In 2 qt. saucepan, melt 3 tbsp. butter over medium heat. Cook onion in butter about 2 minutes, stirring occasionally until tender. Stir in flour, salt and pepper. Cook, stirring constantly, until smooth and bubbly; remove from heat. Stir in milk. Heat to boiling, stirring constantly. Boil 1 minute. Mix potatoes and ham in casserole; gently press down so surface is even. Pour sauce over potato mixture. Cut 1 tbsp. butter into small pieces; sprinkle over potatoes. Cover and bake 30 minutes. Uncover and bake 1 hour 10 minutes longer or until potatoes are tender. Let stand 5-10 minutes before serving (sauce thickens as it stands).