The second budget memo and corresponding policy was released Tuesday by the ISU provost’s office outlining a new salary adjustment policy for faculty.

“Salary adjustments for faculty and staff are made for several reasons: performance, market/equity, retention, etc. These adjustments occur during the year, but a large majority of the performance-based adjustments are effective on July 1 … for 2011 there were some performance-based salary adjustments given that were effective July 1, 2010,” said David Biedenbach, program manager for the provost’s office.

The policy is intended to “provide a common understanding regarding the purpose of salary adjustments, establish the rationale for annual salary adjustments and guide consistency and accountability in compensation practices for employees covered by the policy,” according to an interoffice communication letter signed by Elizabeth Hoffman, ISU executive vice president and provost.

Biedenbach said the process for those performance-based salary adjustments that are effective July 1 will begin when the supervisor conducts a performance evaluation with the employee.

“These evaluations generally occur in the spring, but there are some units that conduct their evaluations in the fall. Parameters will be established during the budget planning process to help guide performance-based salary adjustments,” Biedenbach said. “These parameters will include a minimum salary adjustment percentage to recognize satisfactory performance, and a threshold above which an individual salary increase must be reviewed and approved by the division vice president or executive vice president and provost.”

The policy, effective Jan. 14, outlines several reasons for awarding a salary adjustment including a performance-based, merit salary adjustment for employees who consistently meet their position’s standards of performance. Other increases include a market or equity need-based adjustment and a retention adjustment.

“Equity-based salary adjustments are made to correct an internal salary disparity related to the job being performed. For example, if you have two employees doing the same job with the same qualifications and experience and there is a large disparity in their salary, an equity-based adjustment may be made. Equity-based adjustments can be made for any employee class; faculty or professional and scientific staff,” Biedenbach said.

Parameters for the performance-based adjustments will be established during the annual budget development process and be effective July 1. The process will include “consultation with the faculty senate, consistent with the faculty handbook and the P&S Council,” according to the memo. “This policy does not cover all aspects of compensation administration and other types of salary adjustments.”

“The faculty senate will have the opportunity to provide advice to the president and executive vice president/provost in determining the parameters that are established each year for performance-based salary adjustments. These parameters will include a minimum salary adjustment percentage to recognize satisfactory performance, and a threshold above which an individual salary increase must be reviewed and approved by the division vice president or executive vice president and provost. The parameters are established during the budget planning process,” Biedenbach said.