merit rasie memo

Merit Pay Guidelines

MEMORANDUM

TO: All Supervisors

FROM: Emily Dush

DATE: November 20, 2013

SUBJECT: Merit Raise Guidelines

General Information

For the 2012/2013 fiscal year, each department will have resources allocated for performance reviews

and salary adjustments. The distribution of merit raises will be based on both performance for the

respective position for the previous year and current salary range. A percentage accrued to base will be

rewarded based on established guidelines; however a lump sum will be awarded to employees whose

salary is over the position range maximum, and whom managers will grant an increase.

In setting salaries for the fiscal 2012/2013 year, please use the following guidelines:

A. In order to create a performance based culture annual performance reviews will be conducted,

assessing employees’ performance for the prior year to determine merit pay for their area.

B. A Merit Matrix Chart guideline has been created to assist you in establishing merit increases

based on performance. The merit increases may not exceed these guidelines, unless approved

by the HR Director, Dan Farrell.

C. Salary increases must be approved by HR Compensation prior to notifying individual employees.

Merit Distribution

To establish a guideline matrix, performance and salary range positions will be taken into account. The

location of the employee’s current salary on the pay grade established for their position should impact

whether the increase is at the low or high end of the merit increase guidelines.

As a general guideline, based on last year’s evaluations we expect to see the following distribution as

follows:

A. 20% of employees to be near, at or above the maximum salary on their pay grade scale.

B. 55% of employees to be in the middle of their pay grade scale.

C. 25% to be near, at or below the minimum salary on their pay grade scale.


Employee Eligibility

A. Any employee must be employed as of the effective date of the merit ( January 1, 2012), with a

hire date on or before October 1, 2011.

B. Any employee who has not completed their 90-day probation period or is considered a seasonal

employee is ineligible.

C. Any employee promoted to a new position after October 1, 2011 will be considered to be in a

90-day probation period and ineligible for a merit increase.

D. Any employee within their 90-day probation period will be eligible for a merit increase at the

end of their 90-days.

Deadlines

A. All performance reviews and merit increase recommendations shall be submitted to HR

Compensation for approval not later than December 5, 2012.

B. Employees shall be notified of any salary increases, whether accrued to base or lump sum

awards not later than December 15, 2012.

C. Any adjustments will take effect for pay period ending January 4, 2013.

Performance Ratings

Excellent (5)

Consistently meets and exceeds all job requirements

Brings new ideas and creativity to own work and department

Exhibits exemplary professionalism in all aspects of performance

Assists and guides teammates regularly

Exceeds Expectations (4)

Consistently meets all job requirements

Carries out regular job functions and occasionally seeks out additional work

Commits to team environment

Applies problem solving skills & creativity in certain situations

Meets Expectations (3)

Consistently meets all job requirements

Successfully carries out regular job functions

Demonstrates behavior consistent with company strategy


Needs Improvement (2)

Needs to gain proficiency in certain skills, knowledge, processes, and job standards

Not fully functional in all aspects of job function

Continued development in team environment

Unsatisfactory (1)

Regularly fails to meet established standards and goals

Fails to use resources appropriately

Lacks required skills/knowledge

Demonstrates difficultly working in a team


Merit Matrix Guidelines

Position Range

Perf

orm

ance

Rating

Below Range Low Range Mid Range High Range Top Range

Exce

llent

8.0% 6.8% 6.0% 5.4% 5.0%

Exce

eds

Expect

ations

5.9% 5.2% 4.3% 4.0% 3.8%

Meets

Expect

ations

3.8% 3.3% 2.9% 2.6% 2.4%

Needs

Impro

vem

ent

2.0% 1.8% 1.6% 1.4% 1.2%

Unsa

tisf

act

ory

0.0% 0.0% 0.0% 0.0% 0.0%


FAQ Review

What pay period will my raise take effect?

Employees should expect to see any adjustments effective January 4, 2013.

Am I eligible for a raise?

All full and part-time workers are eligible for merit raises.

Any employee that is seasonal or in their 90-day probation period they is not eligible.

If an employee is out on FMLA or maternity leave, they are eligible. However,

reviews will take place within 10 days from when they return to their duties and

adjustments will be retroactive.

If an employee is on military leave, they are ineligible for performance reviews,

however will be entitled to the right and benefits that he or she would have attained

if he or she had remained continuously employed.

If an employee is out on workers compensation, they are eligible and will be

reviewed within 10 days from when they return to their duties and adjustments will

be retroactive.

Why are they changing the way raises are given?

Salary positions will be considered in addition to performance in order to align our

compensation strategy with the company’s overall strategy.

What is a pay grade?

A pay grade is a number designation attached to many job titles that share the same salary

range.

What is pay range?

A salary range is the minimum, midpoint and maximum annual salary or hourly rate

assigned for each grade. The midpoint represents the market value for the position.

How is my salary grade determined?

Your salary grade is determined by comparing the market value for similar or external

positions to yours and then comparing your position to the pay of other jobs in the

organization that require the same level of knowledge, skill and abilities.

What is a lump sum?

A lump sum is a single payment made rather than a series of payments made over time.

Lump sum payments will be distributed as bonus checks with employee payroll on January 4,

2013.

What is a raise that is accrued to base?

A raise that is accrued to base is an increase as a percentage to your base rate. Rather than

a lump sum, the monies will be distributed in a series of payments made over time.

Will my raise be applied to overtime?

Any raise that is accrued to base will be applied to overtime. Any raise that is taken as a

lump sum will not be applied to overtime.


What if I’ve changed jobs?

If you have changed jobs within the past 90-days, you are still in your probationary period

and are not eligible. Upon completion of your 90-day probationary period, you will be

reviewed and your salary will be adjusted based on merit. If you are out of your

probationary period, you are fully eligible.

Why did I get the raise that I got?

In order to align compensation to the overall business strategy, we are taking current salary

range positions into consideration.

Employees that are near, at or below the bottom of their salary range will be

rewarded larger raises in order to reduce employee turn-over, acquire high quality

employees and remain competitive.

Employees that are near, at or above their salary range may be artificially low to cut

expense, and keep salaries fair for lower paid employees. These employees will be

awarded lump sums in the form of a bonus check instead.

merit rasie memo

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