Staff Personnel Manual (SPP)

Effective: 7/1/1984

Revised: 8/1/2009

SPP 403–08: Salary Adjustments

Purpose

To define the categories of salary adjustment

Sources

Arizona Board of Regents Policy Manual - 6–901

University policy

Applicability

Classified, service professional, and administrative employees

Policy

The university provides and maintains a salary adjustment process for determining individual salaries. Eligibility for state- and university-sponsored salary adjustments is subject to legislative appropriations and guidelines and approved by the Arizona Board of Regents. The types of salary adjustments that may be provided to an employee are by performance increases, equity adjustments, market adjustments, and performance-based incentives.

All salary adjustments will be provided to affected employees in writing, identifying present salary, salary adjustment amount, new salary, and effective date of the adjustment. This written notification will be under the signature or electronic approval of the employee’s supervisor or higher authority with a copy of the communication filed in both the departmental and official personnel file located in the Office of Human Resources. University-wide salary adjustment programs will follow this same procedure; however, signature authority is the university’s chief Human Resources (HR) officer.

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Salary Administration Terms

Promotion (Competitive and Noncompetitive)

1. Promotion is the action of advancing or elevating an employee to a higher rank or position. Typically a promotion occurs when an individual’s demonstrated performance, contribution, and competencies are recognized by his or her assuming the role and the associated responsibilities of a job in a grade higher than the one currently occupied, which may (noncompetitive) or may not be within the incumbent’s current job family (see SPP 402–05, “Promotion (Competitive or Noncompetitive)”).
2. A change from classified to service professional or service professional to administrative is considered a promotion.
3. A pay adjustment generally not to exceed 10 percent would be associated with a promotion.

Lateral Transfer

1. A lateral transfer results when a change from one job to another job occurs and there is no change in salary grade.
2. A pay increase does not occur with a lateral transfer.

Pay Reduction

1. Department administration should consult with the Office of Human Resources to determine if a pay reduction is appropriate (see SPP 809, “Discipline”).
2. A pay reduction generally occurs when an employee changes from one job to another that has a lower grade.
3. A pay reduction may be appropriate based on circumstances and does not adversely affect the employee’s future earnings potential with the new job.

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Types of Salary Adjustments

Performance Increases

A performance increase may be awarded to an employee based on an assessment of work performance. Performance increases may be provided only when appropriated by the legislature and authorized by the university.

Performance increases usually occur at the start of each fiscal year or as otherwise designated by the legislature.

A classified employee may be eligible for a performance increase not to exceed the maximum of the assigned pay range. Performance-based increases for service professional staff should not exceed the maximum of the assigned market grade.

Performance increases are based on the performance period specified by the university. An employee whose performance evaluation is level 1 (fails to meet the performance expectations) or level 2 (inconsistently fulfills performance expectations) is not eligible for a performance increase. If using a 2008 rating, a performance evaluation level 1 (responsibilities of the position not fulfilled) would not be eligible for a performance increase.

Recognition of an employee’s performance contribution through an increase should be aligned with the guidelines developed by the university to ensure that the strongest performing employees receive an increase appropriate to their value.

Performance increases may be granted only when the university authorizes a salary increase budget and with the approval of the respective leader (the university president, provost, vice president, associate vice president, or dean).

Promotional Salary Adjustments (Skill/Competency Based Increase)

A promotional salary adjustment may be appropriate based on an employee’s demonstrated ability to take on more complex or additional assignments and/or special work beyond that of the job to which the employee is currently assigned.

Salary adjustments associated with a promotion should not exceed 10 percent of the current pay rate; if this adjustment would take the pay rate over the maximum of the assigned grade, the adjustment is modified to no greater than the maximum of the grade ( see SPP 402–05, “Promotion (Competitive or Noncompetitive)”).

Promotional increases do not require leadership approval provided the position being filled was open, budgeted, and competitively filled. Noncompetitive promotions (previously referred to as career progression) require approval of the respective leader.

Equity Adjustments

Colleges, departments, and work units are responsible for establishing and maintaining equitable pay relationships within their work units. When a pay equity problem is discovered, an internal equity adjustment may be recommended. An internal equity adjustment is a salary increase that is intended to correct a pay disparity within a job classification. Factors that may be considered in determining equitable pay relationships are employee credentials, salary history at the university, and documented employee work performance. Administrators/direct supervisors should work directly with Human Resources to determine an appropriate internal equity adjustment when a pay disparity exists.

Reviews of this kind must be approved by leaders prior to submitting the request to HR. Recommendations from HR must be approved by leaders prior to implementation.

Market Adjustments

A market adjustment is initiated as the result of a compensation study. Market adjustments occur when the assigned grade of the job is adjusted to a grade higher and the affected incumbent’s current salary falls below the minimum of the new grade. If additional in-range correction is warranted based on an assessment of the employee’s salary compared to the job’s market rate, taking into consideration performance and experience, administrative officials and HR should work together in partnership to determine appropriate market adjustments. This assessment should include the salaries of other employees within the same job classification in the unit and their salary relationship to market, if appropriate. In the event a mutual agreement cannot be reached, the appropriate person with higher authority in the unit will make the final decision after considering both parties’ perspectives.

A vice president/provost or designee must approve market adjustments that result in the employee’s new salary exceeding the job’s market rate for service professional and administrative employees or the grade midpoint of the salary range for classified employees.

Market adjustments or job reclassifications resulting in upward grade movement with associated financial impacts must be reviewed and approved by leaders prior to submitting to HR. Recommendations from HR must be approved by leaders prior to implementation.

Performance-Based Incentives

Work groups or teams may develop performance-based incentive programs to promote efficiency and effectiveness in the unit. All programs must:

1. have measurable standards of performance related to university goals and objectives that must be achieved in order for employees to receive an incentive
2. apply equally to applicable employees in the unit
3. result in cost reductions, improved service or product quality, or improved productivity
4. not exceed the maximum incentive payment permitted per employee by the Arizona Revised Statutes or be added to an employee’s base salary

   and

5. be funded from up to 80 percent of excess vacancy savings or other monies appropriated from the state general fund or other sources.

Work groups or teams who are interested in establishing incentive programs should contact HR for university guidelines.

Each program must be approved by the appropriate dean or director before being forwarded to the executive director of the Board of Regents for presentation to the Incentives Program Oversight Review Committee for review and recommendation before implementation.

All incentives will be paid to employees through the university’s Human Resources management system and are subject to taxes and withholding. Payments will be made as specified in the approved incentive program plan.

Cross-Reference

For more information on salary increases, see SPP 402–05, “Promotion (Competitive or Noncompetitive).”

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