301 - Compensation Philosophy and Base Pay Administration Overview
Subject: Compensation Philosophy & Base Pay Administration Overview (formerly Base Pay Administration, 306)
Date: February 2015
To describe the compensation philosophy and base pay administration overview at the University.
The University of Chicago is committed to providing a comprehensive total rewards program to attract, retain and reward highly qualified, diverse, and productive employees. Additionally, the compensation program will comply with all applicable laws and contractual requirements.
A. Compensation Philosophy: The University of Chicago is committed to providing a comprehensive total rewards program to attract, retain and reward highly qualified, diverse, and productive employees. To facilitate achievement of our compensation philosophy, we apply the following design objectives:
• The total rewards program emphasizes alignment of employee efforts and results to support the University's mission and goals.
• The University strives to be both externally competitive in relevant labor markets and internally equitable.
• The program also promotes fiscally responsible pay decisions, encourages efficient use of University resources, and ensures compliance with applicable legal and contractual requirements.
B. Base Pay Administration Overview
1. All positions must have a job description which accurately describes the essential functions, job-related qualifications (i.e., experience, education, and functional competencies), FLSA exemption status, working conditions, and mental and physical requirements. Please refer to Policy 302 Job Descriptions for additional details.
2. Positions are evaluated based upon the job content in the job description. Please refer to Policy 303 Job Evaluation for additional details.
3. Critical inputs into a base pay decision include employee performance, relevant skills and job experience, external market data, internal peer data, and budget availability.
4. HR Partners, in conjunction with unit leadership, review non-union staff employee base pay during the following activities:
a. Job evaluation process
b. Annual compensation process
c. Employee job changes such as promotions, demotions, and changes in scope of responsibility
5. All pay decisions must conform to the University's policy of equal employment opportunity, and federal, state, and local laws and regulations.
C. Annual Compensation Planning
1. The annual compensation process is our formal process for reviewing non-union employee base pay levels. This process provides HR Partners and managers the opportunity to review base pay levels and make appropriate adjustments to ensure base pay levels are differentiated to reflect performance, and remain externally competitive and internally equitable.
2. Performance evaluations are recommended for all employees either before or in conjunction with the annual compensation cycle. If a formal performance review process is not currently in place, managers should document and then consider employee performance when making base pay decisions.
3. To recognize and differentiate employee performance, pay guidelines, as a percent of budget, have been established for each annual performance rating.
4. All active, non-union staff employees are eligible for the annual compensation process.
o The University common review date is July 1 for monthly paid employees, and the closest pay period to July 1 for biweekly paid employees.
5. The annual compensation process timeline is established to align with the fiscal year of the University.
6. Employee job changes, such as promotion, demotion, transfer and changes in scope of responsibility may impact base pay. HR Partners can collaborate with the compensation team to facilitate the job evaluation process, which may or may not result in an adjustment to the base pay level.
7. Under exceptional circumstances (i.e., grant funding availability) off cycle base pay adjustments may be given to an employee outside of the annual compensation process. HR Partners can collaborate with the compensation team to determine an appropriate approach to update the base pay for an employee.
8. Under exceptional circumstances, back pay (i.e., making base pay retroactive to a specific date) can be given to an employee, up to a maximum of one month, provided timing is within the same calendar year.
Employees represented by a bargaining unit may be governed by the appropriate bargaining unit agreement.