The 2016-2017 Merit Pay Program

President Napolitano announced in late 2015 that all campuses and locations are required to return to a merit-based pay for performance model for non-represented staff employees beginning fiscal year 2016-17.  The pay for performance program aligns individual employee objectives, milestones and targets with the university’s goals.

In a pay for performance model, the goal is to improve employee and organizational performance by rewarding individual employee effort and contributions.  Employees who meet the expectations of their jobs or perform above expectations receive an adjustment in salary based on that performance.  Employees no longer receive automatic across-the-board salary adjustments.

The salary program applies to non-represented staff in career or partial-year career appointments; it excludes student employees and anyone covered by Academic Personnel policies.  Wages for union-represented employees are governed by labor contracts and are not affected by this program.

Eligibility Criteria

Only employees who meet the following requirement will be eligible for merit increases:

  • Non-represented career or partial year career appointments as of March 31, 2017;
  • Contract employees, where contract exceeds 12 months in duration

What Kind of Increase Can I Expect?

Once your manager or supervisor determines your merit level, a merit increase will be determined using the parameters outlined on this chart.  The amount of the merit award will vary according to your performance contributions and the available budget.  Our program is supported by a limited budget provided by the campus and individual schools and departments.  Every organization will be operating with the same 3 percent merit budget allocation.  The fixed budget means that the actual merit increases will also be limited.  The total of all employee increases within a department cannot exceed that organization’s allocated budget.

2017 Merit Pay Matrix

Overall Performance Appraisal Rating Corresponding Salary Increase
1 - Unacceptable Performance 0.00% Increase Permitted
2 - Partially Meets/Needs Improvement 0.00% to 2.00% Increase Permitted
3 - Meets Expectations 2.25% to 3.25% Increase Permitted
4 - Far Exceeds Expectations 3.50% to 6.00% Increase Permitted
Based on a 3.00% Salary Pool

 

How Was the Model Developed?

In April 2017 and in consultation with HR, the Chancellor’s Cabinet approved the parameters of this year’s merit pay model.  The Cabinet is comprised of 24 academic and administrative leaders from across the campus.  The model is structured yet flexible.  By employing a structured matrix model, overall performance ratings correspond to specified merit increases, thereby giving eligible staff both predictability and consistency across campus.  Nonetheless, the model builds in a level of flexibility that allows managers to distinguish and reward high performers within a spectrum of ranges.

Merit Pay - Implementation Timeline

Sep 1-5
  • HR generates Halogen Overall Performance Rating reports
  • HR provides Halogen Overall Performance Rating reports to designated Department Users
Sep 6-19
  • Web Merit is accessible to authorized Department User to input performance ratings and merit increases
Sep 20-30
  • Final review and verification by HR
Oct 1–24
  • Payroll System is updated with new salary rates
Oct 25-26
  • Pay Compute finalizes (e.g., payroll closed)
Merit Increases Paid*
  • For monthly-paid non-represented employees, Merit Increases (retroactive to July 1) will be paid on November 1.
  • For hourly/bi-weekly paid non-represented employees, Merit Increases (retroactive to June 18) will be paid on October 18.

* in order to receive merit payment, staff must be actively employed on the payout date.

 

New This Year

All divisions have agreed to adopt the following calibration exercise for the 2016 – 2017 Merit Pay Program:

  • Each Division Head shall hold back two-tenths of a percent (0.20%) of the overall 3.00% salary pool.  Merit, then, will be allocated divisionally from the 2.80% merit pool.  The remaining 0.20% reserve shall be used by the Division Head to increase merit awards of the Division’s top performers, noting that no individual merit increase may exceed +6.00%.
  • If a Division Head elects to delegate to a school or department its respective portion of the merit pool, that portion will be reduced by two-tenths of a percent (0.20%), meaning the school or department shall receive a merit pool of 2.80% from which to make merit recommendations.  The school or department may not exceed this 2.80% merit pool.
  • All Divisions agree to use the full merit ranges available in the Merit Matrix.  No Division may erect rules inconsistent with the Merit Matrix.  For example, no Division may decide that all employees receiving an overall “3 – Meets Expectations” will receive a minimum of 3.00%.  This is inconsistent with the Merit Matrix that allows these employees to receive +2.25% to +3.25%.  By agreement, such constructs are disallowed for consistency and calibration.)
  • Eligibility and the Impact of Vacancies
    • Eligibility rules remain the same as last year:  merit is available (1) for all non-represented career employees who were employed on or before March 31, 2017, and (2) for all contract employees whose contract exceeds 12 months in duration.
    • However, by agreement, if an otherwise eligible employee vacates his/her position between April 1, 2017, and the allocation of merit pay in September 2017, that employee’s 3% merit component shall be forfeited by the Division and held in a central fund for purposes of funding a central equity program.  Human Resources will coordinate with Budget partners consistent with this agreement.

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