The Organizational Excellence initiative is off to a running start in 2011, including the announcement today (Jan. 14) that the UC Office of the President has approved a new voluntary separation program for the Davis campus — open to almost the entire campus, subject to eligibility and management approval.

The voluntary separation program, or VSP, with severance pay, goes hand in hand with the campus’s shared service center project, which will consolidate several administrative functions. The university expects to shed more than 100 positions, and, to the extent that employees decide to take voluntary separations, the campus may be able to impose fewer layoffs.

The shared service center project affects finance, payroll, human resources and information technology jobs in five units: Administrative and Resource Management, the Offices of the Chancellor and Provost, Information and Educational Technology, Student Affairs, and University Relations. (The Office of Research has been dropped from the project; see more information below.)

But the VSP extends well beyond these jobs and these units; in fact, only the School of Medicine is excluded. “We are giving most of the Davis campus the option of voluntary separations, as a way to deal with continuing budget challenges,” said Karen Hull, associate vice chancellor for Human Resources.

Indeed, Gov. Brown on Monday proposed a 2011-12 budget with a $500 million cut for the UC system; that translates to an estimated $75 million cut for UC Davis. See separate story.

Now, four days later, Human Resources is announcing that the application period for the voluntary separation program will run from Feb. 15, 2011, to Aug. 15, 2012, and separations must occur between April 1, 2011, and Oct. 1, 2012. See more details below.

The Davis campus last ran a voluntary separation program in 2009 — at which time 52 employees participated, resulting in gross salary savings of $2.75 million plus additional savings in benefit and operational expenses.

The employees who took voluntary separations in 2009 helped the campus avoid a significant number of involuntary layoffs, Hull said. “We are hoping to have the same or greater interest in the new program,” she added.

The VSP announcement comes amid several other important developments on the Organizational Excellence front, all having to deal with the shared service center initiative:

• Manager named — Mike Iadanza joined the UC Davis staff on Jan. 10, as program manager for the shared service center project. “Mike has extensive experience implementing shared service centers in large, complex environments,” Hull said in a Jan. 6 e-mail announcing Iadanza’s hiring.

• Project launch — The four project teams — one each for finance, human resources, information technology and payroll — are scheduled to gather Jan. 31-Feb. 1 to begin the detailed planning for the center. The teams will evaluate the work processes to be performed by the shared service center and identify those processes that will benefit from new strategies and technology. See who's on the four teams.

• Staff training — The Organizational Excellence team and Staff Development and Professional Services are completing work on a certificate series designed for employees who are interested in working in a shared service center. Organizers said they plan to launch the series the week of Feb. 28.

Each of these will be the subject of Dateline UC Davis and Friday Update coverage in the coming weeks.

Shared service center update

Since October’s town hall meeting, the Office of Research asked for and received an exemption from the shared service center project, owing to other transitions that the office is going through at this time.

Hull said the office’s academic-oriented mission also figured in the exemption. “Since academic units were not required to participate in the initial implementation, it was decided that the Office of Research should also be excluded from this phase of the implementation,” she said.

She said she hopes a successful transition for administrative units to the shared service center will draw the interest of academic units at a later time.

With the Office of Research given an exemption, officials revised their estimates for how many jobs may be lost with the establishment of the shared service center, and how much money the university expects to save.

As of today, the university expects to shed 120 to 170 full-time equivalent positions in finance, payroll, human resources and information technology in the five participating units: Administrative and Resource Management, the Offices of the Chancellor and Provost, Information and Educational Technology, Student Affairs, and University Relations.

The shared service center, with approximately 140 FTEs, is scheduled to be fully functional by the summer of 2013, and officials estimate that its efficiencies will save a combined $25 million from 2010-11 through 2015-16. Then, starting in 2016-17, with the transition costs out of the way, the university is estimating annual savings of $10 million.

The university has budgeted $22 million for the transition — to cover the costs of technology and software licensing, severance pay and implementation team staffing.

The transition will begin with the consolidation of work, whereby, for each common task — payroll or desktop computer support, for example — the university will bring together some but not all of the employees with expertise or capabilities in that functional area.

In beginning each phase, the implementation team must decide how many people to assign to the shared service center. For example, the team will study how big of a payroll staff is needed to process X number of transactions? To determine this, Hull said, the implementation team will evaluate transaction volumes, calculate the number of employees served, evaluate the complexity of different types of transactions, and identify best practices in existing units and external organizations.

The implementation strategy, after work consolidation, will continue with:

• Standardizing business functions.

• Redesigning business processes to reduce redundancies, streamline work and remove work from the system.

• Automating business processes.

Voluntary separation program

Eligibility extends to all nonprobationary, career employees on the Davis campus, including employees on approved leaves, except for the following:

• Rehired retirees.
• Senior Management Group (SMG).
• Managers and Senior Professional (MSP), VIII-IX.
• Anyone with an academic title.
• Any employee who, prior to Jan. 15, 2011, is entitled to separation or severance pay under another arrangement, agreement or settlement that is not part of the voluntary separation program.
• Any employee with an appointment of less than 50 percent.

Also, eligibility for represented employees will be determined by collective bargaining as appropriate. See the contracts here.

During the last VSP in 2009, the 52 participants “helped the campus avoid a significant number of involuntary layoffs,” Hull said. “We are hoping to have the same or greater interest in the new program.”

The application period for the 2009 VSP ran for just over two months, July to September, and participants needed to separate from Oct. 20, 2009, to Jan. 8, 2010.

This time, the VSP application period runs for a year and a half. “We are giving employees more time to consider their options and more flexibility on when their separations will take effect, up until Oct. 1, 2012,” Hull said.

For example, an employee could have his or her application accepted in May 2011 but not separate until June 2012.

The program also gives employees the opportunity to change their minds. For example, if you provide more than 12 months’ notice of your intention to separate, you will be allowed to withdraw your application up to six months after management accepts it. With six to 12 months’ notice of separation, you will be able to withdraw your application up to three months after it is accepted.

The VSP process

All decisions will be based first and foremost on business and operational need, said Elizabeth Meyer, director of Employee and Labor Relations. “Therefore, departments will be encouraged to carefully consider whether it is operationally appropriate to recommend approval and whether they can still operate within the stringent parameters of the program,” she said.

In accepting a voluntary separation, a department must be able to demonstrate long-term salary savings that justify the payment of a severance. In demonstrating such savings, departments may consider such options as:

• Possibly discontinuing the employee’s work functions.
• Redistributing this work among other staff.
• Department reorganization that results in long-term net salary savings at a level that supports the severance payment.

Also, in approving a voluntary separation, a department must agree not to refill the position for at least 18 months.

Upon receipt of an application, management will make its final decision within 45 days. Each application must be approved at three levels: department head, dean or vice chancellor (or equivalent position) and the associate vice chancellor for Human Resources.

The program policy states that applications will not be accepted “if the unique skills, knowledge and abilities of an incumbent are highly specialized, the loss of the individual and-or position would be detrimental to operations, and-or the employee cannot be replaced internally.”

Severance payments

The amount of severance is based on years of service as follows:

• Professional and Support Staff (PSS) — One week’s pay for each full year of UC service, up to a maximum of 16 weeks’ pay.

• Management and Senior Professionals (MSP), I-VII — One month’s pay for each full year of UC service, up to a maximum of six months’ pay.

• Represented staff — Severance will be paid in accordance with the layoff provisions of the university’s labor agreements.

Under no circumstances will an individual severance payment exceed $75,000.

Who pays the severance?

Associate Vice Chancellor Hull said the central campus’s Organizational Excellence initiative will pay the severance for any position that is one of the five participating administrative units and affected by the shared service center project.

Departments and units will be responsible for severance payments for employees whose jobs fall outside the scope of the shared service center.

More information

2011-12 voluntary separation program

Organizational Excellence