CINCINNATI - During an annual report on compensation benchmarks to the trustees on April 7, Ohio State administrators estimated that a 4 percent increase in salary is needed for Ohio State to maintain its current salary rankings among peer institutions.

Edward J. Ray, executive vice president and provost; Nancy M. Rudd, vice provost for academic policy and human resources; and Larry M. Lewellen, associate vice president for human resources, presented the report. Recommendations for Ohio State's raise package for fiscal year 2001 will be presented to the board for approval at its May meeting.

"An increase of at least 4 percent will be needed this year to maintain our position," Ray said. "An increase of 3 percent would result in further slippage in the rankings and an increase of 5 percent or higher would make progress."

When compared to the record of nine other major public comprehensive teaching and research universities that Ohio State uses for benchmarking, compensation for Ohio State faculty in fiscal year 2000 is 2.5 percent below the benchmark average of $72,130. Within the Committee on Institutional Cooperation (CIC), which consists of the 11 universities in the Big Ten and the University of Chicago, Ohio State is 5.2 percent below the benchmark average of $74,205, and 1.2 percent below the average of CIC public universities.

Last year, the board approved a 4 percent salary increase for the University. "The salary increase last year was not sufficient to prevent further slippage of our ranking within the benchmark institutions. Our history of rankings shows a steady erosion over the past 10 years," Rudd said.

In the local/regional market, staff salaries for 1999-2000 are 3.6 percent above market for managers and administrators, 7.8 percent below market for professional staff and 7.4 percent below market for paraprofessional and technical positions. Clerical and secretarial staff are 2.8 percent above regional employers and 8.3 percent below state government levels.

Rudd outlined the expected salary increases for several constituencies during the next year. Nationally, higher education is expected to increase salaries by 3.3 percent to 3.8 percent, while all employers are likely to increase salaries by 3.9 percent to 4.4 percent. Within Ohio, employer groups are expected to offer 3.8 percent to 4.2 percent.

Ohio State has taken several steps to ensure that the funds available are put to the best possible use. "Initiatives are in place to ensure we lead higher education in innovative compensation practices with the resources we have available," Lewellen said.

He noted Ohio State's implementation of a reward and recognition policy which provides for responsible use of incentives and cash and non-cash rewards; the addition of budget flexibility for the annual raise process which allows colleges and vice presidential areas to invest additional funds to improve equity and retention and to reward performance; and the development of a compensation planning training program for deans and chairs. All raises at Ohio State continue to be targeted for performance, market equity and internal equity rather than any entitlements.

Ohio State faces several challenges in determining a competitive compensation package, Lewellen said. "Labor markets continue to be very tight, including hot markets such as information systems and technology staff," he said.

"Salary compression is also an issue due to the hiring salaries needed for the tight labor market," Lewellen said. To attract new hires, the University may have to offer new employees more compensation than current employees, placing strain on budgets and leading to issues of salary inequity within a unit or department.

"Last year, more than 75 percent of the colleges and vice presidential units invested their own funds to boost the raise package for their college, demonstrating the seriousness of the situation," he said.

Lewellen also noted that the effects of projected increases in benefit premiums, parking and other fees also must be considered.

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(LO)