The Classification and Compensation project began last month under the direction of Nora Costa, MIT's manager of compensation in the Personnel Office. The project will build on recommendations from the Human Resource Practices Development (HRPD) team, which were researched and prepared at the request of Joan F. Rice, vice president for human resources.
This question-and-answer interview with Ms. Costa focuses on why the Classification and Compensation project is necessary, its goals, what will be included, who is involved, and how and when the work will be done.
What are the primary reasons we need to change our current system?
The current classification and compensation system for administrative staff is about 25 years old and needs to be updated. As at other large employers, the ways in which people do their work at MIT and the skills required have changed dramatically since 1974. It makes sense for MIT to adjust systems that no longer adequately support other changes that have been made in how we operate. Also, the modernization is needed to help us compete successfully for talented, qualified employees in many more marketplaces than we did in the past.
The HRPD team conducted extensive research into the community's perceptions of the current system. Feedback received in focus groups and administrative department meetings indicated that many employees believe that the current classification structure did not fully value the variety of skills and contributions made by the administrative staff, and that we needed to expand the "tools" available to management to reward and provide incentives for people. The redesign of the current system will address the issues raised by the community.
How are jobs classified currently?
The current classification system assigns points based on entry qualifications, job content, required knowledge, responsibilities, impact and working conditions. The points then map to one of 42 salary ranges. After the job is scored by the personnel officer supporting the department, a committee reviews the assignment of the salary range, checking for a correlation between that job and other positions within the same salary range.
What are the goals of this project?
We have developed seven major goals that are aggressive yet attainable through this redesign process. They include the following:
- To produce a system that is easy to understand, access and use;
- To enable managers and supervisors to creatively compensate and reward their most effective employees;
- To provide a mechanism to recognize special market conditions and "hot" skills;
- To expand MIT's use of salary information gathered from the external marketplace;
- To eliminate reclassifications that are unrelated to bona fide changes in duties and responsibilities;
- To introduce the use of variable pay to recognize the varied and special needs of the Institute's departments, laboratories and centers; and
- To provide efficiencies in salary administration through the use of new technology.
How will you go about doing the work?
In addition to a core group of personnel staff, we have assembled review and advisory groups comprised of representatives from a wide cross-section of departments and schools to guide us in our efforts. Including a broad spectrum of advisors will ensure that the priorities, issues and values of all areas are heard and considered in our work. In addition, we have retained the services of an outside compensation consulting firm, the Wilson Group of Concord, MA. The Wilson Group are experts in compensation and reward systems and will help to ensure our new system is sound, durable, and completed in our projected time frame.
Will you look at the "marketplace" in terms of what other organizations pay for particular skills?
Yes, it is one of our main project goals to expand our use of external market data. MIT has many different marketplaces for administrative staff -- other universities, as well as for-profit and not-for-profit organizations at local, regional, and national levels.
Will every administrative staff position on campus be subject to reclassification and possible change in salary as a result?
All 924 jobs will be fit into the new pay structure.
It's unlikely that this work will result in salary changes for individuals. It will be important to identify and create a plan to address any significant equity issues that we may discover in comparing salaries internally to other jobs and to our competitive markets.
If salary increases are indicated for a particular job or family of jobs, it will likely occur over a period of time, and will depend on MIT's overall financial situation. If through our comparisons we see that a job or family of jobs is paid high compared to market, then we will make recommendations on how to address this situation.
One way to deal with salaries above market would be to freeze the base pay for the job(s) in question, and replace a base-pay review increase with a lump-sum payment. This would serve to reward the employee for work well done in the review period, establish a maximum salary amount that MIT is willing to pay for a particular kind of work or job, and allow the market to "catch up" without continually escalating salaries above market. Actual salary decreases for good performers are rare in any organization, and would seem counter-cultural for MIT.
The project may have several beneficial outcomes unrelated to salary, such as producing an accurate and up-to-date job description, a documentation of skills and competencies, and a sense of what's required to develop one's career at the Institute. It will also provide managers with better guidelines for coaching and rewarding staff members.
Will MIT continue to provide merit increases for administrative staff on an annual basis?
Yes. The project will not affect the review cycles of any payroll category, so I expect administrative staff reviews to continue, with salary changes effective July 1.
How will community members get information about the Classification and Compensation project, and will they be able to provide input?
We'll be communicating with the MIT community periodically as the project progresses. Over the next year, look for updates in MIT Tech Talk, on the Personnel Office's web page, and in open-session group meetings. I encourage individuals who want to provide input to speak with the project advisor for their area.
When do you expect to finish reclassifying the administrative staff, and how might this work affect other payroll categories?
The project we've undertaken is large and complex. We have mapped out a plan and intend to communicate the final products sometime in mid-1999, and as I mentioned earlier, with plenty of updates along the way.
Our work on the administrative staff classification and compensation structure will not have any immediate effects on other payroll categories. Feedback from the community has informed us about some very specific limitations of the current system for administrative staff, and we've received a set of recommendations from the HRPD team on how improvements can be made. This project work represents action on the specific issues that were brought to light.
Although we have no specific plans to redesign other payroll categories at this time, I'm confident that we will develop better practices and identify some processing efficiencies that may be applicable to other payroll categories, such as a simplified tool to update job descriptions, the identification of competencies needed for success at the Institute, and technological improvements to the annual review process.
How will this project and the HRPD team's work on competencies fit together?
Members of the HRPD team are on the design group for the Classification and Compensation project, specifically to help us incorporate their research into the redesign. We're working closely together to take advantage of all the knowledge that has been and is being developed in the competency area at MIT. The projects are mutually supportive.
A version of this article appeared in MIT Tech Talk on July 15, 1998.
