How does performance management and the annual salary process work?
It’s everyone’s favorite season of the year: performance review season!
I thought this would be an opportune time to explain the OIT performance management and pay increase process. Because of the sensitive nature of performance and compensation, much of this process can feel opaque.
The OIT follows this high-level process:
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Staff complete their individual year-end self assessments
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Managers work on their team reviews and salary adjustments with their SLT member
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The SLT works together and with their leadership teams to “calibrate” ratings so that we are being consistent in how we rate individuals across the organization
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Feedback from the calibration process is given back to managers and ratings and accompanying increases are adjusted as needed
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SLT members submit their salary plan and the SLT meets to review the final salary plan
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SLT communicates to managers, who communicate to their staff
What is the Annual Salary Pool?
University leadership decides on a percentage for the salary pool–let’s say it’s 3.5% for the year. That means that the OIT would receive an allocation of 3.5% of all of our staff salaries combined.
How are increases decided?
We could give everyone a 3.5% raise across the board, but that wouldn’t really be fair, right? The SLT works together to calibrate what the different ratings mean–and that we are being consistent, fair, and responsible in how we allocate this pool. Different people perform at different levels and we try to reflect that in salary increases. It is also important to acknowledge that we are also using this fund to adjust salaries for people who are lower in the market range to improve equity. That may mean that two people who have the same number rating get different salary percentage adjustments. Let’s say Person A is lower in the range than their teammate, Person B, and both of them are rated a 3. We may decide that we want Person A's raise to be a higher percentage since they are doing the same work as Person B, and their salary is lower in the market reference range.
What if it’s not enough money?
Every year, OIT is allotted money to increase the salary budget, so this is the only money OIT gets that isn’t already allocated to a purpose. This pool enables us to promote people and that’s also why we’ve worked to line up most OIT promotions for July 1, so they coincide with this process. Last year, 24 people received promotions!
OIT has these main components to our recurring budget:
We also sometimes have one-time money–but that money cannot be used for raises because it is not recurring money. When we give someone a raise, we want that to reoccur. I also try to hold back a small percentage of our pool so we have a little bit of flexibility throughout the year as well. We might need this money to change a vacant job from one type to another, which is the most common use. For instance, when we expanded Information Security by using open positions, we had to find the extra recurring dollars to hire those roles at market rates.
Tying it all together
I hope this has helped provide insight into the process and some of the creative approaches our leadership teams have found to ensure that we are acting fairly and using our resources to the best of our ability. We have amazing people and this process is one of the many ways we take care of you. I hope to see you all at the next IT Town Hall meeting!
Yours in ND,
Jane