Compensation and Annual Employee Increases
Frequently Asked Questions (FAQ’s)
Below are a few examples of how annual compensation increases are calculated for different types of employees, based on the FY2025 plan components outlined above.
Every employee is paid an annual salary or an hourly rate. An employee’s base pay is the rate used to determine the FY2025 annual increase, based on the plan components described above. The rate used to calculate an employee’s increase will be the current base rate as of the relevant implementation date for their employee category. Administrative stipends, interim salary rates, and/or other temporary adjustments in pay will not be factored in when calculating a base rate of pay.
Compa-Ratio (Classified Staff)
Per State DHR rule, all Classified Staff positions are assigned a pay grade. Pay grades are based on type of work performed, along with decision making, budgetary and supervisory responsibilities, etc. Each pay grade has a “policy” rate, which is the midpoint wage for each pay grade. The percentage that an employee’s hourly wage is away from the “policy” (midpoint) range is called the “compa-ratio.”
Example: Benny Bengal is a classified employee with a pay grade “J,” which ranges in rate from $20.08 to $40.17 according to the new pay structure for FY2025. Benny’s hourly rate is currently $20.57. The “policy” (midpoint) rate for pay grade J for FY2025 is $26.78. Therefore, Benny’s compa-ratio is 76.8%; current pay rate divided by “policy” (midpoint) hourly rate.
Market-Ratio (Non-Classified Staff and Faculty)
Market ratios are determined by matching positions to current salary survey data in ISU’s peer group by position duties, faculty rank, and discipline. From there, the employee’s annualized base salary is divided by the comparison group median salary to arrive at a salary market ratio.
Example 1 Faculty: Janey Joy is an Assistant Professor in Communication Sciences and Disorders (CSD). Janey’s current annual base salary is $65,623. The current median salary for an Assistant Professor in CSD among ISU’s peer survey group is $74,153. Therefore, Janey’s market ratio is 88.5%; current salary divided by comparison group median salary.
Example 2 Non-Classified: Sam Sailor is an Application Analyst in Information Technology Services (ITS). Sam’s current annual base salary is $60,000. The median salary in ISU’s peer group for Sam’s position in the area of “Information Technology Analysts, Web Professionals, and Other End User Specialists” is $73,684. Therefore, Sam’s market ratio is 81.4%; current salary divided by comparison group median salary.
For more information on the process and data utilized for the market comparisons, please see Salary Market Data Information.
Yes. Employees whose current rate up to the relevant date of implementation is below the FY2025 minimums will be increased to the new minimums according to their assigned pay grade (or non-classified annual salary for non-classified employees) in addition to the other salary components they are eligible for. Below are a few examples of different employee types that are receiving minimum rate increases in addition to other salary components:
Classified Staff Example: Spencer Spade is a full-time classified staff member within pay grade H. Spencer’s current rate is $15.88/hour. The new pay structure minimum for pay grade H is $16.50/hour. Their compa-ratio is 74.3% (current rate $15.88 divided by pay grade H midpoint/policy rate of $20.87). Spencer received a Meets Expectations performance rating on their 2023 evaluation. As a current employee, they will also receive the 1% across the board increase. Their new FY2025 pay rate will be $16.93/hour, which accounts for the following components:
1) Minimum increase of $0.62/hour ($16.50 new minimum rate for pay grade H less current rate $15.88)
2) 1% across the board increase of $0.16/hour (current rate $15.88 multiplied by 1%)
3) Performance/market based increase of $0.27/hour (current rate $15.88 multiplied by 1.7% according to compa-ratio and performance rating on the distribution matrix)
Non-Classified Staff Example: Belinda Bengal is a non-classified employee. Belinda’s current annual base salary is $46,050. She received an evaluation rating of Exceeds Performance Standards, and her market ratio 91.0%. Her new FY2025 annual salary will be $48,707 based on the following components:
1) Minimum increase of $1,275 ($47,325 non-classified minimum annual salary less current salary $46,050)
2) 1% across the board increase of $461 (current salary $46,050 multiplied by multiplied by 1%)
3) Performance/market based increase of $921 (current salary $46,050 multiplied by 2% according to market ratio and performance rating on the distribution matrix)
Faculty Example: Beth Bengal is an Associate Professor, and through the academic promotion process, was successfully promoted to Professor for the AY24-25 year. Beth’s current base salary is $69,965. She received an evaluation rating of Exceeds Expectations (Above Expectations) and her salary market ratio is 100% of the comparison group median. The academic promotion amount for rank to professor is $8,500. Her new FY2025 annual salary will be $80,494:
1) Minimum increase - not applicable
2) 1% across the board increase of $700 (current salary $69,965 multiplied by 1%)
3) Performance/market based increase of $1,329 (current salary $69,965 multiplied by 1.9% according to market ratio and performance rating on the distribution matrix)
4) Academic promotion to Professor $8,500 (current salary $69,965 plus $8,500)