Guide to Managing Human Resources
Chapter 4: Compensation
- Overview
- Guiding Principles
- Salary Ranges
- Range Adjustments and Structure Adjustments
- Open Range or Merit-Based Pay
- Salary Placement Guidelines
- Starting Salaries/New Hire Salaries
- Promotional and Reclassification Increases
- Merit Increases
- Administrative Stipends/Temporary Reclassifications
- Equity Increases
- Additional Resources
Overview
The objective of the Berkeley campus compensation program is to
establish and maintain salary rates and make
individual salary decisions that help you recruit, retain,
and motivate highly qualified employees. The Compensation Unit in
Human Resources oversees the pay programs for all
staff employees covered by Personnel Policies for Staff Members
(PPSM), and the various collective bargaining units.
Policies,
procedures, and practices differ among the programs in terms of
flexibility to manage salary actions, hiring, promotions, and merit
increases. Your Compensation Consultant
is available to consult with you on pay issues and to interpret
pay policy and procedures.
Guiding
Principles
Your goals in the compensation program are to:
- Make salary decisions based upon appropriate qualifications, contributions, performance, and equity and budget considerations
- Encourage and reward excellent performance with merit increases whenever possible
- Provide salary increases, when appropriate, within available funding
- Motivate employees by demonstrating the link between performance and pay
Salary
Ranges
Salary ranges involve a number of factors:
local, state, or national prevailing salary rates, campus recruiting
and retention problems, and internal relationships to other related
classifications.
Currently, two different salary structures for staff positions exist in the campus system: positions with steps (step-based) and positions without steps (open ranges). You can find out which structure a particular position is in by checking the contract or policy that covers the position, or by looking the title up in the Berkeley Campus Title and Pay Plan at http://hrweb.berkeley.edu/pay2/. If the position has steps, they will show in the Title and Pay Plan. If no step rates appear, then the position does not have steps.
Certain titles may be either in bargaining units (covered) or Personnel Policies for Staff Members -- PPSM (uncovered). Covered titles end with a C and uncovered titles end with a U (e.g., 4722C and 4722U). These titles can have different salary ranges; be sure you are reviewing the correct salary range.
Positions
with Steps
Covered under some collective bargaining unit contracts and
Police Sergeants covered by PPSM.
- The salary of an employee must be on one of the predefined steps.
- Title and Pay Plan consists of ranges of monthly and hourly rates of pay
- A Step Structure may range from 1 to 25 or more steps of pay, and may or may not include half-steps.
- Salaries for the majority of staff employees are stated in monthly rates.
- With a range adjustment, each step is increased by a specific percentage and each employee on a step automatically receives the new rate for that step.
Positions
Without Steps
Those in the PPSM - Managers and Senior Professionals (MSP)
group and PPSM - Professional and Support Staff (PSS), except for
Police Sergeants, and some positions covered under some collective
bargaining unit contracts.
- A salary grade range is assigned for each title in MSP & PSS.
- Salaries of individuals in MSP program are determined by their placement in the appropriate range.
- Each grade range is divided into quartiles with a defined minimum, midpoint, and maximum rate. There is a percent range spread within each grade and approximately a 10% midpoint differential between grades in most cases.
- Salaries are stated in annual rates and in whole dollar amounts, not steps.
- An individual's salary may be any whole dollar amount within the range.
Range
Adjustments and Structure Adjustments
Salary
range adjustments apply to step-based positions, usually in one
or more selected classifications on a systemwide or local campus
basis. Recommendations for salary range adjustments are based on,
but not necessarily limited to:
- Prevailing salaries in public jurisdictions and private industry
- Campus recruiting and retention problems
- Internal comparisons
- Amount of available funding
- Agreements with unions
Open-Range
or Merit-Based Pay
Salary
structures for open-range or merit-based pay plans are reviewed
annually and adjusted when funding is available from the state and/or
when warranted by market conditions. Automatic increases are not
provided when structure is adjusted; individuals are usually eligible
for performance-based or merit-based increases.
Salary
Placement Guidelines
The
Salary Placement Guidelines are intended to provide managers with
the framework they need to establish and maintain fair and equitable
salaries in managing the work force.
These guidelines apply to new hire, promotional, reclassification, stipend, equity, and merit increase salary actions. These are guidelines only and do not take the place of University policy or campus procedures.
These Salary Placement Guidelines apply to the broad salary ranges, which do not have steps and which allow managers to appoint employees at a specific whole dollar amount.
- First Quartile (from the minimum up to halfway to the midpoint of the range): The first quartile of the range is usually intended for individuals who are new to the grade, are in a learning situation, and/or do not have substantial experience in the new position.
- Second Quartile: The second quartile of the range is intended for employees who have gained experience and skill and who are becoming more proficient in the position for which they were hired. They generally meet expectations in their positions.
- Third Quartile: The third quartile is typically reserved for experienced employees who frequently exceed expectations.
- Fourth Quartile: The fourth quartile of the range is normally reserved for individuals who are consistently exceptional performers and who have extensive experience.
Starting
Salaries/New Hire Salaries
Establishing
a starting salary for a new employee or deciding to give a promotional
increase requires careful consideration. In both cases, you should
determine how the employee's prior experience, knowledge, and skills
compare with other employees already performing the same job.
Before establishing the starting salary of a new employee, consider each of the following factors:
- Recruiting difficulty (size of qualified applicant pool, length of recruitment, etc.)
- Candidate's salary expectations
- Comparable internal salaries
- Employee's knowledge, skills, and experience compared to others performing similar work
- Budget
For positions with steps (those covered under some bargaining contracts and Police Sergeants in PPSM):
- Authority up to the mid-point of the range is delegated to the hiring department. The Vice Chancellor or delegated Dean has approval through the range. Consultation with OHR is expected for above mid-point salaries.
For PPSM-MSP, PPSM-PSS positions and some positions covered under some collective bargaining unit contracts:
- Requests for consideration above the midpoint are approved by the Vice Chancellor, except where this authority is re-delegated to specific Deans. MSP appointments above the midpoint of the salary range require final approval by the appropriate Vice Chancellor.
- Consultation with OHR is expected for salaries above midpoint.
Promotional
and Reclassification Increases
For
positions under PPSM, hiring departments are authorized to grant
promotional and reclassification increases, not to exceed 25% total
in the fiscal year (except as required to reach range minimum).
- For exclusively represented employees in units with collective bargaining contracts, consult the contract for the specific authority to grant promotional increases.
For non-competitive lateral moves, normally there will be no change in salary. For a lateral move into a competitively recruited position, a salary increase may be granted based on the qualifications of the employee and the requirements of the position.
Merit
Increases
Salary increases are granted to eligible employees in career positions
based upon their job performance. Merit eligibility is contingent
upon completing three months of service in PPSM.
The amount of the increase depends upon the individual's performance in relation to current pay and assigned responsibilities, position within salary range, performance relative to other members of the review unit, and availability of funds.
The Compensation Unit manages the campus' merit programs. Key elements of the staff merit process typically are:
- The Compensation Unit sends a call letter to the control units (organizations under a Vice Chancellor or Provost), announcing the merit program and outlining the merit increase guidelines and control figures as determined by the campus within parameters set by the Office of the President. (Control figures represent the fund pool available for merit increases.)
- Higher merit increases are provided for employees who perform above expectation in achieving goals and objectives; however, no merit increase may result in the final salary exceeding the range maximum and no salary is to fall below the range minimum.
Administrative
Stipends/Temporary Reclassifications
Under
PPSM, stipends may be granted to recognize temporary performance
of higher-level duties or "other significant duties" not
part of the employee's regular position. For employees represented
by a collective bargaining contract, consult with the contract to
determine stipend/temporary reclassification constraints.
Equity
Increases
An equity increase is typically
based on a salary inequity that cannot be corrected through the
merit review cycle.
A salary inequity exists when an employee's salary is significantly below that of others in the same title code with similar performance, experience, skills, knowledge, and assignments. Examples of situations that may indicate a salary inequity include:
- The salary of a long term-employee is low relative to a new hire whose salary is market-driven.
- Significant salary compression exists between a supervisor and his/her employees.
- An employee changes from a limited to a career position in the same class.
- Market factors influence recruitment and retention.
An equity increase may also be considered for employees taking on higher-level functions that do not warrant reclassification to a higher salary grade.
Additional Resources
- Compensation Unit in Human Resources (HR) (http://hrweb.berkeley.edu/about/deptlist.htm)
- Berkeley Campus Title and Pay Plans (http://hrweb.berkeley.edu/hrpay.htm)