How to Compensate Employees
- New Hires
- Job Change
- Performance Merit
- Reward and Recognition
- Temporary Pay
- Exceptional Recruitment/Retention
- Pay Action 7
- Competitive Starting Pay
Market ranges are used to determine competitive starting pay for both internal and external candidates accepting new University Staff positions. There are no state-mandated limitations. A starting salary is typically within the first third of the market range.
The University’s Pay Action 7 tool (PA7) is used to support informed salary decisions, including determining initial offers. PA7 assists managers to consider salary decisions systematically, using seven key factors, resulting in more consistent and equitable decision-making across Grounds. The seven factors are:
- Qualifications (education, experience, unique skills)
- Job content and individual performance contribution)
- The position of the employee’s pay in the market pay range
- Employee’s pay relative to similar jobs at UVa
- Employee’s pay relative to average market salary for similar jobs outside UVa
- Pay history
Length of total State and University service
Differential Pay Adjustments
Differential pay is a base pay adjustment that usually reflects specified job conditions (shift, hazards, etc.) and/or makes salaries competitive with the market. Differentials may be applied to jobs, geographic locations, or individual positions in the University. All differential pay is approved by UHR.
- Promotion Pay
Promotion pay is available to University Staff in the form of a base pay increase. PA7 is used to support salary decisions. There are no state-mandated limitations on the amount of a promotion pay increase, subject to the availability of funding. If the employee is above the top of the market pay range, the increase is typically provided as a bonus rather than a base salary increase.
Promotion pay may be granted for:
- On-the-job application of new skills documented in the employee’s Career Development Action Plan
- Significant changes in job duties and responsibilities with no change in market range
- Significant changes in job duties and responsibilities with a change in market range
Base pay adjustment which varies based upon an employee’s overall performance contribution as measured by the annual performance evaluation. If an employee’s base pay is at or above the upper reference for the pay range, the merit amount may be provided as a one-time payment, rather than as a base pay adjustment, or a combination of both. Each year, the University’s Board of Visitors will review and approve a merit increase budget recommendation developed by the University Human Resources Department. Once approved, guidelines for annual merit increase adjustments will be distributed to the schools and departments on an annual basis. Merit increases are generally provided within the University Staff Human Resource Merit Increase Guidelines distributed each year. Exceptions to the guidelines are reviewed and approved with the Vice President’s, Dean’s Offices and the Director of Compensation Management.
Bonuses, non-monetary awards, and recognition leave provided to employees in recognition of an employee’s contributions to the overall objectives of the University. These rewards are typically provided to employees in recognition of teamwork, special project completion, identification/implementation of new or modified business practices, exemplary effort, and employee appreciation. Additionally, an employee who completes the acquisition of additional knowledge, skills, abilities and/or competencies which are outlined in their Learning Plan are eligible for a promotional one-time payment in recognition of the completion of the designated action(s). These promotions, however, are subject to the funding availability of a School or Department and executable under the authority of the School or Department’s Reward and Recognition Plan. The amount of such one-time payments are at the discretion of the School or Department, but are limited to the Policy maximum of $2,000 per employee per year (for Classified Staff) or $3,000 per employee per year (for University Staff) for all payments being made under the Reward and Recognition Plan.
Temporary pay (referred to as “Acting Pay” in HRMS) is a management-initiated temporary supplemental adjustment to an employee’s pay for assuming new duties and responsibilities on an interim basis (See Supplemental and Differential Pay for University Staff). If duties and responsibilities assumed by the employee is in the same pay band, management can pay 0-10% above the employee’s current pay. If an employee assumes the duties and responsibilities from a role in a higher pay band, management can pay 0-15% above current salary. Temporary pays are authorized by University Human Resources usually for a period of up to three months.
A Justification May Include:
- A description of the employee’s new duties and responsibilities, specifying the reason for the Temporary (“Acting”) Pay request. Added duties and responsibilities should be significant, and circled on the updated EWP.
- If duties are being performed temporarily due to a vacant position, please provide the name of the former employee, position number, and date of resignation.
- If duties are being performed temporarily due to the posting of a new position, please provide the position number of the new position.
- Is the employee continuing to perform her/his current duties in addition to the new duties? If not, describe the duties and percentage of the workload that have been temporarily removed from the position.
*NOTE: The Federal Fair Labor Standards Act (FLSA) specifies that for classified and university staff employees whose FLSA exemption status is “non-exempt”, temporary pay must be included in the calculation of the employee’s regular rate of pay for the purpose of determining the proper overtime rate. Example: John Doe is a non-exempt semi-monthly paid employee with an annual salary of $20,000. He is approved for a 10% temporary pay for three months. If he works overtime during the three months in which he is receiving temporary pay, the amount of the temporary pay must be included in the calculation of the regular rate of pay to determine the proper overtime rate. Calculation: Annual Salary of $20,000 plus annualized temporary pay of $2,000 = $22,000 / 2080 = $10.58 per hour. The Overtime Time and Half rate would be $10.58 x 1.5 = $15.87.
Exceptional Recruitment, Retention, Project-based and other Variable Pay were approved as part of implementation of HR restructuring, 1-1-09. The HR Partner collaborates with the requesting manager to understand and document the need for the Exceptional Recruitment, Retention, Project-based and other Variable Pay plan.
Until further notice, the upcoming “official” PA7-IBA Cycles are suspended. This is also applicable to out-of-cycle In-Band Adjustments.
In December 2008, EVP/COO Leonard Sandridge sent out a message to all staff outlining the impact of the budget shortfalls on the University’s daily business. He wrote, “The Governor’s proposal calls for no salary increases for the Commonwealth’s college and university faculty and staff in 2009-2010, making two fiscal years in which there are no salary increases.”
This does include in-cycle and out-of-cycle In-Band-Adjustments. In other words, we will NOT be administering the Pay Action 7-IBA process until we receive word from University administration that we may begin again. University Human Resources will consider “urgent or critical” adjustments on a case-by-case basis. As always, those In-Band-Adjustments must have the approval of the appropriate Vice President.
Adjustments for of urgent or critical Pay Action 7-IBAs include:
- Reallocating workload when vacant positions will not be filled, resulting in a net decrease in salary expense;
- Countering a documented external competitive offer for an essential employee;
- Retaining an essential employee when there is a clear and imminent threat to retention AND the employee’s pay level is significantly less than those in similar jobs, whether internal or external to the University;
- Converting an expiring Temporary Pay arrangement into an employee’s base salary. In these situations, the circumstances surrounding this recommendation needs to be evaluated in light of the current budget challenges, with a case being presented as to the necessity of such an adjustment/conversion.
Please seek the advice and counsel of your designated Human Resources Consulting Services Consultant, or Alison Miller for any questions you may have. As is the current practice, all In-Band Adjustments and/or Strategic Compensation Alignments must have the approval of the appropriate Vice President.