have received attention. The Office of Human Resources has been reviewed critically, and a new director has been recruited. Compensation levels are now being monitored more consistently with respect to external markets. Grievance procedures have been reassessed, and we are on the verge of issuing new policies and procedures. In fact, virtually all formal policies and procedures relating to human resources are being reexamined and will soon be made broadly available in a much more usable form.
I have no greater personal priority than to assure that the University remains an exciting, fulfilling place for talented people--students and employees--to pursue the future. Toward that end, many improvements have been made over the past two years, and many others are in progress. The road is neither smooth nor straight, but I am committed to making steady progress. Your suggestions and support will be valued enormously.
Sincerely,
Larry R. Faulkner
President
The University of Texas at Austin
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