Procedure 30: Compensation

The following procedure should be read in conjunction with PPSM 30.

(Revised June 2018)

  1. POLICY

    Appointments
    1. New Hires
      The starting salary for a new employee should be based on the following factors:
      1. The candidate's directly related job experience
      2. Recruiting and retention difficulty, including the size of the qualified applicant pool and the duration of the recruitment process.
      3. Comparisons with others performing similar work in the unit, department, or across campus. (Normally the salary of a new employee should not be higher than the salaries of current staff in comparable positions with similar levels of experience and skills.
      4. Potential for future salary growth in the range
      5. In setting the starting salary, the hiring authority should consider the fact that an employee who is hired within three months of a merit review date will not be eligible for a merit increase in that cycle.
      6. Budget/Funding availability.
    2. Authority
      1. The department head (or designee) may approve a salary up to and including the midpoint of the range, based on the factors in 1.a.-f. above.
      2. The vice chancellor of the unit approves salaries above the midpoint for Professional and Support Staff positions, except as redelegated. The vice chancellor approves salaries above the midpoint for Management and Senior Professional positions. To offer a salary above those levels, the designated authority should consult with the Compensation Unit to review and assess the factors cited.
  2. MERIT INCREASES

    General
    1. Merit increases are granted to eligible employees in career positions based upon their job performance.
    2. Merit increases are dependent upon the release of funds by the Office of the President to the campus for such purpose.
    3. The Office of the President allocates merit funding to our campus and the merit control figure is determined by the Chancellor.
    4. Factors to consider when establishing the amount of the increase: the individual’s performance in relation to current pay and assigned responsibilities, position within salary range, performance relative to other members of the review unit, availability of funds.
    5. Larger merit increases are normally reserved for those who consistently exceeded performance standards during the review period. Increases are not granted for employees whose performance is judged unsatisfactory overall.

    Eligibility criteria

    An employee must be appointed to a career position in this program and have at least three months' continuous service before the merit award date to be considered for a merit increase.

    Guidelines for determining increases

    In granting an increase, the resultant pay and position in the range is the primary focus of attention rather than the percent of the increase. The resultant salary should be based on criteria identified in Policy 30C.

    Administration
    1. Upon conclusion of the merit process, all salaries are to be within the range for the title.
    2. The control figure is the same for all funds. There is to be no distinction between central funds and non-central funds in determining individual merit increases.
    3. At the control unit level, or as delegated, merit pools may be combined in accordance with any level requirements to provide larger pools and to allow for recognition of different levels of performance among smaller units.
    4. Control units and/or other organizational levels above the department may establish additional criteria and review methods appropriate to their organization so long as they do not conflict with these procedures.
    5. Merit increase recommendations require at least two levels of review: supervisor and supervisor's immediate supervisor.
    6. Employees are to be informed in writing of their final merit increases as soon as possible following the control unit head's and Director of Central Human Resources' approval of all merit increases.
  3. PROMOTIONAL INCREASES (See Policy 2: Definition of Terms.)

    Effective Date

    Any increase in salary is effective on the date of promotion or upward reclassification. (See Policy 36.)

    Promotion

    The starting salary for an employee who is promoted should be based on the same factors considered in hiring a new employee from outside the University (see Section A.1). Additional consideration may be given to University experience and performance.

    Upward Reclassification

    The starting salary for an employee who is in a position that is reclassified upward should be based on:
    1. The difference in responsibilities between the new and old positions.
    2. Comparison of proposed salary with the salaries of others (in the unit, department, or cross-campus)
    3. Position in the range.
    4. Potential for future salary growth in the range

    Authority
    1. The department head (or designee) approves salaries at the minimum of the range. Based on the above factors, the department head (or designee) may offer a salary above the minimum of the range, up to and including the midpoint of the range.
    2. The vice chancellor approves salaries above the midpoint, except as redelegated. To offer a salary above the midpoint, the delegated authority should consult with the Compensation Unit to review and assess the factors cited.

    Salary Setting upon Demotion or Downward Reclassification (See Policy 2: Definition of Terms.)
    1. Demotion
      1. Upon demotion an employee's salary will be established based on:
        1. The person's directly related job experience
        2. Comparison of proposed salary with salaries of others performing similar work
        3. Reasons for the demotion
      2. The salary will be placed no higher than the salary range maximum for the position.
    2. Downward Reclassification
      Upon downward reclassification at the University’s request, an employee's salary may be retained for up to a year. After one year, the employee's salary will be placed within the appropriate quartile of the salary range of the new title.

      Upon downward reclassification at the employee’s request, the employee’s salary will be placed immediately within the appropriate quartile of the salary range of the new title.
    3. Salary setting should consider:
      1. The difference in level of responsibilities between the new and old assignments.
      2. Comparison of proposed salary with salaries of others (in the unit, department, or cross-campus)
  4. EQUITY INCREASES
    1. An equity increase may be granted under unusual circumstances and is typically based on a serious salary inequity which cannot be corrected through the merit review cycle.
    2. A salary inequity exists when an employee's salary is significantly below that of those in the same title code with similar performance, experience, skills, knowledge, and assignments.
      Examples of situations which may indicate a salary inequity include:
      1. The salary of a long-term employee is low relative to a new hire whose salary is highly market-driven.
      2. There is significant salary compression between a supervisor and their employees.
      3. An employee changes from a limited-term to a career position in the same class.
      4. Market factors influencing recruitment and retention.
    3. If the Chancellor determines that staff salaries are not competitive with the labor market such that staff recruitment and retention may be affected, the Chancellor also may grant an across the board market increase by organizational unit, job field, job level and/or title code to address those market lag concerns. 
    4. An equity increase may be considered for an employee who has assumed a substantial increase in scope of ongoing responsibilities that they are currently performing, but not enough for a reclassification or promotion to a higher level. For example, an employee may be asked to run additional programs at the same complexity level as current programs run by the employee.
    5. Upon a lateral move, normally there will be no change in salary. In exceptional cases, an employee may be considered for an equity increase.
    6. The department head will submit the request through appropriate channels to the control unit head, except as redelegated. The vice chancellor will review and may consult with Central HR before making a final decision.
  5. LIMITED-TERM AND CASUAL /RESTRICTED INCREASES

    An employee in a limited-term position who has completed 900 hours at the current rate, has been on pay status during each of 12 months since the date of hire or last within-range increase, and is recommended for an increase by the supervisor (with consideration given to performance), may be given a salary increase.

    An employee is eligible for an increase of up to 2%, not to exceed the salary range maximum.

    Students in the student Assistant series (title codes: 4919, 4920, and 4921) are eligible for increases based on the department's increase program for casual-restricted employees.
  6. ADMINISTRATIVE STIPENDS

    1. An administrative stipend may be paid when a career employee is temporarily assigned the duties of a position in a higher salary grade (defined by salary range midpoint), or when other significant new projects or duties, that are not part of the employee’s regular position, are assigned for a minimum of 30 working days (six weeks) up to a maximum of 12 months in duration. 

      Stipends should be processed as a percentage of the employee’s monthly rate of pay.

      It is management’s responsibility to ensure that the temporary assignment does not exceed 12 months. An extension of a stipend beyond 12 months requires the approval of the Compensation department.

      For contract appointment and limited appointment employees, change the contractual rate of pay and/or increase the employee’s FTE percentage.

      Stipends for employee’s covered by collective bargaining agreements must be administered in accordance with the appropriate collective bargaining agreement.

      The amount of the administrative stipend shall not exceed the amount of salary increase that could be received by an employee if they were to receive a permanent promotion to the higher level title, which is typically up to 15%. When recommending an administrative stipend, managers should consider potential internal equity issues.

      Administrative Stipends up to 5% are recommended for:

      • Employees temporarily performing higher-level duties up to 10% time;
      • work is lateral but considerably different and outside the scope of the current position and requires up to 10% additional time;
      • work is lateral but supervision of 3 or more FTE is added;

      Administrative Stipends up to 10% are recommended for employees temporarily performing higher-level duties up to 20% time.

      Administrative Stipends up to 15% are recommended for employees temporarily performing higher-level duties 20% or more time.

      Stipends that exceed 15% and/or one year in duration have been previously audited by the UC Regents. Compensation strongly recommends that stipends be capped at 15%.

      The sum of the individual’s salary plus the stipend cannot exceed the salary range maximum of the higher-level position.

      Assignment of temporary duties at a lower level (defined by salary range midpoint) does not warrant a stipend.

      Administrative Stipends should not be provided for:

      • Assignment of duties at a lower level;
      • Additional duties assigned to cover short periods of vacation or other leave;
      • Periodic increases in volume when the nature/complexity of duties is at the same level;
      • Providing a “training opportunity” to develop an employee’s skills and competencies to perform higher-level duties
  7. PREREQUISITES
    1. The "gross" salary range or rate is the total compensation including the value of any perquisites. All salary ranges listed in the title and pay plans are "gross" salary ranges. The gross salary of each position including mandatory perquisites, and the net salary after deduction for
      mandatory perquisites, shall be fully and clearly communicated to all applicants and to newly hired employees.
    2. The net pay for part-time, monthly employees is computed by multiplying the percent of time worked times the gross salary rate and then deducting the value of the mandatory perquisite. For part-time, hourly employees, the net pay is computed by multiplying the number of hours worked times the gross hourly rate, and then deducting the value of the mandatory perquisite.
    3. The value of mandatory perquisites will continue to be deducted from the gross pay during periods of vacation and other absences with pay, including sick leave, with the following limitation: the value of mandatory perquisites will not be deducted from an employee’s gross pay after use of 15 consecutive working days of paid sick leave unless the employee continues to receive the perquisites.