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Policy: Pay Practices Program for University Staff Employees 


Date: 05/22/09 Policy ID: HRM-024 Status: Final

Policy Type: University
   
Contact Office: Consulting Services (UHR)
   
Oversight Executive: Vice President and Chief Human Resources Officer
   
Applies To: Academic Division and the College at Wise.
   
Table of Contents: 

Policy Statement
Roles and Responsibilities
Procedures

   
Reason for Policy: In accordance with the Restructured Higher Education Financial and Administrative Operations Act and the resulting implementation of a new Human Resources system, this policy establishes guidance for consistent, equitable and fiscally responsible means for supervisors to compensate and reward University staff.  The Pay Practices Program supports the University’s commitment to attracting, motivating, developing and retaining qualified employees.  
   
Policy Summary: The Pay Practices Program supports the University’s goal of attracting, motivating, developing, and retaining qualified employees through the use of market-relevant salary ranges and pay practices to reward performance and employee development.
   
Definition of Terms in Statement: 

Pay Practices Program: A process for ensuring that employees’ base pay, salary increases, bonuses, incentives and other rewards (not including employer-sponsored benefits, e.g., health and dental insurance, long- and short-term disability, paid leave, retirement, life insurance, etc.) are in alignment with the University’s mission, goals, and objectives.  The University staff Pay Practices Program consists of eight major components:  (1) market-based pay ranges; (2) competitive starting pay; (3) merit increases; (4) promotion pay; (5) reward and recognition; (6) supplemental/differential pay; (7) incentives - exceptional recruitment, retention and project-based; and (8) strategic compensation alignment.

Bonus: A lump sum payment that is not a part of the employee’s base pay.

Competitive Starting Pay: The base pay offered to candidates accepting a University staff position.  The competitive starting pay is determined by review of several factors including relevant market-based pay range, employee skills, competencies, and other factors as appropriate to the situation.

Differential Pay: 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 UVa Job Titles, geographic locations, or individual positions in the University.

Incentives - Exceptional Recruitment, Retention and Project-based: Incentives which may be applied on an exception basis in order to address significant recruitment and retention needs or for mission-critical projects. Incentive options include sign-on bonus, retention bonus, project-based incentives, compensa­tory leave, and annual leave.

Leave Plan Year: Begins with the first day of the pay period which includes January 1 (known as Pay Period 1) and ends on the last day of the pay period preceding Pay Period 1 of the following year.

Market-based pay ranges: A salary range for a UVa Job Title, based on market pay survey information from reliable primary and/or third party sources.  This data reflects salary levels for similarly situated positions in the talent pool from which the University recruits its employees.  Each range has a lower reference, a competitive range, and an upper reference.

Merit Increases: Base pay adjustments which vary 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.
 
Promotion Pay: A base pay adjustment reflecting an employee’s advancement in applied skills and/or responsibilities.  Salary adjustment decisions are made using a holistic approach where multiple relevant factors (including the market-based pay range, employee skills and competencies, and performance) are considered in support of sound pay decision-making.

Reward and Recognition: 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, employee appreciation and skill acquisition.

Strategic Compensation Alignment: A base pay adjustment provided to retain employees critical to the work of the University.   Salary adjustment decisions are made using a holistic approach where multiple relevant factors (including the market-based pay range, employee skills and competencies, competitive counter-offers, and performance) are considered in support of sound pay decision-making.

Supplemental Pay: Payments that apply to specific positions designed to address unique needs of the University (i.e., interim assignments.)  Supplements are not included as part of the employee’s base pay.

University Staff Employees: Those salaried, non-faculty employees hired on or after July 1, 2006, and those salaried, non faculty employees and Administrative and Professional Faculty electing to participate in the University Human Resources System established by the Board of Visitors under the authority granted by the Restructuring Act, and the Management Agreement.

Restructuring Act: The Restructured Higher Education Financial and Administrative Operations Act, Chapter 4.10 of Title 23 of the Code of Virginia.

Management Agreement: The agreement between the University and the Commonwealth required by Subsection D of §23-38.88 of the Restructuring Act.

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Policy Statement: 

The pay practices are intentionally designed to attract, motivate, develop and retain qualified employees as well as support the University Staff career development model and performance management process.  University Human Resources (UHR) in collaboration with the Schools/Departments will manage pay for all full- and part-time salaried University Staff using this process.  (The focus of pay practices is on all forms of cash compensation and not the employer-sponsored benefits.) There are eight components of the Pay Practices Program: 

  1. Market-based Pay Ranges – Schools/Departments use pay ranges established by UHR as one factor in the consideration of pay decisions.  Each pay range is segmented into thirds, illustrating the relationship between pay levels and employee qualifications, experience and individual performance contributions.  Typically, an employee’s base pay will be within the lower and upper references of the established market-based range.

  2. Competitive Starting Pay – Schools/Departments determine competitive starting pay for individuals taking positions in their units.  Salary offers are approved by the VP/Dean designated authority.

  3. Merit Increases – Schools/Departments provide merit increases based on employee performance and Merit Increase Guidelines annually approved by the Board of Visitors and issued by UHR.

  4. Promotion Pay – Schools/Departments reward employee growth in the job using promotions for skill application and significant growth in duties and responsibilities. Supervisors recommend pay adjustments which are approved by the VP/Dean designated authority.

  5. Reward and Recognition – Schools/Departments provide employees with monetary, additional leave (up to five paid days per Leave Plan Year) and non-monetary awards in order to provide recognition of employee performance and learning achievements.  Supervisors recommend awards which are approved by the VP/Dean authority.  The total of monetary and non-monetary awards shall not exceed three thousand dollars ($3,000) per employee per fiscal year.  Reward and recognition must be executed in accordance with other applicable University-wide policies.

  6. Supplemental and Differential Pay – Schools/Departments use these pay practices to compensate staff for taking on additional short-term assignments, acting assignments, and for shift, location and other differentials.  Supplemental and differential pay require prior approval from UHR.

  7. Incentives - Exceptional Recruitment, Retention and Project-based – Schools/Departments present a recommendation for the usage of recruitment, retention and project-based incentives to their VP/Dean designated authority.   Incentive plans require prior approval from UHR.

    1. A bonus award (including sign-on bonuses) of less than $10,000 must be approved by the dean or the appropriate vice president. Bonus payments of $10,000 or more require written notification to the Vice President & Chief Human Resources Officer, who will submit for final approval to the Executive Vice President & Chief Operating Officer. Such requests must be submitted in writing, justifying the proposed amount.

  8. Strategic Compensation Alignment – Schools/Departments use strategic compensation alignment based on the unique circumstances in their work unit.  Supervisors recommend pay adjustments which are approved by the VP/Dean designated authority.
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Roles and Responsibilities:
The Employee is responsible for:
  • Understanding how the compensation process works, including its alignment with the UVA career development model and performance management process.
The Supervisor is responsible for:
  • Understanding and effectively, fairly and consistently utilizing and actively supporting the University’s Pay Practices Program;
  • Recommending appropriate pay actions in a timely manner;
  • Integrating the pay practices, performance management and career development processes in order to maximize employee performance and growth; and
  • Ensuring compliance with all applicable University policies.
Vice Presidents, Deans and Department Heads, and those with delegated HR authority are responsible for:
  • Approving/disapproving compensation recommendations, as authorized;
  • Ensuring all supervisors are trained and effective in their role as a manager of employee compensation; and
  • Ensuring the integrity of and compliance with the policy on Pay Practices and all other applicable University policies.
University Human Resources is responsible for:
  • Providing on-going training to University staff employees, supervisors, and those with delegated HR authority on the Pay Practices Program;
  • Developing and maintaining market relevant pay ranges;
  • Developing and recommending to the Board of Visitors annual Merit Increase Budgets;
  • Providing annual guidance on Merit Pay practices;
  • Reviewing and approving/disapproving proposals for Incentives - Exceptional Recruitment, Retention and Project-based;
  • Reviewing and approving/disapproving supplemental and differential pay practices submitted by Department Heads;
  • Monitoring and administering the Pay Practice Program;
  • Maintaining records and providing reports as necessary;
  • Providing compensation consulting services; and
  • Ensuring compliance with all federal and state law and University policies.
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Procedures: 

Processing an Award for Reward and Recognition
Completing the University Staff Sign-on Bonus Agreement [link to be added]

   
Related Information: 

Career Development for University Staff Employees
Performance Management for University Staff Employees
Recruiting and Hiring of University Staff and Wage Employees

   
Policy Background: 
   
Major Category: Human Resource Management
   
Category Cross Reference: 
   
   
Process: 
   
Next Scheduled Review: 05/22/12
   
Approved By, Date: Executive Vice President and Chief Operating Officer, 05/22/09
   
Revision History: Updated 5/16/12, 10/8/09.
   
Supersedes (previous policy):