Salary Administration Guidelines
Following are recommended guidelines (policies and procedures) for handling on-going compensation issues:
Human Resources is responsible for establishing and maintaining the University's salary structure(s). A salary structure consists of a number of grades intended to reflect typical industry pay levels related to each job. Each pay grade is constructed with a minimum and maximum dollar amount. The minimum and maximum represent the lowest and highest salary that may be paid for a job assigned to that pay grade. The spread between the minimum and maximum is referred to as the range. The dollar range associated with each pay grade is designed to:
- Allow recognition of variations in performance and experience among employees doing work that demands comparable levels of skills and responsibilities; and
- Be competitive with salaries paid in the market for comparable skills and responsibilities.
Human Resources will annually review the salary structures to ensure a competitive posture within our various labor markets and will adjust the structure by the appropriate labor market rates using third party published survey data. Each job is assigned to a pay grade based on a comparison of the job in relation to similar jobs in the relevant industry and geographic market and an evaluation of duties and responsibilities of the job relative to other jobs.
Senior management determines how the pay ranges are positioned relative to the labor market. The overall compensation strategy will determine whether the pay ranges are above, below or equal to the labor market. This strategy is reviewed periodically and may change from time to time to meet changing business needs.
Any changes made to the salary structure(s) are independent of individual salary adjustments granted to employees.
Employees Below the Pay Range Minimum
If as a result of a pay range adjustment, an employee falls below the minimum of the pay range assigned to their job, the employee's salary will be adjusted to the new minimum of the pay range consistent with the University's Staff Performance Management policy and practices.
Employees Above the Pay Range Maximum
In cases where an employee's current salary or proposed adjusted salary will exceed the maximum of the pay range, the employee may receive a lump sum merit increase to be paid separately and not added to their base salary, until the employee's base salary is recaptured within the salary structure from future salary structure movement.
JOB DESCRIPTIONS/JOB DOCUMENTATION
To assure accurate and valid evaluation of all jobs, it is the responsibility of each department director/manager to regularly review and maintain current job descriptions for all separate and distinct jobs within their department. It is recommended that during the performance review each year that the job description be reviewed to ensure accurate essential responsibilities. Human Resources will provide such assistance as may be requested. Job descriptions provide the organization with important job documentation, such as:
- General description of work
- Essential job functions (examples of typical tasks)
- Minimum qualifications
- Education and experience
- Knowledge, skills and abilities
- Licenses, certifications or registrations
- Essential physical skills
- Environmental conditions
Job descriptions also play an important role in compensation administration, as well as other personnel management functions. They are used to:
- Ensure employees are assigned to appropriate jobs;
- Facilitate job-content evaluation;
- Facilitate salary survey exchanges;
- Explain and, when necessary, defend certain pay-program decisions to employees and outsiders;
- Assist in recruiting efforts;
- Establish performance standards;
- Facilitate organizational design; and
- Assist in establishing career paths (succession planning) and promotional ladders.
Human Resources is responsible for reviewing new jobs, confirming job titles, reviewing changes in existing job classifications that may impact the grade assignment, and approving pay grades and ranges.
Job documentation is the process of collecting and reporting pertinent information about the nature of a specific job that is used to make compensation decisions. The following job documentation must be submitted with each job evaluation/re-classification request:
- Completed analysis questionnaire/job description;
- Revised organizational chart for your department or business unit; and
- Job justification documentation regarding why the position is new or amended.
Job evaluation is a systematic process for determining the worth of a job within an organization relative to all other jobs in the organization. The basic purpose of evaluating jobs is to establish a system of relationships between jobs that recognizes their similarities, differences, and organizational contributions as well as its market value. It provides, as a result, an objective basis for attaching pay ranges to jobs.
Both new and existing jobs will be evaluated using the documentation outlined above. An existing job may be re-classified to a higher or lower pay grade based on expanded or reduced duties and responsibilities. In most instances, the employee should complete the job description questionnaire; the supervisor should review it for completeness and accuracy; the Department Director should approve it and then forwarded it to Human Resources.
There will be a one year moratorium on changes to existing jobs after the completion of the salary study, except in the event of a "reorganization" that will be subject to review and approval by the Unit VP, the VP of Human Resources, the CFO and the President.
After this moratorium, reclassifications will occur one time per year. All reclassifications requests should be made on or before January 1 of each year to be effective July 1.
Human Resources will use the following definitions to determine the type of re-classification request.
Newly created jobs
These positions are newly created jobs that do not currently exist in any other unit, are new to the unit or new to the budget, have at least 60% of time spent performing the jobs' essential responsibilities (as identified in the current job descriptions), are not presently found in the descriptions of other jobs within the University, unit, budget, and are not the result of changes in existing jobs.
Changes in existing jobs
Is defined as a job where at least 60% of time spent performing the jobs' essential responsibilities, as identified in the current job description have changed and may warrant a new job title and a new job description. This can include movement of a job to a higher, lower or same salary grade and are typically within the same job family. Funding for salary adjustments as a result of a reclassification will be provided by the department/division requesting the reclassification.
Is defined as a job in which at least 60% of the jobs' essential responsibilities, as identified in their job description, have not changed but a title change may be required to better fit what they are doing in their job. This may also require an update to the job description.
The classification of existing positions can be changed when it is determined that the position is incorrectly classified. The supervisor must have facts that support the requested change.
Human Resources will then:
- Determine whether the job is exempt or non-exempt;
- Conduct a salary survey data analysis as appropriate (external market pricing);
- Conduct an internal equity comparison, using the existing salary grade assignments as anchor points;
- Determine the appropriate pay grade and range for the job; and
- Submit to Senior Management for review and approval.
The University uses both external equity and internal equity to slot jobs into pay grades which is important in maintaining a competitive compensation strategy.
EXTERNAL EQUITY (MARKET PRICING)
Market pricing is the process of attaching monetary rates to jobs so that the system of internal equity established through job evaluation acquires the added dimension of external equity. It is through market pricing that the internal values of jobs to an organization are aligned with external rates of pay the labor market indicates to be appropriate for those jobs. Market pricing preserves competitiveness with other organizations, reflects economic supply and demand factors affecting specific jobs, and recognizes differences in the various mixes of occupations. Together, internal equity and external competitiveness (market pricing) factors bring balance to compensation decisions.
It is important to remember that the process of market pricing is an analysis of the duties and responsibilities of a job and not an analysis of an employee's level of performance or of a candidate's background or experience.
Internal equity refers to the worth of a job within an organization relative to all other jobs in the organization. Internal job evaluation is the methodology utilized to establish internal equity. Job evaluation expresses the organization's culture and values, allocates compensation funds according to expected contribution to the organization and assists with the valuing of non-benchmarked jobs. Internal equity factors such as knowledge, judgment, autonomy, complexity etc., are used to determine the appropriate internal hierarchy of jobs within the University.
STARTING RATES (NEW HIRES)
Determination of starting pay for a new hire is based on several factors:
- Salaries offered to new employees must be within the applicable pay range.
- The candidate's qualifications and work experience relative to the job requirements.
- Current pay levels of incumbents in the same or similar jobs within the organization.
NEW HIRE SALARY GUIDELINES
The normal hiring range for new employees is between the minimum and the first quartile of the pay range. New hires that meet the requirements for the job, but possess less than one year of relevant experience for the job will normally be hired at or near the minimum of the pay range.
Hiring within the normal hiring range will provide the greatest future incentive for salary increases based on achievement. It also assures salary expense control in the absence of demonstrated performance.
There may be occasions when a candidate's qualifications and relevant work experience warrant a starting salary that is greater than the first quartile of the pay range. Relevant experience is defined as those skills and attributes as identified in the job specification and uniformly recognized in the external market.
All requests for hiring rates above the normal hiring range must be submitted to Human Resources for review and approval with concurrence from Senior Management before an employment offer is made.
For individuals hired between January and July, each Vice President has the discretion to allow an adjustment to salary at such time they deem appropriate. Funding for salary adjustments will be provided by the department/division requesting the adjustment.
A promotion is the advancement of an employee from his or her current job to another open job with greater responsibilities in a higher pay grade. The promotion is based on documented, demonstrable increase in the scope of work. And may or may not have a 60% change in responsibilities depending on the "importance level" of the changes. The granting of a different title alone, without a change in pay grade, is not considered a promotion.
A reclassification promotion may occur when an incumbent in a job family increases responsibility, autonomy, judgment or decision making and is promoted via the reclassification process. Promotions may include an increase in responsibilities, a change within the job family, a change from non supervisory to supervisory or a change from non exempt to exempt due to increased level of decision making or responsibility for policy for the organization.
An employee who receives a promotion to a higher salary grade (either by taking on a new job or the employee's current job is reclassified to a higher salary grade) should receive a salary increase at the time the promotion becomes effective, to at least the minimum of their new pay range.
Promotional increases are limited to a 5-10% increase in base salary, or to the minimum of their new pay range, whichever is greater. Increases will be capped at the pay grade maximum and are subject to review and approval by management, department budget and Human Resources. Promotional salary increases will be granted at the time of the promotion.
Demotions are defined as reductions in job duties and responsibilities that result in a salary grade reduction. Demotional decreases are limited to a 5-10% decrease in base salary or to the maximum of their new pay range, whichever is greater and are subject to review and approval by management, department budget and Human Resources.
If or when an employee is either recruited to or assigned another job within the same salary grade with essentially the same job responsibility level, the employee will remain at their current salary level and salary grade to which they are currently assigned. Salary adjustment requests for lateral transfers, based on internal and/or external equity or a significant change in job status are limited to a 5% increase in base salary and are subject to review by management, department budget and Human Resources.