UNIVERSITY PARK, Pa. — Last week, Penn State President Neeli Bendapudi and the senior administration shared a road map for Penn State’s future and outlined several initiatives to position the University for future success. Grounded in Bendapudi’s vision and goals, Penn State is taking steps over the next 18 months to address its financial challenges, modernize its business model, and move forward on several change initiatives.
“Many in our Penn State community understandably have questions and feedback about these changes and how they will impact faculty, staff and students. Not only do we want to continue to share information and provide answers to questions, where they exist, we also are going to create opportunities for our community to participate in co-creating a successful future for Penn State,” Bendapudi said. “While we are in a period of transformation, we remain committed to our teaching, research and public impact mission.”
Bendapudi asked Penn State community members to share their questions about the road map, and more than 230 comments and questions have been submitted on a range of topics from compensation to the business model to potential impacts on faculty, staff and students.
The following is the first in a series of upcoming Q&As to answer the most frequently asked questions shared around specific topics. This installment provides additional insight on Penn State’s approach to compensation, which accounted for about 35 of the submitted questions.
Total compensation at Penn State includes a complete and competitive package of health and retirement benefits, generous time off programs, income protection options, an employee assistance program, and a tuition benefit for employees and their dependents. Penn State’s benefits go above and beyond many of its peers, offering employees significant time off, generous retirement contributions, and much more. Employees can learn more about the value of their benefits with the Total Compensation online tool.
“I want to thank our Human Resources team and partners for their work on Compensation Modernization over the past few years. Their efforts and dedication have been invaluable as the University has made this historic $60 million investment in staff salaries,” said Jennifer Wilkes, vice president for Human Resources. “We appreciate the questions we’ve received and will continue to share information about Penn State’s approach to investing in and retaining talented faculty and staff.”
Below are the most frequently asked questions regarding compensation.
1. When will more be shared about the final phase of Compensation Modernization and who will be receiving salary increases?
As noted previously, funding for adjusting staff salaries is twofold: Penn State will leverage the $60.2 million strategically allocated to concluding the Compensation Modernization initiative to (1) bring all staff salaries within the newly assigned salary grades, which were shared with staff on Jan. 24, and (2) adjust select staff salaries to better position individual pay in relation to the new pay structure. This funding is not earmarked for specific job families or profiles, but it is meant to recognize the performance, skills and experience of current staff and transition employees into the new pay grades. Leading up to March, HR Strategic Partners will be working with unit leaders to distribute the funds allocated to their areas in a way that aligns with their recruitment and retention goals. Because this work is in progress, there is no clear answer on what percentage of staff will see increases. HR will continue to work with unit leaders and increases will be communicated to affected employees in the latter part of March.
2. The Compensation Modernization initiative created a new market-based pay structure for staff. What is Penn State doing to retain top-performing faculty?
Penn State has 20,912 full-time employees. Of those, about 54% are staff, about 12% are technical service, about 30% are faculty, and about 2% are administrators or executives.
The University has unique processes to provide competitive pay for different groups of employees. The Compensation Modernization initiative created a new pay structure for about 11,190 staff members, or 100% of Penn State staff. Technical service, faculty, administrators and executives also were not included in Compensation Modernization.
There are many ways Penn State works to retain its faculty, including targeted seed grants, competitive retention packages, investment in state-of-the-art equipment, building interdisciplinary teams of faculty in areas of strategic impact, and faculty recognition through chairs, faculty startups and other means.
3. What is the University doing to address pay equity between long-time staff members and new hires?
The University has designed and implemented new guidelines to offer more flexibility for unit leaders to adjust salaries within particular pay grades to more easily recognize and retain high-performing staff. The new guidelines also make it easier for unit leaders to determine an appropriate starting salary for new hires with involvement of HR, removing a previous administrative hurdle (red tape) that led to slower hires. The new pay grades used data from 10 distinct salary surveys to align Penn State salaries with industry benchmarks, and the new pay grades are narrower than the previous salary bands, with the goal of limiting inequity across the University. Under these new guidelines, high-performing staff may be able to grow in their role without moving to a new job through the new staff promotion process, further reducing inequities across the institution.
4. How is the University aligning staff salaries with industry benchmarks now and ongoing?
For staff, the University has committed to undertaking constant reviews of its job profiles, with a goal of reviewing every profile within a two-year period. In addition, Human Resources will undertake a review of the entire salary structure every three to five years. As previously noted, these historic investments in staff salaries mark the conclusion of the Compensation Modernization initiative, but the resulting salary adjustments are a significant step in moving forward with the University’s goal of maintaining its position as an employer of choice in a rapidly changing job market.
5. Why doesn't GSI keep up with inflation?
Penn State values its employees and recognizes the impact of inflation on our workforce, so the University is investing more than $156 million in salary adjustments in total this fiscal year and next, even as the University itself is encountering inflation and stagnant state funding. As Provost Justin Schwartz noted, budgeting for an annual GSI of 3% has a nearly $50 million impact on the University’s annual budget. This will continue to be a commitment to address. Penn State’s leadership works hard to provide employees with the largest salary increases that resources will allow while also meeting its commitment to Pennsylvania students and their families to keep tuition costs as low as possible. The University is working toward a funding model in which salary increases do not rely so heavily on tuition, but rather on other income sources.
Additional Q&As in the series include topics on: