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Administration Policy and Procedure



40.055:  Pay Determination for Classified Staff


Status:Approved on June 29, 2011Signatures and dates
on archival copy
Effective:when approved 
Initiated by:Linda L. Lonsinger
Chief Human Resource Officer
 
Endorsed by:Pam Benoit
Executive Vice President and Provost
 
Approved by:Roderick J. McDavis
President
 


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I.   Overview


A.   Philosophy

Pay determination decisions should support the university's commitment to a market-based pay approach. This ensures the university's ability to attract and retain the talent needed to support Ohio University's mission and initiatives. University Human Resources ("UHR") manages the pay plans and pay structure to ensure market competitiveness. Pay program objectives include the following:

  1. assuring that university employees are fairly and justly rewarded for contributing their knowledge, skills, abilities, and time in accomplishing university objectives;

  2. assuring internal equity and, where appropriate, external equity;

  3. assuring excellence in productivity and performance;

  4. assuring compliance with appropriate laws and regulations; and

  5. assuring administrative efficiency.


B.   Policy and Online Information Precedence

Where this policy conflicts with any of the items listed in the References Subsection, below, this policy takes precedence, regardless of which item has been most recently revised.


C.   Approach

UHR assigns positions to pay grades, or pay levels, based on a comparison of the position's duties to salary survey information. Each pay level has a corresponding pay range that is comprised of the following zones:

  1. Primary Zone:   This is the targeted range for new hires, and for employees who are approaching the Market Reference Point as they gain service time and experience.

  2. Market Zone:  This is the targeted range for employees with significant service time who are fully proficient in their job and consistently meet performance expectations.

  3. Leading Zone:  This is the range for experienced employees with extended service time who are fully proficient and typically have met or exceeded performance expectations.

The amount of work-related time, or longevity, required in each zone depends on a number of factors and varies from individual to individual and from position to position. These factors include: the nature of the duties and responsibilities of the position; the relative learning curve required by the position; the skill level and contribution of the incumbent, etc. The zone titles do not imply the employee's actual level of job performance; however, they do suggest an expected level of job competency.

Movement between zones is strongly influenced by the annual pay increase for employees and movement of the pay structure. There is no targeted timeline for movement between zones.

Pay structure salary levels are evaluated annually by University Human Resources Compensation staff for appropriate adjustments based on market data. This is typically accomplished in the spring in preparation for staff salary and budget planning. University Human Resources utilizes a compilation of national survey databases and other market data to make adjustment decisions.


II.  Approval for Exceptions

The purpose of the policy is to provide flexibility in making pay determination decisions within the context of a market-based approach. Exceptions to pay determination guidelines are subject to planning unit head approval after consultation with and approval by the Chief Human Resource Officer (the appointing authority as defined by civil service law).


III.  New Hire Rate

Departments have the flexibility to set a new hire's salary at any point within the Primary Zone of the assigned pay range. The hiring department is encouraged to contact University Human Resources for advice and counsel regarding salary decisions. In making this decision, consideration should be given to the directly related experience, education, and other knowledge, skills, and abilities that the successful candidate possesses in comparison to the advertised criteria for the position. Candidates who just meet, or somewhat exceed, the minimums will most likely be hired at the beginning of the Primary Zone. The candidates who far exceed minimums (education, experience, etc.) might be hired at the top of the Primary Zone.


IV.  Returning Retirees

For hiring retirees, the hiring manager should refer to Policy 40.037. Where Policy 40.037 is silent on pay determination issues, this policy is in effect. (A retiree returning to work at Ohio University is a re-employment decision by the university, and should be based on the need of the university, and the skills and performance of the employee.) The hiring manager is to contact University Human Resources for consultation prior to hiring a returning retiree. Any exceptions must be approved by the Vice President for Finance and Administration or his or her designee.


V.  Promotions

A promotion is defined as movement to a different position in a higher pay grade or level. This occurs through the employment process.

The amount of the promotional increase should be guided by comparing the relationship of the employee's current pay to the market zone of the higher pay range for the new position. Normally, a promotion should move the employee to either the Developing or the Market Zone. The following should be taken into consideration:

  1. Criteria for the 3 zones as defined above.

  2. The employee's knowledge, skills, abilities, and performance as they compare to those required of the new position.

  3. The current pay of the employee.

Promotional increases must be between 7% and 12% of the employee's current pay, except that the new pay must be at least the minimum of the new pay grade, and the new pay must be at most the maximum of the new pay grade. Department Heads should consult with University Human Resources about the most appropriate pay amount.


VI.  Demotions

A demotion, voluntary or disciplinary, is defined as movement to a different position with decreased responsibility in a lower pay grade. Voluntary demotions would normally occur through the employment process. Disciplinary demotions require University Human Resources approval.

Decreases for demotions must be between 7% and 12% of the employee's current pay, except that the new pay must be at least the minimum of the new pay grade, and the new pay must be at most the maximum of the new pay grade. Involuntary demotion pay decreases require flexibility on behalf of the employing department. Department Heads should consult with University Human Resources about the most appropriate pay amount.

The following criteria should be taken into consideration:

  1. Criteria for the 3 zones as defined above.

  2. The employee's knowledge, skills, abilities, and performance as they compare to those required of the new position.

  3. The current pay of the employee.


VII.  Lateral Transfers

Typically, a lateral transfer is defined as the movement of a person to a similar position -- a position similar in duties and responsibilities and of the same value (pay grade and range). To maintain pay plan integrity, sound compensation theory suggests that lateral transfers should not dictate a modification in the salary level (upward or downward) of the incumbent. For consideration of exceptions, see Section II, above.


VIII.  Reclassification of a Position to a Different Pay Grade

A position may be reclassified and reassigned to a different pay grade (an upgrade or a downgrade) due to significant changes in duties and responsibilities. Those changes may occur on a particular date, or may accumulate over a period of time. The incumbent or the supervisor of the position may request the position be evaluated, or University Human Resources may initiate the evaluation.

If it is determined that the position should be reclassified to a higher pay grade, the incumbent will receive a pay increase between 7% and 12% of the employee's current pay, except that the new pay must be at least the minimum of the new pay grade.

If it is determined that the position should be reclassified to a lower pay grade, there may be a change in the employee's pay. The amount of the pay decrease should be guided by comparing the employee's current pay to the Market Zone of the lower pay range.

In either case, if the new pay rate as determined by the above paragraphs exceeds the maximum of the pay range, then the employee's situation shall be considered "red-circled". Those employees in red-circled situations will receive their upgrade wage increase and their future raises as described in Section XI, below, except that any lump-sum portion of an upgrade wage increase will be paid immediately.


IX.  Effective Date of Pay Change

The effective date of any pay change resulting from a displacement, promotion, or demotion is the date that the employee changed position.

The effective date of any pay decrease resulting from a reclassification will be determined by University Human Resources, and may be immediate, but is never retroactive.

The effective date of any pay increase resulting from a reclassification depends on how the job changed over time, and how the reclassification was initiated:

  1. If the reclassification was initiated by University Human Resources, then the effective date will be determined by University Human Resources. It will be the same date for all employees affected by that decision, and will be communicated to all of them at the same time, as soon as practicable.

  2. If the reclassification was initiated by the employee or his or her supervisor in response to a gradual change in the job's duties over time, then the effective date will be retroactive, by at most one year, to the date when the Job Information Questionnaire was submitted to UHR.

  3. If the reclassification was initiated by the employee or his or her supervisor in response to a specific change in the job's duties on a documented date (e.g., as part of a reorganization), then the effective date will be retroactive, by at most one year, to the documented date of the change of duties.


X.  Reslotting of a Classification to a Different Pay Grade

A classification change that involves no change in job duties, but is instead based solely on changes in the labor market, is known as a "reslotting": University Human Resources will annually, or as deemed necessary, assess the appropriate estimated market value ("EMV") for job classifications in the university pay plan, and may reslot positions to a different pay grade based on the EMV. When a classification is reslotted to a different pay grade, there is no change in the work done by the employee, unlike promotions, demotions, lateral transfers, reclassifications, and displacements. The employee continues to do the same work as before; the change is in the labor market.

If a classification is reslotted to a higher or lower pay grade, there is no immediate change to the pay rate of employees currently in that classification, unless the employee's pay rate falls below the minimum of the new pay grade, in which case, his or her pay rate would be set at the minimum of the pay grade. If the employee's pay rate is above the maximum for the new pay grade, then his or her situation is "red-circled," and future raises will be implemented as described in Section XI, immediately below.


XI.  Pay Raises

Routine, annual pay raises are applied to the employee's existing base pay, and go into effect at the start of the fiscal year. Some years the pay structure will also be adjusted, changing the maximum for each pay grade by an amount that may be more, the same, or less than the standard raise for that year.

For classified employees, the raises are typically calculated by a uniform formula, which may feature fixed dollar amounts, or uniform percentages of the prior base pay, or a combination, applied across the board for all those employees.

If the raise would bring the new pay to a value that is at or below the new maximum for the pay grade of the job, then the entire increase will be added to the employee's base pay.

If the raise would bring the new pay to a value that exceeds the new maximum for the pay grade of the job, then the employee's situation is described as "red-circled," and the raise will be provided as a combination of a (possibly zero) base pay adjustment together with a single lump-sum payment at the start of the fiscal year, according to the following method:

  1. If the old base pay is at or above the new pay grade maximum, the base pay is frozen, unchanged, and the entire raise is provided in the lump-sum payment.

  2. If the old base pay is below the new pay grade maximum (but so close to it that the increase would exceed the pay grade maximum), then a first portion of the raise is used to bring the new base pay up to the new pay grade maximum, and the remaining portion of the raise is provided in the lump-sum payment.

  3. If the employee is full-time classified, the lump-sum is calculated by multiplying the hourly rate difference by 2,080 hours; if the employee is part-time or seasonal classified, the lump-sum is calculated by multiplying the hourly rate difference by 1,040 hours (regardless of the number of hours regularly worked).

  4. The lump-sum portion of the raise is subject to retirement withholding, and therefore does count in the calculation of retirement income.

The result of this approach is that normal raises "compound," with each year's raise being calculated on a higher base pay, except for "red-circled" employees, whose base pay does not increase until the pay structure "catches up" with them.

If a red-circled classified employee receives a lump-sum pay increase at the start of the fiscal year, and during the fiscal year the employee receives a pay increase under any of the provisions of Sections V through X, above, then the lump-sum will be pro-rated by pay periods, and the portion after the effective date of the pay change will be "recaptured" (or "redistributed") evenly over the remaining pay periods.

If a red-circled classified employee receives a lump-sum pay increase at the start of the fiscal year, and during the fiscal year, employment terminates for any reason, or the employee experiences any of the transitions described in Sections V through X, above, resulting in a constant or decreased pay, then no part of the lump-sum will be "recaptured."


XII.  Displacement

Like promotions, demotions, and lateral transfers, described above, a "displacement" is a job change. Displacement results from the processes described in Policy 40.046. In accordance with the Ohio Revised Code, if the new job is classified in a lower pay grade, then the employee will be paid the lesser of the following two values:

  1. his or her old pay rate, or

  2. the maximum pay rate of the new job.


XIII.  Recognition Pay

Supervisors are encouraged to utilize Policy 40.011. This policy allows the acknowledgement of outstanding achievements and dedication of employees throughout the fiscal year.


XIV.  Other Considerations

Employees must be paid at least at the minimum of the pay range for their position. The hiring department is encouraged to contact University Human Resources for advice and counsel regarding salary decisions. Employees may not be paid above the maximum of the pay ranges for their positions. The only exception to this is for those employees whose pay was above maximum at the time of implementation of this pay structure (July 1, 2001).

Should the requirements of the position change substantially, or the contributions of the individual be so exceptional, that a mid-year base pay adjustment is possibly warranted, a business case should be presented to the appropriate Planning Unit Head for concurrence, and to the Chief Human Resource Officer for advice, counsel, and direction.




Reviewers

Proposed revisions of this policy should be reviewed by:

  1. Payroll Manager

  2. Classified Senate


Forms, References, and History


A.   Forms

The following forms are specific to this policy:

  1. The "Job Information Questionnaire" is available from University Human Resources, or online through http://www.ohio.edu/hr/forms/index.cfm#j


B.   References

The following items are relevant to this policy:

  1. Policy 40.011, "Employee Recognition Awards."

  2. Policy 40.036, "Administrative and Professional Pay Plan."

  3. Policy 40.037, "Rehiring of Retired Administrative and Classified Employees."

  4. Policy 40.039, "Compensation for Classified Staff," includes policy items that apply to classified staff, such as a description of the Recognition of Service Award.

  5. Policy 40.040, "Job Classification System," specifies the process by which classified positions are assigned to pay grades, including the available appeals process.

    Policy 40.046, "Layoff and Position Abolishment for Classified Civil Service Employees."

  6. Roles and Competencies:  http://www.ohio.edu/comp/role_based_frame.htm


C.   History

Draft versions of this policy that were circulated for review, their cover memos, their forms, and Reviewers' comments on them are available on the password-protected Review site, at https://www.ohio.edu/policy2/40-055/.

Prior versions of this policy were approved on January 7, 2008, and January 30, 2002.



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Administrative Policy Manual

Dick Piccard revised this page
(http://www.ohio.edu/policy/40-055.html)
on May 13, 2013.
policy@ohio.edu

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