Compensation Administration
Introduction | VCU HR is charged with the design of the HR Plan and has shared responsibility for the proper administration of the Compensation program with department heads and managers. Managers have delegated authority for decision making within prescribed limits. HR is available to provide consultation and guidance as to the implementation of the program and maintains the authority for final decision-making should legal concerns arise. To ensure fair and consistent administration of job titling and compliance with relevant federal laws, VCU HR may change job family and job titles that are determined to be incorrectly assigned. |
Responsibility and Required Approvals | Managers have discretion to establish salaries below the 75th percentile of the salary range, i.e., the first three quartiles. In the majority of circumstances, employee salaries up to this level will be appropriate based on the factors listed above. In situations where an individual has a unique skillset or expertise, managers may request pay above the 75th percentile, i.e., within the fourth quartile. VCU HR approval is required to pay new or existing employees above the 75th percentile of the market range. |
Establishing and maintaining the job structure | VCU HR implemented a three-year review cycle for the job structure, with a full analysis of market pricing data and review of the job structure occurring at least once every three years. Based on the findings of the review, salary ranges may be updated, new jobs added or unutilized jobs removed. Existing ranges may be adjusted by VCU HR outside of the formal three-year review schedule when deemed appropriate based on sufficient data analysis. To maintain and monitor the university Compensation Plan, the following factors form the basis for the periodic review of the implementation and effectiveness of the university’s compensation management program:
Requests to change existing job titles, create new job titles or eliminate existing job titles are communicated by managers, in consultation with the HR professional, to VCU HR. Requests are evaluated by VCU HR and implemented, as appropriate. |
Market-based salary ranges | VCU salary ranges are utilized similarly for both new and continuing employees. All salary offers and pay changes receive initial approval within the school, department or unit. Salary offers and pay changes within the top 25% of the salary range are also reviewed and approved by VCU HR. Typically, an individual will be appropriately and competitively paid with a salary up to the 75th percent of the salary range. However, in those circumstances where higher pay is deemed necessary - based on the individual’s qualifications or a high demand for the position - pay may exceed the salary range maximum with appropriate justification and approval from VCU HR.
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Establishing pay for new hires
| In determining starting pay, a number of factors are considered. These include, but are not limited to:
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Offers to VCU classified employees
| All initial salary offers are presented to the selected candidate as a University and Academic Professional using the salary range criteria as described in the Range Placement section below. However, current VCU Classified employees have the option to retain Classified status. If the current VCU Classified employee accepts the university offer, the employee transfers to the University and Academic Professionals system. If the employee requests a Classified offer a revised salary offer is prepared following the Commonwealth of Virginia Department of Human Resource Management (DHRM) pay practices. This offer is likely to be different from the university offer. Classified salary offers are not based on the university salary ranges. They are based on state policies and pay bands determined by the Virginia Department of Human Resource Management (DHRM). |
Range placement
| Typically, employees new to a job or recently promoted have salaries at the lower end of the salary range. Employees who are qualified, fully capable, and strong performers have salaries in the middle of the salary range. Employees paid at the top of the salary range have advanced qualifications, unique skills or capabilities, and are sustained high performers over time. The midpoint of the salary range represents the market rate for a position and represents a fully proficient employee. Exceptions to the use of this criteria for determining an individual’s base salary are made in consultation with HR. Examples of situations which may require VCU HR consultation include, but are not limited to, pay in high-demand jobs or employees with competitive job offers.
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Compensation
The following plans outline compensation management at VCU and ensure consistent application of compensation practices across all employee types. Note, all vacant non-teaching and research positions at VCU are recruited as University and Academic Professionals.
UAP Compensation
The compensation guidelines are designed for university leadership, managers, employees and human resources personnel to use in conjunction with the Working @ VCU: “Great Place” HR Policies in the implementation of the pay practices for VCU University and Academic Professionals. This program does not apply to classified employees. The objective is to provide a common understanding of the purpose, methods, and procedures involved in compensation administration at VCU. These guidelines become effective January 1, 2018.
Virginia Commonwealth University (VCU) is committed to supporting the university’s goal of attracting and retaining a competent and engaged workforce. The compensation section of the Working @ VCU: Great Place policy supports the fair and transparent administration of compensation for all University and Academic Professionals. The information provided in these guidelines describes the design of the new compensation plan and is intended to assist all stakeholders in the proper administration of the compensation program in support of VCU's strategic goals and overall mission.
Guiding principles and philosophy
The compensation program serves as the framework for the continued implementation and development of compensation practices that embrace and support the mission of the university. VCU administration endorsed the following guiding principles to support its overall compensation philosophy:
Align VCU salaries overall within the appropriate competitive market for the job
Pay for performance (base pay salary increases for merit and promotions) based on sustained contribution
Encourage value-added contributions to the university and careers by better linking career development, performance management and rewards
Establish and maintain internal base pay equity by considering differences in skill, effort, experience, contribution and responsibility among incumbents in like jobs
Offer a total rewards package valued by employees with flexibility to accommodate changing conditions
Provide flexibility through variable compensation (recognition award, annual bonus, incentive) for short-term contributions/achievements
Provide compensation and benefits within VCU’s financial ability to pay which supports a performance-based culture
Assigning university job titles
Managers, in consultation with HR professionals, determine the appropriate university job family and job title for newly created positions, based on a review and analysis of the work performed as compared to the job summaries. VCU HR will periodically review job assignments and determine if changes in title are warranted. To ensure fair and consistent administration of job titling and compliance with relevant federal laws, HR may change university job titles that are incorrectly assigned.
Establishing working titles
Managers retain the discretion to establish reasonable working titles to describe the function of the position in greater detail or to be more easily recognized for both internal and external communications. Working titles are assigned in alignment with business needs and industry standards and should reflect the nature of work and level of authority within the position. Working titles may, and often do, differ from the assigned university job title. University job titles follow certain parameters within the job structure particularly for titles such as manager, director, administrator, and officer. VCU HR provides consultation regarding the development and use of working titles, such as at the time of recruitment to assist in strategically attracting the desired, targeted applicant pool.
Base pay increases
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 pay equity and proper business justification for the request.
Merit increases
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.
Competitive promotion
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.’
Non-competitive/career advancement
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:
Movement across the stages (Emerging, Core, and Expert ) associated with the salary range for a specific job title (Accountant 1) based on achieving career development milestones
Movement to a Job Title with a higher salary range midpoint within the job series. Example: Accountant 1 to Accountant 2, Accountant 3 to Senior Accountant 1
Movement to a Job Title within the same job family, but in another job series. Example: Senior Accountant 2 to Analyst 2, Financial Services
Movement to a Job Title in another Job Family - Consultant 1, Human Resources to Analyst 1, Information Technology
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 Emerging to Core. 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. In Banner, non-competitive promotions are coded as ‘Promotion - Career Development.’
Required Approvals
Non-competitive promotions which place an employee’s salary at greater than 75% of the salary range for their new job require approval from VCU HR. Additionally, non-competitive promotions resulting in an employee’s movement into a position that leads an MBU or above require approval from VCU HR.
Approval Process
Non-competitive promotions which place an employee’s salary at greater than 75% of the salary range for their new job or which result in an employee’s movement into a position that leads an MBU or higher require approval via the appropriate VCU HR Service Delivery Team member’s signature on the employee’s pay assessor.
Off-cycle salary increases
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:
Critical position retention issues
Counter offers for high performers
Organizational restructuring resulting in job changes
Shifts in organizational strategy
Implementation of internal or external organizational studies
To address documented internal alignment issues
Scheduled off-cycle career path advancements
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.
Financial resources
Although all factors must be considered, employee pay is ultimately limited to the available school/division budget.
Roles and responsibilities
Managers have latitude to administer pay within the established compensation program guidelines. VCU HR and HR professionals provide compensation data, reporting, advice and guidance to assist managers in making sound salary decisions.
Role of executive management
Executive management is charged with establishing the compensation philosophy for the university and the administrative practices in support of the compensation philosophy. Executive management also sets the amount for any merit increase pool as part of the annual budget process. They determine compensation priorities, balancing the importance of competitive salaries with stewardship of the university’s financial resources. Executive management is also responsible for effective execution of the compensation program - ensuring that managers are making effective and compliant data-driven compensation decisions.
Role of VCU Human Resources
VCU Human Resources provides consultative and technical guidance to managers and HR Professionals on issues related to compensation management, job evaluation and Fair Labor Standards Act (FLSA) status determinations. All compensation actions for University employees must follow the Working@VCU: “Great Place” HR Policies. The role of the VCU HR Compensation team is to:
Work collaboratively with management and HR professionals to provide policy implementation guidelines, reports, data analytics, training, and decision-making tools to support local compensation decision-making.
Review and approve appropriate compensation exceptions and review job titling and other compensation decision appeals.
Provide consultative services that aim to ensure best practice compensation decision-making, and compliance with applicable legal requirements, to include determination of Fair Labor Standards Act exemption status.
Maintain the job family structure, FLSA, SOC and Role Code crosswalks, and market based salary ranges, ensuring alignment with VCU strategic priorities and compensation best practices and sharing any major updates or changes, as applicable, with Human Resources Professionals and managers.
Perform quality assurance on job title assignments, correcting jobs that are incorrectly placed in the job structure.
Develop annual merit pay guidelines.
Consult on, and approve, variable pay plans.
Perform periodic compensation plan assessment and process improvements to meet emerging and ongoing university needs.
As requested, provide guidance and consultation on individual position description development.
Role of Human Resource consultants
Provide consultative services to HR Professionals and HR Administrators regarding unusual or complex organizational redesigns and compensation situations. Coordinate, as needed, with VCU Compensation.
Role of managers
Managers play an active role in the administration of the University’s compensation plan. They are responsible for using available compensation tools as a part of the plan for making VCU a Great Place to Work. Specific tasks include:
Reviewing the department’s staffing needs and submitting requests for creation of new positions, retitling of positions, and abolishing positions, when appropriate.
Developing and maintaining up-to-date position descriptions, determining working titles, determining job content and KSA’s, and providing input into identification of physical/cognitive requirements for a job.
Consulting with HR Professional and reviewing compensation analysis in order to determine appropriate initial salary offer. Coordinating with HR Professional in seeking VCU HR Compensation approval if offer is above the 75th percentile of the market range.
Actively participating in merit increase process, salary review process, and determination of career advancement and promotion salary increases.
Judiciously using the off-cycle salary increase process to address unforeseen circumstances.
Using reward and recognition practices to help drive performance and employee engagement.
Role of Human Resource professionals
Provide consultative services to meet the needs of the school/unit, applying best practices, and ensuring compliance with applicable policies, regulations, and laws.
Partner with and consult management on compensation best practices and using compensation as a management tool.
Assist managers in organizational design and drafting position descriptions.
Execute or ensure execution of transactions needed to complete pay actions.
Facilitate and consults on decision-making for merit increase process, salary review process, and determination of career advancement and promotion salary increases.
Provide managers with data and policy guidance needed to make effective compensation decisions, including off-cycle salary increases and starting salary determination.
Support managers in understanding and using compensation tools available to University and Academic professionals.
Oversee and implement appropriate process for approvals and exceptions.
Partner with VCU HR in design of improvements to compensation program.
Collaborate with HR in job family and position reviews.
Partner with management and VCU HR Compensation in design of effective Reward & Recognition and variable pay programs.
Role of Human Resource administrator
Department HR Administrators support administration of the compensation program and provide managers with information regarding compensation policy, procedures and guidelines. The role of the Human Resource Administrator is to:
Understand and explain compensation program, procedures and guidelines to managers and employees;
Consult with HR Professional or HR Consultant regarding posted salary hiring ranges, salary offers, merit process implementation, off-cycle increases, and non-base pay adjustments;
Provide systems expertise and implement transactions.
Collaborate with VCU HR and VCU HR Operations in the timely resolution of unprocessed actions and related troubleshooting activities.
Role of University and Academic Professional employees
Employees are expected to understand the basics of the VCU Job Structure, and the general basis and rationale for employee compensation as a University and Academic Professional.
Classified staff compensation
The VCU classified salary administration plan outlines how the university implements the Commonwealth of Virginia’s classified compensation management system. The salary administration plan is the foundation for ensuring consistent application of compensation management and job evaluation decisions for classified positions. The plan will help prevent employee disputes based on misapplication of policy and it will assist the university in monitoring and evaluating the classified compensation management process.
VCU evaluates classified positions using the commonwealth’s classification system (whole job evaluation method). Positions are assigned to roles (known as “Position Classes” in Banner) that encompass a broad group of occupation-related jobs that represent varying levels of work and are further distinguished using the federal Standard Occupational Classification (SOC) system (in Banner, known as federal Occupational Title Code or “OTC”).
Classified positions are administered based on the Department of Human Resources’ (DHRM) Compensation Policy (3.05) and pay practice guidelines.
Effective date
The effective date of the original VCU classified salary administration plan was Sept. 25, 2000. The latest revision of the salary administration plan became effective Oct. 25, 2004.
Recruitment and selection
All vacant, non-Teaching & Research positions at VCU are recruited as University and Academic Professionals. Any current VCU classified employee who competes and is selected as the top candidate for a VCU position, will receive an offer for a University and Academic Professional position. If a classified employee accepts the offer, the individual becomes a University and Academic Professional. If, however, the classified employee prefers to remain classified, the individual may request a new, classified offer. This offer is subject to the state’s classified pay practices.
Pay practices
VCU HR consultants provide consultation and technical guidance to managers and supervisors in their assigned departments on issues dealing with compensation management and job evaluation. All compensation actions for Classified staff must follow the state’s Compensation Policy (3.05) and pay practice guidelines and recognition award guidelines.
Depending on the pay practice being implemented, documentation may include a pay action worksheet, employee work profile, current performance evaluation on file with an acceptable level of employee performance and/or a completed personnel action form. Role changes, in-band adjustments and recognition awards are implemented on a monthly basis (effective the 10th of the month).