Additional Faculty and Staff Compensation Approved

Nov. 3, 2006

TO: UT Faculty and Staff
FROM: Chancellor Loren W. Crabtree
SUBJECT: Compensation Plan

I am pleased to report that the Board of Trustees today approved a plan from the University of Tennessee's Knoxville campus administration for additional faculty and staff compensation.

This plan—developed in coordination with the Council of Deans—centers on our commitment to address the greatest inequity in the original salary plan this year, namely that many of our faculty members who received positive evaluations for their efforts received only a 1 percent salary increase. This was simply not acceptable.

Today, I also want to announce the formation of two important task forces to address the salary issue on campus. First, Provost Bob Holub is forming a broad-based task force to investigate the salary situation and develop a multi-year plan to address it. Additionally, I will appoint a task force in coordination with the Faculty Senate and our employee councils to study an incentive pay plan. This plan will be designed to link pay increases to university priorities and to faculty and staff efforts to achieve institutional goals, and will commit resources to provide incentive pay. Both these efforts are critically important and will help us dedicate our resources to our most important asset—our faculty and staff.

The plan approved today attempts to address cost of living concerns while at the same time retain our commitment to pay for performance.

The plan redirects more than $1.4 million from other campus budgetary categories to salaries. Here, in brief, are the components that the board approved:

• Additional salary increases for all meritorious faculty members (those who met or exceeded expectations in the 2005 performance review). This 1 percent salary increase is effective as of February 1, 2007.
• Salary increases for some faculty to address the most egregious salary inequities, particularly issues of compression and inversion.

These will be effective January 1, 2007.

• Sufficient non-recurring funding to ensure that all members of our faculty and staff employed before July 1, 2006, receive $350 one-time bonuses. In the original plan, these bonuses had been reserved only for faculty and staff with three or more years of service.

Other elements of the compensation package that were effective July 1 are

• Commitment of $170,000 in institutional funds to ensure that staff members earning less than $30,000 receive at least a $600 salary increase.
• Raising the 401K match by $10 a month for the second year in a row. The match now is $40 per month.
• Extension of longevity pay of $100 per year from 25 to 30 years.
  For some long-time faculty and staff, this means an annual increase of up to $500.
• Continuation of the state's payment of 80 percent of health insurance premiums as part of a very competitive benefits package.

We are taking additional steps that we hope will result in more generous salary increases in future years. We have asked the UT system to revise the merit rating scale to include five levels instead of the current four. This added granularity will permit us to reward employees more accurately and fairly under a merit-based system.

We've worked closely with President John Petersen and his staff to make improving faculty and staff salaries a top institutional priority and we will continue to place great emphasis on improving salaries across the institution.

Approval today of this revised mid-year compensation plan is certainly a step in the right direction, although we all wish we had more resources to dedicate to this important area.

We appreciate your continued commitment to the university, and thank you for your effective, dedicated service.