Keep in Mind
Before beginning the Annual Salary Review (ASR), the department should work with their Human Resources Officer and departmental senior administrator on any performance improvement plan(s) and/or possible deferred increase(s).
- A department head or manager may choose to defer an employee's merit increase for three to six months if he/she believes that the employee's performance can improve within that time period.
- The deferral should not be the first indication to an employee that a performance problem exists.
- An employee's performance during the deferral should be documented.
If a merit increase is deferred due to performance:
- The department should notify their Human Resources Officer who will work with the Compensation Office to implement the deferral.
- Contact your Human Resources Officer who will advise on the next steps if performance improves at the end of the three to six-month deferral period.
- The increase would be determined by the merit guidelines in effect at the time of the deferral.
- Funds for the (prorated) increase will be held in the Budget Office to be distributed when the raise becomes effective.
- Contact the Human Resources Officer so an appropriate action plan can be identified. If performance does not improve during the deferral period, the employee will not be eligible for a merit increase.
When a Deferred Increase for Performance is Recommended
- An employee's performance may be marginal and does not fully meet minimal requirements for the position and/or falls below performance standards.
- A deferred merit increase is generally recommended for times when:
- The employee has a good work history.
- You believe the performance problem may be temporary.
- The employee understands that receiving a merit increase at the end of the deferral period is contingent on fully meeting the expectations of the position.
- A performance improvement plan is in place.
Effect on the Annual Performance Review Date
- The employee's annual performance review date would remain unchanged. Any merit increase received would be for the remaining six to nine months until the next regular review date.
- Example: An employee's review date is July 1, but a merit increase is deferred for three months (until October 1). On or before July 1, a performance improvement plan is established and discussed with the employee.
- If performance improves, the merit increase will become effective October 1, and the employee will receive 9/12th of the expected increase (for October through June). His/her next review date will be July 1 of the following year.
Deferrals for Non-Performance Reasons
At times, the merit increase must be deferred for non performance-related reasons, e.g., when the time frame for preparing the annual performance review must be extended. For example:
- A grant award may be pending and the availability of funds is unknown; however, the DLC expects to receive notification shortly.
- The employee's department head or manager is unavailable because he/she is unexpectedly called out of the country or placed on a new assignment for a brief time period.
- The process of review involves several parties and will extend slightly beyond the ASR due date.
- The employee has only been in the position for a short time despite being eligible for review, and the department head or manager is not yet comfortable reviewing the employee's performance.