College of Micronesia-FSM Presentation to FMI Campus Compensation

College of Micronesia-FSM Presentation to FMI Campus Compensation & Benefits Study Results of Stages One & Two September 2010

Background Overview

Background Overview COM’s current compensation model has four classifications of employees : Classified, Professional, Management and Faculty. Since their adoption in 1996 the classifications have not been adjusted to reflect appropriate labor markets and relevant economic standards.

Background Overview In brief, the study is to address the following areas: a) accurate classifications and compensation b) sustainable and competitive pay schedules c) incentive program(s) linking directly to pay schedules d) investigate duplicate and nonessential services

Project Overview

Project Overview Stage 1 : Internal Analysis (including Streamlining Committee Results / Instructional Master Plan) Stage 2 : External Analysis Stage 3 : Implementation Supp. Projects : Performance Management

Stage One : Internal Analysis a) Current Compensation b) Job Evaluation c) Regression Analysis (Internal) d) Job Audit / Streamlining Results

a) Current Compensation

a) Current Compensation Budget - F/Y 10 $ % 5, 893, 634 69. 7 Sp. Contract Services 935, 640 11. 0 Housing 822, 000 9. 7 Social Security 379, 737 4. 5 Health 198, 669 2. 3 Base Salary Retirement Life 175, 583 2. 0 40, 073 0. 4 8, 445, 336 100. 0 4% 2% 2% 10% 11% 70%

a) Current Compensation Departments - as at 4/7/10 $ % Instructional Affairs 2, 660, 647 44. 4 Administration 1, 752, 563 29. 3 Student Services 954, 917 16. 9 CRE 519, 610 9. 7 Presidents Office 100, 776 2. 7 5, 988, 513 100. 0 9% 2% 16% 44% 29%

a) Current Compensation Campuses - as at 4/7/10 $ % National 2, 788, 258 47. 6 Pohnpei 1, 044, 568 17. 4 Chuuk 789, 416 13. 2 Kosrae 577, 552 9. 6 4% 9% 10% 47% 13% Yap 518, 761 8. 7 FMI 269, 958 4. 5 5, 988, 513 100. 0 17%

a) Current Compensation Special Service Contracts $ Sp. Service Contracts - Budget (F/Y 09) 864, 198 Sp. Service Contracts - Budget (F/Y 10) 935, 640

a) Current Compensation Special Service Contracts $ Sp. Service Contracts - Budget (F/Y 09) 864, 198 Sp. Service Contracts - Budget (F/Y 10) 935, 640 Sp. Service Contracts - YTD (F/Y 10) - six months 782, 179

a) Current Compensation Special Service Contracts $ Sp. Service Contracts - Budget (F/Y 09) 864, 198 Sp. Service Contracts - Budget (F/Y 10) 935, 640 Sp. Service Contracts - YTD (F/Y 10) - six months 782, 179 Sp. Service Contracts - YTD less UB & TSP 695, 048

a) Current Compensation Special Service Contracts $ Sp. Service Contracts - Budget (F/Y 09) 864, 198 Sp. Service Contracts - Budget (F/Y 10) 935, 640 Sp. Service Contracts - YTD (F/Y 10) - six months 782, 179 Sp. Service Contracts held by full-time employees (29%) 227, 533

a) Current Compensation Special Service Contracts $ % 202, 313 89. 0 21, 674 9. 5 Student Services 1, 816 0. 8 CRE 1, 730 0. 7 Instructional Affairs Administration 9% 1%1% 89% 227, 533 100. 0

b) Job Evaluation

b) Job Evaluation Job evaluation is a process that re-examines the internal equity of all positions based on job size

b) Job Evaluation It achieves this by assessing the ‘job size’ of individual positions within an organization using a number of measurement factors

b) Job Evaluation Each factor provides a point value with their sum representing the total “points” value of the job

b) Job Evaluation Criteria • • • Education Experience Complexity Scope of Work Problem Solving Supervision Received • • • Work Environment Physical Demands Authority Exercised Results of Decisions Contacts Sup. & Man. Resp.

b) Job Evaluation Results 147 Positions Evaluated

b) Job Evaluation Results Job Evaluation Points 1600 - Range Max 638 - Average 198 - Range Min 589 - Median

c) Regression Analysis

c) Regression Analysis Company Regression Analysis (Base Salary) 60, 000 Exponential Regression e. g. Position X = 450 JE points 50, 000 US $ 40, 000 30, 000 20, 000 10, 000 0 200 300 400 500 600 Job Evaluation Points 700 800 900

c) Regression Analysis Company Regression Analysis (Base Salary) 60, 000 Exponential Regression e. g. Position X = 450 JE points 50, 000 US $ 40, 000 30, 000 Plot the base salary of all employees with the job title of Position X against 450 JE points 20, 000 10, 000 0 200 300 400 500 600 Job Evaluation Points 700 800 900

c) Regression Analysis COM-FSM

Regression Analysis Base Salary Regression : COM-FSM (All Full-Time Positions) 80000 70000 60000 COM-FSM US $ 50000 40000 30000 20000 10000 0 0 200 400 600 800 1000 Job Evaluation Points 1200 1400 1600 1800

Regression Analysis Base Salary Regression : COM-FSM Departments (All Full-Time Positions) 80, 000 Note : excludes President's Office 70, 000 60, 000 US $ 50, 000 CRE 40, 000 Instructional Affairs 30, 000 Administration Services 20, 000 Student Services 10, 000 0 0 200 400 600 800 1000 Job Evaluation Points 1200 1400 1600

Regression Analysis Base Salary Regression : COM-FSM Campuses (All Full-Time Positions) 50, 000 Note : excludes President & VP's Offices 40, 000 National Campus Kosrae Campus 30, 000 Chuuk Campus US $ Yap Campus FMI Campus 20, 000 Pohnpei Campus 10, 000 0 100 200 300 400 500 600 700 800 Job Evaluation Points 900 1000 1100 1200 1300

Regression Analysis Base Salary Regression : COM-FSM 50, 000 Administration Services (All Full-Time Positions) 45, 000 Note : excludes VP's Office 40, 000 Information Technology 35, 000 Dev. & Comm. Relations US $ 30, 000 Accounting 25, 000 IRPO 20, 000 15, 000 Human Resources 10, 000 Maintenance 5, 000 Food Services Bookstore 0 100 200 300 400 500 600 700 800 Job Evaluation Points 900 1000 1100 1200 1300

Regression Analysis Base Salary Regression : COM-FSM Instructional Affairs (All Full-Time Positions) 50, 000 Note : excludes VP's Office & Instructional Coordinators Agriculture 40, 000 Hotel Management Education 30, 000 US $ Maths & Science 20, 000 LRC Academic Programs Social Science 10, 000 Vocational Education Business Language & Literature 0 100 200 300 400 500 600 700 Job Evaluation Points 800 900 1000 1100

Regression Analysis Base Salary Regression : COM-FSM Student Services (All Full-Time Positions) 50, 000 Note : excludes VP's Office & Student Service Coordinators 40, 000 Student Life Dispensary (Plots Only) 30, 000 FAO US $ Counseling ARO 20, 000 Sports & Recreation SSSP 10, 000 Peer Counseling 0 100 200 300 400 500 600 700 Job Evaluation Points 800 900 1000 1100

d) Job Audit / Streamlining Results This stage also provided the ideal opportunity to collectively review the organizational structure of the College.

d) Job Audit / Streamlining Results The focus here was : a) to investigate duplicate and non-essential services b) to integrate results with the work being undertaken by the College’s Streamlining Committee

d) Job Audit Results Key issues that need to be addressed : a) Stakeholder Management b) Optimization of Regional Campuses c) Centralization of Supp. Services (where possible) d) Master Plan(s) c. f. Instructional Programs e) Cost Reduction / Management f) Performance Management

Management Structure Current President Vice President Inst. Affairs Vice President Administration Exec. Director Land Grant Vice President Stud. Services Vice President CRE

Management Structure Current President Vice President Inst. Affairs Campus Director Pohnpei Vice President Administration Campus Director Chuuk Exec. Director Land Grant Vice President Stud. Services Campus Director Kosrae Vice President CRE Campus Director Yap Campus Director FMI

Management Structure Current President Vice President Inst. Affairs Vice President Administration Exec. Director Land Grant Vice President Stud. Services S. S. Co-ord. Inst. Co-ord. Vice President CRE Co-ord. Campus Director Pohnpei Campus Director Chuuk Campus Director Kosrae Campus Director Yap Campus Director FMI Programs & Supp. Services

Management Structure Proposed President Vice President Inst. Affairs Ext. C. Director Pohnpei Vice President Administration Ext. C. Director Chuuk Exec. Director Land Grant Vice President Stud. Services Ext. C. Director Kosrae Vice President CRE Ext. C. Director Yap Ext. C. Director FMI ?

Management Structure Proposed President Exec. Director Land Grant Vice President Inst. Affairs Vice President Administration Vice President Stud. Services Vice President CRE Inst. Co-ord. Nat. Directors CRE Co-ord. Ext. C. Director Pohnpei Ext. C. Director Chuuk Ext. C. Director Kosrae Ext. C. Director Yap Ext. C. Director FMI ? Programs & Supp. Services

FMI Extension Center

FMI Extension Center 1. 2. 3. 4. 5. 6. What are the current FSM goals and objectives in Fisheries development? Recertification as required buy STCW 95 FSM goals and objectives in training maritime and fisheries personnel How much are you willing to pay per student? FMI facilities to prepare for the Guam build-up? What is the role of the FSM National Government in recruiting and job placement? 7. What are other options for this type of training? Outsourcing to other institutions or partnership with other maritime schools.

Summary of Key Issues a) Stakeholder Management b) Optimization of Regional Campuses c) Centralization of Supp. Services (where possible) d) Master Plan(s) c. f. Instructional Programs e) Cost Reduction / Management f) Performance Management

Stakeholder Management - closer relationships / improved communication - increased confidence in COM-FSM - development of partnership(s) c. f. industry - collective needs assessment /continuous improvement - business development / vocational awareness / education - greater student focus / preparation / opportunities / jobs

Extension Centers - improved operational efficiency - wider curriculum (academic / voc. programs) - increased enrollment / increased revenue - centralized support services (where possible) - optimization of infrastructure / resources

Centralized Support Services - improved operational efficiency - optimization of resources - consistency of service delivery (current) - coordinated development of new services - timely procurement / delivery of resource materials (special focus)

Master Plan(s) (in particular Instructional Master Plan) - Instructional / Information Tech. / Infrastructure - integrated approach to program development / delivery - balanced mix of quality academic and voc. programs - collective needs assessment /continuous improvement - enhanced program evaluation / assessment / delivery - improved performance management (faculty)

Cost Reduction / Management - optimization of resources - improved budgeting process - improved operational efficiency - improved fiscal management

Performance Management - enhanced work planning - greater accountability / managed expectations - provision of constructive feedback mechanism - link to performance pay - link to training and development

Stage 2 Compensation Structuring Obtaining and analyzing market compensation data

Market Data - Sources

Market Data - Sources 1. Regional Comparisons Guam Community College Palau Community College of the Marshall Islands American Samoa Community College Northern Marianas College (unable to participate)

Market Data - Sources 2. U. S. Comparisons (GCC Report) a) National Faculty Survey 2007 - 2008 (CUPA) b) Community College Faculty Survey 2007 - 2008 (CUPA) c) Mid Level Admin & Professional Survey 2007 - 2008 (CUPA) d) Administrative Compensation Survey 2007 - 2008 (CUPA)

Market Data Regional Market Percentiles 5 th - 95 th

Regression Analysis Regional Comparisons & Percentiles 160, 000 Base Salary 140, 000 120, 000 US $ 100, 000 80, 000 60, 000 COM-FSM 40, 000 20, 000 0 0 200 400 600 800 1000 Job Evaluation Points 1200 1400 1600 1800

Regression Analysis Regional Comparisons & Percentiles 160, 000 Base Salary 140, 000 GCC 120, 000 US $ 100, 000 CMI 80, 000 ASCC 60, 000 PCC COM-FSM 40, 000 20, 000 0 0 200 400 600 800 1000 Job Evaluation Points 1200 1400 1600 1800

Regression Analysis Regional Comparisons & Percentiles 160, 000 Base Salary 140, 000 GCC 120, 000 CMI 100, 000 US $ 95 th 75 th ASCC 80, 000 50 th 60, 000 25 th 40, 000 20, 000 PCC COM-FSM 0 0 200 400 600 800 1000 Job Evaluation Points 1200 1400 1600 1800

Regression Analysis Regional & US. Market Percentiles 160, 000 Base Salary 15 th 140, 000 10 th 95 th 100, 000 US $ 120, 000 75 th 80, 000 50 th 60, 000 25 th 40, 000 20, 000 0 0 200 400 600 800 1000 Job Evaluation Points 1200 1400 1600 1800

Regression Analysis COM-FSM Plots & Regional Percentiles 160, 000 Base Salary 140, 000 95 th 100, 000 US $ 120, 000 75 th 80, 000 50 th 60, 000 25 th 40, 000 20, 000 0 0 200 400 600 800 1000 Job Evaluation Points 1200 1400 1600 1800

Stage 2 Compensation Structuring In developing a revised compensation model : KEY QUESTION Where in the market “should we / can we” position the College to be more externally competitive i. e. in attracting and retaining employees ?

Regression Analysis COM-FSM Plots & Regional Percentiles 160, 000 Base Salary 140, 000 95 th 100, 000 US $ 120, 000 75 th 80, 000 50 th 60, 000 25 th 40, 000 20, 000 0 0 200 400 600 800 1000 Job Evaluation Points 1200 1400 1600 1800

Structural Adjustment Cost

Estimated Adjustment Cost (10 th Market Percentile - Region) Current Base Salary Total Increase to 10 th Market Percentile $ 5, 988, 513 $ 79, 991 New Base Salary Total $ 6, 068, 504 Current Total Compensation Increase to 10 th Market Percentile $ 7, 630, 563 $ 101, 925 New Total Compensation $ 7, 732, 488 (1. 3%)

Estimated Adjustment (10 th Market Percentile - Region) Number of Employees (< 10 th) 43 (11. 8%) Number of Employees (> 10 th) 320 (88. 2%) Total Full-Time Employees 363 (100. 0%)

Estimated Adjustment Cost (20 th Market Percentile - Region) Current Base Salary Total Increase to 20 th Market Percentile $ 5, 988, 513 $ 204, 272 New Base Salary Total $ 6, 192, 785 Current Total Compensation Increase to 20 th Market Percentile $ 7, 630, 563 $ 260, 283 New Total Compensation $ 7, 890, 847 (3. 4%)

Estimated Adjustment (20 th Market Percentile - Region) Number of Employees (< 20 th) 103 (28. 4%) Number of Employees (> 20 th) 260 (71. 6%) Total Full-Time Employees 363 (100. 0%)

Estimated Adjustment Cost (30 th Market Percentile - Region) Current Base Salary Total Increase to 30 th Market Percentile $ 5, 988, 513 $ 464, 105 New Base Salary Total $ 6, 452, 618 Current Total Compensation Increase to 30 th Market Percentile $ 7, 630, 563 $ 591, 363 New Total Compensation $ 8, 221, 926 (7. 7%)

Estimated Adjustment (30 th Market Percentile - Region) Number of Employees (< 30 th) 185 (51. 0%) Number of Employees (> 30 th) 178 (49. 0%) Total Full-Time Employees 363 (100. 0%)

Estimated Adjustment Cost (40 th Market Percentile - Region) Current Base Salary Total Increase to 40 th Market Percentile $ 5, 988, 513 $ 871, 158 New Base Salary Total $ 6, 859, 671 Current Total Compensation Increase to 40 th Market Percentile $ 7, 630, 563 $ 1, 110, 030 New Total Compensation $ 8, 740, 593 (14. 5%)

Estimated Adjustment (40 th Market Percentile - Region) Number of Employees (< 40 th) 243 (66. 9%) Number of Employees (> 40 th) 120 (33. 1%) Total Full-Time Employees 363 (100. 0%)

Estimated Adjustment Cost (50 th Market Percentile - Region) Current Base Salary Total Increase to 50 th Market Percentile $ 5, 988, 513 $ 1, 400, 322 New Base Salary Total $ 7, 388, 835 Current Total Compensation Increase to 50 th Market Percentile $ 7, 630, 563 $ 1, 784, 290 New Total Compensation $ 9, 414, 853 (23. 3%)

Estimated Adjustment (50 th Market Percentile - Region) Number of Employees (< 50 th) 303 (83. 5%) Number of Employees (> 50 th) 60 (16. 5%) Total Full-Time Employees 363 (100. 0%)

Note : the transition to a more competitive market position may take over a number of years e. g. Option 1 FY 11 - 10 th market percentile FY 12 - 15 th market percentile FY 13 - 20 th market percentile FY 14 - 25 th market percentile

Note : the transition to a more competitive market position may take over a number of years e. g. Option 2 FY 11 - 10 th market percentile FY 12 - standard increment FY 13 - 15 th market percentile FY 14 - standard increment

Target a Specific Group for an Initial Adjustment e. g. Option 3 COM-FSM (full-time employees) No % Administration Employees < 10 th Market Percentile 21 5. 8 Base Salary Increase 30, 803 Administration Employees > 10 th Market Percentile 106 29. 2 7, 886 Instructional Affairs Employees < 10 th Market Percentile 13 3. 6 14, 274 Instructional Affairs Employees > 10 th Market Percentile 118 32. 5 12, 427 Student Services Employees < 10 th Market Percentile 6 1. 7 3, 903 Student Services Employees > 10 th Market Percentile 63 17. 4 4, 572 CRE Employees < 10 th Market Percentile 2 0. 6 342 CRE Employees > 10 th Market Percentile 30 8. 3 2, 541 Presidents Office Employees < 10 th Market Percentile 1 0. 3 2, 977 Presidents Office Employees > 10 th Market Percentile 3 0. 8 266 363 100. 0 79, 991 TOTAL

Stage 3 : Implementation

Stage 3 : Implementation New Pay Schedule Options

Pay Schedule Option (Traditional Approach) 6. 2% 5. 8% 5. 5% 5. 2% 4. 0% 3. 8% 3. 7% 3. 5% Grade Step 1 Step 2 Step 3 Step 4 Step 5 Step 6 Step 7 Step 8 3. 8% A $13, 990 $14, 865 $15, 739 $16. 614 $17, 488 $18, 188 $18, 887 $19, 587 4. 1% B $14, 534 $15, 443 $16, 351 $17, 260 $18, 168 $18, 895 $19, 621 $20, 348 4. 6% C $15, 133 $16, 079 $17, 024 $17, 970 $18, 916 $19, 673 $20, 429 $21, 186 5. 1% D $15, 840 $16, 830 $17, 820 $18, 810 $19, 800 $20, 592 $21, 384 $22, 176 5. 8% E $16, 656 $17, 697 $18, 738 $19, 779 $20, 820 $21, 653 $22, 486 $23, 318

Pay Schedule Option (New Approach)

Pay Schedule Options Every employee would have a : grade, step and sub-step e. g. Employee X Grade I, Step 6, Sub-step B

Stage 3 : Implementation Transition Process to New Compensation Model

Competitor’s Approach

Competitor’s Approach 600 JE Points 500 JE Points

Competitor’s Approach 600 JE Points (20 Positions) 500 JE Points

Competitor’s Approach 600 JE Points (20 Positions) 500 JE Points e. g. Grade K (Step 1)

Competitor’s Approach 600 JE Points 595 JE Points (20 Positions) 505 JE Points 500 JE Points e. g. Grade K (Step 1)

Competitor’s Approach 700 JE Points 605 JE Points e. g. Grade L (Step 1) 600 JE Points 595 JE Points (20 Positions) 505 JE Points 500 JE Points e. g. Grade K (Step 1)

Our Approach

Our Approach 600 JE Points (20 Positions) 500 JE Points

Our Approach 600 JE Points 595 JE Points (20 Positions) 505 JE Points 500 JE Points

Our Approach 600 JE Points 595 JE Points e. g. Grade K (Step 5) (20 Positions) 505 JE Points 500 JE Points e. g. Grade K (Step 2)

Our Approach Let’s look at the mechanics of this process (Two Step Process)

Our Approach Step 1 - Identification of an implementation range Step 2 - Migrate all employees into the new model

Regression Analysis COM-FSM Plots & Regional Percentiles 160, 000 Base Salary 140, 000 95 th 100, 000 US $ 120, 000 75 th 80, 000 50 th 60, 000 25 th 40, 000 20, 000 0 0 200 400 600 800 1000 Job Evaluation Points 1200 1400 1600 1800

Implementation (Step 1)

Implementation (Step 1) We next identify a base salary value (for each position) that we can then transpose to the new pay schedule in order to identify the upper end of an implementation range We do this by initially identifying the midpoint

Implementation (Step 1)

Conversion Process Example

e. g : Position X

e. g : Position X We transpose $29, 995 to the new Pay Schedule

e. g : Position X Using the new Pay Schedule identify the closest base salary sub-step (on the lower side)

e. g : Position X Note : this forms the high end of the implementation range (25 th Market Percentile)

e. g : Position X The low end of the implementation range is 16 sub-steps from the high end

e. g : Position X Implementation Range $29, 756 (Grade G, Step 6, Sub-Step B) - Range Max $25, 630 (Grade G, Step 2, Sub-Step C) - Range Min

Implementation Now that we have an implementation range for each unique position the final step is to migrate all employees into the new compensation model

Implementation Criteria 1. Performance 2. Education 3. Experience TOTAL 8 Points 5 Points 3 Points 50% 31% 19% 16 Points 100%

Implementation Criteria 1. Performance 2. Education 3. Experience TOTAL 8 Points 5 Points 3 Points 50% 31% 19% 16 Points 100% This corresponds to the implementation range

e. g : Position X Employee 1. Performance 2. Education 3. Experience TOTAL 9 Points 4 Points 3 Points 8 Points 4 Points 3 Points 16 Points 15 Points

e. g : Position X Score of 15 = $29, 461 Finally, in comparing this to the employee’s current salary there are two scenarios :

e. g : Position X Score of 15 = $29, 461 1. Where the employee’s current base salary is below this amount

e. g : Position X Score of 15 = $29, 461 Emp X : Current Base Salary = $26, 000

e. g : Position X Score of 15 = $29, 461 Emp X : Current Base Salary = $26, 000 Emp X : New Base Salary = $29, 461 (13% inc) Grade G, 6, A

e. g : Position X Score of 15 = $29, 461 2. Where the employee’s current base salary is above this amount

e. g : Position X Score of 15 = $29, 461 Emp X : Current Base Salary = $31, 500

e. g : Position X Score of 15 = $29, 461 Emp X : Current Base Salary = $31, 500 Emp X : New Base Salary = $31, 586 (0. 3% inc) Grade G, 7, D

Typical Project Overview Stage 1 : Internal Analysis Stage 2 : External Analysis Stage 3 : Implementation Supp. Projects : Performance Management / (optional) Development of Pay Incentives

Integrated Performance Management System

Integrated Performance Management System Work Planning Review Training Performance Pay

Performance Management e. g. Guam Community College e. g. GCC under previous compensation model 10 + Steps - 24 months 7 - 9 Steps - 18 months 1 - 6 Steps - 12 months

Performance Management e. g. Guam Community College Old Compensation Model 10 + Steps - 24 months 7 - 9 Steps - 18 months 1 - 6 Steps - 12 months New Model Everyone will be reviewed annually

Performance Management e. g. Guam Community College Three new performance management tools are being implemented : a) Academic Administrators b) Faculty c) Staff (classified positions)

Performance Management e. g. Guam Community College One of the benefits of the new pay schedule is that a performance range is made available i. e. as a performance incentive on an annual basis

Performance Management

Thank You / Questions