Annual Increase Program

July 2010

People Pillar: Compensation

Community Survey: Compensation consistency across the organization

– Annual Merit Increases

– Targeted Market Assessments for Compensation and Benefits

– Nationally recognized Human Resources Consulting Firm Engaged to Provide Recommendations

The Message

“We care deeply about our people. We are taking proactive and comprehensive measures to make sure everyone working at Vanderbilt is fully compensated.”

Jeff Balser, Leadership Assembly Spring 2010

CompensationFY 2011

• $40 million annual increase budget for VUMC

• Conservative – economic indicators remain unclear and health system cash balance modest

• Same pool and parameters for all faculty and staff – all VU

• At or above most universities peers

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Raise pools for 2010-2011 at peer universities

Emory- 2%Duke- 0% for all faculty above $80,000; $1,000 payment below $80,000Hopkins- 2% raise with a delay in the onset of the raise for 6 moMiami- 2%Michigan- 3% (layoffs)Washington Univ- 2.75%Stanford- 2%Cal Tech- 2%Harvard- 2%Chicago- 3% (over 500 layoffs in FY2010)Wake Forest- 2%Penn- 2.5%Cornell- 2%

Raise pools for 2010-2011 at peer universities

Emory- 2%Duke- 0% for all faculty above $80,000; $1,000 payment below $80,000Hopkins- 2% raise with a delay in the onset of the raise for 6 moMiami- 2%Michigan- 3% (layoffs)Washington Univ- 2.75%Stanford- 2%Cal Tech- 2%Harvard- 2%Chicago- 3% (over 500 layoffs in FY2010)Wake Forest- 2%Penn- 2.5%Cornell- 2%

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CompensationFY 2011

Average 2010 Projected Merit Increases Summary

Source: Compensation Advantage

Not Available

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Annual Increase Program

Ratings (Range) % Inc.5 (4.5 - 5.0) = 3.25%4 (3.8 - 4.4) = 2.50%3 (3.0 - 3.7) = 2.00%

• Annual pay increases this year will be based on individual performance– Applied to individual current rates of pay– May result in partial or full lump sum payment

• Performance based lump sum payments eligible for retirement contributions and match

Ratings (Range) % Inc.5 (4.5 - 5.0) = 2.75%4 (3.8 - 4.4) = 2.25%3 (3.0 - 3.7) = 2.00%

Market pay adjustments based on individual performance Current performance evaluation for 2010 in VPES with at least a “3” ratingOpportunity to review employment status and record for these staff PRN Licensed

Market Based PerformanceLicensed PRN

Licensed PRN Jobs

Job Code Job Title6621 Coord, Patient Acc & Tri, PRN8489 EMT Transport - PRN6714 Licensed Pract Nurse - PRN T16716 Licensed Pract Nurse - PRN T26724 Licensed Pract Nurse-CC PRN T16726 Licensed Pract Nurse-CC PRN T26677 Nurse Practitioner-PRN3904 PRN Licensed5411 Paramedic - PRN6663 Registered Nurse, PRN Tier 16638 Registered Nurse, PRN Tier26662 Registered Nurse-CC, PRN Tier16639 Registered Nurse-CC, PRN Tier2

Effective & Paycheck Dates

Payroll Effective Date Paycheck Date

Biweekly 7/04/2010 7/23/2010

Monthly 7/1/2010 7/31/2010

Total Compensation

BENEFITS

Insurance & Retirement

Paid TimeOff

Tuition

SpendingAccounts

Pay for Performance

SuccessSharing

PerformanceEvaluation

PERFORMANCEDEVELOPMENT

Recognition & Rewards

x 2 = $184,338

Creating Organizational Alignment

Alignment of goals creates momentum to achieve results…

Leader GoalsIndividual Goals