Memo: 2011 Performance-Based Merit Pay Program (May 4, 2011)

Memorandum
Date: May 4, 2011
To: Deans, Directors, Department Heads and Administrators
From: Kathleen Cheng, Manager, Compensation
CC: HR Advisors & Associates; Compensation Consultants/Associates; Joanne Young, Payroll; Curtis Morcom, Okanagan Campus
Re: 2011 Performance-Based Merit Pay Program

About the Merit Pay Program:

The University’s performance-based Merit Pay program recognizes and rewards meritorious performance. The following employee groups are eligible for this program: Management & Professional, Executive Administrative staff (excluded clerical), Farmworkers, and Non-union Technicians and Research Assistants.
This program is designed to provide a tool to move employees who have demonstrated above average performance from the midpoint toward the maximum of their salary ranges.

Faculty/department Administrators have recently raised some good questions, and we offer the following information in response:

• Faculty/department participation in the merit process is a requirement and not optional. Consistent commitment to the program helps ensure its integrity, as well as the University’s ability to retain and recruit outstanding staff.
• Staff members should be evaluated on the basis of their meritorious performance, and not other factors such as equity and market pressures. This focus on performance helps to reinforce the purpose of the program – recognition and reinforcement of outstanding performance. We recognize the increasing pressures on faculties and departments as a result of the “net zero” compensation mandate, as well as budget pressures.
• It is important that managers communicate with staff who are eligible for merit increases whether they are awarded 0%, 3%, or something in between. This is an excellent opportunity to discuss the staff member’s performance and development, and is a key driver of the Merit Pay program.

Eligibility Criteria:

Staff are eligible for merit increases, effective July 1, 2011 if, as of June 30, 2010:

• They were at the midpoint of their salary range or above, and
• They had completed their probationary period.

Staff members who are currently at the maximum of their salary ranges are not eligible for ongoing salary increases. However, these employees can still be rewarded for meritorious performance through a one-time merit payment, extra vacation time, or professional development opportunities.

Performance reviews should be conducted for staff members on an annual basis, and are required to support performance based Merit Pay decisions. Review may be conducted for all staff members at a single point in time each year, or they may be staggered throughout the year as staff members reach their anniversary dates. The Organizational Development & Learning unit of Human Resources offers a performance evaluation tool that may assist in conducting performance reviews.

Funding

This is a reminder that faculties/departments at the Vancouver campus are required to fund the implementation of the 2011 Merit Pay program from existing budgets. Under the new decentralized budget model, this applies to merit payments for both GPO and non-GPO funded staff.

The Okanagan campus has a separate budget process from the Vancouver campus. The Okanagan campus has determined that it will fund merit increases for eligible GPO positions at an average of 2% for the 2011 Merit Pay program. The allocations have been loaded into departmental GPO funding as of April 1, 2011, and units will be responsible for any differences between actual merit pay and the funding allocation provided. Future Merit Pay programs (2012 and beyond) will not be funded centrally; therefore, any merit increases awarded in 2012 and beyond will be funded by existing faculty/department budgets.

Okanagan budget questions can be directed to Curtis Morcom at Okanagan Finance (250-807-8103 or curtis.morcom@ubc.ca).

Points to Remember:

1. Merit paperwork such as the departmental spreadsheet and the Staff Appointment Forms should be submitted to Human Resources by June 7, 2011, and to Payroll by June 15, 2011, respectively, for merit payments to appear on staff members’ paycheques by July 15, 2011.
2. If your department used July 1st as the implementation date for Merit, then you can continue to use this date. If your department uses the anniversary date of staff members, or the department’s business year, then the effective date should fall between July 1, 2011 and June 30, 2012.
3. In some cases staff members have dual departmental reporting relationships. While this complicates the performance evaluation, consultation across departments is important in order to ensure that there is a common understanding of performance criteria, and that a consistent framework is used to evaluate performance.
4. It is most common to award merit increases through an increase to staff members’ base salary. However, another option is to offer an alternative, such as a one-time bonus, extra vacation, or professional development.
5. It’s a good practice to keep your staff notified. Payroll is often contacted directly with inquiries about Merit increases when Administrators are a better source of information about merit results and the reasons for them. With the employee self-service web application now available, Merit increases can be viewed online once the Merit paperwork has been processed by Payroll (http://www.msp.ubc.ca). When possible, encourage your staff to use the self-service web application to view their paycheques online.
6. The guideline for awarded merit continues to be at an average of 2% of eligible salaries. However, this may vary up or down depending on a unit’s staff performance during the merit period. No individual’s merit increase should exceed 3%. As in past years, the Compensation Team will review faculty/department results and follow up as required.

Instructions and Attachments:

Attached to the emailed copy of the memo was a spreadsheet of the staff members in your department/faculty who are eligible for the 2011 Merit Pay program.

There are a number of factors that may result in a staff member being excluded from your department spreadsheet. Inquiries about your spreadsheet can be directed to Joyce Wei at 604-822-6865 or joyce.wei@ubc.ca.

Please visit our Merit web page for merit related information. Here you will find the following resources:

• Instructions for completing your Department Spreadsheet
• Step-by-Step Instructions on implementing Merit
• Merit FAQs

Download this memo as PDF.