There are four ways an employee’s base pay may increase over time: (1) merit increases; (2) competitive promotion; (3) non-competitive career advancement promotions; and (4) off-cycle salary increases. Base pay increases are subject to review by HR to determine alignment with policy as well as other pay practices such as review for compression, internal and external equity and proper business justification for the request.
The university compensation plan supports VCU’s commitment to pay for performance through merit-based pay increases. The merit process is the university’s prescribed annual salary administration process and is referred to as on-cycle. The merit process is typically the basis for individual base salary increases and are considered pay for performance. Merit increases are based on the performance rating determined during the annual performance review process. Employees with salaries at the top of the salary range are permitted to receive a base pay increase, but may, receive a lump sum payment in lieu of a salary increase as determined and approved by the department.
The overall merit pool percentage is determined by the university, typically on an annual basis in conjunction with the budget setting process. Under the 2005 Commonwealth of Virginia Restructured Higher Education Financial and Administrative Operations Act, VCU has the authority to grant salary increases different than those set by the General Assembly for classified employees. Annual merit increases are not guaranteed. When merit increases are awarded, the average amount established in the university’s budget sets the merit pool. All schools and units are held to the same average merit pool. Individual salary increases may vary based on the performance rating received in the performance review process. Typically, employees with ratings of Developing or above are eligible for increases proportionate to the rating. Once a merit increase is approved by University authorities, VCU HR will publish Merit Guidelines outlining eligibility, timing of increases, typical increases associated with each performance rating, approval and submission process, etc.
A competitive promotion occurs when an employee applies through the recruitment process and is selected for a position with a corresponding higher salary range midpoint than the employee’s current job. In Banner, a competitive promotion is coded as ‘Promotion - Competitive.’
A salary increase associated with achieving specified milestones within the employee’s career development plan is considered a non-competitive promotion. Non-competitive promotions are also referred to as Promotion in Place. This progression, as part of career development, is earned by acquiring additional knowledge, skills, degrees, and/or certifications or through successful completion of documented milestones in the career development plan. The career development plan originates and is approved by the manager as part of the annual performance review process.
Managers are expected to consult with HR Professionals regarding content of development plans linked to career advancement increases. Salary increases associated with career development plans are dependent on the availability of funds. Additionally, noncompetitive career advancement promotions must occur within the same division.
Examples of career advancement:
Scenario: An Administrative Assistant I takes several budgeting and finance courses and has demonstrated the skills sets and ability to take on additional fiscal duties. The individual may receive a Promotion-in-Place from Proficient to Accomplished. The employee receives a salary increase and remains in the Administrative Assistant job, Level I.
Although non-competitive promotions typically include movement within the current job title it may include movement to a job title with a higher salary range midpoint, as appropriate and in consultation with HR. Increases for these promotions typically range from 3% to 5% and coincide with the university’s annual merit process (i.e. “on cycle” salary increase process). Promotion-in-place adjustments above 5% are subject to review and approval by VCU HR. Additionally, off-cycle increases in the 3% to 5% range are permitted with appropriate justification. In Banner, non-competitive promotions are coded as ‘Promotion - Career Development.’
It is the intent of the university that most base salary increases, specifically merit and career path advancement, are awarded “on-cycle,” meaning during the annual merit process. However, under exceptional circumstances and with approval from the appropriate vice president or dean in consultation with the HR Professional, off-cycle salary increases are allowed to address unanticipated circumstances or scheduled changes occurring outside of the merit increase timeframe. Off-cycle salary adjustments may be approved for the following:
Note: Career path advancement increases may be processed off-cycle, close to the timing of a documented career development milestone (for example, degree attainment in December), when appropriate.
Administering off-cycle salary increases
Like all salary decisions, the decision about the amount or percentage of the increase takes into consideration all relevant factors such as: market data, employee performance and qualifications, the criticality of the position, and internal alignment. All off-cycle salary increases granted for job changes are accompanied by an updated job description.
Although all factors must be considered, employee pay is ultimately limited to the available school/division budget.