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Compensation Plan Proposal for BOT Meeting

May 24, 2021

Dear Faculty and Staff:

We will be making a compensation recommendation at the upcoming Board of Trustees meeting. We received input and recommendations from both the Faculty and Staff Senates. Those recommendations have been discussed at a number of President’s Council meetings over the course of the past several months. Our recommendation to the Board is framed by the following:

  1. The Tennessee Higher Education Commission (THEC) has capped tuition increases and approved a range of 0-2%. The UofM will be recommending a 1.75% increase, almost the entirety of which will cover the final step in a multi-year process to eliminate the remaining $50/credit hour online fee. This will equalize online and on-ground course costs. The UofM was one of only a few institutions nationally to charge more for online courses (once an additional $300/course). Recall that our Board approved this reduction several years ago because the online fee was dramatically reducing our ability to attract and retain students. A bit of history is important to understand why this discrepancy exists. When budgets were reduced in 2008 secondary to the recession, many departments eliminated their operational budgets in an effort to save positions. They replaced those operational funds with the online fee and became dependent on those funds over time. Last year, we increased academic unit base budgets equivalent to the online fees generated. This final step allows the University to build those funds back into our institutional tuition and fee revenues, so we have stable and reliable operational funds while equalizing costs for students across all offerings, either on-ground or online.
  2. Although Governor Lee’s approved budget recommends a compensation cash pool equivalent to a 4% increase, the State allocation only covers 60% of the costs for implementing a 4% adjustment for the University. All additional costs have to be covered by the institution, ordinarily done with a tuition increase. As summarized above, we cannot increase tuition above 2% this year. The 1.75% increase noted will address the disproportionate costs for online education and assure departments stable operational funds. Given that we are transitioning out of a pandemic, it is simply unwise to enact any additional increase. The 1.75% increase is justified given that the UofM has had the lowest cost increases in TN over the past eight years and by a wide margin, including four years with no tuition increase.
  3. Faculty promotion costs are in addition to the increases noted below.
  4. We will be implementing promotions for full-time instructors, an initiative that has been delayed for far too long.
  5. We continue to cover all part-time faculty in pay increases, an initiative we started six years ago that had not been done for almost 40 years previously.
  6. Limited funds have been set aside for Deans and Department Chairs to continue to address equity and compression, independent of the summary table below.
  7. As we have done over the past six years, we are implementing a tiered approach which rewards those at the lower end of the pay scale disproportionately (i.e., those that are not making the transition to $15/hour), while also providing meaningful base increases for all employees. As is apparent, across the board increases that are not tiered limit our ability to address the other issues summarized here.
  8. As noted several months ago, implementation of a minimum wage of $15/hour (which was supported by both the Faculty and Staff Senates) naturally requires additional funding as we implement increases for the coming fiscal year.
  9. There is a need to reserve some base funds for distribution through the SRI budget process in an effort to expand core infrastructure (i.e., critical need faculty and staff positions) for instructional and research needs.
  10. Finally, we are implementing simple across the board increases (variable depending on salary range) in accordance with the recommendations of the Faculty and Staff Senates.
  11. The total cost for implementing the salary and hourly wage increases summarized in the table below is approximately $7.5M while the total funding allocated by the State to the University for such purposes is $5.4M.

The recommendation will be for a 2% base increase coupled with an additional $600 base increase for all faculty and staff regardless of salary range, except for those moving to the $15/hour minimum wage, as those increases are already significantly more. The table below summarizes the average percentage increase across targeted annual salary and hourly ranges. As you can see, the range is from 3.9% to 2.2% for those on salary. Given the increase to $15/hour minimum wage, the increases on the hourly pay scale are much higher. Please read the note at the bottom of the table, clarifying that those currently making between $14.50-$14.99/hour will receive both the 2% increase and a $600 flat increase. 

Again, this recommendation will be presented at the upcoming Board of Trustees meeting. We believe it represents a balanced approach to a broad range of competing and critical demands, while also containing student costs within the successful model employed over the past seven years, one that has resulted in growth along with improved retention and graduation rates.   

see alt text below

Regards,

Dr. M. David Rudd, President

 

 

 


Alt text for table image above:

FY22 Average Salary Increase Percentage by Range

July 1, 2021 Salary Pool

(1st column: Annual Salary Range) (2nd Column: Avg Inc % w/2% and $600)

30,000-34,999     3.9%

35,000-39,999     3.6%

40,000-44,999     3.4%

45,000-49,999     3.3%

50,000-59,999     3.1%

60,000-64,999     3.0%

65,000-69,999     2.9%

70,000-74,999     2.8%

75,000-79,999     2.8%

80,000-99,999     2.7%

100,000-109,999     2.6%

110,000-134,999     2.5%

135,000-174,999     2.4%

175,000-234,999     2.3%

235,000-354,999     2.2-2.1%

 

 

Salary Range: $23,400-$29,230

(1st Column: $15/HR Hourly Range) (2nd Column: Employee Count) (3rd Column: Avg Inc % $15/HR) (4th Column: Min % $15/HR Inc) (5th Column: Min % w/ $600 Flat Inc) (6th Column: Min % w/ 2% Inc)

12.00-12.49/HR     143     24.6%     21.4%     23.9%     23.4%

12.50-12.99/HR     8     17.3%     15.6%     17.9%     17.6%

13.00-13.49/HR     18     12.8%     11.4%     13.7%     13.4%

13.50-13.99/HR     9     8.2%     7.4%     9.6%     9.4%

14.00-14.49/HR     18     4.6%      3.8%     5.9%     5.8%

14.50-14.99/HR     20     1.3%     0.038%     2.1%     2.0%

Notes: In 14.50-14.99 range, 13 employees receive less than 2% with $15/HR min increase only.

Given that this group will receive both the 2% and 600 flat increase resulting in an average percentage increase of 4.1%.