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Merit Pay Program

Introduction

Elizabethtown College is committed to reward employees for their contributions to the College.  One way we encourage achievement is through performance-based pay increases or merit pay.  Our merit philosophy is to provide an across-the-board increase for all employees meeting performance expectations and to provide funds to distribute for meritorious performance.  Meritorious performance is defined as completing one's work-related responsibilities in a manner that results in achievement that is consistently higher than normal expectations for the position.

This document outlines a three-year program of merit for staff and administrative employees.  Faculty merit is addressed within the Faculty Handbook.

Merit is an important part of a total compensation program.  Meritorious performance will be based on the results of the annual performance appraisal process.  The funding available for merit increases will be determined each year based on factors associated with the College's operating plan, its financial position and the institution's success at achieving its mission.

Eligibility

All full-time staff and administrative employees are eligible for merit pay.  Employees must have at least six months of continuous service before the award date to be considered for merit.

Merit Pay Program Strategy

Merit pay is fully aligned with the employee performance appraisal process and will be determined by the supervisor's overall assessment of the employee's performance as documented on the performance appraisal form.

The performance appraisal form includes the following overall ratings:  Exceptional, Outstanding, Valuable, Developing, and Not Meeting Expectations.

The Employee Performance Appraisal for salaried employees includes (1) an assessment of the salaried employee's performance in meeting identified goals and (2) an assessment of the employee's "Core Performance Factors" (these are the core factors common to all evaluations).  Supervisors would determine the "Overall Performance Assessment" based on the rating on these two sections of the forms.  

Hourly employees may not be asked to identify annual goals nor would their Performance Appraisal necessarily include an assessment of annual goals.  Their "Overall Performance Assessment" would be based on the assessment of the employee's "Core Performance Factors."

Employees with an Overall Assessment rating of "Outstanding" or "Exceptional" will receive a merit increase in addition to any across-the-board increase.

Employees rated "Outstanding" will all receive the same percentage merit increase.  Likewise, those rated "Exceptional" will receive the same percentage merit increase.   The increase for "Exceptional" will normally be higher than for "Outstanding", but the level of merit increases for both categories will not be determined until after the annual performance appraisal/review process is completed.    

It will be expected that no more than one third of employees will be rated at the "Outstanding" and "Exceptional" levels of performance (combined). 

Employees meeting the expectations for their position will be rated "Valuable" and will receive the approved "across-the-board" increase offered by the College.

Employees rated "Developing" receive the approved across-the-board increase for the first year rated as "Developing."  If rated "Developing" for a second year, the employee will receive less than the across-the-board amount.  

Employees rated "Not Meeting Expectations" will not receive an across-the-board increase and will need to engage in a Performance Improvement Plan with their supervisor. 

 The approved Compensation Plan will determine the amount of money available for across-the-board and merit increases.  The size of the merit pool will be determined in addition to the across-the-board increase.  The specific percentage increase for the two levels of merit ("Exceptional" or "Outstanding") will be determined after the annual performance evaluation process is complete and the actual number of individuals rated in these categories and their salary levels are known.

Merit increases constitute an increase in the employee's annual base pay.  Employees whose current salary or hourly rate is beyond the salary range for their current position will receive a merit award as a one-time-payment; it will not be added to their base pay. 

Implementation Process

Merit pay is integral to the Employee Performance Management Process of the College and is directly linked to the annual performance appraisal process.  For this reason our implementation will be focused on the roll-out of a new "Employee Performance Appraisal Process with Merit Pay."  The Recognition Program is separate and distinct from this process.  The annual cycle for Employee Performance Appraisal with Merit Pay is as follows:

  1. Supervisors and employees establish goals and set performance expectations for all employees at the start of the performance evaluation period (the performance evaluation period is July 1 through June 30 of each year).
  2. Supervisors review progress on goals and/or expectations for core performance factors with employees throughout the year; goals may be modified during the year as needed to adjust to changing circumstances.  Any changes to performance goals must be documented at the time the changes are agreed to between the supervisor and employee.
  3. Human Resources will provide training to all supervisors and provide general awareness information to all employees about the Employee Performance Appraisal with Merit Pay in November and December.  HR will also provide training in March as needed.
  4. Evaluations/appraisals are completed between March 1st and May 31st each year.  Supervisors will receive guidance and reminders from Human Resources prior to the date evaluations are due.
    1. Evaluations are important documentation to support employment actions such as merit pay, promotion or dismissal, and are also used in connection with unemployment compensation hearings, EEO charges and other legal actions. 
    2. Appraisals are used to summarize and evaluate the employee's overall performance for the past year, to establish results to be achieved for specific tasks or projects for the next year, and to identify professional development goals to enable the employee to enhance performance in their current position or to prepare for future growth.
  5. Steps in completing the evaluation are as follows:
    1. The first step in completing the evaluation is to have the employee complete a self-evaluation (using the Self-Evaluation Form) and submit this to the supervisor.
    2. The supervisor prepares an evaluation for the employee using the Annual Employee Performance Appraisal Form.
    3. The supervisor discusses the evaluation with the second level supervisor (if applicable).  Both the supervisor and second-level supervisor must agree on the overall evaluation before presenting the evaluation to the employee.
    4. The supervisor presents/discusses the evaluation with the employee and the supervisor adds final comments.
    5. The employee adds comments and signs off.
    6. The supervisor signs-off on the evaluation form.
    7. The evaluation is submitted to Human Resources.
  6. Supervisors must send completed evaluations for all their employees to Human Resources no later than May 31st.
  7. Human Resources will submit to HCRC information for all employees eligible to receive merit pay no later than June 10th.
  8. HCRC will complete its review of employees eligible for merit pay no later than June 15th.  The merit pay percentages will be established and submitted to the President for approval.
  9. Human Resources will send a letter notifying all employees of their annual increase effective July 1st.
Elizabethtown College