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Office of the Chancellor

Chancellor Leland Announces Compensation Strategy

August 4, 2014


I am pleased to announce I have approved a three-year strategy for implementing a new compensation policy for UC Merced’s non-represented staff.

The new policy is designed to:

  • Attract and retain talent by increasing the average range of market percentile for UC non-represented staff from the current 31 percent to at least 45 percent.  (The “average range of market percentile” refers to the percentage that employees are paid within the salary range for their classification. For instance, 100 percent would be at the top of the salary range; 0 percent would be at the bottom.);
  • Achieve greater fairness at UC Merced by addressing salary inequities across the campus within similar job functions and between recent and early hires; and
  • Invest in job functions most critical for achieving campus priorities for Project 2020.

This strategy is the result of a nine-month process that began with a series of listening lessons with managers and non-represented staff. These sessions helped identify some of the greatest pain points with our current compensation situation. A full report on those sessions can be found online.

This was followed by independent analysis of UC Merced salaries, which confirmed what we suspected: approximately 40 percent of our non-represented staff are paid at or below the 25th percentile of their salary ranges, even while performing functions equivalent to those on other campuses or, in some cases, performing multiple functions due to overall understaffing in some areas. From this analysis emerged a philosophy, which can be found online.

Based on this philosophy, my team (in consultation with Staff Assembly and others), developed a strategy for addressing our most serious compensation challenges for non-represented staff. Although the strategy will take several years to fully implement due to budget severe budget constraints, I am committed to making this important investment in our non-represented staff.

Many staff members accepted salaries well below market with the hope that as the campus grew, so would their opportunities and compensation. But with the recession and declining state support for the University of California, salaries have stagnated.

Then, because of competitive employment markets and a now-improving economy, higher salaries were offered to new staff members, even those with less experience than current staff. These and other factors have led to 1) salary compression, where managers are paid only slightly more than those they supervise; and 2) salary inequities between similar job functions and titles.

To grow, we must hire. But to do so without addressing current staff salary inequities will only make a bad situation even worse. The time to address this is now.

This initiative builds on two years of modest across-the-board salary increases (which, unfortunately, were reduced by increases in mandatory retirement contributions). Going forward, we will focus on compensation policies that first address the grosser inequities in our most critical functions; and second, reward performance. For this reason, merit-based salary increases will become more common in the future.

This cannot happen overnight. Therefore, this will be multi-pronged initiative that deploys a variety of compensation and workforce management tools:

Budget Resources. First, I have approved as a down payment on this initiative $800,000 for FY 2014-15, which will serve to address the grossest inequities in a range of job functions most critical to achieving our goals by 2020. These include, but will not be restricted to, financial analysis and services, health, information technology, institutional advancement, project management, policy and planning, and student services.  I anticipate that we will need to make additional investments over the next three years in order to address non-represented staff compensation challenges, and I am committed to making these investments a top budget priority.

Strategic Workforce Planning. Second, we will embark on a campuswide process to create a strategic roadmap for our long-term staffing needs. This Strategic Workforce Planning Initiative is an opportunity for leadership to articulate a vision and drive toward it; an opportunity to create strategies that allow staff members to advance and to grow in functions that they know really matter to UC Merced; and an opportunity for the campus to achieve efficiencies that allow for new investments, to drive innovation, and to invent new and more effective ways of working. It is, in short, an opportunity for UC Merced to become a workforce planning model for the University of California. From this exercise, we will identify the grossest inequities and reclassification and professional training needs.

Performance Management. Third, as we move to a compensation philosophy based on performance, we must create effective, robust and sustainable performance management systems. A revised performance management process is being designed, with the goal of launching a new system by January 2015.

Incentive Awards. Extraordinary work must be rewarded. Therefore, the fourth tool will be a new incentive award program that will be funded from both department and central funds. These awards will be available for represented as well as non-represented staff, as they recognize efforts that go above and beyond job descriptions. New guidelines and procedures for processing incentive awards will be issued in the weeks ahead.

Professional Training. As noted above, the Strategic Workforce Planning Initiative will help identify the gap between current staff skills and the skills that will be needed in the coming years. I am committed to helping current staff members bridge those gaps through rigorous and relevant professional training opportunities that will help them advance and grow professionally.

In the coming weeks, Vice Chancellor for Business and Administrative Services Michael Reese will hold a series of information sessions to provide more detail about the background, analysis and philosophy that is driving this new policy. A schedule can be found below. The Human Resources website also has a section for frequently asked questions.

Staff Assembly will also hold a Town Hall on Thursday, Aug. 21, devoted solely to the subject of our new compensation strategy.  A confidential online chat is being scheduled for Aug. 22 for those who may have additional questions or concerns.

I hope you can attend the information sessions and Town Hall, as a well-informed and engaged staff is going to be crucial to its success.

Compensation is the most tangible recognition of performance. But there will never be enough compensation to convey just how deeply I appreciate each and every one of you for what you do for UC Merced. You make me extraordinarily proud.


Dorothy Leland


Information Sessions
10/7       3:30 – 5 PM     
10/15    9 – 10:30 AM  
All campus sessions are in KL 232. 

Town Hall                         
10/21    3 – 5 PM       
California Room

10/23    9:30 AM (website TBD)