Paul Holmes 19 Apr 2001 // 11:00PM GMT
In an effort to reward performance and encourage a climate of continued excellence, Rutgers University, a premier research and educational institution in New Brunswick, N.J., switched from mandatory yearly raises to a pay-for-performance compensation program for administrative, professional and supervisory (A/P/S) staff. This resulted in employee confusion and dissatisfaction, and led directly to a union organizing campaign of the A/P/S employees. Ketchum was brought in to manage this delicate situation and create a focused communications program to educate employees on the benefits of pay for performance. Because the union organization was underway, program communications were restricted by NLRA regulations, posing additional challenges.
Baseline Research: Ketchum Research conducted interviews with 200 A/P/S employees and other key audiences segments in November 1999 to establish an initial level of employee understanding and support for the pay-for-performance compensation program.
Key Findings: 51percent of employees understood the program “completely”, while 46 percent said they “somewhat” understood it. We found that 59 percent of employees agreed that pay for performance is an effective way to reward employees, with 28 percent saying it is not effective. Ketchum used these results to plan a strategy of increasing employees’ awareness.
Peer University Research: In October 1999, Ketchum conducted in-depth interviews with Human Resource directors from five universities of similar size. We asked how they instituted pay-for-performance compensation, how the systems are administered and how the change was communicated.
Key Findings: Pay for performance is a well-established management practice – more than 20 years old at some universities. A culture of decentralized departments, varied management styles and a history of self-governance made it challenging to switch to a pay-for-performance system. Ketchum incorporated three factors -- cited by interviewees as key to success -- into the Rutgers program: a managerial training program, early employee buy-in and uniform criteria for evaluation.
Research into Vehicle Delivery: Ketchum reviewed previous attempts at communicating this program to employees by interviewing administrators, auditing the methods used and level of messages delivered.
Key Findings: Previous memos to employees were unsuccessful at conveying the benefits of the program. Research indicated that a more branded approach, with upbeat messages, would have to be delivered in a timely manner, just prior to the union vote.
- 300 follow-up interviews were conducted with A/P/S employees in December 2000.
- Participant evaluations of the management training sessions.
- Results of the union vote in spring 2000 (based in large part on attitude toward pay for performance).
- Enable managers to deliver the University’s key messages.
- Increase employee awareness of pay-for-performance acceptance at other universities.
- Improve employee support of the pay-for-performance system at Rutgers.
- Persuade the employee bargaining unit to vote against union representation.
1,300 A/P/S employees; students and other campus employee groups; management, academics, and administration officers, A/P/S supervisors; board of trustees and media.
- Employees, students and the community will benefit from the switch to a pay-for-performance compensation system.
- Under this merit-based compensation system, employees will be rewarded for excellent performance and encouraged in their professional development.
- Rutgers is committed to developing a strategic mission and vision that will bolster its reputation as a premier education and research institution.
- The new pay-for-performance program embodies the Rutgers University mission: to provide students with the highest quality education at an affordable cost.
- Package and brand pay for performance as essential to the University’s mission.
- Deliver customized key messages for each audience based upon research results.
- Encourage employees to contribute suggestions and recommendations.
- Train supervisors as employee’s first point of contact and teach them to deliver key messages.
- Acknowledge that some mistakes have been made during the first phase of system implementation. This positions the University as open and concerned about its employees.
Budget and Timeline:
Program and evaluation ran from October 1999 to December 2000.
Budget for public relations services: $146,000. Budget for out-of-pocket expenses: $16,181.
To generate awareness, excitement and support of the new compensation program, Ketchum felt it must be branded and supported by measured, consistent communications. We also encouraged tactics that would give employees a voice in the process.
Pay-for-performance communication packets and custom printed post-it notes were branded with program-specific design and tag line – Rewarding Achievement.
Ketchum developed performance standards for supervisors to use in employee evaluations.
Ketchum drafted administrative memos during fall 1999 to explain pay for performance to employees, including: what is pay for performance, where is it established, how performance standards work, employee scenarios; and commonly asked questions.
In spring 2000, just prior to the union vote, key messages were reinforced to employees through three-color, custom-printed newsletters, distributed in specially designed, branded folders.
Ketchum conducted two training sessions for 50 supervisors to teach them how to conduct effective employee performance appraisals using the new standards. These sessions included presentations of the research, role-playing scenarios, and brainstorm sessions to test the information presented.
Objective 1: Enable managers to deliver … A majority of employees, 86 percent, believed their written appraisals were fair. 76 percent said their supervisors worked cooperatively with them in the appraisal. Participants rated the management training program a 4.01 out of 5. A/P/S staff rated it at 3.95.
Objective 2: Increase employee awareness … 45 percent of employees were aware that pay for performance is an accepted practice at major universities, up from 13 percent a year ago.
Objective 3: Improve employee support … In the follow-up survey in December 2000, employee acceptance and understanding of the pay-for-performance system had risen by 10 points.
69 percent of employees said that pay for performance was an effective way to reward employees and benefit the University. This was up from 57 percent a year ago.
Objective 4. Persuade the employee bargaining unit …The s0pring 2000 union vote was rejected by a majority of employees, in large part because they had accepted merit-based compensation.